12958 Federal Register / Vol. 72, No. 53 / Tuesday, March 20, 2007 / Rules and Regulations 

1Section 301 of the Act defines ‘‘fleet’’ as ‘‘a 

group of 20 or more light-duty motor vehicles, used 

primarily in a metropolitan statistical area or 

consolidated metropolitan statistical area, as 

established by the Bureau of the Census, with a 

1980 population of more than 250,000, that are 

centrally fueled or capable of being centrally fueled 

and are owned, operated, leased, or otherwise 

controlled by a governmental entity or other person 

who owns, operates, leases, or otherwise controls 

50 or more such vehicles, by any person who 

controls such person, by any person controlled by 

such person, and by any person under common 

control with such person, except that such term 

does not include—

(A) motor vehicles held for lease or rental to the 

general public; 

(B) motor vehicles held for sale by motor vehicle 

dealers, including demonstration motor vehicles; 

(C) motor vehicles used for motor vehicle 

manufacturer product evaluations or tests; 

(D) law enforcement motor vehicles; 

(E) emergency motor vehicles; 

(F) motor vehicles acquired and used for military 

purposes that the Secretary of Defense has certified 

to the Secretary must be exempt for national 

security reasons; 

(G) nonroad vehicles, including farm and 

construction motor vehicles; or 

(H) motor vehicles which under normal 

operations are garaged at personal residences at 

night[.] 

(4) In any action initiated by the 

Office of Special Counsel under 5 U.S.C. 

1215. 

[FR Doc. E7–4959 Filed 3–19–07; 8:45 am] 

BILLING CODE 6325–39–P 

DEPARTMENT OF ENERGY 

Office of Energy Efficiency and 

Renewable Energy 

10 CFR Part 490 

RIN 1904–AB66 

Alternative Fuel Transportation 

Program; Alternative Compliance 

AGENCY: Office of Energy Efficiency and 

Renewable Energy, Department of 

Energy. 

ACTION: Final rule. 

SUMMARY: The Department of Energy 

(DOE) today publishes a final rule to 

implement section 514 of the Energy 

Policy Act of 1992, as amended by 

section 703 of the Energy Policy Act of 

2005, which allows States and 

alternative fuel providers to petition for 

a waiver of the alternative fueled 

vehicle (AFV) acquisition requirements. 

Today’s final rule requires that for a 

State or alternative fuel provider to be 

granted a waiver, the State entity or 

alternative fuel provider must request a 

waiver to demonstrate that in lieu of 

complying with the applicable AFV 

acquisition requirement for a model 

year, it will take other actions to reduce 

its annual petroleum motor fuel 

consumption by an amount equal to 100 

percent alternative fuel use in all of the 

fleet’s AFVs, including AFVs that the 

State entity or alternative fuel provider 

would have been required to acquire if 

there was no waiver. 

DATES: Effective Date: The final rule is 

effective April 19, 2007. 

FOR FURTHER INFORMATION CONTACT: Ms. 

Linda Bluestein, U.S. Department of 

Energy, Office of Energy Efficiency and 

Renewable Energy, FreedomCAR and 

Vehicle Technologies Program, Mailstop 

EE–2G, Room 5F–034, 1000 

Independence Avenue, SW., 

Washington, DC 20585–0121; (202) 586–

6116 or linda.bluestein@ee.doe.gov, or 

Mr. Chris Calamita, U.S. Department of 

Energy, Office of General Counsel, GC–

72, Room 6B–256, 1000 Independence 

Avenue, SW., Washington, DC 20585–

0121; (202) 586–9507 or 

Christopher.calamita@hq.doe.gov. 

SUPPLEMENTARY INFORMATION: 

I. Introduction and Background 

II. Public Comments 

III. Discussion of the Final Rule 

A. Eligibility for alternative compliance 

waiver 

B. Petroleum reduction calculation 

1. Cumulative inventory 

2. Calculation procedure 

C. Eligible reductions in petroleum 

consumption 

1. Light-duty vehicles 

2. Medium- and heavy-duty vehicles 

3. Nonroad vehicles 

4. Rollover of excess petroleum reduction 

D. Waiver applications 

E. Application deadlines 

F. Use of credits 

G. Reporting requirement 

H. Sanctions for violations 

I. Exemptions 

J. Record retention 

K. Other comments 

IV. Regulatory Review 

A. Executive Order 12866 

B. National Environmental Policy Act 

C. Regulatory Flexibility Act 

D. Paperwork Reduction Act 

E. Unfunded Mandates Reform Act of 1995 

F. Treasury and General Government 

Appropriations Act, 1999 

G. Executive Order 13132 

H. Executive Order 12988 

I. Treasury and General Government 

Appropriations Act, 2001 

J. Executive Order 13211 

K. Congressional Notification 

V. Approval by the Office of the Secretary 

I. Introduction and Background 

Title V of the Energy Policy Act of 

1992 (Pub. L. 102–486; the Act) 

established requirements for covered 

alternative fuel providers (‘‘covered 

persons’’) and States to acquire set 

percentages of AFVs. (42 U.S.C. 

13251(a) and 13257(o)) As of 1999, 90 

percent of light-duty motor vehicles 

acquired by a covered person must be 

AFVs. As of 2000, 75 percent of lightduty motor vehicles acquired for a State 

fleet 1 must be AFVs. Section 508 

provides for the use of credits in 

complying with the AFV requirements. 

(42 U.S.C. 13258) Title V also provides 

for an exemption process from the AFV 

requirements. (42 U.S.C. 13251(a)(5) and 

13257(i)) As directed by the Act, DOE 

issued regulations, 10 CFR part 490—

Alternative Fuel Transportation 

Program, to implement the AFV 

provisions. (61 FR 10622; March 14, 

1996). 

On August 8, 2005, the Energy Policy 

Act of 2005, (Pub. L. 109–58; EPACT 

2005) was signed into law. In part, 

EPACT 2005 provides additional 

flexibility for States and covered 

persons subject to AFV acquisition 

requirements under 10 CFR part 490. 

Specifically, section 703 of EPACT 2005 

adds an alternative compliance program 

(entitled ‘‘Alternative Compliance’’) 

under section 514 of title V of the Act. 

(42 U.S.C. 13263a) Section 514 

authorizes DOE to grant to covered 

persons and States a waiver from the 

AFV acquisition requirements under 

section 501 (42 U.S.C. 13251) and 

section 507(o) (42 U.S.C. 13257(o)), 

respectively. The statute provides that 

any State or covered person may apply 

for an alternative compliance waiver, 

and that DOE must grant the waiver if 

the State or covered person 

demonstrates that its fleet will reduce 

annual petroleum consumption by an 

amount equal to the amount of 

petroleum it would reduce if the fleet’s 

cumulative inventory of AFVs operated 

100 percent of the time on alternative 

fuel (42 U.S.C. 13263a(a) and (b)). 

(Under the AFV requirements, States are 

not required to operate AFVs on 

alternative fuel and covered persons are 

required to operate their AFVs on 

alternative fuel only when it is 

available. (42 U.S.C. 13251(a)(4)) In 

addition, the State or covered person 

requesting a waiver must be in 

compliance with all applicable vehicle 

emission standards established by the 

Environmental Protection Agency under 

the Clean Air Act. 

On June 23, 2006, DOE issued a notice 

of proposed rulemaking (NOPR) to 

establish procedures for the submission 

of, and action on, applications for 

alternative compliance waivers 

submitted by States and covered 

persons subject to AFV acquisition 

requirements under part 490, 71 FR 

36034, June 23, 2006. In the NOPR, DOE 

proposed to add a new subpart I to part 

490, which would include provisions 


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2The term ‘‘fleet’’ is defined in title V of the Act 

to include only covered LDVs (42 U.S.C. 13211(9)). 

regarding the timing of waiver requests 

and responses by DOE, waiver 

documentation and application 

requirements, annual reporting of 

petroleum reductions, use of credits to 

offset petroleum reduction shortfalls, 

rollover of excess petroleum reduction 

to future years, enforcement for 

violations, and record retention. 

In addition, using its rulemaking 

authority under title V and section 644 

of the DOE Organization Act (42 U.SC. 

7254), DOE proposed that States or 

covered persons may use vehicles that 

are not part of the ‘‘fleet,’’ such as 

medium- and heavy-duty vehicles, and 

excluded light-duty motor vehicles 

(LDVs), to meet their petroleum 

reduction requirement. Under the same 

authority, DOE sought to address a 

discrepancy in the statutory language 

between the treatment of States that 

have section 508 credits versus those 

that do not. As such, DOE proposed that 

both States that have section 508 credits 

and States that do not have section 508 

credits would be required to achieve 

comparable annual petroleum 

reduction. 

II. Public Comments 

DOE received nine sets of written 

comments from the public. DOE also 

held a public hearing at DOE 

headquarters in Washington, DC on July 

12, 2006, where the NOPR was 

discussed and oral comments were 

received from four industry associations 

and two fuel provider utility companies 

subject to 10 CFR Part 490. 

Written comments were received from 

the National Rural Electric Cooperative 

Association; the California Electric 

Transportation Coalition; the National 

Biodiesel Board; Florida Power and 

Light, a covered fuel provider utility; 

Southern California Edison, a covered 

fuel provider utility; the California 

Natural Gas Vehicle Coalition; NGV 

America, a natural gas vehicle 

association; the National Association of 

Fleet Administrators; and El Paso 

Electric, a covered fuel provider utility. 

Generally, the oral and written 

comments were supportive of the 

proposed rulemaking because of the 

increased flexibility for covered fleets 

and increased emphasis on petroleum 

reduction. Commenters, however, 

provided a variety of suggestions for 

incorporation into the final rule 

including comments on how to 

determine a State’s or covered person’s 

cumulative inventory of AFVs, the 

petroleum reductions eligible for 

consideration under the alternative 

compliance program, and the 

information required for a complete 

waiver application. The specific issues 

raised by commenters are addressed in 

the discussion below. 

III. Discussion of the Final Rule 

A. Eligibility for Alternative Compliance 

Waiver 

Under section 514(a) of the Act, any 

covered person subject to AFV 

acquisition requirements of section 501 

and any State subject to AFV acquisition 

requirements in 507(o) may petition the 

Secretary of Energy for a waiver from 

those requirements. (42 U.S.C. 

13263a(a)) Section 514(b)(1)(A) of the 

Act provides DOE shall grant a waiver 

for a covered person if the covered 

person demonstrates a reduction in 

petroleum consumption equal to the 

reduction that would result under 100 

percent cumulative compliance with the 

fuel use required in section 501 of the 

Act. (42 U.S.C. 13263a(b)(1)(A)) Section 

514(b)(1)(B) of the Act provides that 

DOE shall grant a waiver for a State 

entity granted credits under section 508, 

if that State demonstrates a reduction in 

petroleum motor fuel consumption 

equal to the amount of petroleum the 

fleet’s 2 cumulative inventory of AFVs 

would reduce if the AFVs operated 100 

percent of the time on alternative fuel. 

(42 U.S.C. 13263(b)(1)(B)) In addition, 

the party seeking a waiver must be in 

compliance with all applicable vehicle 

emission standards established by the 

Environmental Protection Agency under 

the Clean Air Act. 

Relying on rulemaking authority 

under title V of the Act and section 644 

of the DOE Organization Act (42 U.S.C. 

7254), DOE proposed that State fleets, 

regardless of whether they earned 

section 508 credits, would be eligible for 

a waiver if they demonstrated a 

reduction in petroleum motor fuel 

consumption equal to the amount of 

petroleum the fleet’s cumulative 

inventory of required AFV acquisitions 

would reduce if those required 

acquisitions operated 100 percent of the 

time on alternative fuel. The proposed 

regulation would treat States equally 

regardless of whether a State was 

granted credits. 

DOE did not receive any comments 

regarding which entities would be 

eligible to apply for a waiver. As such, 

today’s final rule permits covered 

persons, States that have been issued 

credits, and States that have not been 

issued credits to apply for a waiver and 

meet the same requirements. 

B. Petroleum Reduction Calculation 

1. Cumulative Inventory 

Consistent with section 514, the 

proposed rule required both covered 

persons and State entities to reduce 

petroleum fuel consumption by an 

amount equal to the petroleum the 

fleet’s cumulative inventory of AFVs, 

including required AFV acquisitions in 

waiver years, would reduce if those 

vehicles operated 100 percent of the 

time on alternative fuel. Under the 

proposal, a fleet’s cumulative inventory 

is equal to the number of previously 

required AFVs actually in the current 

fleet, plus the number of AFVs 

acquisitions that would be required if a 

waiver were not granted. The inclusion 

of AFV acquisitions in waiver years 

when calculating the necessary 

petroleum reduction is consistent with 

the statute’s purpose of providing States 

and covered persons compliance 

flexibility in exchange for achieving the 

maximum level of petroleum fuel 

reduction. 

If AFV requirements for waiver years 

were not included in the cumulative 

AFV count, a waiver in successive years 

would have rapidly diminishing 

petroleum reduction requirements, 

because a fleet granted successive 

waivers would have fewer and fewer 

AFVs in its fleet as vehicles are retired. 

Fewer AFVs in the fleet would result in 

a lower required petroleum reduction. 

This result would be unreasonable in 

light of the petroleum replacement goal 

of the statute. 

DOE received two sets of supportive 

comments on its interpretation of 

‘‘cumulative.’’ A fuel provider 

association, however, objected to the 

proposed rule with regard to what is 

counted toward a State or covered 

person’s baseline for petroleum 

reduction. The commenter 

recommended that ‘‘cumulative’’ should 

mean all the AFVs that a covered person 

or State would have had in its fleet if 

it had purchased all the AFVs it was 

required to purchase—without 

consideration of previously used vehicle 

credits or exemptions granted. 

Otherwise, the commenter stated, a 

covered person or State that has not 

previously relied on credits or 

exemptions would be required to 

achieve a fuel reduction greater than a 

comparable covered person or State that 

previously relied on credits or 

exemptions. 

Consideration of all AFVs, including 

those requirements addressed through 

credits and exemptions, is overly 

restrictive. In employing credits and 

exemptions, States and covered persons 

were relying upon part 490. States and 


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12960 Federal Register / Vol. 72, No. 53 / Tuesday, March 20, 2007 / Rules and Regulations 

3 ‘‘Gasoline gallon equivalent’’ equates the energy 

content, in British thermal units (BTUs), in a gallon 

of an alternative fuel to that of a gallon of gasoline. 

covered persons typically rely on credits 

or exemptions because it is extremely 

difficult or impossible for them to 

comply through AFV purchases. If AFV 

requirements that were previously 

satisfied through credits or exemptions 

were included in the waiver calculation, 

the waiver option would likely be 

prohibitive for these States and covered 

persons. The advantage of compliance 

under the waiver program is that States 

and covered persons are typically 

required to reduce petroleum 

consumption by a greater amount then 

would occur through compliance with 

credits or exemptions. Additionally, 

going forward the alternative 

compliance option should lead to 

greater petroleum reduction in fleets 

that previously relied on exemptions 

and credits because alternative 

compliance takes into account AFV 

purchase requirements waived under 

the program. Moreover, under a waiver, 

fleets will not be eligible for exemptions 

and credits are limited. DOE, therefore, 

is adopting the eligibility provisions and 

baseline calculation provision as 

proposed. 

One fleet association requested DOE 

be more specific about the AFVs 

required to be used in calculating a 

fleet’s petroleum reduction baseline. 

Specifically, it requested wording that 

specifies that the AFVs to be counted 

are those ‘‘acquired for EPAct 

compliance and included in a prior 

Annual AFV Acquisition Report for 

State and Alternative Fuel Provider 

Fleets (Form DOE/FCVT/101).’’ DOE 

recognizes that some fleets may have 

purchased AFVs outside of the AFV 

requirements. To address this issue the 

final rule specifies inclusion of 

previously required AFVs in a fleet’s 

inventory during the model year for 

which a waiver is being requested 

(section 490.803(a)(1)), and AFVs that 

would have been required in the model 

year for which a waiver is requested and 

in previous model years in which a 

waiver was granted (section 

490.803(a)(2)). 

2. Calculation Procedure 

As proposed, and as adopted today, 

calculation of the necessary petroleum 

reduction is essentially a three step 

procedure. To calculate the petroleum 

reduction necessary to obtain a waiver, 

the State or covered person first 

calculates the amount of alternative fuel 

necessary to operate existing required 

AFVs in a fleet’s inventory, assuming 

operation on alternative fuel 100 

percent of the time. Second, the State or 

covered person calculates the additional 

amount of fuel that would have been 

used by AFVs under the requirements 

for which a waiver is currently being 

requested plus, calculate any additional 

amount that would have been used if 

any previous waivers were not granted. 

The State or covered person then adds 

the first and second calculations 

together. Third, the State or covered 

person subtracts the fuel use attributed 

to any existing required AFVs and LDVs 

acquired in lieu of AFVs under a waiver 

that are being retired. Again, all 

calculations are based on alternative 

fuel use 100 percent of the time. A 

detailed example of how this works is 

provided below. 

In year 1, a covered person has 25 AFVs 

in its fleet and has an AFV acquisition 

requirement of 9. The AFV requirement is 

based on the number of LDVs that the fleet 

anticipates acquiring during the waiver year. 

In this example, the covered person 

anticipates acquiring 10 LDVs, and has an 

AFV acquisition requirement of 9 AFVs (10 

vehicles × 90 percent fuel provider 

requirement). Thus, the cumulative total of 

AFVs for the purpose of the waiver request 

is 34. If the covered person’s LDVs have an 

average fuel consumption of 500 gasoline 

gallon equivalents 3 (gge)/year, the total 

amount of petroleum that the covered person 

must reduce in the first waiver year is 17,000 

gge (34 AFVs and AFV requirements 

combined, multiplied by 500 gge). 

In year 2, the fleet has retired 10 of the 

original required AFVs from its inventory, 

which leaves a total of 15 of the 25 AFVs 

originally counted in year 1. The fleet again 

plans to acquire 10 LDVs, thus generating a 

requirement to acquire 9 AFVs in year 2. 

Since the average number of years that this 

fleet keeps an AFV is 4 years, the 9 AFVs for 

which a waiver was granted in year 1 are 

included in the calculation of the year 2 

required petroleum reduction. This results in 

a total of 33 AFVs (15 + 9 + 9) and a total 

petroleum reduction requirement of 16,500 

gge for year 2 (assuming the same average 

fuel consumption of 500 gge per vehicle). 

In year 3, the fleet has retired 10 more of 

the original required AFVs, leaving 5 in its 

inventory, and it is again required to acquire 

9 AFVs. The calculation of the year 3 

petroleum reduction includes the 9 AFVs 

required for each of years 1 and 2. Therefore, 

the total AFV count for year 3 is 32 (5 + 9 

+ 9 + 9), and the petroleum reduction 

requirement for year 3 is 16,000 gge 

(assuming the same average fuel 

consumption of 500 gge per vehicle). 

In year 4, the fleet has retired the last 5 of 

the original required AFVs and plans to 

acquire 10 LDVs, generating a requirement of 

9 AFVs. A total of 36 AFVs are included in 

the calculation (9 + 9 + 9 + 9), and the 

petroleum reduction requirement for year 4 

is 18,000 gge (assuming the same average fuel 

consumption of 500 gge per vehicle). 

In year 5, the fleet retires the 9 LDVs that 

were acquired in lieu of AFVs under the first 

year’s waiver (the fleet retires LDVs after 4 

years). The fleet acquires 10 more LDVs, 

generating 9 AFV requirements. Therefore, 

the total AFV count for year 5 is 36 (9 + 9 

+ 9 + 9) and the total petroleum requirement 

for year 5 is 18,000 gge (assuming the same 

average fuel consumption of 500 gge per 

vehicle). 

The same approach is used to determine 

the reduction for a State entity, but the 

applicable AFV acquisition percentage 

(75 percent) in section 507(o) would be 

used. 

C. Eligible Reductions in Petroleum 

Consumption 

1. Light-Duty Vehicles 

Section 514(b) of the Act states that 

DOE shall grant a waiver of the AFV 

acquisition requirements on a showing 

that a fleet owned, operated, leased or 

otherwise controlled by a covered 

person or State entity will achieve a 

specified petroleum reduction. The term 

‘‘fleet’’ is defined to include only 

covered LDVs. (42 U.S.C. 13211).) 

However, consistent with the petroleum 

fuel reduction goals of title V of the Act, 

DOE also proposed to include 

petroleum reductions in previously 

excluded LDVs listed in section 490.3 

toward a State’s or covered person’s 

annual petroleum reduction target. This 

provision of the proposal was based on 

DOE’s rulemaking authority under title 

V and section 644 of the DOE 

Organization Act (42 U.S.C. 7254). No 

comments were received with regard to 

this, and DOE in today’s final rule 

permits covered persons and States to 

consider reductions in petroleum 

consumption from LDVs excluded for 

purposes of calculating a fleet 

requirement under 10 CFR 490.3. 

2. Medium- and Heavy-Duty Vehicles 

DOE also proposed to exercise its 

rulemaking authority under title V and 

section 644 of the DOE Authorization 

Act to permit consideration of 

reductions in fuel consumption from 

vehicles with a gross vehicle weight 

rating (gvwr) greater than 8,500 lb, for 

the purpose of complying with a waiver. 

DOE received a comment from an 

industry association saying that adding 

medium- and heavy-duty vehicles was 

desirable, while another industry 

association argued that allowing 

consideration of petroleum reductions 

from larger vehicles reduces the 

momentum of replacing petroleum use 

in LDVs. 

DOE believes that because of limited 

availability of original equipment 

manufacturer (OEM) light-duty models 

for some alternative fuels, particularly 

gaseous fuels, flexibility provided 

through the consideration of mediumand heavy-duty vehicles will make the 


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Federal Register / Vol. 72, No. 53 / Tuesday, March 20, 2007 / Rules and Regulations 12961 

alternative compliance option attractive 

to more fleets. This, in turn, is likely to 

lead to somewhat greater petroleum 

displacement and support of 

infrastructure for replacement fuels. 

For example, in model year 2007 

OEM light-duty gaseous fuel offerings 

are currently limited to just one 

dedicated natural gas compact sedan. 

No propane LDVs currently are being 

offered by an OEM. There are, however, 

medium- and heavy-duty propane and 

natural gas OEM offerings and certified 

conversions from several manufacturers. 

Encouraging the use of gaseous fuel in 

medium- and heavy-duty vehicles 

potentially will also facilitate the use of 

gaseous fuel in the LDV fleet. 

3. Nonroad Vehicles 

In the NOPR, DOE explained its intent 

to allow use of reductions in petroleum 

consumption from excluded vehicles 

listed in section 490.3 to achieve the 

requirement, but inclusion of nonroad 

vehicles was not specifically proposed 

by DOE. Several of the organizations 

that participated in DOE’s public 

hearing asked to specifically include 

petroleum reductions attributable to 

nonroad vehicles. 

Five of the written comments urged 

DOE to allow the inclusion of nonroad 

vehicles. One fleet association stated 

that nonroad vehicles share 

infrastructure with AFVs and that 

consideration of nonroad vehicles 

would further promote replacement 

fuels. One commenter pointed out that 

nonroad vehicles can reduce much more 

petroleum over a vehicle’s lifetime than 

a typical light-duty AFV in a utility 

fleet. Two other commenters stated that 

the expansion to nonroad vehicles 

would be consistent with the regulatory 

language in part 490 that permits States 

and covered persons to obtain credits 

using medium- and heavy-duty vehicles 

once LDV requirements are met. 

Two fuel provider groups were 

opposed to the consideration of nonroad 

vehicles. These commenters stated that 

inclusion of such vehicles would not 

promote increased use of replacement 

fuels in on-road motor vehicles, as was 

the original intent of the statute. 

Limited consideration of nonroad 

vehicles presents an opportunity to 

reduce petroleum and provide States 

and covered persons additional 

compliance flexibility, while also 

contributing to the development of 

infrastructure for replacement fuels 

used by LDVs. In the final rule, DOE is 

permitting limited consideration of 

replacement fuels in nonroad vehicles 

towards petroleum reduction 

requirements. 

Section 490.804(b) of the final rule 

permits consideration of reductions in 

petroleum consumption of nonroad 

vehicles acquired during a waiver year 

in instances in which the refueling 

infrastructure established or upgraded 

during a waiver year that provides 

replacement fuel for nonroad vehicles 

also serves to increase the use of 

replacement fuels in a fleet’s light-duty 

vehicles. For example, during a waiver 

year if a State or covered person adds 

new or upgrades existing refueling 

infrastructure for nonroad vehicles and 

shows DOE that existing or planned 

LDV acquisitions will also use the 

upgraded or new infrastructure, then the 

petroleum reductions from nonroad 

vehicles acquired as a result of those 

additions and upgrades may be used for 

meeting petroleum reduction 

requirements. 

Generally, DOE views petroleum 

reductions from nonroad vehicles as a 

supplemental way for a State or covered 

person to expand its use of replacement 

fuel in on-road vehicles, particularly its 

LDVs. DOE does not view replacement 

fuel use in nonroad vehicles as a 

complete or even substantial 

substitution for a State’s or covered 

person’s annual petroleum reduction in 

its on-road vehicles. As provided in 

section 490.804(b)(2), DOE will 

recognize reductions attributable to 

nonroad vehicles in instances in which 

a State or covered person has taken 

reasonable steps to comply with the 

waiver requirement through reductions 

of petroleum in on-road motor vehicles. 

4. Rollover of Excess Petroleum 

Reduction 

One fuel provider association and one 

fuel provider wrote comments 

supportive of language in the proposed 

rule that permits applying petroleum 

reductions achieved in excess of the 

requirement in one model year to the 

requirement in a later model year. One 

fuel association, however, commented 

that while agreeing with the provision, 

excess petroleum reduction amounts 

should not be tradable. It was not DOE’s 

intention to make excess petroleum 

reductions tradable but rather to provide 

a fleet further flexibility under the 

waiver program. To clarify its intent, 

DOE has added language to the final 

rule stating that petroleum reduction 

gallons are not tradable. 

Section 490.804 in the final rule 

requires application by the State or 

covered person prior to receiving the 

benefit of rolling over petroleum 

reductions to satisfy annual 

requirements. DOE does not intend for 

a State’s or covered person’s entire 

petroleum reduction, or even a 

substantial amount of annual petroleum 

reduction, to be met by petroleum 

reduction rollovers alone. The rollover 

provision is intended to add compliance 

flexibility to States or covered persons, 

particularly those that may have 

difficulty meeting their annual 

requirements because of unusual 

circumstances or circumstances beyond 

their control. For example, a State or 

covered person asking for a substantial 

petroleum rollover would have to show 

DOE it was subject to technology 

failures, delivery delays by 

manufacturers, weather-related 

disasters, emergencies or other such 

unusual circumstances that led or may 

lead to the need for a substantial 

petroleum reduction rollover. Other 

reasons for using the petroleum 

reduction rollovers to meet a substantial 

percentage of annual petroleum 

reduction requirements will be 

considered on a case-by-case basis. 

D. Waiver Applications 

Proposed section 490.803 set forth the 

minimum information that a State or 

covered person must provide DOE as 

part of a waiver application. A 

reasonable amount of information is 

needed for DOE to understand the 

calculation of an applicant’s annual 

petroleum reduction target and the 

methods that will be used to reduce 

petroleum. A waiver application must 

include verifiable data that is sufficient 

to enable DOE to determine whether a 

State’s or covered person’s fleet will 

achieve the amount of petroleum 

reduction required for alternative 

compliance. Information required as 

proposed includes the model year for 

the waiver required; numbers of 

required AFVs existing in the fleet and 

number of acquisition requirements for 

the waiver year and previous waiver 

years; amount of petroleum and nonpetroleum fuel, calculated in gges to be 

used in covered LDVs in the fleet for the 

waiver year including average fuel use 

per vehicle; and certification that Clean 

Air Act requirements are met. 

In addition, DOE proposed that an 

application must include a plan with 

sufficient information to demonstrate 

that planned actions are verifiable, 

involve a reduction in petroleum in the 

fleet’s vehicles, and show a net 

petroleum reduction equal to the 

required annual petroleum reduction. 

Today’s final rule adopts the proposed 

application requirements in § 490.805. 

One fuel provider and one fleet 

association argued that a State or 

covered person applying for a waiver 

should not be required to include the 

amount of fuel used by all of the lightduty vehicles in the fleet because it is 


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12962 Federal Register / Vol. 72, No. 53 / Tuesday, March 20, 2007 / Rules and Regulations 

overly burdensome and is not a 

statutory requirement. In response to 

these commenters, DOE provides in the 

final rule that States and covered 

persons need only report fuel used by 

‘‘covered light-duty vehicles.’’ A State 

or covered person need only report fuel 

use in the vehicles that have been used 

to calculate the baseline amounts in 

waiver applications or in AFVs that the 

fleet acquired for meeting requirements 

under part 490 previous to the waiver. 

It should be noted, however, that if DOE 

needs to verify information or use its 

enforcement authority, DOE does have 

the authority to require a fleet to submit 

such information to obtain an overall 

perspective on the activities of the fleet 

related to compliance with subpart I. 

DOE also intended by its proposal 

that a plan provide for petroleum 

reduction in a State’s or covered 

person’s vehicles and not include 

incentives for third parties. A fleet 

association and a fuel provider both 

commented that in proposed section 

490.803(d)(2), which would exclude 

consideration of third party incentives 

in a reduction plan, use of the phrase 

‘‘State’s or covered person’s own 

vehicles’’ could be interpreted to 

preclude leased vehicles. DOE agrees 

with these commenters. Today’s final 

rule adopts § 490.804 to clarify the 

reductions of petroleum consumption 

that are eligible and ineligible for 

consideration under the waiver 

program. 

E. Application Deadlines 

As proposed, waiver applications 

would be required to be submitted to 

DOE by March 31 in the model year 

prior to which a waiver is requested. 

One fleet association and two fuel 

provider associations stated that the 

proposed deadline was not sufficient to 

prepare a waiver request because 

typically OEMs do not announce 

availability of new model year vehicles 

until late summer. Without knowing 

what vehicle models will be available, 

States and covered persons cannot 

project fuel consumption and potential 

fuel savings. In response to this concern 

the final rule establishes a March 31 

deadline for a State or covered person 

to register its intent to submit a waiver 

application to DOE. Fleets that need the 

new model information may submit 

their applications to DOE no later than 

July 31 prior to the model year for 

which a waiver is sought. If the waiver 

is not dependent on such OEM 

information, DOE requires the State or 

covered person to submit a preliminary 

intent to apply for a waiver by March 31 

and its application for a waiver no later 

than June 30 prior to the model year for 

which it seeks a waiver. 

Given the timing of today’s final rule 

DOE will consider registrations of intent 

to submit a waiver received before May 

31, 2007. This extension of the 

registration of intent deadline applies 

only to applications for MY 2008. 

F. Use of Credits 

One fuel provider and one fuel 

provider association commented that 

the proposed language regarding the use 

of credits was too restrictive and would 

prevent use of subpart F credits to offset 

a shortfall in meeting the petroleum 

reduction required for a waiver. After 

carefully considering this issue, DOE 

has amended the wording in section 

490.808 of the final rule to require that 

a State or covered person ‘‘provide 

documentation that shows a good faith 

effort to meet the requirements.’’ DOE 

has determined that this language 

provides States and covered persons a 

reasonable bar for applying for credits to 

offset a petroleum reduction shortfall, 

while still promoting the goals of the 

program. 

G. Reporting Requirement 

Consistent with section 514(c) of the 

Act, DOE proposed a reporting 

requirement by December 31 following 

a model year for which a waiver is 

granted. A State or covered person 

would meet this requirement by 

providing DOE a statement certifying 

the number of petroleum gallons and 

alternative fuel in gges used by its 

covered light-duty vehicles and the 

amount of petroleum reduced in the 

waiver year due to alternative 

compliance. In the final rule, DOE 

eliminates the proposed requirement to 

report ‘‘a baseline quantity of the 

petroleum motor fuel reduction of the 

State or covered person during the 

following model year, if the State or 

covered person intends to request 

alternative compliance for that model 

year.’’ DOE determined that this 

information would be redundant with 

previously collected information. No 

comments were received on the other 

aspects of the proposed reporting 

requirements. 

H. Sanctions for Violations 

The proposed sanctions for violating 

a granted waiver reflected the statutory 

language of section 514(d) of the Act 

that states that DOE shall revoke the 

waiver of a State or covered person that 

fails to comply with the alternative 

compliance petroleum reduction or 

reporting requirements. DOE may also 

impose a civil penalty for any such 

violation (42 U.S.C. 13264(d)). No 

comments were received on this, and no 

changes were made in corresponding 

provisions in the final rule regarding 

sanctions. 

I. Exemptions 

DOE proposed that it would not grant 

exemptions to a State under § 490.204 or 

to a covered person under § 490.308 if 

the State or covered person has been 

granted an alternative compliance 

waiver. Exemptions are based upon lack 

of alternative fuels and AFVs. The 

waivers provide sufficient flexibility by 

allowing States and covered persons to 

consider a wider range of options for 

meeting their petroleum reduction 

requirements. If a State or covered 

person is granted a waiver, the 

flexibility provided should alleviate any 

need for an exemption. DOE did receive 

a supportive comment on this issue 

from one industry association but no 

comments from any others. DOE is not 

making a change in its position on 

exemptions in the final rule. 

J. Record Retention 

Under proposed § 490.809, a State or 

covered person would be required to 

keep all documents pertaining to its 

application and compliance with a 

waiver for a minimum of three years 

following the end of the waiver year. No 

comments were received on this section 

and the proposed record retention 

provision is adopted in the final rule 

§ 490.810. 

K. Other Comments 

DOE focused its response to 

comments on those that are directly 

relevant to the proposed rule. Other 

comments included areas that may be 

covered in future guidance such as a 

request that DOE standardize inputs and 

outputs to help with the application 

process. Yet other comments were 

clearly outside the scope of this rule 

and/or DOE’s authority, including 

providing extra credits for light-duty 

zero emission vehicles; requiring OEMs 

to make more alternative fuel vehicle 

products available; and applying 

petroleum reduction in lieu of the 

vehicle acquisition requirements in part 

490. 

IV. Regulatory Review 

A. Executive Order 12866 

Today’s final rule has been 

determined to not be a significant 

regulatory action under Executive Order 

12866, ‘‘Regulatory Planning and 

Review,’’ 58 FR 51735 (October 4, 1993). 

Accordingly, this action was not subject 

to review under that Executive Order by 

the Office of Information and Regulatory 


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Affairs of the Office of Management and 

Budget. 

B. National Environmental Policy Act 

DOE has determined that this final 

rule is covered under the Categorical 

Exclusion found in the DOE’s National 

Environmental Policy Act regulations at 

paragraph A.5 of Appendix A to subpart 

D, 10 CFR part 1021, which applies to 

rulemaking that amends an existing rule 

or regulation which does not change the 

environmental effect of the rule or 

regulation being amended. Under the 

final rule, a State entity or alternative 

fuel provider requesting an alternative 

compliance waiver must show that in 

lieu of acquiring AFVs for its covered 

light-duty vehicle fleet, it would use 

alternative fuel and/or other 

replacement fuels in various types of 

motor vehicles to reduce petroleum fuel 

consumption by an amount that equals 

100 percent alternative fuel use in the 

fleet’s AFVs, including AFVs that would 

be required in waiver years. The final 

rule, as authorized by the statute, grants 

the waiver applicant greater compliance 

flexibility in exchange for achieving the 

maximum level of petroleum reduction 

that would occur if the State or covered 

person were to comply with the Act’s 

AFV acquisition requirements. Because 

the amount of petroleum displaced 

would be the same, the final rule would 

not change the environmental effect of 

compliance with part 490. Accordingly, 

neither an environmental assessment 

nor an environmental impact statement 

is required. 

C. Regulatory Flexibility Act 

The Regulatory Flexibility Act (5 

U.S.C. 601 et seq.) requires preparation 

of an initial regulatory flexibility 

analysis for any rule that by law must 

be proposed for public comment, unless 

the agency certifies that the rule, if 

promulgated, will not have a significant 

economic impact on a substantial 

number of small entities. As required by 

Executive Order 13272, ‘‘Proper 

Consideration of Small Entities in 

Agency Rulemaking,’’ 67 FR 53461 

(August 16, 2002), DOE published 

procedures and policies on February 19, 

2003, to ensure that the potential 

impacts of its rules on small entities are 

properly considered during the 

rulemaking process (68 FR 7990). DOE 

has made its procedures and policies 

available on the Office of General 

Counsel’s Web site: http:// 

www.gc.doe.gov. 

DOE has reviewed today’s final rule 

under the provisions of the Regulatory 

Flexibility Act and the procedures and 

policies published on February 19, 

2003. The requirements in 10 CFR part 

490 apply only to alternative fuel 

providers with fleets containing at least 

50 LDVs (20 of which are centrally 

fueled or capable of being centrally 

fueled) and to like-size State fleets in 

metropolitan statistical areas with a 

population of more than 250,000. The 

owners and operators of fleets of this 

size are not small entities. In addition, 

the final rule establishes optional 

procedures for State entities and 

covered persons that wish to receive a 

waiver from otherwise applicable AFV 

acquisition requirements. Alternative 

compliance does not impose any 

additional burdens on the entities 

subject to sections 501 and 507(o) of the 

Energy Policy Act of 1992. On the basis 

of the foregoing, DOE certifies that this 

final rule will not have a significant 

economic impact on a substantial 

number of small entities. Accordingly, 

DOE has not prepared a regulatory 

flexibility analysis for this rulemaking. 

DOE’s certification and supporting 

statement of factual basis will be 

provided to the Chief Counsel for 

Advocacy of the Small Business 

Administration pursuant to 5 U.S.C. 

605(b). 

D. Paperwork Reduction Act 

Under the Paperwork Reduction Act 

of 1995 (44 U.S.C. 3501 et seq.) and the 

procedures implementing that Act, 5 

CFR 1320.1 et seq., a person is not 

required to respond to a collection of 

information unless it displays a 

currently valid OMB control number. 

Section 490.805 (‘‘Application for 

wavier’’), section 490.807 (‘‘Reporting 

requirement’’), and § 490.810 (Record 

retention) contain information 

collection requirements. DOE did not 

receive any comments on the 

information collection requirements of 

this final rule. 

OMB Control Number 1910–5101 is 

assigned to the alternative fuel 

transportation program. 

E. Unfunded Mandates Reform Act of 

1995 

The Unfunded Mandates Reform Act 

of 1995 (Pub. L. 104–4) generally 

requires Federal agencies to examine 

closely the impacts of regulatory actions 

on State, local, and tribal governments. 

Subsection 101(5) of title I of that law 

defines a Federal intergovernmental 

mandate to include any regulation that 

would impose upon State, local, or 

tribal governments an enforceable duty, 

except a condition of Federal assistance 

or a duty arising from participating in a 

voluntary Federal program. Title II of 

that law requires each Federal agency to 

assess the effects of Federal regulatory 

actions on State, local, and tribal 

governments, in the aggregate, or to the 

private sector, other than to the extent 

such actions merely incorporate 

requirements specifically set forth in a 

statute. Section 202 of that title requires 

a Federal agency to perform a detailed 

assessment of the anticipated costs and 

benefits of any rule that includes a 

Federal mandate which may result in 

costs to State, local, or tribal 

governments, or to the private sector, of 

$100 million or more. Section 204 of 

that title requires each agency that 

proposes a rule containing a significant 

Federal intergovernmental mandate to 

develop an effective process for 

obtaining meaningful and timely input 

from elected officers of State, local, and 

tribal governments. 

This final rule provides an alternative 

compliance option for States and 

alternative fuel providers subject to AFV 

acquisition requirements in 10 CFR part 

490. The final rule will not result in the 

expenditure by State, local, and tribal 

governments in the aggregate, or by the 

private sector, of $100 million or more 

in any one year. Accordingly, no 

assessment or analysis is required under 

the Unfunded Mandates Reform Act of 

1995. 

F. Treasury and General Government 

Appropriations Act, 1999 

Section 654 of the Treasury and 

General Government Appropriations 

Act, 1999 (Pub. L. 105–277) requires 

Federal agencies to issue a Family 

Policymaking Assessment for any 

proposed rule that may affect family 

well being. The final rule will not 

impact the autonomy or integrity of the 

family as an institution. Accordingly, 

DOE has concluded that it is not 

necessary to prepare a Family 

Policymaking Assessment. 

G. Executive Order 13132 

Executive Order 13132, ‘‘Federalism,’’

64 FR 43255 (August 4, 1999) imposes 

certain requirements on agencies 

formulating and implementing policies 

or regulations that preempt State law or 

that have Federalism implications. 

Agencies are required to examine the 

constitutional and statutory authority 

supporting any action that would limit 

the policymaking discretion of the 

States and carefully assess the necessity 

for such actions. DOE has examined this 

final rule and has determined that it 

will not preempt State law and will not 

have a substantial direct effect 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. No further action 

is required by Executive Order 13132. 


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H. Executive Order 12988 

With respect to the review of existing 

regulations and the promulgation of 

new regulations, section 3(a) of 

Executive Order 12988, ‘‘Civil Justice 

Reform,’’ 61 FR 4729 (February 7, 1996), 

imposes on Executive agencies the 

general duty to adhere to the following 

requirements: (1) Eliminate drafting 

errors and ambiguity; (2) write 

regulations to minimize litigation; and 

(3) provide a clear legal standard for 

affected conduct rather than a general 

standard and promote simplification 

and burden reduction. With regard to 

the review required by section 3(a), 

section 3(b) of Executive Order 12988 

specifically requires that Executive 

agencies make every reasonable effort to 

ensure that the regulation: (1) Clearly 

specifies the preemptive effect, if any; 

(2) clearly specifies any effect on 

existing Federal law or regulation; (3) 

provides a clear legal standard for 

affected conduct while promoting 

simplification and burden reduction; (4) 

specifies the retroactive effect, if any; (5) 

adequately defines key terms; and (6) 

addresses other important issues 

affecting clarity and general 

draftsmanship under any guidelines 

issued by the Attorney General. Section 

3(c) of Executive Order 12988 requires 

Executive agencies to review regulations 

in light of applicable standards in 

section 3(a) and section 3(b) to 

determine whether they are met or it is 

unreasonable to meet one or more of 

them. DOE has completed the required 

review and determined that, to the 

extent permitted by law, the final rule 

meets the relevant standards of 

Executive Order 12988. 

I. Treasury and General Government 

Appropriations Act, 2001 

The Treasury and General 

Government Appropriations Act, 2001 

(44 U.S.C. 3516 note) provides for 

agencies to review most disseminations 

of information to the public under 

guidelines established by each agency 

pursuant to general guidelines issued by 

the Office of Management and Budget 

(OMB). 

OMB’s guidelines were published at 

67 FR 8452 (February 22, 2002), and 

DOE’s guidelines were published at 67 

FR 62446 (October 7, 2002). DOE has 

reviewed today’s final rule under the 

OMB and DOE guidelines and has 

concluded that it is consistent with 

applicable policies in those guidelines. 

J. Executive Order 13211 

Executive Order 13211, ‘‘Actions 

Concerning Regulations That 

Significantly Affect Energy Supply, 

Distribution, or Use,’’ 66 FR 28355 (May 

22, 2001) requires Federal agencies to 

prepare and submit to the OMB, a 

Statement of Energy Effects for any 

proposed significant energy action. A 

‘‘significant energy action’’ is defined as 

any action by an agency that 

promulgated or is expected to lead to 

promulgation of a final rule, and that: 

(1) Is a significant regulatory action 

under Executive Order 12866, or any 

successor order; and (2) is likely to have 

a significant adverse effect on the 

supply, distribution, or use of energy, or 

(3) is designated by the Administrator of 

OIRA as a significant energy action. For 

any proposed significant energy action, 

the agency must give a detailed 

statement of any adverse effects on 

energy supply, distribution, or use 

should the proposal be implemented, 

and of reasonable alternatives to the 

action and their expected benefits on 

energy supply, distribution, and use. 

Today’s final regulatory action will not 

have a significant adverse effect on the 

supply, distribution, or use of energy 

and is therefore not a significant energy 

action. Accordingly, DOE has not 

prepared a Statement of Energy Effects. 

K. Congressional Notification 

As required by 5 U.S.C. 801, DOE will 

submit to Congress a report regarding 

the issuance of today’s final rule prior 

to the effective date set forth at the 

outset of this notice. The report will 

state that it has been determined that 

the rule is not a ‘‘major rule’’ as defined 

by 5 U.S.C. 801(2). 

V. Approval by the Office of Secretary 

The Secretary of Energy has approved 

the issuance of this final rule. 

List of Subjects in 10 CFR Part 490 

Energy, Energy conservation, Fuel, 

Motor vehicles, Petroleum, and 

Recordkeeping and reporting 

requirements. 

Issued in Washington, DC, on March 12, 

2007. 

Alexander A. Karsner, 

Assistant Secretary, Energy Efficiency and 

Renewable Energy. 

■ For the reasons set forth in the 

preamble, the Department of Energy is 

amending chapter II of title 10 of the 

Code of Federal Regulations as set forth 

below: 

PART 490—ALTERNATIVE FUEL 

TRANSPORTATION PROGRAM 

■ 1. The authority citation for part 490 

is revised to read as follows: 

Authority: 42 U.S.C. 7191 et seq.; 42 U.S.C. 

13201, 13211, 13220, 13251 et seq. 

■ 2. Section 490.600 is revised to read 

as follows: 

§ 490.600 Purpose and scope. 

This subpart sets forth the rules 

applicable to investigations under titles 

III, IV, V, and VI of the Act and to 

enforcement of sections 501, 503(b), 

507, 508, or 514 of the Act, or any 

regulation issued under such sections. 

■ 3. Section 490.603 is revised to read 

as follows: 

§ 490.603 Prohibited acts. 

It is unlawful for any person to violate 

any provision of sections 501, 503(b), 

507, 514 of the Act, or any regulations 

issued under such sections. 

■ 4. A new subpart I is added to read 

as follows: 

Subpart I—Alternative Compliance 

Sec. 

490.801 Purpose and scope. 

490.802 Eligibility for alternative 

compliance waiver. 

490.803 Waiver requirements. 

490.804 Eligible reductions in petroleum 

consumption. 

490.805 Application for waiver. 

490.806 Action on an application for 

waiver. 

490.807 Reporting requirement. 

490.808 Use of credits to offset petroleum 

reduction shortfall. 

490.809 Violations. 

490.810 Record retention. 

Subpart I—Alternative Compliance 

§ 490.801 Purpose and scope. 

This subpart implements section 514 

of the Act (42 U.S.C. 13263a) which 

permits States and alternative fuel 

providers to petition for alternative 

compliance waivers from the alternative 

fueled vehicle acquisition requirements 

in subparts C and D of this part, 

respectively. 

§ 490.802 Eligibility for alternative 

compliance waiver. 

Any State subject to subpart C of this 

part and any covered person subject to 

subpart D of this part may apply to DOE 

for a waiver from the applicable 

alternative fueled vehicle acquisition 

requirements. 

§ 490.803 Waiver requirements. 

DOE grants a State or covered person 

a waiver: 

(a) If DOE determines that the State or 

covered person will achieve a reduction 

in petroleum consumption, through 

eligible reductions as specified in 

§ 490.804 of this subpart, equal to the 

amount of alternative fuel used if the 

following vehicles were operated 100 

percent of the time on alternative fuel 

during the model year for which a 

waiver is requested: 


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(1) Previously required alternative 

fueled vehicles in the fleet’s inventory 

at the start of the model year for which 

a waiver is requested; 

(2) Alternative fueled vehicles that the 

State or covered person would have 

been required to acquire in the model 

year for which a waiver is requested, 

and in previous model years in which 

a waiver was granted, absent any 

waivers; 

(b) The State or covered person is in 

compliance with all applicable vehicle 

emission standards established by the 

Administrator of the Environmental 

Protection Agency under the Clean Air 

Act (42 U.S.C. 7401 et seq.); and 

(c) The State or covered person is in 

compliance with all applicable 

requirements of this subpart. 

§ 490.804 Eligible reductions in petroleum 

consumption. 

(a) Motor vehicles. Demonstrated 

reductions in petroleum consumption 

during the model year for which a 

waiver is requested that are attributable 

to motor vehicles owned, operated, 

leased or otherwise under the control of 

a State or covered person are applicable 

towards the petroleum fuel reduction 

required in § 490.803(a) of this subpart. 

(b) Qualified nonroad vehicles. 

Demonstrated reductions in petroleum 

consumption during the model year for 

which a waiver is requested that are 

attributable to nonroad vehicles owned, 

operated, leased or otherwise under the 

control of a State or covered person 

acquired during waiver years are 

applicable towards the petroleum fuel 

reduction required in § 490.803(a) of 

this subpart: 

(1) If acquisition of the nonroad 

vehicles leads directly to the 

establishment or upgrading of refueling 

or recharging infrastructure during a 

waiver year that would also allow for 

increased petroleum replacement by 

serving the fleet’s on-road light-duty 

vehicles; and 

(2) To the extent that additional 

reductions attributable to motor vehicles 

are not reasonably available. 

(c) Rollover of excess petroleum 

reductions. (1) Petroleum reductions 

achieved by a fleet in excess of the 

amount required for alternative 

compliance in a previous model year are 

applicable towards the petroleum fuel 

reduction requirements for that fleet 

under § 490.803(a) of this subpart upon 

approval by DOE. 

(2) Requests for approval to apply 

rollover reductions to future model 

years for which a waiver is requested 

must be made to DOE in writing as part 

of the reporting requirement specified in 

§ 490.807 of this subpart. 

(3) DOE will apply approved rollover 

reductions to a model year for which a 

waiver was granted but the required 

reduction in petroleum use was not 

achieved only to the extent that 

additional reductions attributable to 

motor vehicles were not reasonably 

available. 

(4) Following receipt of a request to 

roll over excess petroleum reduction, 

DOE notifies the State or covered person 

of the amount of petroleum reduction 

that may be applied to a future model 

year’s petroleum reduction requirement. 

(5) Excess petroleum reductions are 

not tradable. 

(d) Ineligible reductions. The 

petroleum reduction plan required by 

paragraph (c)(4) of this section must not 

include reductions in petroleum 

attributable to incentives for third 

parties to reduce their petroleum use, 

petroleum reductions that are not 

transportation-related, or petroleum 

reductions attributable to non-qualified 

nonroad vehicles. 

§ 490.805 Application for waiver. 

(a) A State or covered person must 

apply for a waiver applicable to an 

entire fleet for a full model year in 

accordance with the deadlines specified 

in paragraph (b) of this section. DOE 

will not grant a waiver for less than an 

entire fleet or less than a full model 

year. 

(b)(1) A State or covered person must 

register a preliminary intent to apply for 

a waiver by March 31 prior to the model 

year for which a waiver is sought. 

(2) If a complete waiver application is 

dependent on information regarding the 

availability of motor vehicle models to 

be released by motor vehicle 

manufacturers, the waiver application 

must be received by DOE no later than 

July 31 prior to the model year for 

which a waiver is sought. 

(3) If a complete waiver application is 

not dependent on information regarding 

the availability of motor vehicle models 

to be released by motor vehicle 

manufacturers, the waiver application 

must be received by DOE no later than 

June 30 prior to the model year for 

which a waiver is sought. 

(c) A waiver application must include 

verifiable data that is sufficient to 

enable DOE to determine whether the 

State or covered person is likely to 

achieve the amount of petroleum 

reduction required for alternative 

compliance and whether the fleet is in 

compliance with Clean Air Act vehicle 

emission standards. At a minimum, the 

State entity or covered person must 

provide DOE with the following 

information: 

(1) The model year for which the 

waiver is requested; 

(2) The total number of required 

alternative fueled vehicle acquisitions 

in the fleet including: 

(i) The number of alternative fueled 

vehicle acquisitions that the State or 

covered person would, without a 

waiver, be required to acquire during 

the model year for which the waiver is 

requested; 

(ii) The number of alternative fueled 

vehicle acquisitions that the State or 

covered person would, without a 

waiver, have been required to acquire 

during the model years for which 

waivers were previously granted; 

(iii) The number of required 

alternative fueled vehicles existing in 

the fleet that were acquired during years 

in which no waiver was in force; and 

excluding 

(iv) Any required alternative fuel 

vehicles acquired during a waiver or 

non-waiver year or light-duty vehicles 

acquired in lieu of alternative fuels 

vehicles during a waiver year that are to 

be retired before the beginning of the 

waiver year; 

(3) The anticipated amount of 

gasoline and diesel and alternative fuel 

(calculated in gasoline gallon 

equivalents (gge)) to be used by the 

covered light-duty vehicles in the fleet 

for the waiver year including an 

estimate of per vehicle average fuel use 

in these vehicles; 

(4) A petroleum reduction plan as 

described in paragraph (d) of this 

section; and 

(5) Documents, or a certification by a 

responsible official of the State or 

covered person, demonstrating that the 

fleet is in compliance with all 

applicable vehicle emission standards 

established by the Administrator of the 

Environmental Protection Agency under 

the Clean Air Act. 

(d) The petroleum reduction plan 

required by paragraph (c)(4) of this 

section must contain a documented 

explanation as to how the State or 

covered person will meet the reduction 

in petroleum consumption required by 

§ 490.803(a) of this subpart. 

(1) The planned actions must: 

(i) Be verifiable; 

(ii) Demonstrate a reduction in 

petroleum use by motor vehicles or 

qualified nonroad vehicles owned, 

operated, leased or otherwise controlled 

by the State or covered person; 

(iii) Provide for a net reduction in 

petroleum consumption as specified in 

§ 490.803(a) of this subpart. 

(2) The documentation for the plan 

may include, but is not limited to, 

published data on fuel efficiency, 

Government data, letters from 


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manufacturers, and data on actual 

usage. 

(e) A State or covered person must 

send its report, and two copies, to DOE 

on official company or agency 

letterhead, and the report must be 

signed by a responsible company or 

agency official. Send to: Regulatory 

Manager, Alternative Fuel 

Transportation Program, FreedomCAR 

and Vehicle Technologies Program, EE–

2G/Forrestal Building, U.S. Department 

of Energy, 1000 Independence Avenue, 

SW., Washington, DC 20585. 

§ 490.806 Action on an application for 

waiver. 

(a) DOE grants or denies a complete 

waiver application within 45 business 

days after receipt of a complete 

application. 

(b) If DOE determines that an 

application is not complete in that 

sufficient information is not provided 

for DOE to make a determination, DOE 

notifies the State or covered person of 

the information that must be submitted 

to complete the application. 

(c) If DOE denies a waiver, and the 

State or covered person wishes to 

exhaust administrative remedies, the 

State or covered person must appeal 

within 30 days of the date of the 

determination, pursuant to 10 CFR part 

1003, subpart C, to the Office of 

Hearings and Appeals, U.S. Department 

of Energy, 1000 Independence Ave., 

SW., Washington, DC 20585. DOE’s 

determination shall be stayed during the 

pendency of an appeal under this 

paragraph. 

§ 490.807 Reporting requirement. 

(a) By December 31 following a model 

year for which an alternative 

compliance waiver is granted, a State or 

covered person must submit a report to 

DOE that includes: 

(1) A statement certifying: 

(i) The total number of petroleum 

gallons and/or alternative fuel gge used 

by the fleet during the waiver year in its 

covered light-duty vehicles; and 

(ii) The amount of petroleum motor 

fuel reduced by the fleet in the waiver 

year through alternative compliance. 

(b) A State or covered person must 

send its report to DOE on official 

company or agency letterhead, and the 

report must be signed by a responsible 

company or agency official. Send to: 

Regulatory Manager, Alternative Fuel 

Transportation Program, FreedomCAR 

and Vehicle Technologies Program, EE–

2G/Forrestal Building, U.S. Department 

of Energy, 1000 Independence Avenue, 

SW., Washington, DC 20585. 

§ 490.808 Use of credits to offset 

petroleum reduction shortfall. 

(a) If a State or covered person granted 

a waiver under this subpart wants to use 

alternative fueled vehicle credits 

purchased or earned pursuant to subpart 

F of this part to offset any shortfall in 

meeting the petroleum reduction 

required under § 490.803(a) of this 

subpart, it must make a written request 

to DOE. 

(1) The State or covered person must 

provide details about the particular 

circumstances that led to the shortfall 

and provide documentation that shows 

a good faith effort to meet the 

requirements. 

(2) DOE may request that a State or 

covered person supply additional 

information about the fleet and its 

operations if DOE deems such 

information necessary for a decision on 

the request. 

(b) If DOE grants the request, it 

notifies the State or covered person of 

the credit amount required to offset the 

shortfall. DOE derives the credit amount 

using the fleet’s fuel use per vehicle 

data. 

(c) DOE gives the State entity or 

covered person until March 31 

following the model year for which the 

waiver is granted, to acquire the number 

of credits required for compliance with 

this subpart. 

§ 490.809 Violations. 

If a State or covered person that 

receives a waiver under this subpart 

fails to comply with the petroleum 

motor fuel reduction or reporting 

requirements of this subpart, DOE will 

revoke the waiver. DOE may impose on 

the State or covered person a penalty 

under subpart G of this part. 

§ 490.810 Record retention. 

A State or covered person that 

receives a waiver under this subpart 

must retain documentation pertaining to 

its waiver application and alternative 

compliance, including petroleum fuel 

reduction by its fleet, for a period of 

three years following the model year for 

which the waiver is granted. 

[FR Doc. E7–5021 Filed 3–19–07; 8:45 am] 

BILLING CODE 6450–01–P 

DEPARTMENT OF TRANSPORTATION 

Federal Aviation Administration 

14 CFR Part 39 

[Docket No. FAA–2006–26495; Directorate 

Identifier 2006–CE–80–AD; Amendment 39–

14997; AD 2007–06–16] 

RIN 2120–AA64 

Airworthiness Directives; Alpha 

Aviation Design Limited (Type 

Certificate No. A48EU Previously Held 

by APEX Aircraft and AVIONS PIERRE 

ROBIN) Model R2160 Airplanes 

AGENCY: Federal Aviation 

Administration (FAA), Department of 

Transportation (DOT). 

ACTION: Final rule. 

SUMMARY: We are adopting a new 

airworthiness directive (AD) for the 

products listed above. This AD results 

from mandatory continuing 

airworthiness information (MCAI) 

issued by an aviation authority of 

another country to identify and correct 

an unsafe condition on an aviation 

product. The MCAI references Alpha 

Aviation Service Bulletin AA–SB–28–

002, dated June 28, 2006, which 

describes the unsafe condition as: 

Development of the New Zealand 

produced Alpha 160A aircraft identified an 

issue with the fuel shut-off valve, where it 

may not be possible to switch the valve ON 

once the valve has been placed in the OFF 

position. This is due to friction in the shutoff system. 

The fuel shut-off valve, which is normally 

ON, is a safety feature to allow the pilot to 

stop fuel flow to the engine in an emergency 

situation such as a forced landing without 

power. The fuel shut-off control is guarded 

and requires a deliberate action by the pilot 

to operate. 

Not withstanding this, a hazardous 

situation is possible if the fuel shut-off valve 

is inadvertently switched OFF in flight and 

the pilot is not able to switch it back ON. 

We are issuing this AD to require 

actions to correct the unsafe condition 

on these products. 

DATES: This AD becomes effective April 

24, 2007. 

The Director of the Federal Register 

approved the incorporation by reference 

of certain publications listed in this AD 

as of April 24, 2007. 

ADDRESSES: You may examine the AD 

docket on the Internet at http:// 

dms.dot.gov or in person at the Docket 

Management Facility, U.S. Department 

of Transportation, 400 Seventh Street, 

SW., Nassif Building, Room PL–401, 

Washington, DC. 

FOR FURTHER INFORMATION CONTACT: Karl 

Schletzbaum, Aerospace Engineer, FAA, 


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