[Federal Register Volume 69, Number 112 (Thursday, June 10, 2004)]
[Proposed Rules]
[Pages 32804-32822]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-13179]



[[Page 32803]]

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Part VII





Environmental Protection Agency





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40 CFR Part 86



Control of Emissions of Air Pollution From New Motor Vehicles: In-Use 
Testing for Heavy-Duty Diesel Engines and Vehicles; Proposed Rule

  Federal Register / Vol. 69, No. 112 / Thursday, June 10, 2004 / 
Proposed Rules  

[[Page 32804]]


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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 86

[OAR-2004-0072; AMS-FRL-7672-8]


Control of Emissions of Air Pollution From New Motor Vehicles: 
In-Use Testing for Heavy-Duty Diesel Engines and Vehicles

AGENCY: Environmental Protection Agency (EPA).

ACTION: Notice of proposed rulemaking.

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SUMMARY: We are proposing to establish a manufacturer-run, in-use 
emissions testing program for 2007 and later model year heavy-duty 
diesel vehicles. The ground-breaking in-use test program will require 
the engine manufacturers to measure exhaust emissions from their diesel 
engines using portable emissions measurement systems. Also for the 
first time, all manufacturers will be regularly providing EPA with a 
significant quantity of emissions data generated from engines used in 
regular service, which EPA will evaluate to ensure the engines comply 
with specified emissions requirements. The proposed rule is a result of 
an agreement between EPA and the Engine Manufacturers Association. This 
proposal advances EPA's clean diesel activities by helping to ensure 
that the benefits of more stringent emission standards are realized 
under real-world driving conditions.

DATES: Comments: Comments must be received on or before August 16, 
2004. See Section IV for more information about written comments.
    Hearings: We will hold a public hearing on July 15, 2004. The 
hearing will start at 10 a.m. local time. If you want to testify at the 
hearing, notify the contact person listed below at least ten days 
before the hearing. See Section IV for more information.

ADDRESSES: Submit your comments, identified by Docket ID No. OAR-2004-
0072, by one of the following methods:
    1. Federal eRulemaking Portal: http://www.regulations.gov. Follow 
the on-line instructions for submitting comments.
    2. Agency Web site: http://www.epa.gov/edocket. EDOCKET, EPA's 
electronic public docket and comment system, is EPA's preferred method 
for receiving comments. Follow the on-line instructions for submitting 
comments.
    3. Mail: Air Docket, Environmental Protection Agency, Mailcode: 
6102T, 1200 Pennsylvania Ave., NW., Washington, DC, 20460, Attention 
Docket ID No. OAR-2004-0072. Also send your comments to: Carol Connell, 
U.S. Environmental Protection Agency, 2000 Traverwood Drive, Ann Arbor, 
Michigan, 48130, Attention Docket ID No. OAR-2004-0072.
    4. Hand Delivery: EPA Docket Center, (EPA/DC) EPA West, Room B102, 
1301 Constitution Ave., NW., Washington, DC., Attention Docket ID No. 
OAR-2004-0072. Such deliveries are only accepted during the Docket's 
normal hours of operation from 8:30 a.m. to 4:30 p.m., Monday through 
Friday, excluding legal holidays, and special arrangements should be 
made for deliveries of boxed information.
    Instructions: Direct your comments to Docket ID No. OAR-2004-0072. 
EPA's policy is that all comments received will be included in the 
public docket without change and may be made available online at http://www.epa.gov/edocket, including any personal information provided, 
unless the comment includes information claimed to be Confidential 
Business Information (CBI) or other information whose disclosure is 
restricted by statute. Do not submit information that you consider to 
be CBI or otherwise protected through EDOCKET, regulations.gov, or e-
mail. The EPA EDOCKET and the federal regulations.gov websites are 
``anonymous access'' systems, which means EPA will not know your 
identity or contact information unless you provide it in the body of 
your comment. If you send an e-mail comment directly to EPA without 
going through EDOCKET or regulations.gov, your e-mail address will be 
automatically captured and included as part of the comment that is 
placed in the public docket and made available on the Internet. If you 
submit an electronic comment, EPA recommends that you include your name 
and other contact information in the body of your comment and with any 
disk or CD-ROM you submit. If EPA cannot read your comment due to 
technical difficulties and cannot contact you for clarification, EPA 
may not be able to consider your comment. Electronic files should avoid 
the use of special characters, any form of encryption, and be free of 
any defects or viruses.
    Docket: All documents in the docket are listed in the EDOCKET index 
at http://www.epa.gov/edocket. Although listed in the index, some 
information is not publicly available, i.e., CBI or other information 
whose disclosure is restricted by statute. Certain other material, such 
as copyrighted material, is not placed on the Internet and will be 
publicly available only in hard copy form. Publicly available docket 
materials are available either electronically in EDOCKET or in hard 
copy at the Air Docket, EPA/DC, EPA West, Room B102, 1301 Constitution 
Ave., NW., Washington, DC. The 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 Public Reading Room is (202) 566-1744, and the 
telephone number for the Air Docket is (202) 566-1742.
    Hearings: We will hold a public hearing at the following location: 
U.S. Environmental Protection Agency, 1310 L Street, NW., Washington, 
DC, 20460, Telephone: (202) 343-9540, Fax: (202) 343-2804.
    See Section IV, ``Public Participation'' below for more information 
on the comment procedure and public hearings.

FOR FURTHER INFORMATION CONTACT: U.S. EPA, Office of Transportation and 
Air Quality, Assessment and Standards Division hotline at (734) 214-
4636 or [email protected]., or alternatively Carol Connell (734) 214-4349 
or [email protected].

SUPPLEMENTARY INFORMATION:

Regulated Entities

    This action would affect you if you produce or import new heavy-
duty diesel engines which are intended for use in highway vehicles such 
as trucks and buses, or produce or import such highway vehicles, or 
convert heavy-duty vehicles or heavy-duty engines used in highway 
vehicles to use alternative fuels.
    The following table gives some examples of entities that may have 
to follow the regulations. But because these are only examples, you 
should carefully examine the regulations in 40 CFR parts 86. If you 
have questions, call the person listed in the FOR FURTHER INFORMATION 
CONTACT section of this preamble:

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                                             NAICS      SIC  codes
                Category                   codes \a\       \b\                           Examples of potentially regulated entities
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Industry................................       336112         3711  Engine and Truck Manufacturers.
                                               336120
Industry................................       811112         7533  Commercial Importers of Vehicles and Vehicle Components.
                                               811198         7549
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\a\ North American Industry Classification System (NAICS).
\b\ Standard Industrial Classification (SIC) system code.

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 No. OAR-2004-0072. The official public 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 
the 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 submit or 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. Once in the system, select ``search,'' 
then key in the appropriate docket identification number.
    Certain types of information will not be placed in the EPA Dockets. 
Information claimed as Confidential Business Information (CBI) and 
other information whose disclosure is restricted by statute, which is 
not included in the official public docket, will not be available for 
public viewing in EPA's electronic public docket. EPA's policy is that 
copyrighted material will not be placed in EPA's electronic public 
docket but will be available only in printed, paper form in the 
official public docket. To the extent feasible, publicly available 
docket materials will be made available in EPA's electronic public 
docket. When a document is selected from the index list in EPA Dockets, 
the system will identify whether the document is available for viewing 
in EPA's electronic public docket. 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 in Section IV.
    For public commenters, it is important to note that EPA's policy is 
that public comments, whether submitted electronically or in paper, 
will be made available for public viewing in EPA's electronic public 
docket as EPA receives them and without change, unless the comment 
contains copyrighted material, CBI, or other information whose 
disclosure is restricted by statute. When EPA identifies a comment 
containing copyrighted material, EPA will provide a reference to that 
material in the version of the comment that is placed in EPA's 
electronic public docket. The entire printed comment, including the 
copyrighted material, will be available in the public docket.
    Public comments submitted on computer disks that are mailed or 
delivered to the docket will be transferred to EPA's electronic public 
docket. Public comments that are mailed or delivered to the Docket will 
be scanned and placed in EPA's electronic public docket. Where 
practical, physical objects will be photographed, and the photograph 
will be placed in EPA's electronic public docket along with a brief 
description written by the docket staff.
    For additional information about EPA's electronic public docket 
visit EPA Dockets online or see 67 FR 38102, May 31, 2002.

Outline of This Preamble

I. Overview
    A. What Is EPA Proposing?
    B. Background on the Origins of This Proposal
    C. Historical Context
    1. Genesis and Description of NTE Standards
    2. Current EPA In-Use NTE Testing
    3. Plans for Nonroad Diesel Engine In-Use NTE Testing
    D. California's Intent To Adopt an In-Use NTE Test Program
II. Details of the Proposal
    A. Applicability
    B. Engine Family Selection
    1. Number of Engine Families
    2. Treatment of Nonconforming Engine Families
    3. Small or Unavailable Engine Families
    C. Phase 1 Testing Scheme
    1. Focus of Initial Testing
    2. Engine Family Evaluation Criteria and Outcomes
    D. Phase 2 Testing Scheme
    1. Initiation and Focus of Additional Testing
    2. Number of Engines and Test Conditions
    E. Vehicle Pass Criteria
    F. NTE Threshold Specification
    1. Not-to-Exceed Standards
    2. Existing In-Use Compliance Margins
    3. New In-use Measurement Margin for Portable Measurement 
Systems
    G. Considerations in Deciding on Remedial Action
    1. Manufacturers' Supplemental Information
    2. EPA's Testing and Supplemental Data
    3. Other Information
    H. Quantity of Data Collected
    I. Screening, Adjustment, and Mileage and of Test Vehicles
    J. Test Conditions
    K. Reporting Requirements
    1. Emission Test Results and Notification of Vehicle Failures
    2. Carve Outs, Deficiencies, or Other NTE Control Area 
Exclusions
    L. Measurement of Emission
    1. Pollutants
    2. Portable Emission Measurement Systems
    M. 2005 and 2006 Pilot Program
    N. Implications for Other EPA Programs
    1. EPA Testing and Supplemental Information
    2. Selective Enforcement Audit (SEA) Testing
    3. Deterioration Factor (DF) Testing
    O. Limitations of Warranty Claims
III. Economic Impact
IV. Public Participation
V. Statutory and Executive Order Review
VI. Statutory Provisions and Legal Authority

I. Overview

    This section provides a summary of the proposed manufacturer-run, 
in-use Not-to-Exceed (NTE) testing program for on-highway, heavy-duty 
diesel vehicles and engines. It also contains background on the genesis 
of this proposal, an

[[Page 32806]]

overview of the origin and application of EPA's NTE emission standards, 
a brief description of our current in-use NTE testing program, and our 
future plans for establishing a manufacturer-run, in-use NTE test 
program for nonroad diesel engines. More detailed information on the 
NTE standards for heavy-duty diesel engines is contained in the 
Technical Support Document accompanying today's action, in addition to 
Section II. F. 1. of this preamble.

A. What Is EPA Proposing?

    We are proposing to establish a manufacturer-run, in-use NTE 
testing program for vehicles with heavy-duty diesel engines, beginning 
in calendar year 2005. There will be a pilot program in calendar years 
2005 and 2006. Beginning in calendar year 2007, the full in-use testing 
program will begin and will apply to 2007 and later model year engines. 
The proposed program addresses a long standing need to monitor the 
emissions performance of the engines installed in these on-highway 
vehicles when they are operated under a wide range of real world 
conditions. It is specifically intended to monitor compliance with the 
NTE exhaust emission standards and to help ensure that heavy-duty 
diesel engines will comply with all applicable emission standards 
(e.g., including those based on the Federal Test Procedure (FTP)) 
throughout their useful lives. Background on our NTE standards is 
presented in Sections I.B. and C. of this Preamble.
    The new testing program will require engine manufacturers for the 
first time to assess in-use exhaust emissions from heavy-duty diesel 
vehicles using onboard, portable emission measurement systems during 
typical operation on the road. Previously, engine emissions testing 
involved removing the engine from the vehicle and testing the engine in 
a laboratory on an engine dynamometer. Starting in the mid-1990s, EPA 
facilitated research into portable systems by developing and using 
prototype systems on a more limited basis in its compliance programs. 
Vehicles were instrumented with portable systems to measure their 
emissions performance during real-world operating conditions. It became 
clear that these systems offered advantages over conventional 
approaches to assess in-use exhaust emissions from engines for design 
improvement, research, modeling, and compliance purposes.
    Under the proposed program, we will designate a certain number of 
heavy-duty diesel engine families for testing. Generally, no more than 
25 percent of a manufacturer's engine families would be designated in 
any single year. We expect manufacturers will use their existing 
customer relationships and create new lines of communication with 
customers to recruit appropriate test vehicles from fleets or 
individual owners. Each selected vehicle will be equipped with a 
portable emission measurement system and driven by its normal operator, 
with a normal payload, over its regular driving route. All data and 
test results will be reported to EPA on a regular basis. The 
manufacturer of a designated heavy-duty engine family will pay for all 
of the expenses associated with the planning, vehicle procurement, 
testing, and data reporting.
    We have designed a two phase test program. In the first phase of 
testing (Phase 1) the manufacturer will test a minimum of five and a 
maximum of 10 vehicles per engine family selected for testing. If five 
out of the first five vehicles, or five out of the first six vehicles 
pass a specified vehicle pass criteria, or vehicle testing criteria, no 
further testing or other data relating to that diesel engine family 
will be required from the manufacturer that year. However, we may 
choose that engine family for testing again in a later year. If the 
above conditions are not met, then a total of 10 vehicles will be 
tested in Phase 1. If eight out of the 10 vehicles pass the vehicle 
testing criteria, no further testing or other data relating to that 
diesel engine family will be required from the manufacturer for that 
year.
    In all other cases, we will decide on a course of action depending 
on the number of vehicles from the designated engine family that fail 
to pass the vehicle testing criteria and other factors. In making our 
decision, we will thoroughly review the test results, consult with the 
engine manufacturer, allow the manufacturer to provide additional data, 
and consider other pertinent information. The action may include, but 
is not limited to, one of the following:

    1. No further action because no significant nonconformance 
issues are indicated;
    2. Initiate the second phase of testing (Phase 2); or
    3. Seek some form of remedial action.

    If five or fewer of the Phase 1 test vehicles satisfy the vehicle 
pass criteria, EPA may require the manufacturer to conduct Phase II 
testing. If only six or seven of the Phase I test vehicles pass the 
vehicle pass criteria, EPA may require the manufacturer to conduct 
Phase II testing under these regulations if the manufacturer agrees to 
perform such testing. However, if Phase 2 testing is conducted for any 
reason, even if the manufacturer elects to pursue the next phase of 
testing voluntarily, we may direct that up to 10 additional vehicles be 
tested. In this phase, we may also focus testing on one or more engine 
configurations within the engine family. Additionally, we may specify 
certain driving routes or other driving conditions (e.g., geographic 
conditions or time of year). The purpose of these additional 
specifications is to better understand how widespread or under what 
conditions the Phase 1 test vehicles are failing to pass the vehicle 
pass criteria. In those instances, the specifications would be based on 
the Phase 1 test conditions that indicated a potential nonconformity.
    As with Phase 1 testing, any remedial action we may choose to 
pursue based on Phase 2 testing will be made only after a thorough 
review of the test results, consultation with the engine manufacturer, 
and consideration of other pertinent information.
    The proposed in-use testing program is primarily designed as an 
information-gathering program that will inform EPA's decision-making. 
The results of in-use testing for any particular engine family will not 
necessarily lead to, or necessarily insulate an engine family from, 
appropriate remedial actions, depending on the particular results of 
the testing and other information in EPA's possession. However, EPA 
believes that the results of the in-use testing and information 
gathered by the program will be a critical resource for EPA in 
determining how to direct our limited resources.
    We expect that the wealth of in-use test data generated by the 
proposed program will have a number of valuable uses in addition to 
monitoring heavy-duty diesel engines for NTE compliance purposes under 
the program. For example, though EPA would not engage in routine NTE 
testing of engines or engine families that satisfy the Phase 1 test 
criteria unless new information indicates that a nonconformity exists, 
we may use the in-use data along with other information to make 
independent evaluations about the possible need to pursue further 
testing or actions. We may also use the information in the development 
of in-use emission factors for emissions and air quality modeling. 
Further, manufacturers have told us that they expect the proposed 
program will fortify the traditional laboratory-based engine 
development process. This will be done by enhancing a manufacturer's 
ability to evaluate the performance of the engine and emissions control 
system

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under real world operating conditions and use, the results of which may 
be used to create cleaner and more durable future engine designs. 
Finally, the in-use test data will also be available to the public for 
review and analysis.
    The proposed in-use NTE testing program will be fully enforceable 
beginning in 2007. To ensure a successful launch of this new program, 
we are also proposing a mandatory pilot program for calendar years 2005 
and 2006 using only the first phase (Phase 1) of testing. During these 
two years both EPA and the heavy-duty diesel engine manufacturers will 
gain valuable experience with the in-use testing protocols, and the 
generation, interpretation, and reporting of in-use emissions data. If 
an engine family fails to meet the vehicle pass requirements of Phase 1 
testing under the pilot program, we will not pursue any form of 
remedial action based solely on that data. However, we may utilize such 
information in conjunction with our own test data and other information 
to assess or pursue any enforcement or remedial action that otherwise 
may be authorized during that time.

B. Background on the Origins of This Proposal

    On October 6, 2000, we published a final rule that promulgated new 
emission standards for on-highway heavy-duty engines. See 65 FR 59896. 
The final rule included new standards, applicable to 2007 and later 
model year heavy-duty diesel engines, called NTE standards. These 
standards are designed to apply under any conditions reasonably 
expected to occur during normal vehicle use. The test procedure for the 
NTE standards is different from most previous test procedures in that 
it is not based on a rigidly timed test cycle, but instead allows 
testing at a wide, though bounded, range of engine and ambient 
conditions that can occur in normal vehicle operations.
    These NTE standards, as well as other provisions of the final rule, 
were particularly designed to ensure that engines and vehicles 
manufactured to meet the FTP standards over the engine certification 
test cycle in the laboratory continued to effectively control emissions 
under any conditions reasonably expected to occur during normal vehicle 
use. The final rule described our concerns regarding additional factors 
that may jeopardize the emission reductions expected in-use from the 
standards promulgated in that rule. See 65 FR at 59910 (October 6, 
2000). Among these factors was the absence of an effective in-use 
compliance program for heavy duty engines and vehicles. We noted that 
we had received broad support from states, environmental organizations, 
and industry to move forward with developing a proposal to address this 
issue. The Engine Manufacturers Association (EMA) committed to work 
diligently and cooperatively with EPA and the California Air Resources 
Board (CARB) to resolve the open questions in a timely fashion. See 64 
FR 58472, 58514 (October 29, 1999).
    EMA and certain individual engine manufacturers challenged EPA's 
adoption of NTE standards in several rules.\1\ EPA, CARB and the engine 
manufacturers, as well as state and environmental organizations, 
engaged in lengthy and ultimately productive discussions to settle 
these challenges and to go forward with a regulatory program that 
included robust measures to ensure that emission controls implemented 
to meet EPA and CARB standards remain effective under all normal 
vehicle operation. One result of these discussions was the 
identification of the basic program elements for a manufacturer run, 
in-use NTE testing program, and an agreement to go forward with a 
rulemaking to implement such a program for on-highway heavy-duty diesel 
engines.\2\ Today's proposal initiates this rulemaking process.
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    \1\ See International Truck et al. v. EPA, (DC Cir Nos. 00-1510 
and 00-1512); EMA et al v. EPA (DC Cir. Nos. 01-1129 and 02-1080); 
International Truck v. EPA, No. 01-1137; EMA v. EPA, (DC Cir. No. 
00-1066); and EMA v. EPA, (DC Cir. No. 03-1007)
    \2\ See Final Settlement Agreement, dated June 3, 2003, in the 
cases cited above.
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C. Historical Context

1. Genesis and Description of NTE Standards
    Traditionally, heavy-duty diesel vehicles and engines have been 
certified to exhaust emission standards in the laboratory. More 
specifically, the engine is tested separately from the vehicle using an 
engine dynamometer and a prescribed ``driving cycle.'' Monitoring for 
compliance with the applicable emission standards during the life of 
these vehicles (i.e., in-use) was also determined by removing the 
engine from the vehicle and then testing it using the same laboratory 
measurement procedures. Several years ago we became concerned that in-
use emissions might inappropriately exceed the applicable standards 
when engines were operated under conditions not found during 
traditional laboratory testing (i.e., off-cycle emissions). An 
investigation into off-cycle emissions performance confirmed that 
advances in engine technology had allowed some manufacturers to design 
engines with control strategies which resulted in substantially greater 
levels of emissions during typical real-world operating conditions than 
were emitted during the laboratory testing cycle required for 
certification.
    To close the gap between laboratory and real world emissions 
performance, and to deter manufacturers from using such strategies in 
the future, we developed NTE emission standards for heavy-duty diesel 
engines. The NTE requirements establish an area or zone under the 
torque curve of an engine where emissions must not exceed a specified 
value for any of the regulated pollutants.\3\ The provisions also 
define a specific range of operating conditions, i.e., temperature, 
altitude, and humidity. The test itself does not involve a specific 
driving cycle of any specific length, i.e., mileage or time, rather it 
involves all driving that could occur within the bounds of the NTE 
control area. The vehicle (or engine) is operated under conditions that 
may reasonably be expected to be encountered in normal vehicle 
operation and use, including operation under steady-state or transient 
conditions and under varying ambient conditions. Within the NTE control 
area, emissions must not exceed a specified multiple of the underlying 
FTP standards. For heavy-duty diesel engines, this multiple is 
generally 1.25 or 1.50 times the applicable FTP standards.
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    \3\ Torque is a measure of rotational force. The torque curve 
for an engine is determined by an engine ``mapping'' procedure 
specified in the Code of Federal Regulations. A graphical 
representation of the NTE control area is contained in the Technical 
Support Document accompanying this proposed rule.
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    Initially, the NTE requirements were a key provision in consent 
decrees with several manufacturers of heavy-duty diesel engines that 
resulted from the investigation described above. This new requirement 
became effective in 1998 for most manufacturers involved in those 
consent decrees, and by November 2002 had been applied for such 
manufacturers to the NOX standards set to go into effect in 
model year 2004. NTE requirements are currently being used as a 
screening tool for 2004 through 2006 model year engines not covered by 
the consent decrees. The NTE requirements will be mandatory for all 
2007 and later heavy-duty diesel engines. We also promulgated NTE

[[Page 32808]]

standards for certain other mobile sources.\4\
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    \4\ The use of NTE testing as a screening tool for 2004-2006 on-
highway heavy-duty diesel engines is discussed in Advisory Circular 
24-3. The final rule applying the NTE to 2007 and model year engines 
is published at 65 FR 59896 (October 6, 2000). Other final rules 
promulgated by EPA extended the NTE approach to new marine 
compression-ignition engines at or above 37 horsepower, 64 FR 73300 
(December 29, 1999) and 67 FR 68242 (November 8, 2002); and to a new 
and more stringent phase of on-highway heavy duty engine standards 
66 FR 5002 (January 18, 2001).
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    The NTE test can be conducted in an emissions testing laboratory 
using an appropriate dynamometer or while the vehicle is being used on 
the road. It is this last feature that makes NTE testing a very 
powerful in-use compliance monitoring tool. In-use testing and 
compliance become much easier with the NTE standards since emissions 
may be sampled during normal vehicle use on the road using portable 
emission measurement systems. As already mentioned, traditional 
laboratory engine testing over a very specific driving schedule 
requires the engine be removed from the vehicle rendering in-use 
testing prohibitively cumbersome and expensive. Further, engine-based 
testing cannot account for the drive train and sensor interactions 
which occur during normal vehicle operation. As such, testing during 
normal vehicle use, using an objective numerical standard, makes 
enforcement easier and provides more certainty of what is occurring in-
use versus a fixed laboratory procedure.
2. Current EPA In-Use NTE Testing
    We have been conducting our own in-use NTE testing of heavy-duty 
diesel engines for the past three years. Over that period, an average 
of 40 on-highway vehicles were tested annually. Vehicles are procured 
through the voluntary participation of commercial and municipal fleets 
and emissions are tested during normal service operation. Portable 
emission measurement systems are installed on-site at the fleet's 
facility before the vehicle begins its service day. EPA uses a 
prototype portable sampling system which measures hydrocarbons (HC), 
carbon monoxide (CO), and oxides of nitrogen (NOX). Our 
experience with this program has aided us in developing today's 
proposal for a manufacturer-run, in-use NTE test program.
3. Plans for Nonroad Diesel Engine In-Use NTE Testing
    We recently promulgated NTE requirements that accompany our new 
transient-cycle emission standards for nonroad diesel engines. This new 
test cycle will be phased into the certification requirements between 
2011 and 2013, depending on an engine's horsepower rating. The NTE 
provisions are similar to those described in this notice for on-highway 
heavy-duty diesel engines. Presently, we are developing an outline for 
a proposed manufacturer-run, in-use NTE test program for nonroad diesel 
engines covered by the new requirements. We expect this program will 
have similar characteristics to today's proposal, but will address some 
unique issues pertaining to the nonroad market. Among these are such 
things as the widely varying power ranges of nonroad engines, including 
those much smaller and much bigger than highway engines), and broad 
array of equipment applications that may use the same engine type or 
model. We anticipate publishing a proposed rulemaking for public 
comment near the beginning of 2005.

D. California's Intent To Adopt an In-Use NTE Test Program

    California's involvement in the development of this program was 
critical in assuring that engine manufacturers are subject to a 
consistent national in-use NTE test program. CARB intends to adopt an 
identical program for 2007 soon after EPA completes its final rule for 
this program. EPA and CARB expect to coordinate in the annual selection 
of engine families to be in-use tested and to work together in 
determining whether Phase 2 testing is warranted for families where the 
number of passing engines in Phase 1 does not automatically lead to no 
further testing. CARB has its own authority and decision process in 
determining remedial action for failing families, but CARB expects to 
work with EPA and the manufacturers in this process in 2007 and 
subsequent model years.

II. Details of the Proposal

    This section presents the details of our proposal for a two phase 
in-use NTE testing program for heavy-duty diesel vehicles. It focuses 
primarily on the fully enforceable program that will begin with the 
2007 model year. A number of the special program features for a pilot 
program during 2005 and 2006 calendar years are also described. Key 
aspects of the pilot program are further summarized in II. M. of this 
section.

A. Applicability

    The proposed requirements apply to diesel engines certified for use 
in heavy-duty vehicles with gross vehicle weight ratings (GVWR) greater 
than 8,500 pounds, except that the requirements do not apply to any 
heavy-duty diesel vehicle that was certified using a chassis 
dynamometer under our CAP 2000 certification program, including medium-
duty passenger vehicles with GVWRs of between 8,500 and 10,000 pounds. 
The manufacturer of heavy-duty diesel engines subject to the proposed 
program is responsible for all of the costs associated with project 
planning, vehicle procurement, testing, and reporting.
    We are proposing a fully enforceable, two-phase test program for 
heavy-duty diesel engines beginning with the 2007 model year. We are 
also proposing a mandatory pilot program for calendar years 2005 and 
2006. Under the pilot program, 2002 through 2006 model year vehicles 
may be tested. The pilot program will utilize only the first phase of 
the two-phase program developed for 2007 and later model years.

B. Engine Family Selection

1. Number of Engine Families
    EPA currently estimates that 96 heavy-duty diesel engine families 
are being certified by 14 manufacturers that would potentially be 
eligible for in-use testing under this proposed program. Our goal in 
deciding how many engine families should be tested each year is to 
conduct enough testing to assure in-use compliance with the applicable 
emission standards, while at the same time keep the program from being 
overly burdensome for the engine manufacturers. We believe that our 
proposed approach satisfies this objective.
    As a general premise, we think it is reasonable to test all of a 
manufacturer's heavy-duty diesel engine families over a four-year 
period. So, we propose to designate up to 25 percent of a 
manufacturer's total number of engine families for testing per calendar 
year. The number of engine families that are tested in a given year 
will be based on the actual number of engine families certified by that 
manufacturer in that year, rounded up or down as appropriate. However, 
for the purpose of calculating the number of engine families certified 
in a given year, we propose to only include engine families with a 
production volume greater than 1,500 engines. This designation strategy 
will provide in-use test data for most of the diesel engine population 
and, at the same time, not overburden manufacturers that have several 
small production engine families. If a manufacturer has three or fewer 
engine families that exceed the annual 1,500 engine production limit, 
including

[[Page 32809]]

when a manufacturer has no families with production levels above that 
limit, we propose testing only one engine family per year.
    We also propose to cap the maximum number of families designated 
for testing over any four-year period to the average number of families 
for that manufacturer over that four-year period, rounding up or down 
as appropriate.
    Several examples showing how many engine families we can designate 
each year for testing under the proposed in-use, manufacturer-run 
program are provided below. The illustrations are arranged in an 
increasing order of complexity. Additional examples and other relevant 
information are presented in the Technical Support Document for today's 
proposal.
    The first two examples illustrate how we would calculate the annual 
number of engine families for testing using the 25 percent per year 
limit for engine families above the 1,500 units per year level, and 
when a manufacturer only has engine families with annual production 
less than 1,500 units per year. First, Manufacturer A has 12 certified 
engine families in production in a given model year, and only 8 out of 
the 12 families have annual productions levels of over 1,500 engines. 
Then the maximum number of engine families we can designate for in-use 
testing from Manufacturer A in that calendar year is 2 (i.e., 25 
percent of 8 engine families). Second, Manufacturer B has 8 engine 
families, all with annual production less than 1500 engines. In this 
situation, we are limited to selecting only 1 engine family for testing 
in that calendar year.
    The next two examples are somewhat more complex. The first of these 
examples shows how the four-year limitation (i.e., cap) on the maximum 
number of designated engine families works with a constant number of 
engine families over time. First, Manufacturer C has 3 engines families 
in production in each of four consecutive years, or an average of 3 
engine families per year over a four-year period. Additionally, all the 
families have annual production volumes over 1,500 units. In this 
situation, 1 engine family per year can be designated for testing in 
three of the four calendar years. However, no family can be selected in 
one of the four years because the number of families tested would 
otherwise exceed the average number of families produced over the four-
year period. Second, Manufacturer D produces 7 engine families each 
year during a four-year period and all the families are over 1,500 
units per year. In this situation, we can select up to 2 engine 
families per year under the 25 percent annual limit (i.e., 25 percent 
of 7 families is 1.75, which rounds up to 2). So, 2 engine families can 
be designated for testing in three of the four calendar years, but only 
1 family can be tested in a fourth year because the four-year cap on 
the maximum number of engines tested would otherwise be exceeded.
    The last example is the most complex. It once again illustrates how 
the four-year cap on the maximum number of designated engine families 
applies, but in this case for a scenario were the number of engine 
families varies over time, and when the fully enforceable program is 
just beginning (i.e., the 2007 calendar year). Manufacturer E produces 
6 engine families in the 2004 through 2009 model years and 7 engine 
families in the 2010 through 2014 model years. We can order testing for 
2 engine families each in 2007, 2008 and 2009 under the 25 percent 
annual limit (i.e., 25 percent of 6 families is 1.5, which rounds up to 
2 using standard rounding practices).\5\ In 2010, however we cannot 
order testing of any families because the average number of certified 
families in the four years preceding testing (including the current 
model year) is 6.25, rounded down to 6. Since we have already tested 6 
engine families in the previous three years, we cannot test another 
engine family in the fourth year because the total number of engine 
families in the four-year period would be greater than the average 
number of engine families produced in the past four years (i.e., 6). In 
2011, we can order the testing of 2 families under the 25 percent 
annual limit. Here, the average number of engine families in the four 
years preceding testing (including the current model year) is 6.5. This 
rounds down to 6, again using standard rounding practices. Since we 
have only tested 4 engine families in the previous three years, we can 
test another 2 engine families in the fourth year. For 2012 the average 
number of engine families in the four-year period is 6.75 (6 families 
in model year 2009 and 7 families in model years 2010 through 2012). 
Rounding up from 6.75, we can order testing for 7 engine families in 
the four-year period prior to 2012. Since we have only ordered testing 
for 4 families in the previous three years, we can order testing for 2 
families under the 25 percent annual limit in 2012. Similarly, we can 
order the testing of 2 families in 2013. However, in 2014, we can order 
testing for only 1 engine family because the average number of families 
produced in the applicable four-year period is 7 and we have already 
ordered testing for 6 engine families in the previous three years.
---------------------------------------------------------------------------

    \5\ See, ``Guide for the Use of the International System of 
Units (SI), NIST Special Publication 811, 1995 Edition, National 
Institute of Standards and Technology, U.S. Department of 
Commerce.'' Under the rounding convention contained in this 
reference, when the first digit discarded is exactly 5, the last 
digit retained should be rounded upward if it is an odd number, but 
no adjustment made if it is an even number.
---------------------------------------------------------------------------

    After the number of engine families that are eligible for in-use 
testing is determined for a calendar year, we may select any engine 
family for testing that a manufacturer has in production that model 
year, or any other engine families produced by the manufacturer in 
previous model years covered by the testing program. We also reserve 
the right to designate any engine family previously tested under this 
program in a subsequent calendar year. This will allow us to evaluate 
the emission performance of heavy-duty diesel vehicles as they 
accumulate mileage over a number of years. It will also allow us to 
assess a manufacturer's remedy of any previous nonconformance problem, 
which was discovered under the proposed in-use testing program. When 
evaluating past model years for testing, we will also consider such 
factors as the likely number of vehicles remaining in service and their 
perspective mileage relative to their certified useful life.
    In order to provide manufacturers with adequate lead time to 
properly plan and conduct testing under the proposed program, we 
propose that in-use testing of any engine family be completed and 
reported to EPA within 18 months. (See Section II. K. of this preamble 
for more information on reporting requirements.) The 18-month testing 
period begins from the date EPA officially notifies the manufacturer 
that an engine family has been designated for in-use testing. We intend 
to make our engine family selections by approximately June 30 of each 
calendar year. Waiting until the mid-point of the calendar year to 
select engine families for testing increases the likelihood that EPA 
will be able to choose from a manufacturer's entire product offering 
for that same model year. Typically, all of a manufacturer's engines 
for a given model year are covered by a certificate of conformity by 
the mid-point of that same calendar year. For example, all 2007 model 
year engines are expected to be certified, in most cases, by the June 
30, 2007. This also allows EPA to calculate the number of engine 
families to be ordered for testing in a given calendar year without 
having to continually update that number and order further testing. In 
the event one or more engine families are certified by a

[[Page 32810]]

manufacturer after June 30, we will update our calculation of the 
number of engine families we can order tested in that calendar year 
and, if appropriate, order further testing. We still may select any 
engine family by the end of that calendar year for testing, including 
the newly certified family, with the understanding that the 
manufacturer has 18 months from the date of selection to complete 
testing.
    We will use the most recent and accurate sales information to 
identify engine families with annual U.S.-directed production volumes 
of 1,500 engines or less when determining the potential number of 
engine families we may require a manufacturer to test in any year. When 
an engine family has reached the end of its production, the actual 
sales for an engine family that is already required to be submitted to 
EPA at the end of each model year as part of the certification program 
will be used for this purpose. If the engine family has not ended 
production and final sales are not available, then we may use the sales 
projection that is provided as part of a manufacturer's certification 
application.
2. Treatment of Nonconforming Engine Families
    A manufacturer may be required to test a number of engine families 
that exceeds the numerical limits described in Section II. B.1. above, 
if there is clear evidence of an emissions nonconformity with respect 
to one or more of that manufacturer's families. More specifically, we 
propose that an engine family for which such a determination is made 
may be designated for testing in the manufacturer-run, in-use NTE 
testing program in any subsequent year without counting toward the 
otherwise applicable limit on the number of families we may select in 
any year.
    For the purposes of the proposed in-use testing program only, if an 
engine family was subject to a recall action (voluntary or mandatory), 
that failure is clear evidence of a nonconformity for any carryover 
engine family produced in a prior or subsequent model 
year.6 7 The remedied engine family may have been normally 
selected for testing under the proposed in-use testing program, but did 
not pass the vehicle pass criteria and was subject to a recall action. 
Alternatively, the remedied family may have been recalled based the 
results of an EPA in-use testing program. This linkage of carryover 
engine families helps ensure that manufacturers will be sufficiently 
motivated to remedy in a timely manner any noncompliance which is 
strongly suspected to cut across multiple engine families. As with 
other aspects of this program, we will consult with the manufacturer 
when contemplating a determination of clear evidence. An engine family 
selected using the ``no count'' designation may have never been tested 
under the proposed manufacturer-run, in-use NTE testing program, or it 
may have been tested but no remedial action was initiated based on the 
test results.
---------------------------------------------------------------------------

    \6\ Manufacturers designate carryover engine families during the 
certification process. The carryover designation indicates that the 
engine family for which a certificate is being requested is nearly 
identical to an engine family which has been previously certified. 
In such instances, the emissions results from the previously 
certified engine family are directly applied or carried over to the 
engine family for which a certificate is being requested.
    \7\ Section 207(c) of the Clean Air Act (CAA) authorizes EPA to 
require manufacturers to recall vehicles or engines for the purpose 
of remedying noncompliance with EPA regulations that occur during 
the regulatory useful life of the vehicle or engine. EPA may only 
require a recall when the noncompliance involves a substantial 
number of a class or category of vehicles or engines which have been 
properly maintained and used. (See CAA Section 207(c)). The 
procedures EPA uses to administer emissions recalls are described in 
40 CFR part 85, subpart S.
---------------------------------------------------------------------------

3. Small or Unavailable Engine Families
    We recognize the possibility that a manufacturer may find it 
difficult or impossible to locate a sufficient number of vehicles from 
a designated diesel engine family to complete testing even after a 
diligent and good faith recruiting effort. This might especially happen 
for families with limited sales, or if a significantly older model year 
is designated for testing. Of course, we will attempt to avoid such an 
outcome in our engine family selection process. However, if a 
manufacturer encounters this problem and cannot complete either the 
Phase 1 or Phase 2 testing in the time frame or manner required, we 
propose that the manufacturer may ask us to modify the testing 
requirements for such engine family or designate a different diesel 
engine family for testing.

C. Phase 1 Testing Scheme

1. Focus of Initial Testing
    The first phase of testing, Phase 1, is intended to quickly screen 
a designated heavy-duty diesel engine family for conformity with the 
applicable NTE standards. If enough of the engines tested from the 
family pass the initial screening, no additional testing is required of 
that family under the in-use testing program in that year. If the early 
test results from Phase 1 indicate a potential nonconformity, then 
several more vehicles will be tested to generate additional information 
regarding the significance of any potential problem, or whether more 
testing in the next phase of the program, Phase 2, is needed to further 
evaluate the emissions performance of that engine family.
2. Engine Family Evaluation Criteria and Outcomes
    For Phase 1 testing, we propose that a manufacturer test a minimum 
of five and a maximum of 10 different vehicles within a designated 
engine family. The exact number of vehicles depends on how many of the 
tests exceed a specified numerical emissions limit, or the vehicle pass 
criteria (see Section II. E. for a description of the vehicle pass 
criteria). We believe that requiring up to 10 vehicle tests will 
provide sufficient information for us to decide if further testing or 
other information is needed to better evaluate a potential 
nonconformity, or if some form of remedial action may be warranted. 
This level of testing is intended to provide a quick indication of an 
engine family's emissions compliance without being overly burdensome to 
engine manufacturers. Our proposed multi-step engine family evaluation 
criteria and the outcomes associated with how many vehicles pass the 
in-use testing requirements at various levels within the testing 
hierarchy are described below.
    A manufacturer will initiate Phase 1 by testing 5 vehicles. If all 
five satisfy the vehicle pass criteria (i.e., 5 out of 5 pass), testing 
stops and no other action is required of the manufacturer for that 
diesel engine family under the program for that year. If only one of 
the initial test vehicles fails the vehicle pass criteria, the 
manufacturer will test another vehicle. The manufacturer may stop 
testing if the sixth vehicle satisfies the vehicle pass criteria (i.e., 
5 out of 6 pass). In the event that neither of the above conditions are 
met (i.e., 4 or fewer out of 6 pass), the manufacturer must test a 
total of 10 vehicles.
    Various outcomes are possible based on the observed number of 
vehicle passes or failures from the Phase 1 testing, as well as other 
supplemental information. If all four of the additional test vehicles 
met the vehicle pass criteria and only two of the original six test 
vehicles exceeded the criteria (i.e., 8 out of 10 pass), testing stops 
and no other action is required of the manufacturer for that diesel 
engine family under the program for that year. When six or seven of the 
10 test vehicles satisfy the vehicle pass criteria (i.e., 6 or 7 out of 
10 pass), the manufacturer must join EPA in follow-up discussions to 
determine whether any further testing, investigations, data 
submissions, or other actions may be warranted. In such

[[Page 32811]]

a case, three outcomes are possible. First, we may ultimately decide 
not to take further action if no significant nonconformity is indicated 
after a thorough evaluation of the causes or conditions that caused 
vehicles in the engine family to fail the vehicle pass criteria, and a 
review of any other supplemental information obtained separately by EPA 
or submitted by the manufacturer shows that no significant 
nonconformity exists. Testing would then stop and no other action is 
required of the manufacturer for that diesel engine family under the 
program for that year. Second, we may seek some form of remedial action 
from the manufacturer based on our evaluation of the Phase 1 test 
results and review of other supplemental information. Third, and 
finally, the engine manufacturer may undertake Phase 2 testing, if both 
EPA and the manufacturer agree this is the best course of action. Of 
course, a manufacturer may always voluntarily conduct Phase 2 testing.
    In the event that fewer than six test vehicles comply with the 
vehicle pass criteria (i.e., 5 or fewer out of 10 pass), the 
manufacturer must consult with EPA just as when six or seven out of 10 
pass as described above. Once again, EPA may decide not to take further 
action if no significant nonconformity is indicated. If a possible 
nonconformity is indicated, the consultation may lead us to mandate 
Phase 2 testing even if the manufacturer does not voluntarily elect to 
do so. In situations where a significant nonconformity is observed 
during Phase 1 testing, we may order a recall action for the diesel 
engine family in question if the manufacturer does not voluntarily 
initiate an acceptable remedial action.

D. Phase 2 Testing Scheme

1. Initiation and Focus of Additional Testing
    The primary purpose of our proposed Phase 2 test program is to gain 
further information regarding the extent to which, and under what 
conditions, the vehicles from the designated engine family are failing 
to pass the vehicle pass criteria. If appropriate, we may direct a 
manufacturer's testing to focus on certain test conditions or a 
subclass of engines within the designated heavy-duty diesel engine 
family as outlined below. As described previously, EPA and the 
manufacturer may agree that it is appropriate to initiate Phase 2 
testing if six or seven of the 10 test vehicles in Phase 1 satisfy the 
vehicle pass criteria. Phase 2 testing may also be mandated by us in 
the event that only five or fewer of the test vehicles in Phase 1 meet 
the vehicle pass criteria. (See Section II.C. for additional 
information regarding the conditions under which Phase 2 may be 
initiated.)
2. Number of Engines and Test Conditions
    We propose to require a manufacturer to test up to 10 vehicles from 
the designated heavy-duty diesel engine family under Phase 2. We may, 
at our discretion, require the testing of fewer than 10 vehicles. A 
pass/fail determination for each vehicle will be made by comparing its 
measured emissions to the same vehicle pass criteria used in Phase 1. 
We believe that testing up to 10 additional vehicles under this phase 
of the program will provide valuable information regarding whether the 
engine family conforms with the applicable requirements.
    We also propose that we may direct a manufacturer to test one or 
more specific engine and emission control or power configurations 
(i.e., subclasses) within the designated engine family. Additionally, 
we may specify certain driving routes or other driving conditions 
(e.g., temperatures, altitudes, geographic conditions, or time of 
year). As already discussed, the purpose of these additional 
specifications is to better understand the extent to which, and under 
what conditions, the vehicles in the engines family are failing to pass 
the vehicle pass criteria. Therefore, the specifications would be based 
on the Phase 1 test conditions that indicated a potential 
nonconformity.
    We also request comment on whether EPA should similarly be allowed 
to direct a manufacturer to test specific engine configurations, test 
routes, and driving conditions for Phase 1 testing when we have 
particular information suggesting that these stipulations may help 
focus testing on areas where EPA has particular emission-related 
concerns. Such an initial focus may not only improve the overall 
effectiveness of the in-use program, and might reduce the number of 
tests a manufacturer may otherwise need to conduct if Phase 2 testing 
is conducted for any reason. Further, we request comment on the extent 
to which the manufacturer should be consulted in selecting the engine 
configurations or test conditions if EPA were to specify such test 
parameters in Phase 1.

E. Vehicle Pass Criteria

    Generally, our proposed vehicle pass criteria involve measuring the 
emissions from the test engine each time it operates for 30 seconds or 
more in the NTE control area. The NTE control area is a defined range 
of engine operating conditions that are subject to the NTE emission 
standards (see Section I.C.1. of this preamble for more information on 
the NTE control area). Each excursion into the NTE control area for 
thirty or more seconds is called an NTE sampling event. The 30 second 
minimum is intended to moderate the influence of short-duration, high 
intensity emission spikes that do not have a significant bearing on 
overall, real-world emissions in the compliance determination. The 
average emission level of the NTE sampling event for each regulated 
pollutant is then compared to an NTE emission threshold. The NTE 
emission threshold is the sum of the applicable NTE standard, any in-
use compliance margin already allowed by the regulations, and a 
proposed in-use measurement margin allowance. The vehicle pass criteria 
then require a comparison of the number of NTE sampling events that 
were below the NTE threshold to all of the sampling events from the 
test. The NTE threshold is further described in Section II. F. of this 
preamble. Also, for the first three years of the program, no sampling 
event may be higher than a specific maximum emission limit. The maximum 
emission limit for these engine families is described below.
    More specifically, we propose that all valid NTE sampling events be 
used in the vehicle pass determination. A valid NTE event is any sample 
that meets the 30 second minimum period described above, excluding any 
engine operation that is exempt from the NTE standards under the 
existing regulations. NTE carve-out provisions either exclude certain 
operating points from the NTE engine control area or exempt engines 
from the NTE standards when operating in defined regions of the NTE 
engine control area. Currently, an engine may also be allowed to 
temporarily exceed the NTE standards under certain limited 
circumstances under the NTE deficiency provisions.\8\ If 90 percent of 
the valid NTE samples on a time-weighted basis for any regulated 
pollutant are no greater than the applicable NTE threshold, then the 
test engine meets the vehicle pass criteria. However, model year 2007 
through 2009 engines must meet certain additional requirements. For 
these years, 100 percent of the valid NTE samples for any regulated 
pollutant must also be less than two times (2X) the applicable NTE 
threshold, except when the engine is certified to a Family Emission 
Limit (FEL) for NOX of 0.50 g/bhp-hr or less. In this case, 
100 percent

[[Page 32812]]

of the valid NTE NOX samples must be less than two times the 
NTE threshold or less than 2.00 g/bhp-hr, whichever is numerically 
greater. While operation in the area of an approved deficiency or 
carve-out is excluded from being a valid NTE event for the purposes of 
this in-use testing program, manufacturers must still employ 
appropriate emissions control during operation in these regions as 
required by the prohibition against defeat devices. For any operation 
which occurs within the area of an approved NTE deficiency, EPA will 
compare the measured emissions results to the emissions estimates the 
manufacturer provided for that deficiency at the time of certification 
so we can determine whether the deficiency requirements have been met.
---------------------------------------------------------------------------

    \8\ For more information on NTE control area limits and 
exclusions, see 65 FR 59912, 59914 (October 6, 2000), and 66 FR 5040 
(January 18, 2001).
---------------------------------------------------------------------------

    We believe that the 90 percent criterion provides a good indicator 
of compliance with the applicable emission standard, while at the same 
time allows for certain emissions behavior that may be very infrequent 
or unusual in nature and, therefore, atypical of overall in-use 
operation. We have fashioned the additional maximum NTE criteria for 
2007-2009 model year engines because we believe it appropriately 
reflects the capability of current control technology when robustly 
designed and properly maintained. We do not envision any situation 
where the current technology could not be designed to avoid emissions 
above these maximum criteria, even in the atypical situations mentioned 
above. EPA will evaluate the need for, and level of, any such NTE 
maximum criteria for 2010 and later model year heavy-duty diesel 
vehicles based, in part, on data from the proposed in-use test program, 
the capability of technology used to comply with the 2010 model year 
requirements, and other relevant test information. If we decide that 
such criteria are appropriate based on this review, any new 
requirements will be established in a rulemaking action. If we take no 
action, the maximum NTE criteria will cease to exist after the 2009 
model year.
    The following multi-part methodology is proposed for determining if 
the engine complies with the 90 percent vehicle pass criterion for each 
regulated pollutant. First, find the average g/bhp-hr emission level 
for each valid NTE sample by dividing the total mass of measured 
emissions (e.g., grams) by the amount of work performed during the NTE 
event (e.g., brake horsepower-hour). (Note that this step is also used 
to determine compliance with the maximum NTE criteria for 2007-2009 
model year engines as described above.) Second, determine for each 
valid NTE sampling event, whether the average emission level is less 
than or equal to the NTE threshold for each pollutant subject to an NTE 
standard. Third, calculate a time-weighted vehicle pass ratio, or the 
number of valid NTE sampling events that meet all applicable NTE 
thresholds compared to the total number of valid NTE sampling events, 
weighted by the time of each valid NTE event. To do this, begin by 
summing the time from each valid NTE sampling event whose average 
emission level is no greater than the NTE threshold for any pollutant, 
and then divide this value by the sum of the engine operating time from 
all valid NTE samples. The resulting value is the vehicle pass ratio. 
However, if any single valid NTE sampling event exceeds 600 seconds or 
10 times the length of the shortest valid NTE event, the time 
contribution for that event must be limited to the smaller of 600 
seconds or 10 times the shortest event for the above calculation. These 
conditions on the maximum allowable duration for any single NTE event 
are intended to prevent a small number of very long sampling events 
from inappropriately overwhelming the time-weighted results. The reader 
may refer to the Technical Support Document for today's proposal for a 
detailed example illustrating the above methodology.
    We want to clarify that the vehicle pass criteria used for the 
manufacturer-run, in-use testing program do not correspond specifically 
to the criteria for showing compliance to the NTE standards. That is, 
the fact that a vehicle meets the vehicle pass criteria under this 
program does not mean that the vehicle passes the NTE standards, or 
that the engine family is in full compliance with the standards, and 
the use of these criteria to show a vehicle ``pass'' in this program 
does not indicate that the criteria would be appropriate for NTE 
testing in other contexts.
    The vehicle pass criteria, along with the engine family evaluation 
criteria of the Phase 1 and Phase 2 test schemes (described later), are 
designed to help make the best use of manufacturers' and EPA's 
resources in determining what further action is appropriate regarding 
that engine family. Therefore, the vehicle pass criteria, the 
definition of a valid NTE sampling event, the criteria for moving from 
Phase I to Phase II, and all other aspects of the in-use testing 
program are solely for purposes of this manufacturer run, in-use test 
program and are not intended to revise, change, or interpret the NTE 
standards, the NTE test procedures, or to define compliance with the 
standards.

F. NTE Threshold Specification

    The numerical value of the NTE threshold is defined as the 
applicable NTE standard, including any compliance margin already built 
into the standard for in-use testing, in addition to a new margin to 
account for the in-use measurement accuracy of the portable emission 
measurement systems. Therefore, these margins are added to the 
applicable standard or FEL to determine the numerical in-use compliance 
limit (i.e., NTE threshold).
1. Not-to-Exceed Standards
    NTE standards applicable to model year 2007 and later heavy-duty 
diesel engines apply to the exhaust emissions of non-methane 
hydrocarbons (NMHC), carbon monoxide (CO), particulate matter (PM) and 
oxides of nitrogen (NOX) from these engines. The levels of 
the NTE standards for these pollutants are determined by applying a 
multiplier to the applicable FTP standard. The multiplier varies by 
pollutant and certification level, but it is generally either 1.25 
times the FTP standard or 1.50 times the FTP standard. See 40 CFR 
86.007-11(a)(4). For 2002-2006 model year engines tested under the 
pilot program, the applicable NTE limit used to develop the NTE 
threshold is 1.25 the FTP standard for that model year.
    The FTP standards for 2002 and 2003 model year heavy-duty diesel 
engines are contained in 40 CFR 86.099-11, except that those engine 
families subject to NTE requirements under the Consent Decrees would 
use an NTE threshold based on the FTP levels found in the appropriate 
Consent Decree. The standards for 2004 to 2006 model year heavy-duty 
diesel engines are contained in 40 CFR 86.004-11. Those for 2007 and 
later model years are shown in 40 CFR 86.007-11.
2. Existing In-Use Compliance Margins
    We previously established compliance margins for in-use 
NOX and PM emissions testing of 2007 to 2010 model year 
heavy-duty diesel engines. For NOX, the margin varies by 
mileage from 0.10 to 0.20 g/bhp-hr for engines certified to an FEL no 
higher than 1.3 g/bhp-hr. For PM, the margin is 0.01 g/bhp-hr. (See 40 
CFR 86.007-11(h) for more details.)
3. New Measurement Margin for Portable Measurement Systems
    We are proposing a new ``accuracy'' margin for portable emission 
measurement devices that was developed after consultation with CARB and 
EMA. This allowance is designed to account for any differences between 
the accuracy of the measurement

[[Page 32813]]

instruments currently available for use on a vehicle and the accuracy 
of those available for use in a laboratory. The allowance also takes 
into account the different way in which emissions are calculated in a 
laboratory versus in the field. This margin has been structured to 
encourage instrument manufacturers to develop more and more accurate 
portable measurement systems in the future. To this end, we intend to 
adjust or phase-out such a margin through future rulemaking based upon 
improvements to the measurement equipment. Any future action, however, 
will not take effect prior to 2010. The adjustment or phase-out would 
apply to any engine tested after such a rule became effective.
    Specifically, we propose a fixed margin of five percent, or 0.05 
times the applicable NTE emissions standard, including any existing in-
use compliance margin. The magnitude of this allowance was determined 
by taking into account the accuracy and repeatability specifications 
for laboratory instruments and field testing instruments that are 
proposed in the companion NPRM discussed in Section II.L of this 
preamble, which will revise the testing procedures under Part 1065 of 
our regulations. Essentially, we calculated the fixed allowance by 
subtracting the laboratory instrumentation compliance margin from the 
field instrumentation compliance margin. The step by step error 
propagation for accuracy and repeatability throughout the laboratory 
and field testing calculations is detailed in Chapter 3 of the 
Technical Support Document of this notice.
    We propose a fixed allowance as a means to encourage measurement 
instrument manufacturers to build more accurate and repeatable 
instruments. A fixed allowance creates the same situation that already 
exists for laboratory measurement instruments, which encourages more 
accurate and repeatable instruments. That is, with no allowance or a 
fixed allowance, a more accurate and repeatable instrument will allow 
engine manufacturers to allocate a smaller fraction of their compliance 
margin to instrument error.
    Another option we considered was a variable measurement allowance. 
This allowance would become smaller as accuracy and repeatability 
improved. However, this approach provides no incentive to procure a 
more accurate or repeatable instrument, because the investment in an 
improved system would net an unchanged compliance margin.
    A final option we studied was a measurement margin that simply 
decreased over time. To justify such an approach, we would have to 
estimate the rate of improvement in accuracy and repeatability for a 
wide variety of measurement technology. If we overestimated the rate of 
instrument improvement, then no instrument would be commercially 
available to meet our specifications. Therefore, we feel that 
attempting to predict the rate of instrument improvement at this time 
would be counterproductive if engine manufacturers became exempt from 
having to measure certain emissions because instruments that meet our 
specifications were unavailable.
    Based on the above, we believe that a fixed measurement margin 
appears to be the best way to encourage the development of more 
accurate and repeatable portable measurement systems. Again, we will 
revisit this issue in the future to determine if this margin should be 
reduced or eliminated based on technical advances in these devices.
    We want to emphasize that although we are proposing a new 
measurement accuracy margin for the in-use NTE testing program, we are 
not making any broader commitments or statements regarding the need for 
such an accuracy margin, or one of this particular magnitude, generally 
for any other onboard testing or NTE testing. The need for accuracy 
margins for onboard testing will be determined as is appropriate for 
each situation, and improvements in the accuracy of measurement devices 
may lead to smaller margins, or no margins, being used in other 
contexts. Conversely, if the circumstance of a particular situation 
indicates that a larger margin is appropriate, we may decide to allow 
for a larger margin in that context.

G. Considerations in Deciding on Remedial Action

    In determining whether to pursue some sort of remedial action 
following Phase 1 and Phase 2 testing, we will consider supplemental 
information obtained separately by us, or submitted by the engine 
manufacturer. This information could include emissions data from 
additional tests performed with onboard portable emissions measurement 
devices, as well as from testing conducted using engine dynamometers or 
chassis dynamometers. The information may include an evaluation of, 
among other things: the margin by which any exceedence was above the 
NTE threshold; the number of engines that showed exceedences; the 
frequency and duration of any exceedences as compared with the 
aggregate amount of time that all of the test vehicles were operated 
within the NTE zone; the emissions of the test vehicles over the entire 
test route, including average(s); the projected emissions impact of the 
exceedences; and the relationship of the exceedences at issue to the 
engine family's ability to comply with the applicable standards or 
FELs. We will also consider any other data or factors relevant to 
determining whether to pursue some form of remedial action.

H. Quantity of Data Collected

    During the 2005 and 2006 pilot program, we are proposing that the 
minimum time for data collection from a test vehicle is one full shift 
(work) day of operation, provided that each test vehicle operates in 
non-idle modes for at least 3 hours during a typical shift day. Prior 
to the commencement of in-use testing, the manufacturer will screen-out 
from Phase 1 testing any vehicle that the manufacturer reasonably 
determines is unlikely to operate in non-idle modes for at least 3 
hours over a full shift.
    In the event that a selected test vehicle does not operate in non-
idle modes for at least 3 hours over the full shift day, we are 
proposing that the vehicle must be tested over a second full shift day 
of operation. Testing shall not be required beyond the second full 
shift day even if that second day of testing also fails to yield, in 
the aggregate, 3 hours of vehicle operation in non-idle modes. In the 
event that no valid NTE sampling events are recorded from a selected 
test vehicle, that vehicle will be deemed to have satisfied the vehicle 
pass/fail criteria for the purposes of this in-use testing program. At 
their option, manufacturers may conduct in-use testing for a longer 
duration.
    While we are proposing this method of data collection for the fully 
enforceable in-use testing program beginning with model year 2007, an 
evaluation of in-use test data prior to 2007 could change the final 
value for the data collection period. During 2005 and 2006, we will 
perform a statistical analysis, in collaboration with EMA, of the 
available in-use testing data, particularly the data generated under 
the proposed pilot program described below, to determine the necessary 
parameters of the test regime. The end result could be either a longer 
or a shorter period of data collection, or other revisions to the in-
use NTE testing program. We will, if appropriate, amend the regulations 
based on the outcome of this analysis.

[[Page 32814]]

I. Screening, Adjustment, and Mileage of Test Vehicles

    To help ensure that testing is conducted on a diverse sample of 
``qualified'' vehicles, we are proposing a number of general pre-
selection criteria for prospective test vehicles within a designated 
engine family. First, test vehicles must be obtained from at least two 
sources. We envision the most common source of engine will be fleet 
operators, but could also include independent operators. As stated 
previously, we believe manufacturers will be able to leverage existing 
relationships with its customers or use this program as an opportunity 
to strengthen those relationships. Second, manufacturers must screen 
each selected vehicle for proper use and maintenance and reject those 
vehicles which have not been properly maintained and used. Third, 
prospective test vehicles must be screened to identify those that are 
reasonably likely to operate in non-idle modes for at least 3 hours 
over the course of a full shift day (see Section II. H. of this 
preamble for more on the non-idle and shift day requirements). Fourth, 
vehicle engines that have been tampered with, rebuilt, or subjected to 
major repairs that could affect emissions, will not be used in testing. 
Fifth, test engines must have their adjustable parameters set to the 
specifications contained in the vehicle/engine maintenance manual 
(i.e., set to spec). Sixth, manufacturers must establish appropriate 
means to ensure that test vehicles are operated only on diesel fuels 
meeting the requisite specifications for the model year in which they 
were emissions certified. Seventh, and finally, no prospective test 
vehicles may be rejected because of high mileage, except for those 
whose engines that exceed their regulatory useful life.
    For the emissions results of the program to be useful, 
manufacturers must screen all candidate vehicles for compliance with 
the above general criteria. A candidate vehicle is any prospective 
vehicle that is identified as potentially fulfilling the requirements 
for the in-use testing program. We are requiring manufacturers to 
submit a general plan that describes how they will identify, locate, 
and screen vehicle for in-use testing. The general plan is intended to 
cover all engine families selected for testing by EPA. The plan must 
indicate whether the procurement and screening method may result in an 
emphasis on testing engines from a particular type of driving route or 
from a particular geographic area. The plan should identify business 
relationships, such as with vehicle manufacturers or fleet operators, 
used to recruit vehicles. Finally, the plan must describe the methods 
that will be used to gather available information about whether 
vehicles and engines meet the seven general vehicle criteria described 
above, including any forms or procedures that will be used.
    For example, the plan could describe a questionnaire the 
manufacturer might require an interested vehicle owner or operator to 
complete about the candidate vehicle. The questionnaire could inquire 
about the maintenance and usage history of the vehicle, including fuel 
usage and current milage. The plan must describe the specific 
quantitative thresholds being used to accept individual vehicles for 
into the in-use testing program. The questionnaire would contain those 
quantitative thresholds beyond which a candidate vehicle would be 
eliminated from consideration for testing.
    The vehicle acceptance criteria for proper maintenance and use must 
be derived from the emissions-related maintenance intervals and usage 
restrictions contained in the owner's manual supplied by the engine 
manufacturer. We expect the criteria could include a grace period which 
would be added to the manufacturer's maintenance interval. This grace 
period would be designed to reflect that it may not be practical for 
even owners of properly maintained and used vehicles to have 
maintenance performed by the required interval in every instance. For 
example, a typical oil change interval of 25,000 miles could be 
extended to an allowable period of 30,000 miles for the purposes of 
acceptance into the manufacturer in-use testing program. The grace 
period will be based on commonly accepted practice in the trucking 
industry will be established by the manufacturers in consultation with 
EPA and ARB. EPA and ARB will work with industry to develop the 
procurement and screening plans as well as the quantitative vehicle 
acceptance criteria. We believe it is most effective to develop those 
criteria separate from this proposal due to the complex and numerous 
possible situations that must be considered.
    We anticipate the criteria contained in the plan could cover 
situations not specifically addressed by the above seven cases. For 
example, a vehicle's onboard diagnostics (OBD) system may have 
illuminated the malfunction indicator light (MIL) and the cause is 
found to be an electrical circuit discontinuity problem. If the 
discontinuity was relatively easy to repair and would have no long-
term, detrimental effect on the engine or emissions system performance, 
the vehicle would not be automatically excluded from the proposed in-
use testing program. A disconnected fuel level sensor or a glow plug 
would likely fall into this category. Conversely, a vehicle that has 
been misfueled with high-sulfur diesel fuel (e.g., as evidenced by the 
fuel tank containing high-sulfur, off-highway diesel fuel), may in some 
cases accelerate engine or engine component degradation with an 
accompanying long-term, negative effect on emissions performance. In 
these cases, the vehicle might be excluded from the in-use testing 
program.
    As this indicates, the presence of an OBD trouble code or an 
illuminated MIL is not automatic grounds for rejecting a candidate 
vehicle during screening, or eliminating a vehicle when preparing the 
vehicle for testing or testing the vehicle. OBD codes can contain 
valuable information regarding the vehicle's condition. An OBD code may 
indicate that the vehicle has been badly maintained, but it may also 
indicate a problem with a component of the emissions control system, or 
the code may be caused by another problem, or may be unclear. While 
exclusion of a vehicle based on poor maintenance is valid, the 
existence of a problem with the emissions system is not a proper reason 
to exclude the vehicle, in particular because it may provide exactly 
the type of information that this in-use testing program is designed to 
find. In general, EPA will allow a manufacturer to reject a candidate 
vehicle based on an OBD trouble code or MIL illumination if the code or 
MIL, and other relevant information, indicate that the vehicle has not 
been properly maintained and used or has been tampered with, misfueled, 
etc., consistent with the discussion above. However, a manufacturer 
should not otherwise exclude a vehicle based on an OBD trouble code or 
illuminated MIL. EPA will not generally approve a manufacturer's 
request to reject a vehicle for reasons other than those discussed 
above. The existence of a trouble code or MIL does not by itself 
justify rejection of the vehicle.
    Similarly, once a vehicle has been accepted into the program, the 
presence of an OBD trouble code or illuminated MIL would not be 
automatic grounds for eliminating a vehicle or aborting a test, once it 
has begun. If a code or MIL is discovered prior to testing, you can 
either test the vehicle with the code or you can ask for approval to 
remedy the cause of the code. We will generally allow manufacturers to 
remedy the cause of the code if it is related to

[[Page 32815]]

maintenance issues, but we will not allow manufacturers to remedy the 
code if the code is related to other concerns, or the cause of the code 
is unclear. If a code or illumination occurs after a test is started, 
the test must be completed without fixing the cause of the code. A 
manufacturer may remedy the cause of the code following the test and 
then retest the vehicle, but the original test will be the test used to 
determine compliance with the pass criteria. We will, however, consider 
the results of the retest in determining what further actions are 
appropriate.
    In general, we do not anticipate significant maintenance and usage 
issues for the vehicles covered by this rulemaking. Trucks powered by 
heavy-duty diesel engines are typically revenue generating assets for 
businesses, and their proper maintenance and use are critical to 
minimizing operating costs. As such, many businesses establish 
sophisticated controls to ensure vehicles are operated and maintained 
per the engine manufacturer's specifications. Further, most 
electronically controlled heavy-duty diesel engines require minimal 
maintenance. Oil changes and valve lash adjustments are the most common 
maintenance items, although that could change with the advent of add-on 
emission controls such as exhaust gas recirculation (EGR) and 
aftertreatment systems.
    EPA must approve the procurement and screening plan prior to any 
testing, as well as any deviations from the plan. Situations where the 
procurement and screening process results in an emphasis on a 
particular engine configuration, application or service class should be 
treated as a deviation from the plan. EPA has 14 working days from 
receipt of a request for a deviation to accept it. Otherwise, the 
deviation is considered acceptable.
    Manufacturers must report information about the procurement and 
screening process used for any designated engine family, including 
copies of any questionnaires or other supporting documentation. 
Manufacturers may instead refer to the approved screening and 
procurement plan when the criteria being used is contained in that 
plan. Manufacturers must also notify EPA when a vehicle is rejected for 
some reason other than a failure to meet the approved criteria in the 
plan. Manufacturers must maintain all records which depict the 
responses of owners or operators interested in participating in the in-
use test program and any other records, including forms, related to 
vehicle procurement and screening process.
    We also expect manufacturers will also establish procedures and 
forms that will facilitate preparing any accepted vehicle for emissions 
testing. Any adjustments specified in those pre-test maintenance 
procedures would have to be derived from the maintenance schedule for 
normal vehicle operation contained in the owner's manual. A parameter 
may be adjusted only if it is outside of its adjustable range. In such 
a case, the adjustable parameter is to be set to the mid-point of its 
adjustable range, unless we grant a request to do otherwise. EPA must 
approve the adjustment of anything not considered to be an adjustable 
parameter.
    EPA and ARB will work with manufacturers to develop general 
maintenance procedures and protocols. We believe it is most efficient 
for manufacturers to contact EPA prior to performing any maintenance 
designed to determine the cause of a failure to comply with the vehicle 
pass criteria. The manufacturer may choose to retest such a vehicle 
after it has performed any corrective actions, and EPA will consider 
the results of the retest when making a compliance determination about 
the engine family. However, we need to understand the nature of any 
adjustments performed prior to that test, and we request the 
opportunity to participate in the diagnostic process. We will continue 
to afford the same courtesy when conducting our in-use testing 
programs. Manufacturers are required to keep records of all maintenance 
and adjustments and report them to us.

J. Test Conditions

    For all Phase 1 testing, we are proposing that test vehicles must 
to be operated over normal driving routes, carrying routine loads 
during normal atmospheric/environmental conditions, with the vehicle's 
normal owner/operator doing the driving. Our intent is to record the 
emissions from the test vehicles as they are used and operated on a 
normal day-to-day basis.
    For Phase 2 testing, we are proposing to retain the discretion to 
direct engine manufacturers to use a generic or specific test route and 
other conditions that replicate those observed in the Phase 1 testing 
that indicated a potential nonconformity. These other conditions may 
include but not be limited to specifying the State and/or contiguous 
States in which testing must be performed, or specifying the time 
period (of no less than 3 months in duration during which the testing 
must be performed. (This latter condition may also be used to ensure 
prompt testing of Phase 2 vehicles or to ensure testing during periods 
of particular atmospheric conditions.) In deciding to make these 
elections, we will take into account lead time and vehicle availability 
constraints.

K. Reporting Requirements

1. Emission Test Results and Notification of Vehicle Failures
    Manufacturers will report test data and other relevant information 
to EPA on a regular basis. Specifically, we propose that manufacturers 
send us reports for all engines tested during a calendar year quarter 
within 30 days after the quarter ends. Alternatively, manufacturers may 
send us a report for individual engines within 30 days after testing is 
completed. In the case of individual engine failures, manufacturers 
must report the emissions and engine data along with any diagnostic 
results and conclusions to EPA within 15 days of conducting the 
emissions test. The accelerated reporting period for failing vehicles 
is designed to afford EPA the opportunity to participate in the 
diagnosis of vehicle failures and any resulting follow-up activities. 
As mentioned previously, we propose that all testing be finished and 
reported for a heavy-duty diesel engine family within 18 months after 
we designate that family for testing.
    These reports will be comprehensive in scope. Manufacturers will be 
asked to detail all emissions data, engine operating parameters, test 
conditions, test equipment specifications, vehicle and engine 
information generated during the manufacturer test program (e.g., 
information on vehicle maintenance and usage history with reasons for 
rejected vehicles, restorative maintenance performed prior to testing), 
vehicle pass results, etc. Engine operating parameters include all 
relevant, readily available information that is electronically sensed, 
measured, calculated, or otherwise stored by the engine's onboard 
computer. This would normally include, but is not limited to, engine 
speed, engine torque, engine coolant temperature, and manifold absolute 
pressure, and any parameter sensed or controlled in order to modulate 
the emissions control system. It is necessary to report any parameters 
used to modulate the emissions control system so that we can readily 
identify operation where an approved deficiency or carve-out applies, 
and the state of the engine during that operation. Toward that goal, we 
are requesting comment on whether manufacturers should be required to 
explicitly identify when the engine is operating in the area of an 
approved carve-out or deficiency and

[[Page 32816]]

report that information as a data output to the portable emissions 
measurement systems. Flagging the presence of a carve-out or deficiency 
in such a manner would likely require minor revisions to the engine's 
on-board computer software. We envision the software revisions would be 
limited to manipulating already broadcast or stored parameters.
    Engine manufacturers will follow a standardized, electronic 
reporting format. We intend to jointly develop the exact content and 
form of the reports with ARB and the engine manufacturers. 
Participation by ARB will ensure that the reporting requirements are 
nationally consistent when it establishes an in-use NTE testing program 
of its own. The reporting requirements are detailed in the regulatory 
text accompanying today's proposed rule. Additional details, including 
the final reporting format, will be published separately by EPA as a 
guidance document.
2. Carve Outs, Deficiencies, or Other NTE Control Area Exclusions
    Depending on the applicable standards, several provisions in the 
existing heavy-duty diesel engine regulations allow a manufacturer to 
temporarily exceed the NTE standards under certain limited 
circumstances, or otherwise exclude defined regions of the NTE engine 
control zone from NTE compliance. We propose that these exceptions also 
be allowed in determining if a vehicle passes the vehicle pass 
criteria. However, all such exclusions and associated test data must be 
described and reported to EPA when reporting emission test results 
under the proposed program. (See 65 FR 59912 and 59914 (October 6, 
2000), and 66 FR 5040 (January 18, 2001)).

L. Measurement of Emissions

    We are proposing to adopt the test procedures in part 1065, subpart 
J, ``Field Testing'' for conducting any emissions testing required in 
this program, as well as any other onboard testing required for heavy-
duty engines under part 86, subpart N. Note that we are proposing 
changes to the current version of part 1065, which are being published 
in a separate companion Notice of Proposed Rulemaking (NPRM) to this 
document.
    Part 1065 was originally promulgated on November 8, 2002 (67 FR 
68242), and was initially applicable to standards regulating large 
nonroad SI engines and recreational vehicles under parts 1048 and 1051. 
The recently promulgated nonroad diesel engine rule has also made part 
1065 applicable to those engines. The test procedures currently in part 
1065 are sufficient to conduct testing, but the new test procedure NPRM 
proposes to reorganize and add content to improve these procedures. The 
new content includes proposed procedures for measuring very low 
concentrations of emissions, using new measurement technology, and 
performing field testing. Regarding field testing, the companion rule 
proposes that in general, field testing equipment and measurement 
instruments meet the same specifications and performance checks that 
laboratory instruments meet. However, for field testing instruments, 
the test procedure rule proposes to allow certain deviations from the 
laboratory specifications. It proposes a procedure for preparing and 
conducting a field test, and additional drift and noise allowances for 
emissions analyzers. Comments regarding the test procedures proposed in 
the separate companion NPRM to this notice should be directed as 
comments toward that notice and not to this notice.
1. Pollutants
    We are proposing to require the in-use measurement of all regulated 
pollutants for heavy-duty diesel engines: total hydrocarbons (THC), 
carbon monoxide (CO), oxides of nitrogen (NOX), and 
particulate matter (PM). We are also proposing to require the 
measurement of carbon dioxide (CO2) and oxygen 
(O2) as a component of test measurement specifications and 
as a means of assuring quality control. Recognizing that experience may 
show that the effectiveness, durability and overall performance of new 
engine technologies and exhaust aftertreatment systems may demonstrate 
that in-use testing for certain pollutants is unnecessary, we will 
consider requests from the engine manufacturers to discontinue 
reporting and/or measurement of one or more pollutants from some or all 
engines based on future test experience. We are requesting comment on 
whether we should also require in-use measurement of non-methane 
hydrocarbons NMHC (or non-methane hydrocarbon equivalence (NMHCE) for 
methanol-fueled vehicles). The 2007 hydrocarbon standards for heavy-
duty engines are written in terms of NMHC (or NMHCE) not THC. In 
addition, recent testing indicates that the traditional relationship of 
NMHC to THC in diesel exhaust (typically, NMHC is 98% of THC) is no 
longer applicable when aftertreatment like PM filters are used. 
Therefore, there is less of an exact correlation between THC and NMHC 
emissions and the traditional way of correlating such emissions in our 
regulations could lead to overestimation of NMHC emissions. Also, as 
discussed below, NMHC can be measured on-vehicle without significant 
further effort. As a result, we believe there may be strong reasons to 
require NMHC measurement, with little extra burden, and we request 
comment on whether the final regulations should require such 
measurement.
2. Portable Emission Measurement Systems
    Portable emission measurement systems will be used to measure the 
emissions and activity of vehicles tested in this program. These 
systems have been under development for a little over ten years. The 
technologies used in these systems have been shown in studies conducted 
by EPA, CARB, and product manufacturers to be effective in general at 
accurately measuring emissions from in-use motor vehicles under the 
various conditions that could be expected in this test program. 
Portable units are already commercially available for use in the 2005 
to 2006 pilot program from a number of manufacturers that measure 
gaseous emissions at the required levels. Particulate measurement 
technology, which is available from equipment manufacturers today, has 
been tested in the laboratory environment with good results. Although 
this demonstrates that the overall technology is available, more work 
is needed to demonstrate its accuracy and efficacy in the laboratory 
and in the field for the purposes of this program. In addition, work is 
continuing to miniaturize the on-board sampling devices and develop 
suitable exhaust dilution sampling techniques and hardware.
    We are confident that portable systems with the capability to 
measure PM emissions at the exhaust concentrations associated with the 
2007 and later model year standards will be readily available for the 
fully enforceable in-use program starting in 2007. Further, we think it 
is possible that these systems will be available in time to start the 
2005 pilot program. For this reason, we are proposing that particulate 
emissions be measured in the pilot program along with gaseous 
emissions. Nonetheless, we recognize that development work on PM 
measurement technology remains to be done.
    EPA intends to be fully involved in the continued development of 
portable PM measurement systems and will continue to carefully monitor 
the work being done by others in the time between this proposal and the 
subsequent final rulemaking. In order to

[[Page 32817]]

help us with this assessment and defining the final requirements, we 
request comments in this area. If EPA determines that these systems are 
not available for the start of the 2005 pilot program, we may consider 
delaying the PM requirement until 2006 or 2007, or temporarily relaxing 
the equipment measurement tolerances.
    The Technical Support Document (Chapter 2) that accompanies today's 
proposal contains more information on the status and development of 
portable emission measurement systems, including efforts to miniaturize 
and improve the accuracy of these units.
    Also, as the Technical Support Document indicates, our measurement 
instrumentation requirements specify that onboard measurement systems 
must be accurate such that they are no more than 5 percent less 
accurate than laboratory measurements. As noted above, we have added a 
5 percent measurement margin to the NTE Threshold under this program to 
account for these accuracy considerations.

M. 2005 and 2006 Pilot Program

    To ensure a successful launch of the fully enforceable program in 
2007, we are proposing a more limited mandatory pilot program for 
calendar years 2005 and 2006. Under the pilot, we will designate engine 
families for testing as described in Section II. B. of this preamble. 
In all likelihood, we will select 2002 through 2006 model year engines 
for testing under the pilot program. After receiving our selections, 
manufacturers will then conduct in-use testing based on the Phase 1 
testing criteria according to the scheme set forth in Section II. C. of 
this preamble. During these two years both EPA and the heavy-duty 
diesel engine manufacturers will gain valuable experience with the in-
use testing protocols, and the generation, interpretation, and 
reporting of in-use NTE emissions data.
    The evaluation of these data for compliance purposes is limited to 
screening for exceedences of the FTP certification standards as well as 
the potential use of defeat devices as outlined in prior Agency 
guidance. The pilot program data could also be used to screen consent 
decree engines certified to pull ahead NTE requirements for compliance 
with the applicable NTE limits. If the pilot program test results 
clearly show that the designated heavy-duty diesel engine family passes 
the Phase 1 testing criteria (i.e., 5 out of 5, 5 out of 6, or 8 out of 
10 vehicles pass), no further testing will be is required of that 
engine family in that year. If the designated engine family does not 
clearly pass the test criteria (i.e., 7 or fewer out of 10 vehicles 
pass) we will not pursue any form of remedial action based solely on 
that data. However, we may utilize these latter test results in 
conjunction with our own test data and other information to assess or 
pursue any appropriate enforcement or regulatory action.

N. Implications for Other EPA Programs

1. EPA Testing and Supplemental Information
    EPA reserves its preexisting authority to conduct repeat testing or 
initiate our own in-use testing of a manufacturer's heavy-duty diesel 
engine family. The purpose of this testing would be primarily to verify 
and supplement, not duplicate, the testing program to be conducted by 
manufacturers. Therefore, we do not intend to conduct routine in-use 
NTE testing of engines or engine families that satisfy the Phase 1 
testing criteria, unless new information indicates that a potential 
nonconformity exists. We will also inform and invite the affected 
manufacturer to observe any in-use testing that we may conduct which is 
related to this program.
2. Selective Enforcement Audit (SEA) Testing
    We will limit the existing SEA program after full implementation of 
the manufacturer-run, in-use program solely to instances where credible 
evidence indicates the existence of a nonconformity. Such evidence may 
include: past noncompliance occurring in new engines or very early in 
the life of in-use engines, a manufacturer's quality assurance/quality 
control (QA/QC) reporting that identifies or otherwise indicates a 
problem, a significant number of consumer complaints or defect reports, 
or test data of any type.
    In general, we anticipate that a robust, mature manufacturer-run 
in-use program would significantly reduce the role SEA plays in EPA's 
compliance program. Assembly line emissions audits ensure that the 
prototype emission control designs approved during the certification 
process successfully transfer into mass produced engines. More 
specifically, SEAs evaluate whether manufacturers' design enough 
compliance margin into the certified emissions levels to account for 
the emissions variability inherent to the design and manufacture of a 
particular engine and emissions control system.
    It is expected that the in-use program will require manufacturers 
to target emissions performance with enough compliance margin below the 
standards to account for expected in-use deterioration, and that this 
margin will exceed normal emissions variability experienced in new 
engines. The use of aftertreatment as the primary means for emissions 
control is expected further to reduce EPA's reliance on SEAs as a 
compliance tool. These systems typically function at high efficiency 
levels and without catastrophic failure on newer engines. If problems 
were to occur, it is often only apparent after the aftertreatment-
equipped engine has been in service for some period of time. During SEA 
testing, the aftertreatment system will have experienced little mileage 
accumulation and, therefore, is expected perform at essentially 
undeteriorated levels. For these reasons, EPA believes SEA testing will 
be less critical for a vigorous enforcement program.
    As mentioned previously, there are circumstances where SEAs would 
still be warranted. Those situations typically involve known or 
expected problems which occur relatively early in the engine's useful 
life, but have not been remedied by the manufacturer. In those cases, 
it is less expensive and more effective to remedy the problem well in 
advance of in-use testing. EPA is also interested in occasionally 
conducting SEAs for small engine families that may not be the focus of 
testing under the manufacturer-run, in-use testing program.
3. Deterioration Factor Testing
    Under our current emissions certification program requirements, 
manufacturers of heavy-duty diesel engines are allowed considerable 
flexibility in generating deterioration factors (DFs). The regulations 
only generally specify how to stabilize the engine system prior to 
conducting the durability testing. All other aspects of generating DFs, 
such as the durability test cycle and the duration of the testing, are 
left to the good engineering judgment of the engine manufacturer. Given 
this latitude, manufacturers have settled on a fairly standard set of 
methodologies for generating DFs.
    Deterioration factors are generated in the laboratory using an 
engine dynamometer. After the engine is stabilized, it is exercised 
over a durability driving cycle for a period of time or mileage 
established by the engine manufacturer as mentioned previously. 
Emissions are measured over this cycle at intervals specified by the 
engine manufacturer. The measured emissions are plotted as a function 
of time or mileage and a statistical curve

[[Page 32818]]

fitting method is used to calculate emissions deterioration over time. 
Since the emission tests are not typically performed to the end of 
engine's useful life, the curve-fit is extrapolated to estimate useful 
life emissions. Either the measured initial, early-life emissions are 
subtracted from the extrapolated useful life emissions (additive DF), 
or the useful life emissions are divided by the early-life emissions 
(multiplicative DF), depending on the emissions control technology, to 
calculate the DF and arrive at the official deteriorated certification 
test results.
    The 2004 and 2007 low emission standards required for heavy-duty 
diesel engines has placed the efficacy of how these traditional DF 
methodologies are developed and applied under increased scrutiny by 
both EPA and the engine manufacturers. The reasons are twofold. First, 
aftertreatment and add-on emissions control technologies such as 
cooled-EGR are more prone to deterioration compared to past engine 
designs. Second, compliance with the emissions standards becomes more 
sensitive to the uncertainty in the emissions trends resulting from 
these common DFs methods as the stringency of the standards increases. 
In the past, manufacturers could target emissions far enough below the 
relatively relaxed emissions standards in order to account for the 
inherent DF variability. The increased stringency of the 2004 and 2007 
standards have reduced those traditional compliance margins, leaving 
less headroom to account for DF uncertainty. Exacerbating the issue is 
the traditional use of multiplicative DFs which mathematically result 
in a larger deteriorated emissions value compared to an additive 
approach.
    The most likely solution for addressing the loss in confidence with 
current DF methods in the near term is for EPA and the engine 
manufacturers to work cooperatively to establish more robust 
accelerated DF methodologies in the laboratory. This would provide more 
certain deteriorated certification emission results. Discussions on 
such a solution have already started on an informal basis with 
individual manufacturers and will become more structured with industry 
in the near future.
    As a longer term approach, it may be possible to reduce or 
eliminate the current laboratory-based DF methods by using the test 
results generated as part of the proposed manufacturer-run in-use 
testing program or test data from other in-use testing that utilizes 
portable emission measurement systems to more accurately predict in-use 
deterioration. For example, a manufacturer may be able to demonstrate 
that DFs generated from the in-use data are superior predictors of 
useful life deterioration, or at least correlate well with the more 
traditional laboratory approach to developing these factors. To this 
end, we intend to assess the generation and submission of DFs based on 
the proposed 2005 and 2006 pilot program. We will examine potential 
ways to diminish or eliminate burdens on manufacturers of generating 
and submitted DFs, while still generating DFs that accurately predict 
in-use deterioration. Any appropriate revisions for generating DFs 
would be promulgated in a subsequent rulemaking action, particularly in 
the rulemaking reexamining the accuracy margin discussed in II. F. 
above.

O. Limitations of Warranty Claims

    An exceedence of the NTE found through the in-use testing program 
is not by itself sufficient to show a breach of the warranty under 
section 207(a)(1)(A) or (B). A breach of this warranty would also 
require either: (1) That, at the time of sale, the engine or vehicle 
was designed, built and equipped in a manner that does not conform in 
all material respects reasonably related to emission controls to the 
engine as described in the application for certification and covered by 
the certificate, or (2) a defect in materials and workmanship of a 
component or part that causes the vehicle or engine to fail to conform 
to the applicable regulations for its useful life. To the extent that 
in-use NTE testing does not reveal such a material deficiency at the 
time of sale in the design or manufacture of an engine compared to the 
certified engine, or a defect in the materials and workmanship of a 
component or part, test results showing an exceedence of the NTE by 
itself would not show a breach of the warranty under section 207(a)(1).

III. Economic Impacts

    The costs associated with our proposal to implement a manufacturer-
run, in-use NTE testing program for heavy-duty diesel engines depends 
primarily on how many vehicles are eventually tested under the Phase 1 
and 2 testing schemes. This is difficult to estimate because the actual 
number for each designated engine family depends on how may vehicles 
pass, or fail, the vehicle pass criteria at various points in the 
tiered testing design. It is also highly dependent on the how 
manufacturers chose to conduct the test program and the availability of 
test vehicles. Obviously, it is difficult to project these variables 
for an all new program. However, based on our experience with in-use 
emissions testing, including the development and use of portable 
measurement systems for compliance testing, we identified a set of 
reasonable testing scenarios that allow us to estimate the potential 
costs associated with the proposed program.
    Our analysis shows a total cost of approximately $870 thousand to 
$1.0 million per year for the case where no manufacturer must test more 
than the minimum number of vehicles under Phase 1 (i.e., 5 vehicles per 
engine family). If all manufacturers were to test the maximum number of 
vehicles required under Phase 1 (i.e., 10 vehicles per engine family), 
the total cost could range from $1.1 to $1.4 million per year. In the 
most unlikely worst case scenario where all manufacturers must test the 
maximum vehicles in Phase 1 and 2 (i.e., 20 vehicles per engine 
family), the total cost could range from $1.5 to $2.0 million per year. 
Our best estimate of the overall cost of the proposed program is $1.0 
million per year for the entire industry. The Technical Support 
Document for this proposal contains a detailed description of our 
economic analysis.
    Overall, while not insignificant, these costs are quite low 
compared to other in-use compliance programs, and especially in 
comparison to a more traditional in-use testing program where the 
engine must be extracted from the vehicle and tested on an engine 
dynamometer in the laboratory.

IV. Public Participation

    We request comment on all aspects of this proposal. This section 
describes how you can participate in this process.

A. How and to Whom Do I Submit Comments?

    We are opening a formal comment period by publishing this document. 
We will accept comments for the period indicated under DATES above. If 
you have an interest in the program described in this document, we 
encourage you to comment on any aspect of this rulemaking. We request 
comment on various topics throughout this proposal.
    Your comments will be most useful if you include appropriate and 
detailed supporting rationale, data, and analysis. If you disagree with 
parts of the proposed program, we encourage you to suggest and analyze 
alternate approaches to accomplish these same goals described in this 
proposal. You should send all comments, except those containing 
proprietary information, to our Air Docket (see ADDRESSES) before

[[Page 32819]]

the end of the comment period. You should also send a copy to the 
Contact Person listed above (see FOR FURTHER INFORMATION CONTACT).
    You may submit comments electronically, by mail, or through hand 
delivery/courier. To ensure proper receipt by EPA, identify the 
appropriate docket identification number in the subject line on the 
first page of your comment. Please ensure that your comments are 
submitted within the specified comment period. Comments received after 
the close of the comment period will be marked ``late.'' EPA is not 
required to consider these late comments. If you wish to submit CBI or 
information that is otherwise protected by statute, please follow the 
instructions in Section IV.B. Do not use EPA Dockets or e-mail to 
submit CBI or information protected by statute.

B. How Should I Submit CBI To the Agency?

    Do not submit information that you consider to be CBI 
electronically through EPA's electronic public docket or by e-mail. 
Send or deliver information identified as CBI only to the following 
address: U.S. Environmental Protection Agency, Assessment and Standards 
Division, 2000 Traverwood Drive, Ann Arbor, MI, 48105, Attention Docket 
ID No. OAR-2004-0072. You may claim information that you submit to EPA 
as CBI by marking any part or all of that information as CBI (if you 
submit CBI on disk or CD ROM, mark the outside of the disk or CD ROM as 
CBI and then identify electronically within the disk or CD ROM the 
specific information that is CBI). Information so marked will not be 
disclosed except in accordance with procedures set forth in 40 CFR part 
2.
    In addition to one complete version of the comment that includes 
any information claimed as CBI, a copy of the comment that does not 
contain the information claimed as CBI must be submitted for inclusion 
in the public docket and EPA's electronic public docket. If you submit 
the copy that does not contain CBI on disk or CD ROM, mark the outside 
of the disk or CD ROM clearly that it does not contain CBI. Information 
not marked as CBI will be included in the public docket and EPA's 
electronic public docket without prior notice. If you have any 
questions about CBI or the procedures for claiming CBI, please consult 
the person identified in the FOR FURTHER INFORMATION CONTACT section.

C. Will There Be a Public Hearing?

    We will hold one public hearing in Washington, DC. The hearing will 
be held on the following date and start at the following time, and 
continue until everyone present has had an opportunity to speak.

------------------------------------------------------------------------
        Hearing location                Date                 Time
------------------------------------------------------------------------
U.S. Environmental Protection    July 15, 2004.....  10 a.m. EDT.
 Agency, 1310 L Street, NW.,
 Washington, DC, Telephone:
 (202) 343-9540, Fax: (202) 343-
 2804.
------------------------------------------------------------------------

    If you would like to present testimony at a public hearing, we ask 
that you notify the contact person listed above at least ten days 
before the hearing. You should estimate the time you will need for your 
presentation and identify any needed audio/visual equipment. We suggest 
that you bring copies of your statement or other material for the EPA 
panel and the audience. It would also be helpful if you send us a copy 
of your statement or other materials before the hearing.
    We will make a tentative schedule for the order of testimony based 
on the notifications we receive. This schedule will be available on the 
morning of each hearing. In addition, we will reserve a block of time 
for anyone else in the audience who wants to give testimony.
    We will conduct the hearing informally, and technical rules of 
evidence will not apply. We will arrange for a written transcript of 
the hearing and keep the official record of the hearing open for 30 
days to allow you to submit supplementary information. You may make 
arrangements for copies of the transcript directly with the court 
reporter.

D. Comment Period

    The comment period for this rule will end on August 16, 2004.

E. What Should I Consider as I Prepare My Comments for EPA?

    You may find the following suggestions helpful for preparing your 
comments:
    1. Explain your views as clearly as possible.
    2. Describe any assumptions that you used.
    3. Provide any technical information and/or data you used that 
support your views.
    4. If you estimate potential burden or costs, explain how you 
arrived at your estimate.
    5. Provide specific examples to illustrate your concerns.
    6. Offer alternatives.
    7. Make sure to submit your comments by the comment period deadline 
identified.
    8. To ensure proper receipt by EPA, identify the appropriate docket 
identification number in the subject line on the first page of your 
response. It would also be helpful if you provided the name, date, and 
Federal Register citation related to your comments.

V. 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:
     Have an annual effect on the economy of $100 million or 
more or adversely affect in a material way the economy, a sector of the 
economy, productivity, competition, jobs, the environment, public 
health or safety, or State, Local, or Tribal governments or 
communities;
     Create a serious inconsistency or otherwise interfere with 
an action taken or planned by another agency;
     Materially alter the budgetary impact of entitlements, 
grants, user fees, or loan programs, or the rights and obligations of 
recipients thereof; or
     Raise novel legal or policy issues arising out of legal 
mandates, the President's priorities, or the principles set forth in 
the Executive Order.
    EPA has determined that this rule is not a significant regulatory 
action under the terms of Executive Order 12866 and is therefore not 
subject to OMB review.

B. Paperwork Reduction Act

    The information collection requirements in this proposed rule have 
been submitted for approval to the Office of Management and Budget

[[Page 32820]]

(OMB) under the Paperwork Reduction Act, 44 U.S.C. 3501 et seq. The 
Agency proposes to collect information to ensure compliance with the 
provisions in this rule. Information-collection requirements related to 
engine manufacturers are in EPA ICR 1897.07. Section 208(a) of 
the Clean Air Act requires that manufacturers provide information the 
Administrator may reasonably require to determine compliance with the 
regulations; submission of the information is therefore mandatory. We 
will consider confidential all information meeting the requirements of 
section 208(c) of the Clean Air Act.
    As shown in Table V-1, the total annual burden associated with this 
proposal is about 720 hours and $48,401, based on a projection of 14 
respondents. The estimated burden for engine manufacturers is a total 
estimate for both new and existing reporting requirements. Burden means 
the total time, effort, or financial resources expended by persons to 
generate, maintain, retain, or disclose or provide information to or 
for a Federal agency. This includes the time needed to review 
instructions; develop, acquire, install, and utilize technology and 
systems for the purposes of collecting, validating, and verifying 
information, processing and maintaining information, and disclosing and 
providing information; adjust the existing ways to comply with any 
previously applicable instructions and requirements; train personnel to 
be able to respond to a collection of information; and transmit or 
otherwise disclose the information.

                    Table V-1.--Estimated Burden for Reporting and Recordkeeping Requirements
----------------------------------------------------------------------------------------------------------------
                                                                  Number of      Annual burden
                       Industry sector                           respondents         hours         Annual costs
----------------------------------------------------------------------------------------------------------------
Engines......................................................              14              720          $48,401
----------------------------------------------------------------------------------------------------------------

    An agency may not conduct or sponsor, and a person is not required 
to respond to a collection of information unless it displays a 
currently valid OMB control number. The OMB control numbers for EPA's 
regulations are listed in 40 CFR part 9 and 48 CFR chapter 15.
    To comment on the Agency's need for this information, the accuracy 
of the provided burden estimates, and any suggested methods for 
minimizing respondent burden, including the use of automated collection 
techniques, EPA has established a public docket for this rule, which 
includes this ICR, under Docket ID number OAR-2004-0072. Submit any 
comments related to the ICR for this proposed rule to EPA and OMB. See 
ADDRESSES section at the beginning of this notice for where to submit 
comments to EPA. Send comments to OMB at the Office of Information and 
Regulatory Affairs, Office of Management and Budget, 725 17th Street, 
NW., Washington, DC 20503, Attention: Desk Office for EPA. Since OMB is 
required to make a decision concerning the ICR between 30 and 60 days 
after June 10, 2004, a comment to OMB is best assured of having its 
full effect if OMB receives it by July 12, 2004. The final rule will 
respond to any OMB or public comments on the information collection 
requirements contained in this proposal.

C. Regulatory Flexibility Act (RFA)

    The Regulatory Flexibility Act (RFA) generally requires an agency 
to prepare a regulatory flexibility analysis of any rule subject to 
notice and comment rulemaking requirements under the Administrative 
Procedure Act or any other statute unless the agency certifies that the 
rule will not have a significant economic impact on a substantial 
number of small entities. Small entities include small businesses, 
small organizations, and small governmental jurisdictions.
    For purposes of assessing the impact of today's rule on small 
entities, small entities are defined as: (1) A small business that is 
primarily engaged in the manufacturing of diesel engines as defined by 
NAIC codes 333618 with less than 1000 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.
    After considering the economic impacts of today's proposed rule on 
small entities, EPA certifies that this action will not have a 
significant economic impact on a substantial number of small entities. 
This proposed rule will not impose any requirements on small entities. 
The test procedures that are established by this proposed rule pertain 
to heavy-duty diesel engine manufacturers. EPA has previously analyzed 
this category for impact on small entities when emission standards were 
finalized for this category of engines in October of 2000 (65 FR 59895, 
October 6, 2000). At that time, EPA noted that only two small entities 
were known to be affected. Those entities were small businesses that 
certify alternative fuel engines or vehicles, either newly manufactured 
or modified from previously certified gasoline engines. The test 
procedures proposed by this action do not pertain to the engines 
manufactured by these small businesses and recent analysis supports 
that there are no additional small businesses that would be impacted by 
this proposed action. We continue to be interested in the potential 
impacts of the proposed rule on small entities and welcome comments on 
issues related to such impacts.

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.
    This rule contains no federal mandates for state, local, or tribal

[[Page 32821]]

governments as defined by the provisions of Title II of the UMRA. The 
rule imposes no enforceable duties on any of these governmental 
entities.
    EPA has determined that this rule contains no federal mandates that 
may result in expenditures of more than $100 million to the private 
sector in any single year. EPA believes that the proposal represents 
the least costly, most cost-effective approach to achieve the emission 
compliance goals of the rule. The costs associated with the proposal 
are discussed in the Draft Technical 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 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 proposed 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 STAPPA/ALAPCO, which 
represents state and local air pollution officials.
    In the spirit of Executive Order 13132, and consistent with EPA 
policy to promote communications between EPA and State and local 
governments, EPA specifically solicits comment on this proposed rule 
from State and local 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.''
    This proposed rule does not have tribal implications as specified 
in Executive Order 13175. This rule will be implemented at the Federal 
level and impose compliance costs only on engine manufacturers and ship 
builders. Tribal governments will be affected only to the extent they 
purchase and use equipment with regulated engines. Thus, Executive 
Order 13175 does not apply to this rule. EPA specifically solicits 
additional comment on this proposed rule from tribal officials.

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 proposed 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 toxic emissions 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.

I. National Technology Transfer 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 proposed rule is not related to any available and applicable 
voluntary consensus standards.

XI. Statutory Provisions and Legal Authority

    Statutory authority for the proposed regulations is provided by the 
Clean Air Act, as amended, 42 U.S.C. 7401 et seq., in particular, 
sections 202-208 of the Act, 42 U.S.C. 7521-7542.

[[Page 32822]]

List of Subjects in 40 CFR Part 86

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

    Dated: June 3, 2004.
Michael O. Leavitt,
Administrator.
[FR Doc. 04-13179 Filed 6-9-04; 8:45 am]
BILLING CODE 6560-50-U