[Federal Register Volume 61, Number 219 (Tuesday, November 12, 1996)]
[Proposed Rules]
[Pages 58022-58028]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-28732]


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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 85

[FRL-5649-4]


Retrofit/Rebuild Requirements for 1993 and Earlier Model Year 
Urban Buses; Additional Update of Post-Rebuild Emission Levels in 1997

AGENCY: Environmental Protection Agency (EPA).

ACTION: Notice of proposed rulemaking.

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SUMMARY: Today's notice of proposed rulemaking describes proposed 
amendments to the current regulations regarding EPA's Urban Bus 
Retrofit/Rebuild Program. Today's proposed rule would allow one 
additional year for equipment manufacturers to certify equipment that 
might influence compliance under Option 2 of the program. Such a 
revision will remove the incentive to switch compliance options by 
guaranteeing the two options remain equivalent, as EPA originally 
intended. In the absence of such a revision to the program regulations, 
the two compliance options will not remain equivalent as EPA intended, 
and urban buses may not be utilizing the ``best retrofit technology * * 
* reasonably achievable'' as Congress required. In addition, urban 
areas, many of which are not in compliance with National Ambient Air 
Quality Standards (NAAQS) for PM, will not realize the full PM benefits 
of this program.

DATES: Written comments on this proposal will be accepted until 
December 12, 1996, or 30 days after the date of a public hearing, if 
one is held.
    EPA will hold a public hearing on this proposal on December 6, 1996 
if it receives a request by November 22, 1996. EPA will cancel this 
hearing if no one requests to testify. Members of the public should 
call the contact person indicated below to notify EPA of their interest 
in testifying at the hearing. Interested parties may call the contact 
person to determine whether the hearing will be held.
    Further information on the public hearing and the submission of 
comments can be found under ``Public Participation'' in the 
Supplementary Information'' section of today's document.

ADDRESSES: Interested parties may submit written comments (in 
duplicate, if possible) to Public Docket No. A-91-28 (Category VII) at 
the address listed below.
    Interested parties may contact the person listed in FOR FURTHER 
INFORMATION CONTACT to determine the time and location of the public 
hearing, if one is requested. A court reporter will be present to make 
a written transcript of the proceedings and a copy will be placed in 
the public docket following the hearing.
    Materials relevant to this proposed rulemaking are contained in 
Public Docket A-91-28 (Category VII). This docket is located in room M-
1500, Waterside Mall (Ground Floor), U.S. Environmental Protection 
Agency, 401 M Street SW, Washington, D.C. 20460. Dockets may be 
inspected from 8 a.m. until 5:30 p.m., Monday through Friday. As 
provided in 40 CFR Part 2, a reasonable fee may be charged by the EPA 
for copying docket materials.

FOR FURTHER INFORMATION CONTACT: Tom Stricker, Engine Programs and 
Compliance Division (6403-J), U.S. Environmental Protection Agency, 401 
M Street SW, Washington, D.C. 20460. Telephone: (202) 233-9322.

SUPPLEMENTARY INFORMATION:

Regulated Entities

    Entities potentially regulated by this proposed action consist of 
the same entities currently regulated by existing Retrofit/Rebuild 
Requirements of 40 CFR Part 85, Subpart O, and include urban transit 
operators in Metropolitan Statistical Areas (MSA's) and Consolidated 
Metropolitan Statistical Areas (CMSA's) with 1980 populations of 
750,000 or more, and equipment manufacturers who voluntarily seek 
equipment certification pursuant to the program regulations. Regulated 
categories and entities include:

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               Category                  Examples of regulated entities 
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Industry.............................  Equipment manufacturers who      
                                        voluntarily seek equipment      
                                        certification pursuant to the   
                                        program regulations.            
Transit operators....................  Transit bus operators in         
                                        Metropolitan Statistical Areas  
                                        (MSA's) and Consolidated        
                                        Metropolitan Statistical Areas  
                                        (CMSA's) with 1980 populations  
                                        of 750,000 or more, who operate 
                                        1993 and earlier model year     
                                        urban buses, or who rebuild or  
                                        replace such bus engines.       
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[[Page 58023]]

    This table is not meant to be exhaustive, but rather provides a 
guide for readers regarding entities likely to be regulated by this 
action. This table lists the type of entities that EPA is now aware 
could potentially be regulated by this action. Other types of entities 
not listed in the table could also be regulated. To determine whether 
your facility or company is regulated by this action, you carefully 
examine the existing urban bus retrofit/rebuild regulations contained 
in 40 CFR Part 85, Subpart O, and the preamble to the final rule (58 FR 
21359, April 23, 1993). If you have any questions regarding the 
applicability of this action to a particular entity, consult the person 
listed in the preceding FOR FURTHER INFORMATION CONTACT section.

I. Introduction

    Section 219(d) of the Clean Air Act requires EPA to promulgate 
regulations that require certain 1993 and earlier model year urban 
buses, having engines which are replaced or rebuilt after January 1, 
1995, to comply with an emission standard or control technology 
reflecting the best retrofit technology and maintenance practices 
reasonably achievable.
    On April 21, 1993, EPA published final Retrofit/Rebuild 
Requirements for 1993 and Earlier Model Year Urban Buses (58 FR 21359). 
The Urban Bus Retrofit/Rebuild Program requires affected operators of 
urban buses to choose between two compliance options. Option 1 
establishes particulate matter (PM) emissions requirements for each 
urban bus in an operator's fleet whose engine is rebuilt or replaced. 
Option 2 is a fleet averaging program that sets out specific annual 
target levels for average PM emissions from urban buses in an 
operator's fleet. The two compliance options are designed to yield 
equivalent emissions reductions for approximately the same cost.
    In the final rule, EPA stated that it would review the retrofit/
rebuild equipment that was certified by July 1, 1994, and again by July 
1, 1996, and publish the post-rebuild PM emission levels for urban bus 
engines affected by the program. These post-rebuild levels are to be 
used by transit operators choosing to comply with Option 2 for 
calculating their fleet emission levels. In two previous Federal 
Register notices (59 FR 45626, September 2, 1994, and 60 FR 42763, 
August 16, 1996), EPA published post-rebuild PM levels based on 
equipment that was certified as of these two dates. Today's notice 
proposes, as described below, that EPA review certified equipment for a 
third time and publish the post-rebuild PM emissions levels 
accordingly, based on equipment certified as of July 1, 1997.

II. Background

A. Compliance Options

    EPA promulgated the final rule regarding the Urban Bus Retrofit/
Rebuild Program on April 23, 1993 (58 FR 21359). In short, the rule 
requires operators of 1993 and earlier model year urban buses, in MSA's 
and CMSA's with a 1980 population of 750,000 or more, to comply with 
one of two program options.
    Option 1 is a performance based program requiring that affected 
urban buses meet a 0.10 g/bhp-hr PM standard at the time of engine 
rebuild or replacement, if equipment has been certified by EPA for six 
months as meeting the 0.10 g/bhp-hr standard for less than a life cycle 
cost limit of $7,940 (in 1992 dollars). (EPA chose to allow a six month 
lead time before requiring such equipment to allow transit operators to 
plan their budgeting and procurement activities, and to help ensure an 
adequate supply of parts are available from equipment manufacturers.) 
If equipment is not certified as meeting the 0.10 g/bhp-hr standard for 
under the life cycle cost limit, then affected buses must receive 
equipment which reduces PM emissions by 25 percent, if such equipment 
has been certified by EPA for six months as meeting the 25 percent 
reduction standard for less than a life cycle cost limit of $2,000 (in 
1992 dollars). If no equipment is certified to meet either the 0.10 g/
bhp-hr standard, or the 25 percent reduction standard, then the 
affected bus engine must be rebuilt to the original engine 
configuration, or to an engine configuration certified to have a PM 
level lower than that of the original engine.
    Option 2 is an averaging based program requiring that affected 
urban bus operators meet an annual average fleet PM level, rather than 
requiring that each individual rebuilt engine meet a specific PM level. 
The transit operator must reduce PM emission from its buses to a level 
low enough to meet an annual average target level for the fleet (TLF). 
The TLF is calculated for each calendar year of the program, beginning 
in calendar year 1996, and is based on EPA's determination of the 
projected PM emission level for each engine model in the affected 
fleet, and on assumed engine rebuild and retirement schedules. The 
actual fleet level attained (FLA) must remain equal to, or below, the 
TLF for each year of the program. The FLA is a fleet weighted average 
PM level based on the ``actual'' PM level of each affected engine. The 
``actual'' PM level of each affected engine is determined by the PM 
certification level of the equipment used to retrofit the engine. If no 
retrofit equipment is installed on the engine, or if no retrofit 
equipment is certified for the engine, then the PM level is based on 
EPA's determination of the projected PM emission level for the engine 
model.
    EPA established the pre-rebuild PM levels for each engine model in 
the final rule. The pre-rebuild PM level for an engine model is based 
on new-engine certification data, if available, for that engine model. 
Otherwise, the level is based on EPA's estimate of such emissions based 
on data from similar engine models. In addition, EPA projected post-
rebuild PM levels for each engine model based on the expectation that 
retrofit equipment would be certified for certain engine models and 
would achieve certain reductions. EPA recognized that these projections 
may not accurately reflect future equipment certification, and that 
transit operators may not be able to comply if the TLF were based on 
unrealistic PM levels. Therefore, the final rule contained requirements 
that EPA revise the post-rebuild PM levels based on equipment that was 
actually certified.
    When determining when it would revise the post-rebuild PM levels, 
EPA considered several factors. First, EPA had to estimate the time 
frame during which equipment manufacturers would likely certify 
equipment for this program. For example, revising the post-rebuild PM 
levels in 1995, and again in 1999, would be meaningless if 
certification activity ceased in 1994. Second, EPA wanted to ensure 
that Option 2 remained comparable in terms of cost, lead time, and 
emissions benefit, to Option 1. Third, EPA wanted to ensure Option 2 
remained a workable and feasible compliance option.
    EPA assumed that certification activity under this program would 
likely be completed by 1996. The retrofit program only affects 1993 and 
earlier model year urban buses, which will only be in operation until 
around 2008. In order to recuperate development costs, EPA expected 
equipment manufacturers to certify equipment as early as possible, and 
for the most popular engine models. In fact, some retrofit kits already 
existed and were in use prior to the publication of the final rule, and 
EPA expected those equipment manufacturers to seek certification 
immediately after the rule was published.
    With early certification activity expected, a revision of post-
rebuild PM

[[Page 58024]]

levels prior to the start of the program (January 1, 1995) was 
determined appropriate. In addition, with certification activity 
expected to be completed by 1996, a second revision of the post-rebuild 
levels in mid-1996 was also determined appropriate. Limiting the number 
of revisions to the post-rebuild PM levels was important to provide 
stability in the averaging program and make it a viable compliance 
option. Having more than two revisions could lead to a ``moving 
target'' for transit operators. Selection of the specific dates for the 
two revisions is discussed below.
    Under Option 1, transit operators are not required to use equipment 
until six months after it is certified as meeting both emissions and 
cost requirements. This lead time is vital to transit operators to 
effectively plan their budgeting and procurement activities. Similarly, 
under Option 2, EPA believes six months of lead time are also 
appropriate. As a result, EPA determined that the first revision of 
post-rebuild PM levels would be based on equipment certified as of July 
1, 1994. This date would allow inclusion of equipment certified early, 
and would also allow Option 2 transit operators six months prior to the 
program start date to plan their budgeting and procurement activities 
in order to meet the TLF for 1996 (TLF96). (Although the first TLF 
calculation for Option 2 is effective for calendar 1996 (TLF96), 
transit operators will likely take actions beginning January 1, 1995 to 
ensure compliance with TLF96 on January 1, 1996.) EPA determined 
the second (and final) revision to post-rebuild PM levels would be 
based on equipment certified as of July 1, 1996.
    This date would allow six months of lead time for transit operators 
to plan their budgeting and procurement activities in order to meet 
TLF98. (Again, transit operators will likely take actions 
beginning January 1, 1997 to ensure compliance with TLF98 on 
January 1, 1998). In addition, by revising the post-rebuild PM levels 
after certification activity was complete, EPA could be assured that 
buses would be using the ``best retrofit technology * * * reasonably 
achievable'' as Congress required.1
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    \1\ Clean Air Act Section 219(d), 42 U.S.C. 7554(d).
---------------------------------------------------------------------------

    In addition to the timing of the post-rebuild PM level revisions, 
EPA was also concerned about the content of the revisions. From an 
environmental standpoint, the lowest PM level certified for an engine 
model would be the most desirable post-rebuild PM level to include in 
the revision. However, low emitting technologies could be quite costly. 
Under Option 1, transit operators are not required to use technology 
unless it can meet certain cost limits. In order to maintain equity 
between Option 1 and Option 2 programs, the final rule requires that 
certified equipment must meet the life cycle cost limits of Option 1 in 
order to be considered for inclusion in the Option 2 revisions of post-
rebuild PM levels. Among the certified equipment that meets the Option 
1 cost limits, the numerically lowest PM certification level for a 
given engine model will establish the revised post-rebuild PM level for 
that engine model.
    Default provisions were also included in the final rule in the 
event equipment meeting cost limits were not certified.

B. Current Status of Program

    Certification activity under the retrofit program has lagged 
substantially behind the schedule anticipated by EPA. In fact, when EPA 
published revised post-rebuild levels based on equipment certified as 
of July 1, 1994 (59 FR 45626, September 2, 1994), no equipment had been 
certified. That revision included no updated post-rebuild PM levels, 
but instead is based on default provisions of the final rule (40 CFR 
85.1403(c)(1)(iii)(B)(5)). The first approval of a certification for 
this program occurred on May 31, 1995 (60 FR 28402), almost a year 
after the post-rebuild levels were revised the first time. Although six 
retrofit kits have been certified by EPA as of August 1996, no 
equipment has been certified as meeting the 0.10 g/bhp-hr PM standard 
for under the life cycle cost limit of $7,940 (in 1992 dollars). 
Therefore,the recent revision to the post-rebuild PM levels were based 
on 25 percent reduction equipment, or on no equipment (for those engine 
models for which no equipment was certified as meeting emissions and 
cost requirements).
    Not only has EPA's assumption that certification activity would 
begin early proven incorrect, but more importantly, EPA's assumption 
that certification activity would be complete by mid-1996 has proven 
incorrect. EPA is currently processing several applications for 
certification, including one aimed at meeting the 0.10 g/bhp-hr PM 
standard for less than the life cycle cost limit of $7,940 (in 1992 
dollars). Several more equipment manufacturers have made initial 
contact with EPA regarding certification of equipment, including 
additional technologies aimed at meeting the 0.10 g/bhp-hr standard. 
Consistent with the current program regulations, none of the 
potentially promising retrofit technologies certified after the July 1, 
1996 final post-rebuild PM level revision can influence compliance 
under Option 2.

C. Potential Inequity Between Compliance Options

    As discussed above, technologies certified after the final post-
rebuild PM revision of July 1996 cannot influence compliance under 
Option 2. In other words, under the current regulations, transit 
operators choosing to comply with Option 2 would never be required to 
reduce their fleet PM levels below those PM levels contained in the 
recent post-rebuild level revision based on equipment certified as of 
July 1, 1996. However, consistent with the final program regulations, 
transit operators choosing to comply with Option 1 would be required to 
use equipment certified to the 0.10 g/bhp-hr standard, even if the 
standard is triggered after July 1, 1996. The result is that Option 1 
could become a much more stringent compliance option. Given the level 
of current certification activity, and the continued interest from 
equipment manufacturers, eventual certification of a 0.10 g/bhp-hr 
technology, and thus the likelihood of program inequity, is likely.
    As discussed above, EPA intended the two compliance options to be 
equivalent in terms of cost, emissions reduction and lead time. 
However, future certification of technology which triggers the 0.10 g/
bhp-hr standard could result in Option 2 being much less costly than 
Option 1. Further, Option 1 would yield significantly more PM 
reductions. The root cause of this inequity is that equipment 
certification activity will continue longer than originally 
anticipated. If the current program regulations are not amended, then 
transit operators, the majority of whom EPA currently believes are 
complying with Option 1, will have a great incentive to switch to 
Option 2. Obviously, PM reductions would be significantly reduced in 
those cities where transit operators switch to Option 2. Furthermore, 
such a loophole is in direct conflict with the Clean Air Act language 
that urban buses use the ``best retrofit technology * * * reasonably 
achievable''.

III. Description of Today's Proposal

    EPA is proposing to amend the current program regulations to 
include an additional revision of post-rebuild PM levels based on 
equipment certified as of July 1, 1997. EPA is currently in receipt of 
one equipment certification application intended to meet the 0.10 g/
bhp-hr standard for less than the life cycle cost limit of $7,940 (in 
1992

[[Page 58025]]

dollars), and expects to receive more in the near future. As such, one 
additional year is expected to allow ample time for equipment 
manufacturers to certify 0.10 g/bhp-hr technology for those engine 
models for which equipment could reasonably be certified.
    The purpose and effect of today's proposed action is simple and 
straightforward. First, the purpose of today's proposal is to close an 
unintended compliance loophole in the original regulations. Unless EPA 
amends the current regulations, certification of a 0.10 g/bhp-hr 
technology which meets cost limits will likely cause eligible transit 
operators choosing to comply with Option 1 to switch to Option 2 to 
avoid potentially high equipment costs. Under this scenario, a mass-
switch to Option 2 will result in PM reductions which fall short of 
those expected from this program, and would negate the benefits of 
certifying the 0.10 g/bhp-hr technology. However, if post-rebuild PM 
levels are revised in mid-1997 to include any eligible 0.10 g/bhp-hr 
technology, there will be no incentive for transit operators to switch 
to Option 2. If 0.10 g/bhp-hr is included in the revised post-rebuild 
PM levels, the Option 2 TLF for future calendar years will be 
substantially reduced, effectively requiring Option 2 transit operators 
to use 0.10 g/bhp-hr technology or retire a substantial number of buses 
early in order to comply with the TLF. In effect, both Option 1 and 
Option 2 would require the use low-emitting technology.
    EPA believes today's proposal is consistent with intent of the 
original regulations and with the intent of Congress. As discussed 
above, EPA originally intended Option 1 and Option 2 to be equivalent 
in terms of emissions reductions, costs, lead time, and stability. 
Moreover, this proposed revision would ensure that EPA's requirements 
reflect the ``best retrofit technology and maintenance practice 
reasonably achieveable'' as required under section 219(d) and intended 
by EPA's initial regulations.
    Clearly, failure to amend the regulations as proposed will result 
in vastly differing PM reductions between the options as transit 
operators using Option 2 will avoid using low-emitting technology. On 
the contrary, amending the regulations as proposed will result in both 
options essentially requiring the use of low-emitting technology, and 
should result in similar PM reductions.
    Regarding costs, EPA originally intended that the cost of the two 
options be comparable, such that both options were truly viable choices 
for transit operators. Today's proposal will ensure that the two 
options remain consistent in terms of cost. Note that today's proposal 
does not result in any additional costs to transit operators not 
previously contemplated in the original rulemaking. EPA is not 
proposing any changes to the life cycle cost requirements or the 
requirement to use certified equipment.
    Today's proposal does not change the six month lead time that 
transit operators would be allowed to plan their budgeting and 
procurement strategies. EPA is proposing to base the final revision of 
post-rebuild PM levels on equipment certified as of July 1, 1997, which 
is six months prior to the date on which transit operators would likely 
begin taking actions to ensure compliance with TLF99.
    Finally, regarding program stability, EPA believes today's proposal 
is consistent with the original regulations, and in addition, provides 
further stability beyond the original regulations. EPA originally 
limited the number of post-rebuild PM level revisions to two in order 
to avoid a ``moving target'' for transit operators. Too much 
instability would likely discourage transit operators from considering 
Option 2 as a viable compliance option. As discussed previously in 
today's notice, EPA determined that revisions of post-rebuild PM levels 
would be based on equipment certified as of July 1, 1994, and again as 
of July 1, 1996. The primary reason these dates were determined 
appropriate at the time of the original rulemaking is that EPA believed 
equipment certification would begin as soon as the final rule was 
published on April 23, 1993, and would be completed by mid-1996. 
Discussions with industry and comments from the public gave no 
indication that certification activity would not follow this assumed 
schedule. In fact, retrofit kits already existed and were being used by 
transit operators when the final rule was published.
    For a variety of reasons, certification activity has lagged behind 
the schedule anticipated by EPA, so much so that no equipment had been 
certified as of July 1, 1994. The first revision of post-rebuild PM 
levels resulted in no revision at all. The recent revision based on 
equipment certified as of July 1, 1996 did contain several updated 
post-rebuild PM levels. In effect, adding a third revision based on 
equipment certified as of July 1, 1997 would be just the second 
revision of any substance. In this regard, the stability of Option 2 is 
still maintained as EPA originally intended. Furthermore, EPA expects 
that option switching that might occur without an additional post-
rebuild PM level revision could be more disruptive to program stability 
than today's proposal.
    EPA believes today's proposed action is consistent with Congress' 
intent that urban buses utilize the ``best retrofit technology * * * 
reasonably achievable.'' Clearly, low-emitting equipment such as 
equipment which meets a 0.10 g/bhp-hr standard would represent the best 
retrofit technology. The fact that transit operators will only be 
required to use such equipment if it meets certain life cycle cost 
limits means that such equipment will be reasonably achievable. The 
fact that EPA miscalculated the time table on which low emitting 
technology would be developed by a year or less does not itself imply 
that such technology is not reasonably achievable.
    EPA solicits comments on this proposal and its effect on the Urban 
Bus Retrofit/Rebuild Program, transit operators and equipment 
manufacturers. In particular, EPA solicits comments on the need to add 
a third revision of post-rebuild PM levels, the timing of a third 
revision, the consistency of today's proposal with the original 
regulations, the need to address the potential compliance loophole that 
may exist, how to ensure the same compliance loophole issue addressed 
by today's proposal does not happen again in the future, and any other 
aspects of the proposed action.

IV. Environmental Impact

    The environmental impacts expected to result from the retrofit/
rebuild program are outlined in the final Regulatory Support Document 
(RSD) for the original rulemaking and can be found in public docket A-
91-28 (see ADDRESSES section above). Today's proposed action would not 
result in any additional emissions reductions beyond those outlined in 
the RSD. However, today's action would help ensure these expected 
reductions are actually achieved by closing an unintended compliance 
loophole. If transit operators are allowed to take advantage of the 
potential loophole in the current program, PM reductions will not be 
achieved at the level EPA originally anticipated. In addition, to the 
extent that transit operators can avoid installing low-emitting 
technology on buses, such buses will not reflect the ``best retrofit 
technology * * * reasonably achievable'' as Congress required.

V. Economic Impact

    Today's proposed action would have no additional economic impact 
compared to the economic impact

[[Page 58026]]

described in original regulations finalized on April 23, 1993. While 
failure to take the proposed action could result in reduced costs for 
those transit operators who could take advantage of the loophole, no 
additional costs unaccounted for in the original regulations would be 
imposed on any transit operators as a result of today's proposed 
action. The costs associated with this program have already been 
determined to be reasonable and the program to be cost-effective.

VI. Public Participation

A. Comments and the Public Docket

    EPA solicits comments on all aspects of this proposal from all 
interested parties since it is our desire to ensure full public 
participation in arriving at final decisions. Wherever applicable, 
complete supporting data and analyses should be submitted to allow EPA 
to make the maximum use of comments. Commenters are encouraged to 
provide specific suggestions for changes to any of the proposal. All 
comments should be directed to the EPA Air Docket No. A-91-28 (Category 
VII) (See ADDRESSES).

B. Public Hearing

    EPA will hold a public hearing on this proposal on December 6, 1996 
if it receives a request by November 22, 1996. EPA will cancel this 
hearing if no one requests to testify. Members of the public should 
call the contact person indicated above to notify EPA of their interest 
in testifying at the hearing. Interested parties may call the contact 
person after November 22, 1996 to determine whether the hearing will be 
held and the time and location of the hearing.

VII. Administrative Designation and Regulatory Analysis

    Under Executive Order 12866 (58 FR 51735 (October 4, 1993)), EPA 
must determine whether a regulatory action is ``significant'' and 
therefore subject to OMB review and the requirements of the executive 
order. The order defines ``significant regulatory action'' as one that 
is likely to result in a rule that may:
    (1) Have an annual effect on the economy of $100 million or more or 
adversely affect in a material way the economy, a sector, the economy, 
productivity, competition, jobs, the environment, public health or 
safety, or State, local, or tribal governments or communities;
    (2) Create a serious inconsistency or otherwise interfere with an 
action taken or planned by another agency;
    (3) Materially alter the budgetary impact of entitlement, grants, 
user fees, or loan programs or the rights and obligations of recipients 
thereof;
    (4) Raise novel legal policy issues arising out of legal mandate, 
the President's priorities, or the principles set forth in the order.
    EPA has determined that this rule is not a ``significant regulatory 
action'' under the terms of Executive Order 12866 and is therefore not 
subject to OMB review.

VIII. Impact on Small Entities

    The Regulatory Flexibility Act requires Federal agencies to 
consider potentially adverse impacts of proposed federal regulations 
upon small entities. In instances where significant impacts are 
possible on a substantial number of these entities, agencies perform a 
proposed Regulatory Flexibility Analysis.
    I certify that there will not be a significant adverse impact on a 
substantial number of small business entities due to the proposed 
revision of the urban bus retrofit/rebuild program. The urban bus 
operators affected by the program regulations are generally not small 
businesses. In addition, EPA determined the original regulations 
relating to the urban bus retrofit/rebuild program did not have an 
adverse impact on a substantial number of small entities. Today's 
proposed revision does not impose any new costs above those included in 
the original rulemaking. Today's action will affect only a few 
businesses using the retrofit fleet averaging program and will likely 
have an effect solely on a small portion of the businesses' fleet. 
There may be benefit to those small business entities that manufacture 
retrofit/rebuild equipment, since urban bus operators may be required 
to use such equipment.

IX. Reporting and Recordkeeping Requirements

    Under the Paperwork Reduction Act of 1980, 44 U.S.C. 3501 et seq., 
EPA must obtain OMB clearance for any activity that will involve 
collecting substantially the same information from 10 or more non-
Federal respondents. The regulatory revisions proposed in today's 
notice do not include any provisions for the collection of information 
from non-Federal respondents.

X. Unfunded Mandates Act

    Section 202 of the Unfunded Mandates Reform Act of 1995 (signed 
into law on March 22, 1995) requites that EPA prepare a budgetary 
impact statement before promulgating a rule that includes a Federal 
mandate that may result in expenditure by State, local, and tribal 
governments, in aggregate, or by the private sector, of $100 million or 
more in any one year. Section of the Unfunded Mandates Reform Act 
requires EPA to establish a plan for obtaining input from and 
informing, educating and advising any small governments that may be 
significantly or uniquely affected by the rule.
    Under section 205 of the Unfunded Mandates Act EPA, must identify 
and consider a reasonable number of regulatory alternatives before 
promulgating a rule for which a budgetary impact statement must be 
prepared. EPA must select from those alternatives the least costly, 
most costly, most cost effective, or least burdensome alternative that 
achieves the objectives of the rule, unless EPA explains why this 
alternative is not selected or the selection of this alternative is 
inconsistant with law.

List of Subjects in 40 CFR Part 85

    Environmental protection, Imports, Labeling, Motor vehicle 
pollution, Reporting and recordkeeping requirements, Research, 
Warranties.

    Dated: November 1, 1996.
Carol M. Browner,
Administrator.

    For the purposes set out in the preamble, part 85 of title 40, 
chapter I of the Code of Federal Regulations is proposed to be amended 
as follows:

PART 85--[AMENDED]

    1. The authority citation for part 85 is revised to read as 
follows:

    Authority: 42 U.S.C. 7401-7671q.

Subpart O--[Amended]

    2. Section 85.1403 is proposed to be amended by revising paragraph 
(c)(1)(iii)(C) and adding paragraph (c)(1)(iii)(D) to read as follows:


Sec. 85.1403  Particulate standard for pre-1994 model year urban buses 
effective at time of engine rebuild or engine replacement.

* * * * *
    (c) * * *
    (1) * * *
    (iii) * * *
    (C) For TLF calculations for calendar year 1998, post-rebuild 
particulate emission levels for a specific engine model shall be equal 
to the following:
    (1) 0.10 g/bhp-hr, for any engine model (other than those indicated 
in paragraph (c)(1)(iii)(C)(4) of this section) for which equipment has 
been certified by July 1, 1996 as meeting the emission and cost 
requirements of paragraph (b)(1) of this section for all affected urban 
bus operators;

[[Page 58027]]

    (2) For any engine model for which no equipment has been certified 
by July 1, 1996 as meeting the requirements of paragraph (b)(1) of this 
section for all affected urban bus operators, but for which equipment 
has been certified by July 1, 1996 as meeting the emission and cost 
requirements of paragraph (b)(2) of this section for all affected urban 
bus operators, the post-rebuild particulate emission level shall equal 
the lowest emission level (greater than or equal to 0.10 g/bhp-hr) 
certified for any such equipment;
    (3) For any engine model for which no equipment has been certified 
by July 1, 1996 as meeting the requirements of either paragraph (b)(1) 
or paragraph (b)(2) of this section, the post-rebuild particulate 
emission level shall equal the pre-rebuild particulate level;
    (4) For any engine model with a pre-rebuild particulate level below 
0.10 g/bhp-hr, the post-rebuild particulate emission level shall equal 
the pre-rebuild particulate level; and
    (5) Notwithstanding paragraph (c)(1)(iii)(C)(3) of this section, if 
by July 1, 1996, no equipment has been certified to meet the emission 
requirements of paragraph (b)(1) or paragraph (b)(2) of this section 
for any of the engine models listed in the table at paragraph 
(c)(1)(iii)(A) of this section, then the post-rebuild particulate 
levels shall be the pre-rebuild particulate levels specified in the 
table at paragraph (c)(1)(iii)(A) of this section.
    (D) For TLF calculations for calendar year 1999 and thereafter, 
post-rebuild particulate emission levels for a specific engine model 
shall be equal to the following:
    (1) 0.10 g/bhp-hr, for any engine model for which equipment has 
been certified by July 1, 1997 as meeting the emission and cost 
requirements of paragraph (b)(1) of this section for all affected urban 
bus operators;
    (2) For any engine model for which no equipment has been certified 
by July 1, 1997 as meeting the requirements of paragraph (b)(1) of this 
section for all affected urban bus operators, for which equipment has 
been certified by July 1, 1997 as meeting the emission and cost 
requirements of paragraph (b)(2) of this section for all affected urban 
bus operators, the post-rebuild particulate emission level shall equal 
the lowest emission level (greater than or equal to 0.10 g/bhp-hr) 
certified for any such equipment;
    (3) For any engine model for which no equipment has been certified 
by July 1, 1997 as meeting the emission and cost requirements of 
paragraph (b)(1) or paragraph (b)(2) of this section for all affected 
urban bus operators, the post-rebuild particulate emission level shall 
equal the pre-rebuild particulate level;
    (4) For any engine model with a pre-rebuild particulate level below 
0.10 g/bhp-hr, the post-rebuild particulate emission level shall equal 
the pre-rebuild particulate level;
    (5) Notwithstanding paragraph (c)(1)(iii)(D)(3) of this section, if 
by July 1, 1997, no equipment has been certified for any of the engine 
models listed in the table at paragraph (c)(1)(iii)(A) of this section, 
then the post-rebuild particulate levels shall be as indicated in the 
table at paragraph (c)(1)(iii)(A) of this section; and
    (6) Notwithstanding paragraph (c)(1)(iii)(D)(3) of this section, if 
by July 1, 1997, equipment has been certified to meet the emissions 
requirements of paragraph (b)(1) or paragraph (b)(2) of this section 
for any of the engine models listed in the table at paragraph 
(c)(1)(iii)(A) of this section, but no equipment has been certified by 
July 1, 1996 to meet the life-cycle cost requirements of paragraph 
(b)(1) or paragraph (b)(2) of this section, then the post-rebuild 
particulate levels shall be as specified in the following table:

----------------------------------------------------------------------------------------------------------------
                                                                                                        Post-   
                                                                                        Pre-rebuild   rebuild PM
                 Engine model                              Model year sold                PM level    level  (g/
                                                                                         (g/bhp-hr)    bhp-hr)  
----------------------------------------------------------------------------------------------------------------
DDC 6V92TA...................................  1979-1987..............................         0.50         0.30
                                               1988-1989..............................         0.30         0.30
DDC 6V92TA DDECI.............................  1986-1987..............................         0.30         0.30
DDC 6V92TA DDECII............................  1988-1991..............................         0.31         0.25
                                               1992...................................         0.25         0.25
                                               1993 (no trap).........................         0.25         0.25
                                               1993 (trap)............................         0.07         0.07
DDC Series 50................................  1993...................................         0.16         0.16
DDC 6V71N....................................  1973-1987..............................         0.50         0.50
                                               1988-1989..............................         0.50         0.50
DDC 6V71T....................................  1985-1986..............................         0.50         0.50
DDC 8V71N....................................  1973-1984..............................         0.50         0.50
DDC 6L71TA...................................  1990...................................         0.59         0.59
                                               1988-1989..............................         0.31         0.31
DDC 6L71TA DDEC..............................  1990-1991..............................         0.30         0.30
Cummins L10..................................  1985-1987..............................         0.65         0.46
                                               1988-1989..............................         0.55         0.46
                                               1990-1991..............................         0.46         0.46
Cummins L10 EC...............................  1992...................................         0.25         0.25
                                               1993 (trap)............................         0.05         0.05
Alternatively-fueled Engines.................  Pre-1994...............................         0.10         0.10
Other Engines................................  Pre-1988...............................         0.50         0.50
                                               1988-1993..............................          \1\         \1\ 
----------------------------------------------------------------------------------------------------------------
\1\ Certification level.                                                                                        


[[Page 58028]]

[FR Doc. 96-28732 Filed 11-8-96; 8:45 am]
BILLING CODE 6560-50-P