[Federal Register Volume 69, Number 10 (Thursday, January 15, 2004)]
[Rules and Regulations]
[Pages 2398-2445]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-6]



[[Page 2397]]

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

Part II





Environmental Protection Agency





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



40 CFR Parts 9, 86, 90, and 1051



Control of Emissions From Highway Motorcycles; Final Rule

  Federal Register / Vol. 69, No. 10 / Thursday, January 15, 2004 / 
Rules and Regulations  

[[Page 2398]]


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

ENVIRONMENTAL PROTECTION AGENCY

40 CFR Parts 9, 86, 90, and 1051

[AMS-FRL-7604-8]
RIN 2060-AJ90


Control of Emissions From Highway Motorcycles

AGENCY: Environmental Protection Agency (EPA).

ACTION: Final rule.

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

SUMMARY: In this action we are adopting revised exhaust emission 
standards for currently regulated highway motorcycles. We are also 
adopting new exhaust emissions standards for motorcycles of less than 
50 cubic centimeters in displacement, which had not previously been 
subject to EPA regulations. Finally, we are adopting new permeation 
evaporative emission standards for all classes of highway motorcycles. 
Highway motorcycles contribute to ozone and particulate matter (PM) 
nonattainment, as well as other types of pollution impacting human 
health and welfare.
    We expect that manufacturers will be able to maintain or even 
improve the performance of their products without compromising safety 
when producing highway motorcycles in compliance with these standards. 
In fact, we estimate that the fuel costs savings associated with these 
regulations will offset about one fourth of the program's cost by the 
time the standards are fully phased in (2030). There are also several 
provisions to address the unique limitations of small volume 
manufacturers.

EFFECTIVE DATE: This final rule is effective March 15, 2004.

ADDRESSES: Materials relevant to this rulemaking are contained in 
Public Docket Numbers A-2000-01 and A-2000-02 at the following address: 
EPA Docket Center (EPA/DC), Public Reading Room, Room B102, EPA West 
Building, 1301 Constitution Avenue, NW., Washington, DC. The EPA Docket 
Center Public Reading Room is open from 8:30 a.m. to 4:30 p.m., Monday 
through Friday, except on government holidays. You can reach the 
Reading Room by telephone at (202) 566-1742, and by facsimile at (202) 
566-1741. The telephone number for the Air Docket is (202) 566-1742. 
You may be charged a reasonable fee for photocopying docket materials, 
as provided in 40 CFR part 2.
    For further information on electronic availability of this action, 
see SUPPLEMENTARY INFORMATION below.

FOR FURTHER INFORMATION CONTACT: U.S. EPA, Office of Transportation and 
Air Quality, Assessment and Standards Division hotline, (734) 214-4636, 
[email protected]. Carol Connell, (734) 214-4636; [email protected].

SUPPLEMENTARY INFORMATION:

Regulated Entities

    This action will affect companies that manufacture or introduce 
into commerce highway motorcycles subject to the standards. This 
includes motorcycles with engines with a displacement of less than 50 
cubic centimeters (cc) provided the vehicle otherwise meets the 
regulatory definition of a highway motorcycle. Regulated categories and 
entities include:

----------------------------------------------------------------------------------------------------------------
                                                   NAICS Codes    SIC Codes    Examples of potentially regulated
                    Category                           \a\           \b\                   entities
----------------------------------------------------------------------------------------------------------------
Industry.......................................          336991  ...........  Motorcycle manufacturers.
Industry.......................................          421110  ...........  Independent Commercial Importers
                                                                               of Vehicles and Parts.
----------------------------------------------------------------------------------------------------------------
Notes:
\a\ North American Industry Classification System (NAICS).
\b\ Standard Industrial Classification (SIC) system code.

    This list is not intended to be exhaustive, but rather provides a 
guide regarding entities likely to be regulated by this action. To 
determine whether this action regulates particular activities, you 
should carefully examine the regulations. You may direct questions 
regarding the applicability of this action to the person listed in FOR 
FURTHER INFORMATION CONTACT.

How Can I Get Copies of This Document and Other Related Information?

    Docket. EPA has established an official public docket for this 
action under Docket ID Nos. OAR-2002-0024, A-2000-01, and A-2000-02. 
The official docket consists of the documents specifically referenced 
in this action, any public comments received, and other information 
related to this action. Although a part of the official docket, the 
public docket does not include Confidential Business Information (CBI) 
or other information whose disclosure is restricted by statute. The 
official public docket is the collection of materials that is available 
for public viewing at Air Docket in the EPA Docket Center, (EPA/DC) EPA 
West, Room B102, 1301 Constitution Ave., NW., Washington, DC. The EPA 
Docket Center Public Reading Room is open from 8:30 a.m. to 4:30 p.m., 
Monday through Friday, excluding legal holidays. The telephone number 
for the Reading Room is (202) 566-1742, and the telephone number for 
the Air Docket is (202) 566-1742.
    Electronic Access. You may access this Federal Register document 
electronically through the EPA Internet under the Federal Register 
listings at http://www.epa.gov/fedrgstr/.
    An electronic version of the public docket is available through 
EPA's electronic public docket and comment system, EPA Dockets. You may 
use EPA Dockets at http://www.epa.gov/edocket/ to view public comments, 
access the index listing of the contents of the official public docket, 
and to access those documents in the public docket that are available 
electronically. Although not all docket materials may be available 
electronically, you may still access any of the publicly available 
docket materials through the docket facility identified above under the 
heading ``Docket.'' Once in the system, select ``search,'' then key in 
the appropriate docket identification number.

Table of Contents

I. Introduction
    A. Background
    B. How Is This Document Organized?
    C. What Requirements Are We Adopting?
    D. Putting This Action Into Perspective
    E. Statutory Authority
    F. Modification, Customization and Personalization of 
Motorcycles
    G. Future Actions
II. Why Is EPA Taking This Action?
    A. What Are The Health and Welfare Effects of Highway Motorcycle 
Emissions?
    B. What Is the Emission Inventory Contribution From Highway 
Motorcycles?
III. Which Vehicles and Engines Are Covered?

[[Page 2399]]

    A. What is a Highway Motorcycle?
    B. What are Class I, Class II, and Class III Highway 
Motorcycles?
IV. Exhaust Emission Standards and Test Procedures
    A. What are the New Exhaust Emission Standards?
    B. Can I Average, Bank, or Trade Emission Credits?
    C. What are The Applicable Test Procedures?
    D. What Test Fuel Is Required for Emission Testing?
    E. Hardship Provisions
    F. Special Compliance Provisions for Small Manufacturers
    G. Exemption for Motorcycle Kits and Custom Motorcycles
V. Technological Feasibility of the Exhaust Emission Standards
    A. Class I Motorcycles and Motorcycle Engines Under 50cc
    B. Class I and Class II Motorcycles Between 50 and 180cc
    C. Class III Motorcycles
    D. Safety and Performance Impacts
    E. Non-Conformance Penalties
VI. Permeation Emission Control
    A. Overview
    B. Permeation Emission Standards
    C. Testing Requirements
    D. Special Compliance Provisions
    E. Technological Feasibility
VII. Environmental Impacts and Program Costs
    A. Environmental Impacts
    B. Motorcycle Engine and Equipment Costs
    C. Aggregate Costs and Cost-Effectiveness
VIII. Public Participation
IX. Statutory and Executive Order Reviews
    A. Executive Order 12866: Regulatory Planning and Review
    B. Paperwork Reduction Act
    C. Regulatory Flexibility Act (RFA), as Amended by the Small 
Business Regulatory Enforcement Fairness Act of 1996 (SBREFA), 5 
U.S.C. 601 et seq.
    D. Unfunded Mandates Reform Act
    E. Executive Order 13132: Federalism
    F. Executive Order 13175: Consultation and Coordination with 
Indian Tribal Governments
    G. Executive Order 13045: Protection of Children from 
Environmental Health and Safety Risks
    H. Executive Order 13211: Actions that Significantly Affect 
Energy Supply, Distribution, or Use
    I. National Technology Transfer and Advancement Act
    J. Congressional Review Act
    K. Plain Language

I. Introduction

A. Background

    Air pollution is a serious threat to the health and well-being of 
millions of Americans and imposes a large burden on the U.S. economy. 
Ground-level ozone, carbon monoxide, and particulate matter are linked 
to potentially serious respiratory health problems, especially 
respiratory effects and environmental degradation, including visibility 
impairment in our national parks.
    This rule addresses these air pollution concerns by adopting 
national emission standards for highway motorcycles, including a 
category of motorcycle that is currently unregulated. These new 
standards are a continuation of the process of establishing emission 
standards for on-highway engines and vehicles under Clean Air Act 
section 202(a). We are adopting new exhaust emission standards and new 
standards for permeation emissions from highway motorcycles.
    Over the past quarter century, state and federal governments have 
established emission-control programs that significantly reduce 
emissions from numerous types of sources. Many of these sources now 
pollute at only a small fraction of their pre-control rates. In 
contrast, today's rule revises EPA standards for on-highway motorcycles 
for the first time since 1977.\1\ These final standards for motorcycles 
reflect the development of emission-control technology that has 
occurred since we last set standards for these engines which took 
effect in 1978. A review of current motorcycle certification results 
clearly indicates that the emissions performance of a majority of 
current motorcycles surpasses levels required by current federal 
regulations. The standards established in this rule will further lower 
emissions in the next 3-7 years.
---------------------------------------------------------------------------

    \1\ See 42 FR 1122, Jan. 5, 1977.
---------------------------------------------------------------------------

    Nationwide, highway motorcycles are significant contributors to 
mobile-source air pollution, currently accounting for 0.6 percent of 
mobile-source hydrocarbon (HC) emissions, 0.1 percent of mobile-source 
oxides of nitrogen (NOX) emissions, and less than 0.1 
percent of mobile-source particulate matter (PM) emissions.\2\ Without 
these further regulations, highway motorcycles would account for 2.2 
percent of mobile source HC, 0.3 percent of mobile source 
NOX, and 0.1 percent of mobile-source particulate matter 
(PM) emissions by 2020. These standards will reduce exposure to these 
emissions and help avoid a range of adverse health effects associated 
with ambient ozone and PM levels, especially in terms of respiratory 
impairment and related illnesses. In addition, the standards will help 
reduce acute exposure to air toxics and PM for persons who operate or 
who work with or are otherwise active in close proximity to these 
sources. They will also help address other environmental problems 
associated with these sources, such as visibility impairment in our 
national parks and other wilderness areas.
---------------------------------------------------------------------------

    \2\ While we characterize emissions of hydrocarbons, this can be 
used as a surrogate for volatile organic compounds (VOC), which 
comprises a very similar, but slightly different, set of compounds. 
Hydrocarbons are generally easier to test for, and therefore, are 
easier to regulate.
---------------------------------------------------------------------------

    This final rule follows several EPA notices: An Advance Notice of 
Proposed Rulemaking (ANPRM) published on December 7, 2000 (65 FR 
76797); a Notice of Proposed Rulemaking (NPRM) published on August 14, 
2002 (67 FR 53050), and an additional notice dated October 30, 2002 (67 
FR 66097). In the NPRM we proposed new exhaust emission standards for 
highway motorcycles, including motorcycles of less than 50 cubic 
centimeters (cc) in displacement, and requested comment on promulgating 
standards controlling emissions from fuel tank and hose permeation from 
highway motorcycles.\3\ We received comments on the NPRM from a wide 
variety of stakeholders, including the motorcycle manufacturing 
industry, motorcycle user groups, various governmental bodies, 
environmental groups, and the general public. These comments are 
available for public viewing in Docket A-2000-02. Our responses to 
these comments are detailed in the Summary and Analysis of Comments, 
which is available in the docket and on our Web site.
---------------------------------------------------------------------------

    \3\ The NPRM also proposed provisions for controlling 
evaporative emissions from marine vessels that use spark-ignition 
engines. These provisions are not a part of this action; a final 
rule addressing these provisions is being developed and will be 
published in a separate future action.
---------------------------------------------------------------------------

B. How Is This Document Organized?

    This final rule covers highway motorcycles, which vary in size from 
small scooters with engines of less than 50cc displacement to large 
touring models with engines that approach the size of small automobile 
engines (over 1000cc). In general the text is often organized by EPA's 
definitions of motorcycle classes, which are based on the size of the 
engine and are used to distinguish motorcycles for the purposes of 
applying emission standards.
    Section I describes the general provisions that we are finalizing 
and provides some background and context for the final rule.
    Section II describes the air quality needs that cause us to publish 
this final rule, as well as describing how highway motorcycles 
contribute to air pollution.
    Section III describes specifically which vehicles are covered by 
the final rule.

[[Page 2400]]

    Section IV describes the new exhaust emission standards and related 
provisions that we are finalizing.
    Section V describes our findings regarding the technological 
feasibility of the exhaust emission standards for highway motorcycles.
    Section VI describes the permeation evaporative emission standards 
and related provisions that we are finalizing. It also describes the 
permeation testing requirements and our findings regarding the 
technological feasibility of the permeation requirements.
    Section VII summarizes the projected environmental impacts and 
costs of this rule. We expect the costs of this emission control 
program to be about $27 million (including fuel savings) annually by 
the time the program is fully implemented. The emission benefits of 
this program are projected to be approximately 55,000 tons of 
HC+NOX annually by the time the program is fully 
implemented.
    Finally, Sections VIII and IX contain information about public 
participation and various administrative requirements.
    The remainder of this section summarizes the new requirements and 
provides some background and context for the final rule.

C. What Requirements Are We Adopting?

    In general, we are harmonizing the federal motorcycle exhaust 
emission standards with those of the state of California, but on a 
delayed schedule relative to implementation in California and with some 
additional provisions that provide additional flexibility in meeting 
the standards. The process by which motorcycle manufacturers certify 
their motorcycles to the exhaust emission standards, including the test 
procedures, the driving cycle, and other elements of the federal 
program, are generally unchanged. We are also adopting exhaust emission 
standards for previously unregulated motorcycles with engines that are 
less than 50cc in displacement. In addition, we are adopting standards 
that will require the use of low permeability fuel tanks and fuel hoses 
on all motorcycles.
1. Class I and II Motorcycles
    We are adopting a new exhaust emission standard for Class I and 
Class II motorcycles of 1.0 g/km HC, to replace the current federal HC 
standard of 5.0 g/km. This standard will become effective starting with 
the 2006 model year. Class I and II motorcycles have been meeting a 
standard of 1.0 g/km HC in California since 1982, and by 2006 the 
European versions of these motorcycles will be meeting HC and 
NOX standards that when combined are below 1.0 g/km.\4\ We 
are also finalizing an optional HC+NOX standard of 1.4 g/km, 
which will be required for manufacturers who decide to take advantage 
of provisions that allow the transfer of emission credits and averaging 
of Class I and II engine families. Class I and II motorcycles represent 
about 5-10 percent of annual U.S. motorcycle sales. Class I and II 
motorcycles will also have to meet new requirements regarding low 
permeation fuel tanks and fuel hoses.
---------------------------------------------------------------------------

    \4\ California standards are met using a test procedure 
identical to EPA's, whereas compliance with European standards is 
determined using a different test procedure.
---------------------------------------------------------------------------

    We are also adopting a new definition of a Class I motorcycle which 
includes motorcycles with engine displacements of less than 50cc. These 
motorcycles--which are powered mostly by two-stroke engines currently--
have not been subject to EPA emission regulations until now. We are 
finalizing a useful life for the under 50cc category of 5 years or 
6,000 km, whichever first occurs. We are also revising the test 
procedure for this unique category of Class I motorcycles to ensure 
that these small motorcycles are tested appropriately.
2. Class III Motorcycles
    We are adopting new exhaust emission standards for Class III 
motorcycles. Class III motorcycles represent more than 90 percent of 
annual U.S. sales. These standards, which can be met on a corporate-
average basis, are identical to the standards of the California 
program. Specifically, we are adopting a ``Tier-1'' standard of 1.4 g/
km HC+NOX starting in the 2006 model year, and a ``Tier-2'' 
standard of 0.8 g/km starting in the 2010 model year. Because both HC 
and NOX are ozone precursors, this new standard will better 
reduce ozone than an HC-only standard. Implementation on a nationwide 
basis will take place starting two model years after implementation of 
identical exhaust emission standards in California, ensuring that 
manufacturers have adequate lead time to plan for these new standards 
and to have full product lines available for sale. The federal CO 
standard of 12.0 g/km is unchanged by this final rule. The process by 
which manufacturers certify their motorcycles, the test procedures, the 
driving cycle, and other elements of the federal program remain 
unchanged. Class III motorcycles will also have to meet new 
requirements regarding low permeation fuel tanks and fuel hoses.

D. Putting This Action Into Perspective

    Federal standards for highway motorcycles were first established in 
the 1978 model year (see 42 FR 1126, Jan. 5, 1977). Interim standards 
were effective for the 1978 and 1979 model years, and final standards 
took effect with the 1980 model year. The interim standards ranged from 
5.0 to 14.0 g/km HC depending on engine displacement, while the interim 
CO standard of 17.0 g/km applied to all motorcycles. The standards and 
requirements effective for 1980 and later model year motorcycles, which 
do not include NOX emission standards, currently remain 
unchanged from when they were established 25 years ago. Crankcase 
emissions from motorcycles have also been prohibited since 1980. The 
level of technology required to meet these standards is widely 
considered to be comparable to the pre-catalyst technology in the 
automobile. These standards, which resulted in the phase-out of two-
stroke engines for highway motorcycles above 50cc displacement, 
achieved significant reductions in emissions. There are no current 
federal standards for evaporative emissions from motorcycles. The 
current federal exhaust emission standards are shown in Table I.D-1.

[[Page 2401]]



                    Table I.D-1.--Current Federal Exhaust Emission Standards for Motorcycles
----------------------------------------------------------------------------------------------------------------
                                                                                                    Useful life
                 Class                         Engine size           HC (g/km)       CO (g/km)         (km)a
----------------------------------------------------------------------------------------------------------------
I.....................................  50-169..................             5.0            12.0          12,000
II....................................  170-279.................             5.0            12.0          18,000
III...................................  279..........             5.0            12.0         30,000
----------------------------------------------------------------------------------------------------------------
Notes:
a ``Useful life'' is the period over which the manufacturer must demonstrate compliance with emission standards.
  It is unrelated to how long a consumer can keep or ride a motorcycle.

    However, it is clear that the impact of the current federal 
standards on motorcycle emission control was fully realized by the end 
of the 1980's, and that international and other efforts have been the 
driving factor in more recent technology development for motorcycle 
emissions control. In the past two decades, other actions in Europe, 
Asia, and California have caused motorcycle emission controls to 
continue to advance, despite the static U.S. emission standards in that 
same time period. In fact, most manufacturers elect to certify many of 
their motorcycles to the California standards (described below in 
section I.D.2) and market them nationwide. This practice has resulted 
in the average certification levels shown in Table I.D-2.

                   Table I.D-2.--Average Certification Levels for 2003 Model Year Motorcycles
----------------------------------------------------------------------------------------------------------------
                     Class                                 Engine size               HC (g/km)       CO (g/km)
----------------------------------------------------------------------------------------------------------------
I.............................................  50-169..........................             1.3             7.2
II............................................  170-279.........................             0.9             7.2
III...........................................  279..................             0.9             6.7
----------------------------------------------------------------------------------------------------------------
Note: Manufacturers typically certify at levels that provide them with sufficient ``headroom'' between the
  actual certification level and the standard. This ``headroom'' is often 30-50% of the standard, as can be seen
  in the CO levels in this table which compare to a standard of 12 g/km.

1. New Federal Emission Standards for Recreational Vehicles
    On November 8, 2002, we adopted new standards for all-terrain 
vehicles (ATVs), snowmobiles, and off-highway motorcycles.\5\ These 
standards resulted from requirements in the Clean Air Act regarding all 
nonroad vehicles. In light of the requirements in the Act and our 
subsequent action to control emissions from off-road motorcycle and ATV 
emissions, we felt it both necessary and a matter of common sense to 
initiate an action to review and update the two-decade-old highway 
motorcycle emission standards. Table I.D-3 shows the emission standards 
that apply to recreational vehicles.
---------------------------------------------------------------------------

    \5\ See 67 FR 68241 (November 8, 2002). The final rule also 
contained new standards for large spark-ignition engines such as 
those used in forklifts and airport ground-service equipment and 
recreational marine diesel engines.
---------------------------------------------------------------------------

    Compliance with the off-highway motorcycle and ATV standards will 
be determined using the same test cycle that is currently used for 
highway motorcycles. Therefore the standards are directly comparable. 
The current federal highway motorcycle HC standard of 5.0 g/km appears 
even more misaligned with the current state of emission control 
technology when compared to the standards that their off-highway 
cousins will be meeting in the next few years. Today's action rectifies 
this imbalance in motorcycle and ATV emission standards.

                          Table I.D-3.--Recreational Vehicle Exhaust Emission Standards
----------------------------------------------------------------------------------------------------------------
                                                                  Emission standards
              Vehicle                     Model year      ----------------------------------       Phase-in
                                                              HC g/kW-hr       CO g/kW-hr
----------------------------------------------------------------------------------------------------------------
Snowmobile........................  2006.................            100              275    50%
                                    2007 through 2009....            100              275    100%
                                    2010 -option 1.......             75              200
                                    2010 -option 2.......             45              275
----------------------------------------------------------------------------------------------------------------
                                                                  HC+NOX               CO
                                                                    g/km             g/km
----------------------------------------------------------------------------------------------------------------
Off-highway.......................  2006.................              2.0             25.0  50%
Motorcycle........................  2007 and later.......              2.0             25.0  100%
ATV...............................  2006.................              1.5             35.0  50%
                                    2007 and later.......              1.5             35.0  100%
----------------------------------------------------------------------------------------------------------------

2. California Emission Standards for Highway Motorcycles
    Motorcycle exhaust emission standards in California were originally 
identical to the federal standards that took effect in 1980. The 
definitions of motorcycle classes used by California ARB continue to be 
identical to the federal definitions. However, California ARB has 
revised its standards several times in bringing them to their current 
levels (see Table I.D-4). In the 1982

[[Page 2402]]

model year the standards were modified to tighten the HC standard from 
5.0 g/km to 1.0 or 1.4 g/km, depending on engine displacement. 
California adopted an evaporative emission standard of 2.0 g/test for 
all three motorcycle classes for 1983 and later model year motorcycles. 
California later amended the regulations for 1988 and later model year 
motorcycles to further lower emissions and to make the compliance 
program more flexible for manufacturers. The 1988 and later standards 
could be met on a corporate-average basis, and the Class III 
motorcycles were split into two separate categories: 280 cc to 699 cc 
and 700 cc and greater. These are the standards that apply in 
California now. Like the federal standards, there are currently no 
limits on NOX emissions for highway motorcycles in 
California. Under the corporate-average scheme, no individual engine 
family is allowed to exceed a cap of 2.5 g/km HC. Like the federal 
program, California also prohibits crankcase emissions. Current 
California exhaust emission standards are shown in Table I.D-4.

                  Table I.D-4.--Current California Highway Motorcycle Exhaust Emission Standards
----------------------------------------------------------------------------------------------------------------
                     Class                              Engine size (cc)             HC (g/km)       CO (g/km)
----------------------------------------------------------------------------------------------------------------
I & II........................................  50-279..........................             1.0            12.0
III...........................................  280-699.........................             1.0            12.0
III...........................................  700 and above...................             1.4            12.0
----------------------------------------------------------------------------------------------------------------

    In November 1999, the California ARB adopted new exhaust emission 
standards for Class III motorcycles that would take effect in two 
phases--Tier 1 standards starting with the 2004 model year, followed by 
Tier 2 standards starting with the 2008 model year (see Table I.D-5). 
Existing California standards for Class I and Class II motorcycles (see 
Table I.D-4), which have been in place since 1982, remain unchanged, as 
does their evaporative emissions standard. As with the current 
standards in California, manufacturers will be able to meet the 
requirements on a corporate-average basis. Perhaps most significantly, 
California ARB's Tier 1 and Tier 2 standards control NOX 
emissions for the first time by establishing a combined 
HC+NOX standard. California ARB made no changes to the CO 
emission standard, which remains at 12.0 g/km, equivalent to the 
existing federal standard. In addition, California ARB is providing an 
incentive program to encourage the introduction of Tier 2 motorcycles 
before the 2008 model year. This incentive program allows the 
accumulation of emission credits that manufacturers can use to meet the 
2008 standards. Like the federal program, these standards will also 
apply to dual-sport motorcycles.

       Table I.D-5.--Tier 1 and Tier 2 California Class III Highway Motorcycle Exhaust Emission Standards
----------------------------------------------------------------------------------------------------------------
                                                                                   HC + NOX  (g/
                  Model year                           Engine displacement              km)         CO  (g/km)
----------------------------------------------------------------------------------------------------------------
2004 through 2007 (Tier 1)....................  280 cc and greater..............             1.4            12.0
2008 and subsequent (Tier 2)..................  280 cc and greater..............             0.8            12.0
----------------------------------------------------------------------------------------------------------------

    California ARB also adopted a new definition of small-volume 
manufacturer that will take effect with the 2008 model year. Currently 
and through the 2003 model year, all manufacturers must meet the 
standards, regardless of production volume. Small-volume manufacturers, 
defined in California ARB's recent action as a manufacturer with 
California sales of combined Class I, Class II, and Class III 
motorcycles not greater than 300 units annually, do not have to meet 
the new standards until the 2008 model year, at which point the Tier 1 
standard applies.
3. European Union and Other International Actions
    The European Union (EU) has established a new phase of motorcycle 
standards, which took effect in 2003, and has recently finalized a 
second phase that will start in 2006. The 2003 European standards are 
more stringent than the existing federal standards, and, with the 
exception of the CO standard, are roughly comparable to the California 
Tier 1 standards taking effect in 2004. The 2003 standards would 
require emissions to be below the values shown in Table I.D-6, as 
measured over the European ECE-40 test cycle.\6\ The standards in Table 
I.D-6 apply to motorcycles of less than 50cc (e.g., scooters and 
mopeds) only if the motorcycle can exceed 45 kilometers per hour (28 
miles per hour). Starting in 2002 motorcycles of less than 50cc that 
cannot exceed 45 kilometers per hour (28 miles per hour) are subject to 
a new HC+NOX standard of 1.2 grams per kilometer and a CO 
standard of 1.0 gram per kilometer.
---------------------------------------------------------------------------

    \6\ The ECE-40 cycle is used by several countries around the 
world for motorcycle emission testing. It has its origins in 
passenger car driving, being derived from the European ECE-15 
passenger car cycle. The speed-time trace is simply a combination of 
straight lines, resulting in a ``modal'' cycle, rather than the 
transient nature of the U.S. Federal Test Procedure (FTP).

 Table I.D-6.--European Union 2003 Motorcycle Exhaust Emission Standards
                    for Motorcycles 150cc
------------------------------------------------------------------------
       HC  (g/km)               CO  (g/km)              NOX  (g/km)
------------------------------------------------------------------------
            1.0                      5.5                     0.3
------------------------------------------------------------------------

New standards that would apply starting in 2006, along with a revised 
test cycle (as an interim cycle to bridge between the current EU cycle 
and a possible WMTC cycle in the future) have been recently finalized 
by the EU. Setting aside the difference in test cycles, the 2006 EU HC 
and NOX standards are roughly comparable to and perhaps 
somewhat more stringent than the California Tier 2 motorcycle standards 
effective in 2008. The 2006 EU standards are shown in Table I.D-7.

[[Page 2403]]



 Table I.D-7.--European Union 2006 Motorcycle Exhaust Emission Standards
                    for Motorcycles 150cc
------------------------------------------------------------------------
       HC  (g/km)               CO  (g/km)              NOX  (g/km)
------------------------------------------------------------------------
            0.3                      2.0                    0.15
------------------------------------------------------------------------

    Many other nations around the world, particularly in South Asia 
where two-stroke small displacement motorcycles can be a majority of 
the vehicle population, have also recently improved their emission 
standards or are planning to do so in the next several years. For 
example, Taiwan has adopted an HC+NOX standard of 1.0 gram 
per kilometer for all two-strokes starting in 2003 (as tested on the 
European ECE-40 test cycle). (Four-stroke motorcycle engines will have 
to meet at standard of 2.0 grams per kilometer.) India has proposed a 
standard for all motorcycles of 1.3 grams per kilometer 
HC+NOX in 2003 and 1.0 grams per kilometer HC+NOX 
in 2005 (as tested on the Indian Drive Cycle, or IDC).\7\ China has 
adopted the 2003 European standards described above, implementing them 
in 2004, a year later than Europe.
---------------------------------------------------------------------------

    \7\ The IDC, although not a transient cycle like the FTP, 
appears to be the only cycle currently in use that is based on 
actual measurements of motorcycles in use. Although the FTP is based 
on real-world driving of passenger cars and not motorcycles, it is 
reasonable to argue that the two types of vehicles are driven 
similarly.
---------------------------------------------------------------------------

E. Statutory Authority

    Section 202(a)(1) and (2) of the Clean Air Act authorizes EPA to 
promulgate, and from time to time revise, standards applicable to 
emissions of any air pollutant from any class or classes of new motor 
vehicles that, in the Administrator's judgment cause or contribute to 
air pollution which in EPA's judgment may reasonably be anticipated to 
endanger public health or welfare. Such regulations shall apply for the 
useful life of the vehicle and ``shall take effect after such period as 
the Administrator finds is necessary to permit the development and 
application of the requisite technology, giving appropriate 
consideration to the cost of compliance within such period.''
    In particular, section 202(a)(3)(E) states that motorcycles shall 
be treated as heavy-duty vehicles unless ``the Administrator 
promulgates regulations under subsection (a) of this section applying 
standards applicable to the emission of air pollutants from motorcycles 
as a separate class or category. In any case in which such standards 
are promulgated for such emissions as a separate class or category, the 
Administrator, in promulgating such standards, shall consider the need 
to achieve equivalency of emission reductions between motorcycles and 
other motor vehicles to the maximum extent practicable.''
    EPA's initial standards regulating motorcycles were promulgated on 
December 23, 1976 (42 FR 1122). In that final rule EPA made the finding 
that highway motorcycles were a contributor to air pollution and that 
control of their emissions is necessary to meet the National Ambient 
Air Quality Standards. The air quality analyses conducted for this 
final rule (see the Final Regulatory Support Document) continue to 
support this conclusion. The standards promulgated in the 1976 rule and 
in this final rule treat motorcycles as a separate class of motor 
vehicle, and thus are governed by the language in section 202(a)(1) and 
(2) and 202(a)(3)(E). In promulgating these standards, EPA has 
considered the need to achieve equivalency in emission reduction 
between motorcycles and other motor vehicles (see Section 4.1 of the 
Final Regulatory Support Document).

F. Modification, Customization and Personalization of Motorcycles

    Many motorcycle owners personalize their motorcycles in a variety 
of ways. This is one of the aspects of motorcycle ownership that is 
appealing to a large number of motorcycle owners, and they take their 
freedom to customize their bikes very seriously. However, there are 
some forms of customization that are not legal under the provisions of 
Clean Air Act section 203(a), which states that it is illegal:

for any person to remove or render inoperative any device or element 
of design installed on or in a motor vehicle or motor vehicle engine 
in compliance with regulations under this title prior to its sale 
and delivery to the ultimate purchaser or * * * after such sale and 
delivery to the ultimate purchaser.* * *

 or

for any person to manufacture or sell * * * or install, any part or 
component intended for use with * * * any motor vehicle * * * where 
a principal effect of the part or component is to bypass, defeat, or 
render inoperative any device or element of design installed on or 
in a motor vehicle * * * in compliance with regulations under this 
title, and where the person knows or should know that such part or 
component is being offered for sale or installed for such use or put 
to such use. * * *

In other words, under current law, owners of motor vehicles \8\ cannot 
legally make modifications that remove, bypass, or disable emission-
control devices installed by the manufacturer.\9\ It is also illegal 
for part manufacturers and dealers to manufacture, sell or install a 
part or component that the manufacturer or dealer knows or should know 
will be sold or used in a manner that defeats the emissions control 
system.
---------------------------------------------------------------------------

    \8\ A motorcycle is a ``motor vehicle'' as defined under section 
216 of the Clean Air Act, which states that ``[t]he term ``motor 
vehicle'' means any self-propelled vehicle designed for transporting 
persons or property on a street or highway.''
    \9\ See Mobile Source Enforcement Memorandum No. 1A, Interim 
Tampering Enforcement Policy, Office of Enforcement and General 
Council, June 25, 1974 (Docket A-2000-01; document IV-A-27). (http://www.epa.gov/oeca/ore/aed/comp/hcomp.html)
---------------------------------------------------------------------------

    We use the term ``tampering'' to refer specifically to actions that 
are illegal under Clean Air Act section 203; the term, and the 
prohibition, do not apply generally to the wide range of actions that a 
motorcycle enthusiast can take to personalize his or her motorcycle, 
but only to actions that remove or disable emission control devices or 
cause the emissions to exceed the standards. We know, from anecdotal 
reports and from some data collected from in-use motorcycles, that a 
portion of the motorcycle riding population has removed, replaced, or 
modified the original equipment on their motorcycles. This 
customization can include changes that can be detrimental (or, in some 
cases, possibly beneficial) to the motorcycle's emission levels. The 
NPRM sought comments and data that could better help us understand the 
nature of the issue, such that our final rule decisions could be made 
with the best understanding possible of current consumer practices. We 
did not propose to revise the existing tampering restrictions or to 
prohibit many of the things that motorcycle owners are now doing 
legally.
    The new emission standards that we are adopting do not change this 
``tampering'' prohibition, which has been in the Clean Air Act for more 
than 20 years. Part manufacturers are still free to make parts, dealers 
are free to sell and install parts, and owners are free to customize 
their motorcycles in any way, as long as they do not disable emission 
controls or cause the motorcycle to exceed the emission standards. 
Owners are also free to perform routine maintenance on their 
motorcycles to restore or maintain the motorcycle engine and related 
components in their original condition and configuration.

[[Page 2404]]

G. Future Actions

1. 2006 Technology Progress Review
    The California ARB has indicated plans for a technology progress 
review, to take place in 2006, to evaluate manufacturers' progress in 
meeting the Tier 2 standards. Specifically, California ARB documents 
state that the purpose of the 2006 review would be to ``* * * evaluate 
the success, cost, and consumer acceptance of engine modifications 
employed to meet Tier-1 * * *'' and to `` * * * review and discuss 
manufacturers' efforts to meet Tier-2 * * * ''\10\ As part of that 
review, the California ARB has suggested they may reevaluate whether 
the Tier 2 standard should be applied to small-volume manufacturers in 
the future.\11\ We plan to participate in that review and work with the 
California ARB and others. We would intend to make any appropriate 
adjustments to the Tier 2 standards or implementation schedule if our 
review leads to the conclusion that changes are warranted.
---------------------------------------------------------------------------

    \10\ State of California Air Resources Board, October 23, 1998 
``Proposed Amendments to the California On-Road Motorcycle 
Regulation'' Staff Report: Initial Statement of Reasons (Docket A-
2000-01; document II-D-12).
    \11\ State of California Air Resources Board, ``Final Statement 
of Reasons for Rulemaking: Proposed Amendments to the California On-
Road Motorcycle Regulation.''
---------------------------------------------------------------------------

    In the context of the 2006 progress review we will evaluate and 
possibly propose regulatory revisions with regard to a number of issues 
that are discussed in this final rule. In particular, we intend to 
pursue development of a program that would apply emission standards to 
motorcycle engine manufacturers. Small-volume manufacturers may be the 
primary consumers of motorcycle engines built by others, since they 
generally do not have the physical or technical resources to develop, 
test, and manufacture their own engines. Although these small 
manufacturers are provided with a substantial level of flexibility in 
the current program, some additional flexibility may be warranted in 
the future, especially with regard to very small manufacturers 
producing fewer than 100 motorcycles per year. In evaluating any 
potential future actions, we intend to carefully consider the potential 
impacts on the small segment of the motorcycle industry represented by 
the smallest manufacturers.
    It is our view that a program could be structured such that small 
volume motorcycle manufacturers could purchase certified engines 
directly from an engine manufacturer. We believe that such a program 
could be structured such that it is both fair to the engine 
manufacturers and beneficial to small volume motorcycle manufacturers. 
Under one possible approach, small volume motorcycle manufacturers 
could choose to use certified engines and to accept the calibration or 
configuration of a certified engine that they purchase for use in their 
motorcycles. Small volume manufacturers would not be required to use 
certified engines, but if they chose either to use uncertified engines 
or to change the calibration or configuration of the certified engines 
they use, then they would have to independently certify their 
motorcycles to the applicable emission standards.
    In the context of the 2006 review we may also evaluate additional 
evaporative emission requirements, more stringent CO standards, an 
HC+NOX standard for Class I and II motorcycles, and 
revisions to the useful life definitions. Further action on these or 
any other items would depend on an evaluation of appropriate criteria, 
including but not necessarily limited to costs and feasibility. These 
items, including the engine program, could be proposed with the world 
harmonized motorcycle test cycle discussed below if the timing is 
appropriate, or in an independent action if the timing is not 
appropriate.
2. Globally Harmonized Motorcycle Test Cycle
    In the NPRM we noted the effort underway under the auspices of the 
United Nations/Economic Commission for Europe (UN/ECE) to develop a 
global harmonized world motorcycle test cycle (WMTC), and requested 
comment on adopting such a test cycle in the future. The United States 
is also a participating member of UN/ECE. The objective of the WMTC 
project is to develop a scientifically supported test cycle that 
accurately represents the in-use driving characteristics of highway 
motorcycles, and that could ultimately be integrated into the 
requirements of nations around the world. The advantages of such a test 
cycle are numerous. First, the industry could have a single test cycle 
to meet emission standards in many countries (the process recognizes 
that nations will have differing emission standards due the varying 
air-pollution concerns). Second, the test cycle could potentially be 
better than the existing FTP in that it is expected to better represent 
how a wide range of riders drive their motorcycles, which could 
ultimately result in further emission reductions.
    At this time we are not adopting any modifications to the highway 
motorcycle test cycle. We continue to be involved in the WMTC process 
and are hopeful that a test cycle meeting the stated objectives can be 
agreed on by the international participants, including the United 
States. Although a draft test cycle has been developed, some issues 
remain unresolved and it will likely be some time before a new cycle 
can be issued as a global technical regulation under the process 
established by a 1998 international agreement. Under that process, if a 
test cycle is brought to a vote and the United States votes in the 
affirmative, we will then be committed to initiating a rulemaking that 
may lead to an action to adopt the new test cycle. If the timing is 
appropriate this action could include proposals relating to the 2006 
technology review discussed above.

II. Why Is EPA Taking This Action?

    This final rule establishes revised standards for highway 
motorcycles. The current emission standards for these vehicles were set 
in 1978 and are based on 1970-era emission control technology. We are 
adopting new HC and NOX standards that reflect the 
application of more advanced emission control technology. These 
standards are harmonized with California's highway motorcycle emission 
standards, but on a delayed schedule relative to implementation in 
California and with some additional provisions that provide additional 
flexibility in meeting the standards. We are also finalizing new 
federal emission standards for highway motorcycles under 50cc that are 
currently uncontrolled. Finally, we are adopting standards to control 
permeation evaporative emissions from the fuel tanks and fuel hoses on 
highway motorcycles.
    As described below and in the Final Regulatory Support Document, 
these standards will help address the contribution of these engines to 
air pollution that causes public health and welfare problems. HC and 
NOX emissions from highway motorcycles contribute to ambient 
concentrations of ozone. They also add to fine particle levels and 
contribute to visibility impairment. The standards we are adopting, 
which are expected to result in about a 60 percent reduction in HC and 
NOX emissions in 2020, will help reduce these harmful 
emissions. They will also reduce personal exposure for people who 
operate, who work with, or are otherwise in close proximity to these 
vehicles. This is important because, in addition to the health effects 
associated with exposure to ozone and fine PM, many types of 
hydrocarbons are also air toxics.
    Based on the most recent data available for this rule (1999-2001),

[[Page 2405]]

ozone and PM air quality problems are widespread in the United States. 
There are about 111 million people living in counties with monitored 
concentrations exceeding the 8-hour ozone NAAQS, and over 65 million 
people living in counties with monitored PM2.5 levels 
exceeding the PM2.5 NAAQS. This emission control program is 
another component of the effort by federal, state and local governments 
to reduce the health related impacts of air pollution and to reach 
attainment of the National Ambient Air Quality Standard (NAAQS) for 
ozone and particulate matter as well as to improve other environmental 
conditions such as atmospheric visibility.

A. What Are The Health and Welfare Effects of Highway Motorcycle 
Emissions?

    Highway motorcycles generate emissions that contribute to ozone 
formation and ambient levels of PM and air toxics. This section 
summarizes the general health effects of these pollutants. National 
inventory estimates are set out in Section II.B, and estimates of the 
expected impact of these programs are described in Section VII. 
Interested readers are encouraged to refer to the Regulatory Support 
Document for this rule for more in-depth discussions.
1. Health and Welfare Effects Associated With Ground Level Ozone and 
Its Precursors
a. Health and Welfare Effects
    Highway motorcycles contribute to ambient ozone levels through 
their HC and NOX emissions. Volatile organic compounds (VOC) 
and NOX are precursors in the photochemical reaction which 
forms tropospheric ozone. Ground-level ozone, the main ingredient in 
smog, is formed by complex chemical reactions of VOCs and 
NOX in the presence of heat and sunlight. Hydrocarbons are a 
set of compounds that are very similar to, but slightly different from, 
VOCs, and to reduce mobile-source VOC levels we set maximum limits for 
HC emissions.\12\
---------------------------------------------------------------------------

    \12\ For more information about VOC and HC, see U.S. EPA (1997), 
Conversion Factors for Hydrocarbon Emission Components, Report No. 
NR-002. A copy of this document is available in Docket A-2000-02, 
Document IV-A-26.
---------------------------------------------------------------------------

    Ozone can irritate the respiratory system, causing coughing, throat 
irritation, and/or uncomfortable sensation in the 
chest.13 14 Ozone can reduce lung function and make it more 
difficult to breathe deeply, and breathing may become more rapid and 
shallow than normal, thereby limiting a person's normal activity. Ozone 
also can aggravate asthma, leading to more asthma attacks that require 
a doctor's attention and/or the use of additional medication. In 
addition, ozone can inflame and damage the lining of the lungs, which 
may lead to permanent changes in lung tissue, irreversible reductions 
in lung function, and a lower quality of life if the inflammation 
occurs repeatedly over a long time period (months, years, a lifetime). 
People who are of particular concern with respect to ozone exposures 
include children and adults who are active outdoors. Others 
particularly susceptible to ozone effects are people with respiratory 
disease, such as asthma, and people with unusual sensitivity to ozone, 
and children. Beyond its human health effects, ozone has been shown to 
injure plants, which has the effect of reducing crop yields and 
reducing productivity in forest ecosystems.15 16
---------------------------------------------------------------------------

    \13\ U.S. EPA (1996). Air Quality Criteria for Ozone and Related 
Photochemical Oxidants, EPA/600/P-93/004aF. Docket No. A-99-06. 
Document Nos. II-A-15 to 17. More information on health effects of 
ozone is also available at http:/www.epa.gov/ttn/naaqs/standards/ozone/s.03.index.html.
    \14\ U.S. EPA. (1996). Review of National Ambient Air Quality 
Standards for Ozone, Assessment of Scientific and Technical 
Information, OAQPS Staff Paper, EPA-452/R-96-007. Docket No. A-99-
06. Document No. II-A-22.
    \15\ U.S. EPA (1996). Air Quality Criteria for Ozone and Related 
Photochemical Oxidants, EPA/600/P-93/004aF. Docket No. A-99-06. 
Document Nos. II-A-15 to 17. More information on health effects of 
ozone is also available at http:/www.epa.gov/ttn/naaqs/standards/ozone/s.03.index.html.
    \16\ U.S. EPA. (1996). Review of National Ambient Air Quality 
Standards for Ozone, Assessment of Scientific and Technical 
Information, OAQPS Staff Paper, EPA-452/R-96-007. Docket No. A-99-
06. Document No. II-A-22.
---------------------------------------------------------------------------

    The 8-hour ozone standard, established by EPA in 1997, is based on 
well-documented science demonstrating that more people are experiencing 
adverse health effects at lower levels of exertion, over longer 
periods, and at lower ozone concentrations than addressed by the one-
hour ozone standard.\17\ The 8-hour standard addresses ozone exposures 
of concern for the general population and populations most at risk, 
including children active outdoors, outdoor workers, and individuals 
with pre-existing respiratory disease, such as asthma.
---------------------------------------------------------------------------

    \17\ See, e.g., 62 FR 38861-62, July 18, 1997.
---------------------------------------------------------------------------

    There has been new research that suggests additional serious health 
effects beyond those that were known when the 8-hour ozone health 
standard was set. Since 1997, over 1,700 new health and welfare studies 
relating to ozone have been published in peer-reviewed journals.\18\ 
Many of these studies investigate the impact of ozone exposure on such 
health effects as changes in lung structure and biochemistry, 
inflammation of the lungs, exacerbation and causation of asthma, 
respiratory illness-related school absence, hospital and emergency room 
visits for asthma and other respiratory causes, and premature 
mortality. EPA is currently in the process of evaluating these and 
other studies as part of the ongoing review of the air quality criteria 
and NAAQS for ozone. A revised Air Quality Criteria Document for Ozone 
and Other Photochemical Oxidants will be prepared in consultation with 
EPA's Clean Air Science Advisory Committee (CASAC). Key new health 
information falls into four general areas: development of new-onset 
asthma, hospital admissions for young children, school absence rate, 
and premature mortality. In all, the new studies that have become 
available since the 8-hour ozone standard was adopted in 1997 continue 
to demonstrate the harmful effects of ozone on public health and the 
need for areas with high ozone levels to attain and maintain the NAAQS.
---------------------------------------------------------------------------

    \18\ New Ozone Health and Environmental Effects References, 
Published Since Completion of the Previous Ozone AQCD, National 
Center for Environmental Assessment, Office of Research and 
Development, U.S. Environmental Protection Agency, Research Triangle 
Park, NC 27711 (7/2002) Docket No. A-2001-28, Document II-A-79.
---------------------------------------------------------------------------

    In addition to these health effects, HC emissions contain several 
air toxics that can also have adverse impacts on human health. The 
health effects of air toxics are briefly described below and discussed 
in more detail in the final Regulatory Support Document for this rule.
    Ozone and its precursors also have welfare effects. Ozone has been 
shown to injure plants, which has the effect of reducing crop yields, 
reducing productivity in forests and other ecosystems. Ozone also 
attacks certain materials such as rubbers and plastics. Other 
environmental effects, such as acid deposition and eutrophication, are 
related to ozone precursors, such as NOX. Acid deposition, 
or acid rain as it is commonly known, occurs when SO2 and 
NOX react in the atmosphere with water, oxygen, and oxidants 
to form various acidic compounds that later fall to earth in the form 
of precipitation or dry deposition of acidic particles.\19\ Acid rain 
contributes to damage of trees at high elevations and in extreme cases

[[Page 2406]]

may cause lakes and streams to become so acidic that they cannot 
support aquatic life. In addition, acid deposition accelerates the 
decay of building materials and paints, including irreplaceable 
buildings, statues, and sculptures that are part of our nation's 
cultural heritage. To reduce damage to automotive paint caused by acid 
rain and acidic dry deposition, some manufacturers use acid-resistant 
paints, at an average cost of $5 per vehicle--a total of $80-85 million 
per year when applied to all new cars and trucks sold in the U.S.
---------------------------------------------------------------------------

    \19\ Much of the information in this subsection was excerpted 
from the EPA document, Human Health Benefits from Sulfate Reduction, 
written under Title IV of the 1990 Clean Air Act Amendments, U.S. 
EPA, Office of Air and Radiation, Acid Rain Division, Washington, DC 
20460, November 1995. Available in Docket A-2000-01, Document No. 
II-A-32.
---------------------------------------------------------------------------

    Eutrophication is the accelerated production of organic matter, 
particularly algae, in a water body. This increased growth can cause 
numerous adverse ecological effects and economic impacts, including 
nuisance algal blooms, dieback of underwater plants due to reduced 
light penetration, and toxic plankton blooms. Algal and plankton blooms 
can also reduce the level of dissolved oxygen, which can also adversely 
affect fish and shellfish populations. Deposition of nitrogen from on-
highway motorcycle engines contributes to elevated nitrogen levels in 
waterbodies.
b. Current and Projected Ozone Levels
    Ground level ozone today remains a pervasive pollution problem in 
the United States. In 2003, 114 million people (2000 census) lived in 
53 areas designated nonattainment under the 1-hour ozone NAAQS.\20\ 
This sharp decline from the 101 nonattainment areas originally 
identified under the Clean Air Act Amendments of 1990 demonstrates the 
effectiveness of the last decade's worth of emission-control programs. 
However, elevated ozone concentrations remain a serious public health 
concern throughout the nation. Unhealthy ozone concentrations exceeding 
the level of the 8-hour standard (i.e., not requisite to protect the 
public health with an adequate margin of safety) occur over wide 
geographic areas, including most of the nation's major population 
centers. These monitored areas include much of the eastern half of the 
U.S. and large areas of California.
---------------------------------------------------------------------------

    \20\ ``One-hour Ozone and PM 10 Nonattainment Status and Air 
Quality Data Update,'' Memorandum from Patricia Koman to Docket A-
2000-2, August 11, 2003, Docket A-2000-02, Document IV-B-07. See 
also National Air Quality and Emissions Trends Report, 1999, EPA, 
2001, at Table A-19. This document is available at http://www.epa.gov/oar/aqtrnd99/. The data from the Trends report are the 
most recent EPA air quality data that have been quality assured. A 
copy of this table can also be found in Docket No. A-2000-01, 
Document No. II-A-64.
---------------------------------------------------------------------------

    According to data from 1999 to 2001, there are 291 counties where 
111 million people live that measured values that violate the 8-hour 
ozone NAAQS.\21\ An additional 37 million people live in 155 counties 
that have air quality measurements within 10 percent of the level of 
the standard. These areas, though currently not violating the standard, 
will also benefit from the additional emission reductions from this 
rule.
---------------------------------------------------------------------------

    \21\ Additional counties may have levels above the NAAQS but do 
not currently have monitors. See U.S. EPA OAQPS Air Quality Data 
Analysis 1999-2001 Technical Support Document for Regulatory Actions 
(Docket A-2001-28; No. II-A-196).
---------------------------------------------------------------------------

    Based on our air quality modeling performed for our recent Notice 
of Proposed Rulemaking proposing more stringent emission standards for 
nonroad diesel engines and the diesel fuel used in those engines (68 FR 
28328, May 23, 2003), we anticipate that without emission reductions 
beyond those already required under promulgated regulations and 
approved SIPs, ozone nonattainment will likely persist into the future. 
With reductions from programs already in place, the number of counties 
violating the ozone 8-hour standard is expected to decrease in 2020 to 
30 counties where 43 million people are projected to live. Thereafter, 
exposure to unhealthy levels of ozone is expected to begin to increase 
again. In 2030 the number of counties violating the ozone 8-hour NAAQS 
is projected to increase to 32 counties where 47 million people are 
projected to live. In addition, in 2030, 82 counties where 44 million 
people are projected to live will be within 10 percent of violating the 
ozone 8-hour NAAQS.
    EPA is still developing the implementation process for bringing the 
nation's air into attainment with the ozone 8-hour NAAQS (see proposal, 
68 FR 32702, June 2, 2003). The Act contains two sets of requirements 
for State plans implementing the national ozone air quality standards 
in nonattainment areas. Under subpart 1 of Title I, Part D, a State 
must demonstrate that nonattainment areas will attain the ozone 8-hour 
standard as expeditiously as practicable but no later than five years 
from the date that the area was designated nonattainment. However, 
based on the severity of the air quality problem and the availability 
and feasibility of control measures, the Administrator may extend the 
attainment date ``for a period of no greater than 10 years from the 
date of designation as nonattainment.'' Based on these provisions, we 
expect that most or all areas covered under subpart 1 will attain the 
ozone standard in the 2007 to 2014 time period. For areas covered under 
subpart 2, the maximum attainment dates provided under the Act range 
from 3 to 20 years after designation, depending on an area's 
classification. We anticipate that areas covered by subpart 2 will 
attain in the 2007 to 2024 time period.\22\
---------------------------------------------------------------------------

    \22\ EPA has proposed that States submit SIPs that address how 
areas will attain the 8-hour ozone standard within 3 years after 
nonattainment designation for moderate and above areas classified 
under subpart 2 and for some areas classified under subpart 1. EPA 
is also proposing that marginal areas and some areas designated 
under subpart 1 (i.e., those with early attainment dates) will not 
be required to submit attainment demonstrations for the 8-hour ozone 
standard. We therefore anticipate that States will submit their 
attainment demonstration SIPs by April 2007.
---------------------------------------------------------------------------

    Since the HC and NOX emission reductions expected from 
this final rule will go into effect during the period when areas will 
need to attain the 8-hour ozone NAAQS, the projected reductions in 
highway motorcycle emissions are expected to assist States in their 
effort to meet and maintain that standard.
2. Health and Welfare Effects Associated With Particulate Matter
a. Health and Welfare Effects
    Highway motorcycles contribute to ambient particulate matter in two 
ways. First, they contribute through direct emissions of particulate 
matter in the exhaust. Second, they contribute through the indirect 
formation of PM (namely ammonium nitrate and organic carbonaceous 
PM2.5) in the atmosphere through their NOX and 
organic carbon emissions, especially HC. Carbonaceous PM2.5 
is a major portion of ambient PM2.5, especially in populous 
urban areas. The relative contribution of various chemical components 
to PM2.5 varies by region of the country.
    Particulate matter represents a broad class of chemically and 
physically diverse substances. It can be principally characterized as 
discrete particles that exist in the condensed (liquid or solid) phase 
spanning several orders of magnitude in size. All particles equal to 
and less than 10 microns are called PM10 Fine particles can 
be generally defined as those particles with an aerodynamic diameter of 
2.5 microns or less (also known as PM2.5), and coarse 
fraction particles are those particles with an aerodynamic diameter 
greater than 2.5 microns, but equal to or less than a nominal 10 
microns. Fine particles can remain in the atmosphere for days to weeks 
and travel through the atmosphere hundreds to thousands of kilometers, 
while coarse particles deposit to the earth within minutes to

[[Page 2407]]

hours and within tens of kilometers from the emission source.
    Scientific studies show ambient PM (which is attributable to a 
number of sources, including highway motorcycles) is associated with a 
series of adverse health effects. These health effects are discussed in 
detail in the EPA Criteria Document for PM as well as the draft updates 
of this document released in the past year. \23\ \24\
---------------------------------------------------------------------------

    \23\ U.S. EPA (1996). Air Quality Criteria for Particulate 
Matter--Volumes I, II, and III, EPA, Office of Research and 
Development. Report No. EPA/600/P-95/001a-cF. This material is 
available in Docket A-99-06, Documents IV-A-30 to 32. It is also 
available electronically at http://www.epa.gov/ttn/oarpg/ticd.html.
    \24\ U.S. EPA (2002). Air Quality Criteria for Particulate 
Matter--Volumes I and II (Third External Review Draft) This material 
is available in Docket A-2001-28, Documents II-A-98 and II-A-71. It 
is also available electronically at http://cfpub.epa.gov/ncea/cfm/partmatt.cfm.
---------------------------------------------------------------------------

    As described in these documents, health effects associated ambient 
PM have been indicated by epidemiologic studies showing associations 
between short-term exposure and increased hospital admissions for 
ischemic heart disease, heart failure, respiratory disease, including 
chronic obstructive pulmonary disease (COPD) and pneumonia. Short-term 
elevations in ambient PM have also been associated with increased 
cough, lower respiratory symptoms, and decrements in lung function. 
Short-term variations in ambient PM have also been associated with 
increases in total and cardiorespiratory daily mortality. Studies 
examining populations exposed to different levels of air pollution over 
a number of years, including the Harvard Six Cities Study and the 
American Cancer Society Study suggest an association between exposure 
to ambient PM2.5 and premature mortality. 25 26 
Two studies further analyzing the Harvard Six Cities Study's air 
quality data have also established a specific influence of mobile 
source-related PM2.5 on daily mortality \27\ and a 
concentration-response function for mobile source-associated 
PM2.5 and daily mortality.\28\ Another recent study in 14 
U.S. cities examining the effect of PM10 on daily hospital 
admissions for cardiovascular disease found that the effect of 
PM10 was significantly greater in areas with a larger 
proportion of PM10 coming from motor vehicles, indicating 
that PM10 from these sources may have a greater effect on 
the toxicity of ambient PM10 when compared with other 
sources.\29\ Additional studies have associated changes in heart rate 
and/or heart rhythm in addition to changes in blood characteristics 
with exposure to ambient PM. 30 31 For additional 
information on health effects, see the Regulatory Support Document for 
this rule.
---------------------------------------------------------------------------

    \25\ Dockery, DW; Pope, CA, III; Xu, X; et al. (1993). An 
association between air pollution and mortality in six U.S. cities. 
N Engl J Med 329:1753-1759.
    \26\ Pope, CA, III; Thun, MJ; Namboordiri, MM; et al. (1995). 
Particulate air pollution as a predictor of mortality in a 
prospective study of U.S. adults. Am J Respir Crit Care Med 151:669-
674.
    \27\ Laden F; Neas LM; Dockery DW; et al. (2000). Association of 
fine particulate matter from different sources with daily mortality 
in six U.S. cities. Environ Health Perspect 108(10):941-947.
    \28\ Schwartz J; Laden F; Zanobetti A. (2002). The 
concentration-response relation between PM(2.5) and daily deaths. 
Environ Health Perspect 110(10): 1025-1029.
    \29\ Janssen NA; Schwartz J; Zanobetti A.; et al. (2002). Air 
conditioning and source-specific particles as modifiers of the 
effect of PM10 on hospital admissions for heart and lung 
disease. Environ Health Perspect 110(1):43-49.
    \30\ Pope CA III, Verrier RL, Lovett EG; et al. (1999). Heart 
rate variability associated with particulate air pollution. Am Heart 
J 138(5 Pt 1):890-899.
    \31\ Magari SR, Hauser R, Schwartz J; et al. (2001). Association 
of heart rate variability with occupational and environmental 
exposure to particulate air pollution. Circulation 104(9):986-991.
---------------------------------------------------------------------------

    The health effects of PM10 are similar to those of 
PM2.5, since PM10 includes all of 
PM2.5 plus the coarse fraction from 2.5 to 10 micrometers in 
size. EPA also evaluates the health effects of PM between 2.5 and 10 
micrometers in the draft revised Criteria Document. As discussed in the 
Diesel HAD and other studies, most diesel PM is smaller than 2.5 
micrometers.\32\ Both fine and coarse fraction particles can enter and 
deposit in the respiratory system.
---------------------------------------------------------------------------

    \32\ U.S. EPA (1985). Size specific total particulate emission 
factor for mobile sources. EPA 460/3-85-005. Office of Mobile 
Sources, Ann Arbor, MI. A copy of this document is available in 
Docket A-2001-28, Document II-A-35.
---------------------------------------------------------------------------

    PM also causes adverse impacts to the environment. Fine PM is the 
major cause of reduced visibility in parts of the United States, 
including many of our national parks. Other environmental impacts occur 
when particles deposit onto soils, plants, water or materials. For 
example, particles containing nitrogen and sulphur that deposit on to 
land or water bodies may change the nutrient balance and acidity of 
those environments. Finally, PM causes soiling and erosion damage to 
materials, including culturally important objects such as carved 
monuments and statues. It promotes and accelerates the corrosion of 
metals, degrades paints, and deteriorates building materials such as 
concrete and limestone.
b. Current and Projected Levels
    There are NAAQS for both PM10 and PM2.5. 
Violations of the annual PM2.5 standard are much more 
widespread than are violations of the PM10 standards. Each 
of these are discussed below.
    i. PM10 Levels. The current NAAQS for PM10 
were established in 1987. The primary (health-based) and secondary 
(public welfare based) standards for PM10 include both 
short- and long-term NAAQS. The short-term (24 hour) standard of 150 
ug/m\3\ is not to be exceeded more than once per year on average over 
three years. The long-term standard specifies an expected annual 
arithmetic mean not to exceed 50 ug/m\3\ averaged over three years.
    Currently, 29 million people live in PM10 nonattainment 
areas. There are currently 56 moderate PM10 nonattainment 
areas with a total population of 6.6 million.\33\ The attainment date 
for the initial moderate PM10 nonattainment areas, 
designated by law on November 15, 1990, was December 31, 1994. Several 
additional PM10 nonattainment areas were designated on 
January 21, 1994, and the attainment date for these areas was December 
31, 2000. There are an additional 8 serious PM10 
nonattainment areas with a total affected population of 22.7 million. 
According to the Act, serious PM10 nonattainment areas must 
attain the standards no later than 10 years after designation. The 
initial serious PM10 nonattainment areas were designated 
January 18, 1994 and had an attainment date set by the Act of December 
31, 2001. The Act provides that EPA may grant extensions of the serious 
area attainment dates of up to 5 years, provided that the area 
requesting the extension meets the requirements of Section 188(e) of 
the Act. Four serious PM10 nonattainment areas (Phoenix, 
Arizona; Coachella Valley, South Coast (Los Angeles), and Owens Valley, 
California) have received extensions of the December 31, 2001 
attainment date and thus have new attainment dates of December 31, 
2006.\34\
    While all of these areas are expected to be in attainment before 
any significant emission reductions from this rule are expected to 
occur, these reductions will help these areas in maintaining the 
standards.
    ii. PM2.5 Levels. The NAAQS for PM2.5 were 
established by EPA in 1997 (62 Fed. Reg., 38651, July 18, 1997). The 
short term (24-hour) standard is set at a level of 65 [mu]g/m\3\ based 
on the 98th percentile concentration averaged over three years. (This 
air quality statistic

[[Page 2408]]

compared to the standard is referred to as the ``design value.'') The 
long-term standard specifies an expected annual arithmetic mean not to 
exceed 15 ug/m\3\ averaged over three years.
---------------------------------------------------------------------------

    \33\ ``One-hour Ozone and PM10 Nonattainment Status 
and Air Quality Data Update,'' Memorandum from Patricia Koman to 
Docket A-2000-2, August 11, 2003, Docket A-2000-02, Document IV-B-
07.
    \34\ EPA has also proposed to grant Las Vegas, Nevada, an 
extension until December 31, 2006.
---------------------------------------------------------------------------

    High ambient levels of PM2.5 are widespread throughout 
the country. Current PM2.5 monitored values for 1999-2001, 
which cover counties having about 75 percent of the country's 
population, indicate that at least 65 million people in 129 counties 
live in areas where annual design values of ambient fine PM violate the 
PM2.5 NAAQS. There are an additional 9 million people in 20 
counties where levels above the NAAQS are being measured, although 
there are insufficient data at this time to calculate a design value in 
accordance with the standard and thus determine whether these areas are 
violating the PM2.5 NAAQS. In total, this represents 37 
percent of the counties and 64 percent of the population in the areas 
with monitors with levels above the NAAQS. Furthermore, an additional 
11 million people live in 41 counties that have air quality 
measurements within 10 percent of the level of the standard, with 
complete data. These areas, although not currently violating the 
standard, will also benefit from the additional HC and NOX 
reductions from these motorcycle emission standards.
    The air quality modeling performed for our recent Notice of 
Proposed Rulemaking proposing more stringent emission standards for 
nonroad diesel engines and the diesel fuel used in those engines (68 FR 
28328, May 23, 2003) suggests that similar conditions are likely to 
continue to exist in the future in the absence of additional measures 
to reduce these emissions. For example, in 2020 based on emission 
controls currently adopted, we project that 66 million people will live 
in 79 counties with average PM2.5 levels above 15 ug/m\3\. 
In 2030, the number of people projected to live in areas exceeding the 
PM2.5 standard is expected to increase to 85 million in 107 
counties. An additional 24 million people are projected to live in 
counties within 10 percent of the standard in 2020, which will decrease 
to 17 million people in 2030.
    By reducing HC and NOX emissions from highway 
motorcycles, the standards we are finalizing will assist States as they 
implement local controls to reduce PM2.5 levels and help 
ensure long term maintenance with the NAAQS.
3. Health Effects Associated With Air Toxics
    In addition to the human health and welfare impacts described 
above, emissions from the engines covered by this rule also contain 
several Mobile Source Air Toxics, including benzene, 1,3-butadiene, 
formaldehyde, acetaldehyde, and acrolein.\35\ The health effects of 
these air toxics are described in more detail in the Regulatory Support 
Document for this rule. Additional information can also be found in the 
Technical Support Document for our final Mobile Source Air Toxics 
rule.\36\
---------------------------------------------------------------------------

    \35\ EPA recently finalized a list of 21 Mobile Source Air 
Toxics, including VOCs, metals, and diesel particulate matter and 
diesel exhaust organic gases (collectively DPM+DEOG). 66 FR 17230, 
March 29, 2001. This material is available in Docket No. A-2000-01, 
Documents Nos. II-A-42 and II-A-30.
    \36\ See our Mobile Source Air Toxics final rulemaking, 66 FR 
17230, March 29, 2001, and the Technical Support Document for that 
rulemaking. Copies of these documents are available in Docket No. A-
2000-01, Documents Nos. II-A-42 and II-A-30.
---------------------------------------------------------------------------

    The hydrocarbon controls contained in this rule are expected to 
reduce exposure to air toxics and therefore may help reduce the impact 
of these engines on cancer and noncancer health effects.

B. What Is the Emission Inventory Contribution From Highway 
Motorcycles?

    The highway motorcycles subject to the standards finalized today 
contribute to the national inventories of pollutants that are 
associated with the health and public welfare effects described in 
Section II.A. Emission estimates for highway motorcycles were developed 
using information on the certification levels of current motorcycles 
and information on motorcycle use provided by the motorcycle industry. 
A more detailed description of the highway motorcycle modeling and our 
estimation methodology can be found in the Chapter 6 of the Draft 
Regulatory Support Document.
    In order to determine the relative contribution of highway 
motorcycles to overall emissions, we estimated the emissions from all 
sources. Overall emission inventory estimates for the years 1996 and 
2020 are summarized in Tables II.B-1 through II.B-3 for VOC, 
NOX, and PM emissions, respectively.\37\ The estimates shown 
for highway motorcycles are baseline estimates and do not account for 
the impact of the standards adopted today. These tables show the 
relative contributions of the different mobile-source categories to the 
overall national mobile-source inventory. Of the total emissions from 
mobile sources, highway motorcycles contribute about 0.6 percent, 0.1 
percent, and less than 0.1 percent of VOC, NOX, and PM 
emissions, respectively, in the year 1996. The projections for 2020 for 
the highway motorcycles subject to the standards adopted today show 
that emissions from these categories are expected to increase over time 
if left uncontrolled. Projections indicate that motorcycles are 
expected to contribute 2.3 percent, 0.3 percent, and 0.1 percent of 
mobile source VOC, NOX, and PM emissions in the year 2020 if 
left uncontrolled. Population growth and the effects of other 
regulatory control programs are factored into these projections.
---------------------------------------------------------------------------

    \37\ The inventories cited in Tables II.B-1 through II.B-3 were 
developed for the Nonroad Diesel Rulemaking. See 68 FR 28328, May 
23, 2003. The inventories for recreational marine engines greater 
than 50 horsepower, nonroad spark-ignition engines greater than 25 
horsepower, and recreation spark-ignition engines have been updated 
using the latest version of EPA's NONROAD model to account for the 
new standards adopted by EPA in late 2002. See 67 FR 68242, November 
8, 2002.

                             Table II.B-1.--Annual VOC Baseline Emission Levels for Mobile and Other Source Categories a,b,c
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                               1996                                            2020
                                                        ------------------------------------------------------------------------------------------------
                        Category                                           % of mobile                                      % of mobile
                                                         VOC short tons      source         % of total    VOC short tons      source        % of total
--------------------------------------------------------------------------------------------------------------------------------------------------------
Highway Motorcycles....................................          47,368             0.6             0.3           86,520             2.2             0.6
Highway Light-duty.....................................       4,635,410            55.8            25.0        1,755,119            45.4            13.0
Highway Heavy-duty.....................................         608,607             7.3             3.3          226,641             5.9             1.7
Land-based Nonroad Diesel..............................         221,403             2.7             1.2           96,855             2.5             0.7
Recreational Marine Diesel <=50 hp.....................             128             0.0             0.0              108             0.0             0.0
Recreational Marine Diesel 50 hp............           1,199             0.0             0.0            1,531             0.0             0.0
Recreational Marine SI.................................         804,488             9.7             4.3          380,891             9.9             2.8

[[Page 2409]]

 
Nonroad SI <=25 hp.....................................       1,330,229            16.0             7.2          650,158            16.8             4.8
Nonroad SI 25hp.............................          85,701             1.0             0.5           12,265             0.3             0.1
Recreational SI........................................         308,285             3.7             1.7          339,098             8.8             2.5
Commercial Marine Diesel...............................          31,545             0.4             0.2           37,290             1.0             0.3
Commercial Marine SI...................................             960             0.0             0.0              998             0.0             0.0
Locomotive.............................................          48,381             0.6             0.3           36,546             0.9             0.3
Aircraft...............................................         176,394             2.1             1.0          239,654             6.2             1.8
                                                        ------------------------------------------------------------------------------------------------
Total Nonroad..........................................       3,008,713              36              16        1,795,394              46              13
Total Highway..........................................       5,291,385              64              29        2,068,280              54              15
                                                        ------------------------------------------------------------------------------------------------
Total Mobile Sources...................................       8,300,098             100              45        3,863,674             100              29
Stationary Point and Area Sources......................      10,249,136  ..............              55        9,648,376  ..............              71
                                                        ------------------------------------------------------------------------------------------------
Total Man-Made Sources.................................      18,549,234  ..............  ...............      13,512,050  ..............  ..............
Mobile Source Percent of Total.........................              45  ..............  ...............              29  ..............  ..............
--------------------------------------------------------------------------------------------------------------------------------------------------------
Notes:
\a\ These are 48-state inventories. They do not include Alaska and Hawaii.
\b\ The mobile source estimates include both exhaust and evaporative emissions.
\c\ Hydrocarbons (HC) are a set of compounds that are very similar to, but slightly different from, VOCs, and to reduce mobile source VOC levels we set
  maximum limits for HC emissions.


                               Table II.B-2.--Annual NOX Baseline Emission Levels for Mobile and Other Source Categories a
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                               1996                                            2020
                                                        ------------------------------------------------------------------------------------------------
                        Category                                           % of mobile                                      % of mobile
                                                         NOX short tons      source         % of total    NOX short tons      source        % of total
--------------------------------------------------------------------------------------------------------------------------------------------------------
Highway Motorcycles....................................           7,284             0.1             0.0           14,059             0.3             0.1
Highway Light-duty.....................................       4,427,634            33.8            18.0        1,264,342            25.0             8.4
Highway Heavy-duty.....................................       4,626,004            35.3            18.8          696,911            13.8             4.6
Land-based Nonroad Diesel..............................       1,583,664            12.1             6.4        1,140,727            22.6             7.6
Recreational Marine Diesel <=50 hp.....................             523             0.0             0.0              682             0.0             0.0
Recreational Marine Diesel 50 hp............          33,468             0.3             0.1           47,675             0.9             0.3
Recreational Marine SI.................................          33,304             0.3             0.1           61,749             1.2             0.4
Nonroad SI <=25 hp.....................................          63,584             0.5             0.3          100,119             2.0             0.7
Nonroad SI 25hp.............................         273,099             2.1             1.1           43,322             0.9             0.3
Recreational SI........................................           4,297             0.0             0.0           17,129             0.3             0.1
Commercial Marine Diesel...............................         959,704             7.3             3.9          819,201            16.2             5.4
Commercial Marine SI...................................           6,428             0.0             0.0            4,551             0.1             0.0
Locomotive.............................................         921,556             7.0             3.8          612,722            12.1             4.1
Aircraft...............................................         165,018             1.3             0.7          228,851             4.5             1.5
                                                        ------------------------------------------------------------------------------------------------
Total Nonroad..........................................       4,044,645              31              16        3,076,728              61              20
Total Highway..........................................       9,060,922              69              37        1,975,312              39              13
                                                        ------------------------------------------------------------------------------------------------
Total Mobile Sources...................................      13,105,567             100              53        5,052,040             100              33
Stationary Point and Area Sources......................      11,449,752  ..............              47       10,050,213  ..............              67
                                                        ------------------------------------------------------------------------------------------------
Total Man-Made Sources.................................      24,555,319  ..............  ...............      15,102,253  ..............  ..............
Mobile Source Percent of Total.........................              53  ..............  ...............              33  ..............  ..............
--------------------------------------------------------------------------------------------------------------------------------------------------------
Notes:
a These are 48-state inventories. They do not include Alaska and Hawaii.


                         Table II.B-3.--Annual Direct PM-2.5 Baseline Emission Levels for Mobile and Other Source Categories a,b
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                               1996                                            2020
                                                        ------------------------------------------------------------------------------------------------
                        Category                          PM-2.5 short     % of mobile                     PM-2.5 short     % of mobile
                                                              tons           source         % of total         tons           source        % of total
--------------------------------------------------------------------------------------------------------------------------------------------------------
Highway Motorcycles....................................             184             0.0             0.0              434             0.1             0.0
Highway Light-duty.....................................          57,534            10.2             2.6           47,136            13.2             2.3
Highway Heavy-duty.....................................         172,965            30.7             7.8           24,806             7.0             1.2
Land-based Nonroad Diesel..............................         176,510            31.3             8.0          124,334            34.9             6.0
Recreational Marine Diesel <=50 hp.....................              62             0.0             0.0               70             0.0             0.0
Recreational Marine Diesel 50 hp............             815             0.1             0.0            1,162             0.3             0.1

[[Page 2410]]

 
Recreational Marine SI.................................          35,147             6.2             1.6           26,110             7.3             1.3
Nonroad SI <=25 hp.....................................          24,130             4.3             1.1           29,998             8.4             1.5
Nonroad SI 25hp.............................           1,374             0.2             0.1            2,302             0.6             0.1
Recreational SI........................................           7,968             1.4             0.4            9,963             2.8             0.5
Commercial Marine Diesel...............................          36,367             6.5             1.6           41,365            11.6             2.0
Commercial Marine SI...................................           1,370             0.2             0.1            1,326             0.4             0.1
Locomotive.............................................          20,937             3.7             0.9           16,727             4.7             0.8
Aircraft...............................................          27,891             5.0             1.3           30,024             8.4             1.5
Total Nonroad..........................................         332,571              59              15          283,381              80              14
Total Highway..........................................         230,683              41              10           72,376              20               4
                                                        ------------------------------------------------------------------------------------------------
Total Mobile Sources...................................         563,254             100              25          355,757             100              17
Stationary Point and Area Sources......................       1,653,392  ..............              75        1,712,004  ..............              83
                                                        ------------------------------------------------------------------------------------------------
Total Man-Made Sources.................................       2,216,646  ..............  ...............       2,067,761  ..............  ..............
Mobile Source Percent of Total.........................              25  ..............  ...............              17  ..............  ..............
--------------------------------------------------------------------------------------------------------------------------------------------------------
Notes:
\a\ These are 48-state inventories. They do not include Alaska and Hawaii.
\b\ Excludes natural and miscellaneous sources.

III. Which Vehicles and Engines Are Covered?

    We are adopting new standards for new highway motorcycles, 
including those with engines with displacements of less than 50cc. 
These requirements apply to manufacturers of motorcycles. Companies 
that produce and sell motorcycle engines are not directly covered, 
unless such a company also manufactures motorcycles. Every company that 
manufactures motorcycles for introduction into commerce in the U.S., 
whether or not they also manufacture motorcycle engines, is covered by 
EPA regulations. Engine manufacturers will be indirectly required to 
design and build complying engines, because their customers (e.g., 
motorcycle manufacturers that purchase their engines) will require 
engines that comply with emission standards.
    In order to be defined as a highway motorcycle--and therefore 
covered by the new standards--a motorcycle must first be defined as a 
motor vehicle under the Clean Air Act and EPA regulations. EPA 
regulations then specify the characteristics that cause a motor vehicle 
to be defined as a highway motorcycle. EPA regulations also divide 
highway motorcycles into three ``classes,'' which are used to determine 
the specific compliance requirements applicable to a given motorcycle. 
This section explains the definitions and the motorcycle classes 
defined by EPA.

A. What Is a Highway Motorcycle?

    To reach the conclusion that a two- or three-wheeled vehicle is a 
highway motorcycle (a motorcycle legal for use on public roads), the 
vehicle must first be defined as a ``motor vehicle'' under the Clean 
Air Act.
    The Clean Air Act specifies that the term ``motor vehicle,'' as 
used in the Act, applies only to vehicles ``designed for transporting 
persons or property on a street or highway'' (CAA section 216). In 
addition, EPA has promulgated regulations, in 40 CFR 85.1703, that 
elaborate on the Act's definition of motor vehicles and set forth three 
criteria, which, if any one is met, would cause a vehicle to not be 
considered a motor vehicle under the regulations, and therefore not 
subject to requirements applicable to motor vehicles. These criteria 
are:
    (1) The vehicle cannot exceed a maximum speed of 25 miles per hour 
over a level paved surface; or
    (2) The vehicle lacks features customarily associated with safe and 
practical street or highway use, including such things as a reverse 
gear (except motorcycles), a differential, or safety features required 
by state and/or federal law; or
    (3) The vehicle exhibits features which render its use on a street 
or highway unsafe, impractical, or highly unlikely, including tracked 
road contact means, an inordinate size, or features ordinarily 
associated with military combat or tactical vehicles such as armor and/
or weaponry.
    A vehicle that cannot be considered a motor vehicle under the 
statutory and regulatory definitions described above is generally 
considered under the Clean Air Act to be a ``nonroad'' vehicle. Mopeds 
and scooters that do not meet the definition of ``motor vehicle'' 
(e.g., very small mopeds and scooters) because they can not exceed 25 
miles per hour or because they meet some of the other criteria 
described above are considered nonroad recreational vehicles and are 
subject to the applicable emission standards for off-highway 
motorcycles.
    Once it is determined that a vehicle is a ``motor vehicle'', EPA 
regulations then determine which motor vehicles are highway motorcycles 
for the purposes of applying emission standards. Although motorcycles 
come in a variety of two- and three-wheeled configurations and styles, 
for the most part they are two-wheeled, self-powered vehicles. EPA 
regulations currently define a motorcycle as ``any motor vehicle with a 
headlight, taillight, and stoplight and having: two wheels, or three 
wheels and a curb mass less than or equal to 793 kilograms (1749 
pounds)'' (See 40 CFR 86.402-98).
    In the past, vehicles that would otherwise meet the definition of a 
motorcycle but with an engine displacement of less than 50cc (e.g., 
small scooters and mopeds), have not been subject to any EPA emission 
standards. In this final rule we are, for the first time, applying 
emission standards to any highway motorcycle, regardless of 
displacement.

B. What Are Class I, Class II, and Class III Highway Motorcycles?

    Both EPA and California regulations sub-divide highway motorcycles 
into classes based on engine displacement. These divisions have been 
consistent

[[Page 2411]]

between EPA and the California ARB for many years. However, we are 
adopting a revised definition for Class I motorcycles in order to apply 
the Class I emission standards to motorcycles with displacements of 
less than 50cc. The revised definition will take effect with the 2006 
model year. Table V.A-1 shows how these classes are defined before and 
after implementation of new standards for motorcycles with engines of 
less than 50cc displacement.

                            Table III.B-1.--Motorcycle and Motorcycle Engine Classes
----------------------------------------------------------------------------------------------------------------
                                                    Engine displacement (cubic centimeters)
      Motorcycle class       -----------------------------------------------------------------------------------
                                       Through 2005 model year                 2006 and later model years
----------------------------------------------------------------------------------------------------------------
Class I.....................  50-169..................................  0-169.
Class II....................  170-279.................................  170-279.
Class III...................  280 and greater.........................  280 and greater.
----------------------------------------------------------------------------------------------------------------

    Highway motorcycles with engine displacements less than 50cc are 
mostly mopeds and motor scooters (``scooters,'' or sometimes, 
``motorbikes''). These vehicles are generally powered by 49cc two-
stroke engines, although four-stroke engines are becoming more popular. 
Honda, a major player in this market sector, will no longer be 
marketing any two-stroke street-use motorcycles as of the 2003 model 
year; everything, including their 49cc scooter, will be powered by a 
four-stroke engine.
    All motorcycles currently certified to EPA emission standards are 
powered by four-stroke engines. Class I and II motorcycles, which make 
up less than ten percent of unit sales and only 24 out of 175 certified 
2002 engine families, consist mostly of dual-sport motorcycles, 
scooters, and entry-level sport bikes and cruisers. Class III 
motorcycles represent 151 of the 175 certified 2002 engine families, 
and more than 90 percent of annual sales. Most Class III motorcycles 
are powered by relatively large engines, as demonstrated by an average 
displacement in the class of about 1100cc. Although there are some 
motorcycles that use eight-cylinder automotive engines and some on the 
horizon that may have displacements near 2300cc, the typical top-end 
displacement is around 1800cc.

IV. Exhaust Emission Standards and Test Procedures

    We are adopting new exhaust emission standards for highway 
motorcycles. This section includes a description of the new standards 
and other important provisions. A discussion of the technological 
feasibility of the standards is in Section V of this document.

A. What Are the New Exhaust Emission Standards?

    In general, we are harmonizing the federal exhaust emission 
standards for all classes of motorcycles with those of the California 
program, but on a delayed schedule relative to implementation in 
California. For Class I and Class II motorcycles this means meeting 
exhaust emission standards for HC and CO that have applied in 
California since 1982. Motorcycles with engine displacements of less 
than 50cc (previously unregulated) will be considered Class I 
motorcycles, and thus subject to the Class I standards. However, we 
have set a useful life of 6,000 km for under 50cc motorcycles. We are 
also adopting an optional HC+NOX standard for Class I and II 
motorcycles, which will be required of manufacturers wishing to average 
their emissions or transfer emission credits across classes. For Class 
III motorcycles, the standards will require compliance with two tiers 
of exhaust emission standards that California ARB has put in place for 
future model years. The existing federal CO standard of 12.0 g/km 
remains unchanged. The process by which manufacturers certify their 
motorcycles, the test procedures, the driving cycle, and other elements 
of the federal program also remain unchanged.
1. Class I and II Motorcycles
    We are adopting the current California ARB Class I and II exhaust 
emission standards on a nationwide basis starting with the 2006 model 
year. These standards, which have been in place in California since 
1982, are shown in Table IV.A-1. In recent years, motorcycles certified 
to the California standards have been sold nationwide, and there have 
been few, if any, motorcycles in those classes that are limited to 49-
state sales due to their not being able to meet the California 
standards.

                         Table IV.A-1.--Final Class I and II Exhaust Emission Standards
----------------------------------------------------------------------------------------------------------------
                                                 HC  (g/    CO  (g/
          Class and displacement (cc)              km)        km)                     Useful life
----------------------------------------------------------------------------------------------------------------
I-A (0-49)....................................        1.0       12.0  5 years/6,000 km \a\.
I-B (50-169)..................................        1.0       12.0  5 years/12,000 km \a\.
II (170-279)..................................        1.0       12.0  5 years/18,000 km.
----------------------------------------------------------------------------------------------------------------
Notes:
\a\ In order to distinguish the two segments within Class I that have differing useful life definitions, the
  regulatory text defines Class I-A (0-49cc) and Class I-B (50-169cc).

    We are also redefining Class I motorcycles to include those 
motorcycles with engine displacements under 50cc; thus, these 
previously unregulated motorcycles will be subject to the Class I 
standards shown in Table IV.A-1. As described further in Section IV.C, 
certain Class I motorcycles with an engine displacement under 50cc will 
be tested on a driving cycle that is slightly modified in order to 
accommodate the lower speed and acceleration capabilities of these 
motorcycles relative to other Class I motorcycles.
    For all Class I and II motorcycles we are also adopting an optional 
HC+NOX standard of 1.4 g/km. As of 2006 when new Class I and 
II standards become effective, the category of motorcycles under 50cc 
will be meeting an HC+NOX standard of 1.2 g/km in the EU, 
albeit on a different duty cycle. Also in 2006, motorcycles at or above 
50cc but less than 150cc in the EU will be meeting an

[[Page 2412]]

HC standard of 0.8 g/km and a NOX standard of 0.15 g/km 
(combined HC+NOX of 0.95), and motorcycles over 150cc will 
be meeting standards that are even lower. In addition, an 
HC+NOX standard of 1.4 g/km is equivalent to the Class III 
standard that goes into effect in 2006. We believe that an 
HC+NOX standard is the only appropriate way to enable the 
transfer of credits across motorcycle classes in the finalized 
averaging program, and this optional standard should also be required 
of any manufacturer who wants to average Class I and II engine families 
(discussed in detail in Section IV.B).
    We are providing a few years of lead time before these standards 
take effect for several reasons. First, the previously unregulated 
Class I category under 50cc will require some lead time to meet new 
standards. Second, we are allowing some averaging provisions that 
enable manufacturers to transfer Class III emission credits to Classes 
I and II, and these provisions will not be applicable until new Class 
III standards take effect in 2006. Third, although all Class I and II 
engine families in the 2002 model met these standards, that is not the 
case with the 2003 model year. This indicates to us that there may 
possibly be some models already under development in the context of the 
existing federal standard, and an abrupt transition to the new standard 
would create some difficulty in such cases. Given that the vast 
majority of Class I and II motorcycles do already meet the standards we 
are finalizing, it seems unreasonable to potentially disrupt the 
introduction and sale of a small number of motorcycles to advance the 
standards to an earlier date.
    As we noted in the NPRM, the U.S. is a minor market for small 
motorcycles, scooters, and mopeds, especially those with engine 
displacements of under 50cc. Some manufacturers, such as Piaggio (maker 
of the Vespa scooters), may sell only a few thousand units in the U.S., 
but have worldwide sales of scooters that approach the magnitude of 
total U.S. motorcycle sales. We believe that an attempt to drive 
technology and emission limits for these vehicles beyond those that are 
applicable in the major small motorcycle and scooter markets could 
result in the outright withdrawal of some manufacturers' products from 
the U.S. market. These companies could choose to forego the small 
amount of U.S. sales rather than develop specific technologies to 
address U.S. requirements.
2. Class III Motorcycles
    We are harmonizing the federal Class III motorcycle standards with 
the exhaust emission standards of the California program, as shown in 
Table IV.A-1. Specifically, we are adopting a Tier 1 standard of 1.4 g/
km HC+NOX starting in the 2006 model year, and a Tier 2 
standard of 0.8 g/km HC+NOX starting in the 2010 model year. 
Because both HC and NOX are ozone precursors, this new 
standard would better reduce ozone than an HC-only standard. 
Implementation on a nationwide basis will take place starting two model 
years after implementation of identical exhaust emission standards in 
California, ensuring that manufacturers have adequate lead time to plan 
for these new standards. As described in Section IV.B in further 
detail, these standards can be met on a corporate-average basis.

    Table IV.A-1.--Final Class III Exhaust Emission Standards (g/km)
------------------------------------------------------------------------
                    Model year                        HC+NOX       CO
------------------------------------------------------------------------
2006-2009.........................................        1.4       12.0
2010 and later....................................        0.8       12.0
------------------------------------------------------------------------

    As noted earlier, California ARB plans a technology progress review 
in 2006 to evaluate manufacturers' progress in meeting the Class III 
Tier 2 standards. We plan to participate in that review and work with 
California ARB and others, intending to make any appropriate 
adjustments to the standards or implementation schedule if warranted.

B. Can I Average, Bank, or Trade Emission Credits?

    To provide flexibility in meeting the standards, we are adopting an 
emission-credit program comparable to the existing California ARB 
regulations, but with additional flexibility relative to California 
ARB's program. The program consists of two parts. The first component, 
the averaging program, allows manufacturers to meet the standards on a 
fleet-average basis. The second component, the early credits programs, 
provides incentives for the early introduction of Class III motorcycles 
meeting the Tier 2 standards. We are not adopting any banking 
provisions beyond the early credits program, and are not adopting any 
form of emissions trading program. The emission-credit program is 
described in detail in the following paragraphs.
    Under the averaging program, manufacturers are able to balance the 
certified emissions of their motorcycles so that the sales-weighted 
emissions level meets the applicable standard. This means that some 
engine families may have emissions below the standards, while others 
have emissions higher than the standards. For enforcement purposes, 
manufacturers are required to specify a certification limit, or 
``Family Emission Limit'' (FEL) for each engine family. The FEL is the 
emission level that a particular engine family is certified as meeting 
and, in effect, become the standard for the individual family. The FEL 
may be above or below the applicable standard as long as the 
manufacturer's sales-weighted emissions level meets the applicable 
standard.
    We proposed an averaging program for Class III motorcycles only, 
and requested comment on whether we should include Class I and II 
motorcycles in the averaging program. Based on comments, we are 
including Class I and II motorcycles in the averaging program with 
certain restrictions intended to address concerns about the relative 
stringency of the Class I and II standards relative to the Class III 
standards. We are creating two separate averaging sets, one for Class I 
and II motorcycles and one for Class III motorcycles. Averaging would 
be allowed without constraint within each of these two averaging sets. 
However, we are limiting the manner in which credits could be exchanged 
between the two averaging sets. Credits from Class III motorcycles 
could be used to offset debits from Class I and II motorcycles. These 
credits are calculated by multiplying the g/km emission level by the 
useful life (in km) to give total grams of credits. Therefore, there is 
no need to accommodate the engine size differences between the 
different motorcycle classes. However, given that the Class I and II 
standards are less stringent than the Class III standards, we are not 
allowing Class I and II credits to be used to offset debits from Class 
III motorcycles. This also addresses concerns expressed by some 
commenters that all manufacturers do not offer products in all classes, 
and allowing Class I and II credits to be used for Class III compliance 
would inherently disadvantage Class III-only manufacturers. Because the 
Class III standards are HC+NOX standards while the primary 
Class I and II standards are HC only, we will allow such cross class 
averaging only if the manufacturer uses the optional HC+NOX 
standards for Classes I and II. In addition, Class I and II motorcycles 
could be averaged together, but must be certified to the optional 
HC+NOX standards in order to participate in the averaging 
program. We believe that this is an appropriate approach for several 
reasons. California

[[Page 2413]]

does not currently offer an averaging program for Class I and II 
motorcycles. Therefore, the optional standard provides additional 
flexibility relative to the California program, and this flexibility 
allows the certification of motorcycles that are higher-emitting than 
those allowed in California. An averaging program with an HC-only 
standard would result in additional flexibility, but also in additional 
uncertainty regarding the overall impact on total emissions of ozone 
precursors. We have also established that in some recent model years 
all Class I and II motorcycles have been in compliance with the primary 
HC standard that we are adopting, which is not typically the sort of 
situation where additional flexibility is warranted or offered. 
However, we believe that additional flexibility can be offered in 
exchange for controlling NOX to reasonably achievable 
levels.
    We believe that it is appropriate to retain our general historical 
approach to FEL caps by setting the Class III FEL cap at 5.0 g/km 
HC+NOX as proposed, primarily to allow flexibility in the 
transition to the new standards. While it is true that this approach 
will allow some motorcycle models which do not meet the California FEL 
cap of 2.5 g/km HC+NOX to be manufactured and sold outside 
of California, the number of models is quite small (less than ten of 
the 192 model year 2003 engine families certified as of March, 2003). 
However, we also believe that such an approach, while helping to ease 
the transition to the new standards, is not defensible for the long 
term. Thus, we are adopting an FEL cap of 2.5 g/km HC+NOX 
(the level of the California FEL cap) for Class III motorcycles to be 
effective with the implementation of the Tier 2 standards in the 2010 
model year. Consistent with our approach to FEL caps for Class III 
motorcycles, we are adopting 5.0 g/km HC+NOX as an FEL cap 
for Class I and II motorcycles, to apply in the 2006 model year when 
the new standards and averaging program take effect for these 
motorcycles.
    To encourage early compliance with the Tier 2 standards for Class 
III motorcycles, we are adopting an early credits program similar to 
the one in place in California, with timing adjusted due to the 
differing federal implementation schedule. We believe the incentives in 
this program will encourage manufacturers to introduce Tier 2 
motorcycles nationwide earlier than required by the rule. In addition, 
we believe some manufacturers can reduce emissions even further than 
required by the Tier 2 standard, and we would like to encourage the 
early introduction of these very low-emission vehicles.
    Under the early credits program, credits will be calculated based 
on the amount that a Class III motorcycle is below the Tier 2 
standards. These credits are banked and can be used beginning with the 
2010 model year. In order to provide incentives for the early 
introduction of even cleaner Tier 2 motorcycles, we are also adopting 
provisions to increase these early credits by a specific multiplier 
factor depending on how far below the Tier 2 standards a motorcycle is 
and how long before 2010 it is produced. These multipliers are shown in 
Table IV.B-1. Because we expect the Tier 2 technologies to become more 
widespread as 2010 approaches, the multipliers decrease linearly in 
value from 2006 until 2010, when the early compliance incentive will no 
longer have any value (i.e., the multiplier has a value of 1.0) and the 
program will terminate.

Table IV.B-1.--Multipliers To Encourage Early Compliance With the Tier 2
                           Standard and Beyond
------------------------------------------------------------------------
                                               Multiplier (Y) for use in
                                                   MY 2010 and later
                                                corporate averaging \a\
               Model year sold               ---------------------------
                                                           Certified at
                                              Early tier     0.4 g/km
                                                   2          HC+NOX
------------------------------------------------------------------------
2003 through 2006...........................       1.5               3.0
2007........................................       1.375             2.5
2008........................................       1.250             2.0
2009........................................       1.125            1.5
------------------------------------------------------------------------
Notes:
\a\ Early Tier 2 motorcycles and motorcycles certified to 0.4 g/km are
  counted cumulatively toward the MY 2010 and later corporate average.

    In 2010 and later model years the program becomes a basic averaging 
program, where each manufacturer has to meet the applicable 
HC+NOX standard on a fleet-average basis. See the 
regulations at Sec.  86.449.
    We are not adopting a required production line testing (PLT) 
program for highway motorcycles as part of this action. However, we are 
concerned about the integrity of post-certification changes to FELs in 
the absence of a PLT program which could be the source of data needed 
to justify a downward change in an FEL. Thus, we will not allow post-
certification downward changes to FELs in the absence of supporting 
emission data. Further, a manufacturer must provide such data and seek 
advance approval from us for a downward FEL change. In addition, any 
such downward FEL change could not be inconsistent with the levels 
shown in existing certification data. These requirements only apply to 
downward FEL adjustments. We will not require such data or advance 
notice to justify upward adjustments to FELs. However, any upward 
adjustment to FELs must not cause a manufacturer's fleet to violate the 
relevant standard.

C. What Are the Applicable Test Procedures?

    With the exception of the newly regulated category of motorcycles 
with engines of less than 50cc displacement, we are not making any 
changes to the motorcycle exhaust emission test procedures. We have 
noted the potential for a world harmonized test cycle--which would 
likely affect all highway motorcycle classes, and in fact would 
possibly redefine the classes--but international discussions regarding 
such a test cycle and associated standards are still likely two to 
three years away from being completed.
    Class I motorcycles are currently provided with a less severe test 
cycle than Class II and III motorcycles. This test cycle is essentially 
the traditional FTP, but with lower top speeds and reduced acceleration 
rates relative to the FTP that is used for Class II and III motorcycles 
and other light-duty vehicles. The Class I FTP has a top speed of 58.7 
km/hr (36.5 mph), whereas the Class II/III FTP has a top speed of 91.2 
km/hr (56.7 mph). In the NPRM we requested comment on whether the 
existing Class I driving cycle was appropriate for the under 50cc 
category, and manufacturers of these motorcycles commented that it was 
not. The manufacturers (MIC and ACEM) noted that many of the machines 
in the under 50cc category have top speeds that are less than 36.5 mph, 
the highest speed of the current Class I test cycle. Based on these 
comments, we are adopting a modified version of the Class I driving 
cycle--supported by the manufacturers--that ensures that motorcycles 
under 50cc that have top speeds below 58.7 km/hr (36.5 mph) are tested 
within their operational limits.
    Starting with the 2006 model year, the existing Class I driving 
cycle will be modified for motorcycles under 50cc with vehicle top 
speeds of less than 36.5 mph by adjusting each speed point of the 
driving cycle by the ratio of the top speed of the motorcycle to 36.5 
mpg (the top speed of the existing Class I drive cycle). We are 
defining ``vehicle top speed'' in the regulations as the highest 
sustainable speed on a flat paved surface with a rider weighing 80 kg 
(176

[[Page 2414]]

lbs).\38\ A motorcycle under 50cc with a top speed at or greater than 
36.5 mph is required to be tested using the existing and unmodified 
Class I driving cycle.
---------------------------------------------------------------------------

    \38\ Loaded vehicle mass, as defined in 40 CFR 86.402-78.
---------------------------------------------------------------------------

D. What Test Fuel Is Required for Emission Testing?

    The specifications for gasoline to be used by the EPA and by 
manufacturers for emission testing can be found in 40 CFR 86.513-94. 
These regulations also specify that the fuel used for vehicle service 
accumulation shall be ``representative of commercial fuels and engine 
lubricants which will be generally available through retail outlets.'' 
During the last twenty years of regulation of motorcycle emissions, the 
fuel specifications for motorcycle testing have been essentially 
identical to those for automotive testing. However, on February 10, 
2000, EPA published a final rule entitled ``Tier 2 Motor Vehicle 
Emissions Standards and Gasoline Sulfur Control Requirements'' (65 FR 
6697, Feb. 10, 2000). In addition to finalizing a single set of 
emission standards that will apply to all passenger cars, light trucks, 
and larger passenger vehicles (e.g., large SUVs), the rule requires the 
introduction of low-sulfur gasoline nationwide. To provide consistency 
with the fuels that will be in the marketplace, the rule amended the 
test fuel specifications, effective starting in 2004 when the new 
standards will take effect. The principal change that was made was a 
reduction in the allowable levels of sulfur in the test fuel, from a 
maximum of 0.10 percent by weight to a range of 0.0015 to 0.008 percent 
by weight.
    Given that low-sulfur fuel will be the existing fuel in the 
marketplace when our program will take effect (and therefore required 
for service accumulation), we are amending the motorcycle test fuel to 
reflect the true nature of the fuels that will be available in the 
marketplace. Doing so will remove the possibility that a test could be 
conducted with an unrealistically high level of sulfur in the fuel. It 
will also ensure that motorcycles are tested using the same fuels found 
in the marketplace.

E. Hardship Provisions

    We proposed two types of hardship provisions, one of which was 
intended specifically for small businesses and the other intended for 
all manufacturers. The first type of hardship provision allows a small 
volume motorcycle manufacturer to petition for up to three years 
additional lead time if the manufacturer can demonstrate that it has 
taken all possible steps to comply with the standards but the burden of 
compliance would have a significant impact on the company's solvency. 
The second type of hardship provision allows a company to apply for 
hardship relief if circumstances outside of the company's control cause 
a failure to comply, and the failure to sell the noncompliant product 
would have a major impact on the company's solvency.
    In general, we do not expect that manufacturers will need to use 
these hardship provisions. However, having such provisions available 
gives us the flexibility to administratively deal with unexpected 
situations that may arise as companies work toward compliance with the 
regulations. Thus, we are adopting these hardship provisions as 
proposed.

F. Special Compliance Provisions for Small Manufacturers

    While the highway motorcycle market is dominated by large 
companies, there are a large number of small businesses manufacturing 
motorcycles and motorcycle engines. They are active in both the federal 
and California markets. California has been much more active than EPA 
in setting new requirements for highway motorcycles, and indeed, the 
California requirements have driven the technology demands and timing 
for highway motorcycle emission controls. We have developed our special 
compliance provisions partly in response to the technology, timing, and 
scope of the requirements that apply to the small businesses in 
California's program. The provisions discussed below will reduce the 
economic burden on small businesses, allowing harmonization with 
California requirements in a phased, but timely manner.
    The flexibilities described below will be available for small 
entities with U.S. highway motorcycle annual sales of fewer than 3,000 
units per model year (combined Class I, II, and III motorcycles) and 
fewer than 500 employees worldwide. These provisions are appropriate 
because significant research and development resources may be necessary 
to meet the emission standards and related requirements. These 
provisions will reduce the burden while ensuring the vast majority of 
the program is implemented to ensure timely emission reductions. Many 
small highway motorcycle manufacturers market unique ``classic'' and 
``custom'' motorcycles, often with a ``retro'' appearance, that tends 
to make the addition of new technologies a uniquely resource-intensive 
prospect.
1. Delay of Standards for Small Volume Manufacturers
    We are delaying compliance with the Tier 1 standard of 1.4 g/km 
HC+NOX until the 2008 model year for small manufacturers, 
and at this time, we are not requiring these manufacturers to meet the 
Tier 2 standard. The existing California regulations do not require 
small manufacturers to comply with the Tier 2 standard of 0.8 g/km 
HC+NOX. The California Air Resources Board found that the 
Tier 2 standard represents a significant technological challenge and is 
a potentially infeasible limit for these small manufacturers. As noted 
above, many of these manufacturers market specialty products with a 
``retro'' simplicity and style that may not easily lend itself to the 
addition of advanced technologies like catalysts and electronic fuel 
injection. However, the California ARB has acknowledged that, in the 
course of their progress review planned for 2006, they will revisit 
their small-manufacturer provisions. We plan to participate with the 
ARB and others in the 2006 progress review. Following our review of 
these provisions, as appropriate, we may decide to propose to make 
changes to the emission standards and related requirements through 
notice and comment rulemaking, including the applicability of Tier 2 to 
small businesses.
2. Broader Engine Families
    Small businesses have met EPA certification requirements since 
1978. Nonetheless, certifying motorcycles to revised emission standards 
has cost and lead time implications. Relaxing the criteria for what 
constitutes an engine or vehicle family could potentially allow small 
businesses to put all of their models into one vehicle or engine family 
(or more) for certification purposes. Manufacturers would then certify 
their engines using the ``worst case'' configuration within the family. 
This is currently allowed under the existing regulations for small-
volume highway motorcycle manufacturers. These provisions remain in 
place without revision.
3. Averaging, Banking, and Trading
    An emission-credit program allows a manufacturer to produce and 
sell engines and vehicles that exceed the applicable emission 
standards, as long as the excess emissions are offset by the production 
of engines and vehicles emitting at levels below the standards. The 
sales-weighted average of a

[[Page 2415]]

manufacturer's total production for a given model year must meet the 
standards. An emission-credit program typically also allows a 
manufacturer to bank credits for use in future model years. The 
emission-credit program we are implementing for all highway motorcycle 
manufacturers is described above. Some credit programs allow 
manufacturers to buy and sell credits (trade) between and among 
themselves. We are not implementing such a provision at this time, but 
such flexibility could be made available to manufacturers as part of 
the upcoming technology review.
4. Reduced Certification Data Submittal and Testing Requirements
    Current regulations allow significant flexibility for certification 
by manufacturers projecting sales below 10,000 units of combined Class 
I, II, and III motorcycles. For example, a qualifying manufacturer must 
submit an application for certification with a statement that their 
vehicles have been tested and, on the basis of the tests, conform to 
the applicable emission standards. The manufacturer retains adequate 
emission test data, for example, but need not submit it. Qualifying 
manufacturers also need not complete the detailed durability testing 
required in the regulations. We are incorporating no changes to these 
existing provisions.

G. Exemption for Motorcycle Kits and Custom Motorcycles

    During the rulemaking we sought comment on the need for emission 
control requirements for motorcycle engines distinct and separate from 
the current and future requirements for complete motorcycles. We sought 
comment in this area because we had identified a small sector in the 
motorcycle market where the engine manufacturer and chassis 
manufacturer are not the same entity. This includes two very small 
parts of the market: one in which motorcycles are assembled by 
individuals from parts and subassemblies procured from motorcycle kit 
marketers or other separate sources; and another in which elaborate 
custom motorcycles are created for display by collectors. At this time, 
we are not including any certification requirements for engine 
manufacturers. See discussion in Chapter 1.5 of the Summary and 
Analysis of Comments. The small volume motorcycle manufacturers who 
purchase the vast majority of engines from other entities for 
incorporation into the motorcycles will continue to be subject to the 
regulations, and will continue to meet the requirements of the 
regulations, as they have in the past.
    However, for those individuals who put together a single motorcycle 
for individual use and businesses that produce a handful of custom 
motorcycles for display, we believe it is appropriate not to require 
these entities to have to certify their assembled vehicles. Therefore, 
we are promulgating provisions for two special exemptions. The first is 
a one-time exemption for any person building a motorcycle from a kit 
for individual use. We believe that the small benefit of having single 
individuals certify to the standards is outweighed by the substantial 
burden to these individuals in certifying. Moreover, because the 
engines in such kits generally are built by the same companies as those 
engines going to the small volume motorcycle manufacturers, who still 
must certify and who will represent the majority of the engine-makers' 
production, we believe that most of the engines will be the same or 
very similar to the engines used in the certified motorcycles. 
Individuals may not use this provision as a regulatory loophole to 
modify or customize a certified motorcycle in a manner which adversely 
affects emissions. This provision is limited to one motorcycle per 
individual over the life of the provision.
    In the case where the owner of the kit motorcycle is not the 
assembler of the motorcycle, the limitation of one motorcycle per 
person applies to the purchaser of the kit components of the 
motorcycle, who we expect is the end user of the motorcycle, rather 
than to the person or persons who actually assemble the motorcycle. A 
kit purchaser may have the kit assembled by another party and retain 
the one-time exemption for the motorcycle. In order to qualify for the 
exemption under these circumstances, the kit must be purchased by the 
ultimate owner before assembly begins. Parties or businesses who 
purchase kit motorcycles for assembly and retail sale are not covered 
by this exemption.
    The second exemption is a sales-limited exemption for elaborate 
custom motorcycles that are created for display by collectors. The 
chassis of these ``display'' motorcycles are usually unique designs, 
while the engines are either purchased from independent engine 
manufacturers or custom built from engine components. Current 
regulations in 40 CFR 85.1707 contain provisions which provide an 
exemption applicable for all motor vehicles and engines produced solely 
for display purposes. While these regulations are generally appropriate 
for display engines, certain aspects of the current custom-built 
motorcycle market make it appropriate to add a new provision applicable 
only to such motorcycles. In particular, because these motorcycles are 
often sold to collectors, the current exemption, which does not apply 
to engines that are sold, would not be applicable. Therefore, we are 
adding a limited exemption for custom manufacturers to sell a small 
number of these engines every year, with the conditions discussed 
below. It is our understanding that these motorcycles are rarely 
operated on public streets. Therefore, as a condition of this 
exemption, these motorcycles would be allowed to operate on public 
streets or highways only as necessary to the display purpose, such as 
traveling to and from motorcycle shows. No request for the exemption is 
necessary for motorcycles that will not be sold or leased. However, 
manufacturers planning to sell motorcycles for display under this 
exemption will be required to notify EPA of their intent before they 
sell any exempted motorcycles. They must also maintain sales records of 
exempted motorcycles for at least three years and make them available 
to EPA upon request. Sales under this exemption would be limited to 
less than 25 per year per manufacturer. Every motorcycle exempted under 
this provision must include a label that identifies the manufacturer 
and includes the following statement: THIS MOTORCYCLE IS EXEMPT FROM 
EPA EMISSION REQUIREMENTS. ITS USE ON PUBLIC ROADS IS LIMITED PURSUANT 
TO 40 CFR 86.407-78(c). We will generally allow manufacturers to locate 
the label where it will not detract from the appearance of the 
motorcycle. For example, We could allow the label to be located under 
the seat.
    As noted elsewhere, EPA may be revisiting several issues related to 
motorcycle standards in the context of the 2006 technology review and 
review of a possible World Motorcycle Test Cycle. One of the issues we 
may be reviewing at that time is whether it is appropriate to regulate 
motorcycle engine manufacturers or motorcycle kit manufacturers under 
the motorcycle regulations. If we agree to regulate loose engine sales 
at that time, these exemption provisions may no longer be necessary, 
since both kit builders and custom manufacturers would be able to 
purchase certified engines. Therefore, we may propose to remove or 
modify these provisions in the future.

[[Page 2416]]

V. Technological Feasibility of the Exhaust Emission Standards

A. Class I Motorcycles and Motorcycle Engines Under 50cc

    As we have described earlier we are applying the current California 
standard for Class I motorcycles to motorcycles with displacements of 
less than 50cc (e.g., many motor scooters). These motorcycles are 
currently not subject to regulation by the U.S. EPA or the State of 
California. They are, however, subject to emission standards in Europe 
and much of the rest of the world. Historically these motorcycles have 
been powered by 2-stroke engines, but a trend appears to be developing 
that would result in many of these being replaced by 4-stroke engines 
or possibly by advanced technology 2-stroke engines, in some cases with 
catalysts. This trend is largely due to emission requirements in the 
nations where these types of two-wheelers are popular forms of 
transportation.
    It has already been demonstrated that the 4-stroke engine is 
capable of meeting the standards. Class I motorcycles above 50cc are 
already meeting these standards, most of them employing a 4-stroke 
engine with minimal additional emission controls. For example, all 2002 
model year Class I motorcycles (10 engine families) were certified at 
levels ranging from 0.4 to 0.9 grams per kilometer HC. The 2003 Class I 
motorcycle models (11 engine families) were certified at similar levels 
with the exception of two newly introduced models, each of which is 
certified at a level above 3.0 g/km HC. All of these achieve the 
standards with 4-stroke engine designs, and only three incorporate 
additional technology (secondary air injection or a catalyst). These 
current engines range from 80 to 151cc in displacement, which provides 
an indication that small 4-stroke scooter engines are capable of 
meeting the standards. In a test program conducted by the Japan 
Automobile Research Institute, a 49cc 4-stroke achieved average HC 
emissions of 0.71 g/km, a level that falls well under the 1.0 g/km 
standard we are adopting.\39\ The technological feasibility of meeting 
a 1.0 g/km HC standard was also supported by MIC if EPA made 
appropriate revisions to the test cycle and the useful life. We 
evaluated these recommendations and have adopted both of them in this 
final rule. The Association of European Motorcycle Manufacturers (ACEM) 
confirmed that European manufactures will seek to export to the U.S. 
the same motorcycles under 50cc that they develop for the European 
market, and that standards in the E.U. are forcing the transition to 2-
stroke direct injection and 4-stroke EFI technologies in 2002 and 
2003.\40\ ACEM also confirmed the feasibility of meeting the new U.S. 
standard and aligned with MIC comments regarding the test cycle and 
useful life.
---------------------------------------------------------------------------

    \39\ ``WMTC 2nd step validation test results in Japan,'' Japan 
Automobile Research Institute, Nov. 29, 2001. Available for review 
in Docket A-2000-02.
    \40\ ACEM members are: Aprilia, Benelli, BMW, Derbi, Ducati, 
Honda, Kawasaki, KTM, Malaguti, MV Augusta, Peugeot, Piaggio, 
Suzuki, Triumph, Yamaha.
---------------------------------------------------------------------------

    In order to meet more stringent standards being implemented 
worldwide, manufacturers are developing and implementing a variety of 
technology approaches. Honda, perhaps the largest seller of scooters in 
the U.S., has entirely eliminated 2-stroke engines from its scooter 
product lines as of the 2002 model year. They continue to offer a 50cc 
model, but with a 4-stroke engine. Both of Aprilia's 49cc scooters 
available in the U.S. have incorporated electronic direct injection 
technology, which, in the case of one model, enables it to meet the 
``Euro-2'' standards of 1.2 grams per kilometer HC and 0.3 grams per 
kilometer NOX, without use of a catalytic converter.\41\ 
Piaggio, while currently selling a 49cc basic 2-stroke scooter in the 
U.S., expects to begin production of a direct injection version in 
2002, and a 4-stroke 50cc scooter is also in development. Numerous 49cc 
models marketed by Piaggio in Europe are available either as a 4-stroke 
or a 2-stroke with a catalyst. Piaggio, also an engine manufacturer and 
seller, is already offering 50cc 4-stroke and 50cc direct injection 2-
stroke engines that meet the Euro-2 limits to its customers for 
incorporation into scooters.
---------------------------------------------------------------------------

    \41\ Aprila Web site, http://www.apriliausa.com/ridezone/ing/models/scarabeo50dt/moto.htm and http://www.aprilia.com/portale/eng/cafera articolo.phtm1?id=14. Available for review in public docket 
A-2000-02.
---------------------------------------------------------------------------

    The U.S. represents a very small portion of the market for small 
motorcycles and scooters. There are few, if any, manufacturers that 
develop a small-displacement motorcycle exclusively for the U.S. 
market; the domestic sales volumes do not appear large enough at this 
time to support an investment of this kind. The Italian company Piaggio 
(maker of the Vespa scooters), for example, sold about as many scooters 
worldwide in 2000 (about 480,000) as the entire volume of highway 
motorcycles of all sizes sold in the U.S. in that year. U.S. sales of 
Vespas in 2000 amounted to about 4800. The largest scooter markets 
today are in South Asia and Europe, where millions are sold annually. 
In Taiwan alone almost 800,000 motorcycles were sold domestically. More 
than one third of these were powered by 2-stroke engines. Two- and 
three-wheelers constitute a large portion of the transportation sector 
in Asia, and in some urban areas these vehicles--many of them powered 
by 2-stroke engines--can approach 75 percent of the vehicle population. 
According to a World Bank report, two-stroke gasoline engine vehicles 
are estimated to account for about 60 percent of the total vehicle 
fleet in South Asia.\42\
---------------------------------------------------------------------------

    \42\ Improving Urban Air Quality in South Asia by Reducing 
Emissions from Two-Stroke Engine Vehicles. Masami Kojima, Carter 
Brandon, and Jitendra Shah. December 2000. Prepared for the World 
Bank. Available in the public docket for a review (Docket A-2000-01; 
document II-D-191), or on the Internet at: http://www.worldbank.org/html/fpd.esmap/publication/airquality.html.
---------------------------------------------------------------------------

    Many nations are now realizing that the popularity of these 
vehicles and the high density of these vehicles in urban areas are 
contributing to severe air quality problems. As a consequence, some of 
the larger markets for small motorcycles in Asia and India are now 
placing these vehicles under fairly strict regulation. It is clear that 
actions in these nations will move the emission control technology on 
small motorcycles, including those under 50cc, in a positive direction. 
For example, according to the World Bank report, as of 2000 catalytic 
converters are installed in all new two-stroke engine motorcycles in 
India, and 2003 standards in Taiwan will effectively ban new two-
strokes with emission standards so stringent that only a four-stroke 
engine is capable of meeting them.
    Given the emerging international picture regarding emission 
standards for scooters, we believe that scooter manufacturers will be 
producing scooters of less than 50cc displacement that meet our 
standards well in advance of the 2006 model year, the first year we 
will subject this category of motorcycle to U.S. emission standards. We 
expect that small entities that import scooters into the U.S. from the 
larger scooter markets will be able to import complying vehicles. We 
requested comment on this assessment in the NPRM and received none 
indicating otherwise.
    There are numerous other factors in the international arena that 
may affect the product offerings in the less than 50cc market segment. 
For example, the European Union recently changed the requirements 
regarding insurance and

[[Page 2417]]

helmet use for under 50cc scooters and mopeds. Previously, the 
insurance discounts and lack of helmet requirements in Europe provided 
two relatively strong incentives to purchasers to consider a 49cc 
scooter. Recently, however, the provisions were changed such that 
helmets are now required and the insurance costs are comparable to 
larger motorcycles. The result was a drop of about 30 percent in 
European sales of 49cc scooters in 2001 due to customers perceiving 
little benefit from a 49cc scooter relative to a larger displacement 
engine.

B. Class I and Class II Motorcycles Between 50 and 180cc

    As discussed above, we are adopting a new exhaust emission 
standards of 1.0 g/km HC for Class I and Class II motorcycles. The 
existing CO standard is unchanged. These standards have been in place 
in California since 1982. The question of whether or not these 
standards are technically feasible has been answered in the 
affirmative, since 21 of the 22 EPA-certified 2001 model year 
motorcycle engine families in these classes are already certified to 
these standards, all 24 of the 2002 model year engine families meet 
these standards, and 22 of 29 2003 model year engine families meet 
these standards. These 29 model year 2003 engine families are all 
powered by four-stroke engines, with a variety of emission controls 
applied, including basic engine modifications on almost all engine 
families, secondary air injection on three engine families, and 
catalysts on four engine families.

C. Class III Motorcycles

1. Tier 1 Standards
    In the short term, the Tier 1 standard of 1.4 g/km 
HC+NOX reflects the goal of achieving emission reductions 
that can be met with reasonably available control technologies, 
primarily involving engine modifications rather than catalytic 
converters. As noted earlier, this standard will be effective starting 
with the 2006 model year. Based on current certification data, a number 
of existing engine families already could comply with this standard or 
will need relatively simple modifications to comply. In other cases, 
the manufacturers will need to use control technologies that are 
available but are not yet used on their particular cycles (e.g., 
electronic fuel injection to replace carburetors, changes to cam lobes/
timing, etc.). For the most part, manufacturers will not need to use 
advanced technologies such as close-coupled, closed-loop three-way 
catalysts.
    While manufacturers will use various means to meet the Tier 1 
standard, there are four basic types of existing, non-catalyst-based, 
emission-control systems available to manufacturers. The most important 
of these is the use of secondary pulse-air injection. Other engine 
modifications and systems include more precise fuel control, better 
fuel atomization and delivery, and reduced engine-out emission levels 
from engine changes. The combinations of low-emission technologies 
ultimately chosen by motorcycle manufacturers are dependent on the 
engine-out emission levels of the vehicle, the effectiveness of the 
prior emission-control system, and individual manufacturer preferences.
    Secondary pulse-air injection, as demonstrated on current 
motorcycles, is applied using a passive system (i.e., no air pump 
involved) that takes advantage of the flow of gases (``pulse'') in the 
exhaust pipes to draw in fresh air that further combusts unburned 
hydrocarbons in the exhaust. The extra air causes further combustion to 
occur, thereby controlling more of the hydrocarbons that escape the 
combustion chamber. This type of system is relatively inexpensive and 
uncomplicated because it does not require an air pump; air is drawn 
into the exhaust through a one-way reed valve due to the pulses of 
negative pressure inside the exhaust pipe. Secondary pulse-air 
injection is one of the most effective non-catalytic emission-control 
technologies; compared to engines without the system, reductions of 10 
to 40 percent for HC are possible with pulse-air injection. Eighty--or 
about half--of the 162 2003 model year Class III engine families 
certified for sale in the U.S. employ secondary pulse-air injection to 
help meet the current California standards. We anticipate that most of 
the remaining engine families will use this technique to help meet the 
Tier 1 and Tier 2 standards. There are 47 2003 engine families that are 
certified using only engine management techniques (e.g., no use of 
catalysts, fuel injection, secondary air injection, or oxygen sensors). 
The average certification HC level of these families is 1.17 g/km. By 
comparing this to the certification results of engine families that 
employ secondary air injection as the only means of emission control 
beyond engine modifications, we can gain some measure of the 
effectiveness of secondary air injection. We find that the currently 
certified 2003 models which employ secondary air injection have an 
average certification level of 0.91 g/km, a reduction of 0.26 g/km (or 
22%) relative to those using only engine modification techniques.
    Improving fuel delivery and atomization primarily involves the 
replacement of carburetors, currently used on most motorcycles, with 
more precise fuel injection systems. There are several types of fuel 
injection systems and components manufacturers can choose, including 
throttle-body injection systems, multi-point injection systems, and 
sequential multi-point fuel injection systems. Unlike conventional 
multi-point fuel injection systems that deliver fuel continuously or to 
paired injectors at the same time, sequential fuel injection can 
deliver fuel precisely when needed by each cylinder. The most likely 
type of fuel injection manufacturers will choose to help meet the Tier 
1 standard is sequential multi-point fuel injection (SFI).
    Motorcycle manufacturers are already using sequential fuel 
injection (SFI). Of the 162 2003 model year Class III motorcycle engine 
families certified to emission standards, at least 29 employ SFI 
systems.\43\ We anticipate increased application of this or similar 
fuel injection systems to achieve the more precise fuel delivery needed 
to help meet the Tier 1 and Tier 2 standards. We analyzed the EPA 
certification data in the same way as done above with secondary air 
injection to estimate the effect of using SFI vehicle on emissions. 
Again, we identified the baseline of 47 engine families using the 
limited technologies and with an average certification level of 1.17 g/
km HC, and compared the emissions of these engines with the emissions 
of engines using SFI. What we find is that use of all types of fuel 
injection can significantly reduce emissions. If we analyze those 
engine families that use some form of fuel injection other than SFI we 
see an average HC certification level of 1.09 g/km, a modest reduction 
of about 7 percent. However, the engines using SFI had significantly 
lower HC emissions on average of 0.72

[[Page 2418]]

g/km, a reduction of almost 40 percent. While this provides some 
indication of what can be achieved with fuel injection techniques 
(including SFI), it does not necessarily demonstrate the full potential 
of this technology. At this point in time it appears that SFI can get 
motorcycle certification levels down to about 0.4-0.6 g/km HC 
(certification at levels in this range can be seen in several current 
motorcycles that employ no other emission controls), but in the context 
of more stringent standards the manufacturers are likely to be able to 
accomplish even more with SFI, and further reductions by teaming SFI 
with additional emission reduction techniques.
---------------------------------------------------------------------------

    \43\ When manufacturers certify to EPA emission standards, they 
report the fuel delivery system used by each certified model as 
carbureted or fuel injected. They also report the emission control 
technologies used on each model to meet the emission standards. When 
reporting the fuel delivery system, they only indicate whether the 
system is carbureted or fuel injected, but not the specific type of 
fuel injection that is installed. When reporting the control 
technologies 29 models indicated the use of sequential fuel 
injection. However, there may be some inconsistencies in how these 
technologies are reported, and we believe that there may be models 
that employ sequential fuel injection that are shown in our database 
as being fuel injected, but the manufacturer may not have also 
specifically listed sequential fuel injection as a control 
technology on the motorcycle model. This is why we say ``at least'' 
29 models are currently using sequential fuel injection.
---------------------------------------------------------------------------

    In addition to the techniques mentioned above, various engine 
modifications can be made to improve emission levels. Engine 
modifications include a variety of techniques designed to improve fuel 
delivery or atomization; promote ``swirl'' (horizontal currents) and 
``tumble'' (vertical currents); maintain tight control on air-to-fuel 
(A/F) ratios; stabilize combustion (especially in lean A/F mixtures); 
optimize valve timing; and retard ignition timing. Emission performance 
can be improved, for example, by reducing crevice volumes in the 
combustion chamber. Unburned fuel can be trapped momentarily in crevice 
volumes before being subsequently released. Since trapped and re-
released fuel can increase engine-out emissions, the elimination of 
crevice volumes would be beneficial to emission performance. To reduce 
crevice volumes, manufacturers can evaluate the feasibility of 
designing engines with pistons that have reduced, top ``land heights'' 
(the distance between the top of the piston and the first ring).
    Lubrication oil which leaks into the combustion chamber also has a 
detrimental effect on emission performance since the heavier 
hydrocarbons in oil do not oxidize as readily as those in gasoline and 
some components in lubricating oil may tend to foul a catalyst and 
reduce its effectiveness. Also, oil in the combustion chamber may trap 
HC and later release the HC unburned. To reduce oil consumption, 
manufacturers can tighten the tolerances and improve the surface finish 
on cylinders and pistons, piston ring design and materials, and exhaust 
valve stem seals to prevent excessive leakage of lubricating oil into 
the combustion chamber.
    Increasing valve overlap is another engine modification that can 
help reduce emissions. This technique helps reduce NOX 
generation in the combustion chamber by essentially providing passive 
exhaust gas recirculation (EGR). When the engine is undergoing its 
pumping cycle, small amounts of combusted gases flow past the intake 
valve at the start of the intake cycle. This creates what is 
essentially a passive EGR flow, which is then either drawn back into 
the cylinder or into another cylinder through the intake manifold 
during the intake stroke. These combusted gases, when combined with the 
fresh air/fuel mixture in the cylinder, help reduce peak combustion 
temperatures and NOX levels. This technique can be 
implemented by making changes to cam timing and intake manifold design 
to optimize NOX reduction while minimizing impacts to HC 
emissions.
    Secondary pulse-air injection and engine modifications already play 
an important part in reducing emission levels, and we expect increased 
uses of these techniques to help meet the Tier 1 standard. Direct 
evidence of the extent to which these technologies can help 
manufacturers meet the Tier 1 standard can be found in EPA's highway 
motorcycle certification database. This database is comprised of 
publicly-available certification emission levels as well as some 
confidential data reported by the manufacturers pursuant to existing 
motorcycle emission certification requirements.
    We do not expect any of these possible changes to adversely affect 
performance. Indeed, the transition to some of these technologies 
(e.g., advanced fuel injection) is expected to improve performance, 
fuel economy, and reliability.
2. Tier 2 Standards
    In the long term, the Tier 2 HC+NOX standard of 0.8 g/km 
will ensure that manufacturers will continue to develop and improve 
emission control technologies. The Tier 2 standard will become 
effective in the 2010 model year. We believe this standard is 
technologically feasible, though it will present some technical 
challenges for manufacturers. Several manufacturers are, however, 
already using some of the technologies that will be needed to meet this 
standard. In addition, our implementation time frame gives 
manufacturers two years of experience in meeting this standard in 
California before having to meet it on a nationwide basis. Several 
manufacturers already use closed-loop, three-way catalysts on a number 
of their product lines. At least one manufacturer has already certified 
several models to the Tier 2 standards levels, and at least one of 
these models is being sold nationwide. A number of additional models 
currently in the market may also meet the Tier 2 standards, depending 
on NOX levels, using combinations of catalysts, fuel 
injection, secondary air injection, and other engine modifications. The 
current average HC certification level for Class III motorcycles is 
0.93 g/km, with about forty engine families from a variety of 
manufacturers at levels of 0.5 g/km or lower. We expect that the 
provided six to seven years of lead time prior to meeting these 
standards on a nationwide basis will allow manufacturers to optimize 
these and other technologies to meet the Tier 2 standard.
    To meet the Tier 2 standard for HC+NOX, manufacturers 
will likely use more advanced engine modifications and secondary air 
injection. Specifically, we believe manufacturers will use computer-
controlled secondary pulse-air injection (i.e., the injection valve 
would be connected to a computer-controlled solenoid). In addition to 
these systems, manufacturers will probably need to use catalytic 
converters on some motorcycles to meet the Tier 2 standards. There are 
two types of catalytic converters currently in use: two-way catalysts 
(which control only HC and CO) and three-way catalysts (which control 
HC, CO, and NOX). Under the Tier 2 standard, manufacturers 
will need to minimize levels of both HC and NOX. Therefore, 
to the extent catalysts are used, manufacturers will likely use a 
three-way catalyst in addition to engine modifications and computer-
controlled secondary pulse-air injection.
    As discussed previously, improving fuel control and delivery 
provides emission benefits by helping to reduce engine-out emissions 
and minimizing the exhaust variability which the catalytic converter 
experiences. One method for improving fuel control is to provide 
enhanced feedback to the computer-controlled fuel injection system 
through the use of heated oxygen sensors. Heated oxygen sensors (HO2S) 
are located in the exhaust manifold to monitor the amount of oxygen in 
the exhaust stream and provide feedback to the electronic control 
module (ECM). These sensors allow the fuel control system to maintain a 
tighter band around the stoichiometric A/F ratio than conventional 
oxygen sensors (O2S). In this way, HO2S assist vehicles in achieving 
precise control of the A/F ratio and thereby enhance the overall 
emissions performance of the engine. At least one manufacturer is 
currently using this technology on several 2003 as

[[Page 2419]]

well as previous model year engine families.
    In order to further improve fuel control, some motorcycles with 
electronic controls may utilize software algorithms to perform 
individual cylinder fuel control. While dual oxygen sensor systems are 
capable of maintaining A/F ratios within a narrow range, some 
manufacturers may desire even more precise control to meet their 
performance needs. On typical applications, fuel control is modified 
whenever the O2S determines that the combined A/F of all cylinders in 
the engine or engine bank is ``too far'' from stoichiometric. The 
needed fuel modifications (i.e., inject more or less fuel) are then 
applied to all cylinders simultaneously. Although this fuel control 
method will maintain the ``bulk'' A/F for the entire engine or engine 
bank around stoichiometric, it would not be capable of correcting for 
individual cylinder A/F deviations that can result from differences in 
manufacturing tolerances, wear of injectors, or other factors.
    With individual cylinder fuel control, A/F variation among 
cylinders will be diminished, thereby further improving the 
effectiveness of the emission controls. By modeling the behavior of the 
exhaust gases in the exhaust manifold and using software algorithms to 
predict individual cylinder A/F, a feedback fuel control system for 
individual cylinders can be developed. Except for the replacement of 
the conventional front O2S with an HO2S sensor and a more powerful 
engine control computer, no additional hardware is needed in order to 
achieve individual cylinder fuel control. Software changes and the use 
of mathematical models of exhaust gas mixing behavior are required to 
perform this operation.
    In order to maintain good driveability, responsive performance, and 
optimum emission control, fluctuations of the A/F must remain small 
under all driving conditions including transient operation. Virtually 
all current fuel systems in automobiles incorporate an adaptive fuel 
control system that automatically adjusts the system for component 
wear, varying environmental conditions, varying fuel composition, etc., 
to more closely maintain proper fuel control under various operating 
conditions. For some current fuel control systems, this adaptation 
process affects only steady-state operating conditions (i.e., constant 
or slowly changing throttle conditions). However, most vehicles are now 
being introduced with adaptation during ``transient'' conditions (e.g., 
rapidly changing throttle positions).
    Accurate fuel control during transient driving conditions has 
traditionally been difficult because of the inaccuracies in predicting 
the air and fuel flow under rapidly changing throttle conditions. 
Because of air and fuel dynamics (fuel evaporation in the intake 
manifold and air flow behavior) and the time delay between the air flow 
measurement and the injection of the calculated fuel mass, temporarily 
lean A/F ratios can occur during transient driving conditions that can 
cause engine hesitation, poor driveability and primarily an increase in 
NOX emissions. However, by utilizing fuel and air mass 
modeling, vehicles with adaptive transient fuel control are more 
capable of maintaining accurate, precise fuel control under all 
operating conditions. Virtually all cycles will incorporate adaptive 
transient fuel control software; motorcycles with computer controlled 
fuel injection can also benefit from this technique at a relatively low 
cost.
    Three-way catalytic converters traditionally utilize rhodium and 
platinum as the catalytic material to control the emissions of all 
three major pollutants (hydrocarbons (HC), CO, NOX). 
Although this type of catalyst is very effective at converting exhaust 
pollutants, rhodium, which is primarily used to convert NOX, 
tends to thermally deteriorate at temperatures significantly lower than 
platinum. Recent advances in palladium and tri-metal (i.e., palladium-
platinum-rhodium) catalyst technology, however, have improved both the 
light-off performance (light-off is defined as the catalyst bed 
temperature where pollutant conversion reaches 50-percent efficiency) 
and high temperature durability over previous catalysts. In addition, 
other refinements to catalyst technology, such as higher cell density 
substrates and adding a second layer of catalyst washcoat to the 
substrate (dual-layered washcoats), have further improved catalyst 
performance from just a few years ago.
    Typical cell densities for conventional catalysts used in 
motorcycles are less than 300 cells per square inch (cpsi). To meet the 
Tier 2 standard, we expect manufacturers to use catalysts with cell 
densities of 300 to 400 cpsi. If catalyst volume is maintained at the 
same level (we assume volumes of up to 60 percent of engine 
displacement), using a higher density catalyst effectively increases 
the amount of surface area available for reacting with pollutants. 
Catalyst manufacturers have been able to increase cell density by using 
thinner walls between each cell without increasing thermal mass (and 
detrimentally affecting catalyst light-off) or sacrificing durability 
and performance.
    In addition to increasing catalyst volume and cell density, we 
believe that increased catalyst loading and improved catalyst washcoats 
will help manufacturers meet the Tier 2 standards. In general, 
increased precious metal loading (to a point) will reduce exhaust 
emissions because it increases the opportunities for pollutants to be 
converted to harmless constituents. The extent to which precious metal 
loading is increased will be dependent on the precious metals used and 
other catalyst design parameters. We believe recent developments in 
palladium/rhodium catalysts are very promising since rhodium is very 
efficient at converting NOX, and catalyst suppliers have 
been investigating methods to increase the amount of rhodium in 
catalysts for improved NOX conversion.
    Double layer technologies allow optimization of each individual 
precious metal used in the washcoat. This technology can provide 
reduction of undesired metal-metal or metal-base oxide interactions 
while allowing desirable interactions. Industry studies have shown that 
durability and pollutant conversion efficiencies are enhanced with 
double layer washcoats. These recent improvements in catalysts can help 
manufacturers meet the Tier 2 standard at reduced cost relative to 
older three-way catalysts.
    New washcoat formulations are now thermally stable up to 1050 
[deg]C. This is a significant improvement from conventional washcoats, 
which are stable only up to about 900 oC. With the improvements in 
light-off capability, catalysts may not need to be placed as close to 
the engine as previously thought. However, if placement closer to the 
engine is required for better emission performance, improved catalysts 
based on the enhancements described above would be more capable of 
surviving the higher temperature environment without deteriorating. The 
improved resistance to thermal degradation will allow closer placement 
to the engines where feasible, thereby providing more heat to the 
catalyst and allowing them to become effective quickly.
    It is well established that a warmed-up catalyst is very effective 
at converting exhaust pollutants. Recent tests on advanced catalyst 
systems in automobiles have shown that over 90 percent of emissions 
during the Federal Test Procedure (FTP) are now emitted during the 
first two minutes of testing after engine start up. Similarly, the

[[Page 2420]]

highest emissions from a motorcycle occur shortly after start up. 
Although improvements in catalyst technology have helped reduce 
catalyst light-off times, there are several methods to provide 
additional heat to the catalyst. Retarding the ignition spark timing 
and computer-controlled, secondary air injection have been shown to 
increase the heat provided to the catalyst, thereby improving its cold-
start effectiveness.
    In addition to using computer-controlled secondary air injection 
and retarded spark timing to increase the heat provided to the 
catalyst, some vehicles may employ warm-up, pre-catalysts to reduce the 
size of their main catalytic converters. Palladium-only warm-up 
catalysts (also known as ``pipe catalysts'' or ``Hot Tubes'') using 
ceramic or metallic substrates may be added to further decrease warm-up 
times and improve emission performance. Although metallic substrates 
are usually more expensive than ceramic substrates, some manufacturers 
and suppliers believe metallic substrates may require less precious 
metal loading than ceramic substrates due to the reduced light-off 
times they provide.
    Improving insulation of the exhaust system is another method of 
furnishing heat to the catalyst. Similar to close-coupled catalysts, 
the principle behind insulating the exhaust system is to conserve the 
heat generated in the engine for aiding catalyst warm-up. Through the 
use of laminated thin-wall exhaust pipes, less heat will be lost in the 
exhaust system, enabling quicker catalyst light-off. As an added 
benefit, the use of insulated exhaust pipes will also reduce exhaust 
noise. Increasing numbers of manufacturers are expected to utilize air-
gap exhaust manifolds (i.e., manifolds with metal inner and outer walls 
and an insulating layer of air sandwiched between them) for further 
heat conservation.
    Besides the hardware modifications described above, motorcycle 
manufacturers may borrow from other current automobile techniques. 
These include using engine calibration changes such as a brief period 
of substantial ignition retard, increased cold idling speed, and leaner 
air-fuel mixtures to quickly provide heat to a catalyst after cold-
starts. Only software modifications are required for an engine which 
already uses a computer to control the fuel delivery and other engine 
systems. For these engines, calibration modifications provide 
manufacturers with an inexpensive method to quickly achieve light-off 
of catalytic converters. When combined with pre-catalysts, computer-
controlled secondary air injection, and the other heat conservation 
techniques described above, engine calibration techniques may be very 
effective at providing the required heat to the catalyst for achieving 
the Tier 2 standard.

D. Safety and Performance Impacts

    We noted in the NPRM that the nature of motorcycling makes riders 
particularly aware of any safety issues that confront them. Many 
motorcycle riders and their organizations submitted comments on the 
NPRM regarding their concerns that the proposed standards would 
adversely affect both performance and safety. These issues are 
discussed in detail in the Summary and Analysis of Comments; the 
remainder of this section summarizes our key findings regarding these 
issues.
    Motorcycle riders are inherently closer to the engine and exhaust 
pipes than the driver of an enclosed vehicle, and the engine components 
tend to be more exposed and accessible as well. Because of this fact, 
we received many comments regarding the potential safety risk of 
catalytic converters, and many questioned whether this emission control 
device could be implemented on motorcycles without increasing the risk 
of injury to the rider and/or passenger. An economic impact study 
submitted by the Motorcycle Riders Foundation claimed that ``EPA 
ignores the issue of rider safety,'' apparently basing this claim on a 
word search of the rulemaking documents for the terms ``rider safety'' 
and ``consumer safety.'' In fact, the NPRM contained several paragraphs 
regarding the issue of safety as it relates to the use of catalytic 
converters on motorcycles.
    Because of the serious nature of the concerns expressed by riders 
we expanded our assessment of the potential risks of using catalytic 
converters as an emission control device on motorcycles. Our complete 
analysis, described in the Summary and Analysis of Comments, involved 
the following:
    [sbull] An improved assessment of the current use of catalytic 
converters on motorcycles, both in the U.S. and worldwide;
    [sbull] Feedback from the motorcycle manufacturers regarding this 
issue;
    [sbull] An analysis of exhaust- and catalyst-based complaints filed 
by consumers with the National Highway Traffic Safety Administration's 
Office of Defects Investigation, including feedback from manufacturers 
on the nature of these complaints; and
    [sbull] An assessment of the technological approaches to isolating 
the rider and/or passenger from the heat of a catalytic converter.
    We found that in the last five years at least 16 manufacturers have 
certified dozens of models equipped with catalytic converters. In the 
last two years sales of catalyst-equipped models in each year have 
approached twenty percent of all motorcycles sold in the U.S., and we 
conservatively estimate that there are at least 150,000 catalyst-
equipped motorcycles of all sizes and styles on the roads in the U.S. 
today. Given that the total annual mileage accumulated on these 
motorcycles in the U.S. likely exceeds 300 million miles, the rider 
experience with the emission control devices is not trivial. Given this 
experience, we believe that there has been ample opportunity to assess 
the issue of catalyst safety, not just on a hypothetical basis but on 
the basis of actual manufacturing and on-road riding experience. Any 
serious concerns would be likely to be brought to the attention of 
manufacturers and/or the National Highway Traffic Safety Administration 
(NHTSA). Our analysis of the NHTSA database on consumer complaints 
revealed a small number related to the exhaust pipe, and only seven 
related to heat from the exhaust pipe. (In 1998 there were an estimated 
5.4 million on-highway motorcycles in use in the United States.) These 
seven complaints are detailed in Table V.D-1.

 Table V.D-1.--National Highway Traffic Safety Administration, Office of
   Defects Investigation; Database of Consumer Complaints: Complaints
                Regarding Excess Heat from Exhaust Pipes
------------------------------------------------------------------------
                  No.                               Complaint
------------------------------------------------------------------------
1......................................  Passenger on motorcycle
                                          received burns on leg from hot
                                          mufflers.
2......................................  Muffler not designed with heat
                                          shield, causing burn injury to
                                          driver when motorcycle turned
                                          over.
3......................................  Exhaust manifold reaches
                                          temperatures so high that it
                                          has an orange glow.
                                          Manufacturer knows of problem,
                                          and there isn't a solution.
                                          Consumer will add additional
                                          information.

[[Page 2421]]

 
4......................................  Consumer states that when at a
                                          stop the exhaust pipe will
                                          glow red and this can cause
                                          injuries to the consumer.
                                          Dealer notified.
5......................................  Exhaust system cross over pipe
                                          is located too close to seat,
                                          causing driver to be burned
                                          while driving, even if
                                          properly dressed.
6......................................  Consumer states exhaust pipes
                                          are positioned below foot pegs
                                          so that when you come to a
                                          stop and put feet down, it's
                                          very likely that pant leg will
                                          at least brush up against
                                          pipe. Consumer has ruined
                                          clothes because of this.
                                          Manufacturer does not feel
                                          this is a problem, they
                                          suggested to consumer that he
                                          buy after market exhaust
                                          guards, which are expensive.
7......................................  Exhaust pipes are positioned
                                          below foot pegs so that when
                                          you come to a stop and put
                                          your foot down you will brush
                                          up against hot pipe.
------------------------------------------------------------------------
Source: National Highway Traffic Safety Administration, Office of
  Defects Investigation. Consumer Complaints Database. See http://www-odi.nhtsa.dot.gov/cars/problems/complain/.

    Two of the seven (Nos. 1 and 2 in the table above) were clearly 
regarding motorcycles without catalysts, and of the remaining five only 
two were regarding models that clearly did have catalysts (Nos. 6 and 
7). We are unable to determine whether complaints numbered 3-5 involve 
motorcycles with catalysts; although the manufacturer has been using 
catalysts for a number of years, sales of these motorcycles have been 
limited to California to date. The complaints shown in the table 
originated from Ohio, New York, and Arizona. The manufacturers of the 
motorcycles reflected in these five complaints unanimously stated their 
belief that these are isolated cases, that they have no record of 
consumer complaints indicating that widespread problems exist, and that 
they make every effort to protect the rider from injury or harm.
    We are confident that manufacturers can design and produce 
motorcycles that respond to these safety concerns, and information 
submitted by the manufacturers supports our assessment that catalytic 
converters can be safely integrated into motorcycle designs. There are 
a number of approaches that manufacturers are using today to protect 
the rider from excessive heat. Some motorcycle designs permit the 
catalyst to be placed on the underside of the motorcycle where it is 
unable to contact the rider. Other manufacturers will use a double-pipe 
exhaust system to reduce heat loss, allowing the exhaust gases to 
remain hot before reaching the catalyst while maintaining lower 
exterior temperatures. Some manufacturers are placing the catalyst 
inside the muffler or close to the manifold in areas where it is 
unlikely to be contacted by the rider or passenger. Footrests can be 
shielded and pipes can be insulated to reduce the exterior transmission 
of heat. The fact that these approaches are already being successfully 
employed, combined with the significant lead time provided for the Tier 
2 standard, leads us to conclude that catalysts can be safely 
integrated into both current and future motorcycle designs.
    Every motorcycle manufacturer who either testified at the public 
hearing or provided written comments on the proposed rule has 
unequivocally stated that they can build motorcycles that will meet the 
standards with no negative impact on safety or performance relative to 
motorcycles manufactured today. Finally, MECA addressed this issue at 
the public hearing by noting that catalyst technology has been applied 
to over 15 million two- and three-wheelers worldwide. There is no 
indication from any nation worldwide--some of which are far more 
dependent on motorcycles as daily transportation than we are in the 
U.S.--that the use of catalysts on motorcycles presents a significant 
risk to the rider.
    We do not expect any of these possible technology changes to 
adversely affect performance. Indeed, the transition to some of these 
technologies (e.g., advanced fuel injection) would be expected to 
improve performance, fuel economy, and reliability. In the last ten 
years, and especially within the last few years, there has been an 
increasing use of the technologies that we expect will be used to meet 
the new standards (i.e., secondary air injection, sequential fuel 
injection, and catalytic converters). There is no evidence to suggest 
that motorcycle performance has declined during that period, and every 
reason to believe that manufacturers have been able to continue to 
develop products that make continual improvements in performance. There 
are too many examples to repeat here that demonstrate that emission 
controls can be incorporated into motorcycles concurrent with increases 
in performance and handling, as well as decreases in weight. Consider 
the redesigned 2003 Yamaha YZF-R6, a 600cc high performance motorcycle 
in the highly competitive middleweight super sport/racing category. 
Relative to the 2002 model, the 2003 YZF-R6 is eight pounds lighter, 
several horsepower stronger, is being very well-reviewed in the press, 
and has about half the emissions of the 2002 model (0.6 g/km HC in 2003 
versus 1.1 g/km HC in 2002). It's also being sold at the same price as 
the 2002 model. Emission-related improvements for 2003 include the 
addition of fuel injection and a catalytic converter. Even with the 
addition of a catalytic converter, the use of advanced materials 
enables the exhaust system of the 2003 model to be more than two pounds 
lighter than the 2002 model. We recognize that these are examples and 
do not address all combinations of technology and all sizes and styles 
of motorcycles, but they are clear demonstrations of what is achievable 
with the technology and materials available today.
    Finally, motorcycle manufacturers have a tremendous amount at stake 
with respect to the issues of performance and safety, as well as the 
greatest amount of experience and technological expertise. They have 
every reason to balk at new emission standards if they believe that 
catalytic converters will raise in-use safety concerns and cause rider 
injuries and deaths as some have alleged. However, the manufacturers 
have not raised concerns. In fact, more than a dozen manufacturers from 
Indian to Honda and Harley-Davidson have unequivocally stated in the 
public record--directly or through their industry association--that 
motorcycles produced under the new standards will be as safe and have 
the same or better performance as motorcycles today.

E. Non-Conformance Penalties

    Clean Air Act section 206(g) (42 U.S.C. 7525(g)), allows us to 
issue a

[[Page 2422]]

certificate of conformity for heavy-duty engines or for highway 
motorcycles that exceed an applicable section 202(a) emissions 
standard, but do not exceed an upper limit associated with that 
standard, if the manufacturer pays a nonconformance penalty (NCP) 
established by rulemaking. Congress adopted section 206(g) in the Clean 
Air Act Amendments of 1977 as a response to perceived problems with 
technology-forcing heavy-duty engine emissions standards. If strict 
standards were maintained, then some manufacturers, ``technological 
laggards,'' might be unable to comply initially and would be forced out 
of the marketplace. NCPs were intended to remedy this potential 
problem. The laggards would have a temporary alternative that would 
permit them to sell their engines or vehicles by payment of a penalty. 
Through regulation, we established three criteria for determining the 
eligibility of emission standards for NCPs in any given model year. 
First, the emission standard in question must become more difficult to 
meet, either by becoming more stringent itself or by its interaction 
with another emission standard that has become more stringent. Second, 
substantial work must be required to meet the emission standard. We 
consider ``substantial work'' to mean the application of technology not 
previously used in that vehicle or engine class/subclass, or a 
significant modification of existing technology, to bring that vehicle/
engine into compliance. We do not consider minor modifications or 
calibration changes to be classified as substantial work. Third, it 
must be likely that a company will become a technological laggard. A 
technological laggard is defined as a manufacturer who cannot meet a 
particular emission standard due to technological (not economic) 
difficulties and who, in the absence of NCPs penalties, might be forced 
from the marketplace.
    We do not believe that the three criteria could be satisfied with 
respect to the Tier 1 standards. Thus, we are not at this time planning 
to offer NCPs for the Tier 1 standards. Furthermore, it is too early to 
determine whether the criteria will be satisfied with regards to the 
Tier 2 standards. Thus, we are also not offering NCPs at this time for 
the Tier 2 standards. However, we will monitor the manufacturers' 
efforts to comply with the Tier 2 standards and will consider proposing 
NCPs for the standards in the future if we believe conditions warrant 
them.

VI. Permeation Emission Control

A. Overview

    In the proposal we specified only exhaust emission controls for 
motorcycles. However, we provided a detailed discussion of permeation 
emissions from motorcycles and technological strategies for reducing 
such emissions. We requested comment on whether we should finalize 
standards that would require low permeation fuel tanks and hoses and on 
the possible forms that regulations on permeation emissions from 
motorcycles could take. In a supplemental Federal Register notice (67 
FR 66097, October 30, 2002), we stated that if we were to finalize 
permeation requirements for motorcycles, that it was highly likely that 
they would be modeled after those in the recreational vehicle 
regulations which had been recently finalized. Motorcycle manufacturers 
initially expressed concern about the feasibility of the proposed 
standards. However, through discussions between EPA and industry, 
manufacturers' concerns about the feasibility of permeation standards 
were largely resolved.
    We are adopting performance standards intended to reduce permeation 
emissions from motorcycles. The standards, which apply to new 
motorcycles starting in 2008, are nominally based on manufacturers 
reducing these permeation emissions from new motorcycles by 
approximately 90 percent overall. We are also adopting several special 
compliance provisions to reduce the burden of permeation emission 
regulations on small businesses. These special provisions are the same 
as for the exhaust emission standards, as applicable.

B. Permeation Emission Standards

1. What Are the Emission Standards and Compliance Dates?
    We are finalizing new standards that will require an 85-percent 
reduction in plastic fuel tank permeation and a 95-percent reduction in 
fuel system hose permeation from new motorcycles beginning in 2008. 
These standards and their implementation dates are presented in Table 
VI.B-1. Section VI.C presents the test procedures associated with these 
standards. Test temperatures are presented in Table VI.B-1 because they 
represent an important parameter in defining the emission levels.
    The permeation standards are based on the inside surface areas of 
the hoses and fuel tanks. We sought comment on whether the potential 
permeation standards for fuel tanks should be expressed as grams per 
gallon of fuel tank capacity per day or as grams per square meter of 
inside surface area per day. Although volume is generally used to 
characterize fuel tanks, we base the standard on inside surface area 
because permeation is a function of surface area. In addition, the 
surface to volume ratio of a fuel tank changes with capacity and 
geometry of the tank. Two similar shaped tanks of different volumes or 
two different shaped tanks of the same volume could have different g/
gallon/day permeation rates even if they were made of the same material 
and used the same emission-control technology. Therefore, we believe 
that using a g/m2/day form of the standard more accurately 
represents the emissions characteristics of a fuel tank and minimizes 
complexity. This is consistent with the permeation standards for 
recreational vehicles.

                               Table VI.B-1.--Permeation Standards for Motorcycles
----------------------------------------------------------------------------------------------------------------
                                          Implementation
          Emission component                   date                Standard               Test  temperature
----------------------------------------------------------------------------------------------------------------
Fuel Tank Permeation..................               2008  1.5 g/m2/day............  28[deg]C (82[deg]F)
Hose Permeation.......................               2008  15 g/m2/day.............  23[deg]C (73[deg]F)
----------------------------------------------------------------------------------------------------------------

    These standards are revised compared to the values we sought 
comment on in the notice. This revision is intended to accommodate 
emissions test variability and in-use deterioration associated with low 
permeation technology. Since the notice, we have received test 
information that suggests that a tank permeation standard representing 
an 85 rather than a 95-percent reduction is appropriate to accommodate 
these factors. Nonetheless, we continue to believe that manufacturers 
will target control technologies and strategies focused on achieving 
reductions of 95 percent in production tanks. With regard to the 
permeation standard for hoses, we have adjusted the standard slightly 
to give the manufacturers more freedom in selecting their hose material 
and to accommodate the fact that we

[[Page 2423]]

selected a certification test fuel based on a 10-percent ethanol blend, 
which would be prone to greater permeation than neat gasoline. The 
final standards are consistent with the recreational vehicle standards 
that were finalized after the motorcycle NPRM.
    Cost-effective technologies exist to significantly reduce 
permeation emissions. Because essentially all of the plastic fuel tanks 
are made from high density polyethylene (HDPE), manufacturers would be 
able to choose from several technologies for providing a permeation 
barrier in HDPE tanks. The use of metal fuel tanks would also meet the 
standards, because fuel does not permeate through metal. The hose 
permeation standard can be met using barrier hose technology or through 
using low permeation automotive-type tubing. These technologies are 
discussed in Section VI.E. The implementation date gives manufacturers 
four years to comply. This will allow manufacturers time to implement 
controls in their tanks and hoses in an orderly business manner.
2. Will I Be Able To Average, Bank, or Trade Emissions Credits?
    Averaging, banking, and trading (ABT) refers to the generation and 
use of emission credits based on certified emission levels relative to 
the standard. The general ABT concept is discussed in detail in Section 
IV.C. In many cases, an ABT program can improve technological 
feasibility, provide manufacturers with additional product planning 
flexibility, and reduce costs which allows us to consider emission 
standards with the most appropriate level of stringency and lead time, 
as well as providing an incentive for the early introduction of new 
technology.
    We are finalizing ABT for non-metal fuel tanks to facilitate the 
implementation of the standard across a variety of tank designs. To 
meet the standard on average, manufacturers would be able to divide 
their fuel tanks into different emission families and certify each of 
their emission families to a different Family Emissions Level (FEL). 
The emission families would include fuel tanks with similar 
characteristics, including wall thickness, material used (including 
additives such as pigments, plasticizers, and UV inhibitors), and the 
emission-control strategy applied. The FELs would then be weighted by 
sales volume and fuel tank inside surface area to determine the average 
level across a manufacturer's total production. An additional benefit 
of a corporate-average approach is that it provides an incentive for 
developing new technology that can be used to achieve even larger 
emission reductions or perhaps to achieve the same reduction at lower 
costs or to achieve some reductions early.
    For purposes of ABT we will not consider metal tanks as part of any 
sort of credit program. In other words, metal fuel tanks will not be 
able to generate permeation credits. We do not want to provide an 
opportunity for ``windfall'' credits for metal fuel tanks because this 
would undermine the value of the standard. The standard is based on 
feasible technology for plastic fuel tanks. If averaging were allowed 
between plastic and metal fuel tanks (which are used on most 
motorcycles), the standard would have to be adjusted accordingly.
    If a manufacturer were to certify the majority of their fuel tanks 
to a level below the permeation standard, they would have the option of 
leaving a small number of their fuel tanks uncontrolled. In this case, 
manufacturers would have the option of either testing the uncontrolled 
fuel tanks or using an assigned family emission level of 12 g/
m2/day.
    Any manufacturer could choose to certify each of its evaporative 
emission control families at levels which would meet the standard. Some 
manufacturers may choose this approach as they could see it as less 
complicated to implement.
    We are also finalizing a voluntary program intended to give an 
opportunity for manufacturers to prove out technologies earlier than 
2008. Manufacturers will be able to use permeation control strategies 
early, and even if they do not meet the 1.5 g/m2/day 
standard, they can earn credit through partial emission reduction that 
will give them more lead time to meet the standard. This program will 
allow a manufacturer to certify fuel tanks early to a less stringent 
standard of 3.0 g/m2/day and thereby delay meeting the 1.5 
g/m2/day fuel tank permeation standard by 1 tank-year for 
every tank-year of early certification. As an alternative, this delay 
could be applied to other fuel tanks provided that these tanks have an 
equal or smaller inside surface area and meet a level of 3.0 g/
m2/day. As an example, suppose a manufacturer were to sell 
50 motorcycles in 2006 and 75 motorcycles in 2007 with fuel tanks that 
meet a level of 3.0 g/m2/day. This manufacturer would then 
be able to sell 125 vehicles with fuel tanks that meet a level of 3.0 
g/m2/day in 2008 and later years. No uncontrolled tanks 
could be sold after 2007. In addition to providing implementation 
flexibility to manufacturers, this option, if used, would result in 
additional and earlier emission reductions.
    For hoses, we do not believe that ABT provisions would result in a 
significant technological or cost benefit to manufacturers. We believe 
that all fuel hoses can meet the permeation standards using 
straightforward technology as discussed in Section VI.E. From EPA's 
perspective, including an ABT program in the rule creates a long-term 
administrative burden that is not worth taking on since it does not 
provide the industry with useful flexibility.
3. How Do I Certify My Products?
    We are finalizing a certification process similar to our existing 
program for other mobile sources. Manufacturers test representative 
prototype designs and submit the emission data along with other 
information to EPA in an application for a Certificate of Conformity. 
As discussed in Section VI.C.3, we will allow manufacturers to certify 
based on either design (for which there is already data) or by 
conducting its own emissions testing. If we approve the application, 
then the manufacturer's Certificate of Conformity allows the 
manufacturer to produce and sell the vehicles described in the 
application in the U.S.
    Manufacturers certify their fuel systems by grouping them into 
emission families that have similar emission characteristics. The 
emission family definition is fundamental to the certification process 
and to a large degree determines the amount of testing required for 
certification. The regulations include specific characteristics for 
grouping emission families for each category of tanks and hoses. For 
fuel tanks, key parameters include wall thickness, material used 
(including additives such as pigments, plasticizers, and UV 
inhibitors), and the emission-control strategy applied. For hoses, key 
parameters include material, wall thickness, and emission-control 
strategy applied. To address a manufacturer's unique product mix, we 
may approve using broader or narrower engine families. The 
certification process for vehicle permeation is similar as for the 
process for certifying engines.
4. What Durability Provisions Apply?
    We are adopting several additional provisions to ensure that 
emission controls will be effective throughout the life of the 
motorcycle. This section discusses these provisions for permeation 
emissions from motorcycles.
a. How Long Do My Vehicles Have To Comply?
    Manufacturers would be required to build fuel systems that meet the

[[Page 2424]]

emission standards over each motorcycle's useful life. For the 
permeation standards, we use the same useful life as for exhaust 
emissions from motorcycle engines based on the belief that fuel system 
components and engines are intended to have the same design life. This 
useful life is 5 years or 6,000 km for Class I <50cc, 12,000 km for 
Class I =50cc, 18,000 km for Class II, and 30,000 km for 
Class III. Further, we are applying the same warranty period for 
permeation emission related components of the fuel system as for 
exhaust emission-related components of the motorcycle.
b. How Do I Demonstrate Emission Durability?
    We are adopting several additional provisions to ensure that 
emission controls will be effective throughout the life of the vehicle. 
Motorcycle manufacturers must demonstrate that the permeation emission-
control strategies will last for the useful life of the vehicle. Any 
deterioration in performance would have to be included in the family 
emissions limit. This section discusses durability provisions for fuel 
tanks and hoses.
    For plastic fuel tanks, we are specifying a preconditioning and 
four durability steps that must be performed in conjunction with the 
permeation testing for certification to the standard. These steps, 
which include fuel soaking, slosh, pressure-vacuum cycling, temperature 
cycling, and ultra-violet light exposure, are described in more detail 
in Section VI.C.1. The purpose of these preconditioning steps is to 
help demonstrate the durability of the fuel tank permeation control 
under conditions that may occur in use. For fuel hoses, the only 
preconditioning step that we are requiring is a fuel soak to ensure 
that the permeation rate is stabilized prior to testing. Data from 
before and after the durability tests would be used to determine 
deterioration factors for the certified fuel tanks. The durability 
factors would be applied to permeation test results to determine the 
certification emission level of the fuel tank at full useful life. The 
manufacturer would still be responsible for ensuring that the fuel tank 
and hose meet the permeation standards throughout the useful life of 
the motorcycle.
    We recognize that motorcycle manufacturers will likely depend on 
suppliers/vendors for complying tanks and fuel hoses. We believe that, 
in addition to normal business practices, our testing requirements will 
help assure that suppliers/vendors consistently meet the performance 
specifications laid out in the certificate.

C. Testing Requirements

    To obtain a certificate allowing sale of products meeting EPA 
emission standards, manufacturers generally must show compliance with 
such standards through emission testing. The test procedures for 
determining permeation emissions from fuel tanks and hoses on 
motorcycles are described below. This section also discusses design-
based certification as an alternative to performing specific testing. 
These test procedures are the same as those existing for recreational 
vehicles.
1. What Are the Test Procedures for Measuring Permeation Emissions From 
Fuel Tanks?
    Prior to testing the fuel tanks for permeation emissions, the fuel 
tank must be preconditioned by allowing the tank to sit with fuel in it 
until the hydrocarbon permeation rate has stabilized. Under this step, 
the fuel tank must be filled with a 10-percent ethanol blend in 
gasoline (E10), sealed, and soaked for 20 weeks at a temperature of 28 
+/- 5[deg]C. Once the soak period has ended, the fuel tank is drained, 
refilled with fresh fuel, and sealed. The permeation rate from fuel 
tanks is measured at a temperature of 28 +/- 2[deg]C over a period of 
at least 2 weeks. Consistent with good engineering judgment, a longer 
period may be necessary for an accurate measurement for fuel tanks with 
low permeation rates. Permeation loss is determined by measuring the 
weight of the fuel tank before and after testing and taking the 
difference. Once the mass change is calculated, it is divided by the 
manufacturer determined tank surface area and the number of days of 
soak to get the emission rate. As an option, permeation may be measured 
using alternative methods that will provide equivalent or better 
accuracy. Such methods include enclosure testing as described in 40 CFR 
part 86. The fuel used for this testing will be a blend of 90-percent 
gasoline and 10-percent ethanol.
    To determine permeation emission deterioration factor, we are 
specifying three durability tests: slosh testing, pressure-vacuum 
cycling, and ultra-violet exposure. The purpose of these deterioration 
tests is to help ensure that the technology is durable and the measured 
emissions are representative of in-use permeation rates. For slosh 
testing, the fuel tank is filled to 40-percent capacity with E10 fuel 
and rocked for 1 million cycles. The pressure-vacuum testing contains 
10,000 cycles from -0.5 to 2.0 psi. These two durability tests are 
based on draft recommended SAE practice.\44\ The third durability test 
is intended to assess potential impacts of UV sunlight (0.2 [mu]m-0.4 
[mu]m) on the durability of the surface treatment. Because most of the 
irradiance from sunlight in this range is seen in wavelengths above 0.3 
[mu]m, we recommend testing with an average wavelength above 0.3 [mu]m 
such as the UVA lamp described in SAE J2020.\45\ In the UV exposure 
test, the tank must be exposed to a UV light of at least 24 W/
m2 (0.4 W-hr/m2/min) on the tank surface for 15 
hours per day for 30 days. Alternatively, it can be exposed to direct 
natural sunlight for an equivalent period of time. To allow for 
weekends and rainy days, these exposure days do not need to be 
continuous.
---------------------------------------------------------------------------

    \44\ Draft SAE Information Report J1769, ``Test Protocol for 
Evaluation of Long Term Permeation Barrier Durability on Non-
Metallic Fuel Tanks,'' (Docket A-2000-01, document IV-A-24).
    \45\ SAE Surface Vehicle Standard J2020, ``Accelerated Exposure 
of Automotive Exterior Materials Using a Fluorescent UV and 
Condensation Apparatus,'' Revised February, 2003 (Docket A-2000-02, 
document, IV-A-10).
---------------------------------------------------------------------------

2. What Are the Test Procedures for Measuring Permeation Emissions From 
Fuel System Hoses?
    The permeation rate of fuel from hoses would be measured at a 
temperature of 23 +/- 2[deg]C using SAE method J30 \46\ with E10. The 
hose must be preconditioned with a fuel soak to ensure that the 
permeation rate has stabilized. The fuel to be used for this testing 
would be a blend of 90-percent gasoline and 10-percent ethanol. This 
fuel is consistent with the test fuel used for highway evaporative 
emission testing. Alternatively, for purposes of submission of data at 
certification, permeation could be measured using alternative equipment 
and procedures that provide equivalent results. To use these 
alternative methods, manufacturers would have to apply to us and 
demonstrate equivalence. Examples of alternative approaches that we 
anticipate manufacturers may use are the recirculation technique 
described in SAE J1737,\47\ enclosure-type testing such as in 40 CFR 
part 86, or weight loss testing such as described in SAE J1527.\48\
---------------------------------------------------------------------------

    \46\ SAE Recommended Practice J30, ``Fuel and Oil Hoses,'' June 
1998 (Docket A-2000-01, document IV-A-92).
    \47\ SAE Recommended Practice J1737, ``Test Procedure to 
Determine the Hydrocarbon Losses from Fuel Tubes, Hoses, Fittings, 
and Fuel Line Assemblies by Recirculation,'' 1997 (Docket A-2000-01, 
document, IV-A-34).
    \48\ SAE Recommended Practice J1527, ``Marine Fuel Hoses,'' 1993 
(Docket A-2000-01, document IV-A-19).

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

[[Page 2425]]

3. Can I Certify Based on Engineering Design Rather Than Through 
Testing?
    In general, test data would be required to certify fuel tanks and 
hoses to the permeation standards. Test data could be carried over from 
year to year for a given emission-control design. We do not believe the 
cost of testing tanks and hose designs for permeation would be 
burdensome especially given that the data could be carried over from 
year to year, and that there is a good possibility that the broad 
emission family concepts embodied in this program would lead to minimum 
testing. However, there are some specific cases where we would allow 
certification based on design. These special cases are discussed below.
    We would consider a metal fuel tank to meet the design criteria for 
a low permeation fuel tank because fuel does not permeate through 
metal. However, we would not consider this design to be any more 
effective than any other low permeation fuel tank for the purposes of 
any sort of credit program. Although metal is impermeable, seals and 
gaskets used on the fuel tank may not be. The design criteria for the 
seals and gaskets would be that either they would not have a total 
exposed surface area exceeding 1000 mm2, or the seals and 
gaskets would have to be made of a material with a permeation rate of 
10 g/m2/day or less at 23[deg]C as measured under ASTM 
D814.\49\ A metal fuel tank with seals that meet this design criteria 
would readily pass the standard.
---------------------------------------------------------------------------

    \49\ ASTM Standard Test Method D 814-95 (Reapproved 2000), 
``Rubber Property--Vapor Transmission of Volatile Liquids,'' (Docket 
A-2000-01, document IV-A-95).
---------------------------------------------------------------------------

    Another technology that we considered for design-certification was 
multi-layer fuel tank construction with low-permeation (EVOH) barrier. 
This technology is widely used in automotive applications to meet the 
vehicle evaporative emission standards. However, we believe that a 
manufacturer must demonstrate that their design meets the standards 
prior to certification. For instance, if the layers are not sealed well 
at a seam or if the fuel tank is prone to delamination in-use, 
permeation emissions could be above the standard without a noticeable 
fuel leak. Therefore, we would require the manufacturer to submit test 
data on the effectiveness and durability of the fuel tank. As discussed 
above, test data could be carried over from year-to-year and across 
product lines provided that a worst case configuration is tested.
    Similarly, if manufacturers were to produce fuel tanks out of low-
permeability materials other than metal (such as an acetal copolymer), 
permeation testing on a worst case configuration would initially need 
to be performed. This test data could then be used to certify other 
fuel tanks which are otherwise similar and using the same material 
(including additives). Because permeation is a function of wall 
thickness, the worst case configuration, in this case, would likely be 
the fuel tank design with the thinnest walls. If new test data 
demonstrates that the use of other technology designs will ensure 
compliance with the applicable emission standards, we may establish 
additional design certification options for these technologies such as 
those we are finalizing for metal fuel tanks. \2\
    Fuel hoses can be certified by design as being manufactured in 
compliance with certain accepted SAE specifications. Specifically, a 
fuel hose meeting the SAE J30 R11-A or R12 requirements could be 
design-certified to the standard. In addition, fuel line meeting the 
SAE J2260 \50\ Category 1 requirements could be design-certified to the 
standard. These fuel hoses and fuel line specifications are based on 
15-percent methanol fuel and higher temperatures. We believe that fuel 
hoses and lines that are tested and meet these requirements would also 
meet our hose permeation standards because both are generally 
acknowledged as representing more stringent test parameters. In the 
future, if new SAE specifications are developed which are consistent 
with our hose permeation standards, we would consider including hoses 
meeting the new SAE requirements as being able to certify by design.
---------------------------------------------------------------------------

    \50\ SAE Recommended Practice J2260, ``Nonmetallic Fuel System 
Tubing with One or More Layers,'' 1996, (Docket A-2000-01, document 
IV-A-18).
---------------------------------------------------------------------------

    At certification, manufacturers will have to submit an engineering 
analysis showing that the tank or hose designs will meet the standards 
throughout their full useful life. The tanks and hoses will remain 
subject to the emission standards throughout their useful lives. The 
design criteria relate only to the issuance of a certificate.
4. Technical Amendments to 40 CFR Part 1051 Test Procedures
    We are updating the figure in Sec.  1051.515 that presents a flow 
chart of the fuel tank test procedures to help better clarify the 
procedures. In addition, we are updating the structure of the language 
in Sec.  1051.515 to be parallel to the construction of the flow chart. 
In the UV exposure test, we are simplifying the units from W-hr/
m2/min to W/m2 (0.40 W-hr/m2/min 
equals 24 W/m2). These changes are for clarity only and do 
not result in substantive changes to the test procedures. One other 
change we are making is to make the length of the UV exposure test in 
the regulations match the length specified in the preamble for the 
recreational vehicles FRM. Therefore, we are changing the specification 
of 4 weeks in the regulatory text to 30 days. The UV exposure test is 
contained in Sec.  1051.515(d)(2). All of these changes were developed 
in the process of the motorcycle rulemaking. However, we decided to 
make the amendments applicible to recreational vehicles as well for 
several reasons. These reasons include: (1) The motorcycle permeation 
requirements are essentially the same as for recreational vehicles, (2) 
the motorcycle test procedures are in the same body of regulatory text 
as for recreational vehicles, (3) the amendments are not substantive, 
and (4) the amendments help clarify the test procedures.

D. Special Compliance Provisions

    We believe that the permeation control requirements will be 
relatively easy for small businesses to meet, given the relatively low 
cost of the requirements and the availability of materials and 
treatment support by outside vendors. In addition, this regulatory 
program is structured in such a way to minimize burdens on all 
manufacturers by including design-based certification, ABT, broad 
emission families, minimized compliance requirements, and hardship 
provisions. Low permeation fuel hoses are available from vendors today, 
and we would expect that surface treatment would be applied through an 
outside company if that is the compliance approach used. However, to 
minimize any additional burden these requirements may impose on small 
businesses, we are delaying the implementation date of the permeation 
standards for small business manufacturers to 2010.

E. Technological Feasibility

    We believe there are several strategies that manufacturers can use 
to meet our permeation emission standards. This section gives an 
overview of this technology. See Chapters 3 and 4 of the Final 
Regulatory Support Document for more detail on the technology discussed 
here.
1. Implementation Schedule
    The permeation emission standards for fuel tanks become effective 
in the 2008 model year. Several technologies are available that could 
be used to meet this standard. Surface treatments to reduce tank 
permeation are widely used

[[Page 2426]]

today in other container applications, and the technology and 
production facilities needed to conduct this process exist. Selar[reg] 
is used by at least one portable fuel tank manufacturer and has also 
been used in automotive applications. Plastic tanks with coextruded 
barriers have been used in automotive applications for years. However, 
plastic fuel tanks used in motorcycles are primarily high-density 
polyethylene tanks with no permeation control. We received comment that 
they it would be unreasonable for manufacturers to have to comply 
before 2008 because this is the date already established for 
recreational vehicles. Manufacturers will need lead time to allow for 
durability testing and other development work associated with applying 
this technology to motorcycles. This is especially true for 
manufacturers or vendors who choose to set up their own surface barrier 
treatment equipment in-house.
    We believe that the low permeation hose technology can also be 
applied in the 2008 time frame. A lower permeation fuel hose exists 
today known as the SAE R9 hose that is as flexible as the SAE R7 hose 
used in most motorcycle applications today. These SAE hose 
specifications are contained in SAE J30 cited above. This hose would 
meet our permeation standard on gasoline, but probably not on a 10-
percent ethanol blend. As noted in Chapter 4 of the Final Regulatory 
Support Document, barrier materials typically used in R9 hose today may 
have permeation rates 3 to 5 times higher on a 10-percent ethanol blend 
than on straight gasoline. However, there are several lower 
permeability barrier materials that can be used in rubber hose that 
will comply with the hose permeation requirement on a 10-percent 
ethanol blend and still be flexible and durable enough for use in 
motorcycles. This hose is available for automotive applications at this 
time, but some lead time may be required to apply these hoses to 
motorcycles if hose connection fitting changes were required. This 
would enhance both in-use effectiveness and safety. For these reasons, 
we are implementing the hose permeation standard on the same schedule 
as the tank permeation standards.
2. Standard Levels
    We have identified several strategies for reducing permeation 
emissions from fuel tanks and hoses. We recognize that some of these 
technologies may be more desirable than others for some manufacturers, 
and we recognize that different strategies for equal emission 
reductions may be better for different applications. A specific example 
of technology that could be used to meet the fuel tank permeations 
would be surface barrier treatments such as sulfonation or 
fluorination. With these surface treatments, more than a 95-percent 
reduction in permeation emissions from new fuel tanks is feasible. 
However, variation in material tolerances and in-use deterioration can 
reduce this effectiveness. Given the lead time for the standards, 
manufacturers will be able to provide fuel tanks with consistent 
material quality, and the surface treatment processes can be optimized 
for a wide range of material qualities and additives such as pigments, 
plasticizers, and UV inhibitors. We do not expect a large deterioration 
in use; however, data on slosh testing suggest that some deterioration 
is likely. To accommodate variability and deterioration, we are 
finalizing a standard that represents about an 85-percent reduction in 
permeation emissions from plastic fuel tanks. It is our expectation 
that manufacturers will aim for an effectiveness rate as near to 100 
percent as practical for new tanks. Therefore, even with variability 
and deterioration in use, control rates are likely to exceed 85 
percent. Several materials are available today that could be used as a 
low permeation barrier in rubber hoses. We present more detail on these 
and other technological approaches below.
3. Technological Approaches
a. Fuel Tanks
    Blow molding is widely used for the manufacture of fuel tanks for 
motorcycles. Typically, blow molding is performed by creating a hollow 
tube, known as a parison, by pushing high-density polyethylene (HDPE) 
through an extruder with a screw. The parison is then pinched in a mold 
and inflated with an inert gas. In highway applications, non-permeable 
plastic fuel tanks are produced by blow molding a layer of ethylene 
vinyl alcohol (EVOH) or nylon between two layers of polyethylene. This 
process is called coextrusion and requires at least five layers: the 
barrier layer, adhesive layers on either side of the barrier layer, and 
HDPE as the outside layers which make up most of the thickness of the 
fuel tank walls. However, multi-layer construction requires additional 
extruder screws which significantly increases the cost of the blow 
molding process. Multi-layer fuel tanks can also be formed using 
injection molding. In this method, a low viscosity polymer is forced 
into a thin mold to create each side of the fuel tank. The two sides 
are then welded together. To add a barrier layer, a thin sheet of the 
barrier material is placed inside the mold prior to injection of the 
polyethylene. The polyethylene, which generally has a much lower 
melting point than the barrier material, bonds with the barrier 
material to create a shell with an inner liner.
    A less expensive alternative to coextrusion is to blend a low 
permeable resin in with the HDPE and extrude it with a single screw. 
The trade name typically used for this permeation control strategy is 
Selar[reg]. The low permeability resin, typically EVOH or nylon, 
creates non-continuous platelets in the HDPE fuel tank which reduce 
permeation by creating long, tortuous pathways that the hydrocarbon 
molecules must navigate to pass through the fuel tank walls. Although 
the barrier is not continuous, this strategy can still achieve greater 
than a 90-percent reduction in permeation of gasoline. EVOH has much 
higher permeation resistance to alcohol than nylon; therefore, it would 
be the preferred material to use for meeting our standard which is 
based on testing with a 10-percent ethanol fuel.
    Another type of low permeation technology for fuel tanks would be 
to treat the surfaces of plastic fuel tanks with a barrier layer. Two 
ways of achieving this are known as fluorination and sulfonation. The 
fluorination process causes a chemical reaction where exposed hydrogen 
atoms are replaced by larger fluorine atoms to create a barrier on the 
surface of the fuel tank. In this process, a batch of fuel tanks are 
generally processed post production by stacking them in a steel 
container. The container is then voided of air and flooded with 
fluorine gas. By pulling a vacuum in the container, the fluorine gas is 
forced into every crevice in the fuel tanks. As a result of this 
process, both the inside and outside surfaces of the fuel tank are 
treated. As an alternative, fuel tanks can be fluorinated on-line by 
exposing the inside surface of the fuel tank to fluorine during the 
blow molding process. However, this method may not prove as effective 
as off-line fluorination which treats the inside and outside surfaces.
    Sulfonation is another surface treatment technology where sulfur 
trioxide is used to create the barrier by reacting with the exposed 
polyethylene to form sulfonic acid groups on the surface. Current 
practices for sulfonation are to place fuel tanks on a small assembly 
line and expose the inner surfaces to sulfur trioxide, then

[[Page 2427]]

rinse with a neutralizing agent. However, sulfonation can also be 
performed using a batch method. Either of these processes can be used 
to reduce gasoline permeation by more than 95 percent.
    Over the first month or so of use, polyethylene fuel tanks can 
expand by as much as three percent due to saturation of the plastic 
with fuel. Manufacturers have raised the concern that this hydrocarbon 
expansion could affect the effectiveness of surface treatments like 
fluorination or sulfonation. We believe this will not have a 
significant effect on the effectiveness of these surface treatments. We 
and California ARB have performed extensive permeation testing on HDPE 
fuel tanks with and without these surface treatments. Prior to the ARB 
permeation testing, the tanks were prepared by first performing a 
durability procedure where the fuel container is cycled a minimum of 
1000 times between -1 psi and 5 psi. In addition, for both the EPA and 
ARB testing, the fuel containers were soaked with fuel to stabilize 
permeation rates. The test data, presented in Chapter 4 of the Final 
Regulatory Support Document show that fluorination and sulfonation are 
still effective after this testing.
    Manufacturers have also commented that fuel sloshing in the fuel 
tank, under normal in-use operation, could wear off the surface 
treatments. However, we do not believe that this is likely. These 
surface treatments actually result in an atomic change in the structure 
of the outside surface of the fuel tank. To wear off the treatment, the 
plastic would need to be worn away on the outside surface. In addition, 
testing by California ARB shows that the fuel tank permeation standard 
can be met by fuel tanks that have been sloshed for 1.2 million cycles. 
Test data on an sulfonated automotive HDPE fuel tank after five years 
of use showed no deterioration in the permeation barrier. This data are 
presented in Chapter 4 of the Final Regulatory Support Document.
    Permeation can also be reduced from fuel tanks by constructing them 
out of a lower permeation material than HDPE. For instance, metal fuel 
tanks would not permeate. In addition, there are grades of plastics 
other than HDPE that could be molded into fuel tanks. An example of 
materials which have excellent permeation resistance, even with 
alcohol-blended fuels, are acetal copolymers and thermoplastic 
polyesters.
b. Hoses
    Fuel hoses produced for use in motorcycles are generally extruded 
nitrile rubber with a cover for abrasion resistance. Lower permeability 
fuel hoses produced today for other applications are generally 
constructed in one of two ways: either with a low permeability layer or 
by using a low permeability rubber blend. By using hose with a low 
permeation thermoplastic layer, permeation emissions can be reduced by 
more than 95 percent. Because the thermoplastic layer is very thin, on 
the order of 0.1 to 0.2 mm, the rubber hose retains its flexibility. 
Two thermoplastics which have excellent permeation resistance, even 
with an alcohol-blend fuel, are ETFE and THV.\51\
---------------------------------------------------------------------------

    \51\ Ethylene-tetrafluoro-ethylene (ETFE), tetra-fluoro-
ethylene, hexa-fluoro-propylene, and vinyledene fluoride (THV).
---------------------------------------------------------------------------

    In automotive applications, multilayer plastic tubing, made of 
fluoropolymers is generally used. An added benefit of these low 
permeability lines is that some fluoropolymers can be made to conduct 
electricity and therefore can prevent the buildup of static charges. 
Although this technology can achieve more than an order of magnitude 
lower permeation than barrier hoses, it is relatively inflexible and 
may need to be molded in specific shapes for each motorcycle design. 
Manufacturers have commented that motorcycle hose would need to be 
designed for elements such as location, exposure, and vibration that 
are unique to motorcycle design.
4. Conclusions
    The standards for permeation emissions for motorcycles reasonably 
reflect what manufacturers can achieve through the application of 
available technology. Manufacturers will have several years of lead 
time to select, design, and produce permeation emission-control 
strategies that will work best for their product lines. We expect that 
meeting these requirements will pose a challenge, but one that is 
feasible taking into consideration the availability and cost of 
technology, lead time, noise, energy, and safety. The role of these 
factors is presented in detail in Chapters 3 and 4 of the Final 
Regulatory Support Document.
    The permeation standards are based on the effective application of 
low permeable materials or surface treatments. This is a step change in 
technology; therefore, we believe that even if we set a less stringent 
permeation standard, these technology options would likely still be 
used. In addition, this technology is relatively inexpensive and can 
achieve meaningful emission reductions. The standards are expected to 
achieve more than an 85-percent reduction in permeation emissions from 
fuel tanks and more than 95 percent from hoses. We believe that more 
stringent standards could result in significantly more expensive 
materials without corresponding additional emission reduction. In 
addition, the control technology would generally pay for itself over 
time by conserving fuel that would otherwise evaporate. The projected 
costs and fuel savings are discussed in Section VII.B.

VII. Environmental Impacts and Program Costs

    The following section summarizes the emission benefits, costs, and 
cost per ton of pollutant reduced of the new motorcycle emission 
standards. Further information on these and other aspects of the 
environmental and economic impacts of this rule are presented in more 
detail in the Regulatory Support Document for this rulemaking.

A. Environmental Impacts

    Emission estimates for highway motorcycles were developed using 
information on the emission levels of current motorcycles and updated 
information on motorcycle use provided by the motorcycle industry. 
Permeation emissions for highway motorcycles were developed based on 
known material permeation rates as a function of surface area and 
temperature. A more detailed description of the methodology used for 
projecting inventories and projections for additional years can be 
found in the Chapter 6 of the Regulatory Support Document.
    Tables VII.A-1 and VII.A-2 contain the projected emission 
inventories for the years 2010 and 2020, respectively, from the 
motorcycles subject to this rulemaking. The inventories are presented 
for the base case which assumes no change from current conditions 
(i.e., without the standards taking effect) and assuming the standards 
being adopted today take effect. The inventories for 2010 and 2020 
include the effect of growth. The percent reductions based on a 
comparison of estimated emission inventories with and without the 
emission standards are also presented.

[[Page 2428]]



                    Table VII.A-1--2010 Projected On-Highway Motorcycle Emissions Inventories
                                              [thousand short tons]
----------------------------------------------------------------------------------------------------------------
                                                     NOX                                     HC
                                  ------------------------------------------------------------------------------
            Standards                               With        Percent                     With       Percent
                                    Base  case   standards     reduction    Base  case   standards    reduction
----------------------------------------------------------------------------------------------------------------
Exhaust..........................           11           10            9            45           41           10
Permeation.......................  ...........  ...........  ............           16           13           22
                                  ------------------------------------------------------------------------------
    Total........................           11           10            9            61           54           13
----------------------------------------------------------------------------------------------------------------


                    Table VII.A-2--2020 Projected On-Highway Motorcycle Emissions Inventories
----------------------------------------------------------------------------------------------------------------
                                                     NOX                                     HC
                                  ------------------------------------------------------------------------------
            Standards                               With        Percent                     With       Percent
                                    Base  case   standards     reduction    Base  case   standards    reduction
----------------------------------------------------------------------------------------------------------------
Exhaust..........................           14            7           50            58           28           51
Permeation.......................  ...........  ...........  ............           21            3           85
                                  ------------------------------------------------------------------------------
    Total........................           14            7           50            79           31           61
----------------------------------------------------------------------------------------------------------------

    As described in Section II, there will also be environmental 
benefits associated with reduced haze in many sensitive areas.
    Finally, anticipated reductions in hydrocarbon emissions will 
correspond with reduced emissions of the toxic air emissions referenced 
in Section II. In 2020, the projected reduction in hydrocarbon 
emissions should result in an equivalent percent reduction in air toxic 
emissions.

B. Motorcycle Engine and Equipment Costs

    In assessing the economic impact of setting emission standards, we 
have made a best estimate of the technologies and their associated 
costs to meet the standards. In making our estimates for the final rule 
we have relied on our own technology assessment, which includes 
information supplied by individual manufacturers, and we have made 
revisions after considering information provided by commenters. 
Estimated costs include variable costs (for hardware and assembly time) 
and fixed costs (for research and development, retooling, and 
certification). We projected that manufacturers will recover the fixed 
costs over the eight years of production and used an amortization rate 
of 7 percent in our analysis. The analysis also considers total 
operating costs, including maintenance and fuel consumption. Cost 
estimates based on the projected technologies represent an expected 
change in the cost of engines as they begin to comply with new emission 
standards. All costs are presented in 2001 dollars. Full details of our 
cost analysis can be found in Chapter 5 of the Regulatory Support 
Document.
    Cost estimates based on the current projected costs for our 
estimated technology packages represent an expected incremental cost of 
vehicles in the near term. For the longer term, we have identified 
factors that would cause cost impacts to decrease over time. First, as 
noted above, we project that manufacturers will spread their fixed 
costs over the first eight years of production. After the eighth year 
of production, we project that the fixed costs would be retired and the 
per unit costs could be reduced as a result.
    For highway motorcycles above 50cc, the analysis also incorporates 
the expectation that manufacturers and suppliers will apply ongoing 
research and manufacturing innovation to making emission controls more 
effective and less costly over time. Research in the costs of 
manufacturing has consistently shown that as manufacturers gain 
experience in production and use, they are able to apply innovations to 
simplify machining and assembly operations, use lower cost materials, 
and reduce the number or complexity of component parts.\52\ (see the 
Final Regulatory Support Document for additional information). The cost 
analysis generally incorporates this learning effect by decreasing 
estimated variable costs by 20 percent starting in the third year of 
production. Long-term impacts on costs are expected to decrease as 
manufacturers fully amortize their fixed costs and learn to optimize 
their designs and production processes to meet the standards more 
efficiently. The learning curve has not been applied to the motorcycles 
under 50cc because we expect manufacturers to use technologies that 
will be well established prior to the start of the program.
---------------------------------------------------------------------------

    \52\ For further information on learning curves, see previous 
final rules for Tier 2 highway vehicles (65 FR 6698, February 10, 
2000), marine diesel engines (64 FR 73300, December 29, 1999), 
nonroad diesel engines (63 FR 56968, October 23, 1998), and highway 
diesel engines (62 FR 54694, October 21, 1997).
---------------------------------------------------------------------------

    We project average costs of $30 per Class III highway motorcycle to 
meet the Tier 1 standard and $45 to meet the Tier 2 standards, 
incremental to Tier 1. We anticipate the manufacturers will meet the 
emission standards with several technologies, including electronic fuel 
injection, catalysts, pulse-air systems, and other general improvements 
to engines. For motorcycles with engines of less than 50cc, we project 
average costs of $44 per motorcycle to meet emission standards. We 
anticipate the manufacturers of these small motorcycles (mostly 
scooters) will meet the emission standards by replacing any remaining 
two-stroke engines with four-strokes. The costs are based on the 
conversion to 4-stroke because we believe this to be the most likely 
technology path for the majority of scooters. Manufacturers could also 
choose to employ advanced technology two-stroke (e.g., direct injection 
and/or catalysts) designs. The process of developing clean technologies 
is very much underway already as a result of regulatory actions in 
Europe and the rest of world where the primary markets for small 
motorcycles exist. Chapter 4 of the Regulatory Support Document 
describes these technologies further.

[[Page 2429]]

    We received comments that our costs appeared to be underestimated. 
We have considered these comments and, where further data and 
information was provided, we have made revisions to our cost estimates 
when they were appropriate. Chapter 5 for the Summary and Analysis of 
Comments provides our detailed response to comments. It is important to 
note that the above cost estimates are average costs and are based on 
both the current state of technology and projections of technology 
needed to meet standards. Our average cost estimates consider, for 
example, that almost half of current production is already equipped 
with fuel injection and about 20 percent of production is equipped with 
catalysts. To estimate average per unit costs, the costs associated 
with the increased use of emission control technologies due to the new 
standards are spread over all units produced. Costs for individual 
models would be higher or lower than the average depending on the 
changes manufacturers decide to make for their various models. Models 
already equipped with fuel injection, pulse air, and a catalyst are 
likely to have low incremental costs compared to models that are not 
currently equipped with these technologies. The averaging program for 
the standards provides manufacturers with flexibility in determining 
what technologies to use on their various models. Because several 
models are already available with the anticipated long-term emission-
control technologies, we believe that manufacturers and consumers will 
be able to bear the added cost associated with the new emission 
standards.
    We have also estimated a per unit cost for fuel tank and hose 
permeation control for motorcycles. About 10 percent of motorcycles 
sold have plastic fuel tanks which would be subject to the fuel tank 
permeation requirements. We project the additional cost per tank, 
assuming sulfonation treatment, to be less than $2 per fuel tank. This 
cost includes shipping, handling, and overhead costs. Weighting 
technology cost for plastic tanks with zero costs for metal tanks which 
will not need to apply permeation control, we get an average cost of 
less than $0.20 per motorcycle. Hose permeation costs are based on the 
costs of existing barrier-lined hoses products used in marine and 
automotive applications. We projected an incremental cost of less than 
$2 per motorcycle for barrier hoses. This cost includes upgrades to the 
hose clamps. Therefore, the average cost per motorcycle for permeation 
emission control is projected to be about $2.
    Because evaporative emissions are composed of otherwise usable fuel 
that is lost to the atmosphere, measures that reduce evaporative 
emissions will result in fuel savings. We estimate that the average 
fuel savings, due to permeation control, be about 9 gallons over the 
12.5 year average operating lifetime. This translates to a discounted 
lifetime savings of nearly $7 at an average fuel price of $1.10 per 
gallon (non-tax). Therefore, we anticipate that the fuel savings will 
more than offset the technology costs.

C. Aggregate Costs and Cost-Effectiveness

    The above section presents unit cost estimates for each of the 
standards being adopted for motorcycles. These average costs represent 
the total set of costs the engine manufacturers will bear to comply 
with emission standards. With current and projected estimates of 
vehicle sales, we translate these costs into projected direct costs to 
the nation for the new emission standards in any year. A summary of the 
annualized costs to manufacturers is presented in Table VII.C-1. (The 
annualized costs are determined over the first twenty-years that the 
new standards will be effective.) The annual cost savings for highway 
motorcycles are due to reduced fuel costs (from the <50cc motorcycle 
standards and the permeation controls). The total fleetwide fuel 
savings start slowly, then increase as greater numbers of compliant 
motorcycles enter the fleet. Table VII.C-1 presents a summary of the 
annualized reduced operating costs as well.

     Table VII.C-1.--Estimated Annualized Cost to Manufacturers and
       Annualized Fuel Savings Due to the New Motorcycle Standards
------------------------------------------------------------------------
                                    Annualized cost    Annualized  fuel
            Standards              to manufacturers   savings  (millions/
                                    (millions/year)          year)
------------------------------------------------------------------------
Exhaust.........................               $32.0                $0.2
Permeation......................                 1.4                 4.2
Aggregate \a\...................                33.4                3.7
------------------------------------------------------------------------
Notes:
\a\ Because of the different implementation dates for the exhaust and
  permeation standards, the aggregate is based on a 22 year (rather than
  20 year) annualized cost. Therefore, the aggregate is not equal to the
  sum of the costs for the two standards.

    We calculated the cost per ton of emission reductions for the 
standards. For these calculations, we attributed the entire cost of the 
program to the control of ozone precursor emissions (HC or 
NOX or both). Table VII.C-2 presents the discounted cost-
per-ton estimates for this action. Reduced operating costs offsets a 
portion of the increased cost of producing the cleaner highway 
motorcycles under 50cc. Reduced fuel consumption also offsets the costs 
of permeation control.

                        Table VII.C-2.--Estimated Cost-per-Ton of the Emission Standards
----------------------------------------------------------------------------------------------------------------
                                                  Discounted                          Discounted cost per ton
                                   Effective      reductions                     -------------------------------
           Category                  date         per engine       Pollutants      Without  fuel     With fuel
                                                 (short tons)                         savings         savings
----------------------------------------------------------------------------------------------------------------
Highway motorcycles 50cc.
Highway motorcycles 50cc.
Highway motorcycles <50cc.....            2006            0.02  Exhaust HC......           2,130           1,750
Permeation control............            2008            0.02  Evaporative HC..             103          ($260)
----------------------------------------------------------------------------------------------------------------


[[Page 2430]]

    Because the primary purpose of cost-effectiveness is to compare our 
program to alternative programs, we made a comparison between the cost 
per ton values presented in this chapter and the cost-effectiveness of 
other programs. Table VI.C-3 summarizes the cost effectiveness of 
several recent EPA actions for controlled emissions from mobile 
sources. Additional discussion of these comparisons is contained in the 
Regulatory Impact Analysis.

   Table VII.C-3.--Cost-Effectiveness of Previously Implemented Mobile
                             Source Programs
                    [Costs Adjusted to 2001 Dollars]
------------------------------------------------------------------------
                         Program                               $/ton
------------------------------------------------------------------------
Tier 2 vehicle/gasoline sulfur..........................     1,437-2,423
2007 Highway HD diesel..................................     1,563-2,002
2004 Highway HD diesel..................................         227-444
Off-highway diesel engine...............................         456-724
Tier 1 vehicle..........................................     2,202-2,993
NLEV....................................................           2,069
Marine SI engines.......................................     1,255-1,979
On-board diagnostics....................................           2,480
Marine CI engines.......................................          26-189
------------------------------------------------------------------------

VIII. Public Participation

    A wide variety of interested parties participated in the rulemaking 
process that culminates with this final rule. This process provided 
opportunity for public comment following the proposal that we published 
August 14, 2002 (67 FR 53050). We held a public hearing on the proposal 
in Ann Arbor, Michigan on September 17, 2002. At that hearing, oral 
comments on the proposal were received and recorded. We published an 
additional notice for comment in two areas on October 30, 2002 (67 FR 
66097). A written comment period remained open until January 7, 2003. 
Comments and hearing testimony have been placed in the docket for this 
rule. We considered these comments in developing the final rule.
    We have prepared a detailed Summary and Analysis of Comments 
document, which describes the comments we received on the proposal and 
our response to each of these comments. The Summary and Analysis of 
Comments is available in the docket for this rule and on the Office of 
Transportation and Air Quality Internet home page at http://www.epa.gov/otaq/roadbike.htm.

IX. Statutory and Executive Order Reviews

A. Executive Order 12866: Regulatory Planning and Review

    Under Executive Order 12866 (58 FR 51735, October 4, 1993), the 
Agency must determine whether the regulatory action is ``significant'' 
and therefore subject to review by the Office of Management and Budget 
(OMB) and the requirements of this Executive Order. The Executive Order 
defines a ``significant regulatory action'' as any regulatory action 
that is likely to result in a rule that may:
    [sbull] 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;
    [sbull] Create a serious inconsistency or otherwise interfere with 
an action taken or planned by another agency;
    [sbull] Materially alter the budgetary impact of entitlements, 
grants, user fees, or loan programs, or the rights and obligations of 
recipients thereof; or
    [sbull] Raise novel legal or policy issues arising out of legal 
mandates, the President's priorities, or the principles set forth in 
the Executive Order.
    A Final Regulatory Support Document has been prepared and is 
available in the docket for this rulemaking and at the internet address 
listed under ADDRESSES above. Annual initial costs of this rulemaking 
are estimated to be well below $100 million per year, even when 
excluding annualized operating cost savings of approximately $3.7 
million per year. Even so, OMB has informed us that it considers this 
rule to be a ``significant regulatory action.'' Thus, this action was 
submitted to the Office of Management and Budget (OMB) for review under 
Executive Order 12866. Written comments from OMB and responses from EPA 
to OMB comments are in the public docket for this rulemaking.

B. Paperwork Reduction Act

    The information collection requirements in this final rule have 
been submitted for approval to the Office of Management and Budget 
(OMB) under the Paperwork Reduction Act, 44 U.S.C. 3501 et seq. (ICR 
No. 0783.46). The reporting requirements in this final rule are not 
enforceable until the Office of Management and Budget approves them.
    The information being collected is to be used by EPA to ensure that 
new highway motorcycles comply with applicable emissions standards 
through certification requirements and various subsequent compliance 
provisions.
    The annual public reporting and recordkeeping burden for this 
collection of information is estimated to average 32 hours per 
response, with collection required annually. The estimated number of 
respondents is 46. The total annual cost for the first 3 years of the 
program is estimated to be $79,428 per year, including $23,686 in 
operating and maintenance costs and no capital costs, at a total of 
1,449 hours per year.
    Burden means the total time, effort, or financial resources 
expended by persons to generate, maintain, retain, disclose, or provide 
information to or for a federal agency. This includes the time needed 
to review instructions; develop, acquire, install, and utilize 
technology and systems for the purposes of collecting, validating, and 
verifying information, processing and maintaining information, and 
disclosing and providing information; adjusting the existing ways to 
comply with any previously applicable instructions and to requirements; 
train personnel to be able to respond to a collection of information; 
search data sources; complete and review the collection of information; 
and transmit or otherwise disclose the information.
    An agency may not conduct or sponsor, and a person is not required 
to respond to a collection of information unless it displays a 
currently valid OMB control number. The OMB control numbers for EPA's 
regulations in 40 CFR are listed in 40 CFR part 9. When this ICR is 
approved by OMB, then we will publish a technical amendment to

[[Page 2431]]

40 CFR part 9 in the Federal Register to display the OMB control number 
for the approved information collection requirements contained in this 
final rule.

C. Regulatory Flexibility Act (RFA), as Amended by the Small Business 
Regulatory Enforcement Fairness Act of 1996 (SBREFA), 5 U.S.C. 601 et 
seq.

    We have determined that it is not necessary to prepare a regulatory 
flexibility analysis in connection with this final rule. We have also 
determined that this rule will not have a significant economic impact 
on a substantial number of small entities.
    For purposes of assessing the impacts of this final rule on small 
entities, small entity is defined as: (1) A small business that is 
primarily engaged in the manufacture of motorcycles, as defined by 
NAICS code 336991, with less than 500 employees (based on Small 
Business Administration size standards); (2) a small governmental 
jurisdiction that is a government of a city, county, town, school 
district or special district with a population of less than 50,000; and 
(3) a small organization that is any not-for-profit enterprise which is 
independently owned and operated and is not dominant in its field.
    In accordance with section 609 of the RFA, we conducted outreach to 
small entities and convened a Small Business Advocacy Review (SBAR) 
Panel prior to proposing this rule, to obtain advice and 
recommendations of representatives of the small entities that 
potentially would be subject to the rule's requirements. Through the 
Panel process, we gathered advice and recommendations from small-entity 
representatives who would be affected by the provisions in the rule 
relating to large SI engines and land-based recreational vehicles, and 
published the results in a Final Panel Report, dated July 17, 2001. We 
also prepared an Initial Regulatory Flexibility Analysis (IRFA) in 
accordance with section 603 of the Regulatory Flexibility Act. The IRFA 
is found in chapter 8 of the Draft Regulatory Support Document. The 
Panel report and the IRFA have been placed in the docket for this 
rulemaking (Public Docket A-2000-01, item II-A-85, and Public Docket A-
2000-02, item III-B-01).
    We proposed the majority of the Panel recommendations, and took 
comments on these and other recommendations. Since highway motorcycles 
have had to meet emission standards for more than twenty years, we have 
good information on the number of companies that manufacture or market 
highway motorcycles for the U.S. market in each model year. In addition 
to the largest six manufacturers (BMW, Harley-Davidson, Honda, 
Kawasaki, Suzuki, Yamaha), we find as many as several dozen more 
companies that have operated in the U.S. market in the last couple of 
model years. Most of these are U.S. companies that are either 
manufacturing or importing motorcycles, although a few are U.S. 
affiliates of larger companies in Europe or Asia. Some of the U.S. 
manufacturers employ only a few people and produce only a handful of 
custom motorcycles per year, while others may employ several hundred 
and produce up to several thousand motorcycles per year. These new 
emission standards impose no new development or certification costs for 
any company producing compliant engines for the California market. In 
fact, implementing the California standards with a two-year delay also 
allows manufacturers to streamline their production to further reduce 
the cost of compliance. The estimated hardware costs are less than one 
percent of the cost of producing a highway motorcycle, so none of these 
companies should have a compliance burden greater than one percent of 
revenues. We expect that a small number of companies affected by EPA 
emission standards will not already be certifying products in 
California. For these companies, the modest effort associated with 
applying established technology will add compliance costs representing 
between 1 and 3 percent of revenues. The flexible approach we are 
adopting to limit testing, reporting, and recordkeeping burden prevents 
excessive costs for all these companies. Thus, EPA has determined that 
this final rule will not have a significant economic impact on a 
substantial number of small entities.
    Although this final rule will not have a significant economic 
impact on a substantial number of small entities, EPA nonetheless has 
tried to reduce the impact of this rule on small entities. We prepared 
a Small Business Flexibility Analysis that examines the impact of the 
rule on small entities, along with regulatory alternatives that could 
reduce that impact. This analysis would meet the requirements for a 
Final Regulatory Flexibility Analysis (FRFA), had that analysis been 
required. The Small Business Flexibility Analysis can be found in 
Chapter 8 of the Final Regulatory Support Document, which is available 
for review in the docket and is summarized below. The key elements of 
our Small Business Flexibility Analysis include:

--The need for, and objectives of, the rule.
--The significant issues raised by public comments, a summary of the 
Agency's assessment of those issues, and a statement of any changes 
made to the proposed rule as a result of those comments.
--The types and number of small entities to which the rule will apply.
--The reporting, record keeping and other compliance requirement of the 
rule.
--The steps taken to minimize the impact of the rule on small entities, 
consistent with the stated objectives of the applicable statute.

    A fuller discussion of each of these elements can be found in the 
Small Business Flexibility Analysis (Chapter 8 of the Final Regulatory 
Support Document).
1. The Need for and Objectives of This Rule
    The current HC and CO emission standards for highway motorcycles 
were set in 1978 and are based on 1970s technology. There are currently 
no NOX standards for highway motorcycles. We expect that 
implementation of the standards will result in about a 50 percent 
reduction in HC emissions and NOX emissions from highway 
motorcycles in 2020. These emission reductions would reduce ambient 
concentrations of ozone, and fine particles, which is a health concern 
and contributes to visibility impairment. The standards would also 
reduce personal exposure for people who operate or who work with or are 
otherwise in close proximity to these engines and vehicles. As 
described more fully in the Final Regulatory Support Document for this 
rule, many types of hydrocarbons are air toxics.
    The reductions in emissions are a part of the effort by federal, 
state and local governments to reduce the health related impacts of air 
pollution and to reach attainment of the NAAQS for ozone and 
particulate matter (PM) as well as to improve other environmental 
effects such as atmospheric visibility. Based on the most recent data 
available for this rule (1999-2001), ozone and PM air quality problems 
are widespread in the United States. There are 111 million people 
living in counties with monitored concentrations exceeding the 8-hour 
ozone NAAQS, and over 65 million people living in counties with 
monitored PM2.5 levels exceeding the PM2.5 NAAQS.

[[Page 2432]]

2. Summary of Significant Issues Raised by Public Comment
    We received a number of comments during the public comment process, 
these comments mainly focused on 8 specific areas of concern for 
commenters: (1) Impact on small/independent and aftermarket motorcycle 
shops, and the belief EPA did not fulfill its SBREFA obligations; (2) 
customer rejection of products; (3) fewer options for customers and 
lower sales; (4) cost of ownership will increase, and consumers will be 
unable to service their own motorcycles; (5) reduction/elimination of 
competition from aftermarket and specialty shops (for major 
manufacturers); (6) elimination of aftermarket supplies and services; 
(7) consumers will be forced to purchase only manufacturer-offered 
products; and (8) the Barcia Act/H.R. 5433. A detailed summary of the 
comments that we received regarding the NPRM can be found in the Final 
Summary and Analysis of Comments located in the public docket for this 
rulemaking.
3. Numbers and Types of Small Entities Affected
    The following table provides an overview of the primary SBA small 
business categories potentially affected by this regulation.

   Table IX.C-1--Primary SBA SBA Small Business Categories Potentially
                  Affected by This Proposed Regulation
------------------------------------------------------------------------
                                                   Defined by SBA  as a
            Industry             NAICS\a\ codes  small  business If: \b\
------------------------------------------------------------------------
Motorcycle manufacturers.......          336991  <500 employees.
------------------------------------------------------------------------
Notes:
\a\ North American Industry Classification System.
\b\ According to SBA's regulations (13 CFR 121), businesses with no more
  than the listed number of employees or dollars in annual receipts are
  considered ``small entities'' for purposes of a regulatory flexibility
  analysis.

    Of the numerous manufacturers supplying the U.S. market for highway 
motorcycles, Honda, Harley Davidson, Yamaha, Kawasaki, Suzuki, and BMW 
are the largest, accounting for 95 percent or more of the total U.S. 
sales. Harley-Davidson is the only company manufacturing highway 
motorcycles exclusively in the U.S. for the U.S. market.
    Since highway motorcycles have had to meet emission standards for 
the last twenty years, we have good information on the number of 
companies that manufacture or market highway motorcycles for the U.S. 
market in each model year. In addition to the big six manufacturers 
noted above, we find as many as several dozen more companies that have 
operated in the U.S. market in the last couple of model years. Most of 
these are U.S. companies that are either manufacturing or importing 
motorcycles, although a few are U.S. affiliates of larger companies in 
Europe or Asia. Some of the U.S. manufacturers employ only a few people 
and produce only a handful of custom motorcycles per year, while others 
may employ several hundred and produce up to several thousand 
motorcycles per year.
4. Potential Reporting, Record Keeping, and Compliance
    For any emission control program, we must have assurances that the 
regulated engines will meet the standards. Historically, EPA programs 
have included provisions placing manufacturers responsible for 
providing these assurances. The program that we are adopting for 
manufacturers subject to this rule include testing, reporting, and 
record keeping requirements. Testing requirements for some 
manufacturers may include certification (including deterioration 
testing). Reporting requirements would likely include test data and 
technical data on the engines including defect reporting. Manufacturers 
would likely have to keep records of this information.
5. Steps Taken To Minimize the Impact on Small Entities
    The SBAR Panel considered a variety of provisions to reduce the 
burden of complying with new emission standards and related 
requirements. Some of these provisions (such as emission-credit 
programs and hardship provisions) would apply to all companies, while 
others would be targeted at the unique circumstances faced by small 
businesses. A complete discussion of the regulatory alternatives 
recommended by the Panel can be found in the Final Panel Report.
    The following Panel recommendations are being finalized in this 
rule:
i. Delay of Proposed Standards
    We are delaying compliance with the Tier 1 standard of 1.4 g/km 
HC+NOX until the 2008 model year for small manufacturers, 
and at this time, we are not requiring these manufacturers to meet the 
Tier 2 standard. The existing California regulations do not require 
small manufacturers to comply with the Tier 2 standard of 0.8 g/km 
HC+NOX. The California Air Resources Board found that the 
Tier 2 standard represents a significant technological challenge and is 
a potentially infeasible limit for these small manufacturers. As noted 
above, many of these manufacturers market specialty products with a 
``retro'' simplicity and style that may not easily lend itself to the 
addition of advanced technologies like catalysts and electronic fuel 
injection. However, the California ARB has acknowledged that, in the 
course of their progress review planned for 2006, they will revisit 
their small-manufacturer provisions. We plan to participate with the 
ARB and others in the 2006 progress review. Following our review of 
these provisions, as appropriate, we may decide to propose to make 
changes to the emission standards and related requirements through 
notice and comment rulemaking, including the applicability of Tier 2 to 
small businesses. The hardship provisions described below could be used 
to provide a small manufacturer with yet additional lead time if 
justified.
ii. Broader Engine Families
    Small businesses have met EPA certification requirements since 
1978. Nonetheless, certifying motorcycles to revised emission standards 
has cost and lead time implications. Relaxing the criteria for what 
constitutes an engine or vehicle family could potentially allow small 
businesses to put all of their models into one vehicle or engine family 
(or more) for certification purposes. Manufacturers would then certify 
their engines using the ``worst case'' configuration within the family.

[[Page 2433]]

This is currently allowed under the existing regulations for small-
volume highway motorcycle manufacturers. These provisions remain in 
place without revision.
iii. Averaging, Banking, and Trading
    An emission-credit program allows a manufacturer to produce and 
sell engines and vehicles that exceed the applicable emission 
standards, as long as the excess emissions are offset by the production 
of engines and vehicles emitting at levels below the standards. The 
sales-weighted average of a manufacturer's total production for a given 
model year must meet the standards. An emission-credit program 
typically also allows a manufacturer to bank credits for use in future 
model years. The emission-credit program we are implementing for all 
highway motorcycle manufacturers is described above. Some credit 
programs allow manufacturers to buy and sell credits (trade) between 
and among themselves. We are not implementing such a provision at this 
time, but such flexibility could be made available to all small 
manufacturers as part of the upcoming technology review.
iv. Reduced Certification Data Submittal and Testing Requirements
    Current regulations allow significant flexibility for certification 
by manufacturers projecting sales below 10,000 units of combined Class 
I, II, and III motorcycles. For example, a qualifying manufacturer must 
submit an application for certification with a statement that their 
vehicles have been tested and, on the basis of the tests, conform to 
the applicable emission standards. The manufacturer retains adequate 
emission test data, for example, but need not submit it. Qualifying 
manufacturers also need not complete the detailed durability testing 
required in the regulations. We are incorporating no changes to these 
existing provisions.
v. Hardship Provisions
    We proposed two types of hardship provisions, one specifically for 
small businesses and one available to all manufacturers. The first type 
of hardship provision allows a manufacturer to petition for additional 
lead time if the manufacturer can demonstrate that it has taken all 
possible steps to comply with the standards but the burden of 
compliance would have a significant impact on the company's solvency. 
The second type of hardship provision allows a company to apply for 
hardship relief if circumstances outside of the company's control cause 
a failure to comply, and the failure to sell the noncompliant product 
would have a major impact on the company's solvency.
6. Conclusion
    After considering the economic impacts of today's final rule on 
small entities, EPA has concluded that this action will not have a 
significant economic impact on a substantial number of small entities. 
We have conducted a substantial outreach program designed to gather 
information as to the effect of this final rulemaking on small 
entities. This process included an SBAR Panel, which sought advice and 
recommendations from potentially affected small entities regarding ways 
to minimize their compliance burden. We published both an ANPRM and an 
NPRM which requested comments from potentially affected entities, as 
well as other interested parties in the public at large. We have 
determined, from the information that we have gathered during the 
SBREFA process, that there are 42 manufacturers that certified 
motorcycles in the year 2003. Of these, 30 manufacturers are small by 
the SBREFA definition given above. However, certification emission data 
indicates that essentially all of these 30 manufacturers are currently 
meeting the Tier 1 exhaust emission standard. Given small costs of 
complying with the permeation evaporative emission requirements and the 
lead time and other flexibilities that are being finalized in this 
rulemaking, these manufacturers will not be significantly affected by 
the rule.
    Therefore, we have determined that this final rulemaking will not 
have a significant economic impact on a substantial number of small 
entities.

D. 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, EPA 
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 in any 
one year. Before promulgating an EPA rule for which a written statement 
is needed, section 205 of the UMRA generally requires EPA 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 EPA to adopt an alternative other than the least 
costly, most cost-effective, or least burdensome alternative if the 
Administrator publishes with the final rule an explanation of why that 
alternative was not adopted.
    Before EPA establishes any regulatory requirements that may 
significantly or uniquely affect small governments, including tribal 
governments, it must have developed under section 203 of the UMRA a 
small government agency plan. The plan must provide for notifying 
potentially affected small governments, enabling officials of affected 
small governments to have meaningful and timely input in the 
development of EPA regulatory proposals with significant Federal 
intergovernmental mandates, and 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 would 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. We believe that this 
final rule represents the least costly, most cost effective approach to 
achieve the air quality goals of the rule. The costs and benefits are 
discussed in Section VII and in the Final Regulatory Support Document.

E. Executive Order 13132: Federalism

    Executive Order 13132, entitled ``Federalism'' (64 FR 43255, August 
10, 1999), requires EPA 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, EPA may not issue a 
regulation that has federalism implications, that imposes substantial 
direct compliance

[[Page 2434]]

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 EPA consults with 
State and local officials early in the process of developing the 
proposed regulation. EPA 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, EPA 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.
    Although Section 6 of Executive Order 13132 does not apply to this 
rule, EPA did consult with representatives of various State and local 
governments in developing this rule. EPA has also consulted 
representatives from STAPPA/ALAPCO, which represents state and local 
air pollution officials.

F. Executive Order 13175: Consultation and Coordination With Indian 
Tribal Governments

    Executive Order 13175, entitled ``Consultation and Coordination 
with Indian Tribal Governments'' (65 FR 67249, November 6, 2000), 
requires EPA to develop an accountable process to ensure ``meaningful 
and timely input by tribal officials in the development of regulatory 
policies that have tribal implications.'' ``Policies that have tribal 
implications'' is defined in the Executive Order to include regulations 
that have ``substantial direct effects on one or more Indian tribes, on 
the relationship between the Federal government and the Indian tribes, 
or on the distribution of power and responsibilities between the 
Federal government and Indian tribes.''
    This final rule does not have tribal implications. It will not have 
substantial direct effects on tribal governments, on the relationship 
between the Federal government and Indian tribes, or on the 
distribution of power and responsibilities between the Federal 
government and Indian tribes, as specified in Executive Order 13175. 
This rule contains no Federal mandates for tribal governments. Thus, 
Executive Order 13175 does not apply to this rule.

G. Executive Order 13045: Protection of Children From Environmental 
Health and Safety Risks

    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 EPA has reason to believe may 
have a disproportionate effect on children. If the regulatory action 
meets both criteria, section 5-501 of the Order directs the Agency 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 the Agency.
    This final rule is not subject to the Executive Order because it 
does not involve decisions on environmental health or safety risks that 
may disproportionately affect children.
    The effects of ozone and PM on children's health were addressed in 
detail in EPA's rulemaking to establish the NAAQS for these pollutants, 
and EPA is not revisiting those issues here. EPA believes, however, 
that the emission reductions from the strategies proposed in this 
rulemaking will further reduce air toxics and the related adverse 
impacts on children's health.

H. Executive Order 13211: Actions That Significantly Affect Energy 
Supply, Distribution, or Use

    This rule is not a ``significant energy action'' as defined in 
Executive Order 13211, ``Actions Concerning Regulations That 
Significantly Affect Energy Supply, Distribution, or Use'' (66 FR 28355 
(May 22, 2001)) because it is not likely to have a significant adverse 
effect on the supply, distribution or use of energy. The standards have 
for their aim the reduction of emissions from highway motorcycles, and 
have no effect on fuel formulation, distribution, or use. Generally, 
the program leads to reduced fuel usage due to the reduction of wasted 
fuel through evaporation.

I. National Technology Transfer and Advancement Act

    Section 12(d) of the National Technology Transfer and Advancement 
Act of 1995 (``NTTAA''), Public Law 104-113, section 12(d) (15 U.S.C. 
272 note) directs EPA to use voluntary consensus standards in its 
regulatory activities unless doing so 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) that are developed or 
adopted by voluntary consensus standards bodies. NTTAA directs EPA to 
provide Congress, through OMB, explanations when the Agency decides not 
to use available and applicable voluntary consensus standards.
    This final rule involves technical standards. The following 
paragraphs describe how we specify testing procedures for engines 
subject to this proposal.
    We are adopting provisions to test exhaust emissions from highway 
motorcycles with the Federal Test Procedure, a chassis-based transient 
test. There is no voluntary consensus standard that would adequately 
address engine or vehicle operation for suitable emission measurement.
    For permeation emissions, we are adopting testing provisions which 
utilize consensus standards where applicable. For fuel hose testing we 
are adopting the hose permeation standard developed by the Society of 
Automotive Engineers. There is no voluntary consensus standard for 
testing permeation emissions from fuel tanks. Therefore, we are 
adopting provisions to use the permeation emission test procedures 
recently adopted for nonroad recreational vehicles.

J. 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. EPA will submit a report containing this rule and other

[[Page 2435]]

required information to the U.S. Senate, the U.S. House of 
Representatives, and the Comptroller General of the United States 
before the rule is published in the Federal Register. This rule is not 
a ``major rule'' as defined by 5 U.S.C. 804(2).

K. Plain Language

    This document follows the guidelines of the June 1, 1998 Executive 
Memorandum on Plain Language in Government Writing. To read the text of 
the regulations, it is also important to understand the organization of 
the Code of Federal Regulations (CFR). The CFR uses the following 
organizational names and conventions.
    Title 40--Protection of the Environment
    Chapter I--Environmental Protection Agency
    Subchapter C--Air Programs. This contains parts 50 to 99, where the 
Office of Air and Radiation has usually placed emission standards for 
motor vehicle and nonroad engines.
    Subchapter U--Air Programs Supplement. This contains parts 1000 to 
1299, where we intend to place regulations for air programs in future 
rulemakings.
    Part 1045--Control of Emissions from Marine Spark-ignition Engines 
and Vessels
    Part 1068--General Compliance Provisions for Engine Programs. 
Provisions of this part apply to everyone.
    Each part in the CFR has several subparts, sections, and 
paragraphs. The following illustration shows how these fit together.

Part 1045
Subpart A
     Section 1045.1
     (a)
     (b)
     (1)
     (2)
     (i)
     (ii)
     (A)
     (B)

    A cross reference to Sec.  1045.1(b) in this illustration would 
refer to the parent paragraph (b) and all its subordinate paragraphs. A 
reference to ``Sec.  1045.1(b) introductory text'' would refer only to 
the single, parent paragraph (b).

List of Subjects

40 CFR Part 9

    Reporting and recordkeeping requirements.

40 CFR Part 86

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

40 CFR Part 90

    Administrative practice and procedure, Air pollution control, 
Confidential business information, Imports, Labeling, Reporting and 
recordkeeping requirements, Research, Warranties.

40 CFR Part 1051

    Environmental protection, Administrative practice and procedure, 
Air pollution control, Confidential business information, Imports, 
Labeling, Penalties, Reporting and recordkeeping requirements, 
Warranties.

    Dated: December 23, 2003.
Michael O. Leavitt,
Administrator.


0
For the reasons set out in the preamble, title 40, chapter I of the 
Code of Federal Regulations is amended as set forth below.

PART 9--[AMENDED]

0
1. The authority citation for part 9 continues to read as follows:

    Authority: 7 U.S.C. 135 et seq., 136-136y; 15 U.S.C. 2001, 2003, 
2005, 2006, 2601-2671; 21 U.S.C. 331j, 346a, 348; 31 U.S.C. 9701; 33 
U.S.C. 1251 et seq., 1311, 1313d, 1314, 1318 1321, 1326, 1330, 1342 
1344, 1345 (d) and (e), 1361; E.O. 11735, 38 FR 21243, 3 CFR, 1971-
1975 Comp. p. 973; 42 U.S.C. 241, 242b, 243, 246, 300f, 300g, 300g-
1, 300g-2, 300g-3, 300g-4, 300g-5, 300g-6, 300j-1, 300j-2, 300j-3, 
300j-4, 300j-9, 1857 et seq., 6901-6992k, 7401-7671q, 7542, 9601-
9657, 11023, 11048.


0
2. Section 9.1 is amended in the table by adding the entries under the 
existing center heading in numerical order to read as follows:


Sec.  9.1  OMB approvals under the Paperwork Reduction Act.

* * * * *

------------------------------------------------------------------------
                                                            OMB  control
                      40 CFR citation                            no.
------------------------------------------------------------------------
 
                                * * * * *
------------------------------------------------------------------------
 Control of Air Pollution From New and In-Use Motor Vehicles and New and
     In-Use Motor Vehicle Engines; Certification and Test Procedures
------------------------------------------------------------------------
 
                                * * * * *
86.446-2006...............................................     2060-0460
86.447-2006...............................................     2060-0460
86.448-2006...............................................     2060-0460
86.449-2006...............................................     2060-0460
 
                                * * * * *
------------------------------------------------------------------------

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

0
3. The authority citation for part 86 continues to read as follows:

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

Subpart E--[Amended]

0
4. A new Sec.  86.401-2006 is added to read as follows:


Sec.  86.401-2006  General applicability.

    This subpart applies to 1978 and later model year, new, gasoline-
fueled motorcycles built after December 31, 1977, and to 1990 and later 
model year, new methanol-fueled motorcycles built after December 31, 
1989 and to 1997 and later model year, new natural gas-fueled and 
liquefied petroleum gas-fueled motorcycles built after December 31, 
1996 and to 2006 and later model year new motorcycles, regardless of 
fuel.

0
5. Section 86.402-98 is amended by adding definitions for ``Designated 
Compliance Officer'', ``Motor vehicle'', and ``Useful life'' in 
alphabetical order to read as follows:


Sec.  86.402-98  Definitions.

* * * * *
    Designated Compliance Officer means the Manager, Engine Programs 
Group (6405-J), U.S. Environmental Protection Agency, 1200 Pennsylvania 
Ave., Washington, DC 20460.
* * * * *
    Motor vehicle has the meaning we give in 40 CFR 85.1703.
* * * * *
    Useful life is defined for each class (see Sec.  86.419) of 
motorcycle:
    (1) Class I-A--5.0 years or 6,000 km (3,728 miles), whichever 
occurs first.
    (2) Class I-B--5.0 years or 12,000 km (7,456 miles), whichever 
occurs first.
    (3) Class II--5.0 years or 18,000 km (11,185 miles), whichever 
occurs first.
    (4) Class III--5.0 years or 30,000 km (18,641 miles), whichever 
occurs first.

0
6. Section 86.407-78 is revised to read as follows:


Sec.  86.407-78  Certificate of conformity required.

    (a) General requirement. Every new motorcycle manufactured for 
sale, sold, offered for sale, introduced or delivered for introduction 
into commerce, or imported into the United States which is subject to 
any of the standards prescribed in this subpart is required to be 
covered by a certificate of conformity issued pursuant to this subpart, 
except as specified in paragraph (b) of this section, or otherwise 
exempted from this requirement.

[[Page 2436]]

    (b) Interim personal use exemption. An individual may manufacture 
one motorcycle for personal use without a certificate of conformity, 
subject to the following provisions:
    (1) The motorcycle may not be manufactured from a certified 
motorcycle. The motorcycle may not be manufactured from a partially 
complete motorcycle that is equivalent to a certified motorcycle, 
unless the emission controls are included in the final product. The 
motorcycle must be manufactured primarily from unassembled components, 
but may incorporate some preassembled components. For example, fully 
preassembled transmissions may be used.
    (2) The motorcycle may not be sold within five years of the date of 
final assembly.
    (3) No individual may manufacture more than one motorcycle during 
his or her lifetime under this exemption. This restriction applies with 
respect to the person who purchases the components and/or uses the 
motorcycle, rather than to the person(s) who actually assemble(s) the 
motorcycle.
    (4) This exemption may not be used to circumvent the requirements 
of paragraph (a) of this section or the requirements of the Clean Air 
Act. For example, this exemption would not cover a case in which an 
entity purchases a kit, assembles the kit, and then sells it to another 
party; this would be considered to be the sale of the complete 
motorcycle.
    (c) Interim display exemptions. Uncertified custom motorcycles that 
are used solely for display purposes are exempt from the standards 
provided they conform to the requirements of this paragraph (c). Unless 
a certificate of conformity has been received for such motorcycles, 
they may not be operated on the public streets or highways except for 
that operation incident and necessary to the display purpose.
    (1) No request is necessary for display motorcycles that will not 
be sold or leased.
    (2) The following requirements apply for exempting display 
motorcycles that will be sold or leased:
    (i) Manufacturers planning to sell motorcycles for display must 
notify EPA of their intent to do so before they sell any exempted 
motorcycles. They must also maintain sales records of exempted 
motorcycles for at least three years and make them available to EPA 
upon request.
    (ii) No manufacturer may sell or lease more than 24 exempted 
display motorcycles in any single calendar year.
    (iii) Anyone selling or leasing a motorcycle exempt under this 
paragraph (c) must ensure that the buyer or lessee agrees to comply 
with the display exemption terms in the regulations.
    (3) Each motorcycle exempt under this paragraph (c) must include a 
label that identifies the manufacturer and includes the following 
statement: THIS MOTORCYCLE IS EXEMPT FROM EPA EMISSION REQUIREMENTS. 
ITS USE ON PUBLIC ROADS IS LIMITED PURSUANT TO 40 CFR 86.407-78(c). EPA 
may allow manufacturers to locate the label in a location where it is 
obscured or hidden by a readily removable component. For example, EPA 
may allow the label to be located under the seat.
    (4) As described in 40 CFR part 1051, motorcycles that are not 
considered to be motor vehicles according to 40 CFR 85.1703(a) may be 
exempt under this paragraph (c) from the standards and requirements of 
40 CFR part 1051. Such motorcycles shall be combined with the 
manufacturer's highway motorcycles with respect to the sales 
restriction described in paragraph (c)(2)(ii) of this section.
    (5) This exemption may not be used to circumvent the requirements 
of paragraph (a) of this section or the requirements of the Clean Air 
Act.

0
7. A new Sec.  86.410-2006 is added to read as follows:


Sec.  86.410-2006  Emission standards for 2006 and later model year 
motorcycles.

    (a)(1) Exhaust emissions from Class I and Class II motorcycles 
shall not exceed the standards listed in the following table:

      Table E2006-1.--Class I and II Motorcycle Emission Standards
------------------------------------------------------------------------
                                              Emission standards  (g/km)
                 Model year                  ---------------------------
                                                   HC            CO
------------------------------------------------------------------------
2006 and later..............................          1.0          12.0
------------------------------------------------------------------------

    (2) Exhaust emissions from Class III motorcycles shall not exceed 
the standards listed in the following table:

         Table E2006-2.--Class III Motorcycle Emission Standards
------------------------------------------------------------------------
                                                      Emission standards
                                                             (g/km)
          Tier                    Model year         -------------------
                                                       HC + NOX     CO
------------------------------------------------------------------------
Tier 1.................  2006-2009..................         1.4    12.0
Tier 2.................  2010 and later.............         0.8    12.0
------------------------------------------------------------------------

    (b) The standards set forth in paragraphs (a) (1) and (2) of this 
section refer to the exhaust emitted over the driving schedule as set 
forth in subpart F and measured and calculated in accordance with those 
procedures.
    (c) Compliance with the HC+NOX standards set forth in 
paragraph (a)(2) of this section may be demonstrated using the 
averaging provisions of Sec.  86.449.
    (d) No crankcase emissions shall be discharged into the ambient 
atmosphere from any new motorcycle subject to this subpart.
    (e) Manufacturers with fewer than 500 employees worldwide and 
producing fewer than 3,000 motorcycles per year in the United States 
are considered small-volume manufacturers for the purposes of this 
section. The following provisions apply for these small-volume 
manufacturers:
    (1) Small-volume manufacturers are not required to comply with the 
Tier 1 standards applicable to Class III motorcycles until model year 
2008.
    (2) Small-volume manufacturers are not required to comply with the 
Tier 2 standards applicable to Class III motorcycles.
    (f) Manufacturers may choose to certify their Class I and Class II 
motorcycles to an HC + NOX standard of 1.4 g/km instead of 
the 1.0 g/km HC standard listed in paragraph (a)(1) of this section. 
Engine families certified to this standard may demonstrate compliance 
using the averaging provisions of Sec.  86.449.
    (g) Model year 2008 and later motorcycles must comply with the 
evaporative emission standards described in 40 CFR 1051.110. 
Manufacturers may show compliance using the design-based certification 
procedures described in 40 CFR 1051.245. Manufacturers may comply with 
the tank permeation standards using the averaging provisions in 40 CFR 
part 1051, subpart H, but may not include any motorcycles equipped with 
metal fuel tanks in their average emission level. Manufacturers may not 
average between highway motorcycle engine families and recreational 
vehicle families.

0
8. Section 86.416-80 is amended by revising the introductory text of 
paragraph (b) and adding paragraphs (a)(2)(viii) and (f) to read as 
follows:


Sec.  86.416-80  Application for certification.

    (a) * * *
    (2) * * *
    (viii) Beginning with model year 2008, a description of the 
evaporative emission controls and applicable test data.
* * * * *

[[Page 2437]]

    (b) New motorcycles produced by a small-volume manufacturer (as 
defined in Sec.  86.410(e)) or by any other manufacturer whose 
projected sales in the United States is less than 10,000 units (for the 
model year in which certification is sought) are covered by the 
following:
* * * * *
    (f) Upon request, the Administrator may allow a manufacturer to use 
alternate certification procedures that are equivalent in terms of 
demonstrating compliance with the requirements of this part.

0
9. A new Sec.  86.419-2006 is added to read as follows:


Sec.  86.419-2006  Engine displacement, motorcycle classes.

    (a)(1) Engine displacement shall be calculated using nominal engine 
values and rounded to the nearest whole cubic centimeter, in accordance 
with ASTM E 29-93a (incorporated by reference in Sec.  86.1).
    (2) For rotary engines, displacement means the maximum volume of a 
combustion chamber between two rotor tip seals, minus the minimum 
volume of the combustion chamber between those two rotor tip seals, 
times three times the number of rotors, according to the following 
formula:

cc = (max. chamber volume - min. chamber volume) x 3 x no. of rotors

    (b) Motorcycles will be divided into classes based on engine 
displacement.
    (1) Class I--0 to 169 cc (0 to 10.4 cu. in.).
    (i) Class I motorcycles with engine displacement less than 50 cc 
comprise the Class I-A subclass.
    (ii) Class I motorcycles with engine displacement 50 cc or higher 
comprise the Class I-B subclass.
    (2) Class II--170 to 279 cc (10.4 to 17.1 cu. in.).
    (3) Class III--280 cc and over (17.1 cu. in. and over).
    (c) At the manufacturer's option, a vehicle described in an 
application for certification may be placed in a higher class (larger 
displacement). All procedures for the higher class must then be 
complied with and compliance with emission standards will be determined 
on the basis of engine displacement.

0
10. A new Sec.  86.445-2006 is added to subpart E to read as follows:


Sec.  86.445-2006  What temporary provisions address hardship due to 
unusual circumstances?

    (a) After considering the circumstances, the Director of the Office 
of Transportation and Air Quality may permit you to introduce into 
commerce highway motorcycles that do not comply with emission standards 
if all the following conditions and requirements apply:
    (1) Unusual circumstances that are clearly outside your control and 
that could not have been avoided with reasonable discretion prevent you 
from meeting requirements from this chapter.
    (2) You exercised prudent planning and were not able to avoid the 
violation; you have taken all reasonable steps to minimize the extent 
of the nonconformity.
    (3) Not having the exemption will jeopardize the solvency of your 
company.
    (4) No other allowances are available under the regulations of this 
part to avoid the impending violation, excluding those in Sec.  86.446.
    (b) To apply for an exemption, you must send the Designated 
Compliance Officer a written request as soon as possible before you are 
in violation. In your request, show that you meet all the conditions 
and requirements in paragraph (a) of this section.
    (c) Include in your request a plan showing how you will meet all 
the applicable requirements as quickly as possible.
    (d) You must give us other relevant information if we ask for it.
    (e) We may include reasonable additional conditions on an approval 
granted under this section, including provisions to recover or 
otherwise address the lost environmental benefit or paying fees to 
offset any economic gain resulting from the exemption. For example, in 
the case of multiple tiers of emission standards, we may require that 
you meet the less stringent standards.
    (f) Add a permanent, legible label, written in block letters in 
English, to a readily visible part of each motorcycle exempted under 
this section. This label must include at least the following items:
    (1) The label heading ``EMISSION CONTROL INFORMATION''.
    (2) Your corporate name and trademark.
    (3) Engine displacement (in liters) and model year of the engine or 
whom to contact for further information.
    (4) The statement ``THIS MOTORCYCLE IS EXEMPT UNDER 40 CFR 86.445-
2006 FROM EMISSION STANDARDS AND RELATED REQUIREMENTS.''.

0
11. A new Sec.  86.446-2006 is added to subpart E to read as follows:


Sec.  86.446-2006  What are the provisions for extending compliance 
deadlines for small-volume manufacturers under hardship?

    (a) After considering the circumstances, the Director of the Office 
of Transportation and Air Quality may extend the compliance deadline 
for you to meet new or revised emission standards, as long as you meet 
all the conditions and requirements in this section.
    (b) To be eligible for this exemption, you must qualify as a small-
volume manufacturer under Sec.  86.410-2006(e).
    (c) To apply for an extension, you must send the Designated 
Compliance Officer a written request. In your request, show that all 
the following conditions and requirements apply:
    (1) You have taken all possible business, technical, and economic 
steps to comply.
    (i) In the case of importers, show that you attempted to find a 
manufacturer capable of supplying complying products as soon as you 
became aware of the applicable requirements, but were unable to do so.
    (ii) For all other manufacturers, show that the burden of 
compliance costs prevents you from meeting the requirements of this 
chapter.
    (2) Not having the exemption will jeopardize the solvency of your 
company.
    (3) No other allowances are available under the regulations in this 
part to avoid the impending violation, excluding those in Sec.  86.445.
    (d) In describing the steps you have taken to comply under 
paragraph (c)(1) of this section, include at least the following 
information:
    (1) Describe your business plan, showing the range of projects 
active or under consideration.
    (2) Describe your current and projected financial standing, with 
and without the burden of complying fully with the regulations in this 
part.
    (3) Describe your efforts to raise capital to comply with 
regulations in this part (this may not apply for importers).
    (4) Identify the engineering and technical steps you have taken or 
plan to take to comply with the regulations in this part.
    (5) Identify the level of compliance you can achieve. For example, 
you may be able to produce engines that meet a somewhat less stringent 
emission standard than the regulations require.
    (e) Include in your request a plan showing how you will meet all 
the applicable requirements as quickly as possible.
    (f) You must give us other relevant information if we ask for it.

[[Page 2438]]

    (g) An authorized representative of your company must sign the 
request and include the statement: ``All the information in this 
request is true and accurate, to the best of my knowledge.''
    (h) Send your request for this extension at least nine months 
before new standards apply. Do not send your request before the 
regulations in question apply to other manufacturers.
    (i) We may include reasonable requirements on an approval granted 
under this section, including provisions to recover or otherwise 
address the lost environmental benefit. For example, we may require 
that you meet a less stringent emission standard or buy and use 
available emission credits.
    (j) We will approve extensions of up to one year. We may review and 
revise an extension as reasonable under the circumstances.
    (k) Add a permanent, legible label, written in block letters in 
English, to a readily visible part of each motorcycle exempted under 
this section. This label must include at least the following items:
    (1) The label heading ``EMISSION CONTROL INFORMATION''.
    (2) Your corporate name and trademark.
    (3) Engine displacement (in liters) and model year of the 
motorcycle or whom to contact for further information.
    (4) The statement ``THIS MOTORCYCLE IS EXEMPT UNDER 40 CFR 86.446 
FROM EMISSION STANDARDS AND RELATED REQUIREMENTS.''.

0
12. A new Sec.  86.447-2006 is added to subpart E to read as follows:


Sec.  86.447-2006  What are the provisions for exempting motorcycles 
under 50 cc from the requirements of this part if they use engines 
certified under other programs?

    (a) This section applies to you if you manufacture engines under 50 
cc for installation in a highway motorcycle (that is, a motorcycle that 
is a motor vehicle). See Sec.  86.448-2006 if you are not the engine 
manufacturer.
    (b) The only requirements or prohibitions from this part that apply 
to a motorcycle that is exempt under this section are in this section 
and Sec.  86.448-2006.
    (c) If you meet all the following criteria regarding your new 
engine, it is exempt under this section:
    (1) You must produce it under a valid certificate of conformity for 
one of the following types of engines or vehicles:
    (i) Class II engines under 40 CFR part 90.
    (ii) Recreational vehicles under 40 CFR part 1051.
    (2) You must not make any changes to the certified engine that we 
could reasonably expect to increase its exhaust emissions. For example, 
if you make any of the following changes to one of these engines, you 
do not qualify for this exemption:
    (i) Change any fuel system parameters from the certified 
configuration.
    (ii) Change any other emission-related components.
    (iii) Modify or design the engine cooling system so that 
temperatures or heat rejection rates are outside the original engine's 
specified ranges.
    (3) You must make sure the engine has the emission label we require 
under 40 CFR part 90 or part 1051.
    (4) You must make sure that fewer than 50 percent of the engine 
model's total sales, from all companies, are used in highway 
motorcycles.
    (d) If you produce only the engine, give motorcycle manufacturers 
any necessary instructions regarding what they may or may not change 
under paragraph (c)(2) of this section. Upon request, send EPA a list 
the motorcycle models you expect to be produced under this exemption in 
the model year (including motorcycles produced under Sec.  86.448-
2006), and the manufacturers of those motorcycles.
    (e) If you produce both the engine and motorcycle under this 
exemption, you must do all of the following to keep the exemption 
valid:
    (1) Make sure the original emission label is intact.
    (2) Add a permanent supplemental label to the engine in a position 
where it will remain clearly visible after installation in the vehicle. 
In your engine's emission label, do the following:
    (i) Include the heading: ``Highway Motorcycle Emission Control 
Information''.
    (ii) Include your full corporate name and trademark.
    (iii) State: ``THIS ENGINE WAS ADAPTED FOR HIGHWAY USE WITHOUT 
AFFECTING ITS EMISSION CONTROLS.''.
    (iv) State the date you finished installation (month and year).
    (3) Send the Designated Compliance Officer a signed letter by the 
end of each calendar year (or less often if we tell you) with all the 
following information:
    (i) Identify your full corporate name, address, and telephone 
number.
    (ii) List the motorcycle models you expect to produce under this 
exemption in the coming year.
    (iii) State: ``We produce each listed model as a highway motorcycle 
without making any changes that could increase its certified emission 
levels, as described in 40 CFR 86.447.''.
    (f) If your vehicles do not meet the criteria listed in paragraph 
(c) of this section, they will be subject to the standards and 
prohibitions of this part. Producing these vehicles without a valid 
exemption or certificate of conformity would violate the prohibitions 
in Clean Air Act section 203 (42 U.S.C. 7522).
    (g) Upon request, you must send to EPA emission test data on the 
duty cycle for Class I motorcycles. You may include the data in your 
application for certification or in your letter requesting the 
exemption.
    (h) Vehicles exempted under this section are subject to all the 
requirements affecting engines and vehicles under 40 CFR part 90 or 
part 1051, as applicable. The requirements and restrictions of 40 CFR 
part 90 or 1051 apply to anyone manufacturing these engines, anyone 
manufacturing vehicles that use these engines, and all other persons in 
the same manner as if these engines were used in a nonroad application.

0
13. A new Sec.  86.448-2006 is added to subpart E to read as follows:


Sec.  86.448-2006  What are the provisions for producing motorcycles 
under 50 cc with engines already certified under other programs?

    (a) You may produce a highway motorcycle (that is, a motorcycle 
that is a motor vehicle) under 50 cc using a nonroad engine if you meet 
four criteria:
    (1) The engine or vehicle is certified to 40 CFR part 90 or part 
1051.
    (2) The engine is not adjusted outside the engine manufacturer's 
specifications, as described in Sec.  86.447-2006(c)(2) and (d).
    (3) The engine or vehicle is not modified in any way that may 
affect its emission control.
    (4) Fewer than 50 percent of the engine model's total sales, from 
all companies, are used in highway motorcycles.
    (b) If you produce a motorcycle under this exemption, you must do 
all of the following to keep the exemption valid:
    (1) Make sure the original emission label is intact.
    (2) Add a permanent supplemental label to the motorcycle in a 
position where it will remain clearly visible.
    (i) Include the heading: ``Highway Motorcycle Emission Control 
Information''.
    (ii) Include your full corporate name and trademark.
    (iii) State: ``THIS MOTORCYCLE WAS PRODUCED WITH A NONROAD ENGINE 
FOR HIGHWAY USE WITHOUT AFFECTING THE ENGINE'S EMISSION CONTROLS.''.
    (c) This section does not apply if you manufacture the engine 
yourself; see Sec.  86.447-2006.

[[Page 2439]]

    (d) Upon request, you must send to EPA emission test data on the 
duty cycle for Class I motorcycles.
    (e) Vehicles exempted under this section are subject to all the 
requirements affecting engines and vehicles under 40 CFR part 90 or 
part 1051, as applicable. The requirements and restrictions of 40 CFR 
part 90 or 1051 apply to anyone manufacturing these engines, anyone 
manufacturing vehicles that use these engines, and all other persons in 
the same manner as if these engines were used in a nonroad application.

0
14. A new Sec.  86.449 is added to subpart E to read as follows:


Sec.  86.449  Averaging provisions.

    (a) This section describes how and when averaging may be used to 
show compliance with applicable HC+NOX emission standards. 
Emission credits may not be banked for use in later model years, except 
as specified in paragraph (j) of this section.
    (1) Compliance with the Class I and Class II HC+NOX 
standards set forth in Sec.  86.410-2006 (f) may be demonstrated using 
the averaging provisions of this section. To do this you must show that 
your average emission levels are at or below the applicable standards 
in Sec.  86.410-2006.
    (2) Compliance with the Class III HC+NOX standards set 
forth in Sec.  86.410-2006 (a)(2) may be demonstrated using the 
averaging provisions of this section. To do this you must show that 
your average emission levels are at or below the applicable standards 
in Sec.  86.410-2006.
    (3) Family emission limits (FELs) may not exceed the following 
caps:

----------------------------------------------------------------------------------------------------------------
                                                                                                     FEL cap  (g/
                                                                                                         km)
                  Class                                Tier                      Model year         ------------
                                                                                                        HC+NOX
----------------------------------------------------------------------------------------------------------------
Class I or II............................  Tier 1.....................  2006 and later.............          5.0
Class III................................  Tier 1.....................  2006-2009..................          5.0
                                           Tier 2.....................  2010 and later.............          2.5
----------------------------------------------------------------------------------------------------------------

    (b) Do not include any exported vehicles in the certification 
averaging program. Include only motorcycles certified under this 
subpart and intended for sale in the United States.
    (c) To use the averaging program, do the following things:
    (1) Certify each vehicle to a family emission limit.
    (2) Calculate a preliminary average emission level according to 
paragraph (d) of this section using projected production volumes for 
your application for certification.
    (3) After the end of your model year, calculate a final average 
emission level according to paragraph (d) of this section for each 
averaging set for which you manufacture or import motorcycles.
    (d) Calculate your average emission level for each averaging set 
for each model year according to the following equation and round it to 
the nearest tenth of a g/km. Use consistent units throughout the 
calculation. The averaging sets are defined in paragraph (k) of this 
section.
    (1) Calculate the average emission level as:
    [GRAPHIC] [TIFF OMITTED] TR15JA04.000
    
Where:

FELi = The FEL to which the engine family is certified.
ULi = The useful life of the engine family.

Productioni = The number of vehicles in the engine family.

    (2) Use production projections for initial certification, and 
actual production volumes to determine compliance at the end of the 
model year.
    (e)(1) Maintain and keep five types of properly organized and 
indexed records for each group and for each emission family:
    (i) Model year and EPA emission family.
    (ii) FEL.
    (iii) Useful life.
    (iv) Projected production volume for the model year.
    (v) Actual production volume for the model year.
    (2) Keep paper records of this information for three years from the 
due date for the end-of-year report. You may use any additional storage 
formats or media if you like.
    (3) Follow paragraphs (f) through (i) of this section to send us 
the information you must keep.
    (4) We may ask you to keep or send other information necessary to 
implement this subpart.
    (f) Include the following information in your application for 
certification:
    (1) A statement that, to the best of your belief, you will not have 
a negative credit balance for any motorcycle when all credits are 
calculated. This means that if you believe that your average emission 
level will be above the standard (i.e., that you will have a deficit 
for the model year), you must have banked credits pursuant to paragraph 
(j) of this section to offset the deficit.
    (2) Detailed calculations of projected emission credits (zero, 
positive, or negative) based on production projections. If you project 
a credit deficit, state the source of credits needed to offset the 
credit deficit.
    (g) At the end of each model year, send an end-of-year report.
    (1) Make sure your report includes the following things:
    (i) Calculate in detail your average emission level and any 
emission credits based on actual production volumes.
    (ii) If your average emission level is above the allowable average 
standard, state the source of credits needed to offset the credit 
deficit.
    (2) Base your production volumes on the point of first retail sale. 
This point is called the final product-purchase location.
    (3) Send end-of-year reports to the Designated Compliance Officer 
within 120 days of the end of the model year. If you send reports 
later, EPA may void your certificate ab initio.
    (4) If you generate credits for banking pursuant to paragraph (j) 
of this section and you do not send your end-of-year reports within 120 
days after the end of the model year, you may not use the

[[Page 2440]]

credits until we receive and review your reports. You may not use 
projected credits pending our review.
    (5) You may correct errors discovered in your end-of-year report, 
including errors in calculating credits according to the following 
table:

------------------------------------------------------------------------
          If . . .                And if . . .          Then we . . .
------------------------------------------------------------------------
(i) Our review discovers an   The discovery occurs  Restore the credits
 error in your end-of-year     within 180 days of    for your use.
 report that increases your    receipt.
 credit balance.
(ii) You discover an error    The discovery occurs  Restore the credits
 in your report that           within 180 days of    for your use.
 increases your credit         receipt.
 balance.
(iii) We or you discover an   The discovery occurs  Do not restore the
 error in your report that     more than 180 days    credits for your
 increases your credit         after receipt.        use.
 balance.
(iv) We discover an error in  At any time after     Reduce your credit
 your report that reduces      receipt.              balance.
 your credit balance.
------------------------------------------------------------------------

    (h) Include in each report a statement certifying the accuracy and 
authenticity of its contents.
    (i) We may void a certificate of conformity for any emission family 
if you do not keep the records this section requires or give us the 
information when we ask for it.
    (j) You may include Class III motorcycles that you certify with 
HC+NOX emissions below 0.8 g/km in the following optional 
early banking program:
    (1) To include a Class III motorcycle in the early banking program, 
assign it an emission rate of 0.8 g/km when calculating your average 
emission level for compliance with the Tier 1 standards.
    (2)(i) Calculate bankable credits from the following equation:

Bonus credit = Y x [(0.8 g/km - Certified emission level)] x 
[(Production volume of engine family) x (Useful life)]
    (ii) The value of Y is defined by the model year and emission 
level, as shown in the following table:

----------------------------------------------------------------------------------------------------------------
                                                         Multiplier (Y) for use in MY 2010 or later corporate
                                                                               averaging
                                                     -----------------------------------------------------------
                     Model year                        If your certified emission
                                                      level is less than 0.8 g/km,   If your certified emission
                                                       but greater than 0.4 g/km,   level is less than 0.4 g/km,
                                                             then Y = . . .                then Y = . . .
----------------------------------------------------------------------------------------------------------------
2003 through 2006...................................                         1.500                         3.000
2007................................................                         1.375                         2.500
2008................................................                         1.250                         2.000
2009................................................                         1.125                         1.500
----------------------------------------------------------------------------------------------------------------

    (3) Credits banked under this paragraph (j) may be use for 
compliance with any 2010 or later model year standards as follows:
    (i) If your average emission level is above the average standard, 
calculate your credit deficit according to the following equation, 
rounding to the nearest tenth of a gram:

Deficit = (Emission Level - Average Standard) x (Total Annual 
Production) x (Useful Life)
    (ii) Credit deficits may be offset using banked credits.
    (k) Credits may not be exchanged across averaging sets except as 
explicitly allowed by this paragraph (k).
    (1) There are two averaging sets:
    (i) Class I and Class II motorcycles certified to HC+NOX 
standards.
    (ii) Class III motorcycles.
    (2) Where a manufacturer's average HC+NOX emission level 
for Class III motorcycles (as calculated under paragraph (d)(1) of this 
section) is below the applicable standard, the manufacturer may 
generate credits that may be used show compliance with 
HC+NOX standards for Class I and Class II motorcycles during 
the same model year. Use the following equations to calculate credits 
and credit deficits for each class or subclass:

Credit = (Average Standard - Emission Level) x (Total Annual 
Production) x (Useful Life)

Deficit = (Emission Level - Average Standard) x (Total Annual 
Production) x (Useful Life)
    (l) Manufacturers participating in the averaging program of this 
section may modify FELs during the model year as specified in this 
paragraph (l).
    (1) Upon notifying EPA, manufacturers may raise the FEL for an 
engine family and begin labeling motorcycles with the new FEL.
    (2) Manufacturers may ask to lower FELs based on test data of 
production vehicles showing that the motorcycles in the engine family 
have emissions below the new FEL. Manufacturers must test the 
motorcycles according to 40 CFR part 1051, subpart D. Manufacturers may 
not begin labeling motorcycles with the new FEL until they have 
received EPA approval to do so.
    (3) Manufacturers may not change the FEL of any motorcycle that has 
been placed into service or that is no longer in their possession.

Subpart F--[Amended]

0
15.A new Sec.  86.505-2004 is added to read as follows:


Sec.  86.505-2004  Introduction; structure of subpart.

    (a) This subpart describes the equipment required and the 
procedures to follow in order to perform exhaust emission tests on 
motorcycles. Subpart E sets forth the testing requirements and test 
intervals necessary to comply with EPA certification procedures. 
Alternate equipment, procedures, and calculation methods may be used if 
shown to yield equivalent or superior results, and if approved in 
advance by the Administrator.
    (b) Three topics are addressed in this subpart. Sections 86.508 
through 86.515 set forth specifications and equipment requirements; 
Sec. Sec.  86.516 through 86.526 discuss calibration methods and 
frequency; test procedures and data requirements are listed (in 
approximate order of performance) in Sec. Sec.  86.527 through 86.544.

[[Page 2441]]

    (c) For diesel-fueled motorcycles, use the sampling and analytical 
procedures and the test fuel described in subpart B of this part for 
diesel-fueled light-duty vehicles. PM measurement is not required.

0
16.A new Sec.  86.513-2004 is added to read as follows:


Sec.  86.513-2004  Fuel and engine lubricant specifications.

    Section 86.513-2004 includes text that specifies requirements that 
differ from Sec.  86.513-94. Where a paragraph in Sec.  86.513-94 is 
identical and applicable to Sec.  86.513-2004, this may be indicated by 
specifying the corresponding paragraph and the statement ``[Reserved]. 
For guidance see Sec.  86.513-94.'' Where a corresponding paragraph of 
Sec.  86.513-94 is not applicable, this is indicated by the statement 
``[Reserved].''
    (a) Gasoline. (1) Gasoline having the following specifications will 
be used by the Administrator in exhaust emission testing of gasoline-
fueled motorcycles. Gasoline having the following specifications or 
substantially equivalent specifications approved by the Administrator, 
shall be used by the manufacturer for emission testing except that the 
octane specifications do not apply.

                        Table 1 of Sec.   86.513-2004.--Gasoline Test Fuel Specifications
----------------------------------------------------------------------------------------------------------------
                  Item                                 Procedure                             Value
----------------------------------------------------------------------------------------------------------------
Distillation Range:
    1. Initial boiling point, [deg]C....  ASTM D 86-97                        23.9--35.0 \1\.
2. 10% point, [deg]C....................  ASTM D 86-97                        48.9--57.2.
3. 50% point, [deg]C....................  ASTM D 86-97                        93.3--110.0.
4. 90% point, [deg]C....................  ASTM D 86-97                        148.9--162.8.
5. End point, [deg]C....................  ASTM D 86-97                        212.8.
Hydrocarbon composition:
    1. Olefins, volume %................  ASTM D 1319-98                      10 maximum.
    2. Aromatics, volume %..............  ASTM D 1319-98                      35 minimum.
    3. Saturates........................  ASTM D 1319-98                      Remainder.
    Lead (organic), g/liter.............  ASTM D 3237                         0.013 maximum.
    Phosphorous, g/liter................  ASTM D 3231                         0.005 maximum.
    Sulfur, weight %....................  ASTM D 1266                         0.08 maximum.
    Volatility (Reid Vapor Pressure),     ASTM D 3231                         55.2 to 63.4\1\.
     kPa.
----------------------------------------------------------------------------------------------------------------
\1\ For testing at altitudes above 1 219 m, the specified volatility range is 52 to 55 kPa and the specified
  initial boiling point range is 23.9[deg] to 40.6[deg] C.

    (2) Unleaded gasoline and engine lubricants representative of 
commercial fuels and engine lubricants which will be generally 
available through retail outlets shall be used in service accumulation.
    (3) The octane rating of the gasoline used shall be no higher than 
4.0 Research octane numbers above the minimum recommended by the 
manufacturer.
    (4) The Reid Vapor Pressure of the gasoline used shall be 
characteristic of commercial gasoline fuel during the season in which 
the service accumulation takes place.
    (b) through (d) [Reserved]. For guidance see Sec.  86.513-94.

0
17. Section 86.515-78 is amended by adding paragraph (d) to read as 
follows:


Sec.  86.515-78  EPA urban dynamometer driving schedule.

* * * * *
    (d) For motorcycles with an engine displacement less than 50 cc and 
a top speed less than 58.7 km/hr (36.5 mph), the speed indicated for 
each second of operation on the applicable Class I driving trace (speed 
versus time sequence) in appendix I(c) shall be adjusted downward by 
the ratio of actual top speed to specified maximum test speed. 
Calculate the ratio with three significant figures by dividing the top 
speed of the motorcycle in km/hr by 58.7. For example, for a motorcycle 
with a top speed of 48.3 km/hr (30 mph), the ratio would be 48.3/58.7 = 
0.823. The top speed to be used under this section shall be indicated 
in the manufacturer's application for certification, and shall be the 
highest sustainable speed of the motorcycle with an 80 kg rider on a 
flat paved surface. If the motorcycle is equipped with a permanent 
speed governor that is unlikely to be removed in actual use, measure 
the top speed in the governed configuration; otherwise measure the top 
speed in the ungoverned configuration.

0
18. Section 86.544-90 is amended by revising the introductory text to 
read as follows:


Sec.  86.544-90  Calculations; exhaust emissions.

    The final reported test results, with oxides of nitrogen being 
optional for model years prior to 2006 and required for 2006 and later 
model years, shall be computed by use of the following formula: (The 
results of all emission tests shall be rounded, in accordance with ASTM 
E29-93a (incorporated by reference in Sec.  86.1), to the number of 
places to the right of the decimal point indicated by expressing the 
applicable standard to three significant figures.)
* * * * *

Subpart I--[Amended]

0
19. Section 86.884-14 is amended by revising the equation in paragraph 
(a) to read as follows:
    (a) * * *
    [GRAPHIC] [TIFF OMITTED] TR15JA04.001
    
* * * * *

PART 90--CONTROL OF EMISSIONS FROM NONROAD SPARK-IGNITION ENGINES 
AT OR BELOW 19 KILOWATTS

0
20. The authority citation for part 90 continues to read as follows:

    Authority: 42 U.S.C. 7521, 7522, 7523, 7524, 7525, 7541, 7542, 
7543, 7547, 7549, 7550, and 7601(a).

Subpart A--[Amended]

0
21. Section 90.1 is amended by adding paragraph (g) to read as follows:


Sec.  90.1  Applicability.

* * * * *
    (g) This part also applies to engines under 50 cc used in 
motorcycles that are motor vehicles if the manufacturer uses

[[Page 2442]]

the provisions of 40 CFR 86.447-2006 to meet the emission standards in 
this part instead of the requirements of 40 CFR part 86. In this case, 
compliance with the provisions of this part is a required condition of 
that exemption.

PART 1051--CONTROL OF EMISSIONS FROM RECREATIONAL ENGINES AND 
VEHICLES

0
22. The authority citation for part 1051 continues to read as follows:

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

Subpart A--[Amended]

0
23. Section 1051.1 is amended by adding new paragraphs (g) and (h) to 
read as follows:


Sec.  1051.1  Does this part apply to me?

* * * * *
    (g) This part also applies to engines under 50 cc used in 
motorcycles that are motor vehicles if the manufacturer uses the 
provisions of 40 CFR 86.447-2006 to meet the emission standards in this 
part instead of the requirements of 40 CFR part 86. Compliance with the 
provisions of this part is a required condition of that exemption.
    (h) The evaporative emission requirements of this part applies to 
highway motorcycles as specified in 40 CFR part 86.

Subpart C--[Amended]

0
24. Section 1051.245 is amended by revising paragraphs (c)(1)(i) and 
(e)(2) to read as follows:


Sec.  1051.245  How do I demonstrate that my engine family complies 
with evaporative emission standards?

* * * * *
    (c) * * *
    (1) * * *
    (i) Calculate the deterioration factor from emission tests 
performed before and after the durability tests as described in Sec.  
1051.515(c) and (d) and using good engineering judgment. The durability 
tests described in Sec.  1051.515(d) represent the minimum requirements 
for determining a deterioration factor. You may not use a deterioration 
factor that is less than the difference between evaporative emissions 
before and after the durability tests as described in Sec.  1051.515(c) 
and (d).
* * * * *
    (e) * * *
    (2) For certification to the standards specified in Sec.  
1051.110(b) with the control technologies shown in the following table:

       Table 2 of Sec.   1051.245.--Design-Certification Technologies for Controlling Fuel-Line Permeation
----------------------------------------------------------------------------------------------------------------
If the fuel-line permeability control technology is . .  Then you may design-certify with a fuel line permeation
                           .                                             emission level of . . .
----------------------------------------------------------------------------------------------------------------
(i) Hose meeting Category 1 permeation specifications    15 g/m \2\/day.
 in SAE J2260 (incorporated by reference in Sec.
 1051.810).
(ii) Hose meeting the R11-A or R12 permeation            15 g/m \2\/day.
 specifications in SAE J30 (incorporated by reference
 in Sec.   1051.810).
----------------------------------------------------------------------------------------------------------------

* * * * *

Subpart F--Test Procedures

0
25. Section 1051.501 is amended by revising paragraphs (d)(2) and 
(d)(3) to read as follows:


Sec.  1051.501  What procedures must I use to test my vehicles or 
engines?

* * * * *
    (d) * * *
    (2) Fuel Tank Permeation. (i) For the preconditioning soak 
described in Sec.  1051.515(a)(1) and fuel slosh durability test 
described in Sec.  1051.515(d)(3), use the fuel specified in Table 1 of 
Sec.  1065.210 of this chapter blended with 10 percent ethanol by 
volume. As an alternative, you may use Fuel CE10, which is Fuel C as 
specified in ASTM D 471-98 (incorporated by reference in Sec.  
1051.810) blended with 10 percent ethanol by volume.
    (ii) For the permeation measurement test in Sec.  1051.515(b), use 
the fuel specified in Table 1 of Sec.  1065.210 of this chapter. As an 
alternative, you may use the fuel specified in paragraph (d)(2)(i) of 
this section.
    (3) Fuel Hose Permeation. Use the fuel specified in Table 1 of 
Sec.  1065.210 of this chapter blended with 10 percent ethanol by 
volume for permeation testing of fuel lines. As an alternative, you may 
use Fuel CE10, which is Fuel C as specified in ASTM D 471-98 
(incorporated by reference in Sec.  1051.810) blended with 10 percent 
ethanol by volume.
* * * * *

0
26. Section 1051.515 is amended by revising the introductory text of 
paragraphs (a) and (b), paragraphs (b)(8), (c), and (d) and adding 
paragraph (e) and Figure 1051.515-1 to read as follows:


Sec.  1051.515  How do I test my fuel tank for permeation emissions?

* * * * *
    (a) Preconditioning fuel soak. To precondition your fuel tank, 
follow these five steps:
* * * * *
    (b) Permeation test run. To run the test, follow these nine steps 
for a tank that was preconditioned as specified in paragraph (a) of 
this section:
* * * * *
    (8) Subtract the weight of the tank at the end of the test from the 
weight of the tank at the beginning of the test; divide the difference 
by the internal surface area of the fuel tank. Divide this g/
m2 value by the number of test days (using at least three 
significant figures) to calculate the g/m2/day emission 
rate. Example: If a tank with an internal surface area of 0.72 
m2 weighed 31882.3 grams at the beginning of the test and 
weighed 31760.2 grams after soaking for 25.03 days, then the g/m\2\/day 
emission rate would be: (31882.3 g-31760.2 g) / 0.72 m2 / 
25.03 days = 6.78 g/m2/day.
* * * * *
    (c) Determination of final test result. To determine the final test 
result, apply a deterioration factor to the measured emission level. 
The deterioration factor is the difference between permeation emissions 
measured before and after the durability testing described in paragraph 
(d) of this section. Adjust the baseline test results for each tested 
fuel tank by adding the deterioration factor to the measured emissions. 
The deterioration factor determination must be based on good 
engineering judgement. Therefore, during the durability testing, the 
test tank may not exceed the fuel tank permeation standard described in 
Sec.  1051.110 (this is known as ``line-crossing''). If the 
deterioration factor is less than zero, use zero.
    (d) Durability testing. You normally need to perform a separate 
durability demonstration for each substantially different combination 
of treatment approaches and tank materials. Perform these 
demonstrations before an emission

[[Page 2443]]

test by taking the following steps, unless you can use good engineering 
judgment to apply the results of previous durability testing with a 
different fuel system. You may ask to exclude any of the following 
durability tests if you can clearly demonstrate that it does not affect 
the emissions from your fuel tank.
    (1) Pressure cycling. Perform a pressure test by sealing the tank 
and cycling it between +2.0 psig and -0.5 psig and back to +2.0 psig 
for 10,000 cycles at a rate 60 seconds per cycle.
    (2) UV exposure. Perform a sunlight-exposure test by exposing the 
tank to an ultraviolet light of at least 24 W/m2 (0.40 W-hr/
m2/min) on the tank surface for 15 hours per day for 30 
days. Alternatively, the fuel tank may be exposed to direct natural 
sunlight for an equivalent period of time, as long as you ensure that 
the tank is exposed to at least 450 daylight hours.
    (3) Slosh testing. Perform a slosh test by filling the tank to 40 
percent of its capacity with the fuel specified in Sec.  
1051.501(d)(2)(i) and rocking it at a rate of 15 cycles per minute 
until you reach one million total cycles. Use an angle deviation of 
+15[deg] to -15[deg] from level. This test must be performed at a 
temperature of 28[deg]C +/-5[deg] C.
    (4) Final test result. Following the durability testing, the fuel 
tank must be soaked (as described in paragraph (a) of this section) to 
ensure that the permeation rate is stable. The period of slosh testing 
and the period of ultraviolet testing (if performed with fuel in the 
tank consistent with paragraph (a)(1) of this section) may be 
considered to be part of this soak, provided that the soak begins 
immediately after the slosh testing. To determine the final permeation 
rate, drain and refill the tank with fresh fuel, and repeat the 
permeation test run (as described in paragraph (b) of this section) 
immediately after this soak period. The same test fuel must be used for 
this permeation test run as for the permeation test run performed prior 
to the durability testing.
    (e) Flow chart. The following figure presents a flow chart for the 
permeation testing described in this section, showing the full test 
procedure with durability testing, as well as the simplified test 
procedure with an applied deterioration factor:

BILLING CODE 6560-50-P

[[Page 2444]]

[GRAPHIC] [TIFF OMITTED] TR15JA04.002

BILLING CODE 6560-50-C

[[Page 2445]]


0
27. A new Sec.  1051.640 is added to subpart G to read as follows:


Sec.  1051.640  What special provisions apply for custom off-highway 
motorcycles that are similar to highway motorcycles?

    You may ask to exempt custom-designed off-highway motorcycles that 
are substantially similar to highway motorcycles under the display 
exemption provisions of 40 CFR 86.407-78(c). Motorcycles exempt under 
this provision are subject to the restrictions of 40 CFR 86.407-78(c) 
and are considered to be motor vehicles for the purposes of this part 
1051.

[FR Doc. 04-6 Filed 1-14-04; 8:45 am]
BILLING CODE 6560-50-P