[Federal Register Volume 69, Number 177 (Tuesday, September 14, 2004)]
[Rules and Regulations]
[Pages 55332-55342]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-20673]


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FEDERAL TRADE COMMISSION

16 CFR Part 309


Labeling Requirements for Alternative Fuels and Alternative 
Fueled Vehicles

AGENCY: Federal Trade Commission.

ACTION: Final rule.

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SUMMARY: The Federal Trade Commission (``Commission'' or ``FTC'') is 
publishing amendments to the Commission's rule concerning Labeling 
Requirements for Alternative Fuels and Alternative Fueled Vehicles 
(``Rule''). The Commission is amending the Rule to delete vehicle-
specific emissions information and, in its place, adding a reference to 
the Environmental Protection Agency's (EPA's) green vehicle guide Web 
site. EPA's guide, located on its Web site at http://www.epa.gov/greenvehicle, provides detailed, comparative information regarding 
vehicle emissions generally and by vehicle model. The Commission 
commenced this rulemaking proceeding because the emissions standards on 
the current alternative fueled vehicle (``AFV'') label are obsolete as 
of the 2004 vehicle model year, and the Ford Motor Company (``Ford'') 
petitioned the Commission to revise the label. The Commission also 
conducted a review of this Rule pursuant to the Commission's regulatory 
review program.

EFFECTIVE DATE: The amendments will become effective on March 31, 2005.

FOR FURTHER INFORMATION CONTACT: Hampton Newsome, Attorney, (202) 326-
2889, or Neil Blickman, Attorney, (202) 326-3038, Division of 
Enforcement, Bureau of Consumer Protection, Federal Trade Commission, 
Washington, DC 20580.

SUPPLEMENTARY INFORMATION:

Part A--Background

1. The Rule

    The Energy Policy Act of 1992 (``EPA 92'' or the ``Act'') \1\ 
establishes a comprehensive national energy policy to increase U.S. 
energy security in cost-effective and environmentally beneficial ways. 
The Act seeks to reduce U.S. dependence on oil imports, encourage 
conservation and more efficient energy use, reduce the use of oil-based 
fuels in the motor vehicle sector, and provide new energy options. The 
Act also provides for programs that encourage the development of 
alternative fuels and alternative fueled vehicles.
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    \1\ Pub. L. 102-486, 106 Stat. 2776 (1992).
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    Section 406(a) of EPA 92 directed the Commission to establish 
uniform labeling requirements, to the greatest extent practicable, for 
alternative fuels and AFVs.\2\ In accordance with the statutory 
directive, on May 19, 1995, the Commission published a Rule requiring 
disclosure of specific information \3\ on:

[[Page 55333]]

(a) Labels posted on fuel dispensers for non-liquid alternative fuels 
(e.g., compressed natural gas, hydrogen, and electricity), effective 
August 21, 1995; and (b) labels on AFVs, which are designed to operate 
on at least one alternative fuel (e.g., vehicles fueled by compressed 
natural gas, liquified petroleum gas, ethanol, and electricity), 
effective November 20, 1995.\4\
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    \2\ 42 U.S.C. 13232(a). EPA 92 did not specify what information 
should be displayed on these labels. Instead, it provided generally 
that the Commission's rule must require disclosure of 
``appropriate,'' ``useful,'' and ``timely'' cost and benefit 
information on ``simple'' labels.
    \3\ 60 FR 26926. The Rule also requires that sellers maintain 
records substantiating product-specific disclosures they include on 
these labels.
    \4\ AFVs come in a variety of vehicle models, such as sedans, 
pickup trucks, and sport utility vehicles. Hybrid electric vehicles, 
however, such as the Ford Escape, Toyota Prius, and Honda Insight, 
are not defined as AFVs under EPA 92 and, therefore, they are not 
covered by the Commission's Rule. According to staff at the 
Department of Energy, most AFVs are purchased by government and 
private fleets (e.g., the U.S. Postal Service, transit bus 
authorities, United Parcel Service, and Federal Express).
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    Section 309.20 of the Rule provides that before offering for 
consumer sale a new covered AFV, manufacturers must affix, on a visible 
surface of each such vehicle, a label consisting of three parts.\5\ 
Part one discloses objective information about the estimated cruising 
range and detailed emissions information of the particular AFV. Part 
two discloses and explains specific factors consumers should consider 
before buying an AFV.\6\ Part three lists specific toll-free telephone 
numbers for consumers who want to call the federal government for more 
information about AFVs.\7\ Section 309.20 of the Rule further states 
that no marks or information other than that specified by the Rule may 
appear on the label.
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    \5\ Section 309.1(f) of the Rule defines a covered vehicle as 
either of the following: (1) A dedicated or dual fueled passenger 
car (or passenger car derivative) capable of seating 12 passengers 
or less; or (2) a dedicated or dual fueled motor vehicle (other than 
a passenger car or passenger car derivative) with a gross vehicle 
weight rating less than 8,500 pounds which has a vehicle curb weight 
of less than 6,000 pounds and which has a basic vehicle frontal area 
of less than 45 square feet, which is: (i) Designed primarily for 
purposes of transportation of property or is a derivation of such a 
vehicle; or (ii) designed primarily for transportation of persons 
and has a capacity of more than 12 persons. Further, section 
309.1(t) of the Rule defines a new covered vehicle as a covered 
vehicle which has not been acquired by a consumer. The Rule also 
contains labeling requirements for used AFVs.
    \6\ The factors include information concerning fuel type, 
operating costs, fuel availability, performance/convenience, and 
energy security/renewability.
    \7\ The federal government agencies referenced are the 
Department of Energy (``DOE'') and the National Highway Traffic 
Safety Administration (``NHTSA'').
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2. EPA's Emissions Certification Program

    For many years, EPA has promulgated emissions classification 
standards as part of its Federal Motor Vehicle Control Program, which 
establishes pollution limits for ``criteria air pollutants'' (i.e., 
hydrocarbons, carbon monoxide, nitrogen oxides, and particulate 
matter). These pollutants are released as exhaust from an automobile's 
tailpipe. In addition, hydrocarbons in vapor form are released due to 
the evaporation of fuel and during refueling. The standards apply to 
new motor vehicles manufactured in specified model years. After 
manufacturers submit appropriate test reports and data, the EPA 
Administrator issues a ``certificate of conformity'' to those vehicle 
manufacturers demonstrating compliance with the applicable emissions 
standards.
    Pursuant to its authority under the 1990 Clean Air Act 
Amendments,\8\ EPA began issuing stricter emission standards for each 
model year as a way of reducing levels of the criteria air pollutants. 
One set of standards, the Tier 1 standards, was phased in beginning 
with the 1994 model year. The second set of standards, phased in 
beginning with the 2000 model year, establishes stricter standards as 
part of a new ``clean-fuel vehicles'' program.\9\ To qualify as a 
clean-fuel vehicle, a vehicle must meet one of five increasingly 
stringent standards. The standards are denominated, in increasing order 
of stringency, TLEV (``Transitional Low Emission Vehicle''), LEV (``Low 
Emission Vehicle''), ULEV (``Ultra Low Emission Vehicle''), ILEV 
(``Inherently Low Emission Vehicle''), and ZEV (``Zero Emission 
Vehicle''). The FTC Rule requires both sets of EPA emission standards 
to be disclosed because the Commission determined that information 
concerning EPA emission certification levels provides a simple way of 
comparing different AFVs and, therefore, is useful to consumers 
considering AFV acquisitions.\10\ Since the FTC's Rule was promulgated, 
EPA has promulgated new tailpipe emission standards, called the ``Tier 
2'' standards.\11\ As a result, the EPA standards currently required to 
be disclosed on the Commission's AFV label are obsolete starting in the 
2004 vehicle model year.
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    \8\ Pub. L. 101-549, 104 Stat. 2399 (1990).
    \9\ See 40 CFR 88 (1996).
    \10\ 60 FR 26926, 26946 (May 19, 1995).
    \11\ 65 FR 6698 (Feb. 10, 2000). These standards regulate 
emissions from cars and light-duty trucks, which include sport 
utility vehicles, pick-up trucks, and minivans.
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3. Ford's Petition

    Ford's petition concerns EPA's Tier 2 tailpipe emission standards. 
These standards, as well as new, more stringent California Low Emission 
Vehicle II (``LEV II'') standards discussed below, limit exhaust 
emissions of five pollutants: Non-methane organic gases, carbon 
monoxide, nitrogen oxides, particulate matter, and formaldehyde.\12\
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    \12\ According to staff at EPA, the Tier 2 program is designed 
to reduce the emissions most responsible for the ozone and 
particulate matter impact from vehicles--nitrogen oxides and non-
methane organic gases consisting primarily of hydrocarbons and 
contributing to ambient volatile organic compounds, and hence urban 
smog.
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    Tier 2 is a fleet averaging program, which is modeled after the 
California LEV II standards. Manufacturers can produce vehicles with 
emissions ranging from relatively dirty to zero, but the mix of 
vehicles a manufacturer sells each year must have average nitrogen 
oxide emissions below a specified value. The Tier 2 tailpipe emissions 
standards are structured into eleven certification levels of different 
stringency called ``certification bins.'' Vehicle manufacturers will 
have a choice of certifying particular vehicles to any of the eleven 
bins.
    Additionally, Ford noted that in October 1999, California adopted 
more stringent state tailpipe emission standards, called the ``LEV II'' 
standards, which are applicable starting in the 2004 vehicle model 
year. California did not adopt the same standards EPA established, nor 
did it adopt the same acronyms (bins) for its standards. California's 
LEV II standards are denominated, in increasing order of stringency, 
LEV, ULEV, SULEV (``Super Ultra Low Emission Vehicle''), PZEV 
(``Partial Zero Emission Vehicle''), and ZEV. California's LEV II 
standards affect passenger cars, light-duty trucks, and medium-duty 
vehicles.
    Ford, and other manufacturers, are required to certify their AFVs 
to the more stringent EPA Tier 2 emission standards beginning in the 
2004 model year. Ford petitioned the Commission to amend the 
Commission's AFV label because it does not provide a means of conveying 
information about the new EPA Tier 2 standards. Ford specifically 
requested that the Commission amend the Rule to permit use of an AFV 
label that substitutes the eleven Tier 2 certification bins for the EPA 
emission standards that currently appear on the label. Ford also 
requested that the Commission amend the Rule to permit inclusion of 
boxes and acronyms for California LEV II emission standards on the 
Commission's AFV label. Alternatively, Ford requested that the AFV 
label be amended to require disclosure of only the EPA Tier 2 emission 
standard, if any, to which the AFV has been certified, and permit 
disclosure on the same label of the California LEV II emission 
standard, if any, to which the AFV has been certified. Ford's petition 
raised

[[Page 55334]]

important issues which led the Commission to initiate this proceeding 
and consider alternatives to existing requirements.\13\
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    \13\ The NPR describes Ford's petition in greater detail. See 68 
FR at 24670-71.
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Part B--The Notice of Proposed Rulemaking

    In response to Ford's petition, the Commission issued a proposed 
rule on May 8, 2003 (68 FR 24669) seeking comments on possible 
amendments to the AFV label.\14\ Specifically, the Commission sought 
comments on Ford's petition, the impact of EPA's new Tier 2 standards 
on the label, and four options the Commission proposed for amending the 
label. The Commission also posed specific questions about these options 
and broad questions as part of its overall regulatory review of 
existing alternative fuel and AFV labeling requirements.\15\ These four 
options the Commission proposed are summarized as follows:
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    \14\ This rulemaking proceeding has been conducted pursuant to 
section 553 of the Administrative Procedure Act (``APA''), 5 U.S.C. 
553, as was the original proceeding promulgating the Rule. This 
Final Rule is being published pursuant to the provisions of Part 1, 
Subpart C of the Commission's Rules of Practice, 16 CFR 1.21-1.26, 
and 5 U.S.C. 551 et seq.
    \15\ See 68 FR at 24678.
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1. Option No. 1

    This option tracked Ford's first proposal. It would modify the AFV 
label by substituting EPA's Tier 2 emission standards for the EPA 
standards that currently are depicted on the label. The Tier 2 
standards reflect the varying emissions levels and are divided into 11 
categories or ``bins.'' In the Option 1 label, these bins were depicted 
as a horizontal row of boxes with corresponding acronyms that were 
divided into 11 equal parts or ``bins.'' This option would permit an 
additional, second row of boxes and acronyms that depict the California 
LEV II standards. If a vehicle has been certified to a California LEV 
II standard, this option would allow that fact to be noted with a mark 
in a box on the label, along with a caret inserted above the standard 
to which the vehicle has been certified. Option 1 also included a 
reference to EPA's new green vehicle guide Web site, and stated: 
``Emissions are an important factor. For more information about how the 
vehicle you are considering compares to others, visit http://www.epa.gov/greenvehicle.''

2. Option No. 2

    This option tracked Ford's alternate proposal. It would require 
disclosure of the EPA Tier 2 emission standard, if any, to which the 
AFV has been certified, and permit disclosure on the same label of the 
California LEV II emission standard, if any, to which the AFV has been 
certified. Unlike the existing label requirements, the label would not 
indicate where the vehicle's emissions rating falls on the range of 
emission standards. For this option, the Commission also proposed 
providing a reference to EPA's green vehicle guide Web site in part 
three of the label. This option would simplify the emissions disclosure 
section of the label and allow manufacturers to indicate their 
compliance with the EPA Tier 2 and California LEV II emission 
standards.

3. Option No. 3

    This option deleted specific reference to EPA's emissions standards 
on the front of the AFV label, and instead directed interested 
consumers to EPA's green vehicle guide Web site. The Commission further 
proposed moving the information in parts two and three of the AFV label 
from the back to the front of the label.

4. Option No. 4

    This option combined option number two and, in part, option number 
three. Specifically, the Commission proposed requiring disclosure of 
only the EPA Tier 2 emission standard, if any, to which the AFV has 
been certified, and permitting disclosure on the same label of the 
California LEV II emission standard, if any, to which the AFV has been 
certified. For this option, the Commission also proposed providing a 
reference in part three of the label to EPA's green vehicle guide Web 
site.

5. Used AFVs

    In the NPR, the Commission proposed adding the reference to EPA's 
green vehicle guide website to the Rule's label for used AFVs. This 
label does not contain the cruising range and emissions information 
required for new AFV labels. Part one discloses and explains specific 
factors consumers should consider before buying a used AFV. Part two 
lists specific toll-free telephone numbers for consumers who want to 
call DOE and NHTSA for more information about AFVs. Section 309.21 of 
the Rule further states that no marks or information other than that 
specified by the Rule may appear on the label.

Part C--Public Comments

    In response to the May 8, 2003 proposed rule, the Commission 
received comments from (1) the Alliance of Automobile Manufacturers 
(``Alliance''), (2) the Association of International Automobile 
Manufacturers, Inc. (``AIAM''), (3) the National Automobile Dealers 
Association (``NADA''), and (4) the California Air Resources Board 
(``ARB'') staff. The bulk of the comments addressed aspects of the AFV 
label and the options presented in the proposed rule. The comments 
focused on vehicle labeling and did not address the issue of labeling 
for alternative fuels in connection with the overall regulatory review 
of the Rule.

1. The Need for the Alternative Fueled Vehicle Labels

    The Alliance urged the Commission to repeal the AFV label 
requirements arguing that the label is duplicative of information 
provided elsewhere. According to the Alliance, ``fleet purchasers 
usually receive information on alternative fueled vehicles during 
government or fleet conferences or seminars or are directly contacted 
by the manufacturer.'' As a result, it contends, the label adds little 
or no value for most consumers looking to buy these vehicles. In 
addition, the Alliance indicated that consumer information such as 
cost, fuel type, fuel economy values, fuel costs, and emissions can be 
found on other labels such as the pricing label, fuel economy label, 
and the Vehicle Emissions Control Information (``VECI'') label, which 
are all displayed on the vehicle at the time of purchase.\16\ 
Similarly, NADA suggested that the FTC should require that the 
alternative fueled vehicle label be incorporated into the EPA fuel 
economy label. NADA believes that consumers would benefit from having 
all this information in one place.\17\ The other two commenters, AIAM 
and ARB, did not address whether the FTC label should be eliminated or 
moved.
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    \16\ Alliance, cover letter and p. 1.
    \17\ NADA, p. 2.
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2. Vehicle-Specific Emissions Information on the Label

    AIAM supported the continued inclusion of vehicle-specific 
emissions information on the label (i.e., Option 1). It stated that 
this information allows consumers to compare vehicles. For the label to 
have practical value, AIAM stressed that it needed to have substantive 
content. In its view, emissions information is relevant because 
consumers are usually interested in purchasing alternative fueled 
vehicles because they have lower pollution levels. AIAM also suggested 
that such emissions information may not be easily available to 
consumers if it is not included on the FTC label. According to AIAM, 
manufacturers also should have the option of displaying

[[Page 55335]]

California and federal emissions information on the same label to avoid 
the need for separate labels.\18\
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    \18\ AIAM, pp. 1-2.
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    The Alliance, on the other hand, preferred eliminating emissions 
information from the label (if the Commission decides to retain the 
label). Accordingly, the Alliance supported the adoption of a modified 
version of Option 3, which would eliminate specific emissions 
information. The Alliance indicated that, although some AFVs are 
certified to lower emissions standards than their gasoline equivalents, 
a comparison of the emissions certification for both types of vehicles 
is difficult without access to emissions information for both types of 
vehicles. In its view, however, informed purchasers seek emissions 
information prior to visiting the showroom. The Alliance also 
recommended a one-sided label which, in essence, is a condensed version 
of Option 3 in the Commission's proposed rule.
    The Alliance raised three specific concerns about the retention of 
emissions information on the label. First, it contended the emission 
block proposed in Option 1 does not correctly describe the emission 
levels for California. Given the phase-in period for California, some 
models will be certified under LEV 1 program standards while others 
will be certified under LEV II program standards during 2004 to 2006. 
Accordingly, LEV1 information would have to be included on the label 
until 2006. In addition, the Alliance described other complications 
associated with permitting the California standards to be included on 
the label.\19\ In essence, it asserted that listing all of the 
different California categories ``becomes extremely cumbersome.'' \20\
    Second, the Alliance indicated that the use of a bar graph to rank 
vehicles from ``fewer emissions'' to ``more emissions'' as proposed in 
Option 1 ``becomes even more difficult and highly subjective for both 
the California and Federal standards.'' In the Alliance's view, the 
Federal bin standards do not necessarily provide an appropriate means 
to rank vehicles. For example, the Alliance claims that the bin 8, 9, 
and 10 NMOG standard is less stringent for certain truck classes. In 
addition, a vehicle certified to a lower bin standard might have more 
emissions than a vehicle certified to a higher bin standard if the 
vehicle certified to a higher bin standard meets a more stringent 
evaporative emission standard. Finally, the Alliance opposed the 
continued inclusion of specific emissions information on the label 
because, in its view, the regulations will need revisions in the future 
because EPA and CARB frequently change emission standards and add new 
standard categories.\21\ The Alliance also commented that as ``emission 
standards for all vehicles have become more stringent, alternative 
fuels are no longer significantly cleaner than many gasoline fueled 
vehicles.'' \22\
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    \19\ According to the Alliance, the LEV I program LEV and ULEV 
emission standards differ based on each of seven different weight 
classes. The LEV I program also has LEV, ULEV, and SULEV standards 
that differ from the LEV I program standards. Finally, the Alliance 
contended that California requires manufacturers to sell vehicles 
certified to a Federal bin standard in cases where that bin standard 
is cleaner, on a NMOG + Nox basis, than the California standard to 
which the vehicles would have been certified in California. 
Alliance, p. 2.
    \20\ Alliance, p. 1.
    \21\ Id., p. 2.
    \22\ Id., p. 4.
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    NADA also supported the elimination of vehicle emissions 
information. It noted that the EPA 92 does not require the inclusion of 
such information. Acknowledging that the FTC concluded that emissions 
information may prove useful to consumers, NADA believes that the 
complexity of the Federal and California certification categories makes 
the emissions information impractical for the alternative fueled 
vehicle label. In addition, NADA observed that emissions information is 
already found on under-hood mounted labels, in owners manuals, and on 
Federal government websites. Instead of emissions information, it 
suggested the inclusion of an ``Environmental Impact'' statement on the 
new vehicle label similar to that found on the used vehicle label.\23\
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    \23\ NADA, p. 4.
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    The ARB staff did not support the inclusion of California emissions 
information on the label. It stated that California certified vehicles 
must already be labeled on a visible surface with a ``Smog Index 
Label,'' which provides a numerical rating of the relative cleanliness 
of the vehicle pursuant to Title 13, California Code of Regulations, 
Section 1965. In addition, ARB staff indicated that every California-
certified vehicle must have a permanent under-hood label with the 
emission standard to which the vehicle is certified. ARB staff also 
stated that separate listings of California information outside the 
vehicle may be confusing to some consumers. ARB staff, like the 
Alliance, also observed that the State's original requirements (LEV 1) 
would have to be permitted on labels because such standards will still 
be in effect during the phase-in period through the 2006 model 
year.\24\
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    \24\ ARB, p. 1.
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3. Additional Information on the Label

    AIAM commented that the label should continue to display 
information regarding fuel type, operating costs, performance/
convenience, fuel availability, and energy security/renewability. Most 
of this information is currently displayed on the back side of the 
label. AIAM stressed that the label must contain substantive content if 
it is to have any practical value.
    Several commenters addressed whether certain websites should be 
referenced on the label. The Alliance, AIAM, and NADA all indicated 
that the label should reference the DOE Alternative Fuels Vehicle Data 
Center website to point consumers to additional AFV information.\25\ 
They did not support a reference to the EPA's Green Vehicle Guide 
website. The Alliance suggested that it is difficult to locate the AFV 
information at the EPA Web site.\26\ According to the Alliance, the EPA 
site covers more than alternative fueled vehicles and, as such, could 
be confusing for consumers interested only in AFV information.\27\ The 
Alliance supported a reference to the National Highway Traffic Safety 
Administration's (``NHTSA's'') Auto Safety Hotline, as well as to the 
DOE National Alternative Fuels Hotline.
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    \25\ Alliance, p. 5; AIAM, p. 2; and NADA, p. 2.
    \26\ Alliance, p. 5.
    \27\ NADA, p. 2.
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4. Label Size, Format, and Wording

    The Alliance urged the Commission, if the label is retained, to 
revise section 309.20 to allow optional information such as part 
numbers, bar codes, and vehicle identification numbers or other 
markings. The inclusion of a part number would allow tracking and 
release of the label and would be consistent with ISO (International 
Organization of Standardization) procedures. As mentioned in this 
section, the Alliance proposed a consolidated one-sided label that 
would condense some of the information and would not contain emissions 
information or a reference to EPA's website. The Alliance also 
suggested that the Commission retain the label size in the existing 
rule.\28\
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    \28\ Id.
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5. Used AFV Label

    NADA suggested that the Commission modify the used vehicle label so 
that it fits on one page and takes into account

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changes made to the new vehicle label.\29\
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    \29\ NADA, p. 2.
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6. Effective Date and Phase-In Period

    Both the Alliance and AIAM urged that Rule amendments become 
effective the first model year that begins 180 days after the final 
rule, with the option of earlier compliance.\30\ They explained that at 
least 180 days is needed if the amendments change the size and format 
of the label. Also, by making the effective date coincide with the new 
model year, all vehicles in that year would display the same label 
format.\31\
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    \30\ Alliance, p. 5; and AIAM, p. 2.
    \31\ Alliance, p. 5.
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Part D--Discussion of Comments and Final Rule Amendments

1. Continued Need for Label

    The Energy Policy Act of 1992 directs the Commission to ``establish 
uniform labeling'' requirements for alternative fuels and alternative 
fueled vehicles.\32\ Although the Act allows the Commission to 
consolidate requirements with other labels, it does not give the 
Commission discretion to forgo such requirements altogether. The 
Commission understands that some commenters believe the label has 
limited utility because the AFV market is comprised primarily of fleet 
purchasers that generally have done extensive research before placing 
orders. The Act, however, does not give the Commission the authority to 
eliminate AFV labeling requirements completely.
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    \32\ 42 U.S.C. 13232(a).
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    In any event, the Commission believes that the AFV label continues 
to provide important guidance for consumers. Many consumers may be 
unfamiliar with important factors to consider when purchasing an AFV. 
The label provides information consumers can use to educate themselves 
on the characteristics of AFVs, to the extent they are available in 
showrooms.\33\ Although some of this information can be found elsewhere 
on the vehicle, such information may be difficult to find (e.g., 
emissions information on labels found under the hood). Other 
information, such as cruising range, is not available elsewhere on the 
vehicle. The Commission recognizes that most of these vehicles are 
purchased by fleets or other commercial buyers who may have little need 
for labels affixed to the vehicles. It is difficult, however, to 
predict the future buying patterns as new developments emerge over 
time.\34\
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    \33\ According to DOE staff, AFV showroom availability for 
consumers is limited. DOE's alternative fuels data center Web site 
(http://www.afdc.doe.gov) also indicates that there are a limited 
number of dedicated AFV dealers and AFV fueling stations nationwide. 
Further, DOE staff estimate that in 2004, approximately 548,000 AFVs 
will be on the road. This represents less than one percent of on-
road vehicles.
    \34\ For example, Honda has introduced a compressed natural gas 
vehicle (the Civic GX). See, e.g., Washington Post, Aug. 29, 2003, 
p. E02.
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    In addition, as some of the comments observe, the EPA 92 allows the 
Commission to consolidate required disclosures for AFVs with other 
labels where appropriate.\35\ The Commission has not identified any 
viable options for incorporating the information from the FTC label 
into other labels, such as the fuel economy label as suggested by NADA. 
In its 1995 final rule document, the Commission concluded that it would 
not be appropriate to consolidate information the Commission requires 
into existing labels because those labels do not have sufficient space 
to accommodate AFV disclosures. That document specifically referenced 
an EPA statement that the fuel economy label was too ``crowded'' to 
incorporate additional AFV information.\36\ The Commission has no 
evidence that the facts underlying its decision have changed.
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    \35\ 42 U.S.C. 13232(a).
    \36\ 97 FR at 26950.
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2. Emissions on Label

    The Commission continues to believe that AFV emissions information 
is important for consumers. The Commission has concluded, however, that 
the FTC-mandated label is no longer the best means of communicating 
vehicle-specific emissions information. Accordingly, the Commission is 
amending the Rule to require the inclusion of general guidance on 
emissions and information to link consumers to EPA's online database 
(Green Vehicle Guide), which provides detailed information about the 
emissions characteristics of AFVs and other vehicles.
    The Commission has decided to make this label change for several 
reasons. First, the changes to EPA and California standards increase 
the complexity of emission information that would have to be provided. 
The increased number of categories (or ``bins'') caused by the new Tier 
2 EPA standards would make the label information even denser. In 
addition, if the Commission allowed California emissions certification 
information to be included on the FTC label, it would further 
complicate effective presentation of EPA's standards because California 
uses different terminology, and there is a two-year phase-in period for 
that State's new requirements.
    Second, the development of EPA's website, and the reductions in the 
emissions from conventional fueled vehicles call into question the 
continued utility of specific emissions information on the FTC label. 
EPA's green vehicle guide website presents emissions ratings on a 
simple scale EPA developed for the website. In contrast, the emissions 
information on the FTC label does not provide consumers with an easy 
way to compare the emissions characteristics of AFVs with conventional 
fuel vehicles because conventional vehicles do not have a similar label 
on the outside of the vehicle.\37\ In the 1995 rulemaking proceeding, 
the Commission concluded that information relating to emissions of 
specific AFVs would be useful on the label to aid consumers choosing or 
deciding whether to replace an existing vehicle with an alternative 
fueled vehicle. The Commission also cited to DOE materials that 
suggested that alternative fuels produce lower amounts of air toxics 
and ozone forming emissions than gasoline. 60 FR at 26946.
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    \37\ As NADA pointed out, emissions information for both 
conventional fueled vehicles and AFVs is available on under-hood 
mounted labels. The Commission recognizes, however, that these under 
the hood emissions labels may be difficult for the average consumer 
to locate or understand given the limited information provided on 
the label.
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    Since the 1995 rulemaking, however, the emissions characteristics 
of both AFVs and gasoline fueled vehicles have changed. As discussed in 
Part A, EPA promulgated more stringent emissions standards for all 
vehicles in 2000.\38\ According to EPA, these new standards 
substantially improve the emissions characteristics of all vehicles, 
including gasoline fueled vehicles.\39\ Given these developments, the 
Commission believes it is appropriate to reconsider the current 
emissions-related requirements on the label. At its Alternative Fuels 
Data Center website, DOE explains that the emissions characteristics of 
alternative fuels continue to provide some advantages over gasoline. At 
the same time, certain benefits from the use of alternative fuels may 
be partially offset by other considerations. For instance, according to 
DOE, compressed natural gas (CNG) vehicles can demonstrate a reduction 
in ozone-forming emissions (CO and Nox) compared to some conventional 
fuels but may also increase hydrocarbon

[[Page 55337]]

emissions.\40\ The emissions ratings found in EPA's Green Vehicle 
database (at http://www.epa.gov/greenvehicle) indicate that alternative 
fuel vehicles do not consistently yield the best emissions ratings or 
necessarily yield better emissions scores than their gasoline 
counterparts in the same vehicle class. The Alliance made a similar 
observation in its comments stating that alternative fuels are ``no 
longer significantly cleaner than many gasoline fueled vehicles.'' \41\
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    \38\ See 65 FR 6698.
    \39\ See, e.g., `` EPA's Program for Cleaner Vehicles and 
Cleaner Gasoline,'' Regulatory Announcement (EPA420-F-99-051).
    \40\ See DOE's Alternative Fuels Data Center (http://www.afdc.doe/) (visited Aug. 28, 2003).
    \41\ Alliance, p. 4.
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    The current FTC label does not allow consumers to gauge the 
significance of the emissions information in the broader context (i.e., 
when compared to all vehicles on the market, conventional and 
alternative fueled vehicles). Such comparative information is readily 
available, however, through the EPA website. The website provides a 
better, more comprehensive means to provide consumers with complex 
emissions information about most, if not all, vehicles on the market 
(excepting heavy vehicles). It also provides a more detailed 
explanation of the data than is possible on a label on AFVs, which, as 
noted above, have limited availability in showrooms. The Commission 
therefore concludes that it is preferable to link consumers to EPA's 
site than to continue to require vehicle specific emissions information 
on the label. This will provide a better means for consumers to examine 
the various costs and benefits of purchasing an AFV than is provided by 
existing label requirements when no comparable information appears on 
the labels for conventional fueled vehicles at this time.
    Third, as discussed in the proposed rule, the emissions information 
on the current label is based on standards that change over time. Any 
label revisions made to reflect the new Tier 2 standards also may 
become obsolete in the future, necessitating further rulemaking 
proceedings. The frequency of such revisions is difficult to predict 
but the Commission believes that referencing the EPA website will more 
effectively help consumers who want this information.

3. Final Label--Content, Size and Format

    After considering the comments, the Commission has decided to 
follow Option 3 as described in the proposed rule with several 
modifications.\42\ Under these amendments, the label no longer contains 
a specific reference to EPA's emissions standards, and instead contains 
a box with a check mark labeled ``Emissions'' and directs interested 
consumers to EPA's green vehicle guide website. As discussed in the 
proposed rule, information on the back of the old label has now been 
moved to the front. This eliminates the need for a two-sided label and 
this is likely to reduce compliance costs and the clutter caused by a 
two-sided label. The label will continue to list specific factors 
consumers should consider before buying an AFV, as well as referrals to 
DOE, EPA, and NHTSA for more information about AFVs. In addition, the 
Commission has added a reference to the joint EPA and DOE fuel economy 
Web site (http://www.fueleconomy.gov), which provides detailed 
information on gas mileage and cruising range for conventional vehicles 
and AFVs. The Commission also is amending the Rule to allow the 
inclusion of part numbers, bar codes, and vehicle identification 
numbers. This will allow manufacturers to save costs by incorporating 
this information on the label. It also may aid consumers by providing 
some specific identifying information for the vehicle to which the 
label is attached.
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    \42\ The Commission has decided to adopt the 7 by 7.5 inch size 
proposed in Option 3 to accommodate the additional information 
required on the one-sided label.
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4. Used Label

    In response to NADA's suggestion, the Commission has modified the 
used vehicle label so that it fits on one page and takes into account 
changes made to the new vehicle label. The used label is now Figure 6 
of Appendix A.

5. Phase-In Period

    The amended label will be mandatory for all covered AFVs produced 
180 days after publication of this final rule. The Commission believes 
that this will give manufacturers ample time to label their vehicles 
and will ensure that all vehicles launched in the 2006 model year will 
display the amended label. The Commission recognizes that these 
amendments, coupled with the new EPA emissions standards, may make it 
difficult for manufacturers to use labels that are compliant with FTC 
requirements (which reference old EPA standards) even though their 
vehicles are being certified to new EPA standards. In light of this, 
the Commission expects that manufacturers will begin using the amended 
label as soon as possible. In the meantime, the Commission does not 
plan to take enforcement action against manufacturers who have sought, 
in good faith, to display accurate emissions information on the FTC 
label.

Part E--Regulatory Review

    In accordance with its regulatory review schedule, the Commission 
has conducted a regulatory review of the Rule during this rulemaking 
proceeding. In the NPR, the Commission sought information about the 
costs and benefits of the entire Rule and its regulatory and economic 
impact. Only one commenter directly addressed the Commission's 
regulatory review questions. As discussed in Part C, the Alliance 
stated that the alternative fuel vehicle label has outlived its 
usefulness and is no longer needed. The Rule has limited benefit, 
according to the Alliance, because very few buyers purchase the 
vehicles from showroom floors. In addition, the costs of the label must 
be passed on to purchasers. The Alliance also indicated that the 
primary way to reduce the costs of compliance would be to delete the 
label requirement.\43\
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    \43\ Alliance, p. 4.
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    As discussed in more detail in Part D, the Act does not give the 
Commission the authority to eliminate labeling requirements altogether. 
In the absence of viable means to incorporate requirements into other 
labels, the Commission has determined to follow the directive in the 
Act by continuing to require an FTC label for AFV's. In addition, the 
Commission's label provides consumers with information they can use to 
educate themselves on the characteristics of the vehicles they are 
considering.

Part F--Regulatory Analysis

    Under section 22 of the FTC Act, 15 U.S.C. 57b, the Commission must 
issue a preliminary regulatory analysis for a proceeding to amend a 
rule only when it (1) estimates that the amendment will have an annual 
effect on the national economy of $100,000,000 or more; (2) estimates 
that the amendment will cause a substantial change in the cost or price 
of certain categories of goods or services; or (3) otherwise determines 
that the amendment will have a significant effect upon covered entities 
or upon consumers. The Commission has determined that the amendments to 
the Rule will not have such effects on the national economy or on 
covered businesses or consumers.
    The Regulatory Flexibility Act (``RFA''), 5 U.S.C. 601-12, requires 
that the agency conduct an analysis of the anticipated economic impact 
of the proposed amendments on small businesses. The purpose of a 
regulatory flexibility analysis is to ensure that the agency considers 
impact on small entities and examines regulatory

[[Page 55338]]

alternatives that could achieve the regulatory purpose while minimizing 
burdens on small entities. Section 605 of the RFA, 5 U.S.C. 605, 
provides that such an analysis is not required if the agency head 
certifies that the regulatory action will not have a significant 
economic impact on a substantial number of small entities.
    The Commission has concluded that the proposed Rule amendments will 
not affect a substantial number of small entities because information 
the Commission currently possesses indicates that relatively few 
companies currently manufacture, convert, or sell AFVs. Of those that 
manufacture, convert, or sell AFVs, most are not ``small entities,'' as 
that term is defined either in section 601 of RFA, 5 U.S.C. 601(6), or 
applicable regulations of the Small Business Administration, 13 CFR 
part 121. Accordingly, the proposed amendments would not appear to have 
a significant economic impact upon such small entities. Specifically, 
the AFV label amendments, which will reduce the number of emission 
standard disclosures, add references to EPA's green vehicle guide and 
the DOE/EPA fuel economy Web site, and convert a two-sided label to a 
one-sided one should benefit both small and large businesses. The 
amendments also should not have a significant or disproportionate 
impact on the labeling costs of small AFV manufacturers.
    Based on available information, therefore, the Commission certifies 
that amending the Rule will not have a significant economic impact on a 
substantial number of small businesses.

Part G--Paperwork Reduction Act

    The Rule contains various information collection requirements for 
which the Commission has obtained clearance under the Paperwork 
Reduction Act, 44 U.S.C. 3501 et seq., Office of Management and Budget 
(``OMB'') Control Number 3084-0094. As noted above, Section 309.20 of 
the Rule provides that before offering a new covered AFV for 
acquisition to consumers, manufacturers must affix on a visible surface 
of each such vehicle a new vehicle label consisting of three parts. 
Part one must disclose objective information about the estimated 
cruising range and environmental impact of the particular AFV.
    The Commission has concluded that the amendments would not have an 
overall effect on the paperwork burden associated with the 
aforementioned paperwork requirements. Consequently, there are no 
additional ``collection of information'' requirements included in the 
amendments to submit to OMB for clearance under the Paperwork Reduction 
Act. The Commission's amendments to modify disclosure of emissions 
information will decrease the Rule's paperwork burden. Further, adding 
specifically described references on the label to EPA's green vehicle 
guide and fuel economy Web sites will not significantly increase the 
Rule's paperwork burden, and likely will be offset by decreases in 
burden associated with the repeal of specific emissions 
disclosures.\44\
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    \44\ The public disclosure of information originally supplied by 
the federal government to the recipient for the purpose of 
disclosure to the public is not included within the definition of 
``collection of information'' in the Paperwork Reduction Act, 5 CFR 
1320.3(c)(2).
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    Thus, the Commission has concluded that the proposed amendments 
would not increase, or otherwise affect the paperwork burden associated 
with compliance with the Rule.

List of Subjects in 16 CFR Part 309

    Alternative fuel, Alternative fueled vehicle, Energy conservation, 
Labeling, Reporting and recordkeeping, Trade practices.


0
Accordingly, 16 CFR Part 309 is amended as follows:

PART 309--[AMENDED]

0
1. The authority citation for Part 309 continues to read as follows:

    Authority: 42 U.S.C. 13232(a).


0
2. Section 309.20 is revised to read as follows:


Sec.  309.20  Labeling requirements for new covered vehicles.

    (a) Affixing and maintaining labels. (1) Before offering a new 
covered vehicle for acquisition to consumers, manufacturers shall affix 
or cause to be affixed, and new vehicle dealers shall maintain or cause 
to be maintained, a new vehicle label on a visible surface of each such 
vehicle.
    (2) If an aftermarket conversion system is installed on a vehicle 
by a person other than the manufacturer prior to such vehicle's being 
acquired by a consumer, the manufacturer shall provide that person with 
the vehicle's estimated cruising range (as determined by Sec.  
309.22(a) for dedicated vehicles and Sec.  309.22(b) for dual fueled 
vehicles) and ensure that new vehicle labels are affixed to such 
vehicles as required by paragraph (a) of this section.
    (b) Layout. Figures 4, 5, and 5.1 are prototype labels that 
demonstrate the proper layout. All positioning, spacing, type size, and 
line widths shall be similar to and consistent with the prototype 
labels. Labels required by this section are one-sided and rectangular 
in shape measuring 7 inches (17.78 cm) wide and 7\1/2\ inches (19.05 
cm) long. Figure 4 of appendix A represents the prototype for the 
labels for dedicated vehicles. Figures 5 and 5.1 of appendix A 
represent the prototype of the labels for dual-fueled vehicles; Figure 
5 of appendix A represents the prototype for vehicles with one fuel 
tank and Figure 5.1 of appendix A represents the prototype for vehicles 
with two fuel tanks. No marks or information other than that specified 
in this subpart shall appear on this label except that the label may 
include part numbers, bar codes, and vehicle identification numbers 
consistent with Figures 4, 5, and 5.1.
    (c) Type size and setting. The Helvetica Condensed and Helvetica 
family typefaces or equivalent shall be used exclusively on the label. 
Specific type sizes and faces to be used are indicated on the prototype 
labels (Figures 4, 5, and 5.1 of appendix A). No hyphenation should be 
used in setting headline or text copy. Positioning and spacing should 
follow the prototypes closely.
    (d) Colors and Paper Stock. All labels shall be printed in process 
black ink on Hammermill Offset Opaque Vellum/S.70 Sky Blue (or 
equivalent) paper.
    (e) Content. (1) Headlines and text, as illustrated in Figures 4, 
5, and 5.1 of appendix A, are standard for all labels.
    (2) Estimated cruising range. (i) For dedicated vehicles, 
determined in accordance with Sec.  309.22(a).
    (ii) For dual fueled vehicles, determined in accordance with Sec.  
309.22(b).

0
3. Section 309.21 is revised to read as follows:


Sec.  309.21  Labeling requirements for used covered vehicles.

    (a) Affixing and maintaining labels. Before offering a used covered 
vehicle for acquisition to consumers, used vehicle dealers shall affix 
and maintain, or cause to be affixed and maintained, a used vehicle 
label on a visible surface of each such vehicle.
    (b) Layout. Figure 6 of appendix A is the prototype label that 
demonstrates the proper layout. All positioning, spacing, type size, 
and line widths should be similar to and consistent with the prototype 
label. The label required by this section is one-sided and rectangular 
in shape measuring 7 inches (17.78 cm) in width and 7\1/2\ inches 
(19.05 cm) in height. No marks or information other than that specified 
in this subpart shall appear on this label, except that the label may 
include part numbers, bar codes, and vehicle

[[Page 55339]]

identification numbers consistent with Figure 6.
    (c) Type size and setting. The Helvetica Condensed and Helvetica 
family typefaces or equivalent shall be used exclusively on the label. 
Specific type sizes and faces to be used are indicated on the prototype 
label (Figure 6 of appendix A). No hyphenation should be used in 
setting headline or text copy. Positioning and spacing should follow 
the prototype closely.
    (d) Colors and Paper Stock. All labels shall be printed in process 
black ink on Hammermill Offset Opaque Vellum/S.70 Sky Blue (or 
equivalent) paper.
    (e) Contents. Headlines and text, as illustrated in Figure 6 of 
appendix A, are standard for all labels.

0
4. Appendix A to Part 309 is amended by removing Figures 7, and 8 and 
revising Figures 4, 5, 5.1, and 6 to read as follows:

Appendix A to Part 309--Figures for Part 309

* * * * *
[GRAPHIC] [TIFF OMITTED] TR14SE04.000


[[Page 55340]]


[GRAPHIC] [TIFF OMITTED] TR14SE04.001


[[Page 55341]]


[GRAPHIC] [TIFF OMITTED] TR14SE04.002


[[Page 55342]]


[GRAPHIC] [TIFF OMITTED] TR14SE04.003


    By direction of the Commission.
Donald S. Clark,
Secretary.
[FR Doc. 04-20673 Filed 9-13-04; 8:45 am]
BILLING CODE 6750-01-C