[Federal Register Volume 62, Number 109 (Friday, June 6, 1997)]
[Rules and Regulations]
[Pages 31192-31270]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-12366]



[[Page 31191]]

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Part II





Environmental Protection Agency





_______________________________________________________________________



40 CFR Parts 85 and 86



New Motor Vehicles and New Motor Vehicle Engines Air Pollution Control: 
Voluntary Standards for Light-Duty Vehicles; Final Rule

  Federal Register / Vol. 62, No. 109 / Friday, June 6, 1997 / Rules 
and Regulations  

[[Page 31192]]


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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Parts 85 and 86

[AMS-FRL-5823-7]
RIN 2060-AF75


Control of Air Pollution From New Motor Vehicles and New Motor 
Vehicle Engines: Voluntary Standards for Light-Duty Vehicles

AGENCY: Environmental Protection Agency (EPA).

ACTION: Final rule.

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SUMMARY: Today EPA is finalizing the main regulatory framework for the 
National Low Emission Vehicle (National LEV) program. After EPA takes 
comment on and finalizes supplemental regulations, today's regulations 
would allow auto manufacturers to volunteer to comply with tailpipe 
standards for cars and light, light-duty trucks that are more stringent 
than EPA can mandate. Once a manufacturer opts into the program, the 
standards would be enforced in the same manner as any other federal 
motor vehicle pollution control requirement. Manufacturers would be 
willing to opt into this program if there is a binding commitment to it 
by the northeastern part of the country (the Ozone Transport Region 
(OTR) or the States of the Ozone Transport Commission (OTC States)).
    If the program were to come into effect after EPA finalizes the 
supplemental regulations, it would achieve significant reductions in 
smog and other air pollution nationwide. It also would achieve the same 
emission reductions in the OTR as if each OTC State adopted a state 
motor vehicle program. Today's regulations, together with other Agency 
actions, also substantially harmonize federal and California motor 
vehicle standards and test procedures to enable manufacturers to design 
and test vehicles to one set of standards nationwide if they opt into 
National LEV.
    With this final rule, EPA is providing the regulatory structure 
that is a necessary step towards completion of an on-going process 
initiated by the OTC States and the auto manufacturers to improve 
public health through the introduction of cleaner vehicles nationwide 
and in the Northeast. The process cannot be completed until the auto 
manufacturers and the OTC States both agree to be bound by the program. 
As a result of the hard work of these parties, agreement has been 
reached on the main regulatory framework of the National LEV program. 
This agreement is reflected in today's rule. However, some additional 
issues must be resolved regarding the commitments the OTC States must 
make for the program to come into effect. EPA will resolve these issues 
when it adopts a supplemental final rule after further notice and 
comment. If National LEV is implemented, it will demonstrate how 
cooperative, partnership efforts can produce a smarter, cheaper program 
that reduces regulatory burden while increasing protection of the 
environment and public health.

DATES: This regulation is effective August 5, 1997. The incorporation 
by reference of certain publications listed in the regulations is 
approved by the Director of the Federal Register as of August 5, 1997. 
Sections 86.085-37(b)(1) introductory text, 86.1710-97(a), 86.1712-97, 
and 86.1776-97 contain information collection requirements that have 
not yet been approved by the Office of Management and Budget (OMB) and 
are not effective until OMB has approved them. EPA will publish a 
document announcing the effective date of these sections.

ADDRESSES: Materials relevant to this final rule have been placed in 
Public Docket No. A-95-26. The docket is located at the Air Docket 
Section, U.S. Environmental Protection Agency, 401 M Street SW, 
Washington, DC 20460 (Telephone 202-260-7548; Fax 202-260-4400) in Room 
M-1500, Waterside Mall, and may be inspected weekdays between 8:00 a.m. 
and 5:30 p.m. A reasonable fee may be charged by EPA for copying docket 
materials.

FOR FURTHER INFORMATION CONTACT: Karl Simon, Office of Mobile Sources, 
U.S. Environmental Protection Agency, 401 M Street SW, Washington, DC 
20460. Telephone (202) 260-3623; Fax (202) 260-6011; e-mail 
[email protected].

SUPPLEMENTARY INFORMATION:

    Regulated entities. Entities potentially regulated by this action 
are those that manufacture and sell new motor vehicles in the United 
States. Regulated categories and entities include:

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              Category                  Examples of regulated entities  
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Industry............................  New motor vehicle manufacturers.  
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    This table is not intended to be exhaustive, but rather provides a 
guide for readers regarding entities likely to be regulated by this 
action. This table lists the types 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 activities are regulated by this action, you should carefully 
examine the applicability criteria in Sec. 86.1701-97 of the rule. If 
you have questions regarding the applicability of this action to a 
particular entity, consult the person listed in the preceding FOR 
FURTHER INFORMATION CONTACT section.

I. Obtaining Electronic Copies of the Regulatory Documents

    The Preamble, Regulations, and Response to Comments documents are 
also available electronically from the EPA internet site and via dial-
up modem on the Technology Transfer Network (TTN), which is an 
electronic bulletin board system (BBS) operated by EPA's Office of Air 
Quality Planning and Standards. Both services are free of charge, 
except for your existing cost of internet connectivity or the cost of 
the phone call to TTN. Users are able to access and download files on 
their first call using a personal computer per the following 
information. The official Federal Register version is made available on 
the day of publication on the primary internet sites listed below. The 
EPA Office of Mobile Sources also publishes these notices on the 
secondary internet sites listed below and on TTN.

Internet

World Wide Web: http://www.epa.gov/docs/fedrgstr/EPA-AIR/ (either 
select desired date or use Search feature) or http://www.epa.gov/
OMSWWW/ (look in What's New or under the specific rulemaking topic)
Gopher: gopher.epa.gov Follow menus: Rules: EnviroSubset:Air or 
gopher.epa.gov Follow menus: Offices:Air:OMS
FTP: ftp.epa.gov Directory: pub/gopher/fedrgstr/EPA-AIR/ or ftp.epa.gov 
Directory: pub/gopher/OMS/
TTN BBS: 919-541-5742 (1,200-14,400 bps, no parity, eight data bits, 
one stop bit) Off-line: Mondays from 8:00-12:00 Noon ET Voice helpline: 
919-541-5384

    A user who has not called TTN previously will first be required to 
answer some basic informational questions for registration purposes. 
After completing the registration process, proceed through the 
following menu choices from the Top Menu to access information on this 
rulemaking.

 GATEWAY TO TTN TECHNICAL AREAS (Bulletin Boards)
 OMS--Mobile Sources Information
 Rulemaking & Reporting
<1> Light Duty

[[Page 31193]]

<10> File area #10 OTC Low-Emissions Vehicle & National LEV
    At this point, the system will list all available files in the 
chosen category in reverse chronological order with brief descriptions. 
To download a file, type the letter ``D'' and hit your Enter key. Then 
select a transfer protocol that is supported by the terminal software 
on your own computer, and pick the appropriate command in your own 
software to receive the file using that same protocol. After getting 
the files you want with your computer, you can quit the TTN BBS with 
the oodbye command. If you are unfamiliar with handling compressed 
(i.e. ZIP'ed) files, go to the TTN top menu, System Utilities (Command: 
1) for information and the necessary program to download in order to 
unZIP the files of interest after downloading to your computer.
    Please note that due to differences between the software used to 
develop the document and the software into which the document may be 
downloaded, changes in format, page length, etc. may occur.

II. Outline and List of Acronyms and Abbreviations

A. Outline

    This final rule preamble is organized into the following 
sections:

I. Obtaining Electronic Copies of the Regulatory Documents
II. Outline and List of Acronyms and Abbreviations
    A. Outline
    B. List of Acronyms and Abbreviations
III. Introduction and Background
    A. Introduction
    B. Benefits of the National LEV Program
    C. Background
    1. Current Federal Motor Vehicle Emissions Control Program
    2. California Low Emission Vehicle Program
    3. OTC Efforts to Reduce Motor Vehicle Emissions in the OTR
    4. Public Process
    D. National LEV Program
    1. Agreement--A Necessary Predicate for the National LEV Program
    2. Description of National LEV Program
IV. Provisions of the National LEV Program
    A. Program Structure
    1. Opt-In to National LEV and In-Effect Finding
    2. Opt-Out from National LEV
    a. Conditions Allowing Opt-Out
    (1) OTC States' Failure to Meet or Keep Their Commitments
    (2) EPA Changes to Stable Standards
    (i) Designation of Stable Standards
    (ii) Changes to Stable Standards
    b. Opt-Out Procedures
    c. Effective Date of Opt-Out
    d. Programs in Effect as a Result of Opt-Out
    e. Opt-Out by States
    3. Duration of Program
    B. National LEV Voluntary Tailpipe and Related Standards and 
Phase-In
    1. Exhaust Emission Standards for Categories of NLEVs
    a. Certification Standards
    b. In-Use Standards
    2. Non-methane Organic Gases Fleet Average Standards
    a. Compliance With the NMOG Standards
    b. Tracking Vehicles for Fleet Average NMOG Compliance
    c. OTC State Government ATV Purchases
    d. Reporting Requirements
    3. Fleet Average NMOG Credit Program
    a. Fleet Average NMOG Credit Program Requirements
    b. Early Reduction Credits
    c. Enforcement of Fleet Average NMOG Credit Program
    d. Reporting for Fleet Average NMOG Credit Program
    4. Limits on Sale of Tier 1 Vehicles and TLEVs
    5. Tailpipe Emissions Testing
    a. Federal Test Procedure
    b. Compliance Test Fuel
    c. NMOG vs. NMHC
    d. Reactivity Adjustment Factors
    6. On-Board Diagnostics Systems Requirements
    7. In-Use Fuel
    8. Hybrid Electric Vehicles
    C. Low Volume and Small Volume Manufacturers
    D. Legal Authority
    E. Enforceability and Prohibited Acts
V. National LEV Will Produce Creditable Emissions Reductions
    A. Emissions Reductions From National LEV
    B. Enforceability of National LEV
    C. Finding National LEV in Effect
    D. SIP Credits
VI. Other Applicable Federal Requirements and Harmonization With 
California Requirements
    A. Introduction
    B. Harmonization of Federal and California Standards
    1. Onboard Refueling Vapor Recovery and Evaporative Emissions
    2. Cold CO
    3. Certification Short Test
    4. High Altitude Requirements
    C. Federal Compliance Requirements
    1. Selective Enforcement Auditing and Quality Audit Programs
    2. Imports
    3. In-Use and Warranty Requirements
VII. Structure of National LEV Regulations
VIII. Technical Correction to Maintenance Instructions
IX. Administrative Requirements
    A. Administrative Designation
    B. Regulatory Flexibility Act
    C. Unfunded Mandates Reform Act
    D. Congressional Review of Agency Rulemaking
    E. Reporting and Recordkeeping Requirements
X. Statutory Authority
XI. Judicial Review

B. List of Acronyms and Abbreviations

AAMA  American Automobile Manufacturers Association
AIAM  Association of International Automobile Manufacturers
APA  Administrative Procedure Act
AQL  Acceptable Quality Level
ATV(s)  Advanced Technology Vehicle(s)
BBS  Bulletin Board System
CAA  Clean Air Act
CAAA  Clean Air Act Amendments of 1990
CAL LEV  California Low Emission Vehicle Program
CARB  California Air Resources Board
CFR  Code of Federal Regulations
CO  Carbon Monoxide
CQA  California Quality Audit
CST  Certification Short Test
EPA  U.S. Environmental Protection Agency
EPAct  Energy Policy Act
FACA  Federal Advisory Committee Act
FR  Federal Register
FRM  Final Rulemaking, Final Rule
FTP  Federal Test Procedure
GSA  General Services Administration
GVWR  Gross Vehicle Weight Rating
HC(s)  Hydrocarbon(s)
HCHO  Formaldehyde
HEV(s)  Hybrid Electric Vehicle(s)
HLDT(s)  Heavy Light-Duty Truck(s)
IBR  Incorporation by Reference
ICI(s)  Independent Commercial Importer(s)
ICR  Information Collection Request
I/M  Inspection and Maintenance
ILEV(s)  Inherently Low Emission Vehicle(s)
LDT(s)  Light-Duty Truck(s)
LDV(s)  Light-Duty Vehicle(s)
LEV(s)  Low Emission Vehicle(s)
LLDT(s)  Light Light-Duty Truck(s)
LVW  Loaded Vehicle Weight
MIL  Malfunction Indicator Light
MOU  Memorandum of Understanding
MY  Model Year
NAAQS  National Ambient Air Quality Standards
National LEV  National Low Emission Vehicle
NLEV  National Low Emission Vehicle
NMHC  Non-methane Hydrocarbons
NMOG  Non-methane Organic Gases
NOX  Oxides of Nitrogen
NPRM  Notice of Proposed Rulemaking
NTR  Northeast Trading Region
OBD  On-Board Diagnostics
OBD II  Second Phase On-Board Diagnostics
OMB  Office of Management and Budget
ORVR  On-Board Refueling Vapor Recovery
OTC  Ozone Transport Commission
OTC LEV  Ozone Transport Commission Low Emission Vehicle
OTR  Ozone Transport Region
PM  Particulate Matter
RAF(s)  Reactivity Adjustment Factor(s)
RFA  Regulatory Flexibility Analysis
RFG  Reformulated Gasoline
RIA  Regulatory Impact Analysis
SEA  Selective Enforcement Audit
SFTP  Supplemental Federal Test Procedure
SIA  Service Information Availability
SIP  State Implementation Plan
SNPRM  Supplemental Notice of Proposed Rulemaking
The Act  Clean Air Act
The Agency  U.S. Environmental Protection Agency
THC  Total Hydrocarbon
TLEV(s)  Transitional Low Emission Vehicle(s)
TTN  Technology Transfer Network

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UDDS  Urban Dynamometer Driving Cycle
ULEV(s)  Ultra Low Emission Vehicle(s)
UMRA  Unfunded Mandate Reform Act
VOC(s)  Volatile Organic Compound(s)
ZEV(s)  Zero Emission Vehicle(s)

III. Introduction and Background

    The U.S. Environmental Protection Agency (EPA) is adopting 
regulations for the National Low Emission Vehicle (National LEV) 
program in this final rule. EPA believes this is a cleaner, smarter, 
cheaper pollution control program for new motor vehicles. Under the 
National LEV program, auto manufacturers have the option of agreeing to 
comply with more stringent tailpipe emissions standards--standards that 
EPA could not impose without manufacturer agreement. Once manufacturers 
commit to the program, the standards will be enforceable in the same 
manner that other federal motor vehicle emissions control requirements 
are enforceable. Manufacturers have indicated their willingness to 
volunteer to meet these tighter emissions standards if EPA and the 
northeastern states (i.e., those in the Ozone Transport Commission 
(OTC) or the ``OTC States'') agree to certain conditions, including 
providing manufacturers with regulatory stability, recognizing that 
establishing advanced technology vehicles (ATVs) in the Northeast is a 
shared responsibility (rather than the sole responsibility of auto 
manufacturers), and reducing regulatory burdens by harmonizing federal 
and California motor vehicle emissions standards.
    The National LEV program is another step in an unprecedented, 
cooperative effort by the OTC States, auto manufacturers, 
environmentalists, fuel providers, EPA, and other interested parties to 
improve air quality. The OTC States and environmentalists provided the 
opportunity for this cooperative effort by pushing for adoption of the 
California Low Emission Vehicle (CAL LEV) program throughout the 
northeast Ozone Transport Region (OTR). Under EPA's leadership, the 
states, auto manufacturers, environmentalists, and other interested 
parties then embarked on a process marked by extensive public 
participation and a demonstrated willingness to work with each other 
and to solve problems jointly. This working relationship is 
particularly remarkable given the adversarial and litigious nature of 
previous interactions between the parties.
    In today's final rule, EPA is establishing the regulatory framework 
for National LEV. Given statutory constraints, however, the National 
LEV program will only be implemented if it is agreed to by the OTC 
States and the auto manufacturers. EPA does not have authority to force 
either the OTC States or the manufacturers to sign up to the program.
    The OTC States and auto manufacturers have reached agreement on 
most issues raised by the National LEV program. Each side has sent EPA 
a Memorandum of Understanding (MOU) that it has initialed, indicating 
its agreement with the National LEV program as contained in that MOU. 
(These initialed documents are in the public docket for this 
rulemaking.) Although there are differences in the two Memoranda, they 
show that agreement has been reached between the OTC States and the 
auto manufacturers on the substantive issues addressed in this rule. 
With a few limited exceptions, those agreements are consistent with 
today's rule. EPA applauds the efforts of these parties, particularly 
the leadership shown by the OTC States and the auto manufacturers.
    The OTC States and auto manufacturers have not reached agreement on 
a few remaining issues, in particular, those related to OTC State opt-
in and commitment to the program. EPA did not take comment on and 
therefore cannot finalize these portions of the National LEV program in 
today's rule. These issues will need to be resolved and reflected in 
EPA regulations before the National LEV program can come into effect. 
Because the auto manufacturers and the OTC States have not resolved 
these issues, EPA will publish a Supplemental Notice of Proposed 
Rulemaking (SNPRM) to take comment on these issues before EPA resolves 
them in a supplemental final rule.
    National LEV will provide environmental benefits by reducing air 
pollution nationwide. The program is designed to address air pollution 
problems, and will produce public health and environmental benefits 
both inside and outside the OTR. This will assist all states that were 
considering adopting the California LEV program to meet their 
obligations under the Clean Air Act (CAA or the Act).
    EPA has determined that the National LEV program will result in 
emissions reductions in the OTR that are equivalent to or greater than 
the emissions reductions that would be achieved through OTC state-by-
state adoption of the CAL LEV program. For a number of years, the OTC 
has been working to reduce motor vehicle emissions either by adoption 
of the CAL LEV program throughout the OTR or by adoption of the 
National LEV program. As a means to achieve such reductions, National 
LEV continues to provide a preferable alternative to adoption of CAL 
LEV throughout the OTR. Not only will National LEV provide emissions 
reductions benefits to the OTC States, it will reduce states' costs of 
providing their citizens with healthy air by avoiding the costs of 
state programs that duplicate each others' and EPA's efforts. Although 
a recent court decision struck down one of the OTC States' regulatory 
options for regionwide adoption of CAL LEV programs, Virginia v. EPA, 
No. 95-1163 (D.C. Cir. March 11, 1997)(discussed in section III.C.3.), 
the auto manufacturers and OTC States have recently sent letters to EPA 
expressing their continued support for National LEV. (Letter from AAMA 
and AIAM to EPA, April 15, 1997; Letter from OTC to EPA, April 18, 
1997; both letters are in docket no. A-95-26).
    EPA is also providing important relief from certain regulatory 
requirements to the auto manufacturers. Rather than having a fleet of 
California vehicles that are designed and tested to California 
standards, and a separate fleet of federal vehicles that are designed 
and tested to federal standards, in most instances under National LEV 
manufacturers will certify vehicles to harmonized California and 
federal standards that will allow them to sell most vehicles 
nationwide. Not only will this reduce testing and design costs, it will 
allow more efficient distribution and marketing of vehicles nationwide.
    The cooperative nature of the program by itself should provide 
environmental benefits sooner, and in a way that greatly reduces 
regulatory transaction costs, than would otherwise be the case. 
Focusing energy on implementing the program the parties helped jointly 
design is a better use of resources than continued disagreement over 
whether any program should be implemented at all.

A. Introduction

    EPA is today adopting the regulatory structure for a voluntary, 
National LEV program. The National LEV program includes a set of 
exhaust emissions standards that will significantly reduce emissions of 
ozone-producing pollutants nationwide from new light-duty vehicles 
(LDVs) and light-duty trucks (LDTs) at or below 6000 lbs gross vehicle 
weight rating (GVWR) (light, light-duty trucks, or LLDTs). The program 
includes a manufacturer fleet average standard for non-methane organic 
gas (NMOG) applicable in the OTC States beginning in Model Year

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(MY) 1997,1 and applicable nationwide (except California) 
beginning in MY2001. Manufacturers are not required to meet the 
standards in this program unless they choose to opt into the program. 
However, if a manufacturer opts into the program and EPA finds that the 
program is in effect, then the manufacturer will be bound by the 
program's requirements. A manufacturer that opts into the program can 
opt out only in certain limited circumstances.
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    \1\ As discussed in note 17 below, EPA is using MY 1997 as a 
placeholder for the actual start date of National LEV.
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    In addition to the national public health benefits that would 
result from National LEV, the program has been motivated largely by the 
OTC's efforts to reduce motor vehicle emissions either by adoption of 
the CAL LEV program throughout the OTR or by adoption of the National 
LEV program. One of the OTC States' efforts was a petition the OTC 
filed with EPA. On December 19, 1994, EPA approved this petition, which 
requested that EPA require all OTC States to adopt the CAL LEV program 
(called the Ozone Transport Commission Low Emission Vehicle (OTC LEV) 
program. 60 FR 4712 (January 24, 1995) (OTC LEV Decision)). In that 
rule, EPA found that the reduction of emissions from new motor vehicles 
throughout the OTR is necessary to mitigate the effects of air 
pollution transport in the region and to bring ozone nonattainment 
areas in the OTR into attainment (including maintenance) by the dates 
specified in the CAA, as amended in 1990. On the basis of this finding, 
EPA issued a finding that the State Implementation Plans (SIPs) of the 
OTC States are substantially inadequate. Under the OTC's recommended 
program, all new motor vehicles sold in the OTR beginning in MY1999 
would be required to be certified by the California Air Resources Board 
(CARB) to any one of the California motor vehicle emissions standards 
(i.e., California Tier 1, Transitional Low Emission Vehicle (TLEV), Low 
Emission Vehicle (LEV), Ultra Low Emission Vehicle (ULEV), or Zero 
Emission Vehicle (ZEV)). Manufacturers could choose to sell any mix of 
California-certified vehicles to comply with annual fleet average NMOG 
standards, which become increasingly stringent over time. Pursuant to 
the OTC recommendation, individual states in the OTR could (but were 
not required to) adopt a ZEV mandate to the extent permitted by the 
CAA.
    The OTC LEV decision was challenged by the Commonwealth of Virginia 
and several motor vehicle manufacturers. The Court of Appeals held that 
EPA did not have authority to require the OTC States to adopt the CAL 
LEV program and vacated EPA's OTC LEV decision. Virginia v. EPA, No. 
95-1163 (D.C. Cir. March 11, 1997).
    The court decision striking EPA's OTC LEV decision changes some of 
the legal requirements for National LEV. When EPA proposed the National 
LEV program, it proposed criteria that the National LEV program would 
have to meet to be an acceptable LEV-equivalent program that would 
relieve OTC States of their obligation under the OTC LEV decision. EPA 
proposed that National LEV (1) would need to achieve emissions 
reductions equivalent to those that would be achieved by OTC LEV, and 
(2) would be an enforceable, stable program that was in effect. Because 
EPA no longer need find that National LEV is an acceptable LEV-
equivalent program, EPA has reevaluated whether National LEV is legally 
required to meet the two criteria. EPA has determined that there is no 
longer a legal requirement for National LEV and OTC LEV to achieve 
equivalent emissions reductions. Nonetheless, for all parties to 
support National LEV, it must produce an acceptable quantity of 
emission reductions. Furthermore, for EPA to grant SIP credits, 
National LEV must be an enforceable, stable program.
    In today's rule, EPA finds that National LEV will achieve 
reductions in new motor vehicle emissions in the OTR that are at least 
equivalent to the reductions that would be achieved through OTC state-
by-state adoption of the CAL LEV program. EPA also finds that once 
manufacturers opt into the National LEV program, it is enforceable 
against the manufacturers. After EPA provides further notice to take 
comment on the type of OTC State commitments that would make the 
program lasting, the Agency intends to promulgate final provisions for 
OTC State commitments sufficient to adequately assure that National LEV 
will produce the intended emissions reductions for the intended 
duration of the program. Then, EPA will be able to find that National 
LEV is in effect when all auto manufacturers have opted into the 
program.
    EPA provided numerous opportunities for public participation in the 
decision-making process leading to OTC LEV and National LEV, as 
described more fully in section III.C.4. EPA established a subcommittee 
of the Clean Air Act Advisory Committee pursuant to the Federal 
Advisory Committee Act (FACA) to evaluate issues relating to obtaining 
reductions in emissions from new motor vehicles. The Subcommittee has 
also served as a public forum to discuss voluntary, 49-state motor 
vehicle emissions standards and provided comments to EPA on the 
National LEV program.

B. Benefits of the National LEV Program

    The National LEV program will result in significant environmental 
and public health benefits nationwide if the OTC States and auto 
manufacturers agree to implement it. The program promulgated today 
represents a significant step towards the goal of reducing smog 
throughout the United States. The National LEV program will also 
achieve reductions in emissions of other pollutants, including 
particulate matter (PM), benzene, and formaldehyde.
    Ground-level ozone, the principal harmful component in smog, is 
produced by a complex set of chemical reactions involving volatile 
organic compounds (VOCs) and oxides of nitrogen (NOX) in the 
presence of sunlight. Ground-level ozone causes health problems, 
including damaged lung tissue, reduced lung function, and lungs that 
are sensitized to other irritants. Scientific evidence indicates that 
the ambient levels of ozone affect healthy adults and children, as well 
as people with impaired respiratory systems, such as asthmatics. A 
reduction in lung function during periods of moderate exercise has been 
found following exposure to ozone for six to seven hours at 
concentrations at or near the current standard. This decrease in lung 
function may be accompanied by symptoms such as chest pain, coughing, 
nausea, and pulmonary congestion. Studies, to date, indicate that the 
acute health effects of exposure to ozone at the level of the current 
ozone NAAQS (such as coughing, chest pain, and shortness of breath) are 
reversible in most people when the exposure stops. However, the extent 
of such reversibility depends on factors such as the length of exposure 
and individual activity level. With repeated exposure to ozone over 
time, many of these symptoms attenuate but some indicators of cell 
damage suggest continued lung inflammation. Ground-level ozone is also 
responsible for significant agricultural crop yield losses each year. 
Studies also indicate that the current ambient levels of ozone are 
responsible for damage to both terrestrial and aquatic ecosystems, 
including acidification of surface waters, reduction in fish 
populations, damage to forests and wildlife, soil degradation, and 
reduced visibility.
    The primary NAAQS for various pollutants, including ozone, are set 
by EPA on the basis of air quality criteria

[[Page 31196]]

and allowing an adequate margin of safety, at a level that the Agency 
determines is necessary to protect public health. EPA then classifies 
areas across the country based on whether they attain these standards. 
Areas that do not meet these standards are deemed ``nonattainment'' 
areas and rated based on the severity of their air quality problem. 
There are 66 ozone nonattainment areas throughout the United States, 
including several areas classified as ``serious'' or ``severe'' for 
ozone. Houston and the upper Midwest, in particular, experience high 
levels of ground-level ozone pollution. The implementation of the 
National LEV program nationwide in MY2001 will advance the goal of 
emissions reductions in those areas. Motor vehicles are a significant 
contributor to smog because of their emissions of VOCs and 
NOX. A vehicle certified to the National LEV standards will, 
over its lifetime, emit 400 pounds less pollution than a Tier 1 
vehicle. Implementation of National LEV is expected to achieve 
nationwide reductions of NOX emissions of 400 tons/day in 
2005 and 1250 tons/day in 2015, and nationwide reductions in NMOG 
emissions of 279 tons/day in 2005 and 778 tons/day in 2015.
    In evaluating the OTC petition, EPA analyzed the level of emissions 
reductions throughout the OTR necessary to attain (or maintain) the 
NAAQS for ozone, given the serious transport issue. EPA concluded, 
based on its analysis in the context of the OTC LEV decision, that 
NOX reductions of 50 percent to 75 percent from 1990 levels 
from every portion of the OTR lying to the south, southwest, west, and 
northwest of each serious or severe OTR nonattainment area, and VOC 
reductions of 5 percent to 75 percent from the portion of the OTR in or 
near (and upwind of) each serious and severe OTR nonattainment area, 
are necessary to bring each such area into attainment by the applicable 
date.
    EPA has projected that, without a program that achieves reductions 
in the Northeastern United States equivalent to those achieved by OTC 
state-by-state adoption of CAL LEV, on-highway vehicles will account 
for approximately 38 percent of NOX emissions and 22 percent 
of anthropogenic VOC emissions in 2005. As described in the OTC LEV 
decision, EPA's modeling analyses support the conclusion that no 
combination of potentially broadly practicable control measures in the 
OTR would be sufficient to achieve the necessary level of emissions 
reductions without more stringent new motor vehicle emission standards. 
Thus, EPA determined that all of the emissions reductions in the OTR 
associated with implementing the OTC LEV program, or a LEV-equivalent 
program, are necessary. While the court decision overturned the OTC LEV 
decision requiring adoption of OTC LEV, the court did not overturn 
EPA's underlying assessment of the need for significant additional 
emissions reductions in the region.
    More stringent motor vehicle standards outside the OTR, such as 
those contained in today's rule, will help the OTR achieve necessary 
reductions, in addition to producing benefits in States outside the 
OTR. EPA has determined that the National LEV program promulgated today 
would provide at least equivalent emissions reductions of VOCs and 
NOX in the OTR as would OTC state-by-state adoption of CAL 
LEV programs, and would do so in a more efficient and cost-effective 
manner, for several reasons.2 First, the National LEV 
program provides for the introduction of TLEVs in the OTR in MY1997, 
two years earlier than EPA had required under the OTC LEV 
program.3 Second, since the National LEV program will apply 
nationwide (except for California) in MY2001, vehicles purchased 
outside the OTR that move into the region will be up to 70 percent 
cleaner than incoming vehicles (i.e., Tier 1 vehicles) would have been 
under the OTC LEV program. EPA estimated that if migration into the OTR 
of non-LEV vehicles were taken into account in estimating benefits of 
OTC LEV, this would result in a 16 ton/day increase in VOC emissions 
and a 28 ton/day increase in NOX emissions in 2005 compared 
to EPA's estimates of highway vehicle emissions in the OTR without 
factoring in migration. The National LEV program, when implemented 
nationwide in MY2001, will greatly reduce this migration effect. Even 
more significant, without the OTC LEV SIP call, a substantial number of 
the OTC States are now unlikely to adopt state CAL LEV programs 
effective for the relevant timeframe, which dramatically increases the 
relative benefits of National LEV over an approach that relies on OTC 
state-by-state adoption of CAL LEV.
---------------------------------------------------------------------------

    \2\ Since EPA's modeling was completed, circumstances have 
changed that have set back the potential realistic start dates both 
for National LEV and for OTC state-by-state implementation of CAL 
LEV. EPA's modeling shows that the programs as designed (i.e., 
National LEV starting in MY1997 and CAL LEV throughout the OTR 
implemented by MY1999) would produce equivalent emission reductions. 
See section V.A. In the SNPRM, EPA will discuss the relative 
emission reduction effects of delayed start dates.
    \3\ Although it is unrealistic to start National LEV with MY1997 
(see discussion in n. 17), EPA believes it is possible for National 
LEV to start sooner than most OTC States could start state LEV 
programs.
---------------------------------------------------------------------------

    The National LEV program is also expected to achieve pollution 
reduction benefits from motor vehicles beyond those associated with 
ozone pollution, including benefits from control of PM, benzene, and 
formaldehyde. All states, not just those in the OTR, will realize these 
air quality benefits.
    PM is the generic term for a broad class of chemically and 
physically diverse substances that exist as discrete particles over a 
wide range of sizes. PM emissions have been associated with numerous 
serious health effects, including upper and lower respiratory illnesses 
such as pneumonia, chronic obstructive pulmonary disease, chronic 
bronchitis, aggravation of the respiratory system in children with pre-
existing illnesses, and premature mortality in sensitive individuals 
(such as those with cardiovascular diseases). In addition, studies have 
shown that PM emissions episodes can result in a short-term decrease in 
lung function in small children. PM emissions also contribute to 
impairment of visibility, acidic deposition, and potential modification 
of the climate.
    The National LEV program will require diesel LDVs and LLDTs to meet 
PM standards that are more stringent than the comparable Tier 1 
standards. As discussed more fully in the Regulatory Impact Analysis 
(RIA) 4 for this rulemaking, EPA's modeling shows that 
implementation of the National LEV program will result in a 28.6 ton/
day reduction in particulates less than 10 microns in diameter (PM-10) 
in 2005, compared to expected PM emissions when current Tier 1 
standards apply outside the OTC and OTC state-by-state adoption of CAL 
LEV is fully implemented within the OTC. Furthermore, in western areas 
(such as Denver) with a PM pollution problem caused by nitrates, the 
NOX reductions achieved by the National LEV program will 
provide additional PM emissions benefits.
---------------------------------------------------------------------------

    \4\ Available in the public docket for review; see ADDRESSES.
---------------------------------------------------------------------------

    National LEV also will decrease emissions of two carcinogens: 
benzene and formaldehyde. As discussed more fully in the RIA for this 
rulemaking, EPA's modeling demonstrates that implementation of the 
National LEV program will reduce emissions of benzene by seven tons/day 
and formaldehyde by four tons/day nationwide in 2005. EPA has 
classified benzene as a Group A known human carcinogen, based on 
studies on workers

[[Page 31197]]

showing that long-term exposure to high levels of benzene causes 
cancer. Exposure to benzene emissions has also been associated with 
non-cancer health effects, including blood disorders, adverse effects 
on the immune system, and damage to reproductive organs. EPA has 
classified formaldehyde as a probable human carcinogen, based on animal 
studies showing that long-term exposure to, and inhalation of, 
formaldehyde is associated with certain types of tumors. In addition, 
exposure to formaldehyde is associated with non-cancer health effects, 
including irritation of the eyes, nose, throat, and lower airway, at 
low levels of exposure, and adverse effects on the liver and kidneys. 
Unlike the current federal Tier 1 program, the National LEV program 
includes standards for formaldehyde emissions from motor vehicles.
    EPA believes that the National LEV program is particularly 
promising because it would provide these nationwide health and 
environmental benefits while reducing some aspects of the auto 
manufacturers' regulatory burden and compliance costs. Currently, 
manufacturers typically design, test, and produce two different types 
of vehicles (California and federal), each of which must meet different 
standards according to different test procedures. One of the goals of 
the National LEV program is to use a single test procedure and standard 
for each particular type of emission control requirement. Because of 
this harmonization with California's program,5 
implementation of the National LEV program will streamline the process 
for certifying a vehicle for sale, reduce auto manufacturers' design 
and testing costs, and provide other efficiencies in the marketing of 
automobiles.6
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    \5\ In addition to using the same tailpipe standards as 
California, EPA is working with CARB to make changes to other EPA 
standards and test procedures that will further harmonize the 
federal and California motor vehicle emission control programs. EPA 
expects that CARB will reassess its regulations shortly to further 
this harmonization. Even if National LEV becomes effective, 
California will continue to have its own program. Manufacturers 
could decide to sell some vehicles (such as ULEVs or ZEVs) in 
California (or California and the OTR), but not nationwide.
    \6\ EPA received a letter from the Government of Canada 
(available in the public docket for review), indicating that 
government's interest in adopting national motor vehicle emissions 
standards that are the same as those contained in any national low 
emission vehicle program adopted in the United States. Such 
harmonization of motor vehicle emission control standards in the 
United States and Canada would provide even greater efficiencies to 
the auto manufacturers and would broaden the geographical range of 
the emissions benefits of such a program, including the specific 
benefit of reduced downwind pollution transport.
---------------------------------------------------------------------------

    EPA also believes the National LEV program is a preferable 
alternative to OTC state-by-state adoption of CAL LEV because it will 
use fewer regulatory and legislative resources than would OTC state-by-
state adoption of CAL LEV, since the implementation of the National LEV 
program is premised on agreement reached by the OTC States, the auto 
manufacturers, and EPA. The OTC States, the auto manufacturers, and 
EPA, with input from environmental and public health groups, and other 
interested parties, have made significant efforts that resulted in a 
broad outline for a viable, cost-effective national low emission 
vehicle program. EPA believes that cooperation among the various 
interested parties is the best way to achieve significant emissions 
reductions and to design a practical, enforceable, and efficient 
program. It allows the OTC States, EPA, auto manufacturers, other 
affected industry groups, environmental groups and other interested 
parties to spend resources making the program work instead of fighting 
each other on a state-by-state basis over adoption of CAL LEV programs. 
It also eliminates the need for any state, besides California, to spend 
any resources on enforcement of its own motor vehicle emissions control 
program since enforcement responsibilities will remain with EPA and 
California. The National LEV program is a promising example of how 
cooperative efforts can advance the goal of cleaner air.
    EPA has also analyzed the costs of the National LEV program. EPA 
used the detailed assessment of the cost of LEVs produced by CARB in 
1994 and updated in April, 1996. CARB estimated the incremental cost of 
$96 per car for LEVs only in California.7 EPA believes that 
the incremental cost for National LEV will be considerably lower than 
the CARB estimate for a variety of reasons. First, automotive pollution 
control technology will continue to advance, leading to better controls 
at lower costs over time. For example, in the two years between CARB's 
technology assessments, Honda announced the introduction of new LEV 
technology that will add little or no cost to vehicles. Second, the 
National LEV program includes numerous provisions to harmonize federal 
and California motor vehicle requirements. The resulting cost-savings 
for auto manufacturers and dealers (in areas such as vehicle design, 
certification testing, mechanic training and inventory control) will be 
significant and offset at least a portion of the costs for LEVs. Third, 
the nationwide production of LEVs will result in economies of scale for 
the manufacturers. Fourth, CARB's own cost estimates have generally 
been shown to be higher than actual price differences. For example, 
CARB estimates price increases for TLEVs at $61, but informal surveys 
of TLEV prices in California and New York have generally shown no price 
differentials between comparable TLEV and Tier 1 vehicles. Finally, 
auto industry experience has consistently demonstrated rapid price 
decreases in successive model years for newly-introduced technology. 
Analysis discussed in the RIA yields an annual incremental cost 
estimate of $950 million for National LEV when compared to current 
federal regulatory obligations, or of $600 million for National LEV 
when compared to CAL LEV throughout the OTR and current regulations in 
the rest of the country. EPA believes that these costs would actually 
be lower, as discussed above. The total expenditure for new cars in the 
United States in 1993 was approximately $225 billion.
---------------------------------------------------------------------------

    \7\ A November, 1996 CARB Staff Report on Low Emission Vehicle 
and Zero-Emission Vehicle Program Review modified CARB's vehicle 
cost estimates. CARB now estimates the incremental costs of LEVs at 
approximately $120. EPA's cost analysis for the National LEV 
program, which has included the data in CARB's staff reports on the 
CAL LEV program, looks at costs of vehicles in California and then 
estimates National LEV program costs based on nationwide sales 
volumes. Two principal reasons for vehicle price differentials 
between California and National LEV vehicles are economy of scale in 
production volumes and allocation of costs among the number of 
vehicles being produced, with such costs distributed over an 
appropriate number of years. EPA's cost estimates rely in part on 
the start date of the National LEV program, which will be addressed 
in the upcoming SNPRM. See n. 17 below. Once the actual start date 
is determined, EPA will recalculate its estimates for vehicle costs 
using up-to-date cost information.
---------------------------------------------------------------------------

C. Background

    To provide a context for, and background to, the National LEV 
Program, it is necessary to discuss briefly the federal and California 
motor vehicle programs and the OTC's efforts to have the CAL LEV 
program adopted throughout the OTR. Additional background information 
is provided in the Notice of Proposed Rulemaking (NPRM) detailing the 
National LEV program on October 10, 1995 (60 FR 52734, 52738-52740). 
EPA provided extensive and numerous opportunities for public 
involvement in that decision and in developing the framework for a 
national voluntary low emission vehicle program.
1. Current Federal Motor Vehicle Emissions Control Program
    The CAA prohibits the introduction into commerce of a new motor 
vehicle that is not covered by a certificate of conformity issued by 
EPA. To obtain such a certificate for a vehicle or engine

[[Page 31198]]

family, manufacturers must demonstrate compliance with all federal 
emissions control standards and requirements that apply to new motor 
vehicles for that class or category of vehicles for the relevant model 
year. The exhaust emission standards and procedures that currently 
apply to new LDVs and LDTs, known as the Tier 1 standards, were 
promulgated on June 5, 1991 (See 56 FR 25724; the standards themselves 
are codified at 40 CFR 86.094-8 and 86.094-9). The Tier 1 program 
includes standards for non-methane hydrocarbon (NMHC), oxides of 
nitrogen (NOX), carbon monoxide (CO) and particulate matter 
(PM), all measured over the Federal Test Procedure (FTP) and applicable 
for the full statutory useful life of the vehicle. For MY1996 and 
thereafter, all LDVs and the LLDTs must comply with the Tier 1 
standards. The federal motor vehicle program also includes other 
standards and requirements that apply to new motor vehicles, such as 
evaporative emissions, cold temperature CO, on-board refueling vapor 
recovery, and on-board diagnostic equipment.
    Under section 207 of the Act, manufacturers must warrant the 
emissions performance of their new, certified motor vehicles for a 
portion of the vehicle's full useful life. EPA enforces the federal 
standards through its Selective Enforcement Audit (SEA) program 
(assembly line testing) and through in-use compliance testing and 
recall programs.
2. California Low Emission Vehicle Program
    Section 209 of the CAA generally preempts states from adopting and 
enforcing standards relating to emissions from new motor vehicles and 
new motor vehicle engines. 8 However, the Act provides two 
exceptions. One allows EPA to waive preemption for the State of 
California, permitting that state to adopt and enforce its own motor 
vehicle emissions control program. 9 The second exception 
allows states other than California to adopt and enforce California's 
standards, if certain specified conditions are met. 10
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    \8\ Clean Air Act section 209(a), 42 U.S.C. 7543(a).
    \9\ Clean Air Act section 209(b), 42 U.S.C. 7543(b).
    \10\ Clean Air Act section 177, 42 U.S.C. 7507.
---------------------------------------------------------------------------

    In 1990, California adopted the LEV program, containing three basic 
components. First, manufacturers must certify new motor vehicles to one 
of the following five emissions categories: California Tier 1, TLEVs, 
LEVs, ULEVs, and ZEVs. Second, manufacturers must comply with an 
overall fleet average NMOG standard. This requirement began in MY1994 
and becomes more stringent over time. The third element is a ZEV 
production mandate, which requires manufacturers to include a certain 
percentage of ZEVs in their LDV fleet for sale in California. 
Initially, the ZEV mandate would have begun in MY1998, when two percent 
of a manufacturer's LDV fleet was required to be ZEVs. This would have 
increased to five percent in MY2001 through MY2002, then ten percent in 
MY2003. However, at a March 28, 1996, hearing CARB approved changes 
that eliminate all of the ZEV mandates except for the ten percent 
requirement beginning in MY2003. EPA granted California a waiver of 
preemption for its LEV program in January 1993. See 58 FR 4166 (January 
13, 1993).
    The States of New York, Massachusetts, New Jersey, Connecticut, 
Rhode Island, and Vermont, all of which are members of the OTR, have 
adopted all or portions of the California LEV program pursuant to 
section 177 of the Act. Massachusetts and New York are currently 
implementing their LEV programs. Connecticut, New Jersey and Rhode 
Island have also adopted the California LEV program, excluding the ZEV 
production mandate, effective in MY1998 for Connecticut and MY1999 for 
the other two states. In addition, Vermont has adopted the California 
LEV program effective in MY1999, which includes a ZEV sales target, 
that would apply only if certain criteria are met. As a result of 
automobile manufacturers' challenges to the New York and Massachusetts 
LEV programs, federal district and appellate court decisions have 
upheld these programs.11
---------------------------------------------------------------------------

    \11\ Motor Vehicle Manufacturers Association v. New York State 
Department of Environmental Conservation, 79 F.3d 1298 (2d Cir. 
1996); American Automobile Manufacturers Association (AAMA) v. 
Commissioner, Massachusetts Department of Environmental Protection, 
31 F.3d 18 (1st Cir. 1994); Motor Vehicle Manufacturers Association 
v. New York State Department of Environmental Conservation, 17 F.3d 
521 (2nd Cir. 1994); MVMA v. NYSDEC, 869 F. Supp. 1012 (N.D.N.Y. 
Oct. 24, 1994); and AAMA v. Greenbaum, No. 93-10799-MA (D. Mass. 
Oct. 27, 1993).
---------------------------------------------------------------------------

3. OTC Efforts To Reduce Motor Vehicle Emissions in the OTR
    Since it was convened in 1991, the OTC has worked on addressing the 
contribution of motor vehicles to the northeast ozone problem. It has 
identified two methods of controlling new motor vehicle emissions--
state-by-state adoption of the CAL LEV program and National LEV. The 
auto manufacturers have said they prefer National LEV. As part of the 
process of achieving state-by-state adoption of CAL LEV throughout the 
OTR, the OTC sought and obtained from EPA a SIP call requiring each OTC 
State to adopt CAL LEV unless the State could show that the program was 
not necessary for the State to meet certain of its Clean Air Act 
obligations or unless there was an equivalent national motor vehicle 
program. Although a recent court decision struck down this SIP call and 
thus removed one of the mechanisms for the OTC to achieve the goal of 
state-by-state adoption of the CAL LEV program, the OTC States remain 
free to pursue this goal through other means.
    A summary of the OTC LEV decision is provided here. Interested 
parties are referred to the OTC LEV decision SNPRM and Final Rulemaking 
(FRM) for additional information. See 59 FR 48664 (September 22, 1994); 
and 60 FR 4712 (January 24, 1995).
    In February, 1994, the OTC formally recommended, pursuant to 
section 184(c) of the CAA, that EPA require all OTC States to adopt an 
OTC LEV program in their SIPs. The OTC's recommended LEV program would 
have required that, beginning in MY1999, all new LDVs and LLDTs sold or 
otherwise introduced into commerce in the OTR be certified to 
California LEV program standards. In addition, manufacturers would be 
required to meet California's fleet average NMOG standard for such 
vehicles. The OTC recommended that member states be allowed, but not 
required, to adopt California's ZEV mandate, unless EPA determined that 
the CAA required a state to adopt the ZEV mandate in order to adopt the 
NMOG average part of the LEV program. In addition, the OTC stated that 
it expected EPA to evaluate alternatives to OTC LEV.
    On December 19, 1994, EPA approved the OTC recommendation. EPA 
found that the emissions reductions resulting from OTC LEV or a LEV-
equivalent program are necessary for ozone nonattainment areas in the 
OTR to achieve attainment (and maintenance) by the applicable deadline, 
and that the OTC LEV program is consistent with the CAA. See 60 FR 4712 
(January 24, 1995). Based on that approval, EPA issued to each OTC 
State a finding that its SIP is substantially inadequate to meet 
certain requirements insofar as the SIP would not currently achieve 
those necessary emissions reductions. EPA found that states could 
satisfy the finding of SIP inadequacy by adopting OTC LEV or by 
submitting a ``shortfall'' SIP.12 The States were required 
to

[[Page 31199]]

submit a SIP revision on or before February 15, 1996, to cure this 
inadequacy.
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    \12\ As described in the OTC LEV decision, a ``shortfall'' SIP 
program must contain adopted measures that make up the shortfall 
between (1) the emission reductions necessary to prevent adverse 
consequences on downwind nonattainment, as determined by EPA in the 
OTC LEV decision, and (2) the emission reductions that would be 
achieved by the measures mandated by the Clean Air Act and 
potentially broadly applicable measures, as identified by EPA in the 
OTC LEV decision. See 60 FR 4730 (January 24, 1995).
---------------------------------------------------------------------------

    In the OTC LEV decision, EPA also said that the SIP inadequacy 
would be satisfied if EPA were to determine through rulemaking that a 
federal 49-state motor vehicle emission control program was an 
acceptable LEV-equivalent program and that such program was in effect. 
Thus, if EPA were to find that auto manufacturers had opted into a LEV-
equivalent federal motor vehicle emissions control program deemed 
acceptable by EPA through rulemaking action, then states would be 
relieved of the obligation under the OTC LEV decision to adopt the OTC 
LEV program in their SIPs. EPA had proposed that National LEV would be 
such a program, provided that the OTC States and auto manufacturers 
made sufficient commitments to it.
    Only six states made submissions in response to the OTC LEV SIP 
call. New York and Massachusetts both submitted LEV programs that are 
currently in effect. Both programs include ZEV mandates. Connecticut, 
New Jersey, Rhode Island, and Vermont submitted OTC LEV programs in 
which OTC LEV is a ``backstop'' program. Manufacturers would not have 
to comply with those four states' programs if National LEV is an 
acceptable-LEV equivalent program and is in effect. New Jersey's 
program is conditioned further--it will not be implemented unless a 
minimum number of OTC States (excluding itself), represented by 40 
percent of new vehicles registered in the OTR in MY1999, also implement 
the OTC LEV program not later than MY1999. Vermont also has a ZEV sales 
target, which would apply if certain criteria are met, independent of 
whether National LEV is in effect.
    In a recent decision, the Court of Appeals struck down EPA's OTC 
LEV decision and SIP call. Virginia v. EPA, No. 95-1163 (D.C. Cir. 
March 11, 1997). The Court found that, while section 184 of the CAA 
gives EPA authority to require the OTC States to adopt specific 
pollution control measures upon the recommendation of the OTC, sections 
177 and 202(b)(1)(c) of the CAA preclude EPA from requiring the OTC 
States to adopt the CAL LEV program prior to MY2004. The Court let 
stand EPA's underlying finding that the region needs substantial 
emissions reductions to mitigate the effects of air pollution transport 
and to bring (and keep) nonattainment areas in the region into 
attainment for ozone. It also affirmed the right of each State to adopt 
the CAL LEV program if it so chooses.
    The Court decision does not dramatically alter the need for or 
potential benefits of National LEV. Although National LEV's development 
has been closely tied to EPA's OTC LEV decision and SIP call, National 
LEV is not dependent on them. National LEV was developed as an 
alternative to state-by-state adoption of CAL LEV in the OTR. Although 
the Court decision may affect the number of OTC States that will 
actually adopt CAL LEV, it does not limit states' ability to adopt CAL 
LEV and thus does not solve the problems created for manufacturers when 
some states have CAL LEV and some states rely on the federal program. 
Although the states have the option of adopting CAL LEV on a state-by-
state basis, National LEV may provide greater emission reductions to 
upwind states than state-by-state adoption of CAL LEV because some 
states may not adopt CAL LEV.
4. Public Process
    The Agency has employed a public process designed to provide 
maximum opportunity for public participation in an expedited decision-
making process. A complete discussion of the history of this process 
can be found in the NPRM published on October 10, 1995 (60 FR 52734). 
In addition to the numerous public meetings and other opportunities for 
public comment described in that notice, EPA received numerous comments 
on the NPRM and held a widely attended public hearing on November 1, 
1995. In developing today's rule, the Agency has fully considered all 
of the public comments timely filed in this rulemaking. EPA's responses 
to significant comments are contained either in today's rule or in the 
detailed Response to Comments document contained in the public docket. 
Where EPA notes that it is deferring resolution of certain issues 
raised in the NPRM, the response to comments on those issues is also 
deferred. In addition to relying on this rule and the Response to 
Comments document as the statement of basis and purpose for today's 
action, EPA is also relying on the detailed explanations in the NPRM 
where it references those explanations.

D. National LEV Program

1. Agreement--A Necessary Predicate for the National LEV Program
    The National LEV program is a voluntary program that cannot be 
implemented without the agreement of the auto manufacturers and the OTC 
States. EPA cannot require the auto manufacturers to meet the National 
LEV standards, absent the manufacturers' consent, because section 
202(b)(1)(C) of the Clean Air Act prevents EPA itself from mandating 
new exhaust standards applicable before MY2004. The auto manufacturers 
have said that they will not agree to be bound by the National LEV 
program unless the OTC States accept National LEV as an alternative to 
OTC state adoption of CAL LEV programs under section 177. EPA does not 
have the authority to require the OTC States to accept the National LEV 
program. Thus, National LEV is dependent upon the auto manufacturers 
and the OTC States voluntarily committing to the program.13
---------------------------------------------------------------------------

    \13\ See Virginia v. EPA, No. 95-1163 (D.C. Cir. March 11, 
1997), slip. op. at 10, footnote 4. (``The program is voluntary 
because section 202 of the Clean Air Act forbids EPA from itself 
modifying motor vehicle emissions standards `before the model year 
2004.' '').
---------------------------------------------------------------------------

    The OTC States and auto manufacturers have been negotiating a 
voluntary, national program that would include committing to National 
LEV and to the introduction of ATVs in the OTR. They had hoped to 
memorialize their agreement in a comprehensive MOU to be signed by all 
OTC States and all auto manufacturers with sales in the United States. 
The OTC States (collectively) and the auto manufacturers (collectively) 
have each initialed MOUs reflecting their willingness to agree to a 
National LEV program. Although the MOUs are different in some respects, 
they show basic agreement on the national program contained in the 
regulations promulgated today. The ATV component (discussed in more 
detail in footnote 52 below) is not a part of EPA's regulations, but 
would be an agreement between the OTC States and the auto manufacturers 
that would be contained in an attachment to the MOU if that MOU is 
finalized.
    Although the OTC States and the auto manufacturers have reached 
agreement on most issues and EPA today is promulgating the regulatory 
framework for National LEV, some issues are still unresolved. When EPA 
published the NPRM, it anticipated that the OTC States and the auto 
manufacturers would continue to make progress on these few remaining 
issues (mainly related to OTC State commitment to the

[[Page 31200]]

National LEV program), and thus left these issues to be addressed in a 
later SNPRM which could be informed by the anticipated agreement. The 
OTC States and the auto manufacturers have not yet resolved these 
issues. Rather than lose the potential regional and national public 
health benefits of National LEV, EPA intends to publish an SNPRM to 
take comment on the remaining issues that must be finalized for the OTC 
States and the auto manufacturers to commit to the 
program.14 EPA will then resolve these issues in a 
supplemental final rule.
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    \14\ Primarily, the SNPRM will address the OTC States' 
commitment to National LEV (the nature, the mechanisms and the 
timing of the commitments) and related issues. As a result of the 
bifurcation of the National LEV rulemaking process, issues that were 
noticed in the NPRM may not be decided finally until the final rule 
that follows the SNPRM. This rule and the Response to Comments note 
those issues that are not being decided finally in today's rule. The 
SNPRM will describe the issues on which EPA is taking further 
comment.
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    EPA is hopeful that, after these remaining issues are resolved, the 
OTC States and the auto manufacturers will agree to National LEV. The 
program would have many benefits to the nation as a whole, the OTC 
States, and the auto manufacturers. A set of uniform, more stringent 
standards that apply in 49 states is a more environmentally beneficial 
and economically efficient approach to achieving emissions reductions 
from new motor vehicles than a ``patchwork'' of California standards in 
some states and federal standards in others. The National LEV program 
would achieve at least the same level of emissions reductions in the 
OTR as would the OTC state-by-state adoption of the CAL LEV program. 
The introduction of LEVs nationwide would help alleviate pollution 
transport problems in the OTR and in other states and would eliminate 
concerns about non-LEV vehicles being introduced into the OTR from 
states outside the region that have not adopted CAL LEV. In addition, a 
national program would impose less administrative burden on the OTC 
States and other states than would state-by-state adoption and 
enforcement of CAL LEV. Finally, a cooperative, partnership approach to 
program implementation should provide benefits beyond those achieved 
through a traditional command-and-control approach.
2. Description of National LEV Program
    In today's final rule EPA is promulgating a set of voluntary 
National LEV standards to control exhaust emissions of air pollutants 
from new motor vehicles. These standards will apply when the OTC States 
and the motor vehicle manufacturers commit to the National LEV program. 
The National LEV new tailpipe emission standards and related 
requirements will apply in addition to the applicable federal Tier 1 
tailpipe standards and will not change for the duration of the 
program.15 The National LEV standards and requirements 
include: (1) tailpipe emissions standards for NMOG, NOX, CO, 
formaldehyde (HCHO), and PM; (2) fleet average NMOG values; (3) 
allowance for the use of California Phase II reformulated gasoline 
(RFG) as the test fuel for the tailpipe standards; (4) certain 
California on-board diagnostic system requirements (OBD II), excluding 
anti-tampering provisions; and (5) averaging, banking and trading 
provisions.
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    \15\ The CAA requires that all MY1996 and later LDVs and LLDTs 
meet the Tier 1 exhaust emission standards at the time of 
certification. As noted later in section IV, most of the Tier 1 
emission standards have numerically equivalent or more stringent 
analogues in the National LEV standards. Thus, certification to the 
National LEV standards directly demonstrates compliance with most of 
the Tier 1 standards. Manufacturers must still demonstrate 
compliance with those remaining Tier 1 standards that lack National 
LEV analogues.
---------------------------------------------------------------------------

    In general, the National LEV standards and related requirements are 
patterned after California's more stringent tailpipe standards and 
fleet average NMOG standards. Under the National LEV program, 
manufacturers can certify LDVs and LLDTs to one of the following 
certification categories (listed in order of increasing stringency): 
Tier 1, TLEV, LEV, ULEV, or ZEV. Each certification category contains 
tailpipe emission standards for NMOG, CO, NOX, formaldehyde 
(HCHO), and PM. Manufacturers that opt into the National LEV program 
will be required to produce and deliver for sale a combination of 
vehicles that complies with an annual fleet average NMOG value. Sales 
of LDVs and LLDTs in the OTR will have to meet an increasingly 
stringent fleet average NMOG standard from MY1997 16 to 
MY2001. Beginning with MY2001, manufacturers will be required to comply 
with a nationwide (except California) fleet average NMOG standard for 
LDVs and LLDTs that is equivalent to the average NMOG emissions of a 
100 percent LEV fleet. An averaging, banking and trading program 
comparable to California's can be used to meet the fleet average NMOG 
requirements.
---------------------------------------------------------------------------

    \16\ As discussed in n. 17 below, EPA is using MY1997 as a 
placeholder for the actual start date of National LEV.
---------------------------------------------------------------------------

    As National LEV is voluntary, manufacturers will only have to 
comply with the National LEV standards if they choose to opt into the 
program. Once they opt in, however, manufacturers must stay in the 
National LEV program and comply with its standards. Manufacturers may 
opt out of National LEV only under certain circumstances which, if they 
occurred, would change the basic presumptions upon which the 
manufacturers opted into the program. Such conditions are an OTC 
State's failure to meet or keep its commitment regarding adoption of a 
State motor vehicle program under CAA section 177 or a change in one of 
the designated ``Stable Standards'' (as discussed below in section 
IV.A.2.a).
    Any manufacturer that opts into the National LEV program will be 
fully subject to its requirements. Barring one of the limited and 
unlikely events that would allow manufacturers to opt out of the 
program, manufacturers will be required to meet the National LEV 
standards and requirements for all of the model years covered by the 
program. A manufacturer that fails to meet these requirements will be 
subject to the same enforcement measures as exist for violation of any 
federal motor vehicle emission standard promulgated under section 
202(a) of the Act. Once manufacturers opt into National LEV, they will 
find administration and enforcement of its requirements 
indistinguishable from administration and enforcement of the rest of 
the federal motor vehicle emissions program.
    Manufacturers that opt into the National LEV program will have to 
comply with the specified tailpipe emissions and related standards 
beginning in MY1997 17 for LDVs and LDTs offered for sale in 
the OTR, and beginning in MY2001 for those same vehicle categories 
offered for sale in the rest of the country, except California. The 
National LEV standards will continue to apply until the first model 
year for which manufacturers must meet a mandatory federal program that 
is at least as stringent as the National LEV program. By statute, EPA 
can not promulgate mandatory exhaust standards more stringent than Tier 
1 standards (``Tier 2 standards'') applicable before MY2004, so the 
National LEV standards will apply at least through MY2003.
---------------------------------------------------------------------------

    \17\ Throughout this rule, EPA is using MY 1997 as a placeholder 
for the start date of National LEV. MY1997 is the start date in the 
MOUs initialled by the auto manufacturers and the OTC States. EPA 
believes that MY1997 is an unrealistic start date given the court 
decision vacating EPA's OTC LEV decision and given the likely timing 
of final agreement on National LEV. In the upcoming SNPRM, EPA will 
take comment on the appropriate start date for National LEV.
---------------------------------------------------------------------------

    Vehicles in the National LEV program must comply with all other 
federal

[[Page 31201]]

requirements applicable to LDVs and LLDTs for the appropriate model 
year, including emissions standards and requirements, test procedures, 
and compliance and enforcement provisions. However, as part of EPA's 
effort to reinvent environmental regulations by reducing regulatory 
burden without sacrificing environmental benefits, EPA is also 
harmonizing, to the greatest extent possible, federal and California 
standards and test procedures. Thus, today's rule includes changes to 
current federal regulations designed to harmonize certain federal and 
California standards and test procedures, and sections elsewhere in 
this preamble summarize harmonization efforts in other rules. This 
should reduce the regulatory burden on manufacturers by facilitating 
the design, certification, and production of the same vehicles to meet 
both federal and California requirements.

IV. Provisions of the National LEV Program

    The National LEV regulations establish the structure and 
requirements of a voluntary program to reduce tailpipe emissions from 
motor vehicles, as summarized in the above section III.D.2. The 
following sections lay out the provisions of the program in more 
detail. First, EPA describes the structure of the voluntary program, 
explaining how manufacturers opt into the program, under what limited 
conditions they could opt out of the program, and the program's 
duration. The next section lays out the National LEV standards and 
requirements that manufacturers would be opting into. These include the 
tailpipe emissions standards for individual vehicles, the fleet-wide 
average emissions standards, and the averaging, banking and trading 
program through which the fleet-wide standards would be implemented. 
Finally, EPA discusses the legal authority for the voluntary National 
LEV program and the enforceability of these provisions.

A. Program Structure

    This section discusses basic structural elements of the National 
LEV program: the process and timing for manufacturers to opt into the 
program and for EPA to find that the program is ``in effect''; the 
conditions allowing, process for, and ramifications of, a 
manufacturer's decision to opt out of the program; and the duration of 
the program.
1. Opt-In to National LEV and In-Effect Finding
    The opt-in provisions are designed to provide a simple mechanism 
that allows EPA to determine readily when a manufacturer has opted in 
and become legally subject to the National LEV program requirements. A 
motor vehicle manufacturer would opt into the program by submitting a 
written notification that unambiguously and unconditionally states that 
the manufacturer is opting into the program, subject only to the 
condition that EPA finds the program to be in effect.
    Today's regulations set forth various requirements for opt-in 
notifications. The opt-in notification must state that the manufacturer 
will not challenge EPA's authority to establish the National LEV 
program and to enforce it once a manufacturer has unconditionally opted 
into the program. Parties that choose to opt into a program that they 
have volunteered to establish should agree that they will not challenge 
the program later, particularly in the context of an enforcement action 
brought by EPA due to a party's failure to comply with the program 
requirements. The regulations require the manufacturers' notifications 
to contain specified language renouncing such legal challenges. The 
opt-in notification also must be signed by a person or entity within 
the corporation with authority to bind the corporation to its choice. 
The signatory must hold the position of Vice President for 
Environmental Affairs, or a position of equivalent authority.
    The opt-in will become binding upon EPA's receipt of the 
notification or, if it is conditioned on EPA making an in-effect 
finding, upon the satisfaction of that condition. Under today's rule, 
any conditional opt-ins would become fully binding when EPA finds that 
National LEV is in effect. Once EPA has promulgated the few outstanding 
provisions of the National LEV program related to the OTC State 
commitments and begun accepting manufacturer's opt-ins and OTC State 
commitments to the program, EPA can make the finding that the program 
is in effect without any additional rulemaking if all the manufacturers 
listed in the regulations have opted into the program. Upon EPA making 
an in-effect finding, National LEV will be fully enforceable.
    It is possible that the final regulations EPA intends to issue 
after taking further comment on OTC State commitments to National LEV 
(for which EPA will provide further notice and opportunity to comment) 
may result in changes or additions to the opt-in provisions promulgated 
today. For example, at this time, EPA is not establishing deadlines 
either for auto manufacturers to opt into the program or for EPA to 
find that the program is ``in effect''. Rather than making a final 
decision on these issues today, EPA expects to set such deadlines as 
part of the final regulations it intends to issue after taking further 
comment on OTC State commitments and related issues.
2. Opt-Out From National LEV
    For the National LEV program to be useful and beneficial, it should 
continue in effect for a substantial period of time stretching into the 
next decade. States seek certainty regarding emissions benefits over 
time, while motor vehicle manufacturers seek certainty regarding 
emission standards to plan future production. Also, to give states SIP 
credits for National LEV, EPA must find that the emissions reductions 
will be enforceable over the intended duration of the program. All of 
these objectives require that the program be stable over time, and the 
opt-out provisions are structured to support this goal.
    Once manufacturers have voluntarily chosen to opt into the program 
and any permissible conditions of their opt-in have been met, they can 
opt out of the program only under a few specified circumstances, or 
``offramps.'' These offramps are limited to: (1) an OTC State's failure 
to meet or keep its commitment regarding adoption or retention of a 
state motor vehicle program under section 177; or (2) EPA modification 
of certain specified standards or requirements over the manufacturers' 
objection.
    If a manufacturer were to opt out of the National LEV program, when 
that opt-out became effective the manufacturer would become subject to 
all standards that would apply if National LEV did not exist. The 
federal Tier 1 tailpipe emissions and related standards would apply, as 
would any applicable state standards promulgated under section 177. In 
the SNPRM on OTC State commitments, EPA will take comment on what state 
section 177 standards would be applicable, in light of the requirements 
of section 177 and how the OTC States and manufacturers have addressed 
this issue in their initialed MOUs. All vehicles certified under the 
National LEV standards, however, would have to continue to comply with 
those standards, which would have been incorporated as conditions of 
the certificate under which those vehicles were sold. In addition, each 
manufacturer would be held responsible for any debits it held at the 
time it opted out.

[[Page 31202]]

    a. Conditions allowing opt-out. (1) OTC states' failure to meet or 
keep their commitments. The first condition allowing manufacturers to 
opt out is a failure of any OTC State to meet its commitment regarding 
adoption or retention of a section 177 program that does not allow 
compliance with National LEV as a full alternative to compliance with 
the state program. Since National LEV is intended to provide an 
alternative to OTC state-by-state adoption of CAL LEV, manufacturers 
should not be bound to stay in the National LEV program if an OTC State 
requires them to comply with a section 177 program contrary to the 
terms of the final agreement. This offramp not only gives manufacturers 
recourse if an OTC State does not fulfill its part of the bargain, but 
also encourages the OTC States to fulfill their commitments by setting 
a serious penalty for breach of their commitments.
    Unfortunately, EPA is unable to finalize this section of the 
National LEV regulations now.18 When EPA proposed National 
LEV, the manufacturers and the OTC States had not yet reached agreement 
on the exact content and form of such an OTC State commitment. Details 
that had yet to be resolved concerned what the OTC States would commit 
to do regarding adoption or retention of the section 177 programs (both 
LEV and ZEV requirements), the timing of any agreed upon actions, and 
possible instruments for such state commitments (which might be some 
combination of SIP revisions, consent decrees, legislative resolutions, 
letters from the State Attorneys General, Executive Orders from the 
Governor, letters from the Governor to EPA, or an MOU with the 
manufacturers). EPA had expected that the OTC States and auto 
manufacturers would have reached agreement on these issues by this 
time, and had planned to issue an SNPRM taking comment on the whether 
and how the National LEV regulations would reflect the OTC States' and 
auto manufacturers' agreement on these issues. The SNPRM would have 
taken comment on the stability and enforceability of the program in 
light of the nature of those commitments. Unfortunately, the auto 
manufacturers and the OTC States have not yet reached agreement on 
these issues.
---------------------------------------------------------------------------

    \18\  Today's regulations do not provide for an opt-out based on 
this condition. EPA expects to propose to add this condition, as 
discussed below.
---------------------------------------------------------------------------

    Before the National LEV program can go into effect, EPA will need 
to resolve the OTC State commitment issues mentioned above. EPA will 
issue an SNPRM taking comment on these additional issues and then 
promulgate a final rule to complete the National LEV rulemaking that 
was initiated by the NPRM.
    (2) EPA Changes to Stable Standards. With certain exceptions, 
manufacturers will also be able to opt out if EPA changes a motor 
vehicle requirement that it has designated a ``Stable Standard.'' The 
Stable Standards, which are listed in Table 1, are divided into two 
categories: Core Stable Standards and Non-Core Stable Standards. Core 
Stable Standards generally are the National LEV standards that EPA 
could not impose absent the consent of the manufacturers. Non-Core 
Stable Standards are other federal motor vehicle standards that EPA 
does not anticipate changing for the duration of National LEV. For both 
Core and Non-Core Stable Standards, EPA can make changes to which 
manufacturers do not object. For Non-Core Stable Standards, EPA can 
also make changes that do not increase the stringency of the standard 
or that harmonize the standard with the comparable California standard. 
EPA can make other changes to any of the Stable Standards, but such 
changes would allow the manufacturers to opt out of National LEV.
    The primary purpose of this provision is to provide manufacturers 
certainty that the voluntary standards that EPA does not have authority 
to mandate (absent manufacturers' consent) are not changed without 
their consent. The additional stability of the other motor vehicle 
standards that EPA is providing by designating them Non-Core Stable 
Standards should provide manufacturers with additional incentive to opt 
into National LEV. Today's rule follows the same basic approach set out 
in the proposal, but incorporates several refinements, as discussed 
below. This section lists the Stable Standards, explains the rationale 
for including each requirement as a Stable Standard, and explains what 
types of changes EPA can make without giving manufacturers the 
opportunity to opt out of National LEV.
    (i) Designation of Stable Standards. EPA has refined the approach 
to the Stable Standards in the proposal by subdividing them into two 
categories: Core Stable Standards and Non-Core Stable Standards. Core 
Stable Standards generally are standards specific to the National LEV 
program (and certain related requirements). Non-Core Stable Standards 
generally are other motor vehicle pollution control requirements that 
the Agency does not anticipate changing for the duration of the 
National LEV program. The list of Core and Non-Core Stable Standards is 
provided in Table 1.

       Table 1.--Designation of Core and Non-Core Stable Standards      
------------------------------------------------------------------------
                   Type                            Stable standard      
------------------------------------------------------------------------
Core Stable Standards.....................  TLEV, LEV, ULEV, and ZEV    
                                             tailpipe emission standards
                                             (``LEV standards'').       
                                            Fleet average NMOG standards
                                             and related banking and    
                                             trading provisions.        
                                            Federal Test Procedure (FTP)
                                             (as used for determining   
                                             compliance with the LEV    
                                             tailpipe standards, i.e.,  
                                             ``conventional'' or ``on-  
                                             cycle'' FTP).              
                                            Certification test fuel     
                                             specifications (as used for
                                             determining compliance with
                                             the LEV standards).        
                                            Low volume manufacturer     
                                             provisions.                
                                            Limitations on the sale of  
                                             TLEV and Tier 1 vehicles in
                                             the NTR.                   
Non-Core Stable Standards.................  ``Off-cycle'' emissions     
                                             standards.                 
                                            Supplemental Federal Test   
                                             Procedures (SFTP) (as used 
                                             for determining compliance 
                                             with these off-cycle       
                                             emission standards).       
                                            On-board diagnostic (OBD-II)
                                             requirements.              
                                            Cold temperature carbon     
                                             monoxide (Cold CO)         
                                             requirements.              
                                            Evaporative emissions       
                                             control requirements.      
                                            Onboard refueling vapor     
                                             recovery requirements.     
                                            Reactivity adjustment       
                                             factors (RAFs) (used to    
                                             determine compliance with  
                                             LEV standards).            
------------------------------------------------------------------------


[[Page 31203]]

    The Core Stable Standards include:
     The TLEV, LEV, ULEV and ZEV tailpipe standards (the ``LEV 
standards''),
     The fleet average NMOG standards, and
     The limitation on the sales of TLEVs and Tier 1 vehicles 
in the NTR.
These requirements are all standards that EPA could not itself require 
manufacturers to meet prior to MY2004 (absent manufacturer consent) 
because section 202(b)(1)(C) of the Act prohibits EPA from unilaterally 
imposing numerical standards as stringent as these prior to MY2004. 
Since EPA could not impose these standards unilaterally, EPA does not 
believe it should have authority to change these standards 
unilaterally. Designating these numerical standards as Core Stable 
Standards protects the manufacturers' reasonable expectations in opting 
into the voluntary standards by providing an offramp should EPA change 
those standards without their consent.
    The Core Stable Standards also include:
     The specifications for the ``conventional'' or ``on-
cycle'' FTP, as revised,
     The certification test fuel for testing compliance with 
LEV standards,
     The NMOG fleet average banking and trading program, and
     The low-volume manufacturer requirements.
    These requirements are designated as Core Stable Standards because 
changes to these requirements may affect the ability of manufacturers 
to meet the LEV standards or the NMOG fleet average standards, or 
because these requirements are directly related to those standards. 
(Changes to the reactivity adjustment factors (RAFs) might also affect 
the ability of manufacturers to meet the LEV and NMOG fleet average 
standards, but these are designated Non-Core Stable Standards, for the 
reasons discussed below.)
    The on-cycle FTP, the certification test fuel, and the NMOG fleet 
average banking and trading program are the means through which 
compliance with the numerical standards will be determined. The on-
cycle FTP and the test fuel directly impact the ability of 
manufacturers to meet the LEV standards because changes to program 
elements like the FTP drive cycle, road simulation hardware, or the 
blending parameters of the fuel, may translate into changes in the 
emission test scores of vehicles. These test scores are themselves the 
basis for pass/fail decisions with respect to the LEV standards. The 
NMOG fleet average banking and trading program will allow banking and 
trading of credits to give manufacturers flexibility in meeting the 
fleet average NMOG standard. The banking and trading program is part of 
the way that manufacturers will demonstrate compliance with the NMOG 
fleet average standard. Changing this program could adversely affect a 
manufacturer's ability to comply with the fleet average standard. Given 
the voluntary nature of the LEV standards and the NMOG fleet average 
standard, EPA believes that manufacturers are entitled to certainty not 
only with respect to the standards, but also with respect to the means 
by which the manufacturers' compliance with those standards will be 
determined.
    The final Core Stable Standard, the low volume manufacturer 
provisions (including the definition of low volume manufacturer and the 
relaxed phase-in schedule), directly determines the stringency of the 
NMOG fleet average standards. The phase-in schedule provides 
manufacturers meeting the low volume definition higher (less stringent) 
NMOG fleet average standards for the initial years of the National LEV 
program.
    The Non-Core Stable Standards include:
     OBD II requirements,
     Cold temperature CO requirements (through 
MY2000),19
---------------------------------------------------------------------------

    \19\ Section 202(j)(2) of the Act requires the Administrator to 
assess the need for further reductions in cold CO emissions from 
MY2001 and later model year vehicles. Therefore, unlike the other 
Stable Standards, EPA can change cold CO standards for MY2001 and 
later model year vehicles without triggering an off-ramp.
---------------------------------------------------------------------------

     Evaporative emissions requirements, and
     Onboard refueling and vapor recovery requirements.
As described in more detail in the proposal and in the Response to 
Comments document for this rule, EPA reviewed each of these 
requirements and determined that it was highly unlikely that EPA would 
need to change these requirements for the duration of the National LEV 
program (or prior to MY2001, for cold CO requirements). With the 
exception of cold CO (which EPA has a statutory obligation to revisit 
for MY2001), EPA does not have statutory obligation to revise or re-
evaluate these standards for the expected duration of the National LEV 
program. EPA's conclusion that these standards will not need to be 
changed for the expected duration of National LEV (prior to MY2001 for 
cold CO) is based on when these requirements were promulgated by EPA, 
how long it would take to gather information to determine that a new 
control level was appropriate, and EPA's knowledge of technology 
development necessary to meet these requirements.
    The Non-Core Stable Standards also include the recently promulgated 
``off-cycle'' FTP standards and test procedure (Supplemental Federal 
Test Procedure or SFTP). 61 FR 54852 (October 22, 1996). The ``off-
cycle'' FTP standards and SFTP (described in more detail in section 
IV.B.5.a) were developed to test emissions resulting from typical 
driving patterns that were not included in the test procedure that EPA 
and CARB have used historically (the ``on-cycle'' FTP). Currently, the 
only off-cycle standards are based on Tier 1 technology. Given the 
lengthy testing and evaluation process that resulted in the off-cycle 
standards and the time required to populate the fleet with vehicles 
complying with the new standards and then to evaluate them for any 
necessary revision of the standard, EPA does not foresee the need for 
or the ability to revise the off-cycle standards and SFTP for Tier 1 
vehicles for the expected duration of the National LEV program. As 
discussed later in section IV.B.5.a, EPA anticipates that CARB will 
adopt more stringent off-cycle standards for LEVs and ULEVs. Today's 
rule is structured so that EPA can follow that change for National LEV 
certification without allowing manufacturers to opt out of National 
LEV. EPA intends to take comment on additional SFTP issues in the 
SNPRM.
    Finally, EPA has designated reactivity adjustment factors (RAFs) as 
Non-Core Stable Standards. RAFs are used to adjust vehicle emission 
test results to reflect differences in the impact on ozone formation 
between alternative-fueled vehicles and a vehicle fueled with 
conventional gasoline. (See discussion below in section IV.B.5.d.) 
Including RAFs in the National LEV program puts two competing policy 
concerns before the Agency. RAFs play a role in setting the overall 
ability of manufacturers to meet the TLEV, LEV and ULEV tailpipe 
standards, which is an important issue for the auto manufacturers in 
deciding whether to opt into National LEV. One of the principles of 
National LEV has been that EPA should not have unilateral authority to 
change the tailpipe standards and related requirements because they are 
voluntary standards. Following this principle, RAFs should be part of 
the Core Stable Standards. EPA is concerned, however, that locking in 
the RAFs for the duration of National LEV places more weight on them 
than is warranted by the current scientific evidence. CARB set RAFs 
based on the

[[Page 31204]]

best scientific evidence available, but recognized the need for further 
investigation. California will be analyzing its current RAFs and 
possibly revising the values. California has already set up a 
scientific review panel, and the current RAFs apply only through 
MY2000. California's recognition that its RAFs may need to be modified 
weighs against casting the RAFs in concrete in National LEV and 
supports placing them in the Non-Core Stable Standards. EPA believes an 
appropriate compromise between the need for stability and the evolving 
nature of RAFs is to include RAFs in the Non-Core Stable Standards, but 
include a cap of 1.0 for all California Phase 2 RFG RAFs.
    Placing RAFs in the Non-Core Stable Standards means that, to 
harmonize the California and federal requirements, EPA can modify any 
RAF value that California decides to change. This provides the Agency 
with the necessary flexibility to address any uncertainty associated 
with RAFs, but at the same time does not allow EPA to change RAFs 
unilaterally without triggering an offramp. The limitation on changes 
to the California Phase 2 RFG RAFs provides assurances to the 
manufacturers that the stringency of the National LEV program will not 
change dramatically for the gasoline-powered vehicles--the vast 
majority of vehicle types covered by the program. The cap of 1.0 was 
selected because it sets the maximum stringency from a change in RAFs 
for California Phase 2 RFG at what the numerical emission levels would 
be without RAFs. If California sets a RAF greater than 1.0 for 
California Phase 2 RFG, EPA could amend the National LEV regulations to 
provide for a RAF of 1.0 (without triggering an offramp). EPA may make 
any harmonizing changes to RAFs for alternatively-fueled vehicles if 
California modifies the existing RAFs, but this is expected to have a 
minimal impact on the program overall due to the percentage of the 
national fleet that is expected to be alternative-fueled vehicles.
    (ii) Changes to Stable Standards. EPA can make certain types of 
changes to Stable Standards without giving manufacturers the ability to 
opt out of National LEV. EPA can make changes to which manufacturers do 
not object. In addition, EPA can make any of the following types of 
changes to Non-Core Stable Standards without triggering an off-ramp:
     Changes that do not increase the stringency of the 
standard,
     Changes that harmonize the standard with the comparable 
California standard, and
     Changes applicable after MY2006.
    First, a manufacturer cannot opt out of National LEV based on a 
change to any Core Stable Standard unless the manufacturer has provided 
written comment during rulemaking on that change stating that it is 
sufficient to trigger a National LEV offramp. EPA believes this is 
appropriate because it is not necessary to provide an offramp 
opportunity for a change to which the manufacturer has no objection. 
This is the only type of change EPA can make to a Core Stable Standard 
without allowing manufacturers to opt out of National LEV.
    Second, EPA can make technical changes and other revisions that do 
not increase the overall stringency of a Non-Core Stable Standard, 
without triggering an offramp. EPA commonly amends its emission control 
program regulations to address technical and administrative concerns 
raised by program implementation without affecting overall stringency. 
Allowing manufacturers to opt out of the program for such changes would 
endanger the stability of the National LEV program. EPA anticipates 
that the flexibility to make technical changes that do not impact on 
stringency will be appropriate for each of the designated Non-Core 
Stable Standards. However, such amendments are more likely for 
regulations like those of the off-cycle emission program, or the 
evaporative emissions and onboard refueling vapor recovery program 
(ORVR), which are recently promulgated, under review as part of ongoing 
EPA streamlining efforts, or both.
    Third, EPA may change any Non-Core Stable Standard to harmonize 
with the comparable California standard or requirement, even if the 
revision would increase the stringency of the standard or requirement, 
without triggering an offramp. This policy is consistent with the goal 
of harmonizing the federal and California programs. The ability to 
harmonize with California without triggering an offramp will be 
critical in particular for the off-cycle standards and SFTP (discussed 
in detail in section IV.B.5.a below), the OBD program, and RAFs. The 
ability to harmonize with California without triggering an off-ramp 
provides a useful safety valve that helps improve the stability of 
National LEV. If changes to an existing standard would produce 
significant environmental benefits as a result of currently 
unanticipated technological or other developments, based on 
California's past approach to motor vehicle regulation and its 
continuing need for air quality improvements, EPA believes California 
is likely to make those changes. EPA can then achieve the same 
environmental gains by amending its regulations to harmonize with 
California.
    Fourth, EPA can make changes to the Non-Core Stable Standards 
without triggering an offramp if the change is effective after MY2006. 
By MY2006, EPA expects that federal Tier 2 tailpipe standards will be 
adopted and effective, and that the National LEV standards will be 
replaced by the Tier 2 standards. In the event that the National LEV 
program continues beyond MY2006, EPA cannot predict with a reasonable 
degree of accuracy whether it expects to make revisions to the Non-Core 
Stable Standards for an unlimited period after that date. For this 
reason, EPA does not believe it would be appropriate to continue the 
offramp opportunity for changes to Non-Core Stable Standards 
indefinitely. EPA chose MY2006 as the end date for the Non-Core Stable 
Standards offramp to provide manufacturers with increased regulatory 
stability for the maximum intended duration of the National LEV 
program.
    Finally, EPA can make changes to, or promulgate, any federal motor 
vehicle requirements that are not designated in today's regulations as 
Stable Standards, without triggering an offramp opportunity. For 
example, EPA believes it is essential to guarantee attainment of the 
stringency of the requirements already in force (as opposed to 
increasing the stringency of these current requirements) without 
providing manufacturers the opportunity to opt out of the National LEV 
program. Thus, the emissions durability program and defeat device 
requirements, which are designed to ensure that vehicles actually 
comply with the emissions standards over their useful lives, are not 
Stable Standards. See the Response to Comments document for this rule 
and the NPRM (60 FR 52744 (col. 3)). Similarly, an offramp would not be 
triggered by EPA's adoption of a new requirement for motor vehicles, 
such as any air toxics regulations.
    b. Opt-Out Procedures. As proposed, to opt out of the National LEV 
program, a manufacturer would follow the same notification procedure 
used to opt in, additionally specifying the condition allowing opt-out 
and providing supporting evidence for the applicability of that 
condition. A manufacturer also would have to exercise its opt-out 
option within the time limits discussed below.
    Manufacturers generally would have to decide whether to exercise 
their opt-out option within 180 days of the occurrence of the condition 
triggering

[[Page 31205]]

opt-out.20 If one manufacturer sends EPA an opt-out 
notification, however, the time limit for other manufacturers to opt 
out is extended by 30 days beyond the 180 day period. For opt-outs 
based on an EPA change to a Stable Standard, EPA would have an 
opportunity to prevent the opt-out from coming into effect by 
withdrawing the change to the Stable Standard before the effective date 
of the opt-out (discussed below).
---------------------------------------------------------------------------

    \20\ Where the offramp is an EPA change to a Stable Standard, a 
manufacturer would have to exercise its opt-out option within 180 
days of EPA's publication of the change in the Federal Register.
---------------------------------------------------------------------------

    Setting a time limit for opt-out provides an important measure of 
certainty and program stability by ensuring that if manufacturers 
declined to opt out of the program despite the occurrence of an 
offramp, all parties could rely on the program to continue. 
Manufacturers opposed this approach, expressing concern that regardless 
of whether a manufacturer individually believes the triggering event 
sufficient to opt out, manufacturers are likely to opt out upon the 
occurrence of any offramp for fear that one or more of their 
competitors will opt out. Since manufacturers believe they might be at 
a significant competitive disadvantage if they were subject to National 
LEV while other manufacturers were not, all manufacturers would have to 
opt out to protect themselves against that eventuality.
    By allowing manufacturers an extended time period to opt out if 
another manufacturer opts out, EPA is removing the incentive for any 
manufacturer to exercise a protective opt-out. Instead, manufacturers 
can wait to see if any other manufacturer opts out and then decide at 
that time whether they want to exit the program. If no manufacturer 
opts out within the specified time period, the program would remain in 
place. The extended time for opt-out enhances program stability by 
removing an incentive for manufacturers to opt out. Moreover, it 
neither creates a new opportunity to opt out of the program nor reduces 
program stability, because it only arises if an opt-out has already 
occurred.
    For opt-outs based on an EPA change to a Stable Standard, EPA has 
further enhanced program stability by providing an opportunity for EPA 
to withdraw a change to a Stable Standard if such a change in fact 
results in an opt-out. If EPA retracts a change on which an opt-out is 
based, this would invalidate the offramp and prevent the opt-out from 
coming into effect. EPA would have to withdraw the change before the 
effective date of the opt-out (discussed below). The need for such a 
withdrawal might arise in a couple of possible circumstances. In 
objecting to a proposed change to a Stable Standard, manufacturers only 
have to indicate that they believe the change is sufficient to allow an 
opt-out; it would not make sense to try to force manufacturers to make 
a final decision as to whether they would actually opt-out before the 
change is even finalized. Thus, a manufacturer's objection to a 
proposed change would not necessarily indicate that the manufacturer 
would opt out of National LEV based on the change, and EPA might decide 
it is reasonable to go ahead with the change despite an objection. 
Also, EPA may have reason to believe that it has adequately modified a 
proposed change to accommodate objections, but a manufacturer might 
still choose to opt out. Providing EPA an opportunity to withdraw the 
change enhances program stability by protecting against such 
possibilities.
    Within sixty days of an opt-out notification, EPA is required to 
determine whether or not the alleged condition allowing opt-out has 
occurred and therefore whether the opt-out is valid. If the basis for 
an opt-out were a change to a Stable Standard, EPA could find that the 
opt-out is valid provided that EPA did not withdraw the change before 
the effective date of the opt-out. If EPA withdrew the change in time, 
concurrently with the withdrawal EPA could then find that the opt-out 
was not valid. The determination of whether the opt-out was valid would 
not be subject to notice and comment, but it would be a nationally 
applicable final agency action, subject to judicial review under 
section 307(b) of the Act. EPA intends to publish any such 
determination in the Federal Register. If EPA were to agree that an 
opt-out was valid, that determination would be a final agency action 
authorizing the opt-out. Thus, even if the reviewing court subsequently 
overturned EPA's decision, the manufacturer could not be held liable 
for its failure to comply with the National LEV requirements prior to 
the court's decision.
    If EPA were to determine that an opt-out was invalid and the 
manufacturer decided to challenge that determination in court, the 
manufacturer would be on notice that its failure to comply with 
National LEV in the interim would be at the manufacturer's own risk. 
During the pendency of the manufacturer's action challenging EPA's 
determination, the manufacturer would be able to certify Tier 1 
vehicles lawfully.21 If the reviewing court ultimately 
agreed with EPA's determination that the opt-out was invalid, however, 
then the manufacturer was always subject to the National LEV 
requirements and would be liable in an enforcement action to the extent 
that it violated National LEV regulations during the pendency of the 
court action. For example, a manufacturer would be liable for any 
exceedance of the NMOG fleet average requirement during the pendency of 
the court action.22 If the reviewing court ultimately agreed 
with the manufacturer that the opt-out was valid, then the manufacturer 
would not be held to National LEV program requirements from the 
effective date of its opt-out notification.
---------------------------------------------------------------------------

    \21\ The National LEV regulations generally allow manufacturers 
to certify vehicles to Tier 1 standards as one of the five vehicle 
emissions categories. However, sale of Tier 1 vehicles and TLEVs in 
the OTR from MY2001 on is limited to those engine families that are 
certified and offered for sale in California in the same model year, 
and sales of these vehicles industry-wide in the NTR must not exceed 
a cap of five percent, as discussed below in section IV.B.4. In the 
event of a contested opt-out, manufacturers would not have to comply 
with these limitations while the disposition of the opt-out remained 
unresolved, although manufacturers would ultimately be liable for 
violation of some provisions if a court were to find the opt-out 
invalid.
    \22\ The manufacturer would also remain liable for violation of 
the limitation on sales of Tier 1 vehicles and TLEVs where the same 
engine families were not certified and offered for sale in 
California. However, the manufacturer would not be liable for any 
exceedance of the five percent cap and the manufacturer's vehicles 
would not be counted towards the industry-wide cap. This exemption 
is driven by a practical implementation concern. In a situation 
where one manufacturer had opted out of National LEV, it would be 
very difficult to determine other manufacturers' liability under the 
five percent cap in any equitable manner if the cap applied to the 
manufacturer that had opted out.
---------------------------------------------------------------------------

    An EPA determination of the validity of an opt-out will allow for 
quick judicial resolution of any dispute over an opt-out and provide 
compliance guidance in the interim. Occurrence of an opt-out is likely 
to call into question whether the National LEV program will continue, 
which in part will depend on the validity of that opt-out. All parties 
involved (i.e., EPA, the states, the manufacturer opting out, and the 
other manufacturers) would need both of those issues resolved as soon 
as possible.
    Providing for EPA to make a determination regarding the validity of 
an opt-out ensures that any dispute over an opt-out can be resolved in 
the United States Court of Appeals for the District of Columbia. 
Judicial review would be based on the Agency's administrative record. 
Publication of EPA's determination in the Federal Register would start 
a 60-day period for filing a petition for review of EPA's action under 
section 307(b), thereby facilitating

[[Page 31206]]

early identification and faster resolution of opt-out challenges. This 
approach provides greater certainty to both the OTC States and 
manufacturers regarding the status of the National LEV requirements in 
the interim. An EPA determination that an opt-out is valid provides the 
manufacturer with a safe harbor, which allows it to stop complying with 
National LEV without legal risk. Even if the opt-out is successfully 
challenged, the manufacturer will not be liable for noncompliance with 
National LEV during the period prior to the court's decision. Also, OTC 
States are made aware that EPA believes that the opt-out is valid, and 
those states without a CAL LEV program as a backstop will have more 
incentive to adopt CAL LEV in a timely manner if the state wishes to 
continue to control emissions from motor vehicles. If EPA determines an 
opt-out is invalid, the manufacturer will know the risk it would run by 
ceasing compliance.
    If EPA were not required to make a determination on the validity of 
an opt-out, the only ways to challenge an opt-out would be through a 
declaratory judgment action or an enforcement action brought in the 
district court. It is unclear whether a court would grant a motion for 
a declaratory judgment on this issue. An enforcement action might take 
several years to ripen, assuming that an action could not be brought 
until the manufacturer violated the fleet average NMOG requirement and 
then failed to make up the debits within the following model year. 
Moreover, a district court opinion would probably be appealed to the 
court of appeals. Overall, this approach could easily entail anywhere 
from two to five years of uncertainty regarding whether the opt out was 
valid, and whether National LEV would remain in effect. In addition, 
litigation in the district courts is resource intensive, potentially 
involving extensive discovery, and may produce inconsistent results 
across different courts. In the absence of an EPA determination, there 
is an additional disadvantage for a manufacturer. To find out whether 
an opt out is valid, the manufacturer probably would have to stop 
complying with National LEV and put itself at risk for penalties in 
enforcement actions, prior to obtaining a judicial ruling on the 
validity of the opt-out.
    c. Effective Date of Opt-Out. Once EPA or the reviewing court 
determines that an opt-out is valid, the effective date of the opt-out 
will depend on the condition authorizing the opt-out, unless a 
manufacturer specifies a later effective date than provided in the 
regulations. First, if an OTC State were to adopt a state motor vehicle 
program under CAA section 177 in a way that violated a commitment the 
state had made, an opt-out would be effective for the next model 
year.23 The ``next'' model year is the model year named for 
the calendar year following the calendar year in which the state 
violated the commitment. For example, if an OTC State violated a 
commitment in 1999, the manufacturer's opt-out would be effective for 
MY2000. Second, if EPA were to modify one of the Core Stable Standards 
over the objection of a manufacturer, an opt-out would be effective 
starting the model year that includes January 1 of the second calendar 
year following the calendar year in which the manufacturer opted out. 
(E.g., if a manufacturer opted out on July 1, 1999, the opt-out would 
be effective starting with MY2001). However, if the first model year in 
which manufacturers would have to comply with the changed Core Stable 
Standard is earlier, the opt-out would be effective as of that earlier 
date. Third, if EPA were to modify one of the Non-Core Stable Standards 
in a way that would provide an offramp, the opt-out would be effective 
for the first model year to which the modified standard applied. 
However, for opt-outs based on changes to either a Core or Non-Core 
Stable Standard, if EPA withdraws the change to the Stable Standard 
before the date that the opt-out would have become effective, the opt-
out will not become effective. This approach balances achieving 
emissions reductions, minimizing burden on manufacturers, and providing 
incentives for the OTC States and EPA to keep their 
commitments.24
---------------------------------------------------------------------------

    \23\ This decision regarding violation of OTC State commitments 
is not incorporated in the regulations that EPA is promulgating 
today, but will be reflected in a later rule that finalizes the OTC 
State commitment provisions of the program.
    \24\ In the supplemental notice of proposed rulemaking, EPA may 
propose to refine or modify this approach in light of the proposed 
provisions of OTC state commitments. In particular, today's final 
rule does not address the possibility of providing leadtime before 
manufacturers become subject to any backstop ZEV mandates.
---------------------------------------------------------------------------

    Making opt-out effective the next model year after an OTC State 
violates a commitment regarding a section 177 program is consistent 
with the basic agreement underlying the National LEV program; it also 
increases the program's stability. National LEV is founded on the 
concept of a voluntary agreement between the OTC States and the 
automobile manufacturers. The heart of this agreement will be that the 
manufacturers will comply with National LEV, in exchange for the OTC 
States not requiring compliance with a CAL LEV program. Due to the 
inherent legal constraints on attempting to bind a sovereign state to 
future action, the manufacturers are limited in their ability to assure 
through mechanisms enforceable in court that the OTC States could not 
subsequently require compliance with a CAL LEV program. Thus, it is 
important that the structure of the National LEV program provide strong 
practical incentives to the OTC States to fulfill their commitments 
under the agreement and provide recourse to the manufacturers if the 
OTC States violate the agreement. Allowing manufacturers to opt out 
effective the next model year after an OTC State violates a commitment 
regarding a section 177 program provides a strong disincentive for a 
state to take such an action. Assuming that a CAL LEV program is not in 
place as a backstop in some OTC States, those states without backstops 
would receive Tier 1 vehicles for over two years, given section 177's 
lead-time requirements, and all states in the OTR would face higher 
levels of emissions from migration and transport. This somewhat severe 
result is appropriate as an incentive to fulfill one of the key 
commitments underlying the National LEV program. Manufacturers are 
entitled to opt out of National LEV quickly, once the fundamental basis 
of the agreement has been violated.
    The timing of the effective dates of opt-outs based on EPA changes 
to Core or Non-Core Stable Standards is designed to be consistent with 
elements of the fundamental agreement underlying the National LEV 
program while enhancing the stability of the program. Manufacturers 
commented that EPA's original proposal would not give them sufficient 
time to evaluate the consequences of a change in a Stable Standard. 
They also argued they would be less likely to opt out initially upon 
such a change, if they could opt out later if they subsequently found 
the consequences of the change too burdensome. EPA believes that an 
unlimited time for opt-out introduces far too much uncertainty into the 
National LEV program. Thus, the approach adopted in this rule gives 
manufacturers more time to decide whether to opt out, providing 180 
rather than 60 days, but not unlimited time. The approach also enhances 
program stability by providing EPA an opportunity to withdraw any 
change on which manufacturers have based an opt-out, and thereby to 
remove the offramp.
    The slightly different effective dates for opt-outs based on 
changes to Core and Non-Core Stable Standards

[[Page 31207]]

recognize that these two sets of Stable Standards play different roles 
in relation to the National LEV program. For changes to the Core Stable 
Standards, it is appropriate to make an opt-out effective quickly, 
either as soon as EPA has had the opportunity to withdraw its change 
but has declined to do so, or even sooner if manufacturers would 
actually have to comply with the change before that date. The Core 
Stable Standards are the standards the manufacturers have volunteered 
to meet that EPA could not have imposed. These are the National LEV 
exhaust emissions standards, the fleet average NMOG standards, the 
banking and trading provisions that implement these standards, and 
certain other related requirements. The Core Stable Standards are 
discussed more fully in sections IV.A.2.a.(2) and IV.B. of this rule. 
If EPA were to modify any of these requirements over the manufacturers' 
objections, National LEV would require the manufacturers to comply with 
something that EPA did not have the authority to mandate and that the 
manufacturer had never volunteered to meet. Thus, the effective date 
for opt-outs based on changes to Core Stable Standards ensures that 
manufacturers can exit the program as soon as EPA has had the chance to 
prevent the opt-out by revoking the change, and even sooner, if 
necessary to avoid forcing compliance with a requirement that EPA could 
not have imposed absent National LEV. This protects the reasonable 
expectations of the manufacturers volunteering for the National LEV 
program. It also provides an additional incentive for EPA not to make 
changes to Core Stable Standards that might allow an opt-out because 
the opt-out could become effective in a time-frame shorter than the 
time required for OTC States without backstops to adopt and implement a 
CAL LEV program.
    For opt-outs based on changes to Non-Core Stable Standards, EPA is 
finalizing the proposed approach of delaying the effective date of an 
opt-out until the first model year that manufacturers must comply with 
the changed standard. Here too, EPA would have the opportunity to 
withdraw the change prior to the effective date of the opt-out. This 
approach protects emissions reductions without increasing 
manufacturers' burdens or reducing program stability. EPA has 
designated certain standards as Non-Core Stable Standards to give the 
manufacturers some assurance regarding the stability of the federal 
motor vehicle requirements as an additional incentive to volunteer for 
the National LEV program. Although stability of the Non-Core Stable 
Standards is one component of the National LEV program, it is not the 
central exchange on which a voluntary agreement would be founded. To 
the extent that a change in a Non-Core Stable Standard would not apply 
until some future date, delaying the effective date of an opt-out until 
that date would protect the OTC States from increased emissions caused 
by an event outside of their control and would give those states 
without a backstop some time to adopt a CAL LEV program. Yet the 
manufacturers would not be burdened by this approach because as soon as 
they were subject to the revised standard they would no longer have to 
comply with National LEV. The only incentive for EPA to increase the 
stringency of a Non-Core Stable Standard over a manufacturer's 
objection, other than to harmonize with California, would be if the 
overall emission reductions produced were greater than the emission 
reductions from National LEV. Thus, while delaying the opt-out 
effective date provides somewhat less of a disincentive for EPA to 
trigger an offramp, this is appropriate, given that EPA would only take 
such action if it would produce greater emissions reductions than would 
National LEV.
    d. Programs in Effect as a Result of Opt-Out. If a manufacturer 
were to opt out of the National LEV program, when that opt-out became 
effective the manufacturer would be subject to all standards that would 
apply if National LEV did not exist. The federal Tier 1 tailpipe 
emissions and related standards would apply, as would any applicable 
state standards promulgated and in effect under CAA section 177. EPA 
will address this issue further in the SNPRM on OTC State commitments.
     e. Opt-Out By States. EPA received a couple of comments from oil 
industry representatives asserting that all individual states should 
have the opportunity to opt out of National LEV. EPA believes that an 
approach allowing individual states to reject National LEV (except to 
exercise section 177 rights) would be unnecessary, impracticable, 
costly, and counter-productive to the goal of achieving clean air 
nationwide. EPA also notes that no state requested such a right, even 
though all states had the opportunity to comment on National LEV during 
the public comment period and EPA has conducted extensive outreach 
efforts to communicate with states about this program.
    First, EPA believes that states will not want to opt out because 
they will receive important benefits from National LEV. As described 
above in section III.B, numerous areas around the country need 
reductions in smog-forming pollutants and particulate matter. Even 
those areas that do not have smog or PM problems will benefit from 
reductions in emissions of carcinogens and other toxic air pollutants.
    Second, the commenter that suggested an opt-out process for states 
was motivated by concerns that National LEV might require new, costly 
fuel controls. As described more fully below in section IV.B.7., 
today's regulations clarify that National LEV vehicles will not require 
new fuel controls.
    Third, giving a state the right to opt out of National LEV would 
allow a state to require manufacturers to produce dirtier vehicles than 
the manufacturers want to produce--something the CAA prohibits both 
states and the federal government from doing, and that would be a 
perverse policy. Under the CAA, a manufacturer has always had the legal 
option of producing a vehicle that is cleaner than required--something 
the manufacturer might do because it believes that the public favors 
cleaner cars or because it is more cost-effective to manufacture 
vehicles that meet both California and federal standards. The commenter 
that suggested a state opt-out has not explained how such an option is 
allowed by the CAA, nor has it shown sufficient policy justification 
for limiting a manufacturer's right to make cleaner cars.
    Fourth, establishing a mechanism to allow individual states to 
reject air quality benefits by ``opting out'' of a national motor 
vehicle program would run counter to the Congressionally-established 
national approach to regulating motor vehicles. The CAA provides that 
manufacturers would need to meet, at most, two sets of motor vehicle 
standards nationwide. Congress recognized the substantial difficulties 
and costs incurred by building and certifying vehicles to meet a 
multiplicity of different standards and the burdens distribution of 
those vehicles to different states would place on vehicle distribution 
and sales networks. Manufacturers are free to build vehicles with 
tighter emissions controls than required by law, and states and federal 
agencies have no ability to stop manufacturers from doing so.
    Finally, if there were a legal mechanism to allow an individual 
state to opt out of National LEV, such opt-outs could substantially 
increase costs for manufacturers, dealers, and ultimately consumers 
both in opt-out states and others. If an individual state could reject 
National LEV and require manufacturers to build to looser standards, 
even if those vehicles were less expensive to produce, there is no

[[Page 31208]]

guarantee that manufacturers would supply such vehicles at lower prices 
in that state. EPA understands that as a national industry, the 
automotive industry largely redistributes any difference in costs among 
states so that the same model costs about the same in all states. 
Moreover, such dirtier vehicles might actually cost more to produce and 
distribute, given that building vehicles to a different standard would 
require specialized manufacture and distribution of vehicles. The 
manufacturers support National LEV as a more cost-effective approach to 
achieve emission reductions, but cost-savings from nationwide standards 
could be eroded by requiring a third set of standards in a few states. 
If manufacturers did not redistribute those higher costs across all of 
their vehicles, a state that had opted out of National LEV might 
actually experience higher costs for new motor vehicles. Thus, 
implementation of National LEV as a 49-state program is the legal and 
cost-effective approach to achieving cleaner air through cleaner new 
motor vehicles.
3. Duration of Program
    This rule uses MY1997 as a placeholder for the start date of the 
program. As explained above (see n. 17), EPA believes that MY1997 is 
not a reasonable start date and will take comment in the SNPRM on the 
appropriate start date.25
---------------------------------------------------------------------------

    \25\ Auto manufacturers had requested several adjustments to the 
National LEV program to address concerns regarding compliance for 
MY1997, given the abbreviated time frame for program start up. As 
discussed above (see n. 17) EPA is using MY1997 as a placeholder for 
the actual start date of the program, even though EPA now believes 
that start date is not realistic. Rather than include special 
provisions for MY1997, EPA will take comment in the SNPRM on the 
appropriate start date.
---------------------------------------------------------------------------

    Under today's rule, the National LEV program will continue until 
EPA promulgates a mandatory national tailpipe program that is at least 
equivalent in stringency to the National LEV program. If EPA 
promulgates such a mandatory tailpipe program, then the National LEV 
program will end in the first model year that the mandatory program is 
at least as stringent on a fleetwide basis as National LEV.
    EPA proposed that the National LEV program would stay in place 
through MY2003 and possibly through MY2005, depending on whether, by a 
specified date, EPA had signed a final rule establishing new, mandatory 
tailpipe standards (``Tier 2 standards'') at least as stringent as 
National LEV. Under the proposed regulations, if EPA did not issue the 
specified regulations on time, then National LEV would end in MY2003. 
In that event, manufacturers would be required to meet federal Tier 1 
standards starting in MY2004 in any state where California or OTC LEV 
standards were not in effect. EPA also took comment on various other 
possible approaches, including having the National LEV program extend 
until the first model year in which manufacturers must meet new, 
mandatory tailpipe standards at least as stringent as National LEV.
    EPA received several comments expressing serious concern regarding 
the proposal that would allow the National LEV program to end after 
MY2003 if EPA did not promulgate Tier 2 regulations that were more 
stringent than National LEV. These commenters noted that the proposal 
would provide insufficient assurance of future emissions reductions and 
would hinder State efforts to reduce ozone pollution.
    EPA agrees with these comments and has decided not to adopt the 
proposed approach. EPA believes it is unacceptable to set up a program 
that has the country take a step backward environmentally if the Agency 
fails to act by a future deadline. The proposed approach could cause a 
reversion to Tier 1 standards beginning in MY2004, which would cause 
considerable emission increases throughout the country.
    The final regulations require that the National LEV program stay in 
effect until a mandatory federal program is in effect that is 
equivalent or more stringent. This approach will provide greater 
assurance that vehicles manufactured in or after MY2004 will not create 
greater pollution than those manufactured prior to MY2004. It will 
therefore reduce the considerable uncertainty that the proposed 
approach would have created regarding emissions from vehicles after 
MY2004.
    Though some commenters believe that the proposed approach would 
provide EPA with greater incentive to promulgate standards by December 
15, 2000, incentive is not the same as assurance. Promulgation of Tier 
2 standards by December 15, 2000, is not a certainty. Section 202(i) of 
the Act requires several actions by EPA prior to promulgation of Tier 2 
standards. EPA must, for example, complete a report to Congress and 
must make specific determinations discussed in section 202(i). EPA has 
not taken these actions at this time. Until such time as those 
determinations are made, there can be no certainty that Tier 2 
standards will actually be promulgated, or that such standards will be 
equivalent or more stringent than National LEV standards. Moreover, the 
proposed approach would stake the continued reduction of motor vehicle 
emissions on the prospect of EPA completing its Tier 2 process by 
December 15, 2000. Although EPA intends to continue to work diligently 
on its Tier 2 process, there are too many possible occurrences that are 
out of EPA's control for EPA to guarantee completion of the process by 
that date. Therefore, to allow for more certainty in the National LEV 
program, EPA is promulgating regulations that allow the program to 
continue until the first model year in which an equivalent or more 
stringent federal program is implemented and applicable to new LDVs and 
LLDTs.
    Some commenters favored the proposed approach because they assumed 
that the OTC States' commitments regarding State adoption of section 
177 programs would last for the duration of National LEV. These 
commenters wanted a more definite end to the OTC State commitments than 
would be provided by having the OTC State commitments last for the 
duration of National LEV as contained in this rule. EPA believes the 
best way to accommodate this concern is to set a separate end date for 
the OTC State commitments. EPA will take comment on the appropriate end 
date for OTC State commitments in the SNPRM.

B. National LEV Voluntary Tailpipe and Related Standards and Phase-In

    Today's final rule adopts the proposed National LEV exhaust 
emission standards for LDVs and LLDTs.26 The standards are 
closely patterned after the California LEV emission standards, and they 
include exhaust emission standards applicable to individual vehicles as 
well as a set of fleet average NMOG standards.
---------------------------------------------------------------------------

    \26\ The federal definitions of ``light-duty vehicle'' and 
``light light-duty truck'' (40 CFR 86.094-2) correspond exactly to 
the California definitions of ``passenger car'' and ``light-duty 
truck,'' respectively. In addition, the federal light light-duty 
truck and California light-duty truck categories are each divided 
into two subcategories based on identical ranges of loaded vehicle 
weight. The alignment of these definitions allows the California 
emission standards to be applied directly to the corresponding 
federal vehicle certification categories.
---------------------------------------------------------------------------

    Once manufacturers have opted into the National LEV program and EPA 
has found the program to be in effect, manufacturers will be required 
to certify each LDV and LLDT engine family to one of five ``vehicle 
emission categories,'' each of which has a unique set of emission 
standards (described below). The five vehicle emission categories, in 
order of increasing stringency, are the federal Tier 1 standards, 
TLEVs, LEVs, ULEVs, and ZEVs. The Tier 1 category includes the

[[Page 31209]]

federal standards for exhaust emissions of NMHC, CO, NOX, 
and PM. The four remaining categories (the ``LEV'' categories) include 
standards for the same pollutants, as well as for formaldehyde.
    In addition to meeting the exhaust standards for each emission 
category, manufacturers must also comply with fleet average NMOG 
standards (described more fully in section IV.B.3., below). Separate 
standards apply to the LDVs and LLDTs, and compliance is based on the 
number of vehicles produced and offered for sale in each of the five 
emission categories, together with the NMOG standard for that category. 
NMOG averages first take effect in the OTC States in 
MY1997,27 and they decline (become more stringent) until 
stabilizing for MY2001 and beyond. Beginning in MY2001, manufacturers 
must demonstrate compliance with the same NMOG fleet averages both in 
the OTC States and in the 37 States outside the OTC States and 
California. Manufacturers are allowed, but not required, to introduce 
TLEVs, LEVs, ULEVs, and ZEVs outside the OTR and California prior to 
MY2001. However, only vehicles subject to the National LEV program sold 
in the OTR will be counted towards a manufacturer's fleet average NMOG 
calculation during the phase-in period in the OTR.
---------------------------------------------------------------------------

    \27\ MY1997 is used in this rule as a placeholder for the actual 
start date. See n. 17 above.
---------------------------------------------------------------------------

    The exhaust emission standards and fleet average NMOG requirements, 
as well as other regulatory elements of the National LEV program, are 
contained in a new Code of Federal Regulations (CFR) subpart (subpart R 
of title 40, part 86).
1. Exhaust Emission Standards for Categories of NLEVs
    This section discusses the exhaust emission standards that NLEVs 
must meet. In addition to the voluntary National LEV exhaust standards 
that are derived from the California LEV program, manufacturers of 
NLEVs must also demonstrate compliance with a few mandatory federal 
exhaust standards that have no counterpart in the California LEV 
program.28 Both types of standards are discussed here.
---------------------------------------------------------------------------

    \28\ Participation in the voluntary National LEV program does 
not relieve manufacturers of their obligation to meet the mandatory 
federal exhaust emission standards. The core of the mandatory 
federal exhaust standards are the set of Tier 1 standards, plus 
selected pre-Tier 1 (``Tier 0'') standards that Congress let stand 
in the 1990 CAA Amendments. Most of these mandatory federal 
standards have analogues in the National LEV standards, and for each 
of these, the voluntary National LEV standard is of equal or greater 
stringency. Certification of a vehicle to the voluntary standards 
therefore also demonstrates compliance with the analogous mandatory 
standards. (For testing purposes, the National LEV standard may be 
described as ``replacing'' the analogous federal standard, although 
the federal standard technically still applies.) For those few 
federal exhaust standards that have no National LEV counterpart 
(discussed below), manufacturers must also demonstrate compliance of 
NLEVs with those standards.
---------------------------------------------------------------------------

    a. Certification Standards. This final rule establishes separate 
sets of emission standards for LDVs and for LLDTs. Current federal 
regulations divide the LDT vehicle category into two subcategories, 
each of which is further divided into subcategories. LLDTs are those 
LDTs less than or equal to 6000 lbs GVWR, and heavy light-duty trucks 
(HLDTs) are those LDTs greater than 6000 lbs but less than or equal to 
8500 lbs GVWR. The National LEV program contains standards only for the 
LLDTs, therefore the HLDT category will continue to be certified to the 
applicable Tier 1 standards. Emission standards that apply to LLDTs are 
divided into two sets. One set, which is identical to the standards for 
LDVs, applies to LLDTs up through 3750 lbs loaded vehicle weight (LVW), 
and another slightly less stringent set applies to LLDTs between 3750 
and 5750 lbs LVW. Also consistent with current federal and California 
regulations, separate sets of standards are promulgated for the 
vehicle's intermediate useful life (five years or 50,000 miles, 
whichever occurs first) and full useful life (10 years or 100,000 
miles, whichever occurs first).
    As noted above, there are five vehicle emission categories for 
vehicles under the voluntary National LEV program, ranging in 
stringency from the current federal Tier 1 vehicles to ZEVs. The Tier 1 
standards have already been codified in the current federal regulations 
with a phase-in schedule that required 100 percent of MY1996 LDVs and 
LLDTs to meet the Tier 1 standards. The TLEV, LEV, ULEV and ZEV 
certification standards for LDVs and LLDTs up through 3750 lbs LVW are 
shown in Table 2 and those for LLDTs from 3750 to 5750 lbs LVW are 
shown in Table 3. As noted below, the particulate standards adopted 
specifically for National LEV apply only to diesel vehicles. Non-diesel 
vehicles will be subject to the federal Tier 1 PM standards, as 
described below.
    The federal exhaust standards with no California counterparts are 
(1) the Tier 0 total hydrocarbon (THC) standard for all vehicles, (2) 
the Tier 1 50,000-mile PM standard, and (3) the 100,000-mile PM 
standard for non-diesel vehicles. The California program contains 
neither a THC standard nor a 50,000-mile PM standard, and the 
California 100,000-mile PM standard applies only to diesel vehicles. 
All NLEVs must comply with the federal THC emissions standard. EPA has 
adopted the California 100,000-mile diesel PM standard for NLEVs, but, 
to meet the requirements of the mandatory federal program, diesel NLEVs 
must also certify to the Tier 1 50,000-mile PM standard. Non-diesel 
NLEVs must meet the federal Tier 1 50,000-mile and 100,000-mile PM 
standards.
    Compliance with the Tier 0 THC standard should not result in 
testing beyond that required for LEV standards. The current federal 
program provides for a reduced data reporting burden, including the use 
of engineering justifications, in certain cases where compliance with a 
mandatory standard for a given vehicle or emission control technology 
is clear cut. Such is the case for current-technology gasoline vehicles 
when demonstrating compliance with the Tier 1 PM standards and for most 
current technology vehicles whose Tier 1 NMHC values demonstrate 
compliance with the THC standards. The Agency anticipates that 
manufacturers will reduce their compliance burden by taking advantage 
of these same data reporting options when certifying NLEVs.

[[Page 31210]]


  Table 2.--National LEV Intermediate and Full Useful Life Standards (g/mi) for LDVs and LLDTs to 3750 Lbs LVW  
----------------------------------------------------------------------------------------------------------------
                                    Vehicle                                                              PM1    
  Vehicle useful life (miles)       emission         NMOG          CO          NOX          HCHO       (diesel  
                                    category                                                            only)   
----------------------------------------------------------------------------------------------------------------
50,000........................  TLEV                   0.125          3.4          0.4        0.015  ...........
                                LEV                    0.075          3.4          0.2        0.015  ...........
                                ULEV                   0.040          1.7          0.2        0.008  ...........
100,000.......................  TLEV                   0.156          4.2          0.6        0.018         0.08
                                LEV                    0.090          4.2          0.3        0.018         0.08
                                ULEV                   0.055          2.1          0.3        0.011        0.04 
----------------------------------------------------------------------------------------------------------------
\1\ See the discussion in this section IV.B.1.a regarding the applicability of PM standards.                    


  Table 3.--National LEV Intermediate and Full Useful Life Standards (g/mi) for LLDTs From 3751 Lbs LVW to 5750 
                                                     Lbs LVW                                                    
----------------------------------------------------------------------------------------------------------------
                                    Vehicle                                                             PM\1\   
  Vehicle useful life (miles)       emission         NMOG          CO          NOX          HCHO       (diesel  
                                    category                                                            only)   
----------------------------------------------------------------------------------------------------------------
50,000........................  TLEV                   0.160          4.4          0.7        0.018  ...........
                                LEV                    0.100          4.4          0.4        0.018  ...........
                                ULEV                   0.050          2.2          0.4        0.009  ...........
100,000.......................  TLEV                   0.200          5.5          0.9        0.023         0.08
                                LEV                    0.130          5.5          0.5        0.023         0.08
                                ULEV                   0.070          2.8          0.5        0.013        0.04 
----------------------------------------------------------------------------------------------------------------
\1\ See the discussion in this section IV.B.1.a regarding the applicability of PM standards.                    

    The voluntary standards also include two-tiered NMOG standards for 
flexible-fuel and dual-fuel vehicles, based on California's approach to 
standards for these vehicle types.29 Flexible- and dual-fuel 
vehicles have to certify to the applicable standards both on the 
alternative fuel and on gasoline. When certifying on an alternative 
fuel, these vehicles have to meet the intermediate and full useful life 
emission standards for TLEVs, LEVs or ULEVs laid out 
above.30
---------------------------------------------------------------------------

    \29\ Flexible-fuel vehicles are those that can operate on either 
of two different fuels or any combination of those fuels, while 
dual-fuel vehicles can operate on either of two different fuels but 
not on combinations of those fuels.
    \30\ Consistent with California's methodology, the measured NMOG 
mass emissions are adjusted by a RAF for the given type of 
alternative fuel before being compared to the applicable emission 
standard. Determination of the applicable RAF is discussed later in 
section IV.B.5.d.
---------------------------------------------------------------------------

    When certifying on gasoline, flexible-fuel and dual-fuel vehicles 
have to meet the next higher (less stringent) category of NMOG emission 
standards than the standards to which the vehicle was certified on an 
alternative fuel. However, except for NMOG, the vehicle must meet the 
same emissions standards (NOx, CO, etc.) when operated on gasoline as 
it did when operated on the alternative fuel. For example, a flexible-
fuel vehicle that certifies to ULEV standards on an alternative fuel 
would have to certify to the LEV NMOG standard and ULEV CO, NOx, PM, 
and HCHO standards when operated on gasoline. The same principle holds 
true for determining applicable in-use standards for flexible-fuel and 
dual-fuel vehicles. This approach allows manufacturers to optimize the 
emission control system for the alternative fuel rather than for 
gasoline, and encourages rather than discourages the development of 
alternative fuel technologies. Consistent with California, flexible-
fuel and dual-fuel vehicles will be counted toward the NMOG fleet 
average standard on the basis of their NMOG certification levels on the 
alternative fuel, not on gasoline. There is, however, no requirement 
under the National LEV program that such vehicles operate on 
alternative fuels in-use.
    b. In-Use Standards. As proposed in the NPRM, the National LEV 
program explicitly adopts California's intermediate in-use standards, 
which are slightly less stringent than the certification standards. 
These standards, which apply to in-use testing for a period of model 
years following introduction of the certification standards, are set at 
less stringent levels than the certification standards to allow 
manufacturers to gain in-use experience with vehicles certified to LEV 
or ULEV standards. EPA is adopting these standards consistent with the 
current California requirements, which include recently adopted 
revisions. (See the Response to Comments document for further 
discussion of these revisions, section II.D.1.) The in-use standards 
apply through MY1999 for LEVs and through MY2002 for ULEVs, and include 
both intermediate useful life (50,000 miles) and full useful life 
(100,000 miles) standards (full useful life in-use standards apply 
starting with MY1999). In-use standards for LDVs and LLDTs to 3750 lbs 
LVW are shown in Table 4 and those applicable to LLDTs from 3751 to 
5750 lbs LVW are shown in Table 5. As indicated in the tables, 
compliance with in-use standards beyond the intermediate useful life is 
not required for LEVs and ULEVs until after MY1998. These in-use 
standards for vehicles certified under the National LEV program apply 
to vehicles sold both within and outside the OTR. Some of the 
complexity in the tables below results from changes in the in-use 
formaldehyde standards that occur starting with MY2001.

              Table 4.--National LEV In-Use Standards (g/mi) for LDVs and LLDTs to 3750 lbs LVW \1\             
----------------------------------------------------------------------------------------------------------------
                                                 Useful life                                                    
   Vehicle emission category       Model year      (miles)        NMOG          CO          NOX          HCHO   
----------------------------------------------------------------------------------------------------------------
LEV............................       1997-1999       50,000        0.100          3.4          0.3        0.015
                                           1999      100,000        0.125          4.2          0.4        0.018
ULEV...........................       1997-1998       50,000        0.058          2.6          0.3        0.012
                                      1999-2000       50,000        0.055          2.1          0.3        0.012
                                      2001-2002       50,000        0.055          2.1          0.3        0.008
                                      1999-2002      100,000        0.075          3.4          0.4       0.011 
----------------------------------------------------------------------------------------------------------------
\1\ MY1997 is used in this rule as a placeholder for the actual start date. See footnote no. 17.                


           Table 5.--National LEV In-Use Standards (g/mi) for LLDTs From 3751 Lbs LVW to 5750 LVW \1\           
----------------------------------------------------------------------------------------------------------------
                                                 Useful life                                                    
   Vehicle emission category       Model year      (miles)        NMOG          CO          NOX          HCHO   
----------------------------------------------------------------------------------------------------------------
LEV............................       1997-1998       50,000        0.128          4.4          0.5        0.018
                                           1999       50,000        0.130          4.4          0.5        0.018
                                           1999      100,000        0.160          5.5          0.7        0.018
ULEV...........................       1997-1998       50,000        0.075          3.3          0.5        0.014
                                      1999-2002       50,000        0.070          2.8          0.5        0.014
                                      1999-2002      100,000        0.100          4.4          0.7       0.014 
----------------------------------------------------------------------------------------------------------------
\1\ MY1997 is used in this rule as a placeholder for the actual start date. See footnote no. 17.                

2. Non-methane Organic Gases Fleet Average Standards
    a. Compliance with the NMOG Standards. Under the National LEV 
program, manufacturers will be required to meet an increasingly 
stringent fleet average NMOG standard. Today's action adopts the fleet 
average NMOG standards and schedule for LDVs and LLDTs as proposed in 
the NPRM. The fleet average NMOG values (Table 6) will apply, on a 
manufacturer-by-manufacturer basis, to vehicles sold in the OTR from 
MY1997 until the end of the National LEV program.31 The NMOG 
values will also apply to vehicles sold in every state outside the OTR, 
except California, beginning with MY2001. (Low volume manufacturers, as 
defined in this rule, will be exempt until MY2001, as discussed more 
fully in section IV.C. below.) The decreasing fleet average standards 
were derived by multiplying certification emission levels for various 
categories of vehicles by achievable implementation rates for each 
vehicle category. The NMOG standards are equivalent to the sale of 40 
percent TLEVs in MY1997-MY1998, 40 percent TLEVs and 30 percent LEVs in 
MY1999, 40 percent TLEVs and 60 percent LEVs in MY2000, and 100 percent 
LEVs in MY2001.

[[Page 31211]]

    \31\ MY1997 is used in this rule as a placeholder for the actual 
start date. See n. 17 above.

      Table 6.--Fleet Average NMOG Exhaust Emission Standards (g/mi) for LDVs and LLDTs Sold in the OTR\1\      
----------------------------------------------------------------------------------------------------------------
                                                                                                        Fleet   
                 Vehicle type                                        Model year                        average  
                                                                                                         NMOG   
----------------------------------------------------------------------------------------------------------------
LDV and LLDT (0-3750 LVW).....................  1997...............................................        0.200
                                                1998...............................................        0.200
                                                1999...............................................        0.148
                                                2000...............................................        0.095
                                                2001 and later.....................................        0.075
LLDT (3751-5750 LVW)..........................  1997...............................................        0.256
                                                1998...............................................        0.256
                                                1999...............................................        0.190
                                                2000...............................................        0.124
                                                2001 and later.....................................       0.100 
----------------------------------------------------------------------------------------------------------------
\1\ MY1997 is used in this rule as a placeholder for the actual start date. See footnote no. 17.                

    Manufacturers will be required to meet separate NMOG averages for 
each of two vehicle groups; i.e., a fleet average will be calculated 
for LDVs and LLDTs from 0-3750 LVW, and for LLDTs from 3751-5750 LVW. 
Also, as discussed below, manufacturers will have to meet NMOG averages 
for each of these groups in the two separate regions: states within the 
OTR (Northeast Trading Region or NTR), and states (except California) 
outside the OTR (37 States). Prior to MY2001, compliance with the fleet 
average NMOG requirements is required only in the OTR. However, a 
manufacturer choosing to bank credits for use in the 37 States 
beginning in MY2001 will have to demonstrate that its fleet average 
NMOG is more stringent than the NMOG value for Tier 1 vehicles in the 
37 States for these early years.32 Beginning in MY2001, 
manufacturers will have to meet the fleet average NMOG standards 
separately in each of the two regions.
---------------------------------------------------------------------------

    \32\ For purposes of demonstrating compliance with the fleet 
average NMOG standards, the NMOG value for Tier 1 LDVs and LLDTs 0-
3750 lbs LVW is 0.25 grams/mile, and for LLDTs 3751-5750 lbs LVW is 
0.32 grams/mile.
---------------------------------------------------------------------------

    Manufacturers will be able to comply with the fleet average NMOG 
standards by selling any combination of vehicles certified to the Tier 
1, TLEV, LEV,

[[Page 31212]]

ULEV, or ZEV levels, such that the overall LDV and LLDT fleets in each 
region meet the required fleet average values. A sales-weighted fleet 
average will be calculated based on the intermediate useful life (five 
years, 50,000 mile) certification NMOG standards of the vehicle 
categories. A manufacturer will multiply the NMOG emission standard for 
each certification category by the number of that type of vehicle that 
the manufacturer sold in that region, add these products to the Hybrid 
Electric Vehicle (HEV) contribution factor (discussed in section 
IV.B.8.), and then divide by the total number of vehicles sold in that 
region by the manufacturer.
    b. Tracking Vehicles for Fleet Average NMOG Compliance. Because 
vehicles sold to locations in California and other countries, including 
Canada and Mexico, are excluded from the National LEV program, and 
because fleet average NMOG calculations are specific to each of the two 
regions, as described further in the following section, manufacturers 
are required to obtain data on the location of vehicle sales to 
demonstrate accurate fleet average NMOG calculations. However, to ease 
the burden on manufacturers of tracking vehicles to the end user, 
manufacturers need only track vehicles to the location where the 
completed vehicle or truck is purchased, otherwise known as the point 
of first sale. In most cases, this will be the sale from the 
manufacturer to the dealer. In cases where the end user purchases the 
completed vehicle directly from the manufacturer, the location of the 
end user is the point of first sale. Vehicle sales data pertaining to 
vehicles already shipped to a point of first sale is also known as 
first delivery information.
    In the NPRM, EPA proposed to have manufacturers track vehicles to 
the location where the completed vehicle or truck is purchased, but 
mistakenly called this ``point of first retail sale'' (emphasis added). 
EPA did not intend to require, however, to have vehicles tracked to the 
end user, which is the general level of tracking triggered by point of 
first retail sale requirements. The term ``point of first retail sale'' 
derives from requirements applicable to the heavy-duty engine market. 
Heavy duty engine manufacturers often sell engines to truck builders, 
who in turn may sell their completed trucks to consumers or dealers 
located anywhere. This dispersion of the engines even after the first 
sale makes it necessary for manufacturers to track engines to the point 
of first retail sale in order to make a reasonable estimate of the 
engine's final location. However, in the light-duty market, 
manufacturers sell almost all of their production to dealerships, who 
in turn sell most vehicles to users located in the general area of the 
dealership. The practical constraints on dispersion of vehicles after 
the first sale make tracking light-duty vehicles and trucks to the 
point of first retail sale unnecessary, as EPA recognized in 
establishing trading requirements for phase-in of Tier 1 vehicles. 
Thus, today's action clarifies the vehicle tracking requirement and 
corrects the proposed language now to require manufacturers to track 
National LEV vehicles to the point of first sale.
    EPA recognizes that dealers occasionally trade vehicles to obtain 
particular makes or models, but the Agency does not believe that this 
trading will have any significant effect on the air quality benefits of 
the National LEV program. Trading vehicles between dealerships occurs 
largely over limited geographic distances, which means that most trades 
will redistribute vehicles within the same region. EPA believes that 
inter-regional trades would have a de minimis effect on vehicle mixes 
and resulting air quality.
    EPA is making an additional minor change in the regulations to 
clarify an inconsistency in the proposal. The proposed regulations 
applied the National LEV requirements to vehicles that manufacturers 
``produce and deliver for sale,'' which is the language used in the 
California regulations. However, under both the proposed and final 
rules, for purposes of determining compliance with the National LEV 
requirements, manufacturers must track vehicles to the point of first 
sale (point of first retail sale in the proposal). Practically, this 
means that the proposed and final National LEV requirements apply to 
the vehicles actually sold by manufacturers, rather than the vehicles 
delivered for sale, which may be different. As discussed above, for the 
Agency to enforce the National LEV requirements on a region-specific 
basis, it is necessary to track vehicles to where they are first sold. 
The point at which vehicles are delivered for sale is more difficult to 
identify and may give a less accurate indication of the vehicles' final 
destination. Given that the tracking requirement will be used to 
determine compliance, EPA is modifying the applicability of the 
National LEV requirements to reflect that this is the controlling 
requirement. Thus, in the final rule, EPA is applying the National LEV 
requirements to the vehicles actually sold by manufacturers, which are 
the same vehicles used for demonstrating compliance with those 
requirements.
    c. OTC State Government ATV Purchases. Manufacturers may not 
include in their fleet average NMOG calculations ATVs bought in the OTR 
by state governments. EPA is including this limitation at the request 
of the OTC States and auto manufacturers. The OTC States and 
manufacturers intend the limitation to allow the OTC States to promote 
ATV purchases pursuant to the ATV component they had negotiated, 
without allowing manufacturers to offset these purchases with increased 
sales of higher-emitting vehicles. For the purpose of National LEV, an 
ATV is defined as any vehicle certified by CARB or EPA that is either: 
(1) A dual-fuel, flexible-fuel, or dedicated alternatively fueled 
vehicle certified as a TLEV, LEV, or ULEV when operated on the 
alternative fuel; (2) certified as a ULEV or Inherently Low Emission 
Vehicle (ILEV) (irrespective of whether conventionally or alternatively 
fueled); or (3) a dedicated or hybrid electric vehicle.
    This exclusion of OTC State government purchases of ATVs from the 
fleet average NMOG value applies to any ATV purchases by OTC State 
governments that the governments have properly reported to the 
manufacturers. For the limitations to apply, the governments must 
report their purchases of these vehicles to the respective 
manufacturers no later than February 1 of the calendar year following 
the end of a given model year. Reporting should consist of a letter 
from the government official responsible for the purchases to the 
manufacturer representative listed in that manufacturer's application 
for certification. The letter should list the number of vehicles 
purchased, vehicle makes and models, and the associated engine 
families. If necessary, EPA can provide OTC State governments the name 
and address of the manufacturer representative upon request. Reporting 
OTC State governments should also send a copy of this letter to EPA, to 
the name and address stated in section 40 CFR 86.1710-97(g)(4), so that 
EPA can include these data in verifying manufacturers' compliance with 
the fleet average NMOG standards. Failure of the government entities to 
report these data correctly would allow manufacturers to include these 
vehicles in their fleet average NMOG values.
    EPA has determined that Federal government ATV purchases will not 
be excluded from manufacturers' NMOG fleet average values. This 
requirement would be too burdensome to meet effectively because the 
location of Federal vehicle purchases often do not correspond to the 
vehicles' main service

[[Page 31213]]

area. The General Services Administration (GSA) coordinates Federal 
vehicle purchases. Federal agencies order vehicles from GSA and have 
them shipped to or picked up from specified regions. In turn, these 
vehicles are frequently re-distributed elsewhere based on that 
particular agency's needs. Thus, it would be difficult, if not 
impossible, to devise a system to have Federal entities track and 
report the number of ATVs being used in the OTR. In addition, EPA does 
not believe that allowing manufacturers to include ATVs purchased by 
the federal government would raise any problem of double-counting under 
the Energy Policy Act (EPAct). The EPAct requirements are not directed 
towards manufacturers. Thus, a manufacturer that counts a vehicle 
purchased under EPAct towards meeting its National LEV fleet average 
NMOG requirement would not be receiving any additional credit for 
compliance with EPAct as well.
    d. Reporting Requirements. EPA is including in today's rule several 
provisions designed to simplify reporting requirements. Under certain 
conditions, a manufacturer whose entire fleet, apart from California 
vehicles, is certified to LEV or cleaner standards may not need to 
calculate separate NMOG fleet averages for each trading region and may 
use production data in lieu of sales data for determining compliance. 
Manufacturers may also simplify their reporting under National LEV by 
combining the information required here with their annual production 
reports.
    A manufacturer whose entire fleet for the 49 states is certified to 
LEV or cleaner standards would not need to calculate separate fleet 
average NMOG values for each region or track vehicles to specific 
regions to evaluate compliance with the NMOG fleet average requirement. 
Because each individual vehicle is certified at or below the fleet 
average NMOG value, any mix of vehicles sold in either region would 
necessarily meet the applicable fleet average NMOG requirement. The 
manufacturer could simply show compliance with the fleet average NMOG 
requirement by showing that each engine family was certified to a 
standard equivalent to or more stringent than the fleet average NMOG 
requirement. If a manufacturer decides to use this reduced reporting 
requirement, then EPA will designate that manufacturer's fleet average 
NMOG values for the affected model years, for each region, as equal to 
the applicable fleet average NMOG standards for such model year. Such a 
manufacturer would not be able to generate credits because region-
specific tracking is necessary to calculate the credits generated for a 
specific region, based on the number of vehicles sold in that region.
    Region-specific tracking is also used to calculate total number of 
vehicles sold in the OTR for assessing industry-wide compliance with 
the five percent cap on sales of Tier 1 vehicles and TLEVs, which is 
described in section IV.B.4. below. EPA believes that a reasonable 
estimate of the manufacturer's total sales in the OTR will be adequate 
to allow the Agency to assess industry-wide compliance with the five 
percent cap. EPA will estimate the manufacturer's sales in the OTR by 
calculating the average percentage of the manufacturer's total fleet 
that was sold in the OTR over the last two years for which the 
manufacturer reported OTR sales, and then applying this percent to the 
manufacturer's total sales in the 49 states for that model year.
    A manufacturer may also combine the currently required production 
report 33 with the National LEV report in a single 
submission. Manufacturers taking advantage of this option would have to 
report at the time the production report is due, which is typically 30 
days after the end of the model year. This is sooner than EPA has 
allowed for the National LEV report, which is not due until May 1 of 
the calendar year following the model year. EPA is giving manufacturers 
this extra time to file the National LEV report to allow manufacturers 
to include in their report any credit trading activity that occurs 
after the end of the model year. Manufacturers that are not generating 
or using credits probably will not need the additional reporting time. 
The option of combining the reports leaves the choice up to each 
manufacturer to decide for itself whether filing an earlier combined 
report makes sense. EPA believes that these simplified compliance 
provisions allow manufacturers to reduce their compliance burdens 
without diminishing program stringency or EPA's ability to ensure 
compliance.
---------------------------------------------------------------------------

    \33\ See 40 CFR 86.085-37(b).
---------------------------------------------------------------------------

3. Fleet Average NMOG Credit Program
    a. Fleet Average NMOG Credit Program Requirements. An important 
part of today's National LEV rulemaking is the set of provisions 
allowing manufacturers to use a market-based approach to meet the fleet 
average NMOG requirements through averaging, banking, and trading NMOG 
credits and debits. Both this overall approach and most of the 
specifics of program implementation are modeled on California's trading 
program. The few differences between the National LEV and California 
requirements are mainly due to the need to have separate compliance 
determinations in the OTC States and the 37 States, or are driven by 
EPA's legal authority.
    As proposed, fleet average NMOG credits and debits will be 
calculated in the same manner as under the California regulations. 
Credits and debits will be calculated in units of g/mi as the 
difference between the required fleet average NMOG standard and the 
fleet average NMOG value achieved by the manufacturer, multiplied by 
the total number of vehicles the manufacturer sold in a given model 
year in each of the applicable regions, including ZEVs and HEVs. A 
manufacturer will generate credits in a given model year if its fleet 
average NMOG value is lower than the fleet average NMOG standard for 
that model year. Debits will be incurred when a manufacturer produces a 
fleet average NMOG value above the fleet average standard required for 
that model year. A manufacturer's balance for the model year will equal 
the sum of all outstanding credits and debits.
    As under the California regulations, the separate fleet average 
NMOG standards for the two different vehicle classes require 
manufacturers to calculate separate fleet average NMOG values for each 
class. Class A represents the LDVs and LLDTs 0-3750 lbs LVW, and Class 
B represents the LLDTs 3751-5750 lbs LVW. Once calculated, fleet 
average credits and debits are not specific to these classes.
    The National LEV program does, however, include geographic limits 
on both calculation of fleet average NMOG values and offset of debits 
with credits, as proposed in the NPRM. Prior to MY2001, the fleet 
average NMOG standard will apply only to vehicles sold within the OTC 
States.34 To ensure that the voluntary program continues to 
produce acceptable emissions reductions in the OTR, from MY2001 on, 
credit and debit averaging will be conducted in two separate regions: 
the NTR, and the remaining 37 States, excluding both California and the 
NTR. The NMOG average, credits, and debits

[[Page 31214]]

for a regional fleet will be based on vehicles sold in each region, and 
each regional fleet average will have to meet the applicable NMOG 
standard independently.
---------------------------------------------------------------------------

    \34\ For administrative convenience, EPA will include the entire 
Commonwealth of Virginia in the OTR trading region (designated as 
the Northeast Trading Region (NTR)) even though only northern 
Virginia is in the OTR. Inclusion in the trading region means that 
for purposes of assessing compliance with the fleet average NMOG 
standard and the other National LEV provisions, the entire 
Commonwealth of Virginia will be considered as a whole as part of 
the NTR. This inclusion is only for purposes of the National LEV 
program. EPA received no negative comments on the proposed inclusion 
of the entire state of Virginia in the trading region.
---------------------------------------------------------------------------

    Therefore, manufacturers will be required to calculate four 
separate fleet average NMOG values for four separate averaging sets: 
Class A in the NTR, Class A in the 37 States, Class B in the NTR, and 
Class B in the 37 States. Each manufacturer will have a separate 
balance for each of the two regions, which will be calculated by 
summing all of the manufacturers' credits and debits within that 
region.35 Only credits remaining after calculating the 
manufacturer's balance for the region will be available for trading, 
and they may be traded only in that region.
---------------------------------------------------------------------------

    \35\ Credits or debits earned or incurred in the National LEV 
program would not be interchangeable with credits or debits earned 
or incurred in California because the National LEV and California 
LEV programs are separate.
---------------------------------------------------------------------------

    As under the California regulations, the National LEV standards 
provide that manufacturers may incur a debit balance in a given region 
and model year, but the manufacturer must equalize any emission debits 
by the reporting deadline after the end of the following model year. 
Manufacturers will be able to offset debits by (1) using credits 
generated by that manufacturer in a previous year (discounted if 
appropriate), (2) earning an equal amount of emission credits the year 
after incurring the debit, or (3) presenting to EPA an equal amount of 
credits acquired from another manufacturer. However, a manufacturer 
will have to use any available credits from a region to offset any 
debits from the same region in the model year those debits were 
generated. A manufacturer may not carry over to the next model year 
both credits and debits for the same region or transfer those credits 
to another manufacturer. A manufacturer that fails to equalize debits 
within the required time period will be deemed to be in violation as of 
that date. The deadline for equalizing debits is the due date for the 
annual report for the model year following the model year in which the 
debits were generated.
    As proposed, the voluntary standards also incorporate the 
California approach for discounting unused credits over time. Unused 
credits that are available at the end of the second, third and fourth 
model year after the model year in which the credits were generated 
will be discounted to 50 percent, 25 percent, and 0 percent of the 
original value of the credits, respectively. For example, if a 
manufacturer generated 200 credits in the OTR in MY1999, those credits 
would retain their full value in MY2000. However, in MY2001, the 
credits would be discounted by 50 percent, so the manufacturer would 
hold only 100 credits. In MY2002, the manufacturer would hold 50 
credits, and in MY2003, the credits would have no value.
    As with other emission credits or allowances recognized under the 
Act, credits would not be the holder's property, but instead would be a 
limited authorization to emit the designated amount of emissions. 
Nothing in the regulations or any other provision of law should be 
construed to limit EPA's authority to terminate or limit this 
authorization through a rulemaking.
    b. Early Reduction Credits. Manufacturers may also generate credits 
in the 37 States prior to MY2001 for use in the 37 States, as EPA 
proposed in the NPRM. This will provide manufacturers added flexibility 
as well as create an incentive for them to introduce cleaner vehicles 
into this region before MY2001, thus providing air quality benefits 
sooner. Since these credits cannot be used or traded before MY2001, EPA 
will treat any credits earned in the 37 States before MY2001 as if 
earned in MY2001. It does not make sense to apply the normal discount 
rate to these credits before MY2001 because that would remove or 
sharply reduce the incentive for early introductions. This is also 
consistent with California's approach to allowing early generation of 
credits. However, these credits will be subject to the normal discount 
rate starting with MY2001, meaning they will retain their full value 
for MY2002 and will be discounted from then on. In addition, these 
early reduction credits will be subject to a one-time ten percent 
discount applied in MY2001, as discussed below.
    EPA believes that there are substantial benefits to encouraging 
early introductions of cleaner vehicles, but remains concerned that 
giving full, undiscounted credits for all early reductions may generate 
some windfall credits. ``Windfall'' credits are credits given for 
emission reductions the manufacturer would have made even in the 
absence of a credit program. The purpose of giving credits for early 
reductions is to encourage manufacturers to make reductions that they 
would not have made but for the credit program. Because credits can be 
used to offset higher emissions in later years, if manufacturers are 
given credits for early reductions they would have made even without a 
credit program, then the credit program could have a detrimental effect 
on the environment.
    There is some potential for windfall credits here because, in the 
absence of early reduction credits, it is likely that there still would 
be some early introduction of National LEV vehicles in the 37 States. 
Under the California LEV program, windfall credits should not occur 
because there is no other regulatory or market incentive for 
manufacturers to introduce new technology early in California. Under 
National LEV, however, manufacturers would already be producing cleaner 
vehicles for California and the OTR. Distribution efficiencies would 
encourage some cross-border sales of National LEV vehicles in the 
states bordering the OTR, and manufacturers might certify some 50-state 
engine families due to economies of scale in production and 
distribution.36 The potential influence of such economic 
factors is illustrated by the fact that manufacturers are currently 
producing numerous 50-state engine families without the chance to earn 
early credits.37
---------------------------------------------------------------------------

    \36\ To the extent that 50-state vehicles or cross border sales 
are driven by the existence of National LEV requirements in the OTR, 
it could be argued that credits for such vehicles would not be 
windfall credits because the economic incentives for supplying such 
vehicles would stem from the National LEV program itself. Even if 
this were the case, giving manufacturers early reduction credits for 
such vehicles would still reduce the benefits of National LEV 
relative to its benefits absent early reduction credits, which would 
appropriately be considered windfall credits. Moreover, in the 
absence of National LEV, adoption of CAL LEV programs in at least 
some OTC States might well have driven many of the same production 
choices. Thus, to the extent that those 50-state vehicles would have 
been supplied to the 37 States with or without National LEV, early 
reduction credits for such vehicles would be windfalls.
    \37\ This quantity of 50-state vehicles does not necessarily 
have any relevance to estimating supply of such vehicles in the 
absence of early reduction credits, however. In the past, 
manufacturers have moved toward 50-state certification primarily 
because California and federal standards were not significantly 
different. However, the much larger differences between Tier 1 and 
LEV standards will reduce the incentives to certify 50-state 
vehicles under National LEV before MY2001.
---------------------------------------------------------------------------

    Despite the potential for some windfall credits, the 37 States will 
receive substantial benefits from early introductions of cleaner 
vehicles. Early introduction will benefit public health and help areas 
in the 37 States that currently exceed the ozone standard to come into 
attainment sooner through fleet turnover replacement of older, higher-
emitting vehicles. Early reduction credits can be a powerful incentive 
for early introductions, and the National LEV program should take full 
advantage of this tool. Early reduction credits also benefit 
manufacturers by providing additional compliance flexibility. Further, 
while some windfall credits might be generated along with early 
reductions

[[Page 31215]]

that should be credited, such windfall credits could never be precisely 
quantified, given that the calculation would have to be based on 
predicting actions under circumstances that do not exist.
    Balancing these factors, EPA has structured the National LEV 
program to provide a significant incentive for early introductions, 
while assuring some environmental benefit to offset any possible 
windfall credits. EPA believes it is appropriate to err on the side of 
environmental protectiveness here. Compensating for potential windfall 
credits will help ensure that the benefits of encouraging early 
introductions are not offset by increased emissions overall. Moreover, 
while manufacturers objected to any sort of adjustment to account for 
potential windfall credits, the opportunity to earn early reduction 
credits at all is not addressed in the MOUs initialed by the OTC States 
and manufacturers, and EPA does not believe that either party regards 
early reduction credits or limitations on such credits as important in 
their decisions whether to participate in the program.
    It would be impossible to identify which early introductions would 
have occurred even in the absence of the credit incentive. Rather, the 
most straightforward way to address the possibility of windfall credits 
is to discount all early reduction credits by a set percentage. This 
discount rate must be low enough to retain the marginal incentive to 
generate early reduction credits. Recognizing that precision is 
impossible here, EPA has attempted to pick a discount rate that 
reflects some real environmental benefit, but does not so devalue early 
reduction credits as to discourage manufacturers from generating them. 
On the basis of these criteria, EPA has selected a ten percent discount 
rate to be applied on a one-time basis to all credits earned in the 37 
States region before MY2001. The ten percent discount rate should not 
provide a significant disincentive to manufacturers generating credits 
and it is in line with comparable provisions in other EPA 
programs.38 EPA believes that this figure appropriately 
balances the goals of preserving the expected emissions reductions from 
National LEV, with a margin of error to protect the environment, and 
encouraging early introduction of cleaner National LEV vehicles into 
the 37 States.
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    \38\ For example, the Open Market Trading Rule, 60 FR 39668 
(August 3, 1995) and 60 FR 44290 (Aug. 25, 1995) proposed a ten 
percent discount rate for all generated credits. This NPRM has been 
turned into guidance that will be issued to the states. See also the 
heavy duty averaging, banking, and trading program, which requires 
that any debits be made up at a ratio of 1.2 to 1, equivalent to a 
20 percent discount on the credits being applied to make up the 
debits. See 40 CFR 86.094-15.
---------------------------------------------------------------------------

    Today's action also clarifies EPA's proposal to allow low volume 
manufacturers to generate credits in the OTR prior to MY2001, when they 
would first be required to meet the fleet average NMOG standards. In 
the NPRM, EPA stated that these manufacturers could generate and sell 
credits in the OTR. EPA is expanding this requirement to allow low 
volume manufacturers also to bank and then use these credits beginning 
in MY2001. These credits would be discounted in the same manner as 
credits generated in the OTR by the other manufacturers. Unlike the 
early reduction credits in the 37 States, these early reduction credits 
could be used prior to MY2001, if transferred to other manufacturers.
    c. Enforcement of Fleet Average NMOG Credit Program. As described 
in the proposal (60 FR 52750), compliance for vehicles subject to the 
fleet average NMOG standards will be evaluated in two ways. First, 
compliance of an individual vehicle with its certified NMOG tailpipe 
emissions levels will be determined and enforced in the same manner as 
compliance with any other emission standard. Each vehicle must meet its 
certified emission standards as determined and enforced through 
certification, SEA, in-use testing, and, for certain vehicles, testing 
performed under some California assembly-line programs.39 
Second, manufacturers must show that they meet the applicable fleet 
average NMOG standards. Manufacturers can either report a fleet average 
NMOG level meeting the applicable fleet average NMOG standard or 
present to EPA enough credits to offset any debits by the reporting 
deadline after the end of the model year following the model year in 
which the debits were incurred.
---------------------------------------------------------------------------

    \ 39 \ See section VI.C.1. of this rulemaking for a discussion 
on the California Quality Audit Program.
---------------------------------------------------------------------------

    The fleet average NMOG credit program will be implemented and 
enforced through the certificate of conformity, which the manufacturer 
will be required to obtain under 40 CFR 86.1721-97 for all vehicles 
prior to their introduction into commerce. The certificate for each 
vehicle will require the vehicle to meet the applicable National LEV 
tailpipe and related emission standards, and will be conditioned on the 
manufacturer demonstrating compliance with the applicable fleet average 
NMOG standard within the required time frame. If a manufacturer fails 
to meet this condition, the vehicles causing the fleet average NMOG 
violation will be considered not covered by the certificate applicable 
to the engine family. EPA will then assess penalties on an individual 
vehicle basis for sale of vehicles not covered by a certificate.
    If a manufacturer does not equalize its debits within the specified 
time period, EPA will calculate the number of noncomplying vehicles by 
dividing the total amount of debits for the model year by the fleet 
average NMOG requirement applicable for the model year and averaging 
set in which the debits were first incurred. In the case where both 
averaging sets in a region are in deficit, any applicable credits would 
first be allocated to the averaging sets as determined by the 
manufacturer; then, the number of noncomplying vehicles would be 
calculated using the revised debit values. Each noncomplying vehicle 
will be deemed to be in violation of the condition on its certificate. 
EPA will determine these vehicles by designating vehicles in those 
engine families with the highest certification NMOG emission values 
first and continuing until a number of vehicles equal to the calculated 
number of noncomplying vehicles as determined above is reached. In the 
instance where only a portion of vehicles in a particular engine family 
would be deemed noncomplying vehicles, EPA will determine the actual 
noncomplying vehicles by counting backwards from the last vehicle 
produced in that engine family.40 Manufacturers will be 
liable for penalties for each vehicle sold not covered by a 
certificate. This is a one-time violation and would not subject the 
manufacturer to further penalties related to the sale of those vehicles 
without a certificate for failing to meet the fleet average NMOG 
standard.41 Because a violation has not occurred until a 
manufacturer fails to make up outstanding debits within the required 
time period, for purposes of assessing the time of the violation and 
the tolling of the Statute of Limitations, the violation occurs upon 
the due date for filing the annual report for the model

[[Page 31216]]

year after the model year in which the manufacturer generated the 
debits.
---------------------------------------------------------------------------

    \40\ For example, if the noncompliance calculation determined 
that only 100 vehicles of a 1000 vehicle engine family contributed 
to the debit situation, then EPA will designate the last 100 
vehicles produced as the actual vehicles sold in violation of the 
condition of their certificates.
    \41\ Those vehicles, as any other vehicles, would still be 
subject to a federal recall action under section 207(c) of the CAA 
if EPA found they did not meet their certification standards in use, 
but that would be unrelated to the lack of coverage by a certificate 
at the time of sale. For purposes of any in-use enforcement action, 
the vehicles will be held to the certification standards stated in 
the certificate that would have covered the vehicles but for the 
violation of the condition on the certificate.
---------------------------------------------------------------------------

    In the NPRM, EPA took comment on whether manufacturers should 
automatically be required to make up any outstanding debits, even if 
the manufacturer would also be subject to penalties in an enforcement 
action for failure to make up the debits within the required time 
period. Such an approach is exemplified in the acid rain trading 
program under Title IV of the Act. In general, EPA believes that 
enforcement of an emissions trading program should be structured to 
hold the environment harmless for any violations. A trading approach 
provides manufacturers additional flexibility and lower costs for 
compliance with a given standard. It is important that this flexibility 
does not undercut the expected environmental benefits.42 EPA 
believes that requiring manufacturers to offset any debits, in addition 
to paying a penalty, is the best means of ensuring that the 
environmental benefits of an emissions trading program are maintained.
---------------------------------------------------------------------------

    \42\ Even in the case where manufacturers make up debits after 
the deadline there is some cost to the environment from the 
additional delay in meeting the fleet average NMOG standard.
---------------------------------------------------------------------------

    However, EPA believes an approach different from the proposed 
approach is appropriate here. While there will be strong incentives for 
manufacturers to make up outstanding debits, as discussed below, debits 
will not continue to roll over automatically until they are made up. 
Instead, EPA will assess whether a manufacturer met the fleet average 
NMOG requirement for each model year, based on whether the manufacturer 
offset its debits for the model year by the deadline.
    There are several reasons why EPA believes this alternative 
approach is appropriate under the particular circumstances of National 
LEV. First, because National LEV is a voluntary program, EPA cannot 
impose provisions that would preclude the parties from agreeing to the 
program. The motor vehicle manufacturers have indicated that it would 
be unacceptable to continually roll over outstanding debits into the 
next year's balance, in addition to making them subject to penalties 
for failure to make up the debits on time. Second, EPA is confident 
that the National LEV program will meet the statutory requirements for 
emissions reductions from motor vehicles, even if manufacturers are not 
automatically required to make up debits, because National LEV will 
produce emissions reductions substantially beyond those required by 
title II of the CAA. Third, not rolling over debits will not affect the 
relative quantity of emissions reductions from National LEV compared to 
those that would be produced by OTC state-by-state adoption of CAL LEV 
programs because CAL LEV also is not structured to require that 
manufacturers make up debits automatically.
    Finally, EPA believes that its current enforcement authority 
provides strong incentives for manufacturers to remedy the 
environmental harm by making up debits. If the Agency determines that 
an enforcement action is appropriate, EPA would have some discretion in 
choosing the appropriate penalties. The sale of vehicles not covered by 
a certificate is a violation under CAA section 203(a). Section 205 
authorizes penalties of up to $25,000 per vehicle. The applicable 
penalties are listed in section 205(a) of the Act. Among the statutory 
penalty factors listed in section 205 is ``action taken to remedy the 
violation,'' which EPA would take into account in determining the 
ultimate penalty to be assessed. The Agency also has broad injunctive 
relief authority under section 204, and other applicable injunctive 
relief provisions, which EPA would use if necessary to require that 
environmental harm be corrected.
    Where a manufacturer has opted out of the program, the manufacturer 
will remain subject to an enforcement action for failure to make up any 
outstanding debits within the required time period. Such a manufacturer 
could make up debits through purchasing credits. If the manufacturer 
failed to make up the debits, but took other action to remedy the 
violation, EPA would take this into account in determining the ultimate 
penalty to be assessed, as discussed above. Failure to make up debits 
outstanding upon opt-out within the required time frame is a one-time 
violation.
    EPA will also use the mechanism of conditioning the certificate to 
enforce the requirement that manufacturers not sell credits that they 
have not generated. If a manufacturer transferred invalid credits, the 
manufacturer would receive an equivalent number of debits, which the 
manufacturer would be required to offset by the reporting deadline for 
the same model year in which the invalid credits were generated. 
Failure to make up these debits within the required time period would 
be considered a violation of the condition on the certificate and 
nonconforming vehicles will not be covered by the certificate. EPA will 
identify the nonconforming vehicles in the same manner as described 
above.
    When credits are transferred between manufacturers, EPA proposed 
generally to make both the provider and receiver of credits potentially 
liable for any credit shortfall resulting from the trade. With today's 
action, EPA has determined that this is unnecessary in the context of 
the National LEV program. Instead, EPA will treat traded credits as 
presumptively valid, which is the approach California takes under its 
LEV program. Should the credit generator have erroneously sold credits 
that did not exist, the generator would be liable for making up the 
resulting deficits and, where appropriate, for violating the 
regulations governing generation and sale of credits. Where the credit 
generator provided valid credits, yet a credit shortfall occurred 
because the recipient held insufficient credits, no liability would 
attach to the generator. In instances of fraud, EPA retains the 
authority to enforce against any party to such fraud. EPA believes that 
the integrity of credit transactions will be sufficiently served by 
holding the party reporting a shortfall responsible for making up the 
deficit and retaining enforcement authority against parties improperly 
transferring credits.
    This enforcement mechanism operates in a similar fashion to the 
comparable mechanism under the California LEV regulations. California 
focuses on the party reporting a shortfall of credits associated with 
its fleet average NMOG calculations. One difference in the California 
and National LEV fleet average NMOG enforcement schemes is that 
California provides for timely verification of credits while the 
National LEV program does not. This enables California generally to 
avoid instances where invalid credits are traded. The National LEV 
program accounts for this by not holding a credit recipient liable for 
purchasing invalid credits.
    As stated in the discussion on multi-party liability for credit 
transactions in the Response to Comments document, EPA believes that an 
enforcement scheme that will charge a party for credits it sells and 
then generally will only look to the party reporting a shortfall is 
both fair and efficient in the circumstances of the National LEV 
program. This approach will create an incentive for credit generators 
to ensure that the credits they are trading are valid. Putting the 
burden on the credit generator places responsibility on the party that 
is best able to ensure the validity of credits through careful trading 
and record-keeping. This approach also enhances the viability of the 
market by reducing risks for credit buyers. The risk that credits might 
be invalidated and the buyer might be liable for a shortfall would 
create a disincentive for manufacturers to rely

[[Page 31217]]

on credit purchases for compliance, particularly given the difficulty a 
buyer may have in independently validating credits. In cases where 
credits have changed hands more than once, enforcing against the credit 
generator removes any question between the various trading parties as 
to whose credits actually caused the debit situation and creates a 
simple enforcement scheme.
    There are several aspects of National LEV that reduce the need for 
multi-party liability in this program. First, once EPA receives the 
annual compliance reports, it will be very simple to verify whether the 
credits were actually generated and assign responsibility for the 
shortfall. If EPA can easily assign responsibility and enforce against 
one party, there is less need to hold the other party potentially 
liable as well. Second, because verification is so straightforward, EPA 
expects few problems with sales of invalid credits. Giving buyers an 
incentive to help enforce the validity of credits adds relatively 
little under these circumstances, particularly given that access to 
production data would be necessary for validation and this is something 
manufacturers are unlikely to share with competitors. Third, the main 
benefit to retaining multi-party liability in the National LEV context 
would be to protect against a situation where one party sells invalid 
credits and then goes bankrupt, leaving no one liable for either 
penalties or compensation for the environmental harm. Given the 
stability of the motor vehicle manufacturing market, EPA believes this 
is a highly unlikely scenario. In this context, retaining multi-party 
liability simply to address such an eventuality is not worth the likely 
disincentive to trading. EPA does not believe, however, that this 
balancing of advantages and disadvantages would necessarily support the 
same decision for other differently situated trading programs.
    d. Reporting for Fleet Average NMOG Credit Program. Manufacturers 
are required to prepare an annual report after the end of each model 
year to demonstrate compliance with the applicable fleet average NMOG 
standards. Manufacturers must submit the report no later than May 1 of 
the calendar year following the end of the given model year. 
Manufacturers must also report any credit transactions for the year as 
part of the annual report. EPA does not believe that more frequent 
reporting of trading actions, such as the California program 
requirement of immediate reporting of trades, is necessary or 
appropriate under the National LEV program. The only practical benefit 
to more frequent reporting would be for a credit recipient to verify if 
credits had already been traded. But under the liability scheme 
described in today's action, the recipient would generally carry no 
liability if the credit generator sold it credits that were not 
available for sale. Thus, more frequent reporting is not necessary to 
protect the buyer or enforce against the generator in the event of a 
sale of invalid credits. EPA intends to develop an electronic reporting 
mechanism that is similar to California's format. The format for 
reporting fleet average NMOG data will be detailed in a Dear 
Manufacturer letter from EPA after the final regulations have been 
published.
    The integrity of the proposed fleet average NMOG credit program 
depends on accurate record keeping and reporting by manufacturers, and 
effective tracking and auditing by EPA. If a manufacturer fails to 
maintain the required records, EPA may void the certificates for the 
affected vehicles ab initio. If a manufacturer violates reporting 
requirements, the manufacturer is subject to penalties of up to $25,000 
per day, as authorized by section 205 of the Clean Air Act.
    In the NPRM, EPA proposed to allow manufacturers the opportunity 
for a hearing if the Agency decided to void a certificate as part of an 
enforcement action. EPA is including this language in the final rule, 
but is clarifying the scope of its application. A hearing would not be 
available for determination that certain vehicles were not covered by a 
certificate due to a violation of a condition of a certificate, such as 
an exceedance of the fleet average NMOG requirements. In this situation 
EPA is not suspending or revoking the certificate. Rather, EPA is 
applying a limitation included in granting the certificate to determine 
which vehicles the certificate covers. Moreover, if EPA brought an 
enforcement action against a manufacturer based on a determination that 
certain vehicles were not covered by a certificate when sold, such an 
action would provide the manufacturer an opportunity for a hearing at 
that juncture. However, if EPA voids a certificate ab initio, 
manufacturers would have an opportunity for a hearing on that action of 
voiding the certificate.
4. Limits on Sale of Tier 1 Vehicles and TLEVs
    As recommended by the OTC States and the manufacturers, today's 
rule contains two limits on the sale of TLEVs and Tier 1 vehicles in 
the OTC States after MY2000. First, the rule places a five percent cap 
on sales of Tier 1 vehicles and TLEVs in the NTR starting in MY2001. 
The industry-wide number of these LDVs and LLDTs sold in a model year 
in the NTR is limited to five percent of the total number of new 
National LEV motor vehicles sold in that model year in the NTR. Second, 
manufacturers may sell Tier 1 vehicles and TLEVs in the NTR after 
MY2000 only if the same engine families are certified and offered for 
sale in California as Tier 1 vehicles and TLEVs in the same model year. 
These requirements address concerns raised by some parties regarding 
whether National LEV would achieve NOX emissions equivalent 
to OTC LEV (and thus to OTC state-by-state adoption of CAL LEV 
programs). As discussed in greater detail in the NPRM (60 FR 
52751(col.1)), the concern is that the higher fleet average NMOG 
standards under National LEV might allow manufacturers to sell 
relatively greater numbers of Tier 1 vehicles and TLEVs in the OTR than 
they could have sold under OTC state-by-state adoption of CAL LEV 
programs, which could have a disproportionate effect on NOX 
emissions. The final rule modifies the proposed limit on the sale of 
these vehicles in a few respects to simplify its administration.
    As proposed, EPA would assess compliance with the five percent cap 
on the basis of the total sales of vehicles by all manufacturers in the 
NTR in a given model year.43 If the industry-wide cap is 
exceeded, EPA would allocate responsibility for that exceedance among 
individual manufacturers whose sales of Tier 1 vehicles and TLEVs 
exceeded five percent of the number of vehicles in their individual NTR 
fleets. Each of these manufacturers would be responsible only for its 
pro rata share of the industry-wide exceedance, not for the amount by 
which it exceeded five percent of its own fleet. For example, assume 
the industry-wide five percent cap was exceeded by 20 vehicles, 
manufacturers A and B were the only ones who exceeded a manufacturer-
specific five percent cap, manufacturer A exceeded five percent of its 
fleet by 100 vehicles, and manufacturer B exceeded five percent of its 
fleet by 300 vehicles. Manufacturer A would be responsible for five 
vehicles, while manufacturer B would be responsible for 15 vehicles.
---------------------------------------------------------------------------

    \43\ This total would not include vehicles sold by a 
manufacturer that had opted out of National LEV, regardless of 
whether EPA determined the opt-out to be valid.
---------------------------------------------------------------------------

    Apart from the provision for industry-wide averaging to determine 
the total number of vehicles violating the five percent cap, this 
approach does not

[[Page 31218]]

otherwise provide for compliance through averaging, banking and 
trading. As discussed at length in the NPRM (60 FR 52751-52754), a 
trading system is extremely difficult to use to enforce an industry-
wide violation. None of the commenters offered any suggestions as to a 
workable way to retain trading to meet the five percent cap agreed to 
by the OTC States and manufacturers. Nevertheless, the approach in the 
final rule maintains the most important aspect of flexibility for 
manufacturers in that it assesses compliance industry-wide and only 
holds individual manufacturers responsible for their pro rata share of 
the industry-wide exceedance.
    Enforcement of the five percent cap will be delayed until the first 
full model year following a model year in which EPA notifies 
manufacturers that they have exceeded the industry-wide five percent 
cap. This ensures that manufacturers likely to sell Tier 1 vehicles and 
TLEVs in excess of five percent of their individual fleets will have 
warning that the industry as a whole may not be below the five percent 
cap. Those manufacturers will then be able to reduce their own 
percentage production of Tier 1 vehicles and TLEVs beginning in the 
following model year, which would be the first year in which EPA could 
enforce the five percent cap.
    This delayed enforcement of the five percent cap substitutes for a 
trading approach by allowing manufacturers time to adjust their 
production after an industry-wide exceedance rather than protecting 
themselves prior to an industry-wide exceedance by purchasing credits. 
While this delayed enforcement approach has the potential to allow up 
to two years of exceedances of the five percent cap, EPA does not 
believe this is sufficient to affect the acceptability of emissions 
reductions from National LEV when compared to those that could be 
produced by OTC state-by-state adoption of CAL LEV programs. EPA 
believes that both the likelihood of an industry-wide exceedance and 
the emissions impact of such an exceedance, if it occurred, are very 
small. Moreover, the administrative burden of a trading program without 
delayed enforcement greatly outweighs the potential environmental 
benefits of the approach adopted here.
    As proposed, low volume manufacturers are exempt from the five 
percent cap provisions. EPA recognizes that these manufacturers may 
lack the flexibility in their product line that would allow them to 
adjust the makeup of their fleet to meet this requirement. Also their 
small market share means that the potential contribution of increased 
NOX emissions from these manufacturers would be 
insignificant.44 Vehicles produced by low volume 
manufacturers will not be included in calculating the industry-wide 
total number of vehicles sold in the NTR or industry-wide compliance 
with the five percent cap.
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    \44\ For example, in MY1994, low volume manufacturers accounted 
for less than 0.5 percent of the overall motor vehicle fleet.
---------------------------------------------------------------------------

    Coupled with the five percent cap is a requirement that beginning 
in MY2001, manufacturers will be able to offer Tier 1 vehicles or TLEVs 
for sale in the NTR only if the same engine families are certified and 
offered for sale in California in the same model year.45 
This requirement applies to all manufacturers, including low volume 
manufacturers. This provision should reduce the likelihood that the 
industry will ever exceed the five percent cap by encouraging the same 
sales mix under National LEV and OTC state-by-state adoption of CAL LEV 
programs. To meet the tighter NMOG standards in California, 
manufacturers will need to produce a mix of engine families that 
includes relatively fewer Tier 1 vehicles and TLEVs but still meets 
consumer demand for a range of types of vehicles.46 Because 
consumer demand for a given type of vehicle does not tend to vary 
widely by region, once limited to producing a certain number of Tier 1 
and TLEV engine families for California, manufacturers are unlikely to 
sell a significantly different vehicle mix in the OTR. The National LEV 
provision for reduced reporting requirements for manufacturers with 100 
percent LEV fleets provides an additional incentive for manufacturers 
not to produce any Tier 1 vehicles and TLEVs.
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    \45\ This requirement would not apply to a manufacturer 
supplying Tier 1 vehicles pursuant to an opt-out from National LEV 
that EPA had determined to be invalid during the period that the 
determination was undergoing legal challenge.
    \46\ The CARB fleet average NMOG standard for passenger cars for 
MY2001 is 0.070 g/mi, which is below the comparable NMOG standard 
for LEVs. Thus, a manufacturer will likely have to produce a fleet 
of mostly LEVs and ULEVs to meet this California requirement.
---------------------------------------------------------------------------

    Both of these limits on sales of Tier 1 vehicles and TLEVs would be 
implemented and enforced in the same manner as the fleet average NMOG 
standards. The certificate for each Tier 1 vehicle and TLEV produced 
and offered for sale in the NTR in MY2001 and later model years would 
be conditioned on demonstrating compliance with the five percent cap 
provisions; it would also be conditioned on the manufacturer certifying 
and offering for sale the same engine families in California in the 
same model year. If a manufacturer failed to comply with these 
requirements, then each noncomplying vehicle would be deemed to be in 
violation of the certificate of conformity. For a violation of the five 
percent cap, the number of noncomplying vehicles would correspond to 
the manufacturer's pro rata share of the industry-wide exceedance. EPA 
would determine these noncomplying vehicles in the same manner as for 
violations of the fleet average NMOG standards, starting with vehicles 
in engine families with the highest certification NMOG values.
    Manufacturers would not be required to prepare an annual report 
demonstrating compliance with the five percent cap provision because 
all relevant data will be provided to EPA under the requirements of the 
fleet average NMOG program. However, manufacturers would still be 
required to maintain accurate records and failure to do so could result 
in EPA voiding ab initio the certificates of the affected vehicles and 
imposing any other applicable penalties.
5. Tailpipe Emissions Testing
    This section discusses how exhaust emission standards will be 
measured for NLEVs during vehicle certification testing. To specify the 
exhaust emission standards that NLEVs must meet, it is necessary to 
specify the test procedure and fuel used to measure exhaust emissions. 
For the National LEV program, this is complicated by the fact that EPA 
has recently completed revisions to its test procedure used to measure 
exhaust emissions. 61 FR 54852 (October 22, 1996). CARB is also in the 
process of changing its test procedure. This section discusses how the 
National LEV program will be affected by the EPA and CARB changes to 
the FTP. This section also discusses the test fuel to be used for 
measuring National LEV exhaust emissions.
    a. Federal Test Procedure. The FTP, as revised, is the vehicle test 
procedure that will be used by EPA and CARB to determine compliance of 
LDVs and LDTs with the conventional or ``on-cycle'' exhaust emission 
standards. EPA and CARB use the FTP to test vehicle emissions 
performance over a ``typical'' driving schedule, using a dynamometer to 
simulate actual road conditions. EPA recently revised the FTP to 
replicate actual driving patterns more accurately. In addition to 
requiring an equipment change to the existing FTP, the revisions add 
new ``off-cycle'' test sequences (Supplemental Federal Test Procedure 
or SFTP) and standards to control emissions under driving patterns not

[[Page 31219]]

tested under the old FTP.47 This section discusses the 
revisions to the FTP and their ramifications for National LEV.
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    \47\ For purposes of this discussion, the FTP is the old on-
cycle test procedure. The FTP, as revised, is the on-cycle test 
procedure with the new dynamometer. The SFTP is the test procedure 
for the off-cycle driving patterns.
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    The FTP revisions have been under consideration for several years. 
As the Agency noted in the preamble to the National LEV proposal, EPA 
was pursuing changes to the FTP through a separate rulemaking under 
section 206(h) of the CAA, which requires EPA to ``review and revise as 
necessary [the FTP] to insure that vehicles are tested under 
circumstances which reflect the actual current driving conditions under 
which motor vehicles are used. * * *'' After an extensive test program 
and review of available data, the Agency concluded in 1994 that 
modifications to the FTP were necessary. Shortcomings identified in the 
review included a poor representation of actual road load conditions by 
the standard FTP dynamometer and regimes of non-FTP or ``off-cycle'' 
driving whose absence from the existing FTP drive cycle (the Urban 
Dynamometer Driving Cycle or UDDS) had potentially significant 
emissions impacts.
    EPA published a Revised FTP proposal on February 7, 1995 (60 FR 
7404). Key elements of the proposal were an improved dynamometer 
specification, and new off-cycle requirements for aggressive driving 
and air conditioning emission standards, and a new Supplemental Federal 
Test Procedure (SFTP) for determining compliance with those standards. 
The only major change proposed for on-cycle compliance was the 
dynamometer revision (e.g., the UDDS itself was unmodified). The 
stringency of the proposed off-cycle emission standards was based on 
the technologies found in vehicles certified to the current, federal 
on-cycle (Tier 1) emission standards. A final rule implementing the 
SFTP was published on October 22, 1996. 61 FR 54852. EPA did not 
propose LEV-stringency off-cycle standards as part of its Revised FTP 
rulemaking or as part of the National LEV rulemaking.
    EPA and CARB have coordinated closely their review of the FTP, 
their research efforts, and the development of their respective off-
cycle policies. (The vehicle manufacturers have also contributed 
significant testing resources and technical analysis to the program.) 
CARB is likely to make changes identical to EPA's changes to the on-
cycle test procedure. CARB also is likely to adopt off-cycle standards 
and requirements that it deems appropriate for TLEVs, LEVs, and ULEVs. 
The American Automobile Manufacturers Association (AAMA), the 
Association of International Automobile Manufacturers (AIAM), and CARB 
have now reached an agreement regarding off-cycle emission standards 
for LEVs and ULEVs. The agreement to date is summarized in 
correspondence (available in the public docket for this rulemaking) 
between the auto manufacturers and CARB. That agreement centers upon 
establishing low-mileage (4,000 miles) emission standards to assure 
control of emissions from new motor vehicles using the off-cycle 
driving schedules, while relying on a revised FTP, as well as OBD II 
systems, to monitor deterioration of in-use emissions. The 4,000 mile 
standard for LEVs and ULEVs is believed to require controls 
significantly more stringent than would be required by applying the 
recently promulgated federal off-cycle standards. CARB released a 
public mailout on April 3, 1997, that details their proposed off-cycle 
emissions standards, and expects to submit a proposal to their Board in 
July of 1997. The auto manufacturers have concluded that the finalized 
CARB SFTP standards, if consistent with their agreement with CARB, are 
appropriate to extend to the National LEV program.
    In the National LEV NPRM, EPA proposed to apply the Revised FTP 
(both on-cycle and off-cycle components), once it was finalized, to 
vehicles in the National LEV program. Further, the Agency stated its 
intent to harmonize National LEV requirements with any off-cycle FTP 
revisions that California subsequently adopts for its LEV program. The 
Agency received only one comment in response to the National LEV 
proposal on the interplay between the Revised FTP effort and the 
National LEV rule. That comment supported including the SFTP and the 
associated off-cycle emission standards in the Stable Standards.
    EPA's treatment of the FTP in this final National LEV rule is 
consistent with the proposal. Changes to the light-duty test procedures 
promulgated in EPA's final Revised FTP rulemaking apply to NLEVs as 
well as to the rest of the light-duty fleet. Thus, the revised FTP will 
be used to determine compliance with the TLEV, LEV, and ULEV on-cycle 
exhaust standards set forth in IV.B.1. In addition, unless and until 
California adopts off-cycle standards for LEVs and ULEVs, all NLEV 
vehicles must meet the off-cycle exhaust standards recently adopted by 
EPA (40 CFR 86.000-8 and 40 CFR 86.000-9). EPA intends to take further 
comment in the SNPRM on what off-cycle standards and phase-in should 
apply to all vehicle types in the National LEV program if California 
adopts off-cycle standards for LEVs and ULEVs. EPA intends to harmonize 
its off-cycle standards for LEVs and ULEVs with California once 
California adopts such standards. If the final CARB SFTP standards are 
consistent with the CARB/manufacturer agreement, EPA intends to propose 
to adopt the CARB 4,000 mile standard for LEVs and ULEVs under the NLEV 
program, which would probably make compliance with the recently 
promulgated federal off-cycle standards unnecessary for these vehicle 
types.
    b. Compliance Test Fuel. EPA is today adopting the National LEV 
compliance fuel provisions as they were proposed. Manufacturers will 
determine their certification fuel specifications for exhaust testing 
of both petroleum and alternative fuel NLEVs according to California's 
certification fuel requirements. Those regulations currently include 
the option to certify gasoline TLEVs, LEVs, and ULEVs on either federal 
fuel or California Phase II reformulated gasoline. Tier 1 vehicles must 
continue to be certified on federal fuel. The approach to 
specifications for alternative fuels and the rationale for that 
approach are the same as given in the NPRM (50 FR 52755 (col. 3)).
    Data presented by California and others during the adoption of 
California's LEV program emission standards show that the use of 
California Phase II gasoline will reduce vehicle emission levels during 
exhaust testing compared to testing using federal certification fuel, 
thus having a direct impact on the ability of manufacturers to meet the 
standards. In the NPRM, EPA stated a belief that it cannot allow the 
use of California Phase II gasoline to demonstrate compliance with Tier 
1 standards because that would not demonstrate compliance with the 
mandatory federal standards, but solicited comment on this issue. EPA 
is finalizing its proposed requirement that federal fuel must be used 
to certify Tier 1 vehicles.
    There are several logistical reasons to allow manufacturers to use 
California Phase II as a certification fuel in the National LEV 
program. Allowing use of the same certification fuel in the California 
and federal programs will reduce the manufacturers' cost of 
demonstrating compliance, while still ensuring that the CAA-mandated 
exhaust standards are met. Moreover, under OTC state adopted LEV 
programs, all the OTC States would be required to allow the use of 
California Phase II gasoline for emission compliance. Consequently, 
using California Phase II

[[Page 31220]]

gasoline for certification demonstrations in OTC States will not reduce 
the environmental benefits of National LEV relative to the benefits of 
OTC state-by-state adoption of CAL LEV programs.
    The use of California Phase II gasoline for certification and 
compliance testing does not mean that in-use fuels will need to be 
changed to conform to the test fuel. In-use fuels, which are not being 
changed as a result of National LEV, are discussed later (section 
IV.B.7.).
    c. NMOG vs. NMHC. Today's rule adopts California's NMOG measurement 
procedure to measure hydrocarbon (HC) emissions for the National LEV 
standards, as described in more detail in the NPRM (60 FR 52755). The 
measurement of oxygenated HC is more accurate under the NMOG procedures 
as compared to the current federal method. Moreover, vehicles that meet 
the TLEV, LEV, or ULEV NMOG standard will clearly be in compliance with 
the federal Tier 1 NMHC standard.
    d. Reactivity Adjustment Factors. The National LEV program adopts 
California's approach of using RAFs to adjust vehicle emission test 
results to reflect differences in the impact on ozone formation between 
an alternative-fueled vehicle and a vehicle fueled with conventional 
gasoline. The reasons for using RAFs for alternative-fueled vehicles 
are described fully in the NPRM (60 FR 52756 (col. 1)). California has 
already developed RAFs for some fuel types--including California Phase 
II gasoline--and has a process in place to develop RAFs for fuels that 
do not yet have them. Additionally, California allows manufacturers to 
use this process to develop their own engine family-specific RAFs and 
RAFs for fuel types for which California has not yet developed them. In 
the National LEV program, the Agency will use the RAFs already adopted 
by California for alternative-fueled vehicles certifying to the 
National LEV standards, and intends to incorporate RAFs that California 
develops for other fuels, as California develops and adopts them. EPA 
will also allow manufacturers certifying to the National LEV standards 
to develop their own RAFs, subject to Agency approval, using the 
California process for RAF development.
    EPA received comments both supporting and opposing the adoption of 
California's RAF provisions. The Agency has determined that the 
application of RAFs adopted in California for certification of vehicles 
to the National LEV standards on a nationwide basis, as proposed, is 
within the scope of EPA's authority under the CAA, and is reasonable 
and appropriate to further the goal of harmonization of the federal and 
California motor vehicle emissions control programs. See the Response 
to Comments documents for further discussion.
6. On-Board Diagnostics Systems Requirements
    The National LEV program requires on-board emissions diagnostics 
systems that meet California's second phase OBD requirements (OBD II), 
except that compliance with the tampering protection provisions of the 
California OBD II regulations is not required. For reasons specified in 
the Federal Register notice of court decisions regarding Agency 
regulations,48 the Agency has vacated and subsequently 
deleted OBD-related tampering protection requirements from the federal 
OBD regulations. In the National LEV proposal, EPA specifically 
excluded the anti-tampering provisions of the California OBD II 
requirements from the National LEV regulations. The Agency has 
maintained this approach in these final regulations. The incorporation 
of California OBD II into these regulations specifically excludes 
paragraph (d), the anti-tampering provisions (see Appendix XIII in 40 
CFR part 86, paragraph (e)). Therefore National LEV carries no 
requirement that vehicles comply with the tampering protection 
provisions of the California OBD II regulations. With the exception of 
the additional provisions discussed in the following paragraph, the OBD 
requirements for National LEV program vehicles are finalized as they 
were proposed. For a discussion of the California OBD II requirements 
and the rationale for EPA's adoption of them, see the NPRM (60 FR 
52755).
---------------------------------------------------------------------------

    \48\ 59 FR 51114 (October 7, 1994).
---------------------------------------------------------------------------

    In response to comments received by EPA (see Response to Comments 
for additional detail), the Agency has added language to these final 
regulations specifying that all vehicles certified under this program 
must meet the requirements of sections 202(m) (4) and (5) of the CAA. 
Commenters asserted that, even if EPA were not to include the OBD II 
anti-tampering requirements with the National LEV regulations, EPA 
would, nevertheless, be in violation of CAA sections 202(m)(4) and 
202(m)(5), should a vehicle be certified nationally that contained 
California's OBD II anti-tampering measures. As EPA is taking no action 
in this rulemaking that would change manufacturer obligations or 
options regarding the use of anti-tampering measures, EPA does not 
address this claim in this rulemaking. In a separate proceeding dealing 
with California's request for a waiver of preemption for its OBD II 
program under section 209 of the Act, the Agency has considered the 
issue of whether a vehicle certified to all of California's OBD II 
requirements, including compliance with the tampering protection 
provisions of OBD II, is in violation of section 202 (m)(4) or (m)(5). 
(See Docket No. A-90-28, 61 FR 53371 (October 11, 1996)). However, EPA 
intends to ensure that no vehicle certified under the National LEV 
program violates sections 202(m) (4) or (5) of the Act. Thus, EPA has 
added language to the final regulations making clear that any 
manufacturer attempting to certify a vehicle under the National LEV 
program will not be permitted to do so if the vehicle violates sections 
202(m) (4) or (5). Thus, if it is determined that California's 
tampering protection provisions violate sections 202(m) (4) or (5), 
vehicles with such equipment will not be permitted under the National 
LEV program.
    EPA also received a comment stating that EPA's Service Information 
Availability (SIA) regulation (40 CFR 86.094-38(g)) will be 
circumvented by this rulemaking. However, the National LEV regulations 
do not circumvent EPA's SIA regulations. Such SIA regulations apply 
fully to all vehicles certified under the National LEV program, as is 
true for all part 86 regulations not specifically superseded by subpart 
R.
    The commenter also stated that EPA should not allow states outside 
California to adopt California regulations, including OBD II. The CAA 
does not give EPA authority to prevent states from adopting 
California's regulations. To the contrary, the CAA specifically gives 
states the right to decide whether to adopt California's program. Under 
section 177, states have full authority to promulgate California 
emission standards and other procedures. Two states have had such 
regulations in effect for several years and four more have recently 
adopted such regulations. EPA has only an indirect role in this state 
process and cannot prevent any state from adopting California 
regulations. EPA notes that section 177 of the Act provides stringent 
guidelines for states that wish to implement California's emissions 
control standards: state standards must be identical to California 
standards; states may not cause the creation of a ``third vehicle;'' 
and states may not limit the manufacture or sale of a motor vehicle 
that has been certified as meeting California's standards. Thus, as 
long as California's anti-tampering provisions remain in place, states 
may

[[Page 31221]]

be somewhat constrained by CAA section 177 to accept California's anti-
tampering requirements.
    On the other hand, the National LEV program that EPA is approving 
today specifically excludes the anti-tampering requirements from its 
regulations, thus providing manufacturers with the ability not to 
include such provisions in their vehicles. It also contains specific 
language stating that all vehicles certified under this program must 
meet the requirements of CAA sections 202(m) (4) and (5). Thus, the 
National LEV program actually provides considerably more protection for 
the commenters than would the state LEV programs which the National LEV 
program would replace.
7. In-Use Fuel
    In the proposal, EPA reiterated a set of three principles agreed 
upon by representatives of the auto industry, some segments of the oil 
industry, and the OTC States:
    (1) Adoption of the National LEV program does not impose unique 
gasoline requirements on any state. Gasoline specified for use by any 
state will have the same effect on the National LEV program as on the 
OTC LEV program.
    (2) Testing is needed to evaluate the effects of non-California 
gasoline on emissions control systems.
    (3) If testing results show a significant effect, EPA will conduct 
a multi-party process to resolve the issue without adversely affecting 
SIP credits or actual emission reductions when compared to OTC LEV 
using fuels available in the OTR or imposing obligations on 
manufacturers different from the obligations they would have had under 
OTC LEV.
    One area where discussions have already started relates to current 
auto and oil industry studies that address, among other things, the 
possibility that changes in the malfunction indicator light (MIL) 
illumination criteria for National LEV on-board diagnostics systems 
might be appropriate. Provided that the above criteria were met and the 
manufacturers agreed, the National LEV program would not preclude a 
future EPA rulemaking to change the MIL illumination criteria for the 
OBD systems. EPA has recently issued a discussion paper summarizing its 
current understanding of sulfur effects on OBD catalyst monitoring on 
LEVs and will continue working with interested parties in developing a 
resolution of this issue.49
---------------------------------------------------------------------------

    \49\ OBD & Sulfur White Paper, March 1997, (Docket No. A-95-26, 
IV-B-06).
---------------------------------------------------------------------------

    The Agency's approach to in-use fuels for the National LEV program 
remains essentially the same as was presented in the proposal. EPA is 
adopting the National LEV program on the condition that it does not 
require a change in federal fuel regulations. Thus, section 86.1705-
97(g)(5) requires auto manufacturers to design National LEV vehicles to 
operate on fuels that are otherwise required under applicable federal 
regulations.
    EPA retains its authority to adopt new fuel requirements for 
reasons other than the sale or design of vehicles sold because of the 
National LEV program.
8. Hybrid Electric Vehicles
    The National LEV program adopts California's approach to regulating 
emissions from HEVs, which is discussed fully in the NPRM (60 FR 
52756). HEVs are powered by batteries, but also use a small combustion 
engine for additional range. The emissions from HEVs range from none, 
when running off the battery, to levels similar to TLEVs, when using 
the combustion engine. For certification, HEVs will be tested with the 
engine operating at worst case conditions over the standard test cycle. 
An HEV must meet the TLEV, LEV, or ULEV emission standards based on 
emissions from its combustion engine. This ensures that in the worst 
case situation, HEVs will still comply with the least stringent set of 
LEV standards. However, some HEVs will have to demonstrate compliance 
with different, somewhat less stringent, useful life standards for 
certification, depending upon the type of HEV being certified. In 
addition, an HEV's contribution to the manufacturer's NMOG fleet 
average will be calculated to account for the emissions benefits of its 
battery-powered operations. This approach is consistent with 
California's methodology for calculating a manufacturer's compliance 
with the NMOG fleet average standards.
    The Agency is also adopting California's definitions of the 
following terms: electric vehicle, hybrid electric vehicle, series 
hybrid electric vehicle, and parallel hybrid electric vehicle. One 
commenter on the NPRM stated that these definitions are unnecessarily 
narrow and could adversely affect the United States fuel cell industry. 
The Agency acknowledges the commenter's concerns, but believes that the 
vehicle for change in this case rests with CARB. CARB staff have 
acknowledged the need to amend the current regulations as they pertain 
to HEVs given the rapid advancement of technology in the last five 
years, and are consequently preparing to revise and update their 
program to deal with these types of vehicles more appropriately. 
Although the timing of CARB's final action is not certain, EPA intends 
to make changes to the National LEV regulations to incorporate CARB's 
finalized actions if and when it becomes appropriate to do so. The 
Response to Comments document contains additional discussion regarding 
this issue.

C. Low Volume and Small Volume Manufacturers

    Today's rule adopts a new term, ``low volume manufacturer,'' to 
mean a manufacturer that meets the California definition of a small 
volume manufacturer 50 and that has no more than 40,000 
51 sales nationwide of LDVs and LLDTs per model year, based 
on the average sales over the last three model years. This definition 
will be used solely to determine the NMOG fleet average applicable to 
low volume manufacturers and whether a manufacturer must comply with 
the five percent cap on OTR sales of Tier 1 vehicles and TLEVs. Under 
today's rule, low volume manufacturers will not have to meet an NMOG 
average until MY2001, when they must meet an NMOG average of 0.075 g/mi 
in both the NTR and the 37 States trading regions. This treatment is 
consistent with the California LEV program's treatment of these 
manufacturers. The Agency will continue to apply the federal small 
volume manufacturer provisions, which provide relief from emission data 
and durability showings and reduce the amount of information required 
to be submitted, to small volume manufacturers (as defined in current 
federal regulations). Further explanation of and rationale for the low 
volume manufacturer provisions are provided in the NPRM (60 FR 52756-
52757).
---------------------------------------------------------------------------

    \50\ California defines a small-volume manufacturer as a 
manufacturer with sales in California of no more than 3000 vehicles 
that meet the CARB definitions of passenger cars, light-duty trucks, 
and medium-duty vehicles per model year, based on the average sales 
over the last three model years.
    \51\ EPA had requested comment on the appropriate level for a 
national annual sales limit. The Agency chose 40,000 as the level 
that will preclude post-NLEV attempts to ``game'' the program while 
still allowing manufacturers to proceed with current vehicle 
distribution decisions.
---------------------------------------------------------------------------

D. Legal Authority

    EPA has statutory authority to promulgate the National LEV 
standards under sections 202(a) and 301(a) of the CAA, as discussed 
more fully in the NPRM (60 FR 52757-52758). Section 202(a)(1) directs 
the Administrator to prescribe standards for control of air pollutant 
emissions from motor vehicles. This is an affirmative grant of

[[Page 31222]]

authority to the Administrator that allows her to set voluntary, as 
well as mandatory, motor vehicle air pollution standards. Today's 
voluntary standards are not precluded by section 202(b)(1)(C), which 
states that it is the intent of Congress that EPA not modify the 
mandatory ``Tier 1'' standards, promulgated under section 202(g), prior 
to MY2004. In addition, section 301(a) authorizes the Administrator to 
promulgate regulations necessary to carry out her functions under the 
Act. The voluntary standards proposed here fall within the 
Administrator's duty to implement the broad air pollution reduction 
purposes of the Act.
    Section 202(a)(1) gives the Administrator authority to promulgate 
regulatory standards for emissions of air pollutants from motor 
vehicles. This subsection provides:

    [T]he Administrator shall by regulation prescribe (and from time 
to time revise) in accordance with the provisions of this section, 
standards applicable to the emission of any air pollutant from any 
class * * * of new motor vehicles * * *, which in his judgment 
cause, or contribute to, air pollution which may reasonably be 
anticipated to endanger public health or welfare.

    This is a broad grant of authority to the Administrator to 
prescribe standards, including voluntary standards, to regulate 
emissions that contribute to air pollution. Section 202(a) of the Act 
expressly allows--in fact, it requires--EPA to promulgate emission 
standards for motor vehicles. The language of section 202(a) does not 
indicate that such standards be limited to mandatory standards.
    The National LEV program will regulate HCs, CO and NOX. 
These three pollutants are among the most significant contributors to 
air pollution in the United States and, thus, ``may reasonably be 
anticipated to endanger public health or welfare.'' The strong CAA 
focus on controlling these pollutants indicates Congress' concern about 
the harm they cause and the need for their reduction.
    Section 202(a) authorizes EPA to issue the fleet average NMOG 
standard (and the five percent cap on Tier 1 and TLEV sales in the 
OTR), as well as the emission standards individual vehicles must meet. 
That section's reference to ``standards applicable to the emission of 
any air pollutant'' includes requirements that are applicable to fleets 
of vehicles. ``Standards'' does not merely mean the emission levels to 
which individual vehicles are tested. For example, section 202(g) 
requires the Agency to promulgate ``standards which provide that 
emissions from a percentage of each manufacturer's sales volume of such 
vehicles and trucks shall comply [with specified levels].'' Thus, the 
Agency may promulgate standards, such as fleet averages, phase-ins, and 
averaging, banking, and trading programs, that are fulfilled through 
compliance over an entire fleet, or a portion thereof, rather than 
through compliance by individual vehicles.
    The Administrator's authority under section 202(a)(1) is limited 
only by the requirement that such standards be ``in accordance with the 
provisions of'' section 202. As discussed in the NPRM, nothing in 
section 202 bars EPA from adopting emission standards that would be 
binding if and only if a manufacturer were to opt into them. Nor is any 
provision of section 202 inconsistent with a voluntary approach, so as 
to implicitly bar EPA's action.
    The voluntary standards do not conflict with section 202(b)(1)(C), 
which prohibits EPA from changing the Tier 1 emissions standards prior 
to MY2004. Section 202(b)(1)(C) states that ``[i]t is the intent of 
Congress that the numerical emission standards specified in subsections 
(a)(3)(B)(ii), (g), (h), and (i) shall not be modified by the 
Administrator * * * for any model year before the model year 2004.'' 
This language indicates Congress' intent to prohibit modification of 
the mandatory federal Tier 1 standards for NMHC, NOX, CO and 
PM. The promulgation of National LEV would not modify the Tier 1 
standards because the program merely creates a set of voluntary 
standards, authorized under section 202(a), that manufacturers are 
permitted, but not required, to accept. EPA would not be modifying the 
Tier 1 standards itself. The Tier 1 standards will remain in effect, 
but manufacturers could choose to meet them by opting into National 
LEV. For manufacturers that do not opt into National LEV, the Tier 1 
standards will be fully applicable. Congress did not intend to prevent 
manufacturers from voluntarily agreeing to meet reduced emission 
standards.
    Some comments state that section 202(b)(1)(C) does not distinguish 
between voluntary and mandatory standards. However, such comments are 
inapposite. Section 202(b)(1)(C) does not prevent voluntary standards; 
on the contrary, it merely prohibits modifications to the Tier 1 
standards. Since the National LEV program does not modify the mandatory 
Tier 1 standards, which remain fully effective, it is not prohibited by 
section 202(b)(1)(C). In fact, though the court in Virginia v. EPA, No. 
95-1163 (D.C. Cir. March 11, 1997), found that section 202(b)(1)(C) 
forbids EPA from ``requir[ing], mandat[ing], order[ing], or impos[ing] 
conditions demanding that any state enact particular motor vehicle 
emission standards,'' slip op. at 32, the court specifically declined 
to make any determinations regarding the proposed National LEV program, 
noting that the ``program is voluntary,'' slip op. at 10, n.4. This 
language implicitly distinguishes the National LEV program from the 
mandated program struck down in that case.
    Moreover, the voluntary standards approach does not violate the 
intent of section 202(b)(1)(C) because it would expand, not restrict, 
motor vehicle manufacturers' options. Congress passed section 
202(b)(1)(C) to protect manufacturers from EPA actions mandating a more 
restrictive national motor vehicle emissions program. However, in the 
context of the states' adoption of California LEV programs, these 
voluntary regulations actually have the effect of allowing 
manufacturers more flexibility in meeting their legal requirements. 
Were the voluntary standards program not promulgated, manufacturers 
would have to meet state LEV programs in the Northeast. The 
promulgation of the voluntary standards provides manufacturers with 
another method of meeting emission requirements in the Northeast. It 
would be an absurd result for section 202(b)(1)(C), which was enacted 
to protect manufacturers from regulations requiring tighter emission 
standards, to be interpreted to prevent manufacturers from volunteering 
into a program that would relieve them from meeting state regulations 
requiring such tighter standards.
    Regarding comments that parties other than manufacturers are 
affected by the National LEV program, EPA's authority to require 
automobiles to meet emissions requirements under section 202(a) is 
directed towards automobile manufacturers. Though other parties may be 
indirectly affected by regulations promulgated under section 202, only 
manufacturers are directed to act in a certain manner by these 
regulations. Manufacturers are, of course, always permitted to build 
vehicles that meet a more stringent standard. In fact, manufacturers 
currently produce many vehicles that meet California's emission 
standards (50-state vehicle families). The effect of the National LEV 
program on other parties is no different than the effect on such 
parties if a manufacturer decided, in the absence of this program, to 
build vehicles to more stringent standards. The decision as to what 
emissions level a vehicle will meet is the choice of the

[[Page 31223]]

manufacturer based on marketing and other business decisions.
    Moreover, this national emissions program creates significant 
benefits to consumers throughout the nation. Numerous states throughout 
the nation contain areas that are not in attainment with the National 
Ambient Air Quality Standard for ozone. Reductions in other pollutants 
also help produce cleaner air in areas throughout the nation regardless 
of their ozone status. Congress recognized that a central national 
program for control of emissions from automobiles is the best way to 
manage emissions from new motor vehicles. This is why Congress 
specifically preempted states from promulgating their own emission 
reduction programs for new motor vehicles in section 209 of the Act. 
The only exception in the Act is for California, which has special 
environmental concerns that are explicitly recognized by Congress. 
Other states may only use the federal auto emissions program or 
standards identical to California's standards. Manufacturers have 
stated, in fact, that even this limited ability of individual states to 
``piggyback'' on California's regulations can cause significant 
commerce and cost concerns. Thus, the federal National LEV program 
appears to be consistent with the intent of Congress to encourage 
consistent vehicle regulations throughout the United States.
    Section 301(a) provides a further source of EPA authority to 
promulgate the voluntary standards. Section 301(a) authorizes the 
Administrator ``to prescribe such regulations as are necessary to carry 
out his functions under this chapter.'' The primary purpose of the CAA 
is to protect and enhance the quality of the Nation's air resources by 
reducing air pollution. Controlling emissions from mobile sources is a 
key means for achieving the Act's purpose, and Congress recognized this 
in enacting the mobile source provisions. In addition, in numerous 
places throughout the Act, Congress demonstrated its concern that these 
goals be achieved in an efficient and cost-effective manner, minimizing 
the costs of air pollution control to the extent possible. In 
promulgating these voluntary standards, the Administrator is advancing 
the basic pollution reduction goals of the CAA in a manner that 
supports state efforts and is relatively cost-effective compared to OTC 
state-by-state adoption of CAL LEV programs. Because the decision to be 
subject to these standards is voluntary, EPA is simply providing an 
opportunity for an alternate means of compliance, rather than mandating 
new requirements for manufacturers. These actions are consistent with 
section 202 and the rest of the Act, and are well within the Agency's 
broad authority under section 301(a).

E. Enforceability and Prohibited Acts

    As discussed in the NPRM, once manufacturers have opted into the 
voluntary program, the program will become fully enforceable against 
them. Manufacturers will be liable for compliance with these 
regulations to the same extent they are liable for compliance with 
other federal motor vehicle regulations. The manufacturers will have to 
comply with virtually the same testing regime (certification, SEA, and 
in-use recall testing) and the same warranty requirements as for other 
standards. Any manufacturer that has opted into the program and 
subsequently fails to comply with the requirements of the program will 
be subject to sanctions under sections 203, 204 and 205 of the Act.
    Manufacturers and other violators do not have a defense regarding 
the applicability of these sections to the voluntary program because 
such applicability is explicitly found in the regulations. Under 
section 307(b), any challenge to the National LEV provisions must be 
made within 60 days of publication of the final rule. Failure to 
challenge these regulations within the 60 day period for judicial 
review will prevent any person from subsequently challenging the 
enforceability of these regulations. In addition, in their opt-in 
notifications, manufacturers will have committed not to challenge EPA's 
legal authority to establish and enforce the National LEV program, and 
to seek to certify vehicles only in compliance with the National LEV 
requirements.

V. National LEV Will Produce Creditable Emissions Reductions

    The National LEV NPRM included an extensive discussion of the 
criteria for National LEV to be an ``acceptable LEV-equivalent 
program'' for purposes of satisfying the OTC LEV SIP call. In light of 
the OTC LEV court decision invalidating the OTC SIP call (see III.C.3. 
above), there is no longer any federal legal requirement for National 
LEV to be an acceptable LEV-equivalent program. Nevertheless, it is 
still useful to look at the factors that EPA proposed to consider in 
making its determination. These factors bear on whether National LEV 
will be acceptable to both the OTC States and the manufacturers, and 
whether EPA will be able to grant states SIP credits for National LEV.
    EPA proposed to define an acceptable LEV-equivalent program as a 
program that (1) would achieve VOC and NOX emissions 
reductions from mobile sources in the OTR equivalent to or greater than 
those that would be achieved by OTC LEV, and (2) would be enforceable. 
It is still important for EPA to consider these factors in promulgating 
the National LEV program, although the factors now have a different 
legal significance. The first criterion, emissions equivalency, is no 
longer a legal requirement. Nonetheless, EPA anticipates that when the 
OTC States decide whether to commit to National LEV, they will be 
interested in whether National LEV would achieve emissions reductions 
equivalent to the reductions that the OTC States would achieve absent 
National LEV. The second criterion, enforceability, retains legal 
significance; for EPA to credit states for SIP purposes with emissions 
reductions from National LEV, National LEV must be enforceable for its 
anticipated duration.
    As to the first criterion, EPA today finds that National LEV, as 
set forth in today's rule, and OTC LEV, as set forth in the OTC LEV SIP 
call, would produce equivalent VOC and NOX emissions 
reductions. With respect to the second criterion, EPA finds that 
National LEV is enforceable with respect to the elements of the program 
that are completed in this rule. In promulgating the final outstanding 
provisions of National LEV for OTC State commitments and related 
issues, EPA will have to ensure that the complete program is adequately 
enforceable for states to rely on National LEV for emissions reductions 
and for EPA to grant states SIP credits on this basis.
    This rule also establishes the criteria for a subsequent finding 
that National LEV is in effect. Once manufacturers have opted into and 
the OTC States have committed to National LEV, if the criteria for an 
in-effect finding are met, EPA will find that the program is in effect 
and will publish that finding in a Federal Register notice. Once EPA 
has found National LEV in effect, the National LEV emissions standards 
will be enforceable against covered manufacturers for the duration of 
the program.52
---------------------------------------------------------------------------

    \52\ As discussed in the proposal, a number of parties have 
suggested that advancing motor vehicle pollution control technology 
is an important benefit of OTC LEV and should be a criterion for 
determining whether National LEV is an acceptable LEV-equivalent 
program. Although EPA agrees that advancing technology is an 
important policy goal, and EPA believes that the National LEV 
program could be a part of an agreement that would provide important 
opportunities to promote ATVs, the regulatory portion of the 
National LEV program does not address ATVs, EPA does not believe 
that advancing technology is or should be a legally-required 
criterion for approval of a LEV-equivalent program, and given the 
court decision invalidating the OTC LEV SIP call, there is no longer 
any legal requirement for National LEV to be a LEV-equivalent 
program. Virginai v. EPA, No. 95-1163 (D.C. Cir. March 11, 1997). 
Nevertheless, EPA recognizes that including some advanced technology 
component is important for all the parties to reach agreement on an 
MOU and could provide additional environmental benefits beyond 
emissions reduction equivalency.
    To meet the parties' interests in promoting the development of 
ATVs, the auto manufacturers and the OTC States had agreed on 
language for an ``ATV component,'' which was to be included as an 
attachment to the MOV they were negotiating if they were to finalize 
that agreement. EPA supports the approach the OTC States and auto 
manufacturers have been discussing to introduce and establish ATVs 
in the OTR and urges the parties to complete those efforts.
    The ATV component that the OTC States and auto manufacturers 
included in their initialed MOUs is a unique agreement that would 
use an on-going, cooperative relationship to focus on shared 
visions, commitments and responsibilities. The parties would 
identify and address the means to achieve a viable ATV market, 
including infrastructure development, vehicle technology 
improvements, and incentive programs. The ATV component would rely 
on California's program to force technology development, and would 
ensure that technology takes hold in the OTR by having the parties 
jointly identify vehicle sales estimates and then work in an 
integrated manner to develop and execute the tasks necessary to 
establish and maintain a sustainable, viable market for ATVs at the 
retail level. The ATV component anticipates that OTC States, major 
motor vehicle manufacturers, other states, EPA, the Department of 
Energy, fuel providers, converters, fleet operators, and other 
manufacturers of specialty motor vehicles would each have roles to 
play to facilitate the introduction of ATVs. The ATV component 
presents the parties with an important opportunity to show that 
government/industry partnerships can achieve important environmental 
benefits and do so in a way that provides the parties with greater 
flexibility, while still holding them responsible for achieving the 
end goal.
    The ATV component defines an ATV as a vehicle that is certified 
by CARB for sale in California or certified by EPA for sale outside 
of California and that is (1) a dual-fuel, bi-fuel, or dedicated 
alternatively fueled vehicle certified as a TLEV or more stringent 
when operated on the alternative fuel, (2) certified as a ULEV or 
ILEV using any fuel, or (3) a dedicated electric vehicle or HEV.
    EPA would work with each state individually to determine the 
appropriate SIP credit for the ATV component once the program is 
implemented. As ATVs are bought in individual states, EPA and the 
state would be able to calculate the emissions benefits for the life 
of the ATVs. In addition, EPA would also work with states to 
determine whether and what SIP credit is appropriate for specific 
measures (such as commitments to buy a specified number of ATVs).

---------------------------------------------------------------------------

[[Page 31224]]

A. Emissions Reductions From National LEV

    There is no longer any federal legal requirement for the emission 
reductions from National LEV to be equivalent to those from OTC LEV. 
Nevertheless, to help the parties evaluate the relative merits of 
National LEV compared to OTC state-by-state adoption of the CAL LEV 
program, EPA is here presenting its conclusion that the NOX 
and VOC emissions reductions from new motor vehicles within the OTR 
under National LEV would be equivalent to those produced by each OTC 
State's adoption of the CAL LEV program within the timeframe provided 
by the OTC LEV SIP call, based on EPA's modeling of the two programs. 
All of EPA's analyses of this issue lead to the same conclusion: given 
current assumptions about future vehicle performance and given the best 
currently available information about the migration of people and 
vehicles, it is reasonable to conclude that the NOX and VOC 
emissions benefits in the OTR of the National LEV program and each OTC 
State's adoption of the CAL LEV program are essentially equivalent. EPA 
has reviewed the comments on equivalency of the two approaches and 
continues to believe that EPA's analyses and conclusion are correct. 
More detailed discussions of EPA's approach to the modeling and the 
results and responses to specific comments are presented in the NPRM 
(60 FR 52759-52760), memoranda to the Subcommittee cited in the NPRM, 
the RIA for the OTC LEV final rule and for this final rule, and the 
Response to Comments document for this final rule.
    To date, all of EPA's analysis of this issue has compared National 
LEV with OTC LEV, which presumes that every OTC State would adopt the 
CAL LEV program effective MY1999. Because the discussion below presents 
the results of this analysis, and because OTC LEV is simply shorthand 
for adoption of CAL LEV by each OTC State within the timeframe 
specified in the OTC LEV SIP call, the discussion below continues to 
reference the equivalence of National LEV and OTC LEV. Although the two 
approaches as implemented would likely have different start dates than 
what EPA has modeled, EPA does not believe that will undermine the 
finding that National LEV would produce acceptable emission reductions 
as compared to OTC state-by-state adoption of CAL LEV. EPA believes it 
is unrealistic for National LEV to start with MY1997, but it is also 
impossible for most OTC States to have CAL LEV programs effective 
MY1999. Thus, both programs would likely be implemented with start 
dates later than what was modeled. In the SNPRM, EPA will discuss the 
relative emissions effects of these changed circumstances. Nonetheless, 
EPA's conclusion that the two programs as designed produce equivalent 
emissions in the OTR is still useful information. EPA believes that the 
underlying modelling contains valid assumptions regarding the potential 
emissions reductions from a national versus a regional approach to 
motor vehicle emission control. Thus, EPA's basic modelling approach 
remains applicable, regardless of any changes in program start dates. 
Also, EPA's equivalency conclusion provides a baseline for any 
subsequent reevaluations of the relative benefits of the two 
approaches; as long as any changes in start dates do not 
disproportionately reduce the emissions benefits from National LEV, 
National LEV would continue to reduce emissions in the OTR at least 
equivalent to the emissions that would be reduced by OTC state-by-state 
adoption of CAL LEV. This information will be important to OTC States 
as they decide whether to commit to accept National LEV in lieu of a 
State CAL LEV program.
    Table 7 contains the results of EPA's current analysis of the 
comparative emissions reductions, as presented in the RIA. This 
analysis includes the effects of vehicle migration, as discussed below. 
The OTC LEV case shown here assumes that a ZEV sales mandate exists 
only in states that have already adopted this mandate (and that it 
exists at the level specified in the states' regulations that were 
adopted as of September, 1995).53 However, even if it is 
assumed that there are ZEV sales mandates throughout the OTR at these 
same levels, it does not result in a change in EPA's conclusion that 
the emissions benefits of the OTC LEV program, including ZEV mandates 
in all OTC States, and the National LEV program are essentially 
equivalent.
---------------------------------------------------------------------------

    \53\ The modeling was essentially completed prior to CARB's 
change to its ZEV mandate regulations, so the modeling is based on 
ZEV mandates as they existed prior to CARB's changes.

Table 7.--Ozone Season Weekday Emissions for Highway Vehicles in the OTR
                               (Tons/day)                               
------------------------------------------------------------------------
                                                                National
           Year                     Pollutant          OTC LEV     LEV  
------------------------------------------------------------------------
2005......................  NMOG                         1,491     1,483
                            NOX                          2,385     2,389
2007......................  NMOG                         1,361     1,353
                            NOX                          2,218     2,212
2015......................  NMOG                         1,152     1,144
                            NOX                          1,943     1,894
------------------------------------------------------------------------

    Two factors would clearly be most important to the equivalency 
determination. As discussed in section IV.A.3., the National LEV 
program was designed to begin in the OTR with MY1997, two years earlier 
than the OTC LEV program was required to begin. In addition, beginning 
with MY2001, vehicles that migrate into the OTR from

[[Page 31225]]

other states would be substantially cleaner under the National LEV 
program than under the OTC LEV program because the National LEV program 
applies nationally. For the National LEV program to show equivalent 
emissions reductions to the OTC LEV program, these two factors would 
have to outweigh the additional benefits attributable to the OTC LEV 
program due to its lower fleet average NMOG standard.
    EPA's analysis indicates that, in comparing National LEV starting 
in 1997 with OTC LEV starting in 1999, the impact of the earlier start 
date for the National LEV program was not enough by itself to 
compensate for National LEV's higher fleet average NMOG standard, 
except in the earlier years of the program. This analysis is based on 
existing EPA models and standard assumptions about the future 
performance of vehicles under both programs.
    The effects of vehicle migration are more difficult to assess. 
Because actual state-by-state vehicle migration data were not 
available, EPA used human migration data as a surrogate. Using state-
by-state human migration data from the Internal Revenue Service, EPA 
estimated the annual migration rate of people into and out of the OTR. 
Assuming that vehicles migrate at the same rate as people, EPA then 
constructed a simple model to determine what percentage of vehicles in 
the OTR vehicle fleet in any year would have been originally sold 
outside the OTR, taking into account annual in and out migration rates 
as well as motor vehicle scrappage rates. Using this approach, EPA 
determined that approximately 6.5 percent of the motor vehicle fleet in 
the OTR originated outside the OTR. While a number of commenters 
questioned EPA's approach to assessing the impact of migration, none 
presented an alternative basis for making this assessment or data 
indicating that EPA's assessment is incorrect. When the National LEV 
and OTC LEV programs are compared including this migration assumption, 
the emissions reductions associated with the two programs are 
equivalent.
    The OTC States and auto manufacturers had agreed that EPA should 
periodically reevaluate the equivalency of National LEV and OTC LEV. 
Because equivalency with OTC LEV is no longer a legal criterion for 
National LEV, it is not clear that such a periodic reevaluation is 
still necessary. EPA plans to take comment on this issue in the SNPRM 
on the issue of OTC State commitments to the program. The initialled 
MOUs provide that at least every three years, or pursuant to an OTC 
request, EPA would perform a modeling evaluation of the emissions 
reductions of National LEV compared to OTC LEV. This periodic 
evaluation would rely on the mobile source emissions model (MOBILE5a) 
used in the original equivalency determination, unless the OTC States, 
manufacturers, and EPA agreed to use an updated methodology. The 
initialled MOUs further provide that EPA would assess whether National 
LEV provides emissions benefits equivalent to the benefits identified 
in the original OTC LEV recommendation, taking into account changes in 
EPA regulations and their implementation affecting National LEV 
vehicles.
    If EPA does conduct future comparisons, EPA does not believe it is 
accurate or necessary to compare the actual emissions reductions 
produced by National LEV to modeled emissions reductions projected to 
be produced by OTC state-by-state adoption of CAL LEV programs. To the 
extent that actual reductions under the two approaches could vary 
according to vehicle mix or other factors not currently anticipated, it 
is impossible to predict what actual emissions reductions would have 
been under OTC state-by-state adoption of CAL LEV programs. Any 
comparison between actual and modeled reductions would be inherently 
invalid because the projections would be determined using different 
baselines.

B. Enforceability of National LEV

    EPA proposed that enforceability would be a legal criterion for EPA 
to find that National LEV would be an acceptable LEV-equivalent program 
that would relieve the OTC States of their obligations under the OTC 
LEV SIP call. Although the OTC LEV SIP call has been vacated, Virginia 
v. EPA, No. 95-1163 (D.C. Cir., March 11, 1997), National LEV still 
must be enforceable for EPA to grant States credits for SIP purposes. 
There are two aspects to ensuring National LEV is enforceable. First, 
the National LEV program emissions standards and requirements must be 
enforceable against those manufacturers that have opted into the 
program and are operating under its provisions. Second, the program 
itself must be sufficiently stable to make it likely to achieve the 
expected emissions reductions. To achieve the expected emissions 
reductions from National LEV, the off ramps must not be triggered and 
the program must remain in effect for its expected lifetime. As 
discussed below, EPA believes that National LEV meets the first aspect 
of enforceability--the program requirements are legally enforceable 
against manufacturers in the program. Also, the program elements 
finalized today would contribute to a stable National LEV program. 
However, ensuring that the National LEV program will be stable over 
time also depends on program elements relating to OTC State commitments 
to National LEV that will not be finalized until after EPA provides 
further notice and comment. At the time of the proposal, the OTC States 
and the auto manufacturers had not yet finalized agreement on the 
mechanisms through which the States would commit to the National LEV 
program or the substance of the OTC State commitments regarding State 
section 177 programs. Violation of such commitments would allow 
manufacturers to opt out of National LEV. In expectation that the OTC 
States and the auto manufacturers would soon finalize agreement on 
these elements of the program, EPA deferred taking comment on the 
strength of such commitments, the likelihood that an off ramp might be 
triggered, or the overall stability of the National LEV program. Thus, 
a few key elements necessary for the stability of National LEV are 
still outstanding, pending further notice and opportunity for public 
comment.
    As discussed in the NPRM (60 FR 52760), EPA believes that National 
LEV is fully enforceable against those manufacturers that have bound 
themselves to comply with the program. Once a manufacturer opts into 
the National LEV program, it must comply with the applicable standards. 
Because the National LEV regulations are promulgated under CAA sections 
202 and 301, a manufacturer that chooses to be covered by these 
regulations would be subject to the same enforcement procedures as 
exist for the current mandatory federal motor vehicle program. For 
example, violations of the National LEV standards provisions would be 
subject to sanctions under CAA sections 204 and 205. The certification, 
SEA, recall, and warranty provisions of the current federal motor 
vehicle program also apply to the National LEV standards, as well as 
all other federal motor vehicle requirements not explicitly superseded 
by National LEV requirements. The applicability of federal enforcement 
provisions ensures that National LEV will be an enforceable program. As 
a result, as long as manufacturers continue to be subject to the 
National LEV program, the standards and requirements of the program 
will be clearly enforceable.
    In addition to National LEV being legally enforceable, there will 
also be strong practical disincentives to manufacturers either 
challenging the

[[Page 31226]]

enforceability of the standards or even taking advantage of a potential 
offramp, unless the triggering event is something the manufacturers 
consider a substantial burden. The manufacturers strongly support 
National LEV as an alternative to individual State CAL LEV programs. 
Because manufacturers would have to comply with backstop CAL LEV 
programs in one or more States upon an opt-out, manufacturers will be 
reluctant to destabilize National LEV. To date, the States of 
Connecticut, Massachusetts, New Jersey, New York, Rhode Island, and 
Vermont have submitted SIP revisions that require a CAL LEV program 
either as the primary program or as a backstop if National LEV is not 
in effect. EPA is confident that one or more of these States would 
retain a CAL LEV program as a backstop if National LEV were in effect, 
as several States have indicated that this is their intent. This would 
ensure that if National LEV were not in effect, manufacturers would 
have to comply with CAL LEV in one or more States. This level of State 
adoption of backstops provides a sufficient measure of program 
stability to help make National LEV enforceable.
    The only circumstances that would allow the National LEV program to 
terminate prematurely would be an OTC State's failure to meet whatever 
commitments it makes regarding adoption of motor vehicle programs under 
section 177 of the Act or certain EPA changes to Stable Standards. 
These circumstances allowing the program to terminate prematurely are 
limited, and EPA expects that the OTC States will commit to the 
National LEV program in a way that will make premature termination 
unlikely to occur due to their actions. EPA is not at this time 
evaluating the likelihood that the National LEV program will remain in 
effect for the intended duration of the program (i.e., until EPA 
promulgates enforceable federal standards that are at least as 
stringent as the National LEV standards) because EPA has not yet 
evaluated the OTC States' commitments. However, EPA believes that, at 
least with regard to an opt-out triggered by a change in the Stable 
Standards, premature program termination is highly unlikely.
    EPA is confident that the Agency is unlikely to change any of the 
Stable Standards in a manner that would give the auto manufacturers the 
right to opt out of National LEV. As discussed in section IV.A., 
manufacturers would be allowed to opt out of National LEV if EPA made 
certain types of changes to the Core Stable Standards at any time 
during the program, or changes to the Non-Core Stable Standards 
effective prior to MY2007. The Core Stable Standards are requirements 
that EPA does not have the authority to mandate and thus could not 
impose absent a voluntary program. In agreeing to specify a larger set 
of Stable Standards to include the Non-Core Stable Standards, which are 
requirements EPA has authority to modify, the Agency very carefully 
evaluated each proposed Non-Core Stable Standard. EPA considered how 
recently each standard or requirement had been updated, the possibility 
that increased stringency would be technologically feasible and cost-
effective in the time frame of the National LEV program, and the focus 
of the Agency's future regulatory efforts in terms of the most 
promising areas for significant emissions reductions. As discussed in 
more detail in the NPRM, elsewhere in this preamble, and in the 
Response to Comments document, EPA's technical analysis revealed no 
significant shortcomings in the adopted Non-Core Stable Standards that 
would require new, more stringent standards applicable prior to MY2007, 
aside from those potentially mandated by the CAA and thus specifically 
excluded from triggering an offramp (e.g. cold CO past MY2000).
    In addition, EPA will retain substantial flexibility to make many 
types of changes to the designated Stable Standards without triggering 
an offramp. In addition to changes to which the manufacturers do not 
object, for the Non-Core Stable Standards, EPA could make modifications 
that do not affect stringency or that harmonize the federal standard 
with the California standard without providing an opportunity for opt-
out. Finally, EPA would always have the ability to make changes to the 
Non-Core Stable Standards if the need to make such changes outweighs 
the benefits of the National LEV program. Such a situation would only 
arise, however, if the emissions benefits from the change significantly 
outweighed the benefits from National LEV, in which case it is highly 
unlikely that any state would suffer air quality detriment.

C. Finding National LEV in Effect

    As proposed, the National LEV regulations specify criteria for EPA 
to find that the program is in effect, and hence enforceable against 
the manufacturers that have opted in. EPA will find that the National 
LEV program is in effect if all manufacturers listed in the regulations 
have submitted opt-in notifications in accordance with the requirements 
specified in the regulations.54 EPA's finding that the 
program is in effect would be published in the Federal Register, but 
would not require further notice and comment rulemaking. Upon finding 
National LEV in effect, the National LEV requirements will be 
enforceable, and to the extent that manufacturers have conditioned 
their opt-ins upon EPA making such a finding, the opt-ins will become 
fully and unconditionally binding. In today's rule, EPA is not setting 
any deadline for the Agency to make this in effect finding, but EPA 
will address the question of a deadline in a subsequent final rule 
after it has provided further notice and opportunity to comment on the 
OTC State commitments and related issues.
---------------------------------------------------------------------------

    \54\ Before National LEV comes into effect, however, OTC States 
may need to take further action to commit to the National LEV 
program, pusuant to their agreement with the auto manufacturers. EPA 
will take comment on the details of such state actions in the SNPRM 
on OTC State commitments.
---------------------------------------------------------------------------

    Further Agency rulemaking to find that National LEV is in effect 
will be unnecessary because EPA is establishing the criteria for the 
finding through this notice and comment rulemaking, and EPA's finding 
that the criteria are satisfied is an easily verified objective 
determination. As discussed in more detail in the NPRM (60 FR 52762), a 
determination that the listed manufacturers have opted in in accordance 
with the National LEV regulations requires only a straightforward 
evaluation of whether each of the listed manufacturers has submitted an 
opt-in notification containing the requisite language and signed by a 
person with the specified authority.

D. SIP Credits

    EPA will allocate SIP credits for National LEV on a state-by-state 
basis. EPA will work with each individual state, including states 
outside the OTR, to determine how appropriately to credit areas within 
the state for emissions reductions produced by the National LEV 
program. For calculating SIP credits, EPA will apply the same policy 
guidance to National LEV as it would apply to a state's adoption of CAL 
LEV.

VI. Other Applicable Federal Requirements and Harmonization With 
California Requirements

A. Introduction

    Section IV. described the provisions of the National LEV program, 
including the structure of the program, the voluntary emissions 
standards (exhaust and fleet average NMOG), and

[[Page 31227]]

provisions for low volume manufacturers. As noted in that section, the 
federal new motor vehicle emissions control program (including other 
standards and requirements, and certification, compliance, and 
enforcement program elements) continues to apply to vehicles produced 
and sold by manufacturers that opt into the National LEV program. 
Significant elements of the federal program that apply to National LEV 
vehicles include the requirements for evaporative emissions, ORVR, Cold 
CO, the certification short test (CST), and federal high altitude 
compliance. Similarly, EPA would use the current federal compliance 
program to implement the National LEV program, including the fees 
program, SEA, emissions recall program, federal emissions warranties, 
and federal emissions defect reporting requirements. EPA would retain 
the authority to add regulatory requirements to the motor vehicle 
program, (e.g., as may be required under section 202(l) of the CAA to 
address air toxics) or to modify existing requirements as required by 
current law (e.g., as may be required under section 202(j) for cold 
CO). By adopting the set of Stable Standards, EPA is recognizing that 
it does not intend to modify certain existing regulations except in 
limited circumstances.
    Given the manufacturers' voluntary commitment to National LEV, EPA 
committed to reduce the compliance burden for manufacturers in the 
National LEV program by working with CARB to harmonize federal and 
California motor vehicle standards and test procedures to the extent 
possible. This would allow manufacturers to design and test vehicles to 
one set of specifications for sale nationwide, rather than designing 
and testing to two sets (California's and EPA's). While the National 
LEV program itself goes a long way towards this objective by addressing 
program elements such as the exhaust emission standards, the test fuel, 
and test procedures, EPA has expended considerable effort towards 
reconciling differences between federal and California requirements in 
the balance of the mandatory federal program as well. EPA believes that 
the National LEV program, plus harmonization of other federal and 
California standards, is a smarter, cheaper way to regulate that 
increases environmental and public health benefits. The balance of this 
section describes the results of these harmonization efforts and some 
other aspects of the federal program. To further the objective of 
reducing duplicative testing and compliance requirements on the 
manufacturers, EPA will seek consistency with California in future 
regulatory actions where practicable.

B. Harmonization of Federal and California Standards

    The bulk of the harmonization that is occurring between the 
California and federal standards is taking place with respect to the 
National LEV tailpipe standards and related requirements, including OBD 
requirements. These standards and harmonization efforts are discussed 
in section IV., above. Following is a discussion of other applicable 
federal requirements and the status of harmonization efforts.
1. Onboard Refueling Vapor Recovery and Evaporative Emissions
    EPA believes that federal and California ORVR and evaporative 
emissions standards will be completely harmonized. EPA and CARB had 
already begun the process of harmonizing their respective ORVR and 
evaporative test procedures when the National LEV proposal was 
published. CARB set policy at its June 29, 1995, public hearing to 
adopt the EPA ORVR program for California and to proceed with a set of 
evaporative emissions technical amendments, including several revisions 
designed to harmonize the federal and California evaporative emissions 
requirements. Following the hearing, CARB adopted final amendments to 
their evaporative emissions test procedures, dated April 24, 1996, and 
effective on June 24, 1996, which allow automobile manufacturers to 
certify MY1997 and later vehicles using the federal fuel and 
temperature test conditions. CARB also notes that the ongoing effort to 
streamline the evaporative test procedures should result in one test 
procedure for both agencies, and that the revised test procedure will 
incorporate the federal fuel and temperature test conditions in the 
CARB procedures. EPA published a direct final rule in August 1995 
adopting federal evaporative emissions technical amendments that are 
compatible with those being pursued by CARB (60 FR 43880, August 23, 
1995).
    In the proposal for this rulemaking, EPA stated its intent to 
evaluate the relative stringency of the federal and CARB evaporative 
emissions testing specifications for test temperature and test fuel, a 
question that was unresolved at the time the proposal was published. 
EPA indicated that use of CARB's test conditions, should they prove to 
be less stringent, could constitute an unacceptable relaxation of the 
existing federal evaporative emissions requirement. As part of its 
evaluation, EPA hired a contractor to generate test data for both 
running loss and hot soak emissions. The testing program has been 
completed, and a final report has been submitted to the docket for this 
rule (see ADDRESSES). EPA has determined that the data currently 
available indicates that the federal fuel and temperature conditions 
are more stringent in terms of producing more vapor under prescribed 
test conditions. Based on the data currently available, CARB agrees 
that the federal fuel and temperature conditions are as stringent as 
the CARB conditions in terms of producing more vapor under specific 
test conditions. On that basis, EPA is continuing to require federal 
fuel and temperature for evaporative emissions testing. EPA understands 
that under CARB's recent modifications to its evaporative emission 
regulations that CARB now explicitly allows the use of the EPA 
conditions for certification, and that vehicles so certified would 
undergo in-use compliance testing using the federal conditions as well. 
While EPA believes that the federal fuel and temperature produce more 
vapor than the CARB fuel and temperature under prescribed test 
conditions and CARB now accepts the federal test conditions for 
purposes of certification, CARB intends to perform additional tests in 
the future to provide additional data on the impact of the test fuel 
and temperature on evaporative emissions in real life. If the results 
of such testing demonstrate that California's evaporative emissions 
reductions suffer as a result of the harmonized policy, CARB may re-
evaluate the policy for corrective action.
    Use of the federal evaporative test conditions means that National 
LEV vehicles certified to TLEV, LEV, or ULEV standards using the 
California Phase II test fuel option that are undergoing both 
evaporative and exhaust emissions testing will require a switch from 
California Phase II fuel for exhaust testing to federal fuel for 
evaporative emissions testing. The Agency anticipates that the 
incremental burden of the policy will be minimized because broader 
definitions of evaporative emissions families allow manufacturers to 
test far fewer vehicles for evaporative emissions than for tailpipe 
emissions. In addition, the fuel switch will frequently occur anyway 
because the same vehicles tested for ORVR will be tested for 
evaporative emissions, and both California and federal ORVR require 
federal fuel as the test fuel. Finally, the vehicle manufacturers have 
indicated that the

[[Page 31228]]

fuel switch is an acceptable trade-off for the benefits of harmonizing 
the evaporative test conditions between EPA and CARB.
    The auto manufacturers have recently presented a proposal to both 
EPA and CARB for combining and streamlining the evaporative emissions 
and ORVR procedures. Both agencies are actively evaluating this 
proposal, which has as its goal a simpler procedure that saves 
government and industry resources while preserving air quality benefits 
nationally and in California. If these efforts are productive, EPA 
might propose regulations that would affect evaporative emissions and 
ORVR testing of the light-duty fleet during model years covered by the 
National LEV rule. The Agency does not anticipate a conflict between 
such an action and the designation of the current evaporative emissions 
and ORVR procedures as Non-Core Stable Standards. EPA would not pursue 
such a rulemaking to increase stringency in the programs, but rather to 
simplify and make less costly the test procedures applicable to both 
manufacturers and EPA, and EPA would expect manufacturers to support, 
rather than object to, any resulting changes.
2. Cold CO
    California has adopted EPA's Cold CO requirements by reference, so 
the requirements are currently harmonized. EPA notes, however, that 
CARB has a compliance requirement with a complete set of emission 
standards, including an additional CO standard, during testing at 50 
degrees. Because the 50 degree standards are part of the California LEV 
program, they are included as part of the compliance obligation for 
National LEVs.
3. Certification Short Test
    The CST is one requirement for which differences in California and 
federal requirements are necessary due to differences in state-adopted 
Inspection and Maintenance (I/M) programs. As noted in the preamble to 
the NPRM (60 FR 52764), the Agency has a statutory obligation under 
section 206(a) of the CAA to promulgate procedures for manufacturers to 
demonstrate at the time of new vehicle certification that their LDV and 
LDT designs, when properly used and maintained, will pass the emissions 
short test procedures approved by EPA for use in state and local I/M 
programs. State and local I/M programs can choose their emission short 
test procedures from a variety of different options maintained in the 
federal regulations. Because California need not maintain the menu of 
available short test options that is required of EPA under section 
207(b) of the CAA, there is no adequate California counterpart to the 
federal CST to serve as the basis for harmonization. Thus, 
harmonization is not possible, and National LEV vehicles will be 
subject to the same CST requirements as any other federally certified 
LDVs.
4. High Altitude Requirements
    In the NPRM, EPA noted its statutory obligation under section 
206(f) of the CAA to require LDVs and LDTs to comply with mandatory 
section 202 standards at all altitudes; this requirement is 
incorporated in the current (Tier 1) emission standards. The National 
LEV proposal preamble noted that even if manufacturers were voluntarily 
complying with more stringent tailpipe emission standards, NLEVs would 
nonetheless still be required to demonstrate compliance with the Tier 1 
standards, the cold CO requirements, and the evaporative emissions 
requirements at high altitude using the appropriate federal 
certification test fuel for the given test procedure, as defined in 40 
CFR 86.113. The Agency received no comments on this aspect of the 
proposal, and, for the reasons described here and in the NPRM (60 FR 
52764), the proposed approach is retained in the final rule.

C. Federal Compliance Requirements

1. Selective Enforcement Auditing and Quality Audit Programs
    Pursuant to CAA section 206(b), vehicles certified to meet any of 
the National LEV emission standards and requirements will be subject to 
those standards and requirements in an SEA. Section 206(b) authorizes 
the Administrator to test new vehicles to determine whether vehicles 
being manufactured do, in fact, conform to the regulations with respect 
to which a certificate of conformity was issued. National LEV vehicles 
will also be subject to SEAs to show compliance with National LEV 
standards and all other applicable federal emission standards and 
requirements.
    SEA authority serves as an important enforcement tool and provides 
the Agency with the ability to ensure that NLEVs are in compliance with 
the emissions standards. It also allows EPA to ensure that 
manufacturers are not gaming the averaging, banking, and trading 
provisions by maximizing credit generation or minimizing credit usage 
through certifying engine families to unrealistic emissions standards. 
In addition, the SEA program serves as an incentive for manufacturers 
to do their own emissions testing and remedy any potential problems on 
their own before they are identified by the Agency. This helps to 
provide cleaner vehicles at the earliest possible time.
    During an SEA, a manufacturer will test an engine family 
configuration certified to the National LEV standards by testing new 
vehicles off the production line using the same test procedures and 
conditions as used in the certification process for that family. When 
an SEA shows an audit failure of a configuration certified to National 
LEV standards, the certificate of conformity for the selected 
configuration may be suspended, and depending on the required remedy 
for the nonconformity, revoked. This is the same approach EPA has used 
for audit failures of configurations certified to conventional federal 
standards.55
---------------------------------------------------------------------------

    \55\ See the NPRM (60 FR 52764-52766) for a more detailed 
explanation of the SEA procedures.
---------------------------------------------------------------------------

    In the NPRM, EPA noted that the promulgation of National LEV 
standards and the harmonization of other federal and California 
requirements will allow manufacturers to certify an increasing number 
of engine families to both California and National LEV standards (50-
state engine families). This provides an opportunity for EPA to utilize 
its enforcement resources more efficiently and reduce the testing 
burden on manufacturers by coupling the SEA and corresponding CARB 
requirements for 50-state families and configurations. Thus, EPA 
proposed to use emissions testing done by the manufacturers on 50-state 
engine families under the California Quality Audit (CQA) Program as a 
basis for potential SEA actions, where such testing was conducted in a 
manner substantially similar to comparable federal requirements.
    Allowing EPA to use data produced under the CQA Program builds on 
the harmonization of the California and National LEV programs to take 
advantage of new efficiencies possible in EPA enforcement. 
Additionally, this new use of data will reduce regulatory testing 
burdens on the manufacturers. Under the current SEA program, EPA's only 
recourse upon discovering 50-state non-compliance through CARB-required 
testing is to issue the manufacturer an SEA test order for the vehicle 
configuration. The manufacturer would then have to conduct duplicate 
testing for that configuration. If the configuration (which CARB had 
already determined to be in non-compliance) failed the audit, EPA would 
suspend and/or possibly revoke the certificate of conformity. The 
manufacturer would then have to develop a fix for the non-conformity 
and conduct and pass a re-

[[Page 31229]]

 audit to comply with EPA requirements, as well as comply with CARB's 
remedial action plan. By adopting the authority to use CQA data in the 
SEA program, EPA is eliminating these additional testing requirements.
    The regulations adopted in today's final rule will work in the 
following manner. If CARB has determined that a 50-state engine family 
or configuration is in non-compliance, based on manufacturer testing 
required by CARB, EPA would be able to take appropriate action without 
requiring the manufacturer to conduct duplicate testing. EPA would 
evaluate test data received from CARB or directly from a manufacturer 
for a family or configuration that CARB has determined to be in non-
compliance with any applicable standard. If testing were conducted in a 
manner substantially similar to comparable federal requirements, EPA 
would evaluate the test data with respect to the 40 percent Acceptable 
Quality Level (AQL) sampling plans found in Appendices X and XI to 40 
CFR part 86 to determine compliance with applicable federal standards. 
EPA believes the random sampling manufacturers use to select vehicles 
for CARB-required testing will provide a representative family or 
configuration sample, which can be appropriately evaluated with respect 
to the 40 percent AQL criteria. If the test data for the family or 
configuration does not meet the 40 percent AQL, EPA would determine the 
family or configuration to be in non-compliance, and EPA would have 
authority to suspend and/or revoke the certificate of conformity for 
the 50-state family or configuration. Additionally, subsequent to a 
suspension or revocation, the rule allows EPA to reinstate or reissue a 
certificate, upon a manufacturer's written request, after the 
manufacturer has agreed to comply with remedial action required by 
CARB, if EPA believes the action is an effective remedy for the entire 
family or configuration. The manufacturer would not have to conduct a 
re-audit of the suspended/revoked configuration.
    EPA's authority for this approach is provided by CAA section 
206(b)(2)(A)(i), which allows EPA to suspend or revoke a certificate 
based on tests conducted under section 206(b)(1). Section 206(b)(1) 
authorizes tests to be conducted by the Administrator directly, or by 
the manufacturer, in accordance with conditions specified by the 
Administrator. In 40 CFR part 86, EPA prescribes procedures for testing 
whether new motor vehicles conform to the regulations with respect to 
which EPA issued the certificate of conformity. Most of these 
procedures are the same as the procedures specified by California in 
the Assembly-Line Test Procedures Quality Audit. EPA has modified the 
regulations for manufacturer SEA testing to prescribe the procedures 
detailed in the regulations or substantially similar procedures, which 
could encompass testing performed under the CQA program. Substantially 
similar procedures must produce results that are reliable and probative 
indicators of the likely outcome of an SEA based on the Part 86 testing 
requirements detailed in the SEA regulations. Even if CARB specifies 
additional details in the course of testing by the manufacturer, as 
long as the test that the manufacturer actually conducts is still in 
accordance with procedures substantially similar to those detailed by 
EPA, such a test will be in accordance with the conditions specified by 
the Administrator. Thus, EPA may rely on such tests as a basis to 
suspend or revoke a certificate of conformity.
    Because EPA's regulatory authority to suspend or revoke 
certificates is based on testing conducted by EPA or the manufacturer, 
EPA will only suspend or revoke certificates in the manner described 
above if the manufacturer has conducted the testing. The manufacturer 
testing need not be pursuant to a federal test order, however. Also, 
EPA is aware that all emissions testing done under the auspices of the 
CQA program will not necessarily be done using procedures substantially 
similar to comparable federal requirements, making EPA's use of some of 
this data in its SEA program infeasible. Therefore, EPA will work 
cooperatively with CARB and manufacturers in considering all 
information provided by the manufacturer prior to making a decision 
whether to suspend, revoke, and reissue certificates of conformity 
based on data generated under the CQA program. As with any suspension 
or revocation of a certificate of conformity, a manufacturer that 
disagrees with EPA's decision to suspend or revoke a certificate may 
request a public hearing within 15 days of EPA's suspension or 
revocation decision.
2. Imports
    As proposed, EPA is not listing independent commercial importers 
(ICIs) among the manufacturers that would have to opt into the National 
LEV program for EPA to find it in effect. Instead, ICIs will have the 
opportunity to voluntarily certify their vehicles to meet National LEV 
standards if their customers so desire. However, ICIs are prohibited 
from participating in averaging, banking, or trading programs. ICIs not 
certifying vehicles to National LEV standards will continue to be 
required to meet the emissions standards applicable to the year in 
which the vehicle was originally manufactured.
    EPA continues to believe that ICIs should not be required to opt 
into the National LEV program since they generally do not build new 
motor vehicles.56 Additionally, due to the very limited 
number of vehicles, of various model years, that ICIs handle, ICIs 
would be unable to participate in the averaging, banking, and trading 
provisions, which require that a manufacturer has substantial control 
over the certification categories (TLEVs, LEVs, etc.) of the vehicles 
in its fleet.
---------------------------------------------------------------------------

    \ 56\ Comments supported not requiring ICIs to opt in to the 
National LEV program.
---------------------------------------------------------------------------

3. In-Use and Warranty Requirements
    As described in the NPRM, the federal provisions regarding in-use 
(recall) testing will be used to determine compliance with the National 
LEV standards. These provisions are set out in 40 CFR part 85, subpart 
S. The vehicle age and mileage limitations on recall testing, as 
required by sections 202(d)(1) and 207(c) are not affected by today's 
action.57 It is not appropriate to substitute California's 
entire in-use testing and recall program requirements for the 
corresponding federal provisions as part of the National LEV program 
because the two recall programs have different enforcement goals based 
on differences in statutory authority. In addition, EPA must account 
for the differences arising from a compliance program applied on a 
national versus a State-specific level. However, EPA and California 
will continue to cooperate wherever possible in their enforcement 
activities to reduce any unnecessary duplication and to provide 
efficient and timely sharing of information.
---------------------------------------------------------------------------

    \ 57\ EPA does not require any recall testing beyond seven years 
or 75,000 miles, whichever comes first, for vehicles with a useful 
life period of ten years or 100,000 miles, or beyond seven years or 
90,000 miles, whichever comes first, for vehicles with a useful life 
of 11 years or 120,000 miles.
---------------------------------------------------------------------------

    There is no additional burden on manufacturers attributable to 
operation of two enforcement programs because when testing NLEVs to 
determine their compliance with the in-use standards, EPA will use, 
when appropriate, those test procedures utilized in the National LEV 
certification process. As discussed above, these procedures will 
generally be similar to California's procedures. Thus, manufacturers 
will not need to comply with two different sets of enforcement testing 
procedures.

[[Page 31230]]

    In response to manufacturers' concerns over potential in-use fuel 
effects on National LEV vehicles, EPA has stated that it would allow 
extra vehicle preconditioning if necessary. It is not currently 
possible to determine an appropriate level of additional 
preconditioning, given the uncertainty as to in-use fuel effects on 
National LEV vehicles and the question as to whether current levels of 
preconditioning are in fact sufficient to alleviate these effects. 
Therefore, EPA is not including a specific level of additional 
preconditioning in today's action. However, EPA's regulations allow 
additional preconditioning for unusual circumstances when such need is 
demonstrated by a manufacturer.58 Detrimental effects on 
National LEV vehicles from commercially available fuel sold in the 49 
States could likely be considered an unusual circumstance. Thus, under 
these regulations EPA expects to work with manufacturers to determine 
the appropriate level of any necessary additional vehicle 
preconditioning.
---------------------------------------------------------------------------

    \ 58\ See 40 CFR 86.132-96(d).
---------------------------------------------------------------------------

    As discussed in the proposal, the federal warranty and defect 
reporting requirements will apply to National LEV vehicles as they 
would to other vehicles certified under the federal motor vehicle 
program.

VII. Structure of National LEV Regulations

    The requirements applicable to NLEVs are drawn largely from two 
different and complex sources--the current federal motor vehicle 
program and California's existing LEV program. Given this, the Agency 
initially chose in the NPRM to structure the regulations such that they 
referenced, rather than repeated, the two sources as much as possible. 
To accomplish this, the Agency created 40 CFR part 86 subpart R to 
serve as the ``road map'' of National LEV requirements. This new 
subpart has several objectives. First, it details the general 
applicability and provisions of the National LEV program, including how 
auto manufacturers opt into the program and under what circumstances 
they can opt out of the program. Second, it details the specific 
emission standards, fleet average NMOG standards, and averaging, 
banking, and trading provisions that apply to vehicles certified under 
the program. As noted in section IV.B.1., the emission standards are 
identical to those currently in place in California, but are explicitly 
included in the regulations. Because of differences from the provisions 
in California, the NMOG average is also explicitly included in subpart 
R. While the averaging, banking, and trading provisions are modeled 
after California's, there are enough differences in applying such a 
program nationally that they too are included specifically in the new 
subpart. Third, subpart R details the regulatory requirements from the 
California LEV program that apply to National LEV. The provisions in 
the existing federal program generally remain applicable to the 
National LEV program, except in specific instances, detailed in subpart 
R, where the California provisions are used instead.
    Incorporation of provisions from the California LEV program is 
slightly more complex, and has evolved since the NPRM. In general, the 
Agency has used the method of ``incorporation by reference'' (IBR). The 
IBR method allows federal agencies to publish regulations in the 
Federal Register by referring to materials already published elsewhere, 
rather than repeating that information. The legal effect of an IBR is 
that the material is treated as if it were published in the Federal 
Register. This material, like any other properly issued regulation, has 
the force and effect of law. Material is eligible for IBR if several 
conditions are met, including the criteria that the material be 
reasonably available to those affected by the regulation and that the 
volume of material published in the Federal Register is substantially 
reduced. Each use of the IBR method must be approved by the Director of 
the Federal Register.
    The Agency has incorporated by reference in the National LEV 
regulations a number of California regulatory documents. These 
documents are maintained by the Federal Register and in the public 
docket (see ADDRESSES) as a single bound document titled ``California 
Regulatory Requirements Applicable to the National Low Emission Vehicle 
Program, October, 1996.'' The National LEV regulations detail the 
specific California documents that have been incorporated, as well as 
the specific sections within those documents that do not apply to 
National LEV, in an appendix to part 86. Only those California 
documents that can be regarded as finalized regulatory documents with 
the full force of law can be incorporated by reference.
    In the NPRM the Agency used the IBR method extensively to 
incorporate CARB regulatory provisions. Since then, however, the Agency 
noted some problems with this approach, including a lack of clarity 
regarding exactly what in the federal and CARB regulations applied or 
did not apply to the National LEV program. Such problems arose in 
particular when CARB regulations referenced federal regulations, but 
applied them in a modified fashion (CARB regulatory documents that are 
more ``stand-alone'' do not present these problems and have been 
incorporated by reference as described above). These issues were 
resolved in today's final regulations by explicitly including in 
subpart R some of the text of CARB regulations and specifying how and 
under what circumstances that text should apply.

VIII. Technical Correction to Maintenance Instructions

    This final rule also makes a technical correction to regulations 
mandating that manufacturers provide purchasers with instructions 
regarding the proper maintenance and use of vehicles. On August 9, 
1995, EPA published in the Federal Register (60 FR 40474) a rule 
requiring that information for use in emission-related repairs be made 
available to the service and repair industry (``the service information 
rule''). The regulations promulgated in that rule were placed in 
paragraph (g) of 40 CFR Sec. 86.094-38, which provides the requirements 
for Maintenance Instructions for 1994 and later model year vehicles. 
Paragraphs (a) through (f) of that section were to be unchanged from 
the preexisting requirements for Maintenance Instructions provided in 
Sec. 86.087-38. However, EPA inadvertantly did not include a reference 
to the preexisting regulations when it promulgated Sec. 86.094-38 (a) 
through (f). Specifically, EPA generally would use the designation 
``[Reserved]. For guidance see Sec. 86.087-38 (a)-(f)'' to indicate the 
incorporation of earlier regulatory language. However, the promulgated 
rule states only that Sec. 86.094-38 (a)-(f) are ``[Reserved],'' 
without reference to the earlier regulatory language. This may have 
caused some confusion regarding whether the preexisting regulations 
were still in effect beginning in the 1994 model year. This technical 
amendment clarifies that EPA did not intend to remove the preexisting 
requirements for maintenance instructions when it promulgated the 
service information rule.
    EPA is promulgating this technical amendment as a final rule under 
the good cause exception in section 553(b)(B) of the Administrative 
Procedure Act, 5 U.S.C. 553(b)(B). Notice and public procedure for this 
technical amendment are unnecessary and contrary to the public interest 
because this amendment merely corrects an obviously unintended error in 
the

[[Page 31231]]

regulations. At no time during the service information rulemaking did 
EPA state its intention to remove the preexisting maintenance 
instructions requirements from the regulations; nor was such a 
significant change contemplated or requested. Therefore, this technical 
change merely clarifies that regulations already in existence were not 
inadvertantly deleted in the service information rule. EPA does not 
expect any objection to this technical correction. Moreover, because 
these regulations are applicable to current model year families, EPA 
believes it is in the public interest to promulgate this technical 
amendment as soon as possible.

IX. Administrative Requirements

A. Administrative Designation

    Under Executive Order 12866 (58 FR 51735), the Agency must 
determine whether the regulatory action is ``significant'' and 
therefore subject to OMB review and the requirements of the Executive 
Order. The Order defines a ``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 of 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 entitlements, grants, 
user fees, or loan programs or the rights and obligations of recipients 
thereof; or
    (4) Raise novel legal or policy issues arising out of legal 
mandates, the President's priorities, or the principles set forth in 
the Executive Order.
    Pursuant to the terms of Executive Order 12866, it has been 
determined that this rule is a ``significant regulatory action'' 
because of annual impacts on the economy that are likely to exceed $100 
million. As such, this action was submitted to OMB for review. Changes 
made in response to OMB suggestions or recommendations will be 
documented in the public record.

B. Regulatory Flexibility Act

    EPA has determined that it is not necessary to prepare a regulatory 
flexibility analysis in connection with this final rule. EPA has also 
determined that this rule will not have a significant economic impact 
on a substantial number of small entities. Only manufacturers of motor 
vehicles, a group which does not contain a substantial number of small 
entities, will have to comply with the requirements of this rule.

C. Unfunded Mandates Reform Act

    Under sections 202 and 205 of the Unfunded Mandates Reform Act of 
1995 (UMRA), EPA generally must prepare a written statement to 
accompany any proposed or final rule that includes a federal mandate 
that may result in expenditures by state, local, or tribal governments 
in the aggregate, or by the private sector, of $100 million or more in 
any one year.
    EPA has determined that the written statement requirements of 
sections 202 and 205 of UMRA do not apply to today's rule, and thus 
does not require EPA to conduct further analyses pursuant to those 
requirements. National LEV is not a federal mandate because it does not 
impose any enforceable duties and because it is a voluntary program. 
Because National LEV would not impose a federal mandate on any party, 
section 202 does not apply to this rule. Even if these unfunded 
mandates provisions did apply to this rule, they are met by the 
Regulatory Impact Analysis prepared pursuant to Executive Order 12866 
and contained in the docket.
    Section 203 requires EPA to establish a plan for informing and 
advising any small governments that may be significantly or uniquely 
impacted by the rule. EPA has not prepared such a plan because small 
governments would not be significantly or uniquely impacted by the 
rule.

D. Congressional Review of Agency Rulemaking

    Under section 801(a)(1)(A) of the Administrative Procedure Act 
(APA) as amended by the Small Business Regulatory Enforcement Reform 
Act of 1996, EPA submitted a report containing this rule and other 
required information to the U.S. Senate, the U.S. House of 
Representatives, and the Comptroller General of the General Accounting 
Office prior to publication of the rule in today's Federal Register. 
OMB has designated this a ``major rule'' as defined in section 804(2) 
of the APA, as amended.

E. Reporting and Recordkeeping Requirements

    The Information Collection Request (ICR) in this rule has been 
submitted for approval to the OMB under the Paperwork Reduction Act, 44 
U.S.C. 3501 et seq. An ICR document has been prepared by EPA (ICR No. 
1761.02) and a copy may be obtained from Sandy Farmer, OPPE Regulatory 
Information Division, EPA, 401 M St., SW (Mail Code 2137), Washington, 
DC 20460 or by calling (202) 260-2740. The information requirements are 
not effective until OMB approves them.
    The information collection would be conducted to support the 
averaging, banking and trading provisions included in the National LEV 
program. These averaging, banking and trading provisions would give 
automobile manufacturers a measure of flexibility in meeting the fleet 
average NMOG standards. EPA would use the reported data to calculate 
credits and debits and otherwise ensure compliance with the applicable 
production levels. When a manufacturer has opted into the voluntary 
National LEV program, reporting would be mandatory as per the 
regulations included in this rulemaking. This rulemaking would not 
change the requirements regarding confidentiality claims for submitted 
information, which are generally set out in 40 CFR part 2.
    The information collection burden associated with this rule 
(testing, record keeping and reporting requirements) is estimated to 
average 241.3 hours annually for a typical manufacturer. It is expected 
that approximately 25 manufacturers will provide an annual report to 
EPA. However, the hours spent annually on information collection 
activities by a given manufacturer depends upon manufacturer-specific 
variables, such as the number of engine families, production changes, 
emissions defects, and so forth.
    Burden means the total time, effort, or financial resources 
expended by persons to generate, maintain, retain, or disclose or 
provide information to or for a Federal agency. This estimate also 
includes the time needed to: Review instructions; develop, acquire, 
install, and utilize technology and systems for the purposes of 
collecting, validating, and verifying information, processing and 
maintaining information, and disclosing and providing information; 
adjust the existing ways to comply with any previously applicable 
instructions and requirements; train personnel to be able to respond to 
a collection of information; search data sources; complete and review 
the collection of information; and transmit or otherwise disclose the 
information.
    An Agency may not conduct or sponsor, and a person is not required 
to respond to a collection of information unless it displays a 
currently valid OMB control number. The OMB control numbers for EPA's 
regulations are listed in 40 CFR part 9 and 48 CFR chapter 15.

[[Page 31232]]

    Send comments on the Agency's need for this information, the 
accuracy of the provided burden estimates, and any suggested methods 
for minimizing respondent burden, including through the use of 
automated collection techniques to the Director, OPPE Regulatory 
Information Division; U.S. Environmental Protection Agency (2137); 401 
M St., S.W., Washington, D.C. 20460; and to the Office of Information 
and Regulatory Affairs, Office of Management and Budget, 725 17th St., 
N.W., Washington, D.C. 20503, marked ``Attention: Desk Officer for 
EPA.'' Include the ICR number in any correspondence.

X. Statutory Authority

    The promulgation of these regulations is authorized by sections 
202, 203, 204, 205, 206, 207, 208 and 301 of the Clean Air Act as 
amended by the Clean Air Act Amendments of 1990 (CAAA) (42 U.S.C. 7521, 
7522, 7523, 7524, 7525, 7541, 7542, and 7601).

XI. Judicial Review

    Under section 307(b)(1) of the Act, EPA hereby finds that these 
regulations are of national applicability. Accordingly, judicial review 
of this action is available only by filing of a petition for review in 
the United States Court of Appeals for the District of Columbia Circuit 
within 60 days of publication in the Federal Register. Under section 
307(b)(2) of the Act, the requirements which are the subject of today's 
rule may not be challenged later in judicial proceedings brought by EPA 
to enforce these requirements. This rulemaking and any petitions for 
review are subject to the provisions of section 307(d) of the Clean Air 
Act.

List of Subjects

40 CFR Part 85

    Confidential business information, Imports, Labeling, Motor vehicle 
pollution, Reporting and recordkeeping requirements, Research, 
Warranties.

40 CFR Part 86

    Administrative practice and procedure, Confidential business 
information, Incorporation by reference, Labeling, Motor vehicle 
pollution, Reporting and recordkeeping requirements.

    Dated: May 2, 1997.
Carol M. Browner,
Administrator.

    For the reasons set out in the preamble, chapter I, title 40 of the 
Code of Federal Regulations is amended as follows:

PART 85--CONTROL OF AIR POLLUTION FROM MOTOR VEHICLES AND MOTOR 
VEHICLE ENGINES

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

    Authority: 42 U.S.C. 7521, 7522, 7524, 7525, 7541, 7542, and 
7601(a).

Subpart P--[Amended]

    2. Section 85.1515 is amended by revising paragraph (c) to read as 
follows:


Sec. 85.1515  Emission standards and test procedures applicable to 
imported nonconforming motor vehicles and motor vehicle engines.

* * * * *
    (c) Nonconforming motor vehicles or motor vehicle engines of 1994 
OP model year and later conditionally imported pursuant to Sec. 85.1505 
or Sec. 85.1509 shall meet all of the emission standards specified in 
40 CFR part 86 for the model year in which the motor vehicle or motor 
vehicle engine is modified. At the option of the ICI, the nonconforming 
motor vehicle may comply with the emissions standards in 40 CFR 
86.1708-97 or 86.1709-97, as applicable to a light-duty vehicle or 
light light-duty truck, in lieu of the otherwise applicable emissions 
standards specified in 40 CFR part 86 for the model year in which the 
nonconforming motor vehicle is modified. The provisions of 40 CFR 
86.1710-97 do not apply to imported nonconforming motor vehicles. The 
useful life specified in 40 CFR part 86 for the model year in which the 
motor vehicle or motor vehicle engine is modified is applicable where 
useful life is not designated in this subpart.
* * * * *

PART 86--CONTROL OF AIR POLLUTION FROM NEW AND IN-USE MOTOR 
VEHICLES AND NEW AND IN-USE MOTOR VEHICLE ENGINES: CERTIFICATION 
AND TEST PROCEDURES

    3. The authority citation for part 86 is revised to read as 
follows:

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

    4. Section 86.1 is amended by revising the entry for ASTM E29-90 in 
the table in paragraph (b)(1) and by adding an entry after the existing 
entry to the table in paragraph (b)(4), to read as follows:


Sec. 86.1  Reference materials.

* * * * *
    (b) * * *
    (1) * * *

------------------------------------------------------------------------
        Document number and name             40 CFR part 86 reference   
------------------------------------------------------------------------
                                                                        
*                  *                  *                  *              
                  *                  *                  *               
ASTM E29-90, Standard Practice for       86.609-84; 86.609-96; 86.609-  
 Using Significant Digits in Test Data    97; 86.609-98; 86.1009-84;    
 to Determine Conformance with            86.1009-96; 86.1442; 86.1708- 
 Specifications.                          97; 86.1709-97; 86.1710-97;   
                                          86.1728-97.                   
------------------------------------------------------------------------

* * * * *
    (4) * * *

------------------------------------------------------------------------
        Document number and name             40 CFR part 86 reference   
------------------------------------------------------------------------
                                                                        
*                  *                  *                  *              
                  *                  *                  *               
California Regulatory Requirements       86.608-97; 86.608-98; 86.612-  
 Applicable to the National Low           97; 86.1008-97; 86.1012-97;   
 Emission Vehicle Program, October,       86.1702-97; 86.1708-97;       
 1996                                     86.1709-97; 86.1717-97;       
                                          86.1735-97; 86.1771-97;       
                                          86.1775-97; 86.1776-97;       
                                          86.1777-97; Appendix XVI;     
                                          Appendix XVII.                
------------------------------------------------------------------------


[[Page 31233]]

Subpart A--[Amended]

    5. Section 86.082-2 is amended by revising paragraph (a) to read as 
follows:


Sec. 86.082-2  Definitions.

    (a) The definitions of this section apply to this subpart and also 
to subparts B, D, I, and R of this part.
* * * * *
    6. Section 86.085-37 is amended by revising paragraph (b)(1) 
introductory text to read as follows:


Sec. 86.085-37  Production vehicles and engines.

* * * * *
    (b)(1) Any manufacturer of light-duty vehicles or light-duty trucks 
obtaining certification under this part shall notify the Administrator, 
on a yearly basis, of the number of vehicles domestically produced for 
sale in the United States and the number of vehicles produced and 
imported for sale in the United States during the preceding year. Such 
information shall also include the number of vehicles produced for sale 
pursuant to Sec. 88.204-94(b) of this chapter. A manufacturer may elect 
to provide this information every 60 days instead of yearly by 
combining it with the notification required under Sec. 86.079-36. The 
notification must be submitted 30 days after the close of the reporting 
period. A manufacturer may combine the information required under 
Sec. 86.1712(b) with the information included in paragraphs (b)(1) (i) 
through (iv) of this section into the report required under this 
section. The vehicle production information required shall be submitted 
as follows:
* * * * *
    7. Section 86.090-2 is amended by revising the definition for 
``Flexible fuel vehicle (or engine)'' and adding a new definition in 
alphabetical order for ``Dual fuel vehicle (or engine)'' to read as 
follows:


Sec. 86.090-2  Definitions.

* * * * *
    Dual fuel vehicle (or engine) means any motor vehicle (or motor 
vehicle engine) engineered and designed to be operated on two different 
fuels, but not on a mixture of fuels.
* * * * *
    Flexible fuel vehicle (or engine) means any motor vehicle (or motor 
vehicle engine) engineered and designed to be operated on any mixture 
of two or more different fuels.
* * * * *
    8. Section 86.094-38 is amended by adding introductory text and 
revising paragraphs (a) through (f), to read as follows:


Sec. 86.094-38  Maintenance instructions.

    Section 86.094-38 includes text that specifies requirements that 
differ from those specified in Sec. 86.087-38. Where a paragraph in 
Sec. 86.087-38 is identical and applicable to Sec. 86.094-38, this may 
be indicated by specifying the corresponding paragraph and the 
statement ``[Reserved]. For guidance see Sec. 86.087-38.''.
    (a) through (f) [Reserved]. For guidance see Sec. 86.087-38.
* * * * *
    9. Section 86.096-30 is amended by adding paragraphs (a)(19) 
through (a)(22) to read as follows:


Sec. 86.096-30  Certification.

* * * * *
    (a) * * *
    (19) For all light-duty vehicles and light light-duty trucks 
certified to standards under Secs. 86.1710 through 86.1712, the 
provisions of paragraphs (a)(19) (i) through (iv) of this section 
apply.
    (i) All certificates issued are conditional upon manufacturer 
compliance with all provisions of Secs. 86.1710 through 86.1712 both 
during and after model year production.
    (ii) Failure to meet the requirements of Sec. 86.1710 (a) through 
(d) will be considered to be a failure to satisfy the conditions upon 
which the certificate(s) was issued and the vehicles sold in violation 
of the fleet average NMOG standard shall not be covered by the 
certificate.
    (iii) The manufacturer shall bear the burden of establishing to the 
satisfaction of the Administrator that the conditions upon which the 
certificate was issued were satisfied.
    (iv) For recall and warranty purposes, vehicles not covered by a 
certificate because of a violation of this condition of the certificate 
will continue to be held to the standards stated in the certificate 
that would have otherwise applied to the vehicles.
    (20) For all light-duty vehicles and light light-duty trucks 
certified to standards under Secs. 86.1710 through 86.1712, the 
provisions of paragraphs (a)(20) (i) through (iv) of this section 
apply.
    (i) All certificates issued are conditional upon manufacturer 
compliance with all provisions of Secs. 86.1710 through 86.1712 both 
during and after model year production.
    (ii) Failure to comply fully with the prohibition against a 
manufacturer selling credits that it has not generated or are not 
available, as specified in Sec. 86.1710(e), will be considered to be a 
failure to satisfy the conditions upon which the certificate(s) was 
issued and the vehicles sold in violation of this prohibition shall not 
be covered by the certificate.
    (iii) The manufacturer shall bear the burden of establishing to the 
satisfaction of the Administrator that the conditions upon which the 
certificate was issued were satisfied.
    (iv) For recall and warranty purposes, vehicles not covered by a 
certificate because of a violation of this condition of the certificate 
will continue to be held to the standards stated in the certificate 
that would have otherwise applied to the vehicles.
    (21) For all light-duty vehicles and light light-duty trucks 
certified to standards under Secs. 86.1710 through 86.1712, the 
provisions of paragraphs (a)(21) (i) through (iv) of this section 
apply.
    (i) All certificates issued are conditional upon manufacturer 
compliance with all provisions of Secs. 86.1710 through 86.1712 both 
during and after model year production.
    (ii) Failure to comply fully with the prohibition against offering 
for sale Tier 1 vehicles and TLEVs in the Northeast Trading Region, as 
defined in Sec. 86.1702, after model year 2000 if vehicles with the 
same engine families are not certified and offered for sale in 
California in the same model year, as specified in Sec. 86.1711(a), 
will be considered to be a failure to satisfy the conditions upon which 
the certificate(s) was issued and the vehicles sold in violation of 
this prohibition shall not be covered by the certificate.
    (iii) The manufacturer shall bear the burden of establishing to the 
satisfaction of the Administrator that the conditions upon which the 
certificate was issued were satisfied.
    (iv) For recall and warranty purposes, vehicles not covered by a 
certificate because of a violation of this condition of the certificate 
will continue to be held to the standards stated in the certificate 
that would have otherwise applied to the vehicles.
    (22) For all light-duty vehicles and light light-duty trucks 
certified to standards under Secs. 86.1710 through 86.1712, the 
provisions of paragraphs (a)(22) (i) through (iv) of this section 
apply.
    (i) All certificates issued are conditional upon manufacturer 
compliance with all provisions of Secs. 86.1710 through 86.1712 both 
during and after model year production.
    (ii) Failure to comply fully with the prohibition against selling 
Tier 1 vehicles and TLEVs in the Northeast Trading Region, as defined 
in Sec. 86.1702, in excess of five percent of the industry-wide fleet, 
as specified in Sec. 86.1711(b),

[[Page 31234]]

will be considered a failure to satisfy the conditions upon which the 
certificate was issued and the vehicles sold in violation of this 
prohibition shall not be covered by the certificate.
    (iii) The manufacturer shall bear the burden of establishing to the 
satisfaction of the Administrator that the conditions upon which the 
certificate was issued were satisfied.
    (iv) For recall and warranty purposes, vehicles not covered by a 
certificate because of a violation of this condition of the certificate 
will continue to be held to the standards stated in the certificate 
that would have otherwise applied to the vehicles.
* * * * *
    10. A new Sec. 86.097-1 is added to subpart A to read as follows:


Sec. 86.097-1  General applicability.

    Section 86.097-1 includes text that specifies requirements that 
differ from those specified in Sec. 86.094-1. Where a paragraph in 
Sec. 86.094-1 is identical and applicable to Sec. 86.097-1, this may be 
indicated by specifying the corresponding paragraph and the statement 
``[Reserved]. For guidance see Sec. 86.094-1.''.
    (a) through (b) [Reserved]. For guidance see Sec. 86.094-1.
    (c) National Low Emission Vehicle Program for light-duty vehicles 
and light light-duty trucks. A manufacturer may elect to certify 1997 
and later model year light-duty vehicles and light light-duty trucks to 
the provisions of the National Low Emission Vehicle Program contained 
in subpart R of this part. Subpart R of this part is applicable only to 
those manufacturers that opt into the National Low Emission Vehicle 
Program, under the provisions of that subpart, and that have not 
exercised a valid opt-out from the NLEV Program that has gone into 
effect under the provisions of Sec. 86.1705 (d) and (e). All provisions 
of this subpart are applicable to vehicles certified pursuant to 
subpart R of this part, except as specifically noted in subpart R of 
this part.
    (d) [Reserved]
    (e) through (f) [Reserved]. For guidance see Sec. 86.094-1.

Subpart B--[Amended]

    11. Section 86.101 is amended by adding a paragraph (c) to read as 
follows:


Sec. 86.101  General applicability.

* * * * *
    (c) National Low Emission Vehicle Program for light-duty vehicles 
and light light-duty trucks. A manufacturer may elect to certify 1997 
and later model year light-duty vehicles and light light-duty trucks to 
the provisions of the National Low Emission Vehicle Program contained 
in subpart R of this part. Subpart R of this part is applicable only to 
those manufacturers that opt into the National Low Emission Vehicle 
Program, under the provisions of subpart R of this part, and that have 
not exercised a valid opt-out from the NLEV Program, which opt out has 
gone into effect under the provisions of Sec. 86.1705(d) and (e). All 
provisions of this subpart are applicable to vehicles certified 
pursuant to subpart R of this part, except as specifically noted in 
subpart R of this part.

Subpart G--[Amended]

    12. Section 86.601-84 is amended by designating the existing text 
as introductory text, by adding paragraph (a), and by adding and 
reserving paragraph (b) to read as follows:


Sec. 86.601-84  Applicability.

* * * * *
    (a) Section numbering; construction. (1) The model year of initial 
applicability is indicated by the two digits following the hyphen of 
the section number. A section remains in effect for subsequent model 
years until it is superseded.
    (2) A section reference without a model year suffix shall be 
interpreted to be a reference to the section applicable to the 
appropriate model year.
    (b) [Reserved]
    13. Section 86.602-97 is added to subpart G to read as follows:


Sec. 86.602-97  Definitions.

    Section 86.602-97 includes text that specifies requirements that 
differ from those specified in Sec. 86.602-84. Where a paragraph in 
Sec. 86.602-84 is identical and applicable to Sec. 86.602-97, this may 
be indicated by specifying the corresponding paragraph and the 
statement ``[Reserved]. For guidance see Sec. 86.602-84.''
    (a) through (b)(8) [Reserved]. For guidance see Sec. 86.602-84.
    (b)(9) Executive Officer means the Executive Officer of the 
California Air Resources Board or his or her authorized representative.
    (10) Executive Order means the document the Executive Officer 
grants a manufacturer for an engine family that certifies the 
manufacturer has verified that the engine family complies with all 
applicable standards and requirements pursuant to Title 13 of the 
California Code of Regulations.
    (11) 50-state engine family means an engine family that meets both 
federal and California Air Resources Board motor vehicle emission 
control regulations and has received a federal certificate of 
conformity as well as an Executive Order.
    14. Section 86.602-98 is amended by adding paragraphs (b)(9) 
through (b)(11) to read as follows:


Sec. 86.602-98  Definitions.

* * * * *
    (b) * * *
    (9) Executive Officer means the Executive Officer of the California 
Air Resources Board or his or her authorized representative.
    (10) Executive Order means the document the Executive Officer 
grants a manufacturer for an engine family that certifies the 
manufacturer has verified that the engine family complies with all 
applicable standards and requirements pursuant to Title 13 of the 
California Code of Regulations.
    (11) 50-state engine family means an engine family that meets both 
federal and California Air Resources Board motor vehicle emission 
control regulations and has received a federal certificate of 
conformity as well as an Executive Order.
    15. Section 86.603-97 is added to subpart G to read as follows:


Sec. 86.603-97  Test orders.

    Section 86.603-97 includes text that specifies requirements that 
differ from those specified in Sec. 86.603-88. Where a paragraph in 
Sec. 86.603-88 is identical and applicable to Sec. 86.603-97, this may 
be indicated by specifying the corresponding paragraph and the 
statement ``[Reserved]. For guidance see Sec. 86.603-88.''
    (a) through (e) [Reserved]. For guidance see Sec. 86.603-88.
    (f) In the event evidence exists indicating an engine family is in 
noncompliance, the Administrator may, in addition to other powers 
provided by this section, issue a test order specifying the engine 
family the manufacturer is required to test.
    16. Section 86.603-98 is amended by adding paragraph (f) to read as 
follows:


Sec. 86.603-98  Test orders.

* * * * *
    (f) In the event evidence exists indicating an engine family is in 
noncompliance, the Administrator may, in addition to other powers 
provided by this section, issue a test order specifying the engine 
family the manufacturer is required to test.
    17. Section 86.608-97 is added to subpart G to read as follows:


Sec. 86.608-97  Test procedures.

    Section 86.608-97 includes text that specifies requirements that 
differ from

[[Page 31235]]

those specified in Secs. 86.608-90 and 86.608-96. Where a paragraph in 
Sec. 86.608-90 or Sec. 86.608-96 is identical and applicable to 
Sec. 86.608-97, this may be indicated by specifying the corresponding 
paragraph and the statement ``[Reserved]. For guidance see Sec. 86.608-
90.'' or ``[Reserved]. For guidance see Sec. 86.608-96.''
    (a) The prescribed test procedures are the Federal Test Procedure, 
as described in subpart B and/or subpart R of this part, whichever is 
applicable, the cold temperature CO test procedure as described in 
subpart C of this part, and the Certification Short Test procedure as 
described in subpart O of this part. Where the manufacturer conducts 
testing based on the requirements specified in Chapter 1 or Chapter 2 
of the California Regulatory Requirements Applicable to the National 
Low Emission Vehicle Program (October, 1996), the prescribed test 
procedures are the procedures cited in the previous sentence, or 
substantially similar procedures, as determined by the Administrator. 
The California Regulatory Requirements Applicable to the National Low 
Emission Vehicle Program are incorporated by reference (see Sec. 86.1). 
For purposes of Selective Enforcement Audit testing, the manufacturer 
shall not be required to perform any of the test procedures in subpart 
B of this part relating to evaporative emission testing, except as 
specified in paragraph (a)(2) of this section.
    (1) [Reserved]. For guidance see Sec. 86.608-96.
    (2) The following exceptions to the test procedures in subpart B 
and/or subpart R of this part are applicable to Selective Enforcement 
Audit testing:
    (i) For mileage accumulation, the manufacturer may use test fuel 
meeting the specifications for mileage and service accumulation fuels 
of Sec. 86.113, or, for vehicles certified to the National LEV 
standards, the specifications of Sec. 86.1771. Otherwise, the 
manufacturer may use fuels other than those specified in this section 
only with the advance approval of the Administrator.
    (ii) [Reserved]. For guidance see Sec. 86.608-90.
    (iii) The manufacturer may perform additional preconditioning on 
Selective Enforcement Audit test vehicles other than the 
preconditioning specified in Sec. 86.132, or Sec. 86.1773 for vehicles 
certified to the National LEV standards, only if the additional 
preconditioning had been performed on certification test vehicles of 
the same configuration.
    (a)(2)(iv) through (a)(2)(vii) [Reserved]. For guidance see 
Sec. 86.608-90.
    (a)(2)(viii) The manufacturer need not comply with Sec. 86.142, or 
Sec. 86.1775, since the records required therein are provided under 
other provisions of this subpart G.
    (a)(2)(ix) through (a)(3) [Reserved]. For guidance see Sec. 86.608-
90.
    (a)(4) [Reserved]. For guidance see Sec. 86.608-96.
    (b) through (i) [Reserved]. For guidance see Sec. 86.608-90.
    18. Section 86.608-98 is amended by revising paragraphs (a) 
introductory text, (a)(2) introductory text, (a)(2)(i), (a)(2)(iii), 
and (a)(2)(viii), to read as follows:


Sec. 86.608-98  Test procedures.

    (a) The prescribed test procedures are the Federal Test Procedure, 
as described in subpart B and/or subpart R of this part, whichever is 
applicable, the cold temperature CO test procedure as described in 
subpart C of this part, and the Certification Short Test procedure as 
described in subpart O of this part. Where the manufacturer conducts 
testing based on the requirements specified in Chapter 1 or Chapter 2 
of the California Regulatory Requirements Applicable to the National 
Low Emission Vehicle Program (October, 1996), the prescribed test 
procedures are the procedures cited in the previous sentence, or 
substantially similar procedures, as determined by the Administrator. 
The California Regulatory Requirements Applicable to the National Low 
Emission Vehicle Program are incorporated by reference (see Sec. 86.1). 
For purposes of Selective Enforcement Audit testing, the manufacturer 
shall not be required to perform any of the test procedures in subpart 
B of this part relating to evaporative emission testing, other than 
refueling emissions testing, except as specified in paragraph (a)(2) of 
this section.
* * * * *
    (2) The following exceptions to the test procedures in subpart B 
and/or subpart R of this part are applicable to Selective Enforcement 
Audit testing:
    (i) For mileage accumulation, the manufacturer may use test fuel 
meeting the specifications for mileage and service accumulation fuels 
of Sec. 86.113, or, for vehicles certified to the National LEV 
standards, the specifications of Sec. 86.1771. Otherwise, the 
manufacturer may use fuels other than those specified in this section 
only with the advance approval of the Administrator.
* * * * *
    (iii) The manufacturer may perform additional preconditioning on 
Selective Enforcement Audit test vehicles other than the 
preconditioning specified in Sec. 86.132, or Sec. 86.1773, for vehicles 
certified to the National LEV standards only if the additional 
preconditioning was performed on certification test vehicles of the 
same configuration.
* * * * *
    (viii) The manufacturer need not comply with Sec. 86.142, 
Sec. 86.155, or Sec. 86.1775, since the records required therein are 
provided under other provisions of this subpart G.
* * * * *
    19. Section 86.609-97 is added to subpart G to read as follows:


Sec. 86.609-97  Calculation and reporting of test results.

    Section 86.609-97 includes text that specifies requirements that 
differ from those specified in Secs. 86.609-84 and 86.609-96. Where a 
paragraph in Sec. 86.609-84 or Sec. 86.609-96 is identical and 
applicable to Sec. 86.609-97, this may be indicated by specifying the 
corresponding paragraph and the statement ``[Reserved]. For guidance 
see Sec. 86.609-84.'' or ``[Reserved]. For guidance see Sec. 86.609-
96.''
    (a) through (b) [Reserved]. For guidance see Sec. 86.609-96.
    (c) Final deteriorated test results--(1) For each test vehicle. The 
final deteriorated test results for each test vehicle tested according 
to subpart B, subpart C, or subpart R of this part are calculated by 
first multiplying or adding, as appropriate, the final test results by 
or to the appropriate deterioration factor derived from the 
certification process for the engine or evaporative/refueling family 
and model year to which the selected configuration belongs, and then by 
multiplying by the appropriate reactivity adjustment factor, if 
applicable, and rounding to the same number of decimal places contained 
in the applicable emission standard. Rounding is done in accordance 
with the Rounding-Off Method specified in ASTM E29-90, Standard 
Practice for Using Significant Digits in Test Data to Determine 
Conformance with Specifications. This procedure is incorporated by 
reference (see Sec. 86.1). For the purpose of this paragraph (c), if a 
multiplicative deterioration factor as computed during the 
certification process is less than one, that deterioration factor is 
one. If an additive deterioration factor as computed during the 
certification process is less than zero, that deterioration factor will 
be zero.
    (c)(2) [Reserved]. For guidance see Sec. 86.609-96.
    (d) [Reserved]. For guidance see Sec. 86.609-84.

[[Page 31236]]

    20. Section 86.609-98 is amended by revising paragraph (c)(1) to 
read as follows:


Sec. 86.609-98  Calculation and reporting of test results.

* * * * *
    (c) * * *
    (1) For each test vehicle. The final deteriorated test results for 
each light-duty vehicle tested for exhaust emissions and/or refueling 
emissions according to subpart B, subpart C, or subpart R of this part 
are calculated by first multiplying or adding, as appropriate, the 
final test results by or to the appropriate deterioration factor 
derived from the certification process for the engine or evaporative/
refueling family and model year to which the selected configuration 
belongs, and then by multiplying by the appropriate reactivity 
adjustment factor, if applicable, and rounding to the same number of 
decimal places contained in the applicable emission standard. Rounding 
is done in accordance with the Rounding-Off Method specified in ASTM 
E29-90, Standard Practice for Using Significant Digits in Test Data to 
Determine Conformance with Specifications. This procedure has been 
incorporated by reference (see Sec. 86.1). For the purpose of this 
paragraph (c), if a multiplicative deterioration factor as computed 
during the certification process is less than one, that deterioration 
factor is one. If an additive deterioration factor as computed during 
the certification process is less than zero, that deterioration factor 
will be zero.
* * * * *
    21. Section 86.612-97 is added to subpart G to read as follows:


Sec. 86.612-97  Suspension and revocation of certificates of 
conformity.

    (a) The certificate of conformity is immediately suspended with 
respect to any vehicle failing pursuant to Sec. 86.610(b) effective 
from the time that testing of that vehicle is completed.
    (b)(1) Selective Enforcement Audits. The Administrator may suspend 
the certificate of conformity for a configuration that does not pass a 
Selective Enforcement Audit pursuant to Sec. 86.610-98(c) based on the 
first test, or all tests, conducted on each vehicle. This suspension 
will not occur before ten days after failure to pass the audit.
    (2) California Assembly-Line Quality Audit Testing. The 
Administrator may suspend the certificate of conformity for a 50-state 
family or configuration tested in accordance with procedures prescribed 
under Sec. 86.608 that the Executive Officer has determined to be in 
non-compliance with one or more applicable pollutants based on the 
requirements specified in Chapter 1 or Chapter 2 of the California 
Regulatory Requirements Applicable to the National Low Emission Vehicle 
Program (October, 1996), if the results of vehicle testing conducted by 
the manufacturer do not meet the acceptable quality level criteria 
pursuant to Sec. 86.610. The California Regulatory Requirements 
Applicable to the National Low Emission Vehicle Program (October, 1996) 
are incorporated by reference (see Sec. 86.1). A vehicle that is tested 
by the manufacturer pursuant to California Assembly-Line Quality Audit 
Test Procedures, in accordance with procedures prescribed under 
Sec. 86.608, and determined to be a failing vehicle will be treated as 
a failed vehicle described in Sec. 86.610(b), unless the manufacturer 
can show that the vehicle would not be considered a failed vehicle 
using the test procedures specified in Sec. 86.608. This suspension 
will not occur before ten days after the manufacturer receives written 
notification that the Administrator has determined the 50-state family 
or configuration exceeds one or more applicable federal standards.
    (c)(1) Selective Enforcement Audits. If the results of vehicle 
testing pursuant to the requirements of this subpart indicates the 
vehicles of a particular configuration produced at more than one plant 
do not conform to the regulations with respect to which the certificate 
of conformity was issued, the Administrator may suspend the certificate 
of conformity with respect to that configuration for vehicles 
manufactured by the manufacturer in other plants of the manufacturer.
    (2) California Assembly-Line Quality Audit Testing. If the 
Administrator determines that the results of vehicle testing pursuant 
to the requirements specified in Chapter 1 or Chapter 2 of the 
California Regulatory Requirements Applicable to the National Low 
Emission Vehicle Program (October, 1996) and the procedures prescribed 
in Sec. 86.608 indicate the vehicles of a particular 50-state engine 
family or configuration produced at more than one plant do not conform 
to applicable federal regulations with respect to which a certificate 
of conformity was issued, the Administrator may suspend, pursuant to 
paragraph (b)(2) of this section, the certificate of conformity with 
respect to that engine family or configuration for vehicles 
manufactured in other plants of the manufacturer. The California 
Regulatory Requirements Applicable to the National Low Emission Vehicle 
Program (October, 1996) are incorporated by reference (see Sec. 86.1).
    (d) The Administrator will notify the manufacturer in writing of 
any suspension or revocation of a certificate of conformity in whole or 
in part: Except, that the certificate of conformity is immediately 
suspended with respect to any vehicle failing pursuant to 
Sec. 86.610(b) and as provided for in paragraph (a) of this section.
    (e)(1) Selective Enforcement Audits. The Administrator may revoke a 
certificate of conformity for a configuration when the certificate has 
been suspended pursuant to paragraph (b)(1) or (c)(1) of this section 
if the proposed remedy for the nonconformity, as reported by the 
manufacturer to the Administrator, is one requiring a design change(s) 
to the engine and/or emission control system as described in the 
Application for Certification of the affected configuration.
    (2) California Assembly-Line Quality Audit Testing. The 
Administrator may revoke a certificate of conformity for an engine 
family or configuration when the certificate has been suspended 
pursuant to paragraph (b)(2) or (c)(2) of this section if the proposed 
remedy for the nonconformity, as reported by the manufacturer to the 
Executive Officer and/or the Administrator, is one requiring a design 
change(s) to the engine and/or emission control system as described in 
the Application for Certification of the affected engine family or 
configuration.
    (f) Once a certificate has been suspended for a failed vehicle as 
provided for in paragraph (a) of this section, the manufacturer must 
take the following actions:
    (1) Before the certificate is reinstated for that failed vehicle--
    (i) Remedy the nonconformity; and
    (ii) Demonstrate that the vehicle's final deteriorated test results 
conform to the applicable emission standards or family particulate 
emission limits, as defined in this part 86 by retesting the vehicle in 
accordance with the requirements of this subpart.
    (2) Submit a written report to the Administrator within thirty days 
after successful completion of testing on the failed vehicle, which 
contains a description of the remedy and test results for the vehicle 
in addition to other information that may be required by this subpart.
    (g) Once a certificate has been suspended pursuant to paragraph (b) 
or (c) of this section, the manufacturer must take the following 
actions before the Administrator will consider reinstating such 
certificate:

[[Page 31237]]

    (1) Submit a written report to the Administrator which identifies 
the reason for the noncompliance of the vehicles, describes the 
proposed remedy, including a description of any proposed quality 
control and/or quality assurance measures to be taken by the 
manufacturer to prevent the future occurrence of the problem, and 
states the date on which the remedies will be implemented.
    (2) Demonstrate that the engine family or configuration for which 
the certificate of conformity has been suspended does in fact comply 
with the requirements of this subpart by testing vehicles selected from 
normal production runs of that engine family or configuration at the 
plant(s) or the facilities specified by the Administrator, in 
accordance with:
    (i) The conditions specified in the initial test order pursuant to 
Sec. 86.603 for a configuration suspended pursuant to paragraph (b)(1) 
or (c)(1) of this section; or
    (ii) The conditions specified in a test order pursuant to 
Sec. 86.603 for an engine family or configuration suspended pursuant to 
paragraph (b)(2) or (c)(2) of this section.
    (3) If the Administrator has not revoked the certificate pursuant 
to paragraph (e) of this section and if the manufacturer elects to 
continue testing individual vehicles after suspension of a certificate, 
the certificate is reinstated for any vehicle actually determined to 
have its final deteriorated test results in conformance with the 
applicable standards through testing in accordance with the applicable 
test procedures.
    (4) In cases where the Administrator has suspended a certificate of 
conformity for a 50-state engine family or configuration pursuant to 
paragraph (b)(2) or (c)(2) of this section, manufacturers may request 
in writing that the Administrator reinstate the certificate of an 
engine family or configuration when, in lieu of the actions described 
in paragraphs (g) (1) and (2) of this section, the manufacturer has 
agreed to comply with Chapter 3 of the California Regulatory 
Requirements Applicable to the National Low Emission Vehicle Program 
(October, 1996), provided an Executive Order is in place for the engine 
family or configuration. The California Regulatory Requirements 
Applicable to the National Low Emission Vehicle Program (October, 1996) 
are incorporated by reference (see Sec. 86.1).
    (h) Once a certificate for a failed engine family or configuration 
has been revoked under paragraph (e) (1) or (2) of this section and the 
manufacturer desires to introduce into commerce a modified version of 
that engine family or configuration, the following actions will be 
taken before the Administrator may issue a certificate for the new 
engine family or configuration:
    (1) If the Administrator determines that the proposed change(s) in 
vehicle design may have an effect on emission performance deterioration 
and/or fuel economy, he/she shall notify the manufacturer within five 
working days after receipt of the report in paragraph (g)(1) of this 
section or after receipt of information pursuant to paragraph (g)(4) of 
this section whether subsequent testing under this subpart will be 
sufficient to evaluate the proposed change(s) or whether additional 
testing will be required.
    (2) After implementing the change(s) intended to remedy the 
nonconformity, the manufacturer shall demonstrate:
    (i) If the certificate was revoked pursuant to paragraph (e)(1) of 
this section, that the modified vehicle configuration does in fact 
conform with the requirements of this subpart by testing vehicles 
selected from normal production runs of that modified vehicle 
configuration in accordance with the conditions specified in the 
initial test order pursuant to Sec. 86.603. The Administrator shall 
consider this testing to satisfy the testing requirements of 
Sec. 86.079-32 or Sec. 86.079-33 if the Administrator had so notified 
the manufacturer. If the subsequent testing results in a pass decision 
pursuant to the criteria in Sec. 86.610-96(c), the Administrator shall 
reissue or amend the certificate, if necessary, to include that 
configuration: Provided, that the manufacturer has satisfied the 
testing requirements specified in paragraph (h)(1) of this section. If 
the subsequent audit results in a fail decision pursuant to the 
criteria in Sec. 86.610(c), the revocation remains in effect. Any 
design change approvals under this subpart are limited to the 
modification of the configuration specified by the test order.
    (ii) If the certificate was revoked pursuant to paragraph (e)(2) of 
this section, that the modified engine family or configuration does in 
fact conform with the requirements of this subpart by testing vehicles 
selected from normal production runs of that modified engine family or 
configuration in accordance with the conditions specified in a test 
order pursuant to Sec. 86.603. The Administrator shall consider this 
testing to satisfy the testing requirements of Sec. 86.079-32 or 
Sec. 86.079-33 if the Administrator had so notified the manufacturer. 
If the subsequent testing results in a pass decision pursuant to 
Sec. 86.610(c), the Administrator shall reissue or amend the 
certificate as necessary: Provided, That the manufacturer has satisfied 
the testing requirements specified in paragraph (h)(1) of this section. 
If the subsequent testing results in a fail decision pursuant to 
Sec. 86.610(c), the revocation remains in effect. Any design change 
approvals under this subpart are limited to the modification of engine 
family or configuration specified by the test order.
    (3) In cases where the Administrator has revoked a certificate of 
conformity for a 50-state engine family or configuration pursuant to 
paragraph (e)(2) of this section, manufacturers may request in writing 
that the Administrator reissue the certificate of an engine family or 
configuration when, in lieu of the actions described in paragraphs (h) 
(1) and (2) of this section, the manufacturer has complied with Chapter 
3 of the California Regulatory Requirements Applicable to the National 
Low Emission Vehicle Program (October, 1996), provided an Executive 
Order is in place for the engine family or configuration. The 
California Regulatory Requirements Applicable to the National Low 
Emission Vehicle Program (October, 1996) are incorporated by reference 
(see Sec. 86.1).
    (i) A manufacturer may at any time subsequent to an initial 
suspension of a certificate of conformity with respect to a test 
vehicle pursuant to paragraph (a) of this section, but not later than 
fifteen (15) days or such other period as may be allowed by the 
Administrator after notification of the Administrator's decision to 
suspend or revoke a certificate of conformity in whole or in part 
pursuant to paragraph (b), (c) or (e) of this section, request that the 
Administrator grant such manufacturer a hearing as to whether the tests 
have been properly conducted or any sampling methods have been properly 
applied.
    (j) After the Administrator suspends or revokes a certificate of 
conformity pursuant to this section or notifies a manufacturer of his 
intent to suspend, revoke or void a certificate of conformity under 
Sec. 86.084-30(d), and prior to the commencement of a hearing under 
Sec. 86.614, if the manufacturer demonstrates to the Administrator's 
satisfaction that the decision to suspend, revoke or void the 
certificate was based on erroneous information, the Administrator shall 
reinstate the certificate.
    (k) To permit a manufacturer to avoid storing non-test vehicles 
when conducting testing of an engine family or configuration subsequent 
to suspension or revocation of the certificate of conformity for that 
engine family or configuration pursuant to

[[Page 31238]]

paragraph (b), (c), or (e) of this section, the manufacturer may 
request that the Administrator conditionally reinstate the certificate 
for that engine family or configuration. The Administrator may 
reinstate the certificate subject to the condition that the 
manufacturer consents to recall all vehicles of that engine family or 
configuration produced from the time the certificate is conditionally 
reinstated if the engine family or configuration fails the subsequent 
testing and to remedy any nonconformity at no expense to the owner.

Subpart K--[Amended]

    22. Section 86.1001-84 is amended by designating the existing text 
as introductory text, by adding paragraph (a), and by adding and 
reserving paragraph (b) to read as follows:


Sec. 86.1001-84  Applicability.

* * * * *
    (a) Section numbering; construction. (1) The model year of initial 
applicability is indicated by the two digits following the hyphen of 
the section number. A section remains in effect for subsequent model 
years until it is superseded.
    (2) A section reference without a model year suffix shall be 
interpreted to be a reference to the section applicable to the 
appropriate model year.
    (b) [Reserved]
    23. Section 86.1002-97 is added to subpart K to read as follows:


Sec. 86.1002-97  Definitions.

    (a) The definitions in this section apply to this subpart.
    (b) As used in this subpart, all terms not defined in this section 
have the meaning given them in the Act.
    Acceptable quality level (AQL) means the maximum percentage of 
failing engines or vehicles, that for purposes of sampling inspection, 
can be considered satisfactory as a process average.
    Axle ratio means all ratios within 3% of the axle ratio 
specified in the configuration in the test order.
    Compliance level means an emission level determined during a 
Production Compliance Audit pursuant to subpart L of this part.
    Configuration means a subclassification, if any, of a heavy-duty 
engine family for which a separate projected sales figure is listed in 
the manufacturer's Application for Certification and which can be 
described on the basis of emission control system, governed speed, 
injector size, engine calibration, and other parameters which may be 
designated by the Administrator, or a subclassification of a light-duty 
truck engine family/emission control system combination on the basis of 
engine code, inertia weight class, transmission type and gear rations, 
axle ratio, and other parameters which may be designated by the 
Administrator.
    Executive Officer means the Executive Officer of the California Air 
Resources Board or his or her authorized representative.
    Executive Order means the document the Executive Officer grants a 
manufacturer for an engine family that certifies the manufacturer has 
verified the engine family complies with all applicable standards and 
requirements pursuant to Title 13 of the California Code of 
Regulations.
    50-state engine family means an engine family that meets both 
federal and California Air Resources Board motor vehicle emission 
control regulations and has received a federal certificate of 
conformity as well as an Executive Order.
    Inspection criteria means the pass and fail numbers associated with 
a particular sampling plan.
    Test engine means an engine in a test sample.
    Test sample means the collection of vehicles or engines of the same 
configuration which have been drawn from the population of engines or 
vehicles of that configuration and which will receive exhaust emission 
testing.
    Test vehicle means a vehicle in a test sample.
    24. Section 86.1002-2001 is amended by adding paragraphs (b)(8) 
through (b)(11) to read as follows:


Sec. 86.1002-2001  Definitions.

* * * * *
    (b) * * *
    (8) Axle ratio means all ratios within 3% of the axle 
ratio specified in the configuration in the test order.
    (9) Executive Officer means the Executive Officer of the California 
Air Resources Board or his or her authorized representative.
    (10) Executive Order means the document the Executive Officer 
grants a manufacturer for an engine family that certifies the 
manufacturer has verified the engine family complies with all 
applicable standards and requirements pursuant to Title 13 of the 
California Code of Regulations.
    (11) 50-state engine family means an engine family that meets both 
federal and California Air Resources Board motor vehicle emission 
control regulations and has received a federal certificate of 
conformity as well as an Executive Order.
    25. Section 86.1003-97 is added to subpart K to read as follows:


Sec. 86.1003-97  Test orders.

    Section 86.1003-97 includes text that specifies requirements that 
differ from those specified in Sec. 86.1003-90. Where a paragraph in 
Sec. 86.1003-90 is identical and applicable to Sec. 86.1003-97, this 
may be indicated by specifying the corresponding paragraph and the 
statement ``[Reserved]. For guidance see Sec. 86.1003-90.''
    (a) through (f) [Reserved]. For guidance see Sec. 86.1003-90.
    (g) In the event evidence exists indicating an engine family is in 
noncompliance, the Administrator may, in addition to other powers 
provided by this section, issue a test order specifying the engine 
family the manufacturer is required to test.
    26. Section 86.1003-2001 is amended by adding paragraph (g) to read 
as follows:


Sec. 86.1003-2001  Test orders.

* * * * *
    (g) In the event evidence exists indicating an engine family is in 
noncompliance, the Administrator may, in addition to other powers 
provided by this section, issue a test order specifying the engine 
family the manufacturer is required to test.
    27. Section 86.1008-97 is added to subpart K to read as follows:


Sec. 86.1008-97  Test procedures.

    Section 86.1008-97 includes text that specifies requirements that 
differ from those specified in Secs. 86.1008-90 and 86.1008-96. Where a 
paragraph in Sec. 86.1008-90 or Sec. 86.1008-96 is identical and 
applicable to Sec. 86.1008-97, this may be indicated by specifying the 
corresponding paragraph and the statement ``[Reserved]. For guidance 
see Sec. 86.1008-90.'' or ``[Reserved]. For guidance see Sec. 86.1008-
96.''
    (a)(1) [Reserved]. For guidance see Sec. 86.1008-96.
    (2) For light-duty trucks, the prescribed test procedures are the 
Federal Test Procedure, as described in subpart B and/or subpart R of 
this part, whichever is applicable, the idle CO test procedure as 
described in subpart P of this part, the cold temperature CO test 
procedure as described in subpart C of this part, and the Certification 
Short Test procedure as described in subpart O of this part. Where the 
manufacturer conducts testing based on the requirements specified in 
Chapter 1 or Chapter 2 of the California Regulatory Requirements 
Applicable to the National Low Emission Vehicle Program (October, 
1996), the prescribed test procedures are the procedures cited in the 
previous sentence, or substantially similar procedures, as determined 
by

[[Page 31239]]

the Administrator. The California Regulatory Requirements Applicable to 
the National Low Emission Vehicle Program are incorporated by reference 
(see Sec. 86.1). For purposes of Selective Enforcement Audit testing, 
the manufacturer shall not be required to perform any of the test 
procedures in subpart B of this part relating to evaporative emission 
testing, except as specified in paragraph (a)(3) of this section. The 
Administrator may select and prescribe the sequence of any 
Certification Short Tests. Further, the Administrator may, on the basis 
of a written application by a manufacturer, approve optional test 
procedures other than those in subparts B, C, P, and O of this part for 
any motor vehicle which is not susceptible to satisfactory testing 
using the procedures in subparts B, C, P, and O of this part.
    (3) When testing light-duty trucks the following exceptions to the 
test procedures in subpart B and/or subpart R of this part are 
applicable:
    (i) For mileage accumulation, the manufacturer may use test fuel 
meeting the specifications for mileage and service accumulation fuels 
of Sec. 86.113-94, or, for vehicles certified to the National LEV 
standards, the specifications of Sec. 86.1771. Otherwise, the 
manufacturer may use fuels other than those specified in this section 
only with the advance approval of the Administrator.
    (ii) [Reserved]. For guidance see Sec. 86.1008-90.
    (iii) The manufacturer may perform additional preconditioning on 
Selective Enforcement Audit test vehicles other than the 
preconditioning specified in Sec. 86.132, or Sec. 86.1773 for vehicles 
certified to the National LEV standards, only if the additional 
preconditioning had been performed on certification test vehicles of 
the same configuration.
    (a)(3)(iv) through (a)(3)(vii) [Reserved]. For guidance see 
Sec. 86.1008-90.
    (a)(3)(viii) The manufacturer need not comply with Sec. 86.142 or 
Sec. 86.1775, since the records required therein are provided under 
other provisions of this subpart.
    (a)(3)(ix) [Reserved]. For guidance see Sec. 86.1008-90.
    (a)(4) [Reserved]. For guidance see Sec. 86.1008-96.
    (5) [Reserved]. For guidance see Sec. 86.1008-90.
    (6) [Reserved]. For guidance see Sec. 86.1008-96.
    (b) through (i) [Reserved]. For guidance see Sec. 86.1008-90.
    28. Section 86.1008-2001 is amended by revising paragraphs (a)(2), 
(a)(3) introductory text, (a)(3)(i), (a)(3)(iii), and (a)(3)(viii) to 
read as follows:


Sec. 86.1008-2001  Test procedures.

    (a) * * *
    (2) For light-duty trucks, the prescribed test procedures are the 
Federal Test Procedure as described in subpart B and/or subpart R of 
this part, whichever is applicable, the idle CO test procedure as 
described in subpart P of this part, the cold temperature CO test 
procedure as described in subpart C of this part, and the Certification 
Short Test procedure as described in subpart O of this part. For 
purposes of Selective Enforcement Audit Testing, the manufacturer shall 
not be required to perform any of the test procedures in subpart B of 
this part relating to evaporative emission testing, other than 
refueling emissions testing, except as specified in paragraph (a)(3) of 
this section. The Administrator may select and prescribe the sequence 
of any CSTs. Further, the Administrator may, on the basis of a written 
application by a manufacturer, approve optional test procedures other 
than those in subparts B, C, P, O, and R of this part for any motor 
vehicle which is not susceptible to satisfactory testing using the 
procedures in subparts B, C, P, O, and R of this part.
    (3) When testing light-duty trucks, the following exceptions to the 
test procedures in subpart B and/or subpart R of this part are 
applicable to Selective Enforcement Audit testing:
    (i) For mileage accumulation, the manufacturer may use test fuel 
meeting the specifications for mileage and service accumulation fuels 
of Sec. 86.113, or, for vehicles certified to the National LEV 
standards, the specifications of Sec. 86.1771. Otherwise, the 
manufacturer may use fuels other than those specified in this section 
only with the advance approval of the Administrator.
* * * * *
    (iii) The manufacturer may perform additional preconditioning on 
SEA test vehicles other than the preconditioning specified in 
Sec. 86.132, or Sec. 86.1773 for vehicles certified to the National LEV 
standards, only if the additional preconditioning was performed on 
certification test vehicles of the same configuration.
* * * * *
    (viii) The manufacturer need not comply with Sec. 86.142, 
Sec. 86.155, or Sec. 86.1775 since the records required therein are 
provided under other provisions of this subpart K.
* * * * *
    29. Section 86.1009-97 is added to subpart K to read as follows:


Sec. 86.1009-97  Calculation and reporting of test results.

    Section 86.1009-97 includes text that specifies requirements that 
differ from those specified in Secs. 86.1009-84 and 86.1009-96. Where a 
paragraph in Sec. 86.1009-84 or Sec. 86.1009-96 is identical and 
applicable to Sec. 86.1009-97, this may be indicated by specifying the 
corresponding paragraph and the statement ``[Reserved]. For guidance 
see Sec. 86.1009-84.'' or ``[Reserved]. For guidance see Sec. 86.1009-
96.''.
    (a) and (b) [Reserved]. For guidance see Sec. 86.1009-96.
    (c) Final deteriorated test results. (1) The final deteriorated 
test results for each heavy-duty engine or light-duty truck tested 
according to subpart B, C, D, I, N, P, or R of this part are calculated 
by first multiplying or adding, as appropriate, the final test results 
by or to the appropriate deterioration factor derived from the 
certification process for the engine family control system combination 
and model year to which the selected configuration belongs, and then by 
multiplying by the appropriate reactivity adjustment factor, if 
applicable. If the multiplicative deterioration factor as computed 
during the certification process is less than one, that deterioration 
factor will be one. If the additive deterioration factor as computed 
during the certification process is less than zero, that deterioration 
factor will be zero.
    (c)(2) [Reserved]
    (c)(3) through (c)(4) [Reserved]. For guidance see Sec. 86.1009-96.
    (d) [Reserved]. For guidance see Sec. 86.1009-84.
    30. Section 86.1009-2001 is amended by revising paragraph (c)(1) to 
read as follows:


Sec. 86.1009-2001  Calculation and reporting of test results.

* * * * *
    (c) * * *
    (1) The final deteriorated test results for each light-duty truck, 
heavy-duty engine, or heavy-duty vehicle tested according to subpart B, 
C, D, I, M, N, P, or R of this part are calculated by first multiplying 
or adding, as appropriate, the final test results by or to the 
appropriate deterioration factor derived from the certification process 
for the engine or evaporative/refueling family and model year to which 
the selected configuration belongs, and then by multiplying by the 
appropriate reactivity adjustment factor, if applicable. For the 
purpose of this paragraph (c), if a multiplicative deterioration factor 
as computed during the certification process is less than one, that 
deterioration factor will be one. If

[[Page 31240]]

an additive deterioration factor as computed during the certification 
process is less than zero, that deterioration factor will be zero.
* * * * *
    31. Section 86.1012-97 is added to subpart K to read as follows:


Sec. 86.1012-97  Suspension and revocation of certificates of 
conformity.

    (a) The certificate of conformity is immediately suspended with 
respect to any engine or vehicle failing pursuant to Sec. 86.1010(b) 
effective from the time that testing of that engine or vehicle is 
completed.
    (b)(1) Selective Enforcement Audits. The Administrator may suspend 
the certificate of conformity for a configuration that does not pass a 
Selective Enforcement Audit pursuant to Sec. 86.1010(c) based on the 
first test, or all tests, conducted on each engine or vehicle. This 
suspension will not occur before ten days after failure to pass the 
audit.
    (2) California Assembly-Line Quality Audit Testing. The 
Administrator may suspend the certificate of conformity for a 50-state 
engine family or configuration tested in accordance with procedures 
prescribed under Sec. 86.1008 that the Executive Officer has determined 
to be in non-compliance with one or more applicable pollutants based on 
Chapter 1 or Chapter 2 of the California Regulatory Requirements 
Applicable to the National Low Emission Vehicle Program (October, 
1996), if the results of vehicle testing conducted by the manufacturer 
do not meet the acceptable quality level criteria pursuant to 
Sec. 86.1010. The California Regulatory Requirements Applicable to the 
National Low Emission Vehicle Program (October, 1996) are incorporated 
by reference (see Sec. 86.1). A vehicle that is tested by the 
manufacturer in accordance with procedures prescribed under 
Sec. 86.1008 and determined to be a failing vehicle pursuant to Chapter 
1 or Chapter 2 of the California Regulatory Requirements Applicable to 
the National Low Emission Vehicle Program (October, 1996) will be 
treated as a failed vehicle described in Sec. 86.1010(b), unless the 
manufacturer can show that the vehicle would not be considered a failed 
vehicle using the test procedures specified in Sec. 86.1008. This 
suspension will not occur before ten days after the manufacturer 
receives written notification that the Administrator has determined the 
50-state engine family or configuration exceeds one or more applicable 
federal standards.
    (c)(1) Selective Enforcement Audits. If the results of engine or 
vehicle testing pursuant to the requirements of this subpart indicate 
that engines or vehicles of a particular configuration produced at more 
than one plant do not conform to the regulations with respect to which 
the certificate of conformity was issued, the Administrator may suspend 
the certificate of conformity with respect to that configuration for 
engines or vehicles manufactured by the manufacturer in other plants of 
the manufacturer.
    (2) California Assembly-Line Quality Audit Testing. If the 
Administrator determines that the results of vehicle testing pursuant 
to Chapter 1 or Chapter 2 of the California Regulatory Requirements 
Applicable to the National Low Emission Vehicle Program (October, 1996) 
and the procedures prescribed in Sec. 86.1008 indicate the vehicles of 
a particular 50-state engine family or configuration produced at more 
than one plant do not conform to applicable regulations with respect to 
which a certificate of conformity was issued, the Administrator may 
suspend, pursuant to paragraph (b)(2) of this section, the certificate 
of conformity with respect to that engine family or configuration for 
vehicles manufactured by the manufacturer in other plants of the 
manufacturer. The California Regulatory Requirements Applicable to the 
National Low Emission Vehicle Program (October, 1996) are incorporated 
by reference (see Sec. 86.1).
    (d) The Administrator will notify the manufacturer in writing of 
any suspension or revocation of a certificate of conformity in whole or 
in part: Except, that the certificate is immediately suspended with 
respect to any failed engines or vehicles as provided for in paragraph 
(a) of this section.
    (e)(1) Selective Enforcement Audits. The Administrator may revoke a 
certificate of conformity for a configuration when the certificate has 
been suspended pursuant to paragraph (b)(1) or (c)(1) of this section 
if the proposed remedy for the nonconformity, as reported by the 
manufacturer to the Administrator is one requiring a design change(s) 
to the engine and/or emission control system as described in the 
Application for Certification of the affected configuration.
    (2) California Assembly-Line Quality Audit Testing. The 
Administrator may revoke a certificate of conformity for an engine 
family or configuration when the certificate has been suspended 
pursuant to paragraph (b)(2) or (c)(2) of this section if the proposed 
remedy for the nonconformity, as reported by the manufacturer to the 
Executive Officer and/or the Administrator, is one requiring a design 
change(s) to the engine and/or emission control system as described in 
the Application for Certification of the affected engine family or 
configuration.
    (f) Once a certificate has been suspended for a failed engine or 
vehicle as provided for in paragraph (a) of this section, the 
manufacturer must take the following actions:
    (1) Before the certificate is reinstated for that failed engine or 
vehicle--
    (i) Remedy the nonconformity; and
    (ii) Demonstrate that the engine or vehicle's final deteriorated 
test results conform to the applicable emission standards or family 
particulate emission limits, as defined in this part 86 by retesting 
the engine or vehicle in accordance with the requirements of this 
subpart.
    (2) Submit a written report to the Administrator within thirty days 
after successful completion of testing on the failed engine or vehicle, 
which contains a description of the remedy and test results for the 
engine or vehicle in addition to other information that may be required 
by this subpart.
    (g) Once a certificate has been suspended pursuant to paragraph (b) 
or (c) of this section, the manufacturer must take the following 
actions before the Administrator will consider reinstating such 
certificate:
    (1) Submit a written report to the Administrator which identifies 
the reason for the noncompliance of the vehicles, describes the 
proposed remedy, including a description of any proposed quality 
control and/or quality assurance measures to be taken by the 
manufacturer to prevent the future occurrence of the problem, and 
states the date on which the remedies will be implemented.
    (2) Demonstrate that the engine family or configuration for which 
the certificate of conformity has been suspended does in fact comply 
with the requirements of this subpart by testing engines or vehicles 
selected from normal production runs of that engine family or 
configuration at the plant(s) or the facilities specified by the 
Administrator, in accordance with:
    (i) The conditions specified in the initial test order pursuant to 
Sec. 86.1003 for a configuration suspended pursuant to paragraph (b)(1) 
or (c)(1) of this section; or
    (ii) The conditions specified in a test order pursuant to 
Sec. 86.1003 for an engine family or configuration suspended pursuant 
to paragraph (b)(2) or (c)(2) of this section.
    (3) If the Administrator has not revoked the certificate pursuant 
to paragraph (e) of this section and if the

[[Page 31241]]

manufacturer elects to continue testing individual engines or vehicles 
after suspension of a certificate, the certificate is reinstated for 
any engine or vehicle actually determined to have its final 
deteriorated test results in conformance with the applicable standards 
through testing in accordance with the applicable test procedures.
    (4) In cases where the Administrator has suspended a certificate of 
conformity for a 50-state engine family or configuration pursuant to 
paragraph (b)(2) or (c)(2) of this section, manufacturers may request 
in writing that the Administrator reinstate the certificate of an 
engine family or configuration when, in lieu of the actions described 
in paragraphs (g) (1) and (2) of this section, the manufacturer has 
complied with Chapter 3 of the California Regulatory Requirements 
Applicable to the National Low Emission Vehicle Program (October, 
1996), provided an Executive Order is in place for the engine family or 
configuration. The California Regulatory Requirements Applicable to the 
National Low Emission Vehicle Program (October, 1996) are incorporated 
by reference (see Sec. 86.1).
    (h) Once a certificate for a failed engine family or configuration 
has been revoked under paragraph (e) (1) or (2) of this section and the 
manufacturer desires to introduce into commerce a modified version of 
that engine family or configuration the following actions will be taken 
before the Administrator may issue a certificate for the new engine 
family or configuration:
    (1) If the Administrator determines that the proposed change(s) in 
engine or vehicle design may have an effect on emission performance 
deterioration and/or fuel economy, he/she shall notify the manufacturer 
within 5 working days after receipt of the report in paragraph (g)(1) 
of this section or after receipt of information pursuant to paragraph 
(g)(4) of this section whether subsequent testing under this subpart 
will be sufficient to evaluate the proposed change(s) or whether 
additional testing will be required.
    (2) After implementing the change(s) intended to remedy the 
nonconformity, the manufacturer shall demonstrate:
    (i) If the certificate was revoked pursuant to paragraph (e)(1) of 
this section, that the modified configuration does in fact conform with 
the requirements of this subpart by testing engines or vehicles 
selected from normal production runs of that modified configuration in 
accordance with the conditions specified in the initial test order 
pursuant to Sec. 86.1003. The Administrator shall consider this testing 
to satisfy the testing requirements of Sec. 86.079-32 or Sec. 86.079-33 
if the Administrator had so notified the manufacturer. If the 
subsequent testing results in a pass decision pursuant to the criteria 
in Sec. 86.1010(c), the Administrator shall reissue or amend the 
certificate, if necessary, to include that configuration: Provided, 
that the manufacturer has satisfied the testing requirements specified 
in paragraph (h)(1) of this section. If the subsequent audit results in 
a fail decision pursuant to the criteria in Sec. 86.1010(c), the 
revocation remains in effect. Any design change approvals under this 
subpart are limited to the modification of the configuration specified 
by the test order.
    (ii) If the certificate was revoked pursuant to paragraph (e)(2) of 
this section, that the modified engine family or configuration does in 
fact conform with the requirements of this subpart by testing vehicles 
selected from normal production runs of that modified engine family or 
configuration in accordance with the conditions specified in a test 
order pursuant to Sec. 86.1003. The Administrator shall consider this 
testing to satisfy the testing requirements of Sec. 86.079-32 or 
Sec. 86.079-33 if the Administrator had so notified the manufacturer. 
If the subsequent testing results in a pass decision pursuant to 
Sec. 86.1010(c), the Administrator shall reissue or amend the 
certificate as necessary: Provided, that the manufacturer has satisfied 
the testing requirements specified in paragraph (h)(1) of this section. 
If the subsequent testing results in a fail decision pursuant to 
Sec. 86.1010(c), the revocation remains in effect. Any design change 
approvals under this subpart are limited to the modification of the 
engine family or configuration specified by the test order.
    (3) In cases where the Administrator has revoked a certificate of 
conformity for a 50-state engine family or configuration pursuant to 
paragraph (e)(2) of this section, manufacturers may request in writing 
that the Administrator reissue the certificate for an engine family or 
configuration when, in lieu of the actions described in paragraphs (h) 
(1) and (2) of this section, the manufacturer has complied with Chapter 
3 of the California Regulatory Requirements Applicable to the National 
Low Emission Vehicle Program (October, 1996), provided an Executive 
Order is in place for the engine family or configuration. The 
California Regulatory Requirements Applicable to the National Low 
Emission Vehicle Program (October, 1996) are incorporated by reference 
(see Sec. 86.1).
    (i) through (k) [Reserved]
    (l) At any time subsequent to an initial suspension of a 
certificate of conformity for a test engine or vehicle pursuant to 
paragraph (a) of this section, but not later than fifteen (15) days or 
such other period as may be allowed by the Administrator after 
notification of the Administrator's decision to suspend or revoke a 
certificate of conformity in whole or in part pursuant to paragraphs 
(b), (c), (d), (e), or (h) of this section, a manufacturer may request 
a hearing as to whether the tests have been properly conducted or any 
sampling methods have been properly applied.
    (m) After the Administrator suspends or revokes a certificate of 
conformity pursuant to this section or notifies a manufacturer of his 
intent to suspend, revoke or void a certificate of conformity under 
paragraph Sec. 86.087-30(e), and prior to the commencement of a hearing 
under Sec. 86.1014, if the manufacturer demonstrates to the 
Administrator's satisfaction that the decision to suspend, revoke or 
void the certificate was based on erroneous information, the 
Administrator shall reinstate the certificate.
    (n) To permit a manufacturer to avoid storing non-test engines or 
vehicles when conducting testing of an engine family or configuration 
subsequent to suspension or revocation of the certificate of conformity 
for that engine family or configuration pursuant to paragraph (b), (c), 
or (e) of this section, the manufacturer may request that the 
Administrator conditionally reinstate the certificate for that engine 
family or configuration. The Administrator may reinstate the 
certificate subject to the condition that the manufacturer consents to 
recall all engines or vehicles of that engine family or configuration 
produced from the time the certificate is conditionally reinstated if 
the engine family or configuration fails the subsequent testing and to 
remedy any nonconformity at no expense to the owner.
    32. Section 86.1014-97 is added to subpart K to read as follows:


Sec. 86.1014-97  Hearings on suspension, revocation and voiding of 
certificates of conformity.

    Section 86.1014-97 includes text that specifies requirements that 
differ from those specified in Sec. 86.1014-84. Where a paragraph in 
Sec. 86.1014-84 is identical and applicable to Sec. 86.1014-97, this 
may be indicated by specifying the corresponding paragraph and the 
statement ``[Reserved]. For guidance see Sec. 86.1014-84''.
    (a) through (c)(2)(ii) introductory text [Reserved]. For guidance 
see Sec. 86.1014-84.

[[Page 31242]]

    (c)(2)(ii)(A) Whether tests have been properly conducted, 
specifically, whether the tests were conducted in accordance with 
applicable regulations and whether test equipment was properly 
calibrated and functioning; and
    (c)(2)(ii) (B) through (aa) [Reserved]. For guidance see 
Sec. 86.1014-84.
    33. A new subpart R consisting of Secs. 86.1701-97 through 86.1780-
97 is added to part 86 to read as follows:
Subpart R--General Provisions for the Voluntary National Low Emission 
Vehicle Program for Light-Duty Vehicles and Light-Duty Trucks
Sec.
86.1701-97  General applicability.
86.1702-97  Definitions.
86.1703-97  Abbreviations.
86.1704-97  Section numbering; construction.
86.1705-97  General provisions; opt-in; opt-out.
86.1706-97  National LEV program in effect.
86.1707-97  [Reserved]
86.1708-97  Exhaust emission standards for 1997 and later light-duty 
vehicles.
86.1709-97  Exhaust emission standards for 1997 and later light 
light-duty trucks.
86.1710-97  Fleet average non-methane organic gas exhaust emission 
standards for light-duty vehicles and light light-duty trucks.
86.1711-97  Limitations on sale of Tier 1 vehicles and TLEVs; five 
percent cap.
86.1712-97  Maintenance of records; submittal of information.
86.1713-97  Light-duty exhaust durability programs.
86.1714-97  Small-volume manufacturers certification procedures.
86.1715-97  [Reserved]
86.1716-97  Prohibition of defeat devices.
86.1717-97  Emission control diagnostic system for 1997 and later 
light-duty vehicles and light-duty trucks.
86.1718-97 through 86.1720-97  [Reserved]
86.1721-97  Application for certification.
86.1722-97  [Reserved]
86.1723-97  Required data.
86.1724-97  Test vehicles and engines.
86.1725-97  Maintenance.
86.1726-97  Mileage and service accumulation; emission measurements.
86.1727-97  [Reserved]
86.1728-97  Compliance with emission standards.
86.1729-97 through 86.1733-97  [Reserved]
86.1734-97  Alternative procedure for notification of additions and 
changes.
86.1735-97  Labeling.
86.1736-97 through 86.1769-97  [Reserved]
86.1770-97  All-Electric Range Test requirements.
86.1771-97  Fuel specifications.
86.1772-97  Road load power test weight and inertia weight class 
determination.
86.1773-97  Test sequence; general requirements.
86.1774-97  Vehicle preconditioning.
86.1775-97  Exhaust sample analysis.
86.1776-97  Records required.
86.1777-97  Calculations; exhaust emissions.
86.1778-97  Calculations; particulate emissions.
86.1779-97  General enforcement provisions.
86.1780-97  Prohibited acts.

Subpart R--General Provisions for the Voluntary National Low 
Emission Vehicle Program for Light-Duty Vehicles and Light-Duty 
Trucks


Sec. 86.1701-97  General applicability.

    (a) The provisions of this subpart may be adopted by vehicle 
manufacturers pursuant to the provisions specified in Sec. 86.1705. The 
provisions of this subpart are generally applicable to 1997 and later 
model year light-duty vehicles and light light-duty trucks to be sold 
in the Northeast Trading Region, and 2001 and later model year light-
duty vehicles and light light-duty trucks to be sold in the United 
States. In cases where a provision applies only to certain vehicles 
based on model year, vehicle class, motor fuel, engine type, vehicle 
emission category, intended sales destination, or other distinguishing 
characteristics, such limited applicability is cited in the appropriate 
section or paragraph. The provisions of this subpart shall be referred 
to as the ``National Low Emission Vehicle Program'' or ``National LEV'' 
or ``NLEV.''
    (b) All requirements of 40 CFR parts 85 and 86, unless specifically 
superseded by the provisions of this subpart, shall apply to vehicles 
under the National LEV Program. Compliance with the provisions of this 
subpart will be deemed compliance with some of the requirements of 40 
CFR parts 85 and 86, as set forth elsewhere in this subpart.
    (c) The requirements of this subpart apply to new vehicles 
manufactured by covered manufacturers for model years prior to the 
first model year for which a mandatory federal exhaust emissions 
program for light-duty vehicles and light light-duty trucks is at least 
as stringent as the National LEV program with respect to NMOG, 
NOX, and CO exhaust emissions, as determined by the 
Administrator.


Sec. 86.1702-97  Definitions.

    (a) The definitions in subpart A of this part apply to this 
subpart, except where the same term is defined differently in paragraph 
(b) of this section.
    (b) The following definitions shall apply to this subpart:
    Advanced technology vehicle (ATV) means any light-duty vehicle or 
light light-duty truck that is covered by a federal certificate of 
conformity or an Executive Order, as defined in Sec. 86.1002, which is 
either:
    (1) A dual fuel, flexible fuel, or dedicated alternatively fueled 
vehicle certified as a TLEV or more stringent when operated on the 
alternative fuel;
    (2) A ULEV or Inherently Low-Emission Vehicle (ILEV), as defined in 
40 CFR 88.302, either conventionally or alternatively fueled;
    (3) An HEV or ZEV.
    Alcohol fuel means either methanol or ethanol as those terms are 
defined in this subpart.
    All-electric range test means a test sequence used to determine the 
range of an electric vehicle or of a hybrid electric vehicle without 
the use of its auxiliary power unit. The All-Electric Range Test cycle 
is defined in Sec. 86.1770.
    Averaging sets are the categories of LDVs and LDTs for which the 
manufacturer calculates a fleet average NMOG value. The four averaging 
sets for fleet average NMOG value calculation purposes are:
    (1) Class A delivered to a point of first sale in the Northeast 
Trading Region;
    (2) Class A delivered to a point of first sale in the 37 States;
    (3) Class B delivered to a point of first sale in the Northeast 
Trading Region; and
    (4) Class B delivered to a point of first sale in the 37 States.
    Battery assisted combustion engine vehicle means any vehicle which 
allows power to be delivered to the driven wheels solely by a 
combustion engine, but which uses a battery pack to store energy which 
may be derived through remote charging, regenerative braking, and/or a 
flywheel energy storage system or other means which will be used by an 
electric motor to assist in vehicle operation.
    Battery pack means any electrical energy storage device consisting 
of any number of individual battery modules which is used to propel 
electric or hybrid electric vehicles.
    Certification level means the official exhaust emission result from 
an emission-data vehicle which has been adjusted by the applicable mass 
deterioration factor and is submitted to the Administrator for use in 
determining compliance with an emission standard for the purpose of 
certifying a particular engine family. For those engine families which 
are certified using reactivity adjustment factors developed by the 
manufacturer pursuant to Appendix XVII of this part, the exhaust NMOG 
certification level shall include adjustment by the ozone deterioration 
factor.
    Class A comprises LDVs and LDTs 0-3750 lbs LVW that are subject to 
the provisions of this subpart.

[[Page 31243]]

    Class B comprises LDTs 3751-5750 lbs LVW that are subject to the 
provisions of this subpart.
    Continually regenerating trap oxidizer system means a trap oxidizer 
system that does not utilize an automated regeneration mode during 
normal driving conditions for cleaning the trap.
    Conventional gasoline means any certification gasoline which meets 
the specifications of Sec. 86.113(a). The ozone-forming potential of 
conventional gasoline vehicle emissions shall be determined by using 
the methods and gasoline specifications contained in Appendix XVII of 
this part.
    Core Stable Standards means the standards and requirements in 
Sec. 86.1705(g)(1) (i) through (vi).
    Covered manufacturer means an original equipment manufacturer 
(OEM), as defined at 40 CFR 85.1502(9), that meets the conditions 
specified under Sec. 86.1705(a).
    Covered vehicle or engine means a vehicle specified in 
Sec. 86.1701(a), or an engine in such a vehicle, that is manufactured 
by a covered manufacturer.
    Credits means fleet average NMOG credits as calculated from the 
amount that the manufacturer's applicable fleet average NMOG value is 
below the applicable fleet average NMOG standard, times the applicable 
production for a given model year. NMOG credits have units of g/mi.
    Debits means fleet average NMOG debits as calculated from the 
amount that the manufacturer's applicable fleet average NMOG value is 
above the applicable fleet average NMOG standard, times the applicable 
production for a given model year. NMOG debits have units of g/mi.
    Dedicated ethanol vehicle means any ethanol-fueled motor vehicle 
that is engineered and designed to be operated solely on ethanol.
    Dedicated methanol vehicle means any methanol-fueled motor vehicle 
that is engineered and designed to be operated solely on methanol.
    Diesel engine means any engine powered with diesel fuel, gaseous 
fuel, or alcohol fuel for which diesel engine speed/torque 
characteristics and vehicle applications are retained.
    Electric vehicle means any vehicle which operates solely by use of 
a battery or battery pack. This definition also includes vehicles which 
are powered mainly through the use of an electric battery or battery 
pack, but which use a flywheel that stores energy produced by the 
electric motor or through regenerative braking to assist in vehicle 
operation.
    Element of design means any control system (i.e., computer 
software, electronic control system, emission control system, computer 
logic), and/or control system calibrations and/or the results of 
systems interaction, and/or hardware items on a motor vehicle or motor 
vehicle engine.
    Ethanol means any fuel for motor vehicles and motor vehicle engines 
that is composed of either commercially available or chemically pure 
ethanol (CH3CH2OH) and gasoline as specified in 
Sec. 86.1771 (Fuel Specifications). The required fuel blend is based on 
the type of ethanol-fueled vehicle being certified and the particular 
aspect of the certification procedure being conducted.
    Ethanol vehicle means any motor vehicle that is engineered and 
designed to be operated using ethanol as a fuel.
    Executive Officer of the California Air Resources Board (ARB), as 
used in the referenced materials listed in Sec. 86.1 and Appendix XIII 
of this part, means the Administrator of the Environmental Protection 
Agency (EPA).
    Fleet average NMOG value is the fleet average NMOG value calculated 
for a particular averaging set, based upon the applicable production 
for that averaging set.
    49 states is the region comprised of the United States excluding 
California.
    Fuel-fired heater means a fuel burning device which creates heat 
for the purpose of warming the passenger compartment of a vehicle but 
does not contribute to the propulsion of the vehicle.
    Gaseous fuels means liquefied petroleum gas, compressed natural 
gas, or liquefied natural gas fuels for use in motor vehicles.
    Hybrid electric vehicle (HEV) means any vehicle which is included 
in the definition of a ``series hybrid electric vehicle,'' a ``parallel 
hybrid electric vehicle,'' or a ``battery assisted combustion engine 
vehicle.''
    Low emission vehicle (LEV) means any vehicle certified to the low 
emission vehicle standards specified in this subpart.
    Low volume manufacturer, for a particular model year, means any 
vehicle manufacturer that: Is considered a ``small volume 
manufacturer'' by the State of California according to the State of 
California regulatory definition of ``small volume manufacturer'', 
contained in the California Regulatory Requirements Applicable to the 
National Low Emission Vehicle Program (October, 1996), which is 
incorporated by reference (see Sec. 86.1); and has nationwide sales of 
light-duty vehicles and light light-duty trucks less than or equal to 
40,000 units per model year based on the average number of vehicles 
sold by the manufacturer for each of the three most recent model years. 
For manufacturers certifying for the first time, model-year sales shall 
be based on projected sales.
    Methane reactivity adjustment factor means a factor applied to the 
mass of methane emissions from natural gas fueled vehicles for the 
purpose of determining the gasoline equivalent ozone-forming potential 
of the methane emissions.
    Methanol means any fuel for motor vehicles and motor vehicle 
engines that is composed of either commercially available or chemically 
pure methanol (CH3OH) and gasoline as specified in 
Sec. 86.1771 (Fuel Specifications). The required fuel blend is based on 
the type of methanol-fueled vehicle being certified and the particular 
aspect of the certification procedure being conducted.
    Methanol vehicle means any motor vehicle that is engineered and 
designed to be operated using methanol as a fuel.
    Natural gas means either compressed natural gas or liquefied 
natural gas.
    Natural gas vehicle means any motor vehicle that is engineered and 
designed to be operated using either compressed natural gas or 
liquefied natural gas.
    Non-Core Stable Standards means the standards and requirements in 
Sec. 86.1705(g)(1)(vii) through (xii).
    Non-methane organic gases (NMOG) means the sum of oxygenated and 
non-oxygenated hydrocarbons contained in a gas sample as measured in 
accordance with Chapter 5 of the California Regulatory Requirements 
Applicable to the National Low Emission Vehicle Program (October, 
1996). These requirements are incorporated by reference (see 
Sec. 86.1).
    Non-regeneration emission test means a complete emission test which 
does not include a regeneration.
    Northeast Trading Region (NTR) means the region comprised of the 
states of Connecticut, Delaware, Maine, Maryland, Massachusetts, New 
Hampshire, New Jersey, New York, Pennsylvania, Rhode Island, Vermont, 
and Virginia, and the District of Columbia.
    Organic material non-methane hydrocarbon equivalent (or OMNMHCE) 
for methanol-fueled vehicles means the sum of the carbon mass 
contribution of non-oxygenated hydrocarbons (excluding methane), 
methanol, and formaldehyde as contained in a gas sample, expressed as 
gasoline-fueled hydrocarbons. For ethanol-fueled vehicles, organic 
material non-methane hydrocarbon equivalent (OMNMHCE) means the sum of 
carbon mass contribution of non-oxygenated

[[Page 31244]]

hydrocarbons (excluding methane), methanol, ethanol, formaldehyde and 
acetaldehyde as contained in a gas sample, expressed as gasoline-fueled 
hydrocarbons.
    Ozone deterioration factor means a factor applied to the mass of 
NMOG emissions from TLEVs, LEVs, or ULEVs which accounts for changes in 
the ozone-forming potential of the NMOG emissions from a vehicle as it 
accumulates mileage.
    Parallel hybrid electric vehicle means any vehicle which allows 
power to be delivered to the driven wheels by either a combustion 
engine and/or by a battery powered electric motor.
    Periodically regenerating trap oxidizer system means a trap 
oxidizer system that utilizes, during normal driving conditions for 
cleaning the trap, an automated regeneration mode which can be easily 
detected.
    Point of first sale is the location where the completed LDV or LDT 
is purchased, also known as the final product purchase location. The 
point of first sale may be a retail customer, dealer, or secondary 
manufacturer. In cases where the end user purchases the completed 
vehicle directly from the manufacturer, the end user is the point of 
first sale.
    Production is the number of vehicles and/or trucks that a 
manufacturer produces in a given model year that are subject to the 
provisions of this subpart and are included in the same averaging set.
    Reactivity adjustment factor means a fraction applied to the mass 
of NMOG emission from a vehicle powered by a fuel other than 
conventional gasoline for the purpose of determining a gasoline-
equivalent NMOG emission value. The reactivity adjustment factor is 
defined as the ozone-forming potential of the exhaust from a vehicle 
powered by a fuel other than conventional gasoline divided by the 
ozone-forming potential of conventional gasoline vehicle exhaust.
    Regeneration means the process of oxidizing accumulated particulate 
matter. It may occur continually or periodically.
    Regeneration emission test means a complete emission test which 
includes a regeneration.
    Regeneration interval means the interval from the start of a 
regeneration to the start of the next regeneration.
    Series hybrid electric vehicle means any vehicle which allows power 
to be delivered to the driven wheels solely by a battery powered 
electric motor, but which also incorporates the use of a combustion 
engine to provide power to the battery and/or electric motor.
    37 States is the trading region comprised of the United States 
excluding California and the Northeast Trading Region.
    Transitional low emission vehicle (TLEV) means any vehicle 
certified to the transitional low emission vehicle standards specified 
in this subpart.
    Trap oxidizer system means an emission control system which 
consists of a trap to collect particulate matter and a mechanism to 
oxidize the accumulated particulate.
    Type A hybrid electric vehicle means an HEV which achieves a 
minimum range of 60 miles over the All-Electric Range Test as defined 
in Sec. 86.1770.
    Type B hybrid electric vehicle means an HEV which achieves a range 
of 40-59 miles over the All-Electric Range Test as defined in 
Sec. 86.1770.
    Type C hybrid electric vehicle means an HEV which achieves a range 
of 0-39 miles over the All-Electric Range test and all other HEVs 
excluding ``Type A'' and ``Type B'' HEVs as defined in Sec. 86.1770.
    Ultra-low emission vehicle (ULEV) means any vehicle certified to 
the ultra-low emission vehicle standards specified in this subpart.
    Zero-emission vehicle (ZEV) means any vehicle which is certified to 
produce zero emissions of any criteria pollutants under any and all 
possible operational modes and conditions. Incorporation of a fuel 
fired heater shall not preclude a vehicle from being certified as a ZEV 
provided the fuel fired heater cannot be operated at ambient 
temperatures above 40 degrees Fahrenheit and the heater is demonstrated 
to have zero evaporative emissions under any and all possible 
operational modes and conditions.


Sec. 86.1703-97  Abbreviations.

    (a) The abbreviations in subpart A of this part apply to this 
subpart.
    (b) In addition, the following abbreviations shall apply to this 
subpart:

HEV--hybrid electric vehicle.
LEV--low emission vehicle.
NMOG--non-methane organic gases.
NTR--Northeast Trading Region.
TLEV--transitional low emission vehicle.
ULEV--ultra low emission vehicle.
ZEV--zero emission vehicle.


Sec. 86.1704-97  Section numbering; construction.

    (a) The model year of initial applicability is indicated by the 
last two digits of the six-digit group of the section number. A section 
remains in effect for subsequent model years until it is superseded.
    (b) A section reference without a model year suffix shall be 
interpreted to be a reference to the section applicable to the 
appropriate model year.


Sec. 86.1705-97  General provisions; opt-in; opt-out.

    (a) Covered manufacturers must comply with the provisions in this 
subpart, and in addition, must comply with the requirements of 40 CFR 
parts 85 and 86. A manufacturer shall be a covered manufacturer if:
    (1) The manufacturer (or, in the case of joint ventures or similar 
cooperative arrangements between two or more manufacturers, the 
participating manufacturers) has opted into the program pursuant to 
paragraph (c) of this section;
    (2) Where a manufacturer has included the condition on opt-in 
provided for in paragraph (c) of this section, that condition has been 
satisfied; and
    (3) The manufacturer has not validly opted out, pursuant to 
paragraphs (d) and (e) of this section, or the manufacturer has validly 
opted out but that opt-out has not become effective under paragraph (d) 
of this section.
    (b) Covered manufacturers must comply with the standards and 
requirements specified in this subpart beginning in model year 1997. A 
manufacturer not listed in Sec. 86.1706(c) that opts into the program 
after EPA issues a finding pursuant to Sec. 86.1706(a) that the program 
is in effect must comply with the standards and requirements of this 
subpart beginning in the model year that includes January 1 of the 
calendar year after the calendar year in which that manufacturer opts 
in. Light-duty vehicles and light light-duty trucks sold by covered 
manufacturers must comply with the provisions of this subpart.
    (c)(1) To opt into the National LEV program, a motor vehicle 
manufacturer must submit a written statement to the Administrator 
signed by a person or entity within the corporation or business with 
authority to bind the corporation or business to its election and 
holding the position of vice president for environmental affairs or a 
position of comparable or greater authority. The statement must 
unambiguously and unconditionally (apart from the permissible condition 
specified in paragraph (c)(2) of this section) indicate the 
manufacturer's agreement to opt into the program and be subject to the 
provisions in this subpart, and include the following language:
    [xx company,] its subsidiaries, successors and assigns hereby opts 
into the voluntary National LEV program, as defined in 40 CFR part 86, 
subpart R,

[[Page 31245]]

and agrees to be legally bound by all of the standards, requirements 
and other provisions of the National LEV program. [xx company] commits 
not to challenge EPA's authority to establish or enforce the National 
LEV program, and commits not to seek to certify any vehicle except in 
compliance with the regulations in subpart R.
    (2) The opt-in statement may indicate that the manufacturer opts 
into the program subject to the condition that the Administrator finds 
under Sec. 86.1706(a) that the National LEV program is in effect with 
the following language: ``This opt-in is subject only to the condition 
that the Administrator make a finding pursuant to 40 CFR 86.1706(a) 
that the National LEV program is in effect.''
    (3) A manufacturer shall be considered to have opted in upon the 
Administrator's receipt of the opt-in notification and satisfaction of 
the condition set forth in paragraph (c)(2) of this section, if 
applicable.
    (d) A covered manufacturer may opt out of the National LEV program 
only if one of the following specified conditions allowing opt-out 
occurs. A manufacturer must exercise the opt-out option within 180 days 
of the occurrence allowing opt-out, or the opt-out option expires. This 
time period for opt-out is extended by an additional thirty days if any 
manufacturer submits an opt-out notification to the Administrator 
within the 180 day time period. A valid opt-out shall become effective 
upon the times indicated in paragraphs (d)(2) (iii) and (iv) of this 
section or on a date specified by the manufacturer, whichever is later. 
The following are the conditions allowing opt-out:
    (1) [Reserved]
    (2) EPA promulgates a final rule or other final agency action 
making a revision not specified in paragraph (g)(3) or (g)(4) of this 
section to a standard or requirement listed in paragraph (g)(1) of this 
section and the covered manufacturer objects to the revision.
    (i) Only a covered manufacturer that objects to a revision may opt 
out if EPA adopts that revision, except that if such a manufacturer 
opts out, other manufacturers that did not object to the revision may 
also opt out on the basis of that revision. An objection shall be 
sufficient for this purpose only if it was filed during the public 
comment period on the proposed revision and the objection specifies 
that the revision is sufficiently significant to allow opt-out under 
this paragraph (d).
    (ii) An opt-out under this paragraph (d) shall be extinguished if, 
prior to the effective date of the opt-out specified in paragraphs 
(d)(2)(iii) and (iv) of this section, the Administrator signs a rule to 
withdraw the revision to which the manufacturer objected.
    (iii) A valid opt-out based on a revision to a Core Stable Standard 
shall become effective starting the model year that includes January 1 
of the second calendar year following the calendar year in which the 
manufacturer opted out or the first model year to which EPA's revised 
regulations apply, whichever is sooner.
    (iv) A valid opt-out based on a revision to a Non-Core Stable 
Standard shall become effective starting the first model year to which 
EPA's revised regulations apply.
    (e)(1) To opt out of the National LEV program, a covered 
manufacturer must notify the Administrator as provided in paragraph 
(c)(1) of this section, except that the notification shall specify the 
condition under paragraph (d) of this section allowing opt-out, include 
evidence that this condition has occurred, and indicate the 
manufacturer's intent to opt out of the program and no longer be 
subject to the provisions in this subpart. For an opt-out pursuant to 
paragraph (d)(2) of this section, the manufacturer must specify the 
revision triggering the opt-out and shall also provide evidence that 
the triggering revision does not harmonize the standard or requirement 
with a comparable California standard or requirement, if applicable, or 
that the triggering revision has increased the stringency of the 
revised standard or requirement, if applicable. The notification shall 
include the following language: ``[xx company,] its subsidiaries, 
successors and assigns hereby opt out of the voluntary National LEV 
program, as defined in 40 CFR part 86, subpart R.''
    (2) Within sixty days of receipt of an opt-out notification, EPA 
shall determine whether the opt-out is valid by determining whether the 
alleged condition allowing opt-out has occurred and whether the opt-out 
complies with the requirements under paragraph (d) of this section and 
this paragraph (e). For an opt-out based on paragraph (d)(2) of this 
section, EPA may determine that the opt-out is valid provided that EPA 
does not withdraw the revision objected to prior to the effective date 
of the opt-out. If EPA then withdraws the revision, EPA may find that 
the opt-out is no longer valid. An EPA determination regarding the 
validity of an opt-out is not a rule, but is a nationally applicable 
final agency action subject to judicial review pursuant to section 
307(b) of the Clean Air Act (42 U.S.C. 7607(b)).
    (3) A manufacturer that has submitted an opt-out notification to 
EPA remains a covered manufacturer under paragraph (a) of this section 
until EPA or a reviewing court determines that the opt-out is valid and 
the opt-out has come into effect under paragraph (d) of this section.
    (4) In the event that a manufacturer petitions for judicial review 
of an EPA determination that an opt-out is invalid, the manufacturer 
remains a covered manufacturer until final judicial resolution of the 
petition. Pending resolution of the petition, and after the date that 
the opt-out would have come into effect under paragraph (d) of this 
section if EPA had determined the opt-out was valid, the manufacturer 
may certify vehicles to any standards in this part 86 applicable to 
vehicles certified in that model year and sell such vehicles without 
regard to the limitations contained in Sec. 86.1711. However, if the 
opt-out is finally determined to be invalid, the manufacturer will be 
liable for any failure to comply with Secs. 86.1710 through 86.1712, 
except for failure to comply with the limitations contained in 
Sec. 86.1711(b).
    (f) A manufacturer that has opted out and is no longer a covered 
manufacturer under this subpart shall be subject to all provisions that 
would apply to a manufacturer that had not opted into the National LEV 
program, including all applicable standards and requirements 
promulgated under title II of the Clean Air Act (42 U.S.C. 7521 et 
seq.) and any state standards in effect pursuant to section 177 of the 
Clean Air Act (42 U.S.C. 7507). Vehicles certified under the National 
LEV program must continue to meet the standards to which they were 
certified, regardless of whether the manufacturer of those vehicles 
remains a covered manufacturer. A manufacturer that has opted out 
remains responsible for any debits outstanding on the effective date of 
opt-out, pursuant to Sec. 86.1710(d)(3).
    (g)(1) The following are the emissions standards and requirements 
that, if revised, may provide covered manufacturers the opportunity to 
opt out pursuant to paragraph (d)(2) of this section:
    (i) The tailpipe emissions standards for NMOG, NOX, CO, 
HCHO, and PM specified in Sec. 86.1708 (b) and (c) and Sec. 86.1709 (b) 
and (c);
    (ii) Fleet average NMOG standards and averaging, banking and 
trading provisions specified in Sec. 86.1710;
    (iii) Provisions regarding limitations on sale of Tier 1 vehicles 
and TLEVs contained in Sec. 86.1711;

[[Page 31246]]

    (iv) The compliance test procedure (Federal Test Procedure) as 
specified in subparts A and B of this part, as used for determining 
compliance with the exhaust emission standards specified in 
Sec. 86.1708 (b) and (c) and Sec. 86.1709 (b) and (c);
    (v) The compliance test fuel, as specified in Sec. 86.1771;
    (vi) The definition of low volume manufacturer specified in 
Sec. 86.1702;
    (vii) The on-board diagnostic system requirements specified in 
Sec. 86.1717;
    (viii) The light-duty vehicle refueling emissions standards and 
provisions specified in Secs. 86.098-8(d) and subsequent model year 
provisions, and the light-duty truck refueling emissions standards and 
provisions specified in Sec. 86.001-9(d) and subsequent model year 
provisions;
    (ix) The cold temperature carbon monoxide standards and provisions 
for light-duty vehicles specified in Sec. 86.096-8(k) and subsequent 
model year provisions, and for light light-duty trucks specified in 
Sec. 86.097-9(k) and subsequent model year provisions;
    (x) The evaporative emissions standards and provisions for light-
duty vehicles specified in Sec. 86.096-8(b) and subsequent model year 
provisions, and the evaporative emissions standards and provisions for 
light light-duty trucks specified in Sec. 86.097-9(b) and subsequent 
model year provisions;
    (xi) The reactivity adjustment factors and procedures specified in 
Sec. 86.1777(d);
    (xii) The Supplemental Federal Test Procedure, standards and phase-
in schedules specified in Sec. 86.000-8(e) and subsequent model year 
provisions, Sec. 86.000-9(e) and subsequent model year provisions, 
Sec. 86.127 (f) and (g), Sec. 86.129 (e) and (f), Sec. 86.130(e), 
Sec. 86.131(f), Sec. 86.132 (n) and (o), Sec. 86.158, Sec. 86.159, 
Sec. 86.160, Sec. 86.161, Sec. 86.162, Sec. 86.163, Sec. 86.164, and 
Appendix I, paragraphs (g) and (h), to this part.
    (2) The standards and requirements listed in paragraphs (g)(1) (i) 
through (vi) of this section are the ``Core Stable Standards''; the 
standards and requirements listed in paragraphs (g)(1) (vii) through 
(xii) of this section are the ``Non-Core Stable Standards.''
    (3) The following types of revisions to the Stable Standards listed 
in paragraphs (g)(1) (i) through (xii) of this section do not provide 
covered manufacturers the right to opt out of the National LEV program:
    (i) Revisions to which covered manufacturers do not object;
    (ii) Revisions to a Non-Core Stable Standard that do not increase 
the overall stringency of the standard or requirement;
    (iii) Revisions to a Non-Core Stable Standard that harmonize the 
standard or requirement with the comparable California standard or 
requirement for the same model year (even if the harmonization 
increases the stringency of the standard or requirement);
    (iv) Revisions to a Non-Core Stable Standard that are effective 
after model year 2006;
    (v) Revisions to cold temperature carbon monoxide standards and 
provisions for light-duty vehicles (as specified in Sec. 86.096-8(k) 
and subsequent model year provisions) and for light light-duty trucks 
(as specified in Sec. 86.097-9(k) and subsequent model year provisions) 
that are effective after model year 2000;
    (vi) Revisions to the reactivity adjustment factors specified in 
Sec. 86.1777 applicable to gasoline meeting the specifications of 
Sec. 86.1771(a)(1), if such revisions maintain these reactivity 
adjustment factors at values not greater than 1.0.
    (4) Promulgation of mandatory standards and requirements that end 
the effectiveness of the National LEV program pursuant to 
Sec. 86.1701(c) does not provide an opportunity to opt out of the 
National LEV program.
    (5) Adoption of the National LEV program does not impose gasoline 
or other in-use fuel requirements and is not intended to require any 
new federal or state regulation of fuels. Vehicles under National LEV 
will be able to operate on any fuels, including conventional gasoline, 
that, in the absence of the National LEV program, could be sold under 
federal or state law.


Sec. 86.1706-97  National LEV program in effect.

    (a)(1) EPA shall find that the NLEV program is in effect and shall 
subsequently publish this determination if the following conditions 
have been met:
    (i) All manufacturers listed in paragraph (b) of this section have 
lawfully opted in pursuant to Sec. 86.1705; and
    (ii) No valid opt-out has become effective pursuant to 
Sec. 86.1705.
    (2) A finding pursuant to paragraph (a)(1) of this section shall 
become effective at time of signature by the Administrator.
    (b) List of manufacturers of light-duty vehicles and light-duty 
trucks:

American Suzuki Motor Corporation
BMW of North America, Inc.
Chrysler Corporation
Fiat Auto U.S.A., Inc.
Ford Motor Company
General Motors Corporation
Hyundai Motor America
Isuzu Motors America, Inc.
Jaguar Motors Ltd.
Kia Motors America, Inc.
Land Rover North America, Inc.
Mazda (North America) Inc.
Mercedes-Benz of North America
Mitsubishi Motor Sales of America, Inc.
Nissan North America, Inc.
Porsche Cars of North America, Inc.
Rolls-Royce Motor Cars Inc.
Saab Cars USA, Inc.
Subaru of America, Inc.
Toyota Motor Sales, U.S.A., Inc.
Volkswagen of America, Inc.
Volvo North America Corporation


Sec. 86.1707-97  [Reserved]


Sec. 86.1708-97  Exhaust emission standards for 1997 and later light-
duty vehicles.

    (a) Light-duty vehicles certified under the provisions of this 
subpart shall comply with the applicable exhaust emission standards in 
this section. In addition to the exhaust emission standards in this 
section, light-duty vehicles certified under the provisions of this 
subpart shall comply with all applicable emission standards and 
requirements in Sec. 86.096-8 and subsequent model year provisions.
    (1) Light-duty vehicles that meet the exhaust emission standards in 
this section are deemed to be in compliance with all the exhaust 
emission standards in Sec. 86.096-8(a)(1)(i) and subsequent model year 
provisions, except for the emission standards and test procedures for 
total hydrocarbon (THC), particulate matter (PM), and high altitude 
conditions. Diesel light-duty vehicles that meet the PM standard in 
this section are deemed to be in compliance with the PM standard in 
Sec. 86.096-8 and subsequent model year provisions.
    (b)(1) Standards. (i) Exhaust emissions from 1997 and later model 
year light-duty vehicles classified as TLEVs, LEVs, and ULEVs shall not 
exceed the standards in Tables R97-1 and R97-2 in rows designated with 
the applicable vehicle emission category. These standards shall apply 
equally to certification and in-use vehicles, except as provided in 
paragraph (c) of this section. The tables follow:

[[Page 31247]]



 Table R97-1.--Intermediate Useful Life Standards (g/mi) for Light-Duty 
              Vehicles Classified as TLEVs, LEVs, and ULEVs             
------------------------------------------------------------------------
  Vehicle emission category      NMOG        CO        NOX        HCHO  
------------------------------------------------------------------------
TLEV........................      0.125        3.4        0.4      0.015
LEV.........................      0.075        3.4        0.2      0.015
ULEV........................      0.040        1.7        0.2      0.008
------------------------------------------------------------------------


  Table R97-2.--Full Useful Life Standards (g/mi) for Light-Duty Vehicles Classified as TLEVs, LEVs, and ULEVs  
----------------------------------------------------------------------------------------------------------------
                                                                                                           PM   
                Vehicle emission category                     NMOG        CO       NOX S       HCHO     (diesels
                                                                                                         only)  
----------------------------------------------------------------------------------------------------------------
TLEV.....................................................      0.156        4.2        0.6      0.018       0.08
LEV......................................................      0.090        4.2        0.3      0.018       0.08
ULEV.....................................................      0.055        2.1        0.3      0.011       0.04
----------------------------------------------------------------------------------------------------------------

    (ii) Diesel vehicles. The particulate matter (PM) standards in 
paragraph (b)(1)(i) of this section are applicable to diesel light-duty 
vehicles only. For diesel vehicles certifying to the standards set 
forth in paragraph (b)(1)(i) of this section, ``NMOG'' shall mean non-
methane hydrocarbons.
    (iii) NMOG standards for flexible-fuel and dual-fuel light-duty 
vehicles. Flexible-fuel and dual-fuel light-duty vehicles shall be 
certified to exhaust emission standards for NMOG established both for 
the operation of the vehicle on an available fuel other than gasoline 
and for the operation of the vehicle on gasoline as specified in 
Sec. 86.1771.
    (A) The applicable NMOG emission standards for flexible-fuel and 
dual-fuel light-duty vehicles when certifying the vehicle for operation 
on fuels other than gasoline shall be the NMOG standards in paragraph 
(b)(1)(i) of this section.
    (B) The applicable NMOG emission standards for flexible-fuel and 
dual-fuel light-duty vehicles when certifying the vehicle for operation 
on gasoline shall be the NMOG standards in Tables R97-3 and R97-4 in 
the rows designated with the applicable vehicle emission category, as 
follows:

    Table R97-3.--Intermediate Useful Life NMOG Standards (g/mi) for    
  Flexible-Fuel and Dual-Fuel Light-Duty Vehicles Classified as TLEVs,  
                             LEVs, and ULEVs                            
------------------------------------------------------------------------
                   Vehicle emission category                       NMOG 
------------------------------------------------------------------------
TLEV...........................................................     0.25
LEV............................................................    0.125
ULEV...........................................................    0.075
------------------------------------------------------------------------


 Table R97-4.--Full Useful Life NMOG Standards (g/mi) for Flexible-Fuel 
 and Dual-Fuel Light-Duty Vehicles Classified as TLEVs, LEVs, and ULEVs 
------------------------------------------------------------------------
                   Vehicle emission category                       NMOG 
------------------------------------------------------------------------
TLEV...........................................................     0.31
LEV............................................................    0.156
ULEV...........................................................    0.090
------------------------------------------------------------------------

    (iv) Highway NOX. The maximum projected NOX 
emissions measured on the federal Highway Fuel Economy Test in 40 CFR 
part 600, subpart B, shall not be greater than 1.33 times the 
applicable light-duty vehicle standards shown in Tables R97-1 and R97-
2. Both the projected emissions and the Highway Fuel Economy Test 
standard shall be rounded to the nearest 0.1 g/mi in accordance with 
the Rounding-Off Method specified in ASTM E29-90, Standard Practice for 
Using Significant Digits in Test Data to Determine Conformance with 
Specifications, before being compared. These procedures are 
incorporated by reference (see Sec. 86.1).
    (v) Hybrid electric vehicle requirements. Deterioration factors for 
hybrid electric vehicles shall be based on the emissions and mileage 
accumulation of the auxiliary power unit. For certification purposes 
only, Type A hybrid electric vehicles shall demonstrate compliance with 
50,000 mile emission standards (using 50,000 mile deterioration 
factors), and shall not be required to demonstrate compliance with 
100,000 mile emission standards. For certification purposes only, Type 
B hybrid electric vehicles shall demonstrate compliance with 50,000 
mile emission standards (using 50,000 mile deterioration factors) and 
100,000 mile emission standards (using 75,000 mile deterioration 
factors). For certification purposes only, Type C hybrid electric 
vehicles shall demonstrate compliance with 50,000 mile emission 
standards (using 50,000 mile deterioration factors) and 100,000 mile 
emission standards (using 100,000 mile deterioration factors).
    (vi) 50 degree F requirements. Light-duty vehicles shall comply 
with the emission standards for NMOG, CO, NOX, and HCHO in 
paragraph (b)(1)(i) of this section at 50 deg. F, according to the 
procedure specified in Sec. 86.1773. Hybrid electric, natural gas, and 
diesel fueled vehicles are not required to comply with the provisions 
of this paragraph (b)(1)(vi).
    (2) [Reserved]
    (c) Intermediate in-use emission standards. (1) 1997 through 1999 
model year light-duty vehicles certified as LEVs and 1997 through 2002 
model year light-duty vehicles certified as ULEVs shall meet the 
applicable intermediate and full useful life in-use standards in 
paragraphs (c)(2) or (c)(3) of this section, according to the following 
provisions:
    (i) In-use compliance with standards beyond the intermediate useful 
life shall be waived for LEVs and ULEVs through the 1998 model year.
    (ii) The applicable in-use emission standards for vehicle emission 
categories and model years not shown in Tables R97-5, R97-6, and R97-7 
shall be the intermediate and full useful life standards in paragraph 
(b) of this section.
    (2) Light-duty vehicles, including flexible-fuel and dual-fuel 
light-duty vehicles when operated on an available fuel other than 
gasoline, shall meet all intermediate and full useful life in-use 
standards for the applicable vehicle emission category and model year 
in Tables R97-5 and R97-6, as follows:

[[Page 31248]]


      Table R97-5.--Intermediate Useful Life (50,000 Mile) In-Use Standards (g/mi) for Light-Duty Vehicles      
----------------------------------------------------------------------------------------------------------------
                  Vehicle emission category                     Model year      NMOG      CO      NOX      HCHO 
----------------------------------------------------------------------------------------------------------------
LEV.........................................................       1997-1999    0.100      3.4      0.3    0.015
ULEV........................................................       1997-1998    0.058      2.6      0.3    0.012
                                                                   1999-2000    0.055      2.1      0.3    0.012
                                                                   2001-2002    0.055      2.1      0.3    0.008
----------------------------------------------------------------------------------------------------------------


          Table R97-6.--Full Useful Life (100,000 Mile) In-Use Standards (g/mi) for Light-Duty Vehicles         
----------------------------------------------------------------------------------------------------------------
                                                                Model year      NMOG      CO      NOX      HCHO 
----------------------------------------------------------------------------------------------------------------
LEV.........................................................            1999    0.125      4.2      0.4    0.018
ULEV........................................................       1999-2002    0.075      3.4      0.4    0.011
----------------------------------------------------------------------------------------------------------------

    (3) Flexible-fuel and dual-fuel light-duty vehicles when operated 
on gasoline shall meet all intermediate and full useful life in-use 
standards for the applicable vehicle emission category and model year 
in Tables R97-5 and R97-6, except that the applicable intermediate 
useful life NMOG standards for 1997 and 1998 model year flexible-fuel 
and dual-fuel light-duty vehicles when operated on gasoline shall be 
those in Table R97-7, as follows:

    Table R97-7.--Intermediate Useful Life (50,000 Mile) In-Use NMOG    
Standards for 1997 and 1998 Model Year Flexible-Fuel and Dual-Fuel Light-
                 Duty Vehicles When Operated on Gasoline                
------------------------------------------------------------------------
                                                                 NMOG (g/
                   Vehicle emission category                       mi)  
------------------------------------------------------------------------
LEV............................................................    0.188
ULEV...........................................................    0.100
------------------------------------------------------------------------

    (d) NMOG measurement and reactivity adjustment. NMOG emissions 
shall be measured in accordance with Chapter 5 of the California 
Regulatory Requirements Applicable to the National Low Emission Vehicle 
Program (October, 1996). These requirements are incorporated by 
reference (see Sec. 86.1). NMOG emissions shall be compared to the 
applicable NMOG emissions certification or in-use standard according to 
the following calculation procedures:
    (1) For TLEVs, LEVs, and ULEVs designed to operate on any fuel 
other than conventional gasoline, and for flexible-fuel and dual-fuel 
TLEVs, LEVs, and ULEVs when operated on a fuel other than gasoline as 
specified in Sec. 86.1771, manufacturers shall multiply NMOG exhaust 
mass emission levels by the applicable reactivity adjustment factor set 
forth in Sec. 86.1777, or established by the Administrator pursuant to 
Sec. 86.1777. The product of the NMOG exhaust emission levels and the 
reactivity adjustment factor shall be compared to the applicable 
certification or in-use exhaust NMOG mass emission standards 
established for the particular vehicle emission category to determine 
compliance.
    (2) In addition to multiplying the exhaust NMOG mass emission 
levels by the applicable reactivity adjustment factor, TLEV, LEV, or 
ULEV natural gas vehicles shall multiply the exhaust methane mass 
emission level by the applicable methane reactivity adjustment factor 
in Sec. 86.1777 or established by the Administrator pursuant to 
Sec. 86.1777. The reactivity-adjusted NMOG value shall be added to the 
reactivity-adjusted methane value and then the sum shall be compared to 
the applicable certification or in-use exhaust NMOG mass emission 
standards established for the particular vehicle emission category to 
determine compliance.
    (3) The exhaust NMOG mass emission levels for fuel-flexible and 
dual-fuel vehicles when operating on gasoline as specified in 
Sec. 86.1771 shall not be multiplied by a reactivity adjustment factor.


Sec. 86.1709-97  Exhaust emission standards for 1997 and later light 
light-duty trucks.

    (a) Light light-duty trucks certified under the provisions of this 
subpart shall comply with the applicable exhaust emission standards in 
this section. In addition to the exhaust emission standards in this 
section, light light-duty trucks certified under the provisions of this 
subpart shall comply with all applicable emission standards and 
requirements in Sec. 86.097-9 and subsequent model year provisions.
    (1) Light light-duty trucks that meet the exhaust emission 
standards in this section are deemed to be in compliance with all the 
exhaust emission standards in Sec. 86.097-9(a)(1)(i) and subsequent 
model year provisions, except for the emission standards and test 
procedures for total hydrocarbon (THC), particulate matter (PM), and 
high altitude conditions. Diesel light light-duty trucks that meet the 
PM standard in this section are deemed to be in compliance with the PM 
standards in Sec. 86.097-9 and subsequent model year provisions.
    (2) [Reserved]
    (b)(1) Standards. (i) Exhaust emissions from 1997 and later model 
year light light-duty trucks classified as TLEVs, LEVs, and ULEVs shall 
not exceed the standards in Tables R97-8 and R97-9 in rows designated 
with the applicable vehicle emission category and loaded vehicle 
weight. These standards shall apply equally to certification and in-use 
vehicles, except as provided in paragraph (c) of this section. The 
tables follow:

 Table R97-8.--Intermediate Useful Life Standards (g/mi) for Light Light-Duty Trucks Classified as TLEVs, LEVs, 
                                                    and ULEVs                                                   
----------------------------------------------------------------------------------------------------------------
         Loaded vehicle weight           Vehicle  emission  category     NMOG        CO        NOX        HCHO  
----------------------------------------------------------------------------------------------------------------
0-3750.................................  TLEV                             0.125        3.4        0.4      0.015

[[Page 31249]]

                                                                                                                
                                         LEV                              0.075        3.4        0.2      0.015
                                         ULEV                             0.040        1.7        0.2      0.008
3751-5750..............................  TLEV                             0.160        4.4        0.7      0.018
                                         LEV                              0.100        4.4        0.4      0.018
                                         ULEV                             0.050        2.2        0.4      0.009
----------------------------------------------------------------------------------------------------------------


Table R97-9.--Full Useful Life Standards (g/mi) for Light Light-Duty Trucks Classified as TLEVs, LEVs, and ULEVs
----------------------------------------------------------------------------------------------------------------
                                                                                                           PM   
       Loaded vehicle weight          Vehicle  emission       NMOG        CO        NOX        HCHO     (diesels
                                           category                                                      only)  
----------------------------------------------------------------------------------------------------------------
0-3750............................  TLEV                       0.156        4.2        0.6      0.018       0.08
                                    LEV                        0.090        4.2        0.3      0.018       0.08
                                    ULEV                       0.055        2.1        0.3      0.011       0.04
3751-5750.........................  TLEV                       0.200        5.5        0.9      0.023       0.10
                                    LEV                        0.130        5.5        0.5      0.023       0.10
                                    ULEV                       0.070        2.8        0.5      0.013       0.05
----------------------------------------------------------------------------------------------------------------

    (ii) Diesel vehicles. The particulate matter (PM) standards in 
paragraph (b)(1)(i) of this section are applicable to diesel vehicles 
only. For diesel vehicles certifying to the standards set forth in 
paragraph (b)(1)(i) of this section, ``NMOG'' shall mean non-methane 
hydrocarbons.
    (iii) NMOG standards for flexible-fuel and dual-fuel light duty 
trucks. Flexible-fuel and dual-fuel light light-duty trucks shall be 
certified to exhaust emission standards for NMOG established both for 
the operation of the vehicle on an available fuel other than gasoline 
and for the operation of the vehicle on gasoline as specified in 
Sec. 86.1771.
    (A) The applicable NMOG emission standards for flexible-fuel and 
dual-fuel light light-duty trucks when certifying the vehicle for 
operation on fuels other than gasoline shall be the NMOG standards in 
paragraph (b)(1)(i) of this section.
    (B) The applicable NMOG emission standards for flexible-fuel and 
dual-fuel light light-duty trucks when certifying the vehicle for 
operation on gasoline shall be the NMOG standards in Tables R97-10 and 
R97-11 in the rows designated with the applicable vehicle emission 
category and loaded vehicle weight, as follows:

    Table R97-10.--Intermediate Useful Life NMOG Standards (g/mi) for   
Flexible-Fuel and Dual-Fuel Light Light-Duty Trucks Classified as TLEVs,
                             LEVs, and ULEVs                            
------------------------------------------------------------------------
        Loaded vehicle weight          Vehicle emission category   NMOG 
------------------------------------------------------------------------
0-3750...............................  TLEV                        0.25 
                                       LEV                         0.125
                                       ULEV                        0.075
3751-5750............................  TLEV                        0.32 
                                       LEV                         0.160
                                       ULEV                        0.100
------------------------------------------------------------------------


 Table R97-11.--Full Useful Life NMOG Standards (g/mi) for Flexible-Fuel
  and Dual-Fuel Light Light-Duty Trucks Classified as TLEVs, LEVs, and  
                                  ULEVs                                 
------------------------------------------------------------------------
        Loaded vehicle weight          Vehicle emission category   NMOG 
------------------------------------------------------------------------
0-3750...............................  TLEV                        0.31 
                                       LEV                         0.156
                                       ULEV                        0.090
3751-5750............................  TLEV                        0.40 
                                       LEV                         0.200
                                       ULEV                        0.130
------------------------------------------------------------------------

    (iv) Highway NOX. The maximum projected NOX 
emissions measured on the federal Highway Fuel Economy Test in 40 CFR 
part 600, subpart B, shall be not greater than 1.33 times the 
applicable light light-duty truck standards shown in Tables R97-8 and 
R97-9. Both the projected emissions and the Highway Fuel Economy Test 
standard shall be rounded to the nearest 0.1 g/mi in accordance with 
the Rounding-Off Method specified in ASTM E29-90, Standard Practice for 
Using Significant Digits in Test Data to Determine Conformance with 
Specifications, before being compared. These procedures are 
incorporated by reference (see Sec. 86.1).
    (v) Hybrid electric vehicle requirements. Deterioration factors for 
hybrid electric vehicles shall be based on the emissions and mileage 
accumulation of the auxiliary power unit. For certification purposes 
only, Type A hybrid electric vehicles shall demonstrate compliance with 
50,000 mile emission standards (using 50,000 mile deterioration 
factors), and shall not be required to demonstrate compliance with 
100,000 mile emission standards. For certification purposes only, Type 
B hybrid electric vehicles shall demonstrate compliance with 50,000 
mile emission standards (using 50,000 mile deterioration factors) and 
100,000 mile emission standards (using 75,000 mile deterioration 
factors). For certification purposes only, Type C hybrid electric 
vehicles shall demonstrate compliance with 50,000 mile emission 
standards (using 50,000 mile deterioration factors) and 100,000 mile 
emission standards (using 100,000 mile deterioration factors).
    (vi) 50 degree F requirements. Light light-duty trucks shall comply 
with the emission standards for NMOG, CO, NOX, and HCHO in 
paragraph (b)(1)(i) of this section at 50 degrees F, according to the 
procedure specified in Sec. 86.1773. Hybrid electric vehicles, natural 
gas vehicles, and diesel fueled vehicles are

[[Page 31250]]

not required to comply with the provisions of this paragraph 
(b)(1)(vi).
    (2) [Reserved]
    (c) Intermediate in-use emission standards. (1) 1997 and 1998 model 
year light light-duty trucks certified as LEVs or ULEVs shall meet the 
applicable intermediate and full useful life in-use standards in 
paragraphs (c)(2) or (c)(3) of this section, according to the following 
provisions:
    (i) In-use compliance with standards beyond the intermediate useful 
life shall be waived for LEVs and ULEVs through the 1998 model year.
    (ii) The applicable in-use emission standards for vehicle emission 
categories and model years not shown in Tables R97-12, R97-13, and R97-
14 shall be the intermediate and full useful life standards in 
paragraph (b) of this section.
    (2) Light light-duty trucks, including flexible-fuel and dual-fuel 
light light-duty trucks when operated on an available fuel other than 
gasoline, shall meet all intermediate and full useful life in-use 
standards for the applicable vehicle emission category, loaded vehicle 
weight, and model year in Tables R97-12 and R97-13, as follows:

    Table R97-12.--Intermediate Useful Life (50,000 Mile) In-Use Standards (g/mi) for Light Light-Duty Trucks   
----------------------------------------------------------------------------------------------------------------
                                           Vehicle emission                                                     
        Loaded vehicle weight                  category           Model year    NMOG      CO      NOX      HCHO 
----------------------------------------------------------------------------------------------------------------
 0-3750..............................  LEV                         1997-1999    0.100      3.4      0.3    0.015
                                       ULEV                        1997-1998    0.058      2.6      0.3    0.012
                                                                   1999-2000    0.055      2.1      0.3    0.012
                                                                   2001-2002    0.055      2.1      0.3    0.008
3751-5750............................  LEV                         1997-1998    0.128      4.4      0.5    0.018
                                       ........................         1999    0.130      4.4      0.5    0.018
                                       ULEV                        1997-1998    0.075      3.3      0.5    0.014
                                                                   1999-2002    0.070      2.8      0.5    0.014
----------------------------------------------------------------------------------------------------------------


       Table R97-13.--Full Useful Life (100,000 Mile) In-Use Standards (g/mi) for Light Light-Duty Trucks       
----------------------------------------------------------------------------------------------------------------
                                           Vehicle emission                                                     
        Loaded vehicle weight                  category           Model year    NMOG      CO      NOX      HCHO 
----------------------------------------------------------------------------------------------------------------
0-3750...............................  LEV                              1999    0.125      4.2      0.4    0.018
                                       ULEV                        1999-2002    0.075      3.4      0.4    0.011
3751-5750............................  LEV                              1999    0.160      5.5      0.7    0.018
                                       ULEV                        1999-2002    0.100      4.4      0.7    0.014
----------------------------------------------------------------------------------------------------------------

    (3) Flexible-fuel and dual-fuel light light-duty trucks when 
operated on gasoline shall meet all intermediate and full useful life 
in-use standards for the applicable vehicle emission category and model 
year in Tables R97-12 and R97-13, except that the applicable 
intermediate useful life NMOG standards for 1997 and 1998 model year 
flexible-fuel and dual-fuel light light-duty trucks when operated on 
gasoline shall be those in Table R97-14, as follows:

    Table R97-14.--Intermediate Useful Life (50,000 mile) In-Use NMOG   
  Standards (g/mi) for 1997 and 1998 Model Year Flexible-Fuel and Dual- 
         Fuel Light Light-Duty Trucks When Operated on Gasoline         
------------------------------------------------------------------------
                                           Vehicle emission             
        Loaded vehicle weight                  category            NMOG 
------------------------------------------------------------------------
0-3750...............................  LEV                         0.188
                                       ULEV                        0.100
3751-5750............................  LEV                         0.238
                                       ULEV                        0.128
------------------------------------------------------------------------

    (d) NMOG measurement and reactivity adjustment. NMOG emissions 
shall be measured in accordance with Chapter 5 of the California 
Regulatory Requirements Applicable to the National Low Emission Vehicle 
Program (October, 1996). These procedures are incorporated by reference 
(see Sec. 86.1). NMOG emissions shall be compared to the applicable 
NMOG emissions certification or in-use standard according to the 
following calculation procedures:
    (1) For TLEVs, LEVs, and ULEVs designed to operate on any fuel 
other than conventional gasoline, and for flexible-fuel and dual-fuel 
TLEVs, LEVs, and ULEVs when operated on a fuel other than gasoline as 
specified in Sec. 86.1771, manufacturers shall multiply NMOG mass 
exhaust emission levels by the applicable reactivity adjustment factor 
set forth in Sec. 86.1777 or established by the Administrator pursuant 
to Sec. 86.1777. The product of the NMOG exhaust emission levels and 
the reactivity adjustment factor shall be compared to the applicable 
certification or in-use exhaust NMOG mass emission standards 
established for the particular vehicle emission category to determine 
compliance.
    (2) In addition to multiplying the exhaust NMOG mass emission 
levels by the applicable reactivity adjustment factor, TLEV, LEV, or 
ULEV natural gas vehicles shall multiply the exhaust methane mass 
emission level by the applicable methane reactivity adjustment factor 
in Sec. 86.1777 or established by the Administrator pursuant to 
Sec. 86.1777. The reactivity-adjusted NMOG value shall be added to the 
reactivity-adjusted methane value and then the sum shall be compared to 
the applicable certification or in-use exhaust NMOG mass emission 
standards established for the particular vehicle emission category to 
determine compliance.
    (3) The exhaust NMOG mass emission levels for fuel-flexible and 
dual-fuel vehicles when operating on gasoline as specified in 
Sec. 86.1771 shall not be multiplied by a reactivity adjustment factor.


Sec. 86.1710-97  Fleet average non-methane organic gas exhaust emission 
standards for light-duty vehicles and light light-duty trucks.

    (a)(1) Each manufacturer shall certify light-duty vehicles or light 
light-duty trucks to meet the exhaust emission standards in this 
subpart for TLEVs, LEVs, ULEVs, or ZEVs, or the exhaust emission 
standards of Sec. 86.096-8(a)(1)(i) and subsequent model year 
provisions or Sec. 86.097-9(a)(1)(i) and subsequent

[[Page 31251]]

model year provisions, such that, using the applicable intermediate 
useful life standards, the manufacturer's fleet average NMOG values for 
light-duty vehicles and light light-duty trucks sold in the applicable 
region according to the specifications of Tables R97-15 and R97-16 are 
less than or equal to the standards in Tables R97-15 and R97-16 in the 
rows designated with the applicable vehicle type, loaded vehicle 
weight, and model year, as follows:

 Table R97-15.--Fleet Average Non-Methane Organic Gas Standards (g/mi) for Light-Duty Vehicles and Light Light- 
                                Duty Trucks Sold in the Northeast Trading Region                                
----------------------------------------------------------------------------------------------------------------
                                                Loaded                                                  Fleet   
                Vehicle type                   vehicle                    Model year                   average  
                                                weight                                                   NMOG   
----------------------------------------------------------------------------------------------------------------
Light-duty vehicles and Light-duty trucks..          All  1997.....................................        0.200
                                                  0-3750  1998.....................................        0.200
                                                          1999.....................................        0.148
                                                          2000.....................................        0.095
                                                          2001 and later...........................        0.075
Light-duty trucks..........................    3751-5750  1997.....................................        0.256
                                                          1998.....................................        0.256
                                                          1999.....................................        0.190
                                                          2000.....................................        0.124
                                                          2001 and later...........................        0.100
----------------------------------------------------------------------------------------------------------------


 Table R97-16.--Fleet Average Non-Methane Organic Gas Standards (g/mi) for Light-Duty Vehicles and Light Light- 
                                        Duty Trucks Sold in the 37 States                                       
----------------------------------------------------------------------------------------------------------------
                                                Loaded                                                  Fleet   
                Vehicle type                   vehicle                    Model year                   average  
                                                weight                                                   NMOG   
----------------------------------------------------------------------------------------------------------------
Light-duty vehicles and Light light-duty             All  2001 and later...........................        0.075
 trucks.                                          0-3750                                                        
Light light-duty trucks....................    3751-5750  2001 and later...........................        0.100
----------------------------------------------------------------------------------------------------------------

    (2)(i) For the purpose of calculating the HEV contribution factor 
for the fleet average NMOG value, a manufacturer may use adjusted 
values to estimate the contributions of hybrid electric vehicles (or 
``HEVs'') based on the range of the HEV without the use of the engine. 
See Sec. 86.1702 for definitions of HEV types for purposes of 
calculating adjusted NMOG emissions.
    (ii) For the purpose of calculating fleet average NMOG values, 
vehicles that have no tailpipe emissions but use fuel-fired heaters and 
that are not certified as ZEVs shall be treated as Type A HEV ULEVs.
    (3)(i) Each manufacturer's applicable fleet average NMOG value for 
all light light-duty trucks from 0-3750 lbs loaded vehicle weight and 
light-duty vehicles sold in the applicable region according to Tables 
R97-15 and R97-16 shall be calculated in units of g/mi NMOG according 
to the following equation, where the term ``Sold'' means sold in the 
applicable region according to Tables R97-15 and R97-16, and the term 
``Vehicles'' means light light-duty trucks from 0-3750 lbs loaded 
vehicle weight and light-duty vehicles: (((No. of Vehicles Certified to 
the Federal Tier 1 Exhaust Emission Standards and Sold) x (0.25))+((No. 
of TLEVs Sold excluding HEVs) x (0.125))+((No. of LEVs Sold excluding 
HEVs) x (0.075))+((No. of ULEVs Sold excluding HEVs) x (0.040))+(HEV 
contribution factor))/(Total No. of Vehicles Sold, including ZEVs and 
HEVs).
    (ii)(A) ``HEV contribution factor'' shall mean the NMOG emission 
contribution of HEVs to the fleet average NMOG value. The HEV 
contribution factor shall be calculated in units of g/mi as follows, 
where the term ``Sold'' means sold in the applicable region according 
to Tables R97-15 and R97-16.
    (B) HEV contribution factor=(((No. of Type A HEV TLEVs 
Sold) x (0.100)) + ((No. of Type B HEV TLEVs Sold) x (0.113))+((No. of 
Type C HEV TLEVs Sold) x (0.125)))+(((No. of Type A HEV LEVs 
Sold) x (0.057))+((No. of Type B HEV LEVs Sold) x (0.066))+((No. of 
Type C HEV LEVs Sold) x (0.075)))+(((No. of Type A HEV ULEVs 
Sold) x (0.020))+((No. of Type B HEV ULEVs Sold) x (0.030))+((No. of 
Type C HEV ULEVs Sold) x (0.040))).
    (iii)(A) For any model year in which a manufacturer certifies its 
entire fleet of light light-duty trucks from 0-3750 lbs LVW and light-
duty vehicles to intermediate useful life NMOG emission standards 
specified in Secs. 86.1708 and 86.1709 that are less than or equal to 
the applicable fleet average NMOG standard specified in Table R97-15, 
the manufacturer may choose not to calculate a separate fleet average 
NMOG value for each region for such vehicles for that model year.
    (B) The fleet average NMOG value for a manufacturer electing under 
paragraph (a)(3)(iii)(A) of this section not to calculate a separate 
fleet average NMOG value shall be deemed to be the applicable fleet 
average NMOG standard specified in Table R97-15 for the applicable 
model year.
    (C) A manufacturer making the election under paragraph 
(a)(3)(iii)(A) of this section may not generate credits for that model 
year for light light-duty trucks from 0-3750 lbs LVW and light-duty 
vehicles.
    (4)(i) Each manufacturer's applicable fleet average NMOG value for 
all light light-duty trucks from 3751-5750 lbs loaded vehicle weight 
sold in the applicable region according to Tables R97-15 and R97-16 
shall be calculated in units of g/mi NMOG according to the following 
equation, where the term ``Sold'' means sold in the applicable region 
according to Tables R97-15 and R97-16, and the term ``Vehicles'' means 
light light-duty trucks from 3751-5750 lbs loaded vehicle weight: 
(((No. of Vehicles Certified to the Federal Tier 1 Exhaust Emission 
Standards and Sold) x (0.32))+((No. of TLEVs Sold excluding 
HEVs) x (0.160))+((No. of LEVs Sold excluding HEVs) x (0.100))+((No. of 
ULEVs Sold excluding HEVs) x (0.050))+(HEV Contribution factor))/(Total 
No. of Vehicles Sold, including ZEVs and HEVs).
    (ii)(A) ``HEV contribution factor'' shall mean the NMOG emission 
contribution of HEVs to the fleet average NMOG. The

[[Page 31252]]

HEV contribution factor shall be calculated in units of g/mi as 
follows, where the term ``Sold'' means sold in the applicable region 
according to Tables R97-15 and R97-16.
    (B) HEV contribution factor=(((No. of Type A HEV TLEVs 
Sold) x (0.130)) + ((No. of Type B HEV TLEVs Sold) x (0.145))+((No. of 
Type C HEV TLEVs Sold) x (0.160)))+(((No. of Type A HEV LEVs 
Sold) x (0.075))+((No. of Type B HEV LEVs Sold) x (0.087))+((No. of 
Type C HEV LEVs Sold) x (0.100)))+(((No. of Type A HEV ULEVs 
Sold) x (0.025))+((No. of Type B HEV ULEVs Sold) x (0.037))+((No. of 
Type C HEV ULEVs Sold) x (0.050))).
    (iii)(A) For any model year in which a manufacturer certifies its 
entire fleet of light light-duty trucks from 3751-5750 lbs LVW to 
intermediate useful life NMOG emission standards specified in 
Sec. 86.1709 that are less than or equal to the applicable fleet 
average NMOG requirement specified in Table R97-15, the manufacturer 
may choose not to calculate a separate fleet average NMOG value for 
each region for such vehicles for that model year.
    (B) The fleet average NMOG value for a manufacturer electing under 
paragraph (a)(4)(iii)(A) of this section not to calculate a separate 
fleet average NMOG value shall be deemed to be the applicable fleet 
average NMOG requirement specified in Table R97-15 for the applicable 
model year.
    (C) A manufacturer making the election under paragraph 
(a)(4)(iii)(A) of this section may not generate credits for that model 
year for light light-duty trucks from 3751-3750 lbs LVW.
    (5)(i) The calculation of the fleet average NMOG value pursuant to 
paragraphs (a)(3) and (a)(4) of this section shall exclude ATVs, as 
defined in Sec. 86.1702, purchased in the NTR by state governments. In 
determining the quantity of vehicles to be excluded from the NMOG 
calculations, a manufacturer shall only be required to exclude vehicles 
that are reported by the purchasing government in a timely letter, 
containing adequate information, directed to the representative of the 
manufacturer listed in the manufacturer's application for 
certification. Such letter shall be considered timely only if it is 
received no later than February 1 of the calendar year following the 
model year of the purchased vehicles.
    (ii) Adequate information includes the number of vehicles 
purchased, vehicle makes and models, and the associated engine 
families. A copy of the letter should be sent to EPA.
    (6) For any model year prior to model year 2001 for which a 
manufacturer meets the definition of ``low volume manufacturer'' in 
Sec. 86.1702, it shall be exempt from the requirements in paragraph 
(a)(1) of this section. The requirements in paragraph (a)(1) of this 
section applicable to the 2001 and later model years shall apply to low 
volume manufacturers.
    (b) Fleet average NMOG credit and debit calculations. (1) For each 
averaging set, as defined in Sec. 86.1702, manufacturers that achieve 
fleet average NMOG values lower than the fleet average NMOG standard 
for the corresponding model year may generate credits.
    (2) For each averaging set, manufacturers that obtain applicable 
fleet average NMOG values exceeding the fleet average NMOG standard for 
the corresponding model year shall generate debits.
    (3) For each averaging set, credits and debits are to be calculated 
according to the following equation and rounded, in accordance with the 
Rounding-Off Method specified in ASTM E29-90, Standard Practice for 
Using Significant Digits in Test Data to Determine Conformance with 
Specifications, which is incorporated by reference (see Sec. 86.1), to 
the nearest whole number (intermediate calculations will not be 
rounded):

Number of Credits/Debits=(((Applicable Fleet Average NMOG 
Standard)-(Manufacturer's Applicable Fleet Average NMOG 
Value)) x (Applicable Production)).

    (4) For each region and model year, a manufacturer's available 
credits or level of debits shall be the sum of credits or debits 
derived from the respective class A and class B averaging sets for that 
region and model year.
    (c) Fleet average NMOG credits. (1) Credits may be used to offset 
only fleet average NMOG debits of the same region (NTR or 37 States).
    (2) Credits may only be used, traded or carried over to the next 
model year after they are earned. Credits are earned on the last day of 
the model year. Before trading or carrying over credits to the next 
model year, a manufacturer must apply available credits to offset any 
of its debits from the same region, where the deadline to offset such 
debits has not yet passed.
    (3) Credits earned in any given model year shall retain full value 
through the subsequent model year.
    (4) Unused credits that are available at the end of the second, 
third, and fourth model years after the model year in which the credits 
were generated shall be discounted to 50%, 25%, and 0% of the original 
value of the credits, respectively. The discounting of credits also 
applies to credits transferred to other parties.
    (5) Credits may not be used to remedy any nonconformities 
determined by a Selective Enforcement Audit, recall testing, or testing 
performed with respect to Title 13, Chapter 2, Articles 1 and 2 of the 
California Code of Regulations.
    (6) Prior to model year 2001, low volume manufacturers may earn 
credits in the NTR to transfer to other motor vehicle manufacturers for 
use in the NTR or to bank for their own use in the NTR in 2001 and 
subsequent model years. Such credits will be calculated as set forth in 
paragraphs (a) and (b) of this section, except that the applicable 
fleet average NMOG standard shall be 0.25 g/mi NMOG for the averaging 
set for light light-duty trucks from 0-3750 lbs LVW and light-duty 
vehicles or 0.32 g/mi NMOG for the averaging set for light light-duty 
trucks from 3751-5750 lbs LVW. Credits shall be discounted in 
accordance with the provisions in paragraph (c)(4) of this section.
    (7) Manufacturers may earn and bank credits in the 37 states prior 
to model year 2001. Such credits will be calculated as set forth in 
paragraphs (a) and (b) of this section, except that the applicable 
fleet average NMOG standard shall be 0.25 g/mi NMOG for the averaging 
set for light light-duty trucks from 0-3750 lbs LVW and light-duty 
vehicles or 0.32 g/mi NMOG for the averaging set for light light-duty 
trucks from 3751-5750 lbs LVW.
    (i) Emissions credits earned in the 37 states prior to the 2001 
model year shall be treated as generated in the 2001 model year.
    These credits shall be discounted in accordance with the provisions 
in paragraph (c)(4) of this section.
    (iii) In the 2001 model year, a one-time discount rate of 10 
percent shall be applied to all credits earned under the provisions of 
this paragraph (c)(7).
    (8) There are no property rights associated with credits generated 
under the provisions of this section. Credits are a limited 
authorization to emit the designated amount of emissions. Nothing in 
the regulations or any other provision of law should be construed to 
limit EPA's authority to terminate or limit this authorization through 
a rulemaking.
    (d) Fleet average NMOG debits. (1) Manufacturers shall offset any 
debits for a given model year by the fleet average NMOG reporting 
deadline for the model year following the model year in which the 
debits were generated. Manufacturers may offset debits by generating 
credits or acquiring credits

[[Page 31253]]

generated by another manufacturer. Any credit used to offset a debit 
must be from the same region (NTR or 37 States) in which the debit was 
incurred.
    (2)(i) Failure to meet the requirements of paragraphs (a) through 
(d) of this section within the required timeframe for offsetting debits 
will be considered to be a failure to satisfy the conditions upon which 
the certificate(s) was issued and the individual noncomplying vehicles 
not covered by the certificate shall be determined according to this 
section.
    (ii) If debits are not offset within the specified time period, the 
number of vehicles not meeting the fleet average NMOG standards and not 
covered by the certificate shall be calculated by dividing the total 
amount of debits for the model year by the fleet average NMOG standard 
applicable for the model year and averaging set in which the debits 
were first incurred. If both averaging sets are in debit, any 
applicable credits will first be allocated between the averaging sets 
according to the manufacturer's expressed preferences. Then, the number 
of vehicles not covered by the certificate shall be calculated using 
the revised debit values.
    (iii) EPA will determine the vehicles for which the condition on 
the certificate was not satisfied by designating vehicles in those 
engine families with the highest certification NMOG emission values 
first and continuing until a number of vehicles equal to the calculated 
number of noncomplying vehicles as determined above is reached. If this 
calculation determines that only a portion of vehicles in an engine 
family contribute to the debit situation, then EPA will designate 
actual vehicles in that engine family as not covered by the 
certificate, starting with the last vehicle produced and counting 
backwards.
    (3) If a manufacturer opts out of the National LEV program pursuant 
to Sec. 86.1705, the manufacturer continues to be responsible for 
offsetting any debits outstanding on the effective date of the opt-out 
within the required time period. Any failure to offset the debits will 
be considered to be a violation of paragraph (d)(1) of this section and 
may subject the manufacturer to an enforcement action for sale of 
vehicles not covered by a certificate, pursuant to paragraph (d)(2) of 
this section.
    (4) For purposes of calculating tolling of the statute of 
limitations, a violation of the requirements of paragraph (d)(1) of 
this section, a failure to satisfy the conditions upon which a 
certificate(s) was issued and hence a sale of vehicles not covered by 
the certificate, all occur upon the expiration of the deadline for 
offsetting debits specified in paragraph (d)(1) of this section.
    (e) NMOG credit transfers. (1) EPA may reject NMOG credit transfers 
if the involved manufacturers fail to submit the credit transfer 
notification in the annual report.
    (2) A manufacturer may not sell credits that are not available for 
sale pursuant to the provisions in paragraph (c)(2) of this section.
    (3) Except in instances of fraud on the part of the credit 
recipient, where a manufacturer sells credits that were not available 
for sale, the credits shall be treated as valid, and the manufacturer 
that sold the credits shall be liable for any resulting shortfall.
    (4)(i) If a manufacturer transfers a credit that it has not 
generated pursuant to paragraph (b) of this section or acquired from 
another party, the manufacturer will be considered to have generated a 
debit in the model year that the manufacturer transferred the credit. 
The manufacturer must offset such debits by the deadline for the annual 
report for that same model year.
    (ii) Failure to offset the debits within the required time period 
will be considered a failure to satisfy the conditions upon which the 
certificate(s) was issued and will be addressed pursuant to paragraph 
(d)(2) of this section.


Sec. 86.1711-97  Limitations on sale of Tier 1 vehicles and TLEVs; five 
percent cap.

    (a) In the 2001 and subsequent model years, manufacturers may sell 
Tier 1 vehicles and TLEVs in the NTR only if vehicles with the same 
engine families are certified and offered for sale in California in the 
same model year, except as provided under Sec. 86.1705(e)(4).
    (b)(1) The industry-wide percentage of Tier 1 and TLEV light-duty 
vehicles and light light-duty trucks sold in the NTR for 2001 and 
subsequent model years shall not exceed five percent of the total 
number of light-duty vehicles and light light-duty trucks sold in the 
NTR in a given model year.
    (2) When EPA determines that the five-percent cap requirement of 
this section is first exceeded, EPA will notify covered manufacturers 
of the exceedance during the calendar year following the model year for 
which there was an exceedance. The requirement in paragraph (b)(1) of 
this section will be enforceable starting with the model year 
containing January 1 of the calendar year following the calendar year 
in which EPA notifies manufacturers of the exceedance and for each 
model year thereafter.
    (3)(i) An exceedance of the requirement in this section is 
determined according to the following equation where the term 
``Vehicles'' means light-duty vehicles and light light-duty trucks, but 
excludes vehicles sold by a manufacturer that has opted out of the 
National LEV program pursuant to the provisions of Sec. 86.1705, 
pending final judicial resolution of the opt-out petition:

    Total number of Vehicles exceeding five-percent cap=((Total 
number of Tier 1 Vehicles and TLEVs sold in the NTR)--((Total number 
of Vehicles sold in the NTR)-0.05))

    (ii) Where a manufacturer has elected to use the reporting 
provision specified in Sec. 86.1710(a)(3)(iii) or 
Sec. 86.1710(a)(4)(iii), EPA will estimate that manufacturer's number 
of vehicles sold in the NTR by using the following equation, where the 
term ``Vehicles'' means light-duty vehicles and light light-duty 
trucks, but excludes vehicles sold by a manufacturer that has opted out 
of the National LEV program pursuant to the provisions of Sec. 86.1705, 
pending final judicial resolution of the opt-out petition:

    Estimated number of Vehicles in the NTR=(((sum of Vehicles the 
manufacturer sold in the NTR for the latest two reported model 
years) / (sum of Vehicles the manufacturer sold in the 49 states for 
the same latest two reported model years))  x  (number of Vehicles 
the manufacturer sold in the 49 states as reported for the current 
model year))

    (4)(i) Failure to meet the five-percent cap as specified in this 
paragraph (b) will be considered to be a failure to satisfy the 
conditions upon which the certificate(s) was issued and the individual 
nonconforming vehicles not covered by the certificate shall be 
determined as set forth in this paragraph (b)(4).
    (ii) For a model year in which the industry-wide five percent cap 
is exceeded, as specified in paragraph (b)(1) of this section, each 
manufacturer that sold Tier 1 and TLEV light-duty vehicles and light 
light-duty trucks in the NTR in excess of five percent of its sales of 
light-duty vehicles and light light-duty trucks in the NTR is a 
noncomplying manufacturer.
    (iii) A noncomplying manufacturer's share of vehicles exceeding the 
five percent cap for a given model year shall be determined by the 
following equation, where the term ``Vehicles'' means light-duty 
vehicles and light light-duty trucks sold in the NTR, but excludes 
vehicles sold by a manufacturer that has opted out of the National LEV 
program pursuant to the

[[Page 31254]]

provisions of Sec. 86.1705, pending final judicial resolution of the 
opt-out petition:

    Number of noncomplying manufacturer's Vehicles not covered by a 
certificate = ((Total number of Vehicles exceeding five-percent cap) 
x  ((number of the noncomplying manufacturer's Tier 1 Vehicles and 
TLEVs sold in the NTR in excess of five percent of its Vehicle sales in 
the NTR)/ (Sum of the numbers of each noncomplying manufacturer's Tier 
1 Vehicles and TLEVs sold in the NTR in excess of five percent of its 
Vehicle sales in the NTR))).

    (iv) EPA will determine the number of vehicles not covered by a 
certificate based on data reported by manufacturers under 
Sec. 86.1712(b), Sec. 86.085-37(b) and subsequent model year 
provisions, and other information provided to EPA by a manufacturer.
    (5) EPA will determine which vehicles were not covered by a 
certificate by designating vehicles in those engine families with the 
highest certification NMOG emission values first and continuing until a 
number of vehicles equal to the calculated number of vehicles not 
covered by a certificate as determined above is reached. If this 
calculation determines that only a portion of vehicles in an engine 
family contributes to the debit situation, then EPA will, starting with 
the last vehicle produced and counting backwards, designate actual 
vehicles in that engine family as sold without a certificate.
    (6) Low volume manufacturers are exempt from the requirements in 
this paragraph (b) and vehicles produced by low volume manufacturers 
shall not be included in calculations of industry-wide compliance under 
the provisions of this paragraph (b).
    (7) For the time period that a manufacturer has opted-out under 
Sec. 86.1705 and the validity of the opt-out is unresolved, that 
manufacturer is exempt from the requirements in this paragraph (b) and 
vehicles produced by such manufacturer shall not be included in 
calculations of industry-wide compliance under the provisions of this 
paragraph (b), regardless of EPA or a court's determination regarding 
the validity of the opt-out.


Sec. 86.1712-97  Maintenance of records; submittal of information.

    (a) Maintenance of records. (1) The manufacturer producing any 
light-duty vehicles and/or light light-duty trucks subject to the 
provisions in this subpart shall establish, maintain, and retain the 
following information in adequately organized and indexed records for 
each averaging set of each model year:
    (i) Model year;
    (ii) Averaging set;
    (iii) Fleet average NMOG value achieved; and
    (iv) All values used in calculating the fleet average NMOG value 
achieved.
    (2) The manufacturer producing any light-duty vehicles and/or light 
light-duty trucks subject to the provisions in this subpart shall 
establish, maintain, and retain the following information in adequately 
organized and indexed records for each vehicle or truck subject to this 
subpart:
    (i) Model year;
    (ii) Averaging set;
    (iii) EPA engine family;
    (iv) Assembly plant;
    (v) Vehicle identification number;
    (vi) NMOG standard to which the vehicle or truck is certified; and
    (vii) Information on the point of first sale, including the 
purchaser, city, and state.
    (3) The manufacturer shall retain all records required to be 
maintained under this section for a period of eight years from the due 
date for the annual report. Records may be retained as hard copy or 
reduced to microfilm, ADP diskettes, and so forth, depending on the 
manufacturer's record retention procedure; provided, that in every case 
all information contained in the hard copy is retained.
    (4) Nothing in this section limits the Administrator's discretion 
to require the manufacturer to retain additional records or submit 
information not specifically required by this section.
    (5) Pursuant to a request made by the Administrator, the 
manufacturer shall submit to the Administrator the information that the 
manufacturer is required to retain.
    (6) EPA may void ab initio a certificate of conformity for a 
vehicle certified to National LEV certification standards as set forth 
or otherwise referenced in Sec. 86.1708 or Sec. 86.1709 for which the 
manufacturer fails to retain the records required in this section or to 
provide such information to the Administrator upon request.
    (b) Reporting. (1) Each covered manufacturer shall submit an annual 
report. Except as provided in paragraph (b)(2) of this section, the 
annual report shall contain, for each averaging set, the fleet average 
NMOG value achieved, all values required to calculate the NMOG value, 
the number of credits generated or debits incurred, and all the values 
required to calculate the credits or debits. For each region (NTR and 
37 States), the annual report shall contain the resulting balance of 
credits or debits.
    (2) When a manufacturer calculates compliance with the fleet 
average NMOG standards using the provisions in Sec. 86.1710(a)(3)(iii) 
or Sec. 86.1710(a)(4)(iii), then the annual report shall state that the 
manufacturer has elected to use such provision and shall contain, for 
each averaging set, the fleet average NMOG values as specified in 
Sec. 86.1710(a)(3)(iii) or Sec. 86.1710(a)(4)(iii).
    (3) The annual report shall also include documentation on all 
credit transactions the manufacturer has engaged in since those 
included in the last report. Information for each transaction shall 
include:
    (i) Name of credit provider;
    (ii) Name of credit recipient;
    (iii) Date the transfer occurred;
    (iv) Quantity of credits transferred;
    (v) Model year in which the credits were earned; and
    (vi) Region (NTR or 37 States) to which the credits belong.
    (4) Unless a manufacturer reports the data required by this section 
in the annual production report required under Sec. 86.085-37(b) and 
subsequent model year provisions, a manufacturer shall submit an annual 
report for each model year after production ends for all affected 
vehicles and trucks produced by the manufacturer subject to the 
provisions of this subpart and no later than May 1 of the calendar year 
following the given model year. Annual reports shall be submitted to: 
Director, Vehicle Programs and Compliance Division, U.S. Environmental 
Protection Agency, 2565 Plymouth Road, Ann Arbor, Michigan, 48105.
    (5) Failure by a manufacturer to submit the annual report in the 
specified time period for all vehicles and trucks subject to the 
provisions in this section is a violation of section 203(a)(1) of the 
Clean Air Act for each subject vehicle and truck produced by that 
manufacturer.
    (6) If EPA or the manufacturer determines that a reporting error 
occurred on an annual report previously submitted to EPA, the 
manufacturer's credit or debit calculations will be recalculated. EPA 
may void erroneous credits, unless transferred, and shall adjust 
erroneous debits. In the case of transferred erroneous credits, EPA 
shall adjust the manufacturer's credit or debit balance to reflect the 
sale of such credits and any resulting generation of debits.
    (c) Notice of opportunity for hearing. Any voiding of the 
certificate under paragraph (a)(6) of this section will be made only 
after EPA has offered the manufacturer concerned an opportunity for a 
hearing conducted in accordance with Sec. 86.614 for light-duty 
vehicles or

[[Page 31255]]

Sec. 86.1014 for light-duty trucks and, if a manufacturer requests such 
a hearing, will be made only after an initial decision by the Presiding 
Officer.


Sec. 86.1713-97  Light-duty exhaust durability programs.

    The provisions of Sec. 86.094-13 and subsequent model year 
provisions apply to this subpart, except that: Section 86.094-13(f) and 
subsequent model year provisions does not apply to this subpart.


Sec. 86.1714-97  Small volume manufacturers certification procedures.

    The provisions of Sec. 86.096-14 and subsequent model year 
provisions apply to this subpart, except that: Section 86.096-
14(c)(7)(i)(A) and subsequent model year provisions does not apply to 
this subpart.


Sec. 86.1715-97  [Reserved]


Sec. 86.1716-97  Prohibition of defeat devices.

    (a) The provisions of Sec. 86.094-16 and subsequent model year 
provisions apply to this subpart.
    (b) In addition to the provisions of Sec. 86.094-16 and subsequent 
model year provisions, the following requirements shall apply to this 
subpart:
    (1) For each engine family certified to TLEV, LEV, or ULEV 
standards, manufacturers shall submit with the certification 
application, an engineering evaluation demonstrating that a 
discontinuity in emissions of non-methane organic gases, carbon 
monoxide, oxides of nitrogen and formaldehyde measured on the Federal 
Test Procedure (subpart B of this part) does not occur in the 
temperature range of 20 to 86 deg. F. For diesel vehicles, the 
engineering evaluation shall also include particulate emissions.
    (2) [Reserved]


Sec. 86.1717-97  Emission control diagnostic system for 1997 and later 
light-duty vehicles and light-duty trucks.

    (a) The provisions of Sec. 86.094-17 and subsequent model year 
provisions do not apply to this subpart.
    (b) The requirements in Chapter 6 of the California Regulatory 
Requirements Applicable to the National Low Emission Vehicle Program 
(October, 1996) (these requirements are incorporated by reference; see 
Sec. 86.1) apply to this subpart.
    (c) No vehicle shall be certified under the provisions of this 
subpart unless such vehicle complies with the requirements of section 
202(m)(1), (2), (4), and (5) of the Clean Air Act (42 U.S.C. 
7521(m)(1), (2), (4) and (5)).


Sec. 86.1718-97 through Sec. 86.1720-97  [Reserved]


Sec. 86.1721-97  Application for certification.

    The provisions of Sec. 86.096-21 and subsequent model year 
provisions apply to this subpart, with the following exceptions and 
additions:
    (a) The provisions of Sec. 86.096-21(b)(2) and subsequent model 
year provisions do not apply to this subpart. The following shall 
instead apply to this subpart:
    (1) For TLEVs, LEVs, and ULEVs not certified exclusively on 
gasoline, projected U.S. sales data and fuel economy data 19 months 
prior to January 1 of the calendar year with the same numerical 
designation as the model year for which the vehicles are certified, and 
projected U.S. sales data for all vehicles, regardless of operating 
fuel or vehicle emission category, sufficient to enable the 
Administrator to select a test fleet representative of the vehicles (or 
engines) for which certification is requested at the time of 
certification.
    (2) [Reserved]
    (b) For ZEVs and hybrid electric vehicles, the certification 
application shall include the following:
    (1) Identification and description of the vehicle(s) covered by the 
application.
    (2) Identification of the vehicle weight category to which the 
vehicle is certifying: LDV, LDT 0-3750 lbs LVW, LDT 3751-5750 lbs LVW 
(state test weight range), and the curb weight and gross vehicle weight 
rating of the vehicle.
    (3) Identification and description of the propulsion system for the 
vehicle.
    (4) Identification and description of the climate control system 
used on the vehicle.
    (5) Projected number of vehicles sold in the U.S., and projected 
U.S. sales.
    (6) For electric and hybrid electric vehicles, identification of 
the energy usage in kilowatt-hours per mile from the point when 
electricity is introduced from the electrical outlet and the operating 
range in miles of the vehicle when tested in accordance with the All-
Electric Range Test provisions in Sec. 86.1770.
    (7) If the vehicle is equipped with a fuel fired heater, a 
description of the control system logic of the fuel fired heater, 
including an evaluation of the conditions under which the fuel fired 
heater can be operated and an evaluation of the possible operational 
modes and conditions under which evaporative emissions can exist. 
Vehicles which utilize fuel fired heaters which can be operated at 
ambient temperatures above 40 deg. F or which cannot be demonstrated to 
have zero evaporative emissions under any and all possible operation 
modes and conditions shall not be certified as ZEVs.
    (8) For ZEVs and HEVs which use fuel fired heaters, the 
manufacturer shall provide the exhaust emissions value per mile 
produced by the auxiliary fuel fired heater. This shall be accomplished 
by determining heater emissions in grams per minute when operating at a 
maximum heating capacity for a period of 20 minutes, and multiplying 
that number by 3.6 minutes per mile. At the time of certification, 
manufacturers shall submit their test plan which describes the 
procedure used to determine the mass emissions of the fuel fired 
heater.
    (9) All information necessary for proper and safe operation of the 
vehicle, including information on the safe handling of the battery 
system, emergency procedures to follow in the event of battery leakage 
or other malfunctions that may affect the safety of the vehicle 
operator or laboratory personnel, method for determining battery state-
of-charge, battery charging capacity and recharging procedures, and any 
other relevant information as determined by the Administrator.
    (c) For all vehicles subject to the provisions of Sec. 86.1717, 
with its application for certification a description of the malfunction 
and diagnostic system to be installed on the vehicles. (The vehicles 
shall not be certified unless the Administrator finds that the 
malfunction and diagnostic system complies with the requirements of 
Sec. 86.1717.).


Sec. 86.1722-97  [Reserved]


Sec. 86.1723-97  Required data.

    The provisions of Sec. 86.096-23 and subsequent model year 
provisions apply to this subpart, with the following additions to the 
provisions of Sec. 86.096-23(c)(1) and subsequent model year 
provisions:
    (a) For all TLEVs, LEVs, and ULEVs certifying on a fuel other than 
conventional gasoline, manufacturers shall multiply the NMOG exhaust 
certification level for each emission-data vehicle by the appropriate 
reactivity adjustment factor listed in Sec. 86.1777(d)(2)(i) or 
established by the Administrator pursuant to Appendix XVII of this part 
to demonstrate compliance with the applicable NMOG emission standard. 
For all TLEVs, LEVs, and ULEVs certifying on natural gas, manufacturers 
shall multiply the NMOG exhaust certification level for each

[[Page 31256]]

emission-data vehicle by the appropriate reactivity adjustment factor 
listed in Sec. 86.1777(d)(2)(i) or established by the Administrator 
pursuant to Appendix XVII of this part and add that value to the 
product of the methane exhaust certification level for each emission-
data vehicle and the appropriate methane reactivity adjustment factor 
listed in Sec. 86.1777(d)(2)(ii) or established by the Administrator 
pursuant to Appendix XVII of this part to demonstrate compliance with 
the applicable NMOG emission standard. Manufacturers requesting to 
certify to existing standards utilizing an adjustment factor unique to 
its vehicle/fuel system must follow the data requirements described in 
Appendix XVII of this part. A separate formaldehyde exhaust 
certification level shall also be provided for demonstrating compliance 
with emission standards for formaldehyde.
    (b)(1) The manufacturer shall submit to the Administrator a 
statement that those vehicles for which certification is requested have 
driveability and performance characteristics which satisfy that 
manufacturer's customary driveability and performance requirements for 
vehicles sold in the United States. This statement shall be based on 
driveability data and other evidence showing compliance with the 
manufacturer's performance criteria. This statement shall be supplied 
with the manufacturer's final application for certification, and with 
all running changes for which emission testing is required.
    (2) If the Administrator has evidence to show that in-use vehicles 
demonstrate poor performance that could result in wide-spread tampering 
with the emission control systems, he or she may request all 
driveability data and other evidence used by the manufacturer to 
justify the performance statement.


Sec. 86.1724-97  Test vehicles and engines.

    The provisions of Sec. 86.096-24 and subsequent model year 
provisions apply to this subpart, with the following exceptions and 
additions:
    (a) The provisions of Sec. 86.096-24(a)(1) and subsequent model 
year provisions apply to this subpart, with the following addition:
    (1) All engines classified in the same engine family shall be 
certified to identical exhaust emission standards.
    (2) [Reserved]
    (b) The provisions of Sec. 86.0096-24(b) and subsequent model year 
provisions apply to this subpart with the following addition:
    (1) For TLEVs, LEVs, ULEVs, and ZEVs certifying according to the 
provisions of this subpart, a manufacturer may substitute emission data 
vehicles selected by the California Air Resources Board criteria 
instead of using the criteria specified in Sec. 86.096-24(b)(1) (i), 
(ii), and (iv) and subsequent model year provisions.
    (2) [Reserved]


Sec. 86.1725-97  Maintenance.

    The provisions of Sec. 86.094-25 and subsequent model year 
provisions apply to this subpart, with the following additions:
    (a) Hybrid electric vehicles that use Otto-cycle or diesel engines 
are subject to the applicable Otto-cycle or diesel engine maintenance 
requirements of Sec. 86.094-25 (b) through (e) and subsequent model 
year provisions.
    (b) Manufacturers of series hybrid electric vehicles and parallel 
hybrid electric vehicles shall be required to incorporate into the 
vehicles a separate odometer or other device subject to the approval of 
the Administrator that can accurately gauge the mileage accumulation on 
the engines that are used in these vehicles.
    (c)(1) The manufacturer shall equip the vehicle with a maintenance 
indicator consisting of a light that shall activate automatically by 
illuminating the first time the minimum performance level is observed 
for all battery system components. Possible battery system components 
requiring monitoring are:
    (i) Battery water level;
    (ii) Temperature control;
    (iii) Pressure control;
    (iv) Other parameters critical for determining battery condition.
    (2) The manufacturer of a hybrid electric vehicle shall equip the 
vehicle with a useful life indicator for the battery system consisting 
of a light that shall illuminate the first time the battery system is 
unable to achieve an all-electric operating range (starting from a full 
state-of-charge) that is at least 75% of the range determined for the 
vehicle in the All-Electric Range Test (see Sec. 86.1770) and submitted 
in the certification application.
    (3) Hybrid electric vehicle battery system. Manufacturers shall 
maintain the battery system according to the requirements in paragraph 
(c)(1) of this section.


Sec. 86.1726-97  Mileage and service accumulation; emission 
measurements.

    The provisions of Sec. 86.096-26 and subsequent model year 
provisions apply to this subpart, with the following exceptions and 
additions:
    (a) The provisions of Sec. 86.096-26(a)(1) and subsequent model 
year provisions do not apply to this subpart. The following shall 
instead apply to this subpart:
    (1) Section 86.096-26(a) and subsequent model year provisions 
applies to light-duty vehicles and light-duty trucks, except ZEVs which 
shall be exempt from all mileage and service accumulation, durability-
data vehicle, and emission-data vehicle testing requirements.
    (2) [Reserved]
    (b) The provisions of Sec. 86.096-26(a)(2) and subsequent model 
year provisions do not apply to this subpart. The following shall 
instead apply to this subpart:
    (1) The procedure for mileage accumulation shall be the Durability 
Driving Schedule as specified in Appendix IV of this part. A modified 
procedure (Alternative Service Accumulation Durability Program, 
Sec. 86.094-13(e) and subsequent model year provisions) may also be 
used if approved in advance by the Administrator. All light-duty 
vehicles and light-duty trucks shall accumulate mileage at a measured 
curb weight that is within 100 pounds of the estimated curb weight. If 
the vehicle weight is within 100 pounds of being included in the next 
higher inertia weight class as specified in Sec. 86.129, the 
manufacturer may elect to conduct the respective emission tests at the 
higher weight. All mileage accumulation of hybrid electric vehicles 
shall be conducted with the battery pack at the manufacturer's 
indicated lowest state-of-charge at the beginning of the test cycle. At 
no time throughout mileage accumulation shall the battery pack be 
charged using any off-board charging source.
    (2) [Reserved]
    (c) The provisions of Sec. 86.096-26(a)(3)(i) and (ii) and 
subsequent model year provisions apply to this subpart, with the 
following addition:
    (1) The Administrator will accept the manufacturer's determination 
of the mileage at which the engine-system combination is stabilized for 
emission data testing if (prior to testing) a manufacturer determines 
that the interval chosen yields emissions performance that is stable 
and representative of design intent. Sufficient mileage should be 
accumulated to reduce the possible effects of any emissions variability 
that is the result of insufficient vehicle operation. Of primary 
importance in making this determination is the behavior of the 
catalyst, EGR valve, trap oxidizer or any other part of the ECS which 
may have non-linear aging characteristics. In the alternative, the 
manufacturer may elect to accumulate

[[Page 31257]]

4,000 mile  250 mile on each test vehicle within an engine 
family without making a determination.
    (2) [Reserved]
    (d) The provisions of Sec. 86.096-26(a)(4)(i) and (ii) and 
subsequent model year provisions do not apply to this subpart. The 
following shall instead apply to this subpart:
    (1) For Otto-cycle and diesel vehicles and battery assisted 
combustion engine vehicles that use Otto-cycle or diesel engines:
    (i) Prior to initiation of mileage accumulation in a durability-
data vehicle, manufacturers must establish the mileage test interval 
for durability-data vehicle testing of the engine family. Once testing 
has begun on a durability-data vehicle, the durability test interval 
for that family may not be changed. At a minimum, multiple tests must 
be performed at 5,000 miles, 50,000 miles, and the final mileage point 
as long as they meet the requirements of Appendix XV of this part. The 
Administrator will accept durability test interval schedules determined 
by the manufacturer. The testing must provide a DF confidence level 
equal to or better than the confidence level using the former fixed 
mileage test and scheduled maintenance intervals. The procedure for 
making this determination is specified in Appendix XV of this part. The 
mileage intervals between test points must be approximately of equal 
length. The  250 mile test point tolerance and the 
requirement that tests be conducted before and after scheduled 
maintenance is still mandatory. Emission control systems for Otto-cycle 
engines that have step function changes designed into the control 
system must use the 5,000 mile test interval schedule.
    (ii) Testing before and after scheduled (or unscheduled) 
maintenance points must be conducted, and these data are to be included 
in the deterioration factor calculation. Testing before unscheduled 
maintenance may be omitted with the prior consent of the Administrator 
when testing would be dangerous to a vehicle or an operator. The number 
of tests before and after scheduled maintenance and the mileage 
intervals between test points should be approximately equal. Durability 
test interval schedules with multiple testing at test points within 
10,000 miles of or at the 50,000 mile and the final mileage test point 
must be submitted for approval. Multiple testing at maintenance mileage 
tests points within 10,000 miles of the 50,000 mile and the final 
mileage test points may be approved if it can be demonstrated by 
previously generated data that the emission effects of the maintenance 
are insignificant.
    (iii) For engine families that are to be certified to the full 
useful life emission standards, each exhaust emission durability-data 
vehicle shall be driven with all emission control systems installed and 
operating, for the full useful life or such lesser distance as the 
Administrator may agree to as meeting the objective of this procedure. 
Durability tests shall be at every 5,000 miles, from 5,000 miles to the 
full useful life, however, the above procedures may be used to 
determine alternate test intervals subject to the following:
    (A) For engine families that are to be certified to the full useful 
life emission standards, durability vehicles may accumulate less than 
the full useful life if the manufacturer submits other data or 
information sufficient to demonstrate that the vehicle is capable of 
meeting the applicable emission standards for the full useful life. At 
a minimum, 75% of the full useful life shall be accumulated.
    (B) For the purpose of conducting mileage accumulation on light-
duty hybrid electric vehicles, the full useful life of the auxiliary 
power unit shall be defined as 50,000 miles for a Type A hybrid 
electric vehicle, 75,000 miles for a Type B hybrid electric vehicle, 
and 100,000 miles for a Type C hybrid electric vehicle.
    (iv) Alternative durability plans may also be used if the 
manufacturer provides a demonstration that the alternative plan 
provides equal or greater confidence that the vehicles will comply in-
use with the emission standards. All alternative durability plans are 
subject to approval in advance by the Administrator.
    (2) For diesel vehicles equipped with periodically regenerating 
trap oxidizer systems, at least four regeneration emission tests (see 
Secs. 86.106 through 86.145) shall be made. The pollutant mass emission 
calculation procedures for vehicles equipped with periodically 
regenerating trap oxidizer systems are included in Appendix XVI of this 
part. With the advance approval of the Administrator, the manufacturer 
may install: A manual override switch capable of preventing (i.e., 
delaying until the switch is turned off) the start of the regeneration 
process; and a light which indicates when the system would initiate 
regeneration if it had no override switch. Upon activation of the 
override switch the vehicle will be operated on a dynamometer to 
precondition it for the regeneration emission test in accordance with 
Secs. 86.132 and 86.1772. The Urban Dynamometer Driving Schedule (UDDS) 
that is in progress at the time when the light comes on shall be 
completed and the vehicle shall proceed to the prescribed soak period 
followed by testing. With the advance approval of the Administrator, 
the manual override switch will be turned off at some predetermined 
point in the testing sequence, permitting the regeneration process to 
proceed without further manual interaction. The mileage intervals 
between test points shall be approximately equal. The first 
regeneration emission test shall be made at the 5,000 mile point. The 
regeneration emission tests must provide a deterioration factor 
confidence level equal to or better than the confidence level achieved 
by performing regeneration emission tests at the following mileage 
points: 5,000; 25,000; 50,000; 75,000; and 100,000. The procedure for 
making this determination is shown in Appendix XV of this part.
    (3) For gasoline-, gaseous-, and alcohol-fueled vehicles that are 
certified by a whole-vehicle durability protocol, the specified 
evaporative durability test points are at 5,000, 40,000, 75,000, and 
100,000 miles. These requirements are also applicable to hybrid 
electric vehicles. With the exception of flexible-fuel vehicles, a 
manufacturer may conduct evaporative testing at test points used for 
exhaust emission durability testing, provided that the same 
deterioration confidence level for the evaporative emission DF 
determination is retained (see Appendix XIV of this part).
    (4) For flexible-fuel vehicles certifying to TLEV, LEV, or ULEV 
standards, the test schedule shall include exhaust emission tests at 
5,000 miles, 10,000 miles, and every 10,000 miles thereafter to the 
final mileage point using M85 or E85 and certification gasoline. For 
all flexible-fuel vehicles, if evaporative emission testing is 
conducted, exhaust and evaporative emission tests shall also be 
conducted using M35 or E10, or another approved fuel, at the mileage 
points where M85 or E85 testing is conducted. The results of these 
exhaust and evaporative emission tests will be used by the 
Administrator to evaluate the vehicle's emission control deterioration 
with various fuels (M85, M35, and unleaded gasoline; See fuel 
specifications in Sec. 86.1771). Only the M85 or E85 and certification 
gasoline exhaust emission results and the M35 or E10 evaporative 
emission results will be used to determine applicable exhaust and 
evaporative emission deterioration factors, respectively, as required 
in Sec. 86.1728 (Compliance with Emission Standards).
    (e) The provisions of Sec. 86.096-26(a)(5)(i) and subsequent model 
year

[[Page 31258]]

provisions apply to this subpart, with the following addition:
    (1) In addition, the emission tests performed on emission-data 
vehicles and durability-data vehicles shall be non-regeneration 
emission tests for diesel light-duty vehicles and light-duty trucks 
equipped with periodically regenerating trap oxidizer systems. For any 
of these vehicles equipped with continually regenerating trap oxidizer 
systems, manufacturers may use the provisions applicable to 
periodically regenerating trap oxidizer systems as an option. If such 
an option is elected, all references in these procedures to vehicles 
equipped with periodically regenerating trap oxidizer systems shall be 
applicable to the vehicles equipped with continually regenerating trap 
oxidizer systems.
    (2) [Reserved]
    (f) The provisions of Sec. 86.096-26(a)(8) and subsequent model 
year provisions do not apply to this subpart. The following shall 
instead apply to this subpart:
    (1) Once a manufacturer submits the information required in 
Sec. 86.096-26(a)(7) and subsequent model year provisions for a 
durability-data vehicle, the manufacturer shall continue to run the 
vehicle to 50,000 miles if the family is certified to 50,000 mile 
emission standards or to the full useful life if it is certified to 
emission standards beyond 50,000 miles (or to a lesser distance that 
the Administrator may have previously agreed to), and the data from the 
vehicle will be used in the calculations under Sec. 86.094-28 and 
subsequent model year provisions. Discontinuation of a durability-data 
vehicle shall be allowed only with the consent of the Administrator.
    (2) [Reserved]
    (g) The provisions of Sec. 86.096-26(b) and subsequent model year 
provisions do not apply to this subpart.
    (h)(1) The exhaust emissions shall be measured from all exhaust 
emission data vehicles tested in accordance with the federal Highway 
Fuel Economy Test (HWFET; 40 CFR part 600, subpart B). The oxides of 
nitrogen emissions measured during such tests shall be multiplied by 
the oxides of nitrogen deterioration factor computed in accordance with 
Sec. 86.094-28 and subsequent model year provisions, and then rounded 
and compared with the applicable emission standard in Secs. 86.1708 and 
86.1709. All data obtained pursuant to this paragraph (h)(1) shall be 
reported in accordance with procedures applicable to other exhaust 
emissions data required pursuant to these procedures. Hybrid electric 
vehicles shall be tested with the battery state-of-charge set such that 
one of the following two conditions is satisfied:
    (i) The state-of-charge is at the lowest level allowed by the 
control unit of the auxiliary power unit; or
    (ii) The state-of-charge is set such that auxiliary power unit 
operation will be at its maximum level at the beginning and throughout 
the emission test.
    (2) In the event that one or more of the manufacturer's emission 
data vehicles fail the applicable HWFET standard in Secs. 86.1708 and 
86.1709, the manufacturer may submit to the Administrator engineering 
data or other evidence showing that the system is capable of complying 
with the standard. If the Administrator finds, on the basis of an 
engineering evaluation, that the system can comply with the HWFET 
standard, he or she may accept the information supplied by the 
manufacturer in lieu of vehicle test data.


Sec. 86.1727-97  [Reserved]


Sec. 86.1728-97  Compliance with emission standards.

    The provisions of Sec. 86.094-28 and subsequent model year 
provisions apply to this subpart, with the following exceptions and 
additions:
    (a) The provisions of Sec. 86.094-28(a)(1) and subsequent model 
year provisions do not apply to this subpart. The following shall 
instead apply to this subpart:
    (1) The provisions of Sec. 86.094-28(a) and subsequent model year 
provisions apply to light-duty vehicles and light light-duty trucks, 
except ZEVs.
    (2) [Reserved]
    (b) The provisions of Sec. 86.094-28(a)(4)(i) and subsequent model 
year provisions do not apply to this subpart. The following shall 
instead apply to this subpart:
    (1) Separate emission deterioration factors shall be determined 
from the exhaust emission results of the durability-data vehicle(s) for 
each engine-system combination. A separate factor shall be established 
for exhaust HC (non-alcohol vehicles, non-TLEVs, non-LEVs, and non-
ULEVs), exhaust OMHCE or OMNMHCE (alcohol vehicles that are not TLEVs, 
LEVs, or ULEVs), exhaust NMOG (all TLEVs, LEVs, ULEVs), exhaust 
formaldehyde (alcohol vehicles, TLEVs, LEVs, ULEVs), exhaust CO, 
exhaust NOX, and exhaust particulate (diesel vehicles only) 
for each engine-system combination. A separate evaporative emission 
deterioration factor shall be determined for each evaporative emission 
family-evaporative emission control system combination from the testing 
conducted by the manufacturer (gasoline- and alcohol-fueled vehicles 
only). Separate emission correction factors (diesel light-duty vehicles 
and light-duty trucks equipped with periodically regenerating trap 
oxidizer systems only) shall be determined from the exhaust emission 
results of the durability-data vehicle(s) for each engine-system 
combination. A separate factor shall be established for exhaust HC 
(non-alcohol vehicles, non-TLEVs, non-LEVs, and non-ULEVs), exhaust 
OMHCE or OMNMHCE (alcohol vehicles that are not TLEVs, LEVs, or ULEVs), 
exhaust NMOG (TLEVs, LEVs, ULEVs), exhaust CO, exhaust NOX, 
and exhaust particulate for each engine-system combination.
    (2) [Reserved]
    (c) The provisions of Sec. 86.094-28(a)(4)(i)(A)(4) and subsequent 
model year provisions do not apply to this subpart. The following shall 
instead apply to this subpart:
    (1) The manufacturer must use the outlier identification procedure 
set forth in Appendix VIII of this part to test for irregular data from 
a durability-data set. If any data point is identified as a statistical 
outlier, the Administrator shall determine, on the basis of an 
engineering analysis of the causes of the outlier submitted by the 
manufacturer, whether the outlier is to be rejected. The outlier shall 
be rejected only if the Administrator determines that the outlier does 
not reflect representative characteristics of the emission control 
system, i.e., the outlier is a result of an emission control system 
anomaly, test procedure error, or an extraordinary circumstance not 
expected to recur. Only the identified outlier shall be eliminated; 
other data at that test point (i.e., data for other pollutants) shall 
not be eliminated unless the Administrator determines, based on the 
engineering analysis, that they also do not reflect representative 
characteristics of the emission control system. Where the manufacturer 
chooses to apply both the outlier procedure and averaging to the same 
data set, the outlier procedure shall be completed prior to applying 
the averaging procedure. All durability test data, including any 
outliers and the manufacturer's engineering analysis, shall be 
submitted with the final application.
    (2) [Reserved]
    (d) The provisions of Sec. 86.094-28(a)(4)(i)(B) and subsequent 
model year provisions do not apply to this subpart. The following shall 
instead apply to this subpart:
    (1) All applicable exhaust emission results shall be plotted as a 
function of the mileage on the system, rounded to the nearest mile, and 
the best fit straight

[[Page 31259]]

lines, fitted by the method of least squares, shall be drawn through 
all these data points. The emission data will be acceptable for use in 
the calculation of the deterioration factor only if the interpolated 
4,000-mile, 50,000-mile, and full useful life points on this line are 
within the applicable emission standards in Secs. 86.1708 and 86.1709. 
For hybrid electric vehicles, the emission data will be acceptable for 
use in the calculation of the deterioration factor only if the engine 
mileage points corresponding to the interpolated 4,000 mile, 50,000 
mile, and full useful life points of the vehicle on this line are 
within the applicable emission standards in Secs. 86.1708 and 86.1709. 
The engine mileage points shall be determined based on the test 
schedule submitted to the Administrator as required in Sec. 86.096-26. 
As an exception, the Administrator will review the data on a case-by-
case basis and may approve its use in those instances where the best 
fit straight line crosses an applicable standard but no data point 
exceeds the standard or when the best fit straight line crosses the 
applicable standard at the 4,000-mile point but the 5,000-mile actual 
test point and the 50,000 mile and full useful life interpolated points 
are both below the standards. A multiplicative exhaust emission 
deterioration factor shall be calculated for each engine system 
combination as follows:
    (i) For engine families certified to 50,000 mile emissions 
standards:

Factor=Exhaust emissions interpolated to 50,000 miles divided by 
exhaust emissions interpolated to 4,000 miles.

    (ii) For engine families certified to full useful life emissions 
standards beyond 50,000 miles:

Factor = Exhaust emissions interpolated to the full useful life 
divided by exhaust emissions interpolated to 4,000 miles.

    (2) [Reserved]
    (e) The following requirements shall be in addition to the 
provisions of Sec. 86.094-28(a)(4) and subsequent model year 
provisions:
    (1)(i) The regeneration exhaust emission data (diesel light-duty 
vehicles and light-duty trucks equipped with periodically regenerating 
trap oxidizer systems only) from the tests required under Sec. 86.096-
26(a)(4) and subsequent model year provisions shall be used to 
determine the regeneration exhaust emissions interpolated to the 
50,000-mile point. The regeneration exhaust emission results shall be 
plotted as a function of the mileage on the system, rounded to the 
nearest mile, and the best fit straight lines, fitted by the method of 
least squares, shall be drawn through all these data points. The 
interpolated 50,000-mile point of this line shall be used to calculate 
the multiplicative exhaust emission correction factor for each engine-
system combination as follows: 
[GRAPHIC] [TIFF OMITTED] TR06JN97.000

where:

R = the ratio of the regeneration exhaust emissions interpolated to 
50,000 miles to the non-regeneration exhaust emissions interpolated to 
50,000 miles.
n = the number of complete regenerations which occur during the 
durability test.

    (ii) The interpolated values determined in paragraph (e)(1)(i) of 
this section shall be carried out to a minimum of four places to the 
right of the decimal point before dividing one by the other to 
determine the correction factor. The results shall be rounded to three 
places to the right of the decimal point in accordance with the 
Rounding-Off Method specified in ASTM E 29-90, Standard Practice for 
Using Significant Digits in Test Data to Determine Conformance with 
Specifications (incorporated by reference; see Sec. 86.1). For 
applicability to gaseous emission standards under the 100,000 mile 
option, R will be determined based upon projected 100,000 mile 
emissions.
    (2) [Reserved]
    (f) The provisions of Sec. 86.094-28(a)(4)(ii)(A) and subsequent 
model year provisions do not apply to this subpart. The following shall 
instead apply to this subpart:
    (1) The official exhaust emission test results for each emission-
data vehicle at the 4,000 mile test point shall be multiplied by the 
appropriate deterioration factor, and correction factor (diesel light-
duty vehicles and light-duty trucks equipped with periodically 
regenerating trap oxidizer systems only): Provided: that if a 
deterioration factor as computed in Sec. 86.094-28(a)(4)(i)(B) and 
subsequent model year provisions or a correction factor as computed in 
paragraph (e) of this section is less than one, that deterioration 
factor or correction factor shall be one for the purposes of this 
paragraph (f).
    (2) [Reserved]
    (g) The provisions of Sec. 86.094-28(a)(4)(iii) and subsequent 
model year provisions do not apply to this subpart. The following shall 
instead apply to this subpart:
    (1) The emissions to compare with the standard (or the family 
particulate emission limit, as appropriate) shall be the adjusted 
emissions of Sec. 86.094-28(a)(4)(ii)(A) and (B) and subsequent model 
year provisions for each emission-data vehicle. Before any emission 
value is compared with the standard (or the family particulate limit, 
as appropriate), it shall be rounded to one significant figure beyond 
the number of significant figures contained in the standard (or the 
family particulate emission limit, as appropriate) in accordance with 
the Rounding-Off Method specified in ASTM E 29-90, Standard Practice 
for Using Significant Digits in Test Data to Determine Conformance with 
Specifications (incorporated by reference; see Sec. 86.1). The rounded 
emission values may not exceed the standard (or the family particulate 
emission limit, as appropriate). Fleet average NMOG value calculations 
shall be rounded to four significant figures in accordance with the 
Rounding-Off Method specified in ASTM E 29-90, Standard Practice for 
Using Significant Digits in Test Data to Determine Conformance with 
Specifications (incorporated by reference; see Sec. 86.1) before 
comparing with fleet average NMOG requirements.
    (2) [Reserved]
    (h) The provisions of Sec. 86.094-28(b) and subsequent model year 
provisions do not apply to this subpart.


Sec. 86.1729-97 through Sec. 86.1733-97  [Reserved]


Sec. 86.1734-97  Alternative procedure for notification of additions 
and changes.

    The provisions of Sec. 86.082-34 and subsequent model year 
provisions apply to this subpart, with the following exceptions and 
additions:
    (a) The provisions of Sec. 86.082-34(a) and subsequent model year 
provisions apply to this subpart, with the following addition:
    (1) A manufacturer must notify the Administrator within 10 working 
days of making an addition of a vehicle to a certified engine family or 
a change in a vehicle previously covered by certification. The 
manufacturer shall also submit, upon request of the Administrator, the 
following items:
    (i) service bulletin;
    (ii) driveability statement;
    (iii) test log;
    (iv) maintenance log.
    (2) All running changes and field fixes that do not adversely 
affect the system durability are deemed approved unless disapproved by 
the Administrator within 30 days of the receipt of the running change 
or field fix request. A change not specifically identified in the 
manufacturer's application must also be reported to the Administrator 
if the

[[Page 31260]]

change may adversely affect engine or emission control system 
durability. Examples of such changes include any change that could 
affect durability, thermal characteristics, deposit formation, or 
exhaust product composition, i.e., combustion chamber design, cylinder 
head material, camshaft profile, computer modifications, turbocharger, 
intercooler wastegate characteristics, and transmission or torque 
converter specifications. The manufacturer is required to update and 
submit to the Administrator the ``supplemental data sheet'' for all 
running changes and field fixes implemented with the change 
notification. The manufacturer shall submit, on a monthly basis, by 
engine family, a list of running changes/field fixes giving the 
document number date submitted and a brief description of the change.
    (b) [Reserved]


Sec. 86.1735-97  Labeling.

    The following requirements shall apply to TLEVs, LEVs, ULEVs, and 
ZEVs certified under the provisions of this subpart:
    (a) The requirements in Sec. 86.096-35 and subsequent model year 
provisions do not apply to this section.
    (b) The requirements in Chapter 7 of the California Regulatory 
Requirements Applicable to the National Low Emission Vehicle Program 
(October, 1996) shall apply. These requirements are incorporated by 
reference (see Sec. 86.1).


Sec. 86.1736-97 through Sec. 86.1769-97  [Reserved]


Sec. 86.1770-97  All-Electric Range Test requirements.

    (a) ZEVs and Type A and Type B hybrid electric vehicles shall be 
subject to the All-Electric Range Test specified below for the purpose 
of determining the energy efficiency and operating range of a ZEV or of 
a hybrid electric vehicle operating without the use of its auxiliary 
power unit. For hybrid electric vehicles, the manufacturer may elect to 
conduct the All-Electric Range Test prior to vehicle preconditioning in 
the exhaust and evaporative emission test sequence specified in subpart 
B of this part.
    (1) Cold soak. The vehicle shall be stored at an ambient 
temperature not less than 68 deg. F (20 deg. C) and not more than 
86 deg. F (30 deg. C) for 12 to 36 hours. During this time, the 
vehicle's battery shall be charged to a full state-of-charge.
    (2) Driving schedule. At the end of the cold soak period, the 
vehicle shall be placed, either driven or pushed, onto a dynamometer 
and operated through a Highway Fuel Economy Driving Schedule, found in 
40 CFR part 600, Appendix I, followed immediately by an Urban 
Dynamometer Driving Schedule, found in Appendix I of this part 86, 
followed by another Highway Fuel Economy Driving Schedule and an Urban 
Dynamometer Driving Schedule. This sequence of driving schedules shall 
be repeated until the vehicle is no longer able to maintain within 5 
miles per hour of the speed requirements or within 2 seconds of the 
time requirements of the driving schedules in the case of a ZEV, or 
unable to maintain within 5 miles per hour of the speed requirements or 
within 2 seconds of the time requirement of the driving schedules 
without the use of the auxiliary power unit in the case of a hybrid 
electric vehicle.
    (3) Recording requirements. Once the vehicle is no longer able to 
maintain the speed and time requirements specified in paragraph (a)(2) 
of this section, or once the auxiliary power unit turns on, in the case 
of a hybrid electric vehicle, the accumulated mileage and energy usage 
of the vehicle from the point where electricity is introduced from the 
electrical outlet shall be recorded, and the vehicle shall be brought 
to an immediate stop, thereby concluding the All-Electric Range Test.
    (4) Regenerative braking. Regenerative braking systems may be 
utilized during the range test. The braking level, if adjustable, shall 
be set according to the manufacturer's specifications prior to the 
commencement of the test. The driving schedule speed and time 
tolerances specified in paragraph (a)(2) of this section shall not be 
exceeded due to the operation of the regenerative braking system.
    (b) [Reserved]


Sec. 86.1771-97  Fuel specifications.

    (a) The provisions of Sec. 86.113 apply to this subpart, with the 
following exceptions and additions.
    (1) For light-duty vehicles and light light-duty trucks, gasoline 
having the specifications listed below may be used in exhaust emission 
testing as an option to the specifications in Sec. 86.113(a)(1). If a 
manufacturer elects to utilize this option, exhaust emission testing 
shall be conducted by the manufacturer with gasoline having the 
specifications listed in the table in this paragraph (a)(1), and the 
Administrator shall conduct exhaust emission testing with gasoline 
having the specifications listed in the table in this paragraph (a)(1). 
Specifications for non-gasoline fuels and all fuel property test 
methods are contained in Chapter 4 of the California Regulatory 
Requirements Applicable to the National Low Emission Vehicle Program 
(October, 1996). These requirements are incorporated by reference (see 
Sec. 86.1). The table follows:

------------------------------------------------------------------------
               Fuel property                            Limit           
------------------------------------------------------------------------
Octane, (R+M)/2 (min).....................  91.                         
Sensitivity (min).........................  7.5.                        
Lead, g/gal (max) (No lead added).........  0-0.01                      
Distillation Range,  deg.F................  ............................
10 pct. point,............................  130-150.                    
50 pct. point,............................  200-210.                    
90 pct. point,............................  290-300.                    
EP, maximum...............................  390.                        
Residue, vol % (max)......................  2.0.                        
Sulfur, ppm by wt.........................  30-40.                      
Phosphorous, g/gal (max)..................  0.005.                      
RVP, psi..................................  6.7-7.0.                    
Olefins, vol %............................  4.0-6.0.                    
Total Aromatic Hydrocarbons (vol %).......  22-25.                      
Benzene, vol %............................  0.8-1.0.                    
Multi-Substituted Alkyl Aromatic            12-14.                      
 Hydrocarbons, vol %.                                                   
MTBE, vol %...............................  10.8-11.2.                  
Additives.................................  See Chapter 4 of the        
                                             California Regulatory      
                                             Requirements Applicable to 
                                             the National Low Emission  
                                             Vehicle Program (October,  
                                             1996). These procedures are
                                             incorporated by reference  
                                             (see Sec.  86.1).          
Copper Corrosion..........................  No. 1.                      
Gum, Washed, mg/100 ml (max)..............  3.0.                        
Oxidation Stability, minutes (min)........  1,000.                      
Specific Gravity..........................  No limit; report to         
                                             purchaser required.        
Heat of Combustion........................  No limit; report to         
                                             purchaser required.        
Carbon, wt %..............................  No limit; report to         
                                             purchaser required.        
Hydrogen, wt %............................  No limit; report to         
                                             purchaser required.        
------------------------------------------------------------------------

    (2) [Reserved]
    (b) [Reserved]


Sec. 86.1772-97  Road load power test weight and inertia weight class 
determination.

    (a) The provisions of Sec. 86.129 apply to this subpart.
    (b) The following requirements shall also apply to this subpart:
    (1) For electric and hybrid electric vehicle lines where it is 
expected that more than 33 percent of a vehicle line will be equipped 
with air conditioning, per Sec. 86.096-24(g)(2), that derives power 
from the battery pack, the road load shall be increased by the 
incremental horsepower required to operate the air conditioning unit. 
The

[[Page 31261]]

incremental increase shall be determined by recording the difference in 
energy required for a hybrid electric vehicle under all-electric power 
to complete the running loss test fuel tank temperature profile test 
sequence without air conditioning and the same vehicle tested over the 
running loss test fuel tank temperature profile test sequence with the 
air conditioning set to the ``NORMAL'' air conditioning mode and 
adjusted to the minimum discharge air temperature and high fan speed 
over the time period needed to perform the test sequence, and 
converting this value into units of horsepower. Vehicles equipped with 
automatic temperature controlled air conditioning systems shall be 
operated in ``AUTOMATIC'' temperature and fan modes with the system set 
at 72 deg. F. The running loss test fuel tank temperature profile test 
sequence is found in Sec. 86.129(d).
    (2) [Reserved]


Sec. 86.1773-97  Test sequence; general requirements.

    (a) The provisions of Sec. 86.130 apply to this subpart.
    (b) The following additional requirements shall also apply to this 
subpart:
    (1) For purposes of determining conformity with 50 deg. F test 
requirements, the procedures set forth in paragraph (c) of this section 
shall apply. For all hybrid electric vehicles and all 1995 and 
subsequent model-year vehicles certifying to running loss and useful 
life evaporative emission standards, the test sequence specified in 
subpart B of this part shall apply.
    (2) [Reserved]
    (c)(1) Following a 12 to 36 hour cold soak at a nominal temperature 
of 50 deg. F, emissions of CO and NOX measured on the 
Federal Test Procedure (subpart B of this part), conducted at a nominal 
test temperature of 50 deg. F, shall not exceed the standards for 
vehicles of the same emission category and vehicle type subject to a 
cold soak and emission test at 68 to 86 deg. F. For all TLEVs, 
emissions of NMOG and formaldehyde at 50 deg. F shall not exceed the 
50,000 mile certification standard multiplied by a factor of 2.0. For 
all LEVs, emissions of NMOG and formaldehyde at 50 deg. F shall not 
exceed the 50,000 mile certification standard multiplied by a factor of 
2.0. For all ULEVs, emissions of NMOG and formaldehyde at 50 deg. F 
shall not exceed the 50,000 mile certification standard multiplied by a 
factor of 2.0. Emissions of NMOG shall be multiplied by a reactivity 
adjustment factor, if any, prior to comparing with the 50,000 
certification standard multiplied by the specified factor. The test 
vehicles shall not be subject to a diurnal heat build prior to the cold 
start exhaust test or evaporative emission testing.
    (i) For the 50 deg. F emission test, the nominal preconditioning, 
soak, and test temperatures shall be maintained within 3 deg. F of the 
nominal temperature on an average basis and within 5 deg. F of the 
nominal temperature on a continuous basis. The temperature shall be 
sampled at least once every 15 seconds during the preconditioning and 
test periods and at least once each 5 minutes during the soak period. A 
continuous strip chart recording of the temperature with these minimum 
time resolutions is an acceptable alternative to employing a data 
acquisition system.
    (ii) The test site temperature shall be measured at the inlet of 
the vehicle cooling fan used for testing.
    (iii) The test vehicle may be fueled before the preconditioning 
procedure in a fueling area maintained within a temperature range of 68 
to 86 deg. F. The preconditioning shall be conducted at a nominal 
temperature of 50 deg. F. The requirement to saturate the evaporative 
control canister(s) shall not apply.
    (iv) If a soak area remote from the test site is used, the vehicle 
may pass through an area maintained within a temperature range of 68 to 
86 deg. F during a time interval not to exceed 10 minutes. In such 
cases, the vehicle shall be restabilized to 50 deg. F by soaking the 
vehicle in the nominal 50 deg. F test area for six times as long as the 
exposure time to the higher temperature area, prior to starting the 
emission test.
    (v) The vehicle shall be approximately level during all phases of 
the test sequence to prevent abnormal fuel distribution.
    (2) Manufacturers shall demonstrate compliance with this 
requirement each year by testing at least three LDV or LDT emission 
data and/or engineering development vehicles (with at least 4000 miles) 
which are representative of the array of technologies available in that 
model year. Only TLEVs, LEVs, and ULEVs are to be considered for 
testing at 50  deg.F. It is not necessary to apply deterioration 
factors (DFs) to the 50  deg.F test results to comply with this 
requirement. Testing at 50  deg.F shall not be required for fuel-
flexible and dual-fuel vehicles when operating on gasoline. Natural 
gas, hybrid electric and diesel-fueled vehicles shall also be exempt 
from 50  deg.F testing.
    (3) The following schedule outlines the parameters to be considered 
for vehicle selection:
    (i) Fuel control system (e.g., multiport fuel injection, throttle 
body electronic fuel injection, sequential multiport electronic fuel 
injection, etc.);
    (ii) Catalyst system (e.g., electrically heated catalyst, close-
coupled catalyst, underfloor catalyst, etc.);
    (iii) Control system type (e.g., mass-air flow, speed density, 
etc.);
    (iv) Vehicle category (e.g., TLEV, LEV, ULEV);
    (v) Fuel type (e.g., gasoline, methanol, etc.).
    (4) The same engine family shall not be selected in the succeeding 
two years unless the manufacturer produces fewer than three engine 
families. If the manufacturer produces more than three TLEV, LEV, or 
ULEV engine families per model year, the Administrator may request 50 
deg.F testing of specific engine families. If the manufacturer provides 
a list of the TLEV, LEV, and ULEV engine families that it will certify 
for a model year and provides a description of the technologies used on 
each engine family (including the vehicle selection parameters 
information in paragraphs (c)(3) (i) through (v) of this section), the 
Administrator shall select the engine families subject to 50  deg.F 
testing within a 30 day period after receiving such a list and 
description. The Administrator may revise the engine families selected 
after the 30 day period if the information provided by the manufacturer 
does not accurately reflect the engine families actually certified by 
the manufacturer.
    (5) For the purposes of this section, the Administrator will accept 
vehicles selected and tested in accordance with the 50  deg.F testing 
procedures specified by the California Air Resources Board.


Sec. 86.1774-97  Vehicle preconditioning.

    The provisions of Sec. 86.132 apply to this subpart, with the 
following exceptions and additions:
    (a) The provisions of Sec. 86.132 (a) through (e) apply to this 
subpart, with the following additional requirements:
    (1) The UDDS performed prior to a non-regeneration emission test 
shall not contain a regeneration (diesel light-duty vehicles and light-
duty trucks equipped with periodically regenerating trap oxidizer 
systems only). A gasoline fueled test vehicle may not be used to set 
dynamometer horsepower.
    (2) [Reserved]
    (b) [Reserved]


Sec. 86.1775-97  Exhaust sample analysis.

    The following requirements shall apply to TLEVs, LEVs, ULEVs, and 
ZEVs certified under the provisions of this subpart:
    (a) The requirements in Sec. 86.140;
    (b) The requirements in Chapter 5 of the California Regulatory 
Requirements

[[Page 31262]]

Applicable to the National Low Emission Vehicle Program (October, 
1996). These requirements are incorporated by reference (see 
Sec. 86.1).


Sec. 86.1776-97  Records required.

    (a) The provisions of Sec. 86.142 apply to this subpart.
    (b) In addition to the provisions of Sec. 86.142, the following 
provisions apply to this subpart:
    (1) The manufacturer shall record in the durability-data vehicle 
logbook, the number of regenerations that occur during the 50,000 mile 
durability test of each diesel light-duty vehicle and light-duty truck 
equipped with a periodically regenerating trap oxidizer system. The 
manufacturer shall include, for each regeneration: the date and time of 
the start of regeneration, the duration of the regeneration, and the 
accumulated mileage at the start and the end of regeneration. The 
number of regenerations will be used in the calculation of the 
correction factor in Sec. 86.096-28 and subsequent model year 
provisions.
    (2) The requirements in Chapter 5 of the California Regulatory 
Requirements Applicable to the National Low Emission Vehicle Program 
(October, 1996). These requirements are incorporated by reference (see 
Sec. 86.1).
    (3) For additional record requirements see Secs. 86.1770, 86.1771, 
86.1772, 86.1773, 86.1774, and 86.1777.


Sec. 86.1777-97  Calculations; exhaust emissions.

    The provisions of Sec. 86.144 apply to this subpart, with the 
following exceptions and additions:
    (a) The provisions of Sec. 86.144(b) apply to this subpart, with 
the following additional requirement:
    (1) Organic material non-methane hydrocarbon equivalent mass for 
ethanol vehicles:
    OMNMHCEmass=NMHCmass+(13.8756/
32.042) x (CH3OH)mass+(13.8756/
46.064) x (CH3CH2OH)mass+(13.8756/
30.0262) x (HCHO)mass+(13.8756/
44.048) x (CH3CHO)mass
    (2) [Reserved]
    (b) The requirements in Chapter 5 of the California Regulatory 
Requirements Applicable to the National Low Emission Vehicle Program 
(October, 1996) apply to this subpart. These requirements are 
incorporated by reference (see Sec. 86.1).
    (c) The provisions in Appendix XV of this part and Appendix XVI of 
this part apply to this subpart.
    (d) Reactivity adjustment factors. (1) For the purpose of complying 
with the NMOG exhaust emission standards in Secs. 86.1708 and 86.1709, 
the mass of NMOG emissions from a vehicle certified to operate on a 
fuel other than conventional gasoline, including fuel-flexible and 
dual-fuel vehicles when operated on a fuel other than conventional 
gasoline, shall be multiplied by the reactivity adjustment factor 
applicable to the vehicle emission control technology category and 
fuel. The product of the NMOG mass emission value and the reactivity 
adjustment factor shall be compared to the NMOG exhaust emission 
standards to determine compliance with the standards. In addition to 
the above requirements, vehicles operating on natural gas shall add to 
the product of the NMOG mass emission value and the reactivity 
adjustment factor, the product of the methane mass emission value and 
the methane reactivity adjustment factor. This result shall be compared 
to the NMOG exhaust emission standards to determine compliance with the 
standards for natural gas-fueled vehicles.
    (2) The following reactivity adjustment factors have been 
established pursuant to the criteria in Appendix XVII of this part:
    (i) Light-duty vehicles and light-duty trucks:

------------------------------------------------------------------------
                                                              Reactivity
     Vehicle emission control                Fuel             adjustment
       technology category                                      factor  
------------------------------------------------------------------------
TLEVs............................  85% methanol, 15%                0.41
                                    gasoline blends.                    
LEVs and ULEVs through model year  85% methanol, 15%                0.41
 2000.                              gasoline blends.                    
TLEVs through model year 2000....  Gasoline meeting the             0.98
                                    specifications of Sec.              
                                    86.1771(a)(1).                      
LEVs and ULEVs through model year  Gasoline meeting the             0.94
 2000.                              specifications of Sec.              
                                    86.1771(a)(1).                      
TLEVs through model year 2000....  Fuel meeting the                 1.00
                                    specifications for                  
                                    liquefied petroleum gas             
                                    specified in Chapter 4              
                                    of the California                   
                                    Regulatory Requirements             
                                    Applicable to the                   
                                    National Low Emission               
                                    Vehicle Program                     
                                    (October, 1996).                    
LEVs and ULEVs through model year  Fuel meeting the                 0.50
 2000.                              specifications for                  
                                    liquefied petroleum gas             
                                    specified in Chapter 4              
                                    of the California                   
                                    Regulatory Requirements             
                                    Applicable to the                   
                                    National Low Emission               
                                    Vehicle Program                     
                                    (October, 1996).                    
TLEVs through model year 2000....  Fuel meeting the                 1.00
                                    specifications for                  
                                    natural gas specified               
                                    in Chapter 4 of the                 
                                    California Regulatory               
                                    Requirements Applicable             
                                    to the National Low                 
                                    Emission Vehicle                    
                                    Program (October, 1996).            
LEVs and ULEVs through model year  Fuel meeting the                 0.43
 2000.                              specifications for                  
                                    natural gas specified               
                                    in Chapter 4 of the                 
                                    California Regulatory               
                                    Requirements Applicable             
                                    to the National Low                 
                                    Emission Vehicle                    
                                    Program (October, 1996).            
------------------------------------------------------------------------

    (ii) Natural gas light-duty vehicles and light-duty trucks:

------------------------------------------------------------------------
                                                                Methane 
                                                              reactivity
        Vehicle emission control technology category          adjustment
                                                                factor  
------------------------------------------------------------------------
TLEVs.......................................................     0.0043 
LEVs and ULEVs..............................................     0.0047 
------------------------------------------------------------------------

    (3) The Administrator may establish new reactivity adjustment 
factors pursuant to Appendix XVII of this part in addition to those 
listed in paragraph (d)(2) of this section. The Administrator shall 
notify manufacturers in writing of the new reactivity adjustment 
factors within 30 days of their establishment.
    (4) The Administrator may revise any reactivity adjustment factor 
listed in paragraph (d)(2) of this section or established by the 
Administrator pursuant to Appendix XVII of this part if he or she 
determines that the revised reactivity adjustment factor is more 
representative of the ozone-forming potential of vehicle NMOG emissions 
based on the best available scientific knowledge and sound engineering 
judgment. The Administrator shall notify manufacturers in writing of 
any such reactivity adjustment factor at least 3 years prior to January 
1 of the calendar year which has the same numerical designation as the 
model year for which the revised reactivity adjustment factor first 
becomes effective. However, manufacturers may use the revised 
reactivity adjustment factor in certifying

[[Page 31263]]

any new engine family whose certification application is submitted 
following such notification, if they so choose. Manufacturers may also 
continue to use the original reactivity adjustment factor for any 
existing engine family previously certified with that reactivity 
adjustment factor until a new durability-data vehicle is tested for 
that engine family.
    (5) Manufacturers may request the use of a unique reactivity 
adjustment factor for a specific vehicle emission control technology 
category and fuel. The Administrator shall approve such requests in 
accordance with the conditions and procedures of Appendix XVII of this 
part. For the purpose of calculating the reactivity adjustment factor 
as specified in Appendix XVII of this part, the ``g ozone potential per 
g NMOG'' value for the vehicle emission control technology category and 
fuel system for which the manufacturer is requesting the use of a 
unique reactivity adjustment factor shall be divided by the ``g ozone 
potential per g NMOG'' value for a conventional gasoline-fueled vehicle 
established for the vehicle emission control technology category. The 
following ``g ozone potential per g NMOG'' values for conventional 
gasoline-fueled vehicle emission control technology categories have 
been established:
    (i) Light-duty vehicles and light-duty trucks:

------------------------------------------------------------------------
                                                              ``g ozone 
                                                              potential 
                                                            per g NMOG''
       Vehicle emission control technology category              for    
                                                            conventional
                                                              gasoline  
------------------------------------------------------------------------
All TLEVs.................................................        3.42  
All 1993 and subsequent model-year LEVs and ULEVs.........        3.13  
------------------------------------------------------------------------

    (ii) [Reserved]


Sec. 86.1778-97  Calculations; particulate emissions.

    The provisions of Sec. 86.145 and Appendix XVI of this part apply 
to this subpart.


Sec. 86.1779-97  General enforcement provisions.

    (a) The provisions of sections 203-208 of the Clean Air Act, as 
amended, (42 U.S.C. 7522-7525, 7541-7542) apply to all motor vehicles 
manufactured by a covered manufacturer under this program, and to all 
covered manufacturers and all persons with respect to such vehicles.
    (b) Violation of the requirements of this subpart shall subject a 
person to the jurisdiction and penalty provisions of sections 204-205 
of the Clean Air Act (42 U.S.C. 7522-7523).
    (c) EPA may not issue a certificate of conformity to a covered 
manufacturer, as defined in Sec. 86.1702, except based on compliance 
with the standards and requirements in this part 86 and 40 CFR part 85.


Sec. 86.1780-97  Prohibited acts.

    (a) The following acts and the causing thereof are prohibited:
    (1) In the case of a covered manufacturer, as defined by 
Sec. 86.1702, of new motor vehicles or new motor vehicle engines for 
distribution in commerce, the sale, or the offering for sale, or the 
introduction, or delivery for introduction, into commerce, or (in the 
case of any person, except as provided by regulation of the 
Administrator), the importation into the United States of any new motor 
vehicle or new motor vehicle engine subject to this subpart, unless 
such vehicle or engine is covered by a certificate of conformity issued 
(and in effect) under regulations found in this subpart (except as 
provided in sec. 203(b) of the Clean Air Act (42 U.S.C. 7522(b)) or 
regulations promulgated thereunder).
    (2)(i) For any person to fail or refuse to permit access to or 
copying of records or to fail to make reports or provide information 
required under sec. 208 of the Clean Air Act (42 U.S.C. 7542) with 
regard to covered vehicles.
    (ii) For a person to fail or refuse to permit entry, testing, or 
inspection authorized under sec. 206(c) (42 U.S.C. 7525(c)) or sec. 208 
of the Clean Air Act (42 U.S.C. 7542) with regard to covered vehicles.
    (iii) For a person to fail or refuse to perform tests, or to have 
tests performed as required under sec. 208 of the Clean Air Act (42 
U.S.C. 7542) with regard to covered vehicles.
    (iv) For a person to fail to establish or maintain records as 
required under Secs. 86.1723 and 86.1776 with regard to covered 
vehicles.
    (v) For any manufacturer to fail to make information available as 
provided by regulation under sec. 202(m)(5) of the Clean Air Act (42 
U.S.C. 7521(m)(5)) with regard to covered vehicles.
    (3)(i) For any person to remove or render inoperative any device or 
element of design installed on or in a covered vehicle or engine in 
compliance with regulations under this subpart prior to its sale and 
delivery to the ultimate purchaser, or for any person knowingly to 
remove or render inoperative any such device or element of design after 
such sale and delivery to the ultimate purchaser.
    (ii) For any person to manufacture, sell or offer to sell, or 
install, any part or component intended for use with, or as part of, 
any covered vehicle or engine, where a principal effect of the part or 
component is to bypass, defeat, or render inoperative any device or 
element of design installed on or in a covered vehicle or engine in 
compliance with regulations issued under this subpart, and where the 
person knows or should know that the part or component is being offered 
for sale or installed for this use or put to such use.
    (4) For any manufacturer of a covered vehicle or engine subject to 
standards prescribed under this subpart:
    (i) To sell, offer for sale, introduce or deliver into commerce, or 
lease any such vehicle or engine unless the manufacturer has complied 
with the requirements of sec. 207 (a) and (b) of the Clean Air Act (42 
U.S.C. 7541 (a), (b)) with respect to such vehicle or engine, and 
unless a label or tag is affixed to such vehicle or engine in 
accordance with sec. 207(c)(3) of the Clean Air Act (42 U.S.C. 
7541(c)(3)).
    (ii) To fail or refuse to comply with the requirements of sec. 207 
(c) or (e) of the Clean Air Act (42 U.S.C. 7541 (c) or (e)).
    (iii) Except as provided in sec. 207(c)(3) of the Clean Air Act (42 
U.S.C. 7541(c)(3)), to provide directly or indirectly in any 
communication to the ultimate purchaser or any subsequent purchaser 
that the coverage of a warranty under the Clean Air Act is conditioned 
upon use of any part, component, or system manufactured by the 
manufacturer or a person acting for the manufacturer or under its 
control, or conditioned upon service performed by such persons.
    (iv) To fail or refuse to comply with the terms and conditions of 
the warranty under sec. 207 (a) or (b) of the Clean Air Act (42 U.S.C. 
7541 (a) or (b)).
    (b) For the purposes of enforcement of this subpart, the following 
apply:
    (1) No action with respect to any element of design referred to in 
paragraph (a)(3) of this section (including any adjustment or 
alteration of such element) shall be treated as a prohibited act under 
paragraph (a)(3) of this section if such action is in accordance with 
sec. 215 of the Clean Air Act (42 U.S.C. 7549);
    (2) Nothing in paragraph (a)(3) of this section is to be construed 
to require the use of manufacturer parts in maintaining or repairing a 
covered vehicle or engine. For the purposes of the preceding sentence, 
the term ``manufacturer parts'' means, with respect to a motor vehicle 
engine, parts produced or sold by the manufacturer of

[[Page 31264]]

the motor vehicle or motor vehicle engine;
    (3) Actions for the purpose of repair or replacement of a device or 
element of design or any other item are not considered prohibited acts 
under paragraph (a)(3) of this section if the action is a necessary and 
temporary procedure, the device or element is replaced upon completion 
of the procedure, and the action results in the proper functioning of 
the device or element of design;
    (4) Actions for the purpose of a conversion of a motor vehicle or 
motor vehicle engine for use of a clean alternative fuel (as defined in 
title II of the Clean Air Act) are not considered prohibited acts under 
paragraph (a) of this section if:
    (i) The vehicle complies with the applicable standard when 
operating on the alternative fuel; and
    (ii) In the case of engines converted to dual fuel or flexible use, 
the device or element is replaced upon completion of the conversion 
procedure, and the action results in proper functioning of the device 
or element when the motor vehicle operates on conventional fuel.
    33. Appendix XIII is added to part 86 to read as follows:
Appendix XIII to Part 86--State Requirements Incorporated by Reference 
in Part 86 of the Code of Federal Regulations
    The following is an informational list of the California 
regulatory requirements applicable to the National Low Emission 
Vehicle program (October, 1996) incorporated by reference in part 86 
of the Code of Federal Regulations (see Sec. 86.1).

California State Regulations

    (a) State of California; Air Resources Board: California 
Assembly-Line Test Procedures for 1983 Through 1997 Model-Year 
Passenger Cars, Light-Duty Trucks and Medium-Duty Vehicles, adopted 
November 24, 1981, amended June 24, 1996.
    (b) State of California; Air Resources Board: California 
Assembly-Line Test Procedures for 1998 and Subsequent Model-Year 
Passenger Cars, Light-Duty Trucks and Medium-Duty Vehicles, adopted 
June 24, 1996.
    (c) California Code of Regulations, Title 13, Division 3, 
Sections 2108, 2109, 2110.
    (d) State of California; Air Resources Board: California Exhaust 
Emission Standards and Test Procedures for 1988 and Subsequent Model 
Passenger Cars, Light-Duty Trucks, and Medium-Duty Vehicles, adopted 
May 20, 1987, amended June 24, 1996, Section 9.a.
    (e) State of California; Air Resources Board: California Non-
Methane Organic Gas Test Procedures, adopted July 12, 1991, amended 
June 24, 1996.
    (f) State of California; Air Resources Board: Regulations 
Regarding Malfunction and Diagnostic System Requirements--1994 and 
Later Passenger Cars, Light-Duty Trucks, and Medium-Duty Vehicles 
and Engines (OBD II), California Mail Out #95-34, September 26, 
1995, excluding paragraphs (d), (m)(4), and (m)(5).
    (g) State of California; Air Resources Board: California Motor 
Vehicle Emission Control Label Specifications, adopted March 1, 
1978, amended June 24, 1996, excluding paragraphs 2(b), 3.5, and 10.
    34. Appendix XIV is added to part 86 to read as follows:
Appendix XIV to Part 86--Determination of Acceptable Durability Test 
Schedule for Light-Duty Vehicles and Light Light-Duty Trucks Certifying 
to the Provisions of Part 86, Subpart R
    A manufacturer may determine mileage test intervals for 
durability-data vehicles subject to the conditions specified in 
Sec. 86.1726. The following procedure shall be used to determine if 
the schedule is acceptable to the Administrator:
    1. Select exhaust system mileage test points and maintenance 
mileage test points for proposed (prop) schedule.
    2. Calculate the sums of the squares corrected to the mean of 
the system mileages at the proposed test points:

Aprop = 
[<3-ln-grk-S>(Xp)2-((<3-ln-grk-S>Xp)2
 / Np))prop

Where:
Xp = Individual mileages at which the vehicle will be 
tested.
Np = Total number of tests (including before and after 
maintenance tests).

(Subscript ``p'' refers to proposed test schedule).
    3. Determine exhaust system mileage test points and maintenance 
mileage test points based on testing at five thousand mile intervals 
from 5,000 miles through the final testing point and maintenance 
mileage test points selected for the proposed schedule in step 1 of 
this appendix. This schedule will be designated as the standard 
(std) test schedule.
    4. Calculate the sums of squares corrected to the mean of the 
standard schedule:

Bstd = 
[<3-ln-grk-S>(Xs)2-((<3-ln-grk-S>Xs)2
 / Ns))std

Where:
Xs = Individual mileages at which the vehicle will be 
tested.
Ns = Total number of tests (including before and after 
maintenance).

(Subscript ``s'' refers to standard test schedule).
    5. Refer to Table I and determine tp at 
(Np-2)prop degrees of freedom and 
ts at (Ns-2)std.
    6. If (Aprop)\1/2\ 
tp / ts x (Bstd)\1/2\ 
the proposed plan is acceptable.

                         Table I to Appendix XIV                        
------------------------------------------------------------------------
                    Degrees of freedom (N-2)                        t   
------------------------------------------------------------------------
1..............................................................    6.314
2..............................................................    2.920
3..............................................................    2.353
4..............................................................    2.132
5..............................................................    2.015
16.............................................................    1.943
7..............................................................    1.895
8..............................................................    1.860
9..............................................................    1.833
10.............................................................    1.812
11.............................................................    1.796
12.............................................................    1.782
13.............................................................    1.771
14.............................................................    1.761
15.............................................................    1.753
6                                                                  1.746
17.............................................................    1.740
18.............................................................    1.734
19.............................................................    1.729
20.............................................................    1.725
21.............................................................    1.721
22.............................................................    1.717
23.............................................................    1.714
24.............................................................    1.711
25.............................................................    1.708
------------------------------------------------------------------------

    35. Appendix XV is added to part 86 to read as follows:
Appendix XV to Part 86--Procedure for Determining an Acceptable Exhaust 
Regeneration Durability-Data Test Schedule for Diesel Cycle Vehicles 
Equipped With Periodically Regenerating Trap Oxidizer Systems 
Certifying to the Provisions of Part 86, Subpart R
    1. Select exhaust system mileage test points for proposed (prop) 
schedule.
    2. Calculate the sums of the squares corrected to the mean of 
the system mileages at the proposed test points:

Aprop = 
[<3-ln-grk-S>(Xp)2-((<3-ln-grk-S>Xp)2
 / Np))prop

Where:
Xp = Individual mileages at which the vehicle will be 
tested.
Np = Total number of tests (including before and after 
maintenance tests).

(Subscript ``p'' refers to proposed test schedule).
    3. The exhaust system mileage tests points at 5,000, 25,000, 
50,000, 75,000, and 100,000 miles will be designated as the standard 
(std) test schedule.
    4. Calculate the sums of square corrected to the mean of the 
standard tests schedule:

Bstd = 
[<3-ln-grk-S>(Xs)2-((<3-ln-grk-S>Xs)2
 / Ns))std

Where:
Xs = Individual mileages at which the vehicle will be 
tested.
Ns = Total number of regeneration emission tests.

(Subscript ``s'' refers to standard test schedule)
    5. Refer to Table I and determine tp at 
(Np-2)prop degrees of freedom and 
ts at (Ns-2)std degrees of freedom.
    6. If (Aprop)1/2  tp 
/ ts  x  (Bstd)1/2 the proposed 
plan is acceptable.

                         Table I to Appendix XV                         
------------------------------------------------------------------------
                    Degrees of freedom (N-2)                        t   
------------------------------------------------------------------------
1..............................................................    6.314
2..............................................................    2.920
3..............................................................    2.353
4..............................................................    2.132

[[Page 31265]]

                                                                        
5..............................................................    2.015
6..............................................................    1.943
7..............................................................    1.895
8..............................................................    1.860
9..............................................................    1.833
10.............................................................    1.812
11.............................................................    1.796
12.............................................................    1.782
13.............................................................    1.771
14.............................................................    1.761
15.............................................................    1.753
------------------------------------------------------------------------

    36. Appendix XVI is added to part 86 to read as follows:
Appendix XVI to PART 86--Pollutant Mass Emissions Calculation Procedure 
for Gaseous-Fueled Vehicles and for Vehicles Equipped With Periodically 
Regenerating Trap Oxidizer Systems Certifying to the Provisions of Part 
86, Subpart R
    (a) Gaseous-Fueled Vehicle Pollutant Mass Emission Calculation 
Procedure.
    (1) For all TLEVs, LEVs, and ULEVs, the calculation procedures 
specified in Chapter 5 of the California Regulatory Requirements 
Applicable to the National Low Emission Vehicle Program (October, 
1996) shall apply. These procedures are incorporated by reference 
(see Sec. 86.1).
    (b) Pollutant Mass Emissions Calculation Procedure for Vehicles 
Equipped with Periodically Regenerating Trap Oxidizer Systems.
    (1) Exhaust Emissions. (i) The provisions of Sec. 86.1777 apply to 
vehicles equipped with periodically regenerating trap oxidizer systems, 
except that the following shall apply instead of the requirements in 
Sec. 86.144-94(a):
    (ii) The final reported test results shall be computed by the 
use of the following formula:
    (iii) For light-duty vehicles and light-duty trucks:

Ywm = 0.43 ((Yct+Ys)/(Dct + Ds))+0.57 ((Yht+Ys)/(Dht+Ds)).

    (iv) For purposes of adjusting emissions for regeneration:

Re = ((Yr1--Yct)+(Yr2--Ys)+(Yr3--Yht))/(Dct+Ds+Dht).
Yr = Ywm+Re.

Where:
Ywm = Weighted mass emissions of each pollutant, i.e., HC, CO, 
NOX or CO , in grams per vehicle mile.
Yct = Mass emissions as calculated from the ``transient'' phase of 
the cold start test, in grams per test phase.
Yht = Mass emissions as calculated from the ``transient'' phase of 
the hot start test in grams per test phase.
Ys = Mass emissions as calculated from the ``stabilized'' phase of 
the cold start test, in grams per test phase.
Dct = The measured driving distance from the ``transient'' phase of 
the cold start test, in miles.
Dht = The measured distance from the ``transient'' phase of the hot 
start test, in miles.
Ds = The measured driving distance from the ``stabilized'' phase of 
the cold start test, in miles.
Yr = Regeneration emission test.
Re = Mass emissions of each pollutant attributable to regeneration 
in grams per mile.
Yr1 = Mass emissions, during a regeneration emission test, as 
calculated from the ``transient'' phase of the cold start test, in 
grams per test phase.
Yr2 = Mass emissions, during a regeneration emission test, as 
calculated from the ``stabilized'' phase of the cold start test, in 
grams per test phase.
Yr3 = Mass emissions, during a regeneration emission test, as 
calculated from the ``transient'' phase of the hot start test in 
grams per test phase.
    (2) Particulate Emissions. (i) The provisions of Sec. 86.1778 
apply to vehicles equipped with periodically regenerating trap 
oxidizer systems, except that the following shall apply instead of 
the requirements Sec. 86.145-82(a):
    (ii) The final reported test results for the mass particulate 
(Mp) in grams/mile shall be computed as follows.
    (iii) For purposes of adjusting emissions for regeneration:

Mp = 0.43(Mp1+Mp2)/(Dct+Ds)+0.57 (Mp3+Mp2/(Dht+Ds)
Re = ((Mpr1-Mp1)+(Mpr2--Mp2)+(Mpr3--Mp3)/(Dct+Ds+Dht)
Mpr = Mp+Re

Where:
(1) Mp1 = Mass of particulate determined from the ``transient'' 
phase of the cold start test, in grams per test phase. (See 
Sec. 86.110-94(d)(1) for determination.)
(2) Mp2 = Mass of particulate determined from the ``stabilized'' 
phase of the cold start test, in grams per test phase. (See 
Sec. 86.110-94(d)(1) for determination.)
(3) Mp3=Mass of particulate determined from the ``transient'' phase 
of the hot start test, in grams per test phase. (See Sec. 86.110-
94(d)(1) for determination.)
(4) Dct=The measured driving distance from the ``transient'' phase 
of the cold start test, in miles.
(5) Ds=The measured driving distance from the ``stabilized'' phase 
of the cold start test, in miles.
(6) Dht=The measured driving distance from the ``transient'' phase 
of the hot start test, in miles.
(7) Mpr=Regeneration emission test
(8) Re=Mass of particulate attributable to regeneration in grams/
mile.
(9) Mpr1=Mass of particulate determined, during a regeneration 
emission test, from the ``transient'' phase of the cold start test 
in grams per test phase. (See Sec. 86.110-94(d)(1) for 
determination.)
(10) Mpr2=Mass of particulate determined, during a regeneration 
emission test, from ``stabilized'' phase of the cold start test, in 
grams per test phase. (See Sec. 86.110-94(d)(1) for determination.)
(11) Mpr3=Mass of particulate determined, during a regeneration 
emission test, from the ``transient'' phase of the hot start test, 
in grams per test phase. (See Sec. 86.110-94(d)(1) for 
determination.)

    (c) Fuel Economy Calculations for Gaseous Fuels Based on the 
Cold Start CVS-1975 Federal Test Procedure.
    (1) Assume the fuel meets HD-5 specifications (95% 
C3H8, 5% nC4H10, by 
volume).
    (i) Physical constants of Propane and Normal Butane:

------------------------------------------------------------------------
                                                                 Liquid 
                                                                density 
                                    Liquid                      of Hd-5 
  Component     Mol.    Sp. Gr.     density                     (lb/gal 
                 Wt.               (lb/gal @                     at 60  
                                  60 deg. F)                    deg. F) 
                                                                        
------------------------------------------------------------------------
C3H8.........  44.094      0.508      4.235    x     0.95   =     4.0233
nC4H10.......  58.12       0.584      4.868    x     0.05   =     0.2434
                                                              ----------
                                                                        
                                                                  4.2667
------------------------------------------------------------------------

    (ii) Density of the HD-5 fuel:

(0.95 x 4.235)+(0.05 x 4.868)=4.267 lb/gal @ 60 deg. F

    (iii) Molecular Weights:
    (A)

------------------------------------------------------------------------
                          Species                              Mol. Wt. 
------------------------------------------------------------------------
C..........................................................     12.01115
H..........................................................      1.00797
0..........................................................      15.9994
CO.........................................................     28.01055
CO2........................................................     44.00995
CH2.658*...................................................      14.6903
------------------------------------------------------------------------
* Average ratio of Hydrogen to carbon atoms in HD-5 fuel.               

    (B)

C3H8                                                                    
  8/3=2.666 x 0.95 (% propane)=                                    2.533
nC4H10                                                                  
  10/4=2.5 x 0.05 (% Butane)                                      =0.125
                                                                        
                                                             -----------
                                                                   2.568
                                                                        

    (iv) Weight of Carbon in:


[[Page 31266]]


CO=wt. of CO x (12.01115/28.01055)=wt CO x (0.429)
CO2=wt. of CO2 x (12.01115/44.00995) wt 
CO2 x (0.273)
CH2.658=wt. of CH2.658 x (12.01115/14.6903)=wt 
CH2.658 x (0.818)

    (v) Wt. of Carbon per gallon of LPG:

wt. of carbon=4.2667 lbs/gal x 453.59 gms/lb x 0.818=1583 grams C/gal 
HD-5

    (vi) Fuel economy:
    [GRAPHIC] [TIFF OMITTED] TR06JN97.001
    
    [GRAPHIC] [TIFF OMITTED] TR06JN97.002
    
Where:
HC=CVS HC in grams/mile
CO=CVS CO in grams/mile
CO2=CVS CO2 in grams/mile
For gasoline:
=2421 / ( (0.866)(HC)+(0.429)(CO)+(0.273)(CO2 ) )
For Natural Gas:
=1535 / ( (0.759)(HC)+(0.429)(CO)+(0.273)(CO2 ) )

    37. Appendix XVII is added to part 86 to read as follows:
Appendix XVII to Part 86--Procedure for Determining Vehicle Emission 
Control Technology Category/Fuel Reactivity Adjustment Factors for 
Light-Duty Vehicles and Light Light-Duty Trucks Certifying to the 
Provisions of Part 86, Subpart R
    The following procedure shall be used by the Administrator to 
establish the reactivity adjustment factor for exhaust emissions of 
non-methane organic gases (NMOG) and establish the ``methane 
reactivity adjustment factor'' for exhaust methane emissions from 
natural gas vehicles, for the purpose of certifying a vehicle of 
specific emission control technology category and fuel for the 
National LEV program provisions of subpart R of this part.
    (a) The Administrator shall determine representative speciated 
NMOG exhaust emission profiles for light-duty conventional gasoline-
fueled TLEVs, LEVs, and ULEVs according to the following conditions:
    (1) All testing will be conducted using a specified gasoline 
blend representative of commercial gasoline and having the 
specifications listed in Sec. 86.1771.
    (2) Speciated NMOG profiles shall be obtained from a 
statistically valid number of TLEVs, LEVs, and ULEVs.
    (3) The speciated NMOG profiles shall identify and quantify, in 
units of g/mile or mg/mile, as many constituents as possible in 
accordance with the procedures specified in Chapter 5 of the 
California Regulatory Requirements Applicable to the National Low 
Emission Vehicle Program (October, 1996). These procedures are 
incorporated by reference (see Sec. 86.1).
    (b) The ``g ozone potential per mile'' of each NMOG identified 
in the speciated profile shall be determined by multiplying the ``g/
mile NMOG'' emission value of the constituent NMOG by its maximum 
incremental reactivity in paragraph (j) of this appendix.
    (c) The ``total g ozone potential per mile'' of NMOG exhaust 
emissions from the vehicle/fuel system shall be the sum of all the 
constituent NMOG ``g ozone potential per mile'' values calculated in 
paragraph (b) of this appendix.
    (d) The ``g ozone potential per g NMOG'' for the vehicle/fuel 
system shall be determined by dividing the ``total g ozone potential 
per mile'' value calculated in paragraph (c) of this appendix by the 
``total g/mile of NMOG emissions''.
    (e) For light-duty candidate vehicle/fuel systems not powered by 
conventional gasoline, the Administrator shall establish 
``reactivity adjustment factors'' calculated from exhaust emission 
profiles derived according to the same conditions specified in 
paragraphs (a)(1) and (a)(2) of this appendix.
    (f) The ``g ozone potential per g NMOG'' for candidate vehicle/
fuel systems not powered by conventional gasoline shall be 
determined according to paragraphs (b), (c), and (d) of this 
appendix.
    (g)(1) The candidate vehicle/fuel ``reactivity adjustment 
factor'' shall be determined by dividing the ``g ozone potential per 
g NMOG'' calculated in paragraph (f) of this appendix by the ``g 
ozone potential per g NMOG'' value for the vehicle in the same 
emission control technology category operated on conventional 
gasoline. The ``g ozone potential per g NMOG'' values for 
conventional gasoline vehicles are listed in Sec. 86.1777(b)(5) or 
shall be established by the Administrator pursuant to this appendix. 
For candidate vehicle/fuel systems powered by methanol or liquefied 
petroleum gas, the quotient calculated above shall be multiplied by 
1.1. The resulting value shall constitute the ``reactivity 
adjustment factor'' for the methanol or liquefied petroleum gas-
powered vehicle/fuel system.
    (2) For candidate vehicle/fuel systems operating on natural gas, 
a ``methane reactivity adjustment factor'' shall be calculated by 
dividing the maximum incremental reactivity value for methane given 
in paragraph (j) of this appendix by the ``g ozone potential per g 
NMOG'' value for the vehicle in the same emission control technology 
category operated on conventional gasoline as listed in 
Sec. 86.1777(b)(5) or established by the Administrator pursuant to 
this appendix.
    (h) The Administrator shall assign a reactivity adjustment 
factor unique to a specific engine family at the request of a 
vehicle manufacturer provided that each of the following occurs:
    (1)(i) The manufacturer submits speciated NMOG exhaust emission 
profiles to the Administrator obtained from emission testing a 
minimum of four different vehicles representative of vehicles that 
will be certified in the engine family. The test vehicles shall 
include the official emission-data vehicle(s) for the engine family, 
and the mileage accumulation of each vehicle shall be at or greater 
than 4000 miles. One speciated profile shall be submitted for each 
test vehicle. Emission levels of each constituent NMOG shall be 
measured according to Chapter 5 of the California Regulatory 
Requirements Applicable to the National Low Emission Vehicle Program 
(October, 1996). These procedures are incorporated by reference (see 
Sec. 86.1). For the emission-data vehicle(s), the speciated 
profile(s) shall be obtained from the same test used to obtain the 
official exhaust emission test results for the emission-data vehicle 
at the 4,000 mile test point. The manufacturer shall calculate ``g 
ozone potential per g NMOG'' values for each speciated NMOG exhaust 
emission profile in accordance with the procedures specified in 
paragraphs (b), (c), and (d) of this appendix. By using these ``g 
ozone potential per g NMOG'' values, the manufacturer shall 
calculate a ``reactivity adjustment factor'' for each test vehicle 
in accordance with the procedure specified in paragraph (g) of this 
appendix. A ``reactivity adjustment factor'' for the engine family 
shall be calculated by taking the arithmetic mean of the 
``reactivity adjustment factor'' obtained for each test vehicle. The 
95 percent upper confidence bound (95% UCB) shall be calculated 
according to the equation:
[GRAPHIC] [TIFF OMITTED] TR06JN97.003

where:
RAFm = mean ``reactivity adjustment factor'' calculated 
for the engine family.
RAFi = ``reactivity adjustment factor'' calculated for 
the i'th test vehicle.
n = number of test vehicles.

    (ii) The 95 percent upper confidence bound of the ``reactivity 
adjustment factor'' for the engine family shall be less than or 
equal to 115 percent of the engine family ``reactivity adjustment 
factor.''
    (2) The manufacturer submits an ``ozone deterioration factor'' 
for the engine family. To determine the ``ozone deterioration 
factor,'' the manufacturer shall perform two tests at each mileage 
interval for one or more durability vehicle(s) tested in accordance 
with the procedures and conditions specified in subpart R of this 
part for calculating mass deterioration factors. The Administrator 
shall approve the use of other mileage intervals and procedures if 
the manufacturer can demonstrate that equivalently representative 
``ozone deterioration factors'' are obtained. One speciated profile 
shall be submitted for each test. Emission levels of each 
constituent NMOG shall be measured according to Chapter 5 of the 
California Regulatory Requirements Applicable to the National Low 
Emission Vehicle Program (October, 1996). These procedures are 
incorporated by reference (see Sec. 86.1). A mean g/mi NMOG mass 
value and a mean ``g ozone per g NMOG'' value shall be calculated by 
taking the arithmetic mean of each measurement from the speciated 
profiles. These results shall be multiplied together to obtain a 
mean ``total g ozone potential per mile'' value at each mileage 
interval. A mean ``ozone deterioration factor'' shall be calculated 
in accordance with the procedures in Sec. 86.1777

[[Page 31267]]

and this appendix except that the mean total ``g ozone potential per 
mile'' value determined at each mileage interval shall be used in 
place of measured mass emissions. If the ``ozone deterioration 
factor'' is determined to be less than 1.00, the ``ozone 
deterioration factor'' shall be assigned a value of 1.00. The 
``ozone deterioration factor'' shall be multiplied by the product of 
the official exhaust NMOG mass emission results at the 4000 mile 
test point and the mean ``reactivity adjustment factor'' for the 
engine family to obtain the NMOG certification levels used to 
determine compliance with the NMOG emission standards.
    (3) The speciated profiles, mean ``reactivity adjustment 
factor'' for the engine family, and ``ozone deterioration factor'' 
are provided to the Administrator with the certification application 
for the engine family.
    (i) Gasoline meeting the specifications listed in the following 
tables shall be used to determine the ``g ozone potential per g 
NMOG'' of conventional gasoline (the test methods used for each fuel 
property shall be the same as the test method for the identical fuel 
property listed in Sec. 86.1771):

------------------------------------------------------------------------
                       Fuel property                            Limit   
------------------------------------------------------------------------
Sulfur, ppm by weight......................................   300  50
Benzene, volume percent....................................   1.6  0.3
Reid vapor pressure, psi...................................   8.7  0.3
------------------------------------------------------------------------


------------------------------------------------------------------------
                Distillation, D-86 degrees F                            
------------------------------------------------------------------------
10%........................................................      115-135
50%, maximum...............................................          240
90%........................................................      323-333
EP, maximum................................................          420
------------------------------------------------------------------------


------------------------------------------------------------------------
      Hydrocarbon Type, volume percent                                  
------------------------------------------------------------------------
Total Aromatics............................  32  3.0        
Multi-substituted alkyl aromatics..........  21  3.0        
Olefins....................................  12  3.0        
Saturates..................................  remainder                  
------------------------------------------------------------------------

    (j) The maximum incremental reactivities to be used in paragraph 
(b) of this appendix are provided in the table in this paragraph 
(j). Any manufacturer which intends to use the table shall submit to 
the Administrator a list which provides the specific organic gases 
measured by the manufacturer and the maximum incremental reactivity 
value assigned to each organic gas prior to or with the submittal of 
a request for the use of a reactivity adjustment factor unique to a 
specific engine family. The Administrator may deny such requests if 
he or she determines that the maximum incremental reactivity value 
assignments are made incorrectly. The table follows:

               Maximum Incremental Reactivity (MIR) Values              
                  [Units: grams ozone/gram organic gas]                 
------------------------------------------------------------------------
             CAS#                         Compound                MIR   
------------------------------------------------------------------------
                                Alcohols                                
------------------------------------------------------------------------
00067-56-1...................  methanol......................       0.56
00064-17-5...................  ethanol.......................       1.34
------------------------------------------------------------------------
   Light End and Mid-Range Hydrocarbons (Listed in approximate elution  
                                 order)                                 
------------------------------------------------------------------------
                               methane.......................     0.0148
00074-85-1...................  ethene........................       7.29
00074-86-2...................  ethyne........................       0.50
00074-84-0...................  ethane........................       0.25
00115-07-1...................  propene.......................       9.40
00074-98-6...................  propane.......................       0.48
00463-49-0...................  1,2-propadiene................      10.89
00074-99-7...................  1-propyne.....................       4.10
00075-28-5...................  methylpropane.................       1.21
00115-11-7...................  2-methylpropene...............       5.31
00106-98-9...................  1-butene......................       8.91
00106-99-0...................  1,3-butadiene.................      10.89
00106-97-8...................  n-butane......................       1.02
00624-64-6...................  trans-2-butene................       9.94
00463-82-1...................  2,2-dimethylpropane...........       0.37
00107-00-6...................  1-butyne......................       9.24
00590-18-1...................  cis-2-butene..................       9.94
00563-45-1...................  3-methyl-1-butene.............       6.22
00078-78-4...................  2-methylbutane................       1.38
00503-17-3...................  2-butyne......................       9.24
00109-67-1...................  1-pentene.....................       6.22
00563-46-2...................  2-methyl-1-butene.............       4.90
00109-66-0...................  n-pentane.....................       1.04
00078-79-5...................  2-methyl-1,3-butadiene........       9.08
00646-04-8...................  trans-2-pentene...............       8.80
00558-37-2...................  3,3-dimethyl-1-butene.........       4.42
00627-20-3...................  cis-2-pentene.................       8.80
00689-97-4...................  1-buten-3-yne.................       9.24
00513-35-9...................  2-methyl-2-butene.............       6.41
00542-92-7...................  1,3-cyclopentadiene...........       7.66
00075-83-2...................  2,2-dimethylbutane............       0.82
00142-29-0...................  cyclopentene..................       7.66
00691-37-2...................  4-methyl-1-pentene............       4.42
00760-20-3...................  3-methyl-1-pentene............       4.42
00287-92-3...................  cyclopentane..................       2.38
00079-29-8...................  2,3-dimethylbutane............       1.07
01634-04-4...................  1-methyl-tert-butyl-ether.....       0.62
00691-38-3...................  4-methyl-cis-2-pentene........       6.69
00107-83-5...................  2-methylpentane...............       1.53
00674-76-0...................  4-methyl-trans-2-pentene......       6.69

[[Page 31268]]

                                                                        
00096-14-0...................  3-methylpentane...............       1.52
00763-29-1...................  2-methyl-1-pentene............       4.42
00592-41-6...................  1-hexene......................       4.42
00110-54-3...................  n-hexane......................       0.98
13269-52-8...................  trans-3-hexene................       6.69
07642-09-3...................  cis-3-hexene..................       6.69
04050-45-7...................  trans-2-hexene................       6.69
00616-12-6...................  3-methyl-trans-2-pentene......       6.69
00625-27-4...................  2-methyl-2-pentene............       6.69
01120-62-3...................  3-methylcyclopentene..........       5.65
07688-21-3...................  cis-2-hexene..................       6.69
00637-92-3...................  1-ethyl-tert-butyl-ether......       1.98
00922-62-3...................  3-methyl-cis-2-pentene........       6.69
00590-35-2...................  2,2-dimethylpentane...........       1.40
00096-37-7...................  methylcyclopentane............       2.82
00108-08-7...................  2,4-dimethylpentane...........       1.78
00464-06-2...................  2,2,3-trimethylbutane.........       1.32
07385-78-6...................  3,4-dimethyl-1-pentene........       3.48
00693-89-0...................  1-methylcyclopentene..........       7.66
00071-43-2...................  benzene.......................       0.42
03404-61-3...................  3-methyl-1-hexene.............       3.48
00562-49-2...................  3,3-dimethylpentane...........       0.71
00110-82-7...................  cyclohexane...................       1.28
00591-76-4...................  2-methylhexane................       1.08
00565-59-3...................  2,3-dimethylpentane...........       1.51
00110-83-8...................  cyclohexene...................       5.67
00589-34-4...................  3-methylhexane................       1.40
02532-58-3...................  cis-1,3-dimethylcyclopentane..       2.55
00617-78-7...................  3-ethylpentane................       1.40
00822-50-4...................  trans-1,2-dimethylcyclopentane       1.85
00592-76-7...................  1-heptene.....................       3.48
00540-84-1...................  2,2,4-trimethylpentane........       0.93
14686-14-7...................  trans-3-heptene...............       5.53
00142-82-5...................  n-heptane.....................       0.81
02738-19-4...................  2-methyl-2-hexene.............       5.53
03899-36-3...................  3-methyl-trans-3-hexene.......       5.53
14686-13-6...................  trans-2-heptene...............       5.53
00816-79-5...................  3-ethyl-2-pentene.............       5.53
00107-39-1...................  2,4,4-trimethyl-1-pentene.....       2.69
10574-37-5...................  2,3-dimethyl-2-pentene........       5.53
06443-92-1...................  cis-2-heptene.................       5.53
00108-87-2...................  methylcyclohexane.............       1.85
00590-73-8...................  2,2-dimethylhexane............       1.20
00107-40-4...................  2,4,4-trimethyl-2-pentene.....       5.29
01640-89-7...................  ethylcyclopentane.............       2.31
00592-13-2...................  2,5-dimethylhexane............       1.63
00589-43-5...................  2,4-dimethylhexane............       1.50
00563-16-6...................  3,3-dimethylhexane............       1.20
00565-75-3...................  2,3,4-trimethylpentane........       1.60
00560-21-4...................  2,3,3-trimethylpentane........       1.20
00108-88-3...................  toluene.......................       2.73
00584-94-1...................  2,3-dimethylhexane............       1.32
00592-27-8...................  2-methylheptane...............       0.96
00589-53-7...................  4-methylheptane...............       1.20
00589-81-1...................  3-methylheptane...............       0.99
15890-40-1...................  (1a,2a,3b) -1,2,3-                   1.94
                                trimethylcyclopentane.                  
00638-04-0...................  cis-1,3-dimethylcyclohexane...       1.94
02207-04-7...................  trans-1,4-dimethylcyclohexane.       1.94
03522-94-9...................  2,2,5-trimethylhexane.........       0.97
00111-66-0...................  1-octene......................       2.69
14850-23-8...................  trans-4-octene................       5.29
00111-65-9...................  n-octane......................       0.61
13389-42-9...................  trans-2-octene................       5.29
02207-03-6...................  trans-1,3-dimethylcyclohexane.       1.94
07642-04-8...................  cis-2-octene..................       5.29
01069-53-0...................  2,3,5-trimethylhexane.........       1.14
02213-23-2...................  2,4-dimethylheptane...........       1.34
02207-01-4...................  cis-1,2-dimethylcyclohexane...       1.94
01678-91-7...................  ethylcyclohexane..............       1.94
00926-82-9...................  3,5-dimethylheptane...........       1.14
00100-41-4...................  ethylbenzene..................       2.70

[[Page 31269]]

                                                                        
03074-71-3...................  2,3-dimethylheptane...........       1.14
00108-38-3...................  m-&p-xylene...................       7.64
02216-34-4...................  4-methyloctane................       1.14
03221-61-2...................  2-methyloctane................       1.14
02216-33-3...................  3-methyloctane................       1.14
00100-42-5...................  styrene(ethenylbenzene).......       2.22
00095-47-6...................  o-xylene......................       6.46
00124-11-8...................  1-nonene......................       2.23
00111-84-2...................  n-nonane......................       0.54
00098-82-8...................  (1-methylethyl)benzene........       2.24
15869-87-1...................  2,2-dimethyloctane............       1.01
04032-94-4...................  2,4-dimethyloctane............       1.01
00103-65-1...................  n-propylbenzene...............       2.12
00620-14-4...................  1-methyl-3-ethylbenzene.......       7.20
00622-96-8...................  1-methyl-4-ethylbenzene.......       7.20
00108-67-8...................  1,3,5-trimethylbenzene........      10.12
00611-14-3...................  1-methyl-2-ethylbenzene.......       7.20
00095-63-6...................  1,2,4-trimethylbenzene........       8.83
00124-18-5...................  n-decane......................       0.47
00538-93-2...................  (2-methylpropyl)benzene.......       1.87
00135-98-8...................  (1-methylpropyl)benzene.......       1.89
00535-77-3...................  1-methyl-3-(1-                       6.45
                                methylethyl)benzene.                    
00526-73-8...................  1,2,3-trimethylbenzene........       8.85
00099-87-6...................  1-methyl-4-(1-                       6.45
                                methylethyl)benzene.                    
00496-11-7...................  2,3-dihydroindene(indan)......       1.06
00527-84-4...................  1-methyl-2-(1-                       6.45
                                methylethyl)benzene.                    
00141-93-5...................  1,3-diethylbenzene............       6.45
00105-05-5...................  1,4-diethylbenzene............       6.45
01074-43-7...................  1-methyl-3-n-propylbenzene....       6.45
01074-55-1...................  1-methyl-4-n-propylbenzene....       6.45
00135-01-3...................  1,2-diethylbenzene............       6.45
01074-17-5...................  1-methyl-2-n-propylbenzene....       6.45
01758-88-9...................  1,4-dimethyl-2-ethylbenzene...       9.07
00874-41-9...................  1,3-dimethyl-4-ethylbenzene...       9.07
00934-80-5...................  1,2-dimethyl-4-ethylbenzene...       9.07
02870-04-4...................  1,3-dimethyl-2-ethylbenzene...       9.07
01120-21-4...................  n-undecane(hendecane).........       0.42
00933-98-2...................  1,2-dimethyl-3-ethylbenzene...       9.07
00095-93-2...................  1,2,4,5-tetramethylbenzene....       9.07
03968-85-2...................  (2-methylbutyl)benzene........       1.07
00527-53-7...................  1,2,3,5-tetramethylbenzene....       9.07
01074-92-6...................  1-(1,1-dimethylethyl)-2-             5.84
                                methylbenzene.                          
00488-23-3...................  1,2,3,4-tetramethylbenzene....       9.07
00538-68-1...................  n-pentylbenzene...............       1.70
00098-19-1...................  1-(1,1-dimethylethyl)-3,5-           7.50
                                DMbenzene.                              
00091-20-3...................  naphthalene...................       1.18
00112-40-3...................  n-dodecane....................       0.38
------------------------------------------------------------------------
                           Carbonyl Compounds                           
------------------------------------------------------------------------
00050-00-0...................  formaldehyde..................       7.15
00075-07-0...................  acetaldehyde..................       5.52
00107-02-8...................  acrolein......................       6.77
00067-64-1...................  acetone.......................       0.56
00123-33-6...................  propionaldehyde...............       6.53
00123-72-8...................  butyraldehyde.................       5.26
00066-25-1...................  hexanaldehyde.................       3.79
00100-52-7...................  benzaldehyde..................      -0.55
00078-93-3...................  methyl ethyl ketone (2-              1.18
                                butanone).                              
00078-85-3...................  methacrolein..................       6.77
04170-30-3...................  crotonaldehyde................       5.42
00110-62-3...................  valeraldehyde.................       4.41
00620-23-5...................  m-tolualdehyde................      -0.55
------------------------------------------------------------------------


[[Page 31270]]

    38. Appendix XVIII is added to part 86 to read as follows:
Appendix XVIII to Part 86--Statistical Outlier Identification Procedure 
for Light-Duty Vehicles and Light Light-Duty Trucks Certifying to the 
Provisions of Part 86, Subpart R
    Residual normal deviates to indicate outliers are used routinely 
and usefully in analyzing regression data, but suffer theoretical 
deficiencies if statistical significance tests are required. 
Consequently, the procedure for testing for outliers outlined by 
Snedecor and Cochran, 6th ed., Statistical Methods, PP. 157-158, 
will be used. The method will be described generally, then by 
appropriate formulae, and finally a numerical example will be given.
    (a) Linearity is assumed (as in the rest of the deterioration 
factor calculation procedure), and each contaminant is treated 
separately. The procedure is as follows:
    (1) Calculate the deterioration factor regression as usual, and 
determine the largest residual in absolute value. Then recalculate 
the regression with the suspected outlier omitted. From the new 
regression line calculate the residual at the deleted point, denoted 
as (yi-yi'). Obtain a statistic by dividing 
(yi-yi') by the square root of the estimated 
variance of (yi-yi'). Find the tailed 
probability, p, from the t-distribution corresponding to the 
quotient (double-tailed), with n-3 degrees of freedom, with n the 
original sample size.
    (2) This probability, p, assumes the suspected outlier is 
randomly selected, which is not true. Therefore, the outlier will be 
rejected only if 1-(1-p)n < 0.05.
    (3) The procedure will be repeated for each contaminant 
individually until the above procedure indicates no outliers are 
present.
    (4) When an outlier is found, the vehicle test-log will be 
examined. If an unusual vehicle malfunction is indicated, data for 
all contaminants at that test-point will be rejected; otherwise, 
only the identified outlier will be omitted in calculating the 
deterioration factor.
    (b) Procedure for the calculation of the t-Statistic for 
Deterioration Data Outlier Test.
    (1) Given a set of n points, (x1, y1), 
(x2, y2) * * * (xn, yn).
Where:

xi is the mileage of the ith data point.
yi is the emission of the ith data point.
Assume model:

y = a+(x-x)+

    (2)(i) Calculate the regression line.

y = a+b(x-x)

    (ii) Suppose the absolute value of the ith residual

(yi-Yi) is the largest.

    (3)(i) Calculate the regression line with the ith 
point deleted.

y = a\1\+b\1\(x-x)
[GRAPHIC] [TIFF OMITTED] TR06JN97.004

Where:

y1 is the observed suspected outlier.
yi is the predicted value with the suspected outlier 
deleted.
[GRAPHIC] [TIFF OMITTED] TR06JN97.005

(x is calculated without the suspected outlier)
[GRAPHIC] [TIFF OMITTED] TR06JN97.006

    (iii) Find p from the t-statistic table

Where:

p = prob ( t(n-3)  t)
t(n-3) is a t-distributed variable with n-3 degrees of freedom.

    (iv) yi is an outlier if 1-(1-p)n < .05

------------------------------------------------------------------------
                      x                           y        y       y-y  
------------------------------------------------------------------------
8............................................       59    56.14     2.86
6............................................       58    58.17    -0.17
11...........................................       56    53.10     2.90
22 \1\.......................................       53    41.96    11.04
14...........................................       50    50.06    -0.06
17...........................................       45    47.03    -2.03
18...........................................       43    46.01    -3.01
24...........................................       42    39.94     2.06
19...........................................       39    45.00    -6.00
23...........................................       38    40.95    -2.95
26...........................................       30    37.91    -7.91
40...........................................       27    23.73     3.27
------------------------------------------------------------------------
\1\ Suspected outlier.                                                  

    (3)(i) Assume model:

y = a+(x-x)+
y = 45-1.013(x-x)

    (ii) Suspected point out of regression:

y = 44.273-1.053(x-x)
y = 44.273-1.053(22-18.727) = 40.827
yi-yi = 12.173
[GRAPHIC] [TIFF OMITTED] TR06JN97.007

[FR Doc. 97-12366 Filed 6-5-97; 8:45 am]
BILLING CODE 6560-50-P