[Federal Register Volume 66, Number 72 (Friday, April 13, 2001)]
[Rules and Regulations]
[Pages 19296-19311]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-8927]



[[Page 19295]]

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Part II





Environmental Protection Agency





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40 CFR Parts 80 and 86



Control of Air Pollution From New Motor Vehicles; Amendment to the Tier 
2/Gasoline Sulfur Regulations; Final and Proposed Rule

  Federal Register / Vol. 66, No. 72 / Friday, April 13, 2001 / Rules 
and Regulations  

[[Page 19296]]


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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Parts 80 and 86

[AMS-FRL-6768-1]
RIN 2060-AI69


Control of Air Pollution From New Motor Vehicles; Amendment to 
the Tier 2/Gasoline Sulfur Regulations

AGENCY: Environmental Protection Agency (EPA).

ACTION: Direct final rule.

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SUMMARY: Today's action corrects, amends, and revises certain 
provisions of the Tier 2/Gasoline Sulfur regulations to assist 
regulated entities with program implementation and compliance. First, 
it makes minor corrections to clarify the regulations governing 
compliance with the gasoline sulfur standards. Second, with respect to 
the low sulfur gasoline program, it revises the boundaries of the 
Geographic Phase-in Area (GPA) to include counties and tribal lands in 
states adjacent to the eight original GPA states. The intention of this 
amendment is to ensure a smooth transition to low sulfur gasoline 
nationwide and to mitigate the potential for gasoline supply shortages. 
Third, it amends certain provisions of the small refiner and Averaging, 
Banking, and Trading (ABT) programs to assist domestic and foreign 
refiners and importers in establishing gasoline sulfur baselines for 
credit and allotment generation purposes. Fourth, it revises certain 
sampling and testing provisions for low sulfur gasoline to enable 
certain refiners to generate early credits and/or allotments under the 
ABT program. Finally, today's action makes minor revisions to the 
regulations governing compliance with the vehicle standards. We plan to 
make other necessary corrections, amendments, and revisions to the Tier 
2/Gasoline Sulfur regulations in a future rulemaking.

DATES: This direct final rule is effective July 12, 2001, without 
further notice, unless we receive adverse comments or a request for a 
public hearing by June 12, 2001. Should we receive any adverse comments 
on this direct final rule we will publish a timely withdrawal in the 
Federal Register informing the public this rule will not take effect.

ADDRESSES: Comments: All comments and materials relevant to today's 
action should be submitted to Public Docket No. A-97-10 at the 
following address: U.S. Environmental Protection Agency (EPA), Air 
Docket (6102), Room M-1500, 401 M Street, S.W., Washington, D.C. 20460. 
Materials related to this rulemaking are available at EPA's Air Docket 
for review at the above address (on the ground floor in Waterside Mall) 
from 8:00 a.m. to 5:30 p.m., Monday through Friday, except on 
government holidays. You can reach the Air Docket by telephone at (202) 
260-7548 and by facsimile at (202) 260-4400. You may be charged a 
reasonable fee for photocopying docket materials, as provided in 40 CFR 
Part 2.

FOR FURTHER INFORMATION CONTACT: Mary Manners, U.S. EPA, National 
Vehicle and Fuels Emission Laboratory, Assessment and Standards 
Division, 2000 Traverwood, Ann Arbor MI 48105; telephone (734) 214-
4873, fax (734) 214-4051, e-mail [email protected].

SUPPLEMENTARY INFORMATION: EPA is publishing this rule without prior 
proposal because we view this action as noncontroversial and anticipate 
no adverse comment. However, in the ``Proposed Rules'' section of 
today's Federal Register publication, we are publishing a separate 
document that will serve as the proposal to adopt the provisions in 
this Direct Final rule if adverse comments are filed. This rule will be 
effective on July 12, 2001 without further notice unless we receive 
adverse comment or a request for a public hearing by June 12, 2001. If 
EPA receives adverse comment on one or more distinct amendments, 
paragraphs, or sections of this rulemaking, we will publish a timely 
withdrawal in the Federal Register indicating which provisions are 
being withdrawn due to adverse comment. We will address all public 
comments in a subsequent final rule based on the proposed rule. We will 
not institute a second comment period on this action. Any parties 
interested in commenting must do so at this time. Any distinct 
amendment, paragraph, or section of today's rulemaking for which we do 
not receive adverse comment will become effective on the date set out 
above, notwithstanding any adverse comment on any other distinct 
amendment, paragraph, or section of today's rule.

Regulated Entities

    This action will affect you if you manufacture new motor vehicles, 
alter individual imported motor vehicles to address U.S. regulation, or 
convert motor vehicles to use alternative fuels. It will also affect 
you if you produce, distribute, or sell gasoline.
    The table below gives some examples of entities that may have to 
comply with the regulations. However, since these are only examples, 
you should carefully examine these and other existing regulations in 40 
CFR parts 80 and 86. If you have any questions, please call the person 
listed in the FOR FURTHER INFORMATION CONTACT section above.

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                                                         Examples of
          Category              NAICS       SIC          potentially
                               codes a    codes b    regulated entities
------------------------------------------------------------------------
Industry....................     336111       3711  Motor Vehicle
                                                     Manufacturers.
                                 336112
                                 336120
Industry....................     336311       3592  Alternative Fuel
                                                     Vehicle Converters.
                                 336312       3714
                                 422720       5172
                                 454312       5984
                                 811198       7549
                                 541514       8742
                                 541690       8931
Industry....................     811112       7533  Commercial Importers
                                                     of Vehicles and
                                                     Vehicle Components.
                                 811198       7549
                                 541514       8742
Industry....................     324110       2911  Petroleum Refiners.
Industry....................     422710       5171  Gasoline Marketers
                                                     and Distributors.
                                 422720       5172
Industry....................     484220       4212  Gasoline Carriers.
                                 484230       4213
------------------------------------------------------------------------
a North American Industry Classification System (NAICS).
b Standard Industrial Classification (SIC) system code.


[[Page 19297]]

Access to Rulemaking Documents Through the Internet

    Today's action is available electronically on the day of 
publication from the Office of the Federal Register Internet Web site 
listed below. Electronic copies of this preamble, regulatory language, 
and other documents associated with today's final rule are available 
from the EPA Office of Transportation and Air Quality Web site listed 
below shortly after the rule is signed by the Administrator. This 
service is free of charge, except any cost that you already incur for 
connecting to the Internet.
    EPA Federal Register Web Site: 
http://www.epa.gov/docs/fedrgstr/epa-air/ (Either select a desired date 
or use the Search feature.)
    Tier 2/Gasoline Sulfur home page: http://www.epa.gov/otaq/tr2home.htm
    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.

Outline of This Preamble

I. Clarifications and Other Minor Corrections
II. Geographic Phase-in Area
    A. Application Deadline for GPA Standards
    B. How Did EPA Establish the Geographic Phase-in Area?
    C. How Was the GPA Established in the Adjoining States?
    D. What Are the Results of the GPA Counties Process?
III. Small Refiners
    A. Documentation of Crude Oil Capacity by Foreign Refiners
    B. Oxygenates Included in Baseline
IV. Credits and Allotments
    A. Baseline Calculations
    B. Refineries That Were Non-operational in 1997-98
    C. Foreign Refiners With Approved 1990 Baselines Who Did Not 
Submit Anti-dumping Compliance Reports to EPA in 1997-1998
V. Sampling and Testing
    A. Obtaining Test Results Before Gasoline Leaves the Refinery
    1. Before January 1, 2004
    2. January 1, 2004 and Beyond
    B. Sample Retention
    1. Limitation on Length of Time to Retain Samples
    2. Composited Samples
    3. Sample Retention for Reformulated Blendstocks for Oxygenate 
Blending
VI. Changes to Vehicle Compliance Regulations
VII. Administrative Requirements
    A. Administrative Designation and Regulatory Analysis
    B. Regulatory Flexibility
    C. Paperwork Reduction Act
    D. Intergovernmental Relations
    1. Unfunded Mandates Reform Act
    2. Executive Order 13084: Consultation and Coordination With 
Indian Tribal Governments
    3. Executive Order 13132 (Federalism)
    E. National Technology Transfer and Advancement Act
    F. Executive Order 13045: Children's Health Protection
    G. Congressional Review Act
VIII.Statutory Provisions and Legal Authority

I. Clarifications and Other Minor Corrections

------------------------------------------------------------------------
                                    Description of clarification or
           Section                             correction
------------------------------------------------------------------------
Sec.  80.216(a)(1)(i) and      Revised to clarify that the refinery
 (a)(2).                        annual average standard for GPA gasoline
                                is 150.00 ppm instead of 150 ppm, in
                                accordance with the annual average
                                refinery standards under Sec.
                                80.195(a)(1) and Sec.  80.240(a) which
                                are expressed to two decimals.
Sec.  80.230(a)(1)...........  Revised to change ``of'' to ``with'' for
                                clarity.
Sec.  80.225(d)..............  Revised to clarify that the employee/
                                crude oil criteria applies to parties
                                seeking small refiner status under Sec.
                                80.225(d).
Sec.  80.235(f)..............  Revised to clarify that to obtain
                                approval as a small refiner, the
                                information submitted under Sec.  80.235
                                must show that the refiner employed an
                                average of no more than 1500 people and
                                had an average crude oil capacity less
                                than or equal to 155,000 bpcd.
Sec.  80.235(g)(1)...........  Revised to change the phrase ``baseline
                                standard and volume, and per-gallon
                                cap'' to ``annual average sulfur
                                standard, baseline volume and per-gallon
                                cap standard,'' and to add the words
                                ``for the 2004-2007 averaging periods''
                                for clarity.
Sec.  80.245(a)(3)...........  Revised to conform language to other
                                provisions relating to requirements for
                                establishing a sulfur baseline. This
                                revision does not change the substance
                                of the baseline provisions under Sec.
                                80.245.
Sec.  80.250(a)(1) and (a)(2)  Revised to clarify that foreign refiners
                                must include only gasoline imported into
                                the U.S. in calculating a small
                                refinery's baseline and baseline volume.
                                Also revised to reference requirements
                                under Sec.  80.245(a)(3).
Sec.  80.285(a)(1)(i)........  Revised to add the words ``for a
                                refinery'' for clarity.
Sec.  80.285(a)(1)(ii).......  Revised to add the words ``for
                                refineries' and ``refineries'' for
                                clarity.
Sec.  80.285(a)(1)(iii)......  Revised to add the words ``for that
                                refinery'' for clarity.
Sec.  80.285(b)(1)(i)........  Revised to add the words ``for any
                                refinery'' for clarity.
Sec.  80.285(b)(1)(ii).......  Revised to clarify that, for refiners of
                                GPA gasoline, credits generated
                                beginning in 2004 are based on the
                                refinery's annual average sulfur
                                standard for GPA gasoline established
                                under Sec.  80.216(a).
Sec.  80.285(b)(2)...........  Revised to add ``under Sec.  80.310'' for
                                clarity.
Sec.  80.295(a)..............  Revised to clarify that foreign refiners
                                must include only gasoline imported into
                                the U.S. in calculating a sulfur
                                baseline under Sec.  80.295.
Sec.  80.295(b)..............  Revised to change an incorrect reference
                                to Sec.  80.65. The correct reference is
                                Sec.  80.69. Also revised to add the
                                words ``for a refinery'' and ``for that
                                refinery'' for clarity.
Sec.  80.305(a)..............  Revised to clarify in the definition of
                                the term Va that foreign refiners must
                                include only gasoline imported into the
                                U.S. in calculating early credits under
                                Sec.  80.305, and to clarify in the
                                definition of the term Sa that the
                                annual average sulfur level used in the
                                equation in this section is calculated
                                in accordance with Sec.  80.205.
Sec.  80.305(d)..............  Revised to add ``for a refinery'' and
                                ``at that refinery'' and to change
                                ``refiner's'' to ``refinery's'' for
                                clarity.
Sec.  80.310(b)..............  Revised to clarify in the definition of
                                the term Sstd that the standard for GPA
                                gasoline is the standard established for
                                GPA gasoline for the refinery under Sec.
                                 80.216(a), and to clarify in the
                                definition of the term Sa that the
                                annual average sulfur level used in the
                                equation in this section is calculated
                                in accordance with Sec.  80.205.
Sec.  80.410(d)(1)...........  Revised to change an incorrect reference
                                to paragraph (c)(3)(i). The correct
                                reference is paragraph (c)(3)(ii).

[[Page 19298]]

 
Sec.  80.410(s)..............  Revised to change an incorrect reference
                                to paragraph (r). The correct reference
                                is paragraph (p).
Sec.  86.1810-01(l)(1).......  Corrected an inadvertent limitation of
                                applicability by removing the model year
                                designations in the referenced section
                                numbers.
Sec.  86.1810-01(m)(1).......  Corrected an inadvertent limitation of
                                applicability by removing the model year
                                designations in the referenced section
                                numbers.
Sec.  86.1811-04(c)(3)(i) and  Revised to clarify the applicability of
 (ii).                          the NMOG standard to flex, bi- or dual-
                                fueled vehicles on the gasoline or
                                diesel portion of certification only.
Sec.  86.1811-04(e)..........  Revised to delete an erroneous statement
                                about the applicability of the spitback
                                standard to newly assembled vehicles.
Sec.  86.1811-04(f)(2)(i)....  Revised to clarify an incorrect rounding
                                procedure.
Sec.  86.1829-01(2)(i).......  Revised to add a waiver provision for
                                evaporative/refueling testing of CNG or
                                LPG vehicles, inadvertently omitted.
Sec.  86.1835-01(d)..........  Corrected an incorrect reference to
                                paragraph (b) to paragraph (a).
Sec.  86,1841-01(e)..........  Revised to clarify that RAFS may be
                                applied only to NLEV vehicles.
Sec.  86.1845-04(f)(1).......  Revised to change an incorrect reference
                                to NMOG to NMHC.
Sec.  86.1846-01(a)(3).......  Revised to add the word ``passenger'' to
                                ``medium-duty passenger vehicles'' for
                                clarity.
Sec.  86.1860-04(g)(2)(ii)...  Revised to correct a rounding procedure.
Sec.  86.1860-04(h)..........  Revised to clarify that the multipliers
                                for fleet average NOX specified in
                                (h)(1) apply to the denominator in the
                                equation in paragraph (f)(2) of that
                                section. Provide optional formula
                                necessary to address mathematical
                                problems caused by the value of zero
                                associated with Bin 1.
Sec.  86.1861-04(a)(5).......  Revised to correct an inconsistency with
                                small volume hardship provisions by
                                changing the requirement for 100%
                                compliance in a specific model year to
                                one model year before a deficit can be
                                carried forward.
Sec.  86.1861-04(b)(1).......  Revised formula to replace erroneous +
                                symbol with X.
------------------------------------------------------------------------

II. Geographic Phase-in Area

A. Application Deadline for GPA Standards

    Due to the timing of today's action, we are extending the 
application deadline for GPA standards from December 31, 2000 to May 1, 
2001. To apply for the GPA standards under Sec. 80.216 (What standards 
apply to gasoline produced or imported for use in the GPA?), a refiner 
or importer must submit an application in accordance with the 
provisions of Sec. 80.290 (How does a refiner apply for a sulfur 
baseline?).

B. How Did We Establish the Geographic Phase-in Area?

    In the Tier 2/Gasoline Sulfur final rule (65 FR 6698, February 10, 
2000), we established a geographic area in which the low sulfur 
gasoline program will be phased-in differently than the national 
program. This program, referred to as the Geographic Phase-In Area 
(GPA) program, covers seven states in the Rocky Mountains and Upper 
Great Plains, as well as Alaska. The gasoline sulfur standards and 
phase-in schedule for the GPA program can be found at Secs. 80.216, 
80.219, and 80.220. Gasoline produced by any refiner and/or importer 
can be sold in the GPA provided that the refiner and/or importer 
registers with us (see Sec. 80.217) and sells gasoline within the GPA 
consistent with the requirements summarized in the regulations.
    As discussed in the Tier 2 final rulemaking (FRM), the GPA program 
was established to help enable a smooth transition to low sulfur 
gasoline nationwide. The need for such a program was based on the 
competition for engineering and construction resources and the time 
needed for installation of desulfurization equipment. (See 65 FR 6755-
6756)
    As described in the preamble to the Tier 2 FRM, states in the GPA 
were determined based on two criteria: Environmental need and gasoline 
supply. First, we evaluated states based on the environmental need 
criterion. In defining the GPA, we identified those states that have a 
somewhat less urgent environmental need in the near term (relative to 
the 1-hour ozone standard) for ozone precursor reductions\1\ and whose 
emissions are less important with respect to ozone transport. (Tier 2 
vehicles operating on higher sulfur gasoline have increased emission 
rates compared with those operated on 30 ppm, but this effect is 
partially reversible.) Second, we considered the issue of sufficient 
gasoline supply, specifically, the relative difficulty of producing or 
obtaining through product transport (via pipeline, truck, rail or 
barge) adequate supplies of gasoline which would meet the requirements 
of the national low sulfur gasoline program. Upon evaluation of these 
criteria, we identified eight states for the GPA program: Alaska, 
Colorado, Idaho, Montana, New Mexico, North Dakota, Utah, and Wyoming.
---------------------------------------------------------------------------

    \1\ Primarily oxides of nitrogen (NOX) and volatile 
organic compounds (VOCs).
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    In this same assessment we also acknowledged that there may be 
counties in other states adjoining these eight states which are solely 
or predominantly dependent on gasoline produced by the refineries that 
supply these eight states and which meet the same basic environmental 
and gasoline supply criteria. As part of the Tier 2 final rule, we 
committed to conducting additional assessments to identify which 
counties in these adjoining states should be considered for inclusion 
in the GPA program.

C. How Was the GPA Established in the Adjoining States?

    As part of the Tier 2/Gasoline Sulfur final rule, we included 
criteria that should be considered in establishing which counties in 
adjoining states should be included in the GPA program. We designed 
these criteria to include those counties in adjacent states which 
receive a majority of their gasoline from the refineries located in the 
eight states covered by the GPA program. Not including these counties 
within the GPA program could potentially undermine the basic intent of 
the GPA program by pressuring refineries in the eight states to supply 
their markets in the adjoining states with national gasoline, in spite 
of the existence of the GPA program. It could also have the affect of 
creating spot gasoline supply shortages and put upward pressure on 
prices in these counties.

[[Page 19299]]

    EPA's current gasoline sulfur regulations provide that additional 
counties or tribal lands in states adjacent to the eight states listed 
above will be included in the GPA, and gasoline sold there will thus be 
subject to the GPA standards, if one of the following conditions is met 
for the area in 1999: (1) Approximately 50 percent or more of the total 
volume of gasoline, as measured at the terminals and bulk stations, was 
received from refineries located in the eight GPA states, (2) 
approximately 50 percent or more of the total volume of gasoline 
dispensed was received from refineries in the GPA states, or (3) 
approximately 50 percent or more of the total commercial and private 
dispensing outlets were supplied by gasoline produced by refineries 
located in the eight GPA states. See 40 CFR 80.215(a)(2).
    To identify additional areas for inclusion in the GPA under these 
regulations, we worked with interested parties such as petroleum 
marketers and state governments to obtain information regarding 
gasoline distribution practices. We identified pipeline and terminal 
locations and, in several cases, information on GPA and total gasoline 
dispensed in given states and counties. Using the various types of 
information provided as a foundation, we then developed a basic 
methodology to identify counties which rely on GPA refineries for a 
majority of their gasoline. This methodology involved the following 
steps:
     Prepare a list of the states adjoining the eight GPA 
states (10 in total)
     Identify and locate the GPA refineries (those in the eight 
core GPA states that are not expected to qualify as small businesses 
under the low sulfur gasoline program)
     Identify the pipelines used by these GPA refineries to 
transport product to the terminals which suppy gasoline to the 
adjoining states, and
     Identify all other refineries/terminals which service the 
adjoining states
    Using this methodology, we developed an initial list of counties in 
the adjacent states which receive gasoline from the refineries in the 
eight GPA states. We then identified counties which receive the 
majority of their gasoline from a given source. To accomplish this 
task, we mapped counties that fell within a distance range of 100-150 
miles from refinery racks and pipeline terminals used by GPA refineries 
since essentially all gasoline is delivered to private and retail 
outlets by tanker truck. We used this distance range because our 
analysis of the information provided to us by the states and petroleum 
marketers suggested this was a good indicator of a county's primary 
source of gasoline. We then adjusted this initial list of counties 
based on two inputs. First, in some cases, county-specific data on the 
percent of gasoline dispensed that was produced at refineries in the 
eight GPA states was available. We used these data to include or 
exclude specific counties from the program. Second, we excluded a 
county if our analysis indicated that low sulfur gasoline would be 
available from nearby refineries and terminals which are not linked to 
the refineries in the eight core GPA states. In places where refineries 
and terminals are located nearby, we expect that, for economic reasons, 
retail outlets will obtain the majority of their gasoline at those 
locations rather than obtaining gasoline that has been transported a 
much greater distance from a terminal supplied by a refinery in a GPA 
state.
    In summary, under Sec. 80.215(a)(2) of the low sulfur gasoline 
program regulations, we expanded the boundaries of the GPA to include 
additional counties and tribal lands in states adjacent to the eight 
GPA states established under Sec. 80.215(a)(1) of the Tier 2 final 
rule. To accomplish this, we identified the counties in which we 
reasonably concluded that approximately 50 percent or more of the 
gasoline volume dispensed is produced by refineries in the eight GPA 
states. Specifically, we 1) determined the location of terminals that 
receive such gasoline, and 2) identified retail outlets in the adjacent 
states that receive most of their gasoline from these terminals. Next, 
we excluded certain counties based on specific data which showed that 
more than half of the gasoline dispensed came from refineries outside 
the eight GPA states. We then included some additional counties based 
on specific data which showed that more than half of the gasoline 
dispensed came from refineries within the eight GPA states. Finally, we 
excluded some counties identified in our initial analysis based on the 
identification of nearby terminals that provided an economical source 
of gasoline from refineries outside the eight GPA states. We have 
included materials in the docket for today's action that describe in 
more detail the relevant information regarding the location of 
terminals and retail outlets for each county.

D. What Are the Results of the GPA Counties Process?

    Using the approach described above, we have identified 74 counties 
in six states that adjoin the GPA which should be included in the GPA. 
These counties are shown in Figure 1 below and are listed in the 
regulatory text in a new Sec. 80.215.

BILLING CODE 6560-50-U

[[Page 19300]]

[GRAPHIC] [TIFF OMITTED] TR13AP01.023

BILLING CODE 6560-50-C

    GPA gasoline sold in these counties is subject to the requirements 
in Secs. 80.215-80.220, in addition to other applicable requirements in 
part 80. In our analysis, we concluded that no counties in Minnesota, 
Texas, Oklahoma, or Kansas need to be included in the GPA. No county in 
these states meets the criteria in the regulation and with the 
exception of Minnesota, these four states receive little or no gasoline 
from the refineries in the eight states now in the GPA program.
    The eight core GPA states contain a number of American Indian 
reservations. These reservations are fully included in the GPA under 
today's action. The adjacent counties discussed above also contain 25 
American Indian reservations. If a reservation is only partly within a 
GPA state or adjacent county, it is considered fully in the area for 
purposes of the GPA program. This is consistent with the inclusion of 
entire states or counties in the program.
    Overall, the gasoline sold in these adjacent counties and American 
Indian reservations represents about one percent of U.S. gasoline 
consumption, bringing the total gasoline consumption covered by the GPA 
program to 5.7 percent. Even though we have revised the GPA program to 
include these additional counties, the overall emission benefits of the 
early years of the Tier 2/Gasoline Sulfur program are not reduced over 
those described in the final rule. The air quality analysis of the 
final Tier 2 program was based on the premise that all gasoline 
produced or used in the eight GPA states would be covered by the GPA 
program. Thus, GPA gasoline produced at refineries located in the eight 
GPA states was included in the air quality analysis. We believe that 
including the states, counties, and tribal lands described above will 
allow the objectives of the GPA program to be achieved.

III. Small Refiners

A. Documentation of Crude Oil Capacity by Foreign Refiners

    Section 80.235(c)(2) provides that a refiner's application for 
small refiner status must contain the total corporate crude oil 
capacity of each refinery as reported to the Energy Information 
Administration (EIA) of the U.S. Department of Energy. Because foreign 
refiners do not report their crude oil capacity to the EIA, today's 
rule modifies Sec. 80.235(c)(2) to provide that, in the case of a 
foreign refiner, the small refiner status application must contain the 
total crude oil capacity of each refinery as documented by a comparable

[[Page 19301]]

reputable source, such as a professional publication or trade journal.
    Today's rule does not change the definition of ``small refiner'' 
under Sec. 80.225(a), and we are not seeking comment on any of the 
provisions of Sec. 80.225(a).

B. Oxygenates Included in Baseline

    Section 80.250 provides the equations to be used in determining 
small refiner sulfur baselines and baseline volumes. This section, 
however, does not address whether oxygenates added downstream from the 
small refinery are to be included in the calculations. The current low 
sulfur gasoline regulations at Sec. 80.295(b) provide that any refiner 
who, under the RFG and anti-dumping regulations, included oxygenates 
blended downstream in compliance calculations for 1997-1998, must 
include this oxygenate in the calculations for sulfur content under 
Sec. 80.295 for purposes of establishing a baseline for early credit 
generation. We intended the provisions of Sec. 80.250 under the small 
refiner program to be consistent with the provisions of Sec. 80.295, 
since both baselines are intended to reflect current sulfur levels at a 
refinery and are based on the same calculation. As a result, today's 
rule modifies Sec. 80.250 to require any small refiner who included 
oxygenates blended downstream in RFG/anti-dumping compliance 
calculations for 1997-1998, to include this oxygenate for purposes of 
establishing a sulfur baseline under Sec. 80.250.

IV. Credits and Allotments

A. Baseline Calculations

    The current low sulfur gasoline regulations at Sec. 80.205 require 
the annual refinery or importer average or corporate pool average 
calculations to be conducted to two decimal places. However, the 
provisions at Secs. 80.250 and 80.295 for calculating a sulfur baseline 
for purposes of determining small refinery standards and generating 
early credits and allotments currently do not contain a similar 
requirement. We intended the provisions for calculating a sulfur 
baseline to be consistent with the provisions for calculating the 
refinery or importer annual average sulfur level, including the 
requirement to conduct the calculations to two decimal places. As a 
result, today's rule modifies Secs. 80.250 and 80.295 to require the 
baseline calculations under these sections to be conducted to two 
decimal places.
    Note, however, that sulfur credits generated under the sulfur 
program are in units of ``ppm-gallons.'' See Sec. 80.305(c). We 
interpret Sec. 80.305(c) to require sulfur credits to be rounded to the 
nearest ppm-gallon. Therefore, in calculating sulfur credits using the 
equation in Sec. 80.305(a), the refiner should use the refinery's 
sulfur baseline value established under Sec. 80.250 or Sec. 80.295, 
conducted to two decimal places, and the refinery's actual annual 
average sulfur level calculated under Sec. 80.205, conducted to two 
decimal places. Once the sulfur credits are calculated, the refiner 
should round the credits to the nearest ppm-gallon.

B. Refineries That Were Non-Operational in 1997-98

    Section 80.290 requires a refiner to submit in its sulfur baseline 
application the annual average gasoline sulfur baseline for gasoline 
produced in 1997-1998 for each refinery for which the refiner is 
applying for a sulfur baseline. The regulations, however, do not 
address refineries that were shutdown or non-operational during 1997-
1998. Today's rule provides that, for such refineries, sulfur data for 
at least one annual averaging period is required to establish a sulfur 
baseline. The refiner's baseline application must include the 
information required under Sec. 80.290(c) for the gasoline produced 
during each annual averaging period that the refinery was in operation 
after being reactivated. We will evaluate all of the data submitted by 
the refiner in determining the appropriate sulfur baseline for the 
refinery. Where we conclude that the data submitted reasonably reflects 
current sulfur levels, the refinery's baseline will be determined based 
on the annual average sulfur content for the most recent annual 
averaging period that the refinery was in operation. Today's rule 
modifies Secs. 80.290 and 80.295 to clarify these requirements.

C. Foreign Refiners With Approved 1990 Baselines Who Did Not Submit 
Anti-Dumping Compliance Reports to EPA in 1997-1998

    To establish a sulfur baseline for purposes of the small refinery 
standards or generating early sulfur credits, the regulations require 
refiners to submit to us sulfur baseline data for 1997-1998, including 
information on each batch of gasoline produced and the batch number 
assigned to the batch for purposes of compliance with the RFG/anti-
dumping regulations. See Secs. 80.245(a) and 80.290(c). We may then 
verify the data in the refiner's baseline submission by comparing it 
with the data submitted to us on the refiner's 1997-1998 annual 
averaging reports. Foreign refiners who do not have an approved 
individual baseline under the RFG/anti-dumping regulations, and, 
therefore, did not submit batch reports to us in 1997-1998, are 
required to follow the procedures under Secs. 80.91 through 80.93 
(provisions for establishing an individual anti-dumping baseline) to 
establish the volume and sulfur content of gasoline that was produced 
at the foreign refinery and imported into the United States during 
1997-1998, for purposes of calculating a sulfur baseline under 
Sec. 80.250 or Sec. 80.295. See Secs. 80.250(b), 80.290(d) and 
80.410(b)(1). This is in addition to the other baseline establishment 
requirements under Sec. 80.245 or Sec. 80.290.
    The regulations, however, do not address the situation where a 
foreign refiner has received an approved individual anti-dumping 
baseline, but the baseline did not apply for purposes of compliance 
with the anti-dumping regulations until after the 1998 annual averaging 
period. Such a refiner would not have submitted any reports to us in 
1997-1998. In this situation, we believe it is appropriate for the 
foreign refinery's baseline to be based on the gasoline produced by the 
foreign refinery and imported to the United States during the period of 
time that the refinery was subject to its individual anti-dumping 
baseline. The sulfur baseline is intended to be a reasonable 
representation of a refinery's current sulfur level. See 65 FR 6761 
(February 10, 2000). We believe that a baseline based on the refinery's 
post-1998 sulfur data will provide a reasonable a representation of the 
refinery's current sulfur level, and perhaps an even more accurate 
representation of the refinery's current sulfur level than 1997-1998 
data. As a result, today's rule requires a foreign refiner who has an 
approved individual anti-dumping baseline that was not in effect in 
1997-1998 to submit in its sulfur baseline application under 
Sec. 80.245 or Sec. 80.290 information and data for the gasoline 
produced by the refinery during each annual averaging period that the 
refinery was subject to its individual anti-dumping baseline. EPA will 
evaluate all of the data submitted by the foreign refiner in 
determining the appropriate sulfur baseline for the refinery. Where we 
conclude that the data they give us reasonably reflects current sulfur 
levels, the refinery's baseline will be determined based on the average 
sulfur content of gasoline produced by the refinery and imported to the 
United States during the most recent annual averaging period in which 
the refinery was subject to its individual anti-dumping baseline.

[[Page 19302]]

V. Sampling and Testing

A. Obtaining Test Results Before Gasoline Leaves the Refinery

1. Before January 1, 2004
    The current low sulfur gasoline regulations at Sec. 80.330(a)(1) 
require a refiner to collect a representative sample from each batch of 
gasoline produced and then to test each sample to determine its sulfur 
content prior to the gasoline leaving the refinery. The requirements in 
Sec. 80.330(a)(1) apply beginning on January 1, 2004, or January 1 of 
the first year of credit or allotment generation, whichever is earlier. 
Sections 80.330(a)(3) and (a)(4) provide the following exceptions: (1) 
Parties who collect and test composited samples of conventional 
gasoline are allowed to continue that practice until January 1, 2004; 
and (2) parties who are unable to obtain test results prior to the 
gasoline leaving the refinery are exempt from that requirement if they 
have an approved in-line blending exemption under Sec. 80.65(f)(4). The 
current low sulfur gasoline rule, therefore, requires parties who 
currently test each batch of gasoline by testing a representative 
sample taken from the certification tank (i.e., who do not test 
composite samples) to obtain test results prior to the gasoline leaving 
the facility for purposes of generating early credits or allotments 
prior to January 1, 2004. The current low sulfur gasoline rule also 
requires a refiner who produces gasoline using in-line blending 
equipment to have an in-line blending exemption under Sec. 80.65(f)(4) 
in order to generate early credits or early allotments.
    Under the RFG regulations, refiners who produce RFG by in-line 
blending are required to obtain an exemption under Sec. 80.65(f)(4). 
However, refiners who produce conventional gasoline by in-line blending 
are not required to obtain an exemption under Sec. 80.65(f)(4) for 
purposes of anti-dumping compliance. The current low sulfur gasoline 
regulations require these conventional gasoline refiners to apply for 
and receive an exemption under Sec. 80.65(f)(4) to generate early 
credits or allotments.
    We did not intend for refiners who test every batch of conventional 
gasoline by testing samples from the certification tank to have more 
severe testing requirements for purposes of generating early credits or 
allotments prior to January 1, 2004, than refiners who test composite 
samples. In addition, we now believe that the requirement under 
Sec. 80.330(a)(4) to obtain an exemption under Sec. 80.65(f)(4) for in-
line blending operations, regarding both RFG and conventional gasoline, 
is unnecessary for purposes of generating early credits or allotments. 
The requirement to obtain test results prior to the gasoline leaving 
the refinery, and the exemption requirement for in-line blenders, were 
intended to ensure that the sulfur level of each batch produced was 
known at the time of shipment. However, since early credit or allotment 
generation is based on the refinery's annual average sulfur level, 
credits and allotments are not calculated until the end of the annual 
averaging period, after the test results for all batches produced 
during the averaging period are obtained. Therefore, it is unnecessary 
for refiners to obtain test data prior to the gasoline leaving the 
refinery for purposes of early credit or allotment generation. 
Moreover, there are no per-gallon sulfur standards prior to January 1, 
2004, which would necessitate knowing the sulfur content of the 
gasoline prior to its leaving the refinery. As a result, today's rule 
modifies Sec. 80.330 to provide that refiners, including those who 
produce gasoline using computer-controlled in-line blending equipment, 
and those who test every batch of conventional gasoline, are not 
required to obtain test results prior to the gasoline leaving the 
refinery to generate early credits in 2000-2003 or early allotments in 
2003. However, refiners generating early credits or allotments must 
meet the requirements under Sec. 80.330 to obtain a representative 
sample of each batch of gasoline produced, and conform their sampling 
methods to the ASTM methodologies set forth in Secs. 80.330(b)(1) and 
(b)(2). Today's rule also modifies the provisions of Sec. 80.410 to 
allow foreign refiners who generate early sulfur credits in 2000-2003 
to ship gasoline from the foreign refinery without having the sulfur 
content included in the product transfer documents.
2. January 1, 2004 and Beyond
    Beginning on January 1, 2004, refiners must obtain test results 
before the gasoline leaves the refinery or import facility. There is an 
exception to this requirement for refiners who use computerized in-line 
blending methods. In-line blenders typically route finished gasoline 
out of the refinery before an entire batch is completed so they are 
unable to comply with the requirement to test prior to shipment. An 
automatic sampler takes a large number of small volumes from a batch 
throughout production and does not have a representative sample until 
the blending is completed. The current low sulfur gasoline regulations 
address in-line blending by providing that refiners who use such in-
line blending equipment may meet the requirement to test prior to 
shipment under the terms of an exemption under Sec. 80.65(f)(4) of the 
RFG regulations. The basis for this provision is that these exemption 
holders measure sulfur on-line and therefore know the sulfur 
concentration of each batch throughout the blending process and can 
thereby prevent non-complying batches from leaving the refinery.
    Currently, all exemption holders are producers of RFG and must meet 
a wide range of requirements, including the on-line measurement of 
several properties in addition to sulfur. See Sec. 80.65(f)(4). It is 
not practical for in-line blenders of conventional gasoline, with fewer 
requirements, to meet the requirements designed for RFG blenders, and 
there is no process under the current low sulfur gasoline regulations 
for granting a more specialized exemption. As a result, today's rule 
revises Sec. 80.330(a)(4), which requires all in-line blenders to have 
an exemption granted under Sec. 80.65(f)(4), to distinguish between 
conventional gasoline and RFG in-line blenders.
    Today's rule removes the requirement that in-line blenders of 
conventional gasoline obtain an exemption under Sec. 80.65(f)(4) to 
ship gasoline prior to testing. Instead, today's rule provides that any 
refiner who uses in-line blending equipment may be exempt from the 
requirement to obtain test results prior to releasing the gasoline from 
the refinery, provided that the refiner submits to us the information 
required for an in-line blending exemption under Sec. 80.65(f)(4)(i)(A) 
(requiring a detailed description of the in-line blending operation), 
or the refiner has an in-line blending exemption granted under 
Sec. 80.65(f)(4). Today's rule also requires the refiner to submit any 
additional information requested by us and to comply with any other 
requirements that we include in the exemption. For refiners who do not 
hold an exemption under Sec. 80.65(f)(4), in the absence of 
notification by us that the exemption has not been approved, or that 
additional information is required or other requirements have been 
included in the exemption, the in-line blending exemption will be 
effective 60 days from our receipt of the refiner's submission of 
information.
    We believe it is important to ensure that the on-line analyzer 
technology and the refiner's methodology and procedures are sufficient 
for the gasoline sulfur levels that the refinery will have when the low 
sulfur gasoline rule is implemented, for both RFG and conventional 
gasoline. Generally, we

[[Page 19303]]

will require the accuracy of the on-line sulfur measurement to be 
sufficient to identify product segments that violate the applicable 
per-gallon sulfur standards. The control of an in-line blending system 
must be sufficient to prevent non-complying gasoline from leaving the 
refinery. Recordkeeping must be sufficient to allow us to verify the 
sulfur compliance of each batch and the accuracy and control capability 
of the in-line blending system.
    Currently, on-line sulfur measurement technology is evolving and 
refiners are evaluating analyzers. In the preamble to the final rule, 
we indicated that we will be asking in-line blending refiners with 
exemptions under Sec. 80.65(f)(4) to submit additional information 
under the sulfur rule, including information on how sulfur is monitored 
and how streams of gasoline are distributed in the in-blending process. 
See 65 FR 6807. As indicated above, today's action includes provisions 
which require in-line blender-refiners, both refiners of conventional 
gasoline and refiners of RFG under a Sec. 80.65(f)(4) exemption, to 
submit any additional information requested by us and to comply with 
other requirements that we include in the exemption. Today's action 
also provides that we may modify the requirements of an exemption under 
Sec. 80.330(a)(4) if we determine that the in-line blending operation 
does not effectively or adequately control, monitor or document the 
sulfur content of the gasoline, or if we determine that other 
circumstances exist which merit the modification of the requirements 
for an exemption, such as advancements in the state-of-the-art for in-
line blending measurement which allow for additional control or more 
accurate monitoring or documentation of sulfur content. Consistent with 
other provisions of the sulfur rule, today's action provides that a 
refiner's exemption will be void ab initio if we determine that the 
refiner provided false or inaccurate information in any submission 
required for an exemption under Sec. 80.330(a)(4).

B. Sample Retention

1. Limitation on Length of Time To Retain Samples
    Section 80.335(a)(2) requires refiners to retain sample portions 
for the most recent 20 samples collected, or for each sample collected 
during the most recent 21 day period, whichever is greater. This 
section specifies the minimum number of batch samples from a refinery, 
which once created, must be retained. The regulation does not 
specifically address the maximum amount of time that any particular 
sample must be retained. At the time the low sulfur gasoline rule was 
promulgated, it was assumed that refineries and importers produce or 
import a substantial number of batches each year, and, therefore, would 
accrue the 20 batch minimum in a relatively short time period and be 
able to dispose of any additional, older samples quickly. We now 
understand, however, that at least one refiner or importer handles less 
than a handful of batches each year. Under the current low sulfur 
gasoline rule, such refiner or importer may be required to retain batch 
samples for as long as 10 to 20 years. We did not intend for refiners 
to be required to retain sulfur samples for that length of time. As a 
result, today's rule modifies Sec. 80.335(a)(2) to place a limit of 90 
days on the length of time that any one sample must be retained.
    We believe that placing a 90 day maximum on sample retention 
provides a reasonable balance between our need to have samples 
available for enforcement purposes and burden on the industry. Ideally, 
we would require all samples to be available for at least 90 days. 
However, we understand that retaining a large number of samples can 
create an undue burden on parties. Under today's rule only parties who 
produce relatively few batches of gasoline would be required to keep 
any samples for as long as 90 days. We do not believe this would unduly 
burden such parties, since they would only need to retain a few 
samples. Parties who produce a substantial number of batches, for whom 
sample retention is potentially a greater burden, will be able to 
discard samples in less than 90 days.
2. Composited Samples
    Section 80.335(a) provides that beginning on January 1, 2004, or 
January 1 of the first year of allotment or credit generation, 
whichever is earlier, a refiner or importer must retain representative 
samples of the gasoline batch samples analyzed under the requirements 
of Sec. 80.330. Under 80.330(a)(3), composited samples are treated as 
single batches of gasoline and are allowed for sulfur testing purposes 
prior to January 1, 2004. Today's rule modifies Sec. 80.335 to clarify 
that, prior to January 1, 2004, refiners who analyze composited samples 
are required to retain portions of the composited samples, and not 
portions of samples of each batch comprising the composited samples.
3. Sample Retention for Reformulated Blendstocks for Oxygenate Blending
    Section 80.335 describes the sample retention requirements for 
refiners or importers. However, this section does not address how 
reformulated blendstocks for oxygenate blending (RBOB) samples should 
be considered. Section 80.69(a)(2) of the RFG regulations requires 
refiners to conduct testing on RBOB by adding the specified type and 
amount of oxygenate to a representative sample of the RBOB, and 
determining the properties and characteristics of the resulting 
gasoline (i.e., a ``handblend''). Section 80.335(a) requires refiners 
to collect a representative portion of each sample analyzed and retain 
such sample portions as specified in Sec. 80.335(a)(2). We interpret 
Sec. 80.335(a) to require refiners to retain samples of the RBOB 
batches and samples of the ethanol used to conduct the handblend 
testing, rather than samples of the actual handblend. Refiners, 
therefore, are not required to create additional volumes of the 
handblend samples for purposes of fulfilling the sample retention 
requirements of Sec. 80.335. Having the RBOB and accompanying ethanol 
samples available to us will allow us to combine samples of the actual 
RBOB and ethanol used in the handblend. This will enable us to 
determine whether the refiner blended the handblend with proper amounts 
of the components and properly conducted the testing. Today's rule 
clarifies Sec. 80.335 with regard to the sample retention requirement 
for RBOB.

VI. Changes to Vehicle Compliance Regulations

    The table in Section I, above, lists minor changes which we are 
making to Subpart S of 40 CFR Part 86 which contains the certification 
compliance regulations for new motor vehicles. The changes correct some 
errors and inconsistencies and add some clarification. We believe these 
changes are minor and technical in nature, and can be made as a direct 
final rule.

VII. Administrative Requirements

A. Administrative Designation and Regulatory Analysis

    Under Executive Order 12866 (58 FR 51735, Oct. 4, 1993), the Agency 
is required to determine whether this regulatory action would be 
``significant'' and therefore subject to review by the Office of 
Management and Budget (OMB) and the requirements of the Executive 
Order. The order defines a ``significant regulatory action'' as any 
regulatory action that is likely to result in a rule that may:

[[Page 19304]]

     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;
     Create a serious inconsistency or otherwise interfere with 
an action taken or planned by another agency;
     Materially alter the budgetary impact of entitlements, 
grants, user fees, or loan programs or the rights and obligations of 
recipients thereof; or,
     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, we have determined 
that this final rule is not a ``significant regulatory action.''

B. Regulatory Flexibility

    We have determined that this rule will not have a significant 
impact on a substantial number of small entities, and that it is 
therefore not necessary to prepare a regulatory flexibility analysis in 
conjunction with this direct final rule. Because today's rule corrects, 
amends, and revises certain provisions of the December 1999 regulations 
for the control of air pollution from new motor vehicles and for low 
sulfur gasoline, regulated entities will find it easier to comply with 
the requirements of the Tier 2/Gasoline sulfur program. Today's rule 
also identifies counties for inclusion in the GPA, resulting in 
additional flexibility for refiners providing gasoline to those areas.

C. Paperwork Reduction Act

    The Paperwork Reduction Act of 1980, 44 USC 3501 et seq., and 
implementing regulations, 5 CFR Part 1320, do not apply to this action 
as it does not involve the collection of information as defined 
therein.

D. Intergovernmental Relations

1. Unfunded Mandates Reform Act
    Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Public 
Law 104-4, establishes requirements for federal agencies to assess the 
effects of their regulatory actions on state, local, and tribal 
governments, and the private sector. Under section 202 of the UMRA, We 
generally must prepare a written statement, including a cost-benefit 
analysis, for proposed and final rules with ``federal mandates'' that 
may result in expenditures to state, local, and tribal governments, in 
the aggregate, or to the private sector, of $100 million or more for 
any single year. Before promulgating a rule for which a written 
statement is needed, section 205 of the UMRA generally requires us to 
identify and consider a reasonable number of regulatory alternatives 
and adopt the least costly, most cost-effective, or least burdensome 
alternative that achieves the objectives of the rule. The provisions of 
section 205 do not apply when they are inconsistent with applicable 
law. Moreover, section 205 allows us to adopt an alternative that is 
not the least costly, most cost-effective, or least burdensome 
alternative if we provide an explanation in the final rule of why such 
an alternative was adopted.
    Before we establish any regulatory requirement that may 
significantly or uniquely affect small governments, including tribal 
governments, we must develop a small government plan pursuant to 
section 203 of the UMRA. Such a plan must provide for notifying 
potentially affected small governments, and enabling officials of 
affected small governments to have meaningful and timely input in the 
development of our regulatory proposals with significant federal 
intergovernmental mandates. The plan must also provide for informing, 
educating, and advising small governments on compliance with the 
regulatory requirements.
    This rule contains no federal mandates for state, local, or tribal 
governments as defined by the provisions of Title II of the UMRA. The 
rule imposes no enforceable duties on any of these governmental 
entities. Nothing in the rule will significantly or uniquely affect 
small governments.
    We have determined that this rule does not contain a federal 
mandate that may result in estimated expenditures of more than $100 
million to the private sector in any single year. This action has the 
net effect of correcting, amending, and revising certain provisions of 
the Tier 2/Gasoline Sulfur program, and identifying counties for 
inclusion in the GPA. Therefore, the requirements of the Unfunded 
Mandates Act do not apply to this action.
2. Executive Order 13084: Consultation and Coordination With Indian 
Tribal Governments
    On January 1, 2001, Executive Order 13084 was superseded by 
Executive Order 13175. However, this rule was developed during the 
period when Executive Order 13084 was still in force, and so tribal 
considerations were addressed under Executive Order 13084.
    Under Executive Order 13084, we may not issue a regulation that is 
not required by statute, that significantly or uniquely affects the 
communities of Indian Tribal governments, and that imposes substantial 
direct compliance costs on those communities, unless the federal 
government provides the funds necessary to pay the direct compliance 
costs incurred by the tribal governments, or we consult with those 
governments. If we comply by consulting, Executive Order 13084 requires 
us to provide to the Office of Management and Budget, in a separately 
identified section of the preamble to the rule, a description of the 
extent of our prior consultation with representatives of affected 
tribal governments, a summary of the nature of their concerns, and a 
statement supporting the need to issue the regulation. In addition, 
Executive Order 13084 requires us to develop an effective process 
permitting elected officials and other representatives of Indian tribal 
governments ``to provide meaningful and timely input in the development 
of regulatory policies on matters that significantly or uniquely affect 
their communities.''
    Today's rule does not uniquely affect the communities of American 
Indian tribal governments since the motor vehicle emissions, motor 
vehicle fuel, and other related requirements for private businesses in 
today's rule will have national applicability. Furthermore, today's 
rule does not impose any direct compliance costs on these communities 
and no circumstances specific to such communities exist that will cause 
an impact on these communities beyond those discussed in the other 
sections of today's document. The effect of today's rule is no more 
significant than the Tier 2/Gasoline Sulfur program for tribes within 
the original GPA; under today's action, gasoline sold in certain tribal 
lands will be subject to the GPA standards rather than the otherwise 
applicable gasoline sulfur standards until 2007. Accordingly, the 
requirements of section 3(b) of Executive Order 13084 do not apply to 
this rule. Our conclusions regarding the impacts from the 
implementation of today's rule discussed in the other sections of this 
preamble are equally applicable to the communities of American Indian 
tribal governments.
    As described elsewhere in this rule, the overall emission benefits 
of the early years of the Tier 2/Gasoline Sulfur program are not 
reduced over those described in the final rule. The air quality 
analysis of the final Tier 2 program was based on the premise that all 
gasoline produced or used in the eight GPA states would be covered by 
the GPA program. Thus, GPA gasoline produced at refineries located in 
the

[[Page 19305]]

eight GPA states was included in the air quality analysis.
3. Executive Order 13132 (Federalism)
    Executive Order 13132, entitled ``Federalism'' (64 FR 43255, August 
10, 1999), requires us to develop an accountable process to ensure 
``meaningful and timely input by State and local officials in the 
development of regulatory policies that have federalism implications.'' 
``Policies that have federalism implications'' is defined in the 
Executive Order to include regulations that have ``substantial direct 
effects on the States, on the relationship between the national 
government and the States, or on the distribution of power and 
responsibilities among the various levels of government.
    Under section 6 of Executive Order 13132, we may not issue a 
regulation that has federalism implications, that imposes substantial 
direct compliance costs, and that is not required by statute, unless 
the Federal government provides the funds necessary to pay the direct 
compliance costs incurred by State and local governments, or we consult 
with State and local officials early in the process of developing the 
proposed regulation. We also may not issue a regulation that has 
federalism implications and that preempts State law, unless the Agency 
consults with State and local officials early in the process of 
developing the proposed regulation.
    Section 4 of the Executive Order contains additional requirements 
for rules that preempt State or local law, even if those rules do not 
have federalism implications (i.e., the rules will not have substantial 
direct effects on the States, on the relationship between the national 
government and the states, or on the distribution of power and 
responsibilities among the various levels of government). Those 
requirements include providing all affected State and local officials 
notice and an opportunity for appropriate participation in the 
development of the regulation. If the preemption is not based on 
express or implied statutory authority, we also must consult, to the 
extent practicable, with appropriate State and local officials 
regarding the conflict between State law and Federally protected 
interests within the agency's area of regulatory responsibility.
    This final rule does not have federalism implications. It will not 
have substantial direct effects on the States, on the relationship 
between the national government and the States, or on the distribution 
of power and responsibilities among the various levels of government, 
as specified in Executive Order 13132. This rule clarifies and corrects 
certain provisions of an earlier rule that adopted national emissions 
standards for certain categories of motor vehicles and national 
standards to control gasoline sulfur, and identifies additional areas 
to be subject to the GPA program for low sulfur gasoline. The 
requirements of the rule will be enforced by the federal government at 
the national level. Thus, the requirements of section 6 of the 
Executive Order do not apply to this rule. Although section 6 of 
Executive Order 13132 does not apply to this rule, we did consult with 
State and local officials in developing this rule.

E. National Technology Transfer and Advancement Act

    Section 12(d) of the National Technology Transfer and Advancement 
Act of 1995 (NTTAA), Section 12(d) of Public Law 104-113, directs us to 
use voluntary consensus standards in our regulatory activities unless 
it would be inconsistent with applicable law or otherwise impractical. 
Voluntary consensus standards are technical standards (e.g., materials 
specifications, test methods, sampling procedures, and business 
practices) developed or adopted by voluntary consensus standards 
bodies. The NTTAA directs us to provide Congress, through OMB, 
explanations when the we decide not to use available and applicable 
voluntary consensus standards.
    This rule references technical standards adopted by us through 
previous rulemakings. No new technical standards are established in 
today's rule. The standards referenced in today's rule involve the 
measurement of gasoline fuel parameters and motor vehicle emissions. 
The measurement standards for gasoline fuel parameters referenced in 
today's proposal are all voluntary consensus standards. The motor 
vehicle emissions measurement standards referenced in today's rule are 
government-unique standards that were developed by us through previous 
rulemakings. These standards have served our emissions control goals 
well since their implementation and have been well accepted by 
industry. We are not aware of any voluntary consensus standards for the 
measurement of motor vehicle emissions. Therefore, we are using the 
existing EPA-developed standards found in 40 CFR part 86 for the 
measurement of motor vehicle emissions.

F. Executive Order 13045: Children's Health Protection

    Executive Order 13045, ``Protection of Children from Environmental 
Health Risks and Safety Risks'' (62 FR 19885, April 23, 1997) applies 
to any rule that (1) is determined to be ``economically significant'' 
as defined under Executive Order 12866, and (2) concerns an 
environmental health or safety risk that we have reason to believe may 
have a disproportionate effect on children. If the regulatory action 
meets both criteria, section 5-501 of the Order directs us to evaluate 
the environmental health or safety effects of the planned rule on 
children, and explain why the planned regulation is preferable to other 
potentially effective and reasonably feasible alternatives considered 
by us.
    This rule is not subject to the Executive Order because it is not 
an economically significant regulatory action as defined by Executive 
Order 12866. Furthermore, this rule does not concern an environmental 
health or safety risk that we have reason to believe may have a 
disproportionate effect on children.

G. Congressional Review Act

    The congressional review Act, 5 U.S.C. 801 et seq., as added by the 
Small Business Regulatory Enforcement Fairness Act of 1996, generally 
provides that before a rule may take effect, the agency promulgating 
the rule must submit a rule report, which includes a copy of the rule, 
to each House of the Congress and to the Comptroller General of the 
United States. We will submit 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 United States prior 
to publication of the rule in the Federal Register. A Major rule cannot 
take effect until 60 days after it is published in the Federal 
Register. This action is not a ``major rule'' as defined by 5 U.S.C. 
804(2). This rule will be effective July 12, 2001.

VIII. Statutory Provisions and Legal Authority

    Statutory authority for the vehicle controls set in today's final 
rule can be found in sections 202, 206, 207, 208, and 301 of the Clean 
Air Act (CAA), as amended, 42 U.S.C. sections 7521, 7525, 7541, 7542 
and 7601.
    Statutory authority for the fuel controls set in today's final rule 
comes from section 211(c) of the CAA (42 U.S.C. 7545(c)), which allows 
us to regulate fuels that either contribute to air pollution which 
endangers public health or welfare or which impair

[[Page 19306]]

emission control equipment. Additional support for the procedural and 
enforcement-related aspects of the fuel's controls in today's final 
rule, including the record keeping requirements, comes from sections 
114(a) and 301(a) of the CAA.

List of Subjects

40 CFR Part 80

    Environmental protection, Fuel additives, Gasoline, Imports, 
Labeling, Motor vehicle pollution, Penalties, Reporting and 
recordkeeping requirements.

40 CFR Part 86

    Environmental protection, Administrative practice and procedure, 
Confidential business information, Labeling, Motor vehicle pollution, 
Penalties, Reporting and recordkeeping requirements.

    Dated: January 19, 2001.
Carol M. Browner,
Administrator.

    For the reasons set forth in the preamble, parts 80 and 86 of the 
Code of Federal Regulations are amended as follows:

PART 80--REGULATION OF FUELS AND FUEL ADDITIVES

    1. The authority citation for part 80 continues to read as follows:

    Authority: 42 U.S.C. 7414, 7521(l), 7545 and 7601(a).

    2. Section 80.215 is amended by revising paragraphs (a)(2) and 
(a)(3) and by adding paragraph (a)(4) to read as follows:


Sec. 80.215  What is the scope of the geographic phase-in program?

    (a) * * *
    (2) In addition, the following counties within the states 
identified in paragraph (a)(2)(i) of this section and the following 
Federal Indian reservations in paragraph (a)(2)(ii) of this section are 
included in the GPA:
    (i) The list of counties follows:
Arizona
Apache
Coconino
Gila
Greenlee
Navajo
Nebraska
Banner
Box Butte
Cheyenne
Dawes
Deuel
Garden
Keith
Kimball
Morrill
Scotts Bluff
Sheridan
Sioux
Nevada
Elko
Eureka
Humboldt
Lander
Lincoln
White Pine
Oregon
Baker
Crook
Gilliam
Grant
Harney
Malheur
Morrow
Sherman
Umatilla
Union
Wallowa
Wheeler
South Dakota
Bennett
Butte
Corson
Custer
Dewey
Fall River
Haakon
Harding
Jackson
Jones
Lawrence
Meade
Mellette
Pennington
Perkins
Shannon
Stanley
Todd
Ziebach
Washington
Adams
Asotin
Benton
Chelan
Columbia
Douglas
Ferry
Franklin
Garfield
Grant
Kittitas
Lincoln
Okanogan
Pend Oreille
Spokane
Stevens
Walla Walla
Whitman
Yakima
    (ii) The list of Federal Indian reservations follows: Burns Paiute, 
Cheyenne River, Colville, Duck Valley, Ely Colony, Fort Apache, Fort 
McDermitt, Goshute, Haulapai, Havasupai, Hopi, Kalispel, Navajo, Pine 
Ridge, Rosebud, Yakama, San Carlos, Spokane, Standing Rock, Summit 
Lake, Te-Moak, Umatilla, Winnemucca.
    (3) Contiguous tribal reservations of a particular tribe are 
included in the GPA if a portion of the tribal reservation is within 
the GPA state or county.
    (4) Any dispensing facility located partially within a GPA county 
or tribal reservation land shall be considered fully within the GPA for 
purposes of this program.
* * * * *

    3. Section 80.216 is amended by revising paragraphs (a)(1)(i) and 
(a)(2) to read as follows:


Sec. 80.216  What standards apply to gasoline produced or imported for 
use in the GPA?

    (a)(1) * * *
    (i) 150.00 ppm; or
* * * * *
    (2) In the case of any refinery whose actual annual sulfur average 
decreases to a level lower than the refinery's annual average sulfur 
standard established under paragraph (a)(1) of this section during the 
period 2000 through 2003, the standard applicable to that refinery from 
2004 through 2006 shall be the lowest average sulfur content for any 
year in which the refinery generated allotments or credits under 
Sec. 80.275(a) or Sec. 80.305 plus 30 ppm, not to exceed 150.00 ppm.
* * * * *

    4. Section 80.217 is amended by revising paragraph (b) to read as 
follows:


Sec. 80.217  How does a refiner or importer apply for the GPA 
standards?

* * * * *
    (b) Applications under paragraph (a) of this section must be 
submitted by May 1, 2001.
* * * * *

    5. Section 80.225 is amended by revising paragraph (d) to read as 
follows:


Sec. 80.225  What is the definition of a small refiner?

* * * * *
    (d) Notwithstanding the definition in paragraph (a) of this 
section, refiners who acquire and/or reactivate a refinery that was 
shutdown or was non-operational between January 1, 1998, and January 1, 
1999, may apply for small refiner status in accordance with the 
provisions of Sec. 80.235. The

[[Page 19307]]

employee (1500 annual average) and crude oil capacity criteria (155,000 
bpcd) for small refiner status for such refineries will be determined 
in accordance with the provisions of Sec. 80.235(f).

    6. Section 80.230 is amended by revising paragraph (a)(1) to read 
as follows:


Sec. 80.230  Who is not eligible for the hardship provisions for small 
refiners?

    (a) * * *
    (1) Refiners with refineries built after January 1, 1999;
* * * * *

    7. Section 80.235 is amended by revising paragraphs (c)(2), (f) and 
(g)(1) to read as follows:


Sec. 80.235  How does a refiner obtain approval as a small refiner?

* * * * *
    (c) * * *
    (2) The total corporate crude oil capacity of each refinery as 
reported to the Energy Information Administration (EIA) of the U.S. 
Department of Energy (DOE), or, in the case of a foreign refiner, a 
comparable reputable source, such as a professional publication or 
trade journal. The information submitted to EIA or the comparable 
reputable source is presumed to be correct. In cases where a company, 
domestic or foreign, disagrees with this information, the company may 
petition EPA with appropriate data to correct the record within 60 days 
after the company submits its application for small refiner status.
* * * * *
    (f) Approval of small refiner status for refiners who apply under 
Sec. 80.225(d) will be based on all information submitted under 
paragraph (c) of this section. The information submitted must show that 
the refiner employed an average of no more than 1500 people and had an 
average crude oil capacity less than or equal to 155,000 bpcd. Where 
appropriate, the employee and crude oil capacity criteria for such 
refiners will be based on the most recent 12 months of operation.
    (g) * * *
    (1) If approved, EPA will notify the refiner of each refinery's 
applicable annual average sulfur standard, baseline volume, and per-
gallon cap standard under Sec. 80.240 for the 2004-2007 averaging 
periods.
* * * * *

    8. Section 80.245 is amended by revising paragraph (a)(3) and 
adding paragraph (c) to read as follows:


Sec. 80.245  How does a small refiner apply for a sulfur baseline?

    (a) * * *
    (3) For any refiner that acquires and/or reactivates a refinery 
that was shut down or non-operational between January 1, 1997, and 
December 31, 1998, the average sulfur level and average volume of 
gasoline produced during each annual averaging period that the refinery 
was in operation after the refinery was acquired and/or reactivated. 
EPA will evaluate all of the information and data submitted by the 
refiner in determining the appropriate sulfur baseline for the 
refinery. Where EPA concludes that the data submitted reasonably 
reflects current sulfur levels, the refinery's baseline will be 
determined based on the average sulfur content of gasoline produced by 
the refinery during the most recent annual averaging period in which 
the refinery was in operation.
* * * * *
    (c)(1) Foreign refiners who do not have an approved individual 
refinery baseline under Sec. 80.94 must follow the procedures specified 
in Sec. 80.410(b).
    (2) Foreign refiners who have an approved individual refinery 
baseline under Sec. 80.94, but one that was not in effect for purposes 
of anti-dumping compliance during the 1997-1998 annual averaging 
periods, must comply with the requirements of this section for the 
gasoline produced at the refinery and imported into the United States 
during each of the annual averaging periods in which the refinery was 
subject to its individual anti-dumping baseline. EPA will evaluate all 
of the information and data submitted under this section in determining 
the foreign refinery's sulfur baseline pursuant to this paragraph. 
Where EPA concludes that the data submitted reasonably reflects current 
sulfur levels, the refinery's baseline will be determined based on the 
annual average sulfur level and volume of gasoline produced by the 
foreign refinery and imported into the U.S. during the most recent 
annual averaging period in which the refinery was subject to its 
individual anti-dumping baseline.

    9. Section 80.250 is amended by revising the definitions of ``n'' 
and ``i'' following the equations in paragraphs (a)(1) and (a)(2), 
adding paragraphs (a)(3) and (a)(4), and removing and reserving 
paragraph (b) to read as follows:


Sec. 80.250  How is the small refiner sulfur baseline and volume 
determined?

    (a) (1) * * *

n = Total number of batches of gasoline produced from January 1, 
1997, through December 31, 1998 (or the total number of batches of 
gasoline pursuant to Sec. 80.245(a)(3); or, for a foreign refinery, 
the total number of batches of gasoline produced and imported into 
the U.S. from January 1, 1997, through December 31, 1998, or the 
total number of batches of gasoline produced and imported into the 
U.S. pursuant to Sec. 80.245(c)(2)).
i = Individual batch of gasoline produced from January 1, 1997, 
through December 31, 1998 (or individual batch of gasoline pursuant 
to Sec. 80.245(a)(3); or, for a foreign refinery, individual batch 
of gasoline produced and imported into the U.S. from January 1, 
1997, through December 31, 1998, or individual batch of gasoline 
produced and imported into the U.S. pursuant to Sec. 80.245(c)(2)).

    (2) * * *

n = Total number of batches of gasoline produced from January 1, 
1997, through December 31, 1998 (or the total number of batches of 
gasoline pursuant to Sec. 80.245(a)(3); or, for a foreign refinery, 
the total number of batches of gasoline produced and imported into 
the U.S. from January 1, 1997, through December 31, 1998, or the 
total number of batches of gasoline produced and imported into the 
U.S. pursuant to Sec. 80.245(c)(2)).
i = Individual batch of gasoline produced from January 1, 1997, 
through December 31, 1998 (or individual batch of gasoline produced 
pursuant to Sec. 80.245(a)(3); or, for a foreign refinery, 
individual batch of gasoline produced and imported into the U.S. 
from January 1, 1997, through December 31, 1998, or individual batch 
of gasoline produced and imported into the U.S. pursuant to 
Sec. 80.245(c)(2)).

    (3) Any refiner who, under Sec. 80.69 or Sec. 80.101(d)(4), 
included oxygenate blended downstream in compliance calculations for 
1997-1998 must include this oxygenate in the baseline calculations for 
sulfur content under this section.
    (4) Sulfur baseline calculations under this section shall be 
conducted to two decimal places.
    (b) [Reserved]
* * * * *

    10. Section 80.285 is amended by revising paragraphs (a)(1)(i), 
(a)(1)(ii), (a)(1)(iii), (b)(1)(i), (b)(1)(ii) and (b)(2) to read as 
follows:


Sec. 80.285  Who may generate credits under the ABT program?

    (a) * * *
    (1) * * *
    (i) Refiners who establish a sulfur baseline under Sec. 80.295 for 
a refinery;
    (ii) Foreign refiners for refineries with an approved baseline 
under Sec. 80.94, or refineries with baselines established in 
accordance with Sec. 80.290(d); or
    (iii) Small refiners for any refinery subject to the standards 
under Sec. 80.240, using their small refiner baseline

[[Page 19308]]

established under Sec. 80.250 for that refinery.
* * * * *
    (b) * * *
    (1) * * *
    (i) Refiners for any refinery, and importers subject to the 
standards under Sec. 80.195;
    (ii) Refiners and importers of gasoline designated as GPA gasoline 
under Sec. 80.219, using the refinery's annual average sulfur standard 
for GPA gasoline established under Sec. 80.216(a)(for any party 
generating credits under both paragraph (b)(1)(i) of this section and 
this paragraph (b)(1)(ii), such credits must be calculated separately); 
or
* * * * *
    (2) Generation of credits under Sec. 80.310 for all imported 
gasoline shall be through the importer.
* * * * *

    11. Section 80.290 is amended by adding paragraph (c)(6) and 
revising paragraph (d) to read as follows:


Sec. 80.290  How does a refiner apply for a sulfur baseline?

* * * * *
    (c) * * *
    (6) For any refiner that acquires and/or reactivates a refinery 
that was shut down or non-operational between January 1, 1997, and 
December 31, 1998, the average sulfur level of gasoline produced during 
each annual averaging period that the refinery was in operation after 
the refinery was acquired and/or reactivated. EPA will evaluate all of 
the data submitted by the refiner in determining the appropriate sulfur 
baseline for the refinery. Where EPA concludes that the data submitted 
reasonably reflects current sulfur levels, the refinery's baseline will 
be determined based on the average sulfur content of the refinery's 
gasoline production during the most recent annual averaging period the 
refinery was in operation.
    (d)(1) Foreign refiners who do not have an approved refinery 
baseline under Sec. 80.94 must follow the procedures specified in 
Sec. 80.410(b).
    (2) Foreign refiners who have an approved individual refinery 
baseline under Sec. 80.94, but one that was not in effect for purposes 
of anti-dumping compliance during the 1997-1998 annual averaging 
periods, must comply with the requirements of this section for the 
gasoline produced at the refinery and imported to the U.S. during each 
annual averaging period in which the refinery was subject to its 
individual anti-dumping baseline. EPA will evaluate all of the 
information and data submitted under this section in determining a 
foreign refinery's sulfur baseline pursuant to this paragraph (d). 
Where EPA concludes that the data submitted reasonably reflects current 
sulfur levels, a foreign refinery's baseline sulfur level under this 
paragraph will be determined based on the average sulfur level of 
gasoline produced by the foreign refinery and imported to the U.S. 
during the most recent annual averaging period in which the refinery 
was subject to its individual anti-dumping baseline.
* * * * *

    12. Section 80.295 is amended by revising the definitions of ``n'' 
and ``i'' following the equation in paragraph (a), revising paragraph 
(b) and adding paragraph (c) to read as follows:


Sec. 80.295  How is a refinery sulfur baseline determined?

    (a) * * *

n = Total number of batches of gasoline produced during January 1, 
1997 through December 31, 1998 (or the total number of batches of 
gasoline pursuant to Sec. 80.290(c)(6); or, for a foreign refinery, 
the total number of batches of gasoline produced and imported into 
the U.S. during January 1, 1997 through December 31, 1998, or, the 
total number of batches of gasoline produced and imported into the 
U.S. pursuant to Sec. 80.290(d)(2)).
i = Individual batch of gasoline produced during January 1, 1997 
through December 31, 1998 (or individual batch of gasoline produced 
pursuant to Sec. 80.290(c)(6); or, for a foreign refinery, 
individual batch of gasoline produced and imported into the U.S. 
during January 1, 1997 through December 31, 1998, or, individual 
batch of gasoline produced and imported into the U.S. pursuant to 
Sec. 80.290(d)(2)).

    (b) Any refiner who, under Sec. 80.69 or Sec. 80.101(d)(4), 
included oxygenate blended downstream in compliance calculations for 
1997-1998 for a refinery must include this oxygenate in the baseline 
calculations for sulfur content for that refinery under paragraph (a) 
of this section.
    (c) Sulfur baseline calculations under this section shall be 
conducted to two decimal places.

    13. Section 80.305 is amended by revising the definitions of 
``Va'' and ``Sa'' following the equation in 
paragraph (a), and revising paragraph (d) to read as follows:


Sec. 80.305  How are credits generated during the time period 2000 
through 2003?

    (a) * * *

Va = Total volume of gasoline produced during the 
averaging period at the refinery (or for a foreign refinery, the 
total volume of gasoline produced during the averaging period at the 
refinery that was imported into the U.S. in accordance with the 
requirements of Sec. 80.410)

* * * * *

Sa = Actual annual average sulfur level, calculated in 
accordance with the provisions of Sec. 80.205, for gasoline produced 
during the averaging period by the refinery, exclusive of any 
credits, (or for a foreign refinery, the actual average sulfur 
level, calculated in accordance with the provisions of Sec. 80.205, 
for gasoline produced during the averaging period at the refinery 
that was imported into the U.S., in accordance with the requirements 
of Sec. 80.410, exclusive of any credits.)

* * * * *
    (d) Refiners may generate credits for gasoline produced during an 
averaging period for a refinery only if the annual average sulfur level 
for the gasoline produced at that refinery during the averaging period 
is less than 0.90 of the refinery's baseline under Sec. 80.250 or 
Sec. 80.295.
* * * * *

    14. Section 80.310 is amended by revising the definitions of 
Sstd and Sa following the equation in paragraph 
(b) to read as follows:


Sec. 80.310  How are credits generated beginning in 2004?

* * * * *
    (b) * * *

Sstd = 30 ppm; or the sulfur standard for a small 
refinery established under Sec. 80.240; or, for gasoline designated 
as GPA gasoline under Sec. 80.219, the standard for GPA gasoline 
established for a refinery under Sec. 80.216(a).
Sa = Actual annual average sulfur level, calculated in 
accordance with the provisions of Sec. 80.205, for gasoline produced 
at a refinery or imported during the averaging period, exclusive of 
any credits.

* * * * *

    15. Section 80.330 is amended by revising paragraphs (a)(3) and 
(a)(4) to read as follows:


Sec. 80.330  What are the sampling and testing requirements for 
refiners and importers?

    (a) * * *
    (3) Prior to January 1, 2004:
    (i) Any refiner may release gasoline from the refinery prior to 
obtaining the test results required under paragraph (a)(1) of this 
section.
    (ii) Any refiner of conventional gasoline may combine samples of 
gasoline from more than one batch of gasoline or blendstock prior to 
analysis and treat such composite sample as one batch of gasoline or 
blendstock pursuant to the requirements of Sec. 80.101(i)(2).
    (4)(i) Beginning January 1, 2004, any refiner who produces gasoline 
using

[[Page 19309]]

computer-controlled in-line blending equipment is exempt from the 
requirement of paragraph (a)(1) of this section to obtain the test 
results required under paragraph (a)(1) of this section prior to the 
gasoline leaving the refinery, provided that the refiner obtains an 
exemption from this requirement from EPA. To obtain such exemption, the 
refiner must:
    (A) Have been granted an in-line blending exemption under 
Sec. 80.65(f)(4); or
    (B) If the refiner has not been granted an exemption under 
Sec. 80.65(f)(4), submit to EPA all of the information required under 
Sec. 80.65(f)(4)(i)(A). A letter signed by the president, chief 
operating or chief executive officer of the company, or his/her 
designee, stating that the information contained in the submission is 
true to the best of his/her belief must accompany any submission under 
this paragraph (a)(4)(i)(B).
    (ii) Refiners who seek an exemption under paragraph (a)(4)(i) of 
this section must comply with any request by EPA for additional 
information or any other requirements that EPA includes as part of the 
exemption.
    (iii) Within 60 days of EPA's receipt of a submission under 
paragraph (a)(4)(i)(B) of this section, EPA will notify the refiner if 
the exemption is not approved or of any deficiencies in the refiner's 
submission, or if any additional information is required or other 
requirements are included in the exemption pursuant to paragraph 
(a)(4)(ii) of this section. In the absence of such notification from 
EPA, the effective date of an exemption under paragraph (a)(4)(i) of 
this section for refiners who do not hold an exemption under 
Sec. 80.65(f)(4) is 60 days from EPA's receipt of the refiner's 
submission under paragraph (a)(4)(i)(B) of this section.
    (iv) EPA reserves the right to modify the requirements of an 
exemption under paragraph (a)(4)(i) of this section, in whole or in 
part, at any time, if EPA determines that the refiner's operation does 
not effectively or adequately control, monitor or document the sulfur 
content of the refinery's gasoline production, or if EPA determines 
that any other circumstances exist which merit modification of the 
requirements of an exemption, such as advancements in the state of the 
art for in-line blending measurement which allow for additional control 
or more accurate monitoring or documentation of sulfur content. If EPA 
finds that a refiner provided false or inaccurate information in any 
submission required for an exemption under this section, upon 
notification from EPA, the refiner's exemption will be void ab initio.
* * * * *
    16. Section 80.335 is amended by revising paragraph (a)(2) and 
adding paragraphs (d) and (e) to read as follows:


Sec. 80.335  What gasoline sample retention requirements apply to 
refiners and importers?

    (a) * * *
    (2) Retain sample portions for the most recent 20 samples 
collected, or for each sample collected during the most recent 21 day 
period, whichever is greater, not to exceed 90 days for any given 
sample;
* * * * *
    (d) Prior to January 1, 2004, for purposes of complying with the 
requirements of this section, refiners who analyze composited samples 
under Sec. 80.330(a)(3) must retain portions of the composited samples. 
Portions of samples of each batch comprising the composited samples are 
not required to be retained.
    (e) For purposes of complying with the requirements of this section 
for RBOB, a sample of each RBOB batch produced plus a sample of the 
ethanol used to conduct the handblend testing pursuant to Sec. 80.69 
must be retained.
    17. Section 80.410 is amended by revising paragraphs (d)(1), 
(d)(3)(ii), (f)(2)(ii) introductory text, and (s) introductory text to 
read as follows:


Sec. 80.410  What are the additional requirements for gasoline produced 
at foreign refineries having individual small refiner sulfur baselines, 
foreign refineries granted temporary relief under Sec. 80.270, or 
baselines for generating credits during 2000 through 2003?

* * * * *
    (d) * * * (1) Any foreign refiner of a foreign refinery that has 
been assigned an individual sulfur baseline must designate each batch 
of Sulfur-FRGAS as such at the time the gasoline is produced, unless 
the refinery has elected to classify no gasoline exported to the United 
States as Sulfur-FRGAS under paragraph (c)(3)(ii) of this section.
* * * * *
    (3) * * *
    (ii) The certification shall be made part of the product transfer 
documents for the Sulfur-FRGAS. Prior to 2004, the information required 
under paragraph (d)(3)(i)(D)(1) of this section may be omitted from the 
product transfer documents that accompany the gasoline, provided that 
such information is provided to the United States importer prior to 
collection of the representative sample required under paragraph 
(o)(3)(ii)(A) of this section.
* * * * *
    (f) * * *
    (2) * * *
    (ii) Prepare a volume-weighted vessel composite sample from the 
compartment samples, and determine the value for sulfur in accordance 
with the methodology and requirements specified in Sec. 80.330, by:
* * * * *
    (s) Additional requirements for petitions, reports and 
certificates. Any petition for a refinery baseline under Sec. 80.250 or 
Sec. 80.295, any alternative procedures under paragraph (p) of this 
section, and any certification under paragraph (d)(3) of this section 
shall be:
* * * * *

PART 86---CONTROL OF EMISSIONS FROM NEW AND IN-USE HIGHWAY VEHICLES 
AND ENGINES

    18. The authority citation for part 86 continues to read as 
follows:

    Authority: 42 U.S.C. 7401-7521(l) and 7521(m)-7671(q).

    19. Section 86.1810-01 is amended by revising paragraphs (l)(1) 
introductory text and (m)(1) introductory text to read as follows:


Sec. 86.1810-01  General standards; increase in emissions; unsafe 
conditions; waivers.

* * * * *
    (l) Fuel dispensing spitback testing waiver. (1) Vehicles certified 
to the refueling emission standards set forth in Secs. 86.1811(e), 
86.1812(e) and 86.1813(e) are not required to demonstrate compliance 
with the fuel dispensing spitback standard contained in that section 
provided that:
* * * * *
    (m) Inherently low refueling emission testing waiver. (1) Vehicles 
using fuels/fuel systems inherently low in refueling emissions are not 
required to conduct testing to demonstrate compliance with the 
refueling emission standards set forth in Secs. 86.1811(e), 86.1812(e) 
and 86.1813(e) provided that:
* * * * *
    20. Section 86.1811-04 is amended by revising paragraphs (c)(3)(i), 
(c)(3)(ii), and (e) introductory text, and in paragraph (f)(2)(i) by 
revising the introductory text, the equation and the definition for 
SFTP Standard following the equation to read as follows:


Sec. 86.1811-04  Emission standards for light-duty vehicles, light-duty 
trucks and medium-duty passenger vehicles.

* * * * *
    (c) * * *

[[Page 19310]]

    (3)(i) For a given test group of flexible-fueled, bi-fuel or dual 
fuel vehicles certified to bin 10 in Table S04-1, when operated on the 
alcohol or gaseous fuel they are designed to use, manufacturers may 
choose to comply with an NMOG standard of 0.230 for LDV/LLDTs or 0.280 
g/mi for HLDT/MDPVs at full useful life and corresponding intermediate 
life standards of 0.160 g/mi and 0.195 g/mi, respectively, when these 
flexible-fueled, bi-fuel or dual fuel vehicles are certified to operate 
on gasoline or diesel fuel.
    (ii) For a given test group of flexible-fueled, bi-fuel or dual 
fuel vehicles certified to bin 8 in Table S04-1, when operated on the 
alcohol or gaseous fuel they are designed to use, manufacturers may 
choose to comply with a NMOG standard of 0.156 g/mi for LDV/LLDTs and 
0.180 for HLDT/MDPVs at full useful life and corresponding intermediate 
life standards of 0.125 g/mi and 0.140 g/mi, respectively, when these 
flexible-fueled, bi-fuel or dual fuel vehicles are certified to operate 
on gasoline or diesel fuel.
* * * * *
    (e) Evaporative emission standards. Consistent with the phase-in 
requirements in paragraph (k) of this section, evaporative emissions 
from gasoline-fueled, natural gas-fueled, liquefied petroleum gas-
fueled, ethanol-fueled and methanol-fueled vehicles must not exceed the 
standards in this paragraph (e). The standards apply equally to 
certification and in-use vehicles.
* * * * *
    (f) * * *
    (2)(i) Manufacturers must calculate their applicable full useful 
life SFTP standards for NMHC+ NOX, PM and for CO, if using 
the weighted CO standard. If not using the weighted CO standard, 
manufacturers may use the full useful life standalone Tier 1 standards 
for US06 and SC03. To calculate the applicable full useful life 
weighted NMHC+ NOX, PM and CO standards, manufacturers must 
use the following formula:

SFTP Standard = SFTP Standard1-[0.35  x  (FTP 
Standard1-Current FTP Standard)]

Where:
SFTP Standard = Applicable full life weighted SFTP standard for 
NMHC+ NOX, PM or CO. The NMHC+ NOX and PM 
standards must be rounded to two decimal places and the CO standard 
must be rounded to one decimal place.

* * * * *
    21. Section 86.1829-01 is amended by revising paragraph (b)(2)(i) 
to read as follows:


Sec. 86.1829-01  Durability and emission testing requirements; waivers.

* * * * *
    (b) * * *
    (2) * * *
    (i) Testing at low altitude. One EDV in each evaporative/refueling 
family and evaporative/refueling emission control system combination 
must be tested in accordance with the evaporative/refueling test 
procedure requirement of subpart B of this part. The configuration of 
the EDV will be determined under the provisions of Sec. 86.1828-01. The 
EDV must also be tested for exhaust emission compliance using the FTP 
and SFTP procedures of subpart B of this part. In lieu of testing 
natural gas-fueled or liquefied petroleum gas-fueled vehicles, the 
manufacturer may provide a statement in its application for 
certification that, based on the manufacturer's engineering evaluation 
of such emission testing as the manufacturer deems appropriate, these 
vehicles will comply with the emission standards.
* * * * *
    22. Section 86.1835-01 is amended by revising paragraph (d) 
introductory text to read as follows:


Sec. 86.1835-01  Confirmatory certification testing.

* * * * *
    (d) Upon request of the manufacturer, the Administrator may issue a 
conditional certificate of conformity for a test group which has not 
completed the Administrator testing required under paragraph (a) of 
this section. Such a certificate will be issued based upon the 
condition that the confirmatory testing be completed in an expedited 
manner and that the results of the testing be in compliance with all 
standards and procedures.
* * * * *
    23. Section 86.1841-01 is amended by revising paragraph (e) to read 
as follows:


Sec. 86.1814-01  Compliance with emission standards for the purpose of 
certification.

* * * * *
    (e) Unless otherwise approved by the Administrator, manufacturers 
must not use Reactivity Adjustment Factors (RAFs) in their calculation 
of the certification level of any pollutant for any vehicle except for 
LDVs and LLDTs participating in the National Low Emission Vehicle 
(NLEV) program described in subpart R of this part, regardless of the 
fuel used in the test vehicle.
    24. Section 86.1845-04 is amended by revising paragraph (f)(1) to 
read as follows:


Sec. 86.1845-04  Manufacturer in-use verification testing requirements.

* * * * *
    (f)(1) A manufacturer may conduct in-use testing on a test group by 
measuring NMHC exhaust emissions rather than NMOG exhaust emissions. 
The measured NMHC exhaust emissions must be multiplied by the 
adjustment factor used for certification of the test group, or another 
adjustment factor acceptable to the Administrator, to determine the 
equivalent NMOG exhaust emission values for the test vehicle. The 
equivalent NMOG exhaust emission value must be used in place of the 
measured NMHC exhaust emission value in determining the exhaust NMOG 
results. The equivalent NMOG exhaust emission values must be compared 
to the NMOG exhaust emission standard from the emission bin to which 
the test group was certified.
* * * * *
    25. Section 86.1846-01 is amended by revising paragraph (a)(3) to 
read as follows:


Sec. 86.1846-01  Manufacturer in-use confirmatory testing requirements.

    (a) * * *
    (3) For purposes of this section, the term vehicle includes light-
duty vehicles, light-duty trucks and medium-duty passenger vehicles.
* * * * *
    26. Section 86.1860-04 is amended by revising paragraphs (g)(2)(ii) 
and (h) to read as follows:


Sec. 86.1860-04  How to comply with the Tier 2 and interim non-Tier 2 
fleet average NOX standards.

* * * * *
    (g) * * *
    (2) * * *
    (ii) The manufacturer must calculate these extra NOX 
credits, where permitted, by substituting an adjusted NOX 
standard for the applicable NOX standard from the full 
useful life certification bin when it calculates the applicable fleet 
average NOX emissions by the procedure in paragraph (f) of 
this section. The adjusted standard must be equal to the applicable 
full useful life NOX standard multiplied by 0.85 and rounded 
to one more decimal place than the number of decimal places as the 
applicable full useful life NOX standard.
* * * * *
    (h) Additional credits for vehicles certified to low bins. A 
manufacturer may obtain additional NOX credits by certifying 
vehicles to bins 1 and/or 2 in model years from 2001 through 2005 
subject to the following requirements:
    (1) When computing the fleet average Tier 2 NOX 
emissions using the formula

[[Page 19311]]

in paragraph (f)(2) of this section, the manufacturer may multiply the 
number of vehicles certified to bins 1 and 2 by the applicable 
multiplier shown in Table S04-11 when computing the denominator in the 
formula. These multipliers may not be used after model year 2005. The 
table follows:

 Table S04-11.--Multipliers for Additional Tier 2 NOX Credits for Bin 1
                              and 2 LDV/Ts
------------------------------------------------------------------------
                                                              Multiplier
           Bin                        Model year                  73
------------------------------------------------------------------------
2........................  2001, 2002, 2003, 2004, 2005....          1.5
1........................  2001, 2002, 2003, 2004, 2005....          2.0
------------------------------------------------------------------------

    (2) Optionally, instead of the process described in paragraph 
(h)(1) of this section, when computing Tier 2 NOX credits 
using the formula in Sec. 86.1861-04(b)(1), the manufacturer may 
multiply the number of vehicles certified to bin 1 and bin 2 by the 
applicable multiplier shown in Table S04-11 in paragraph (h)(1) of this 
section when computing the ``Total number of Tier 2 Vehicles Sold, 
Including ZEVs and HEVs''. These multipliers may not be used after 
model year 2005.
    27. Section 86.1861-04 is amended by revising paragraph (a)(5) and 
the equation in paragraph (b)(1) to read as follows:


Sec. 86.1861-04  How do the tier 2 and interim non-tier 2 
NOX averaging, banking and trading programs work?

    (a) * * *
    (5) A small volume manufacturer that has opted not to meet all 
phase-in requirements as permitted under Sec. 86.1811-04(k)(5), must:
    (i) demonstrate compliance or obtain appropriate credits to comply 
with the 0.30 g/mi. fleet average NOX standard for interim 
LDV/LLDTs for 100% of its LDV/LLDTs for one model year , in order to 
carry forward a credit deficit for later model year interim LDV/LLDTs; 
and
    (ii) Demonstrate compliance or obtain appropriate credits to comply 
with the 0.07 g/mi. fleet average NOX standard for 100% of 
its LDV/LLDTs for one model year , in order to carry forward a credit 
deficit for later model year Tier 2 LDV/LLDTs; and
    (iii) Demonstrate compliance or obtain appropriate credits to 
comply with the 0.20 g/mi. fleet average interim NOX 
standard for 100% of its HLDT/MDPVs for one model year, in order to 
carry forward a credit deficit for later model year interim HLDT/MDPVs.
* * * * *
    (b) * * * (1) * * *

[(Fleet Average NOX Standard)-(Manufacturer's Fleet Average 
NOX Value)]  x  (Total Number of Tier 2 Vehicles Sold, 
Including ZEVs and HEVs).

Where: * * *
* * * * *
[FR Doc. 01-8927 Filed 4-12-01; 8:45 am]
BILLING CODE 6560-50-U