1

**PROPOSED SUPPORTING STATEMENT** 

**– PART A**  **RECORDKEEPKING AND REPORTING RELATED TO FUEL QUALITY REGULATIONS FOR DIESEL FUEL SOLD IN 2001 & LATER YEARS; FOR TAX** 
**** **EXEMPT (DYED) HIGHWAY DIESEL FUEL; AND NON**
**- ROAD LOCOMOTIVE &**  **MARINE DIESEL FUEL: RENEWAL**  **DOCKET EP A** 
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**- 1121**  **EPA ICR N o.:**  **1718.09** 1. ID ENTIFICATION OF THE INFORMATION COLLECTION
1(a) Title of the Information Collection Fuel Quality

Regulations for Diesel Fuel Sold in 2001 & L ater Years; for Tax

- Exempt (Dyed) Highway Diesel Fuel; & Non

- Road Locomotive & Marine Diesel Fuel (Renewal)

. EPA Control Number 1718.0 9 , OMB Control Number: 2060

- 0308. 1(b) Short Characterization/Abstract This I CR renewal is related to EPA’s diesel fuel regulation s under 40 CFR Part 80, Subpart I , applicable to highway (“motor vehicle” or “MV”) diesel fuel and non

- road, locomotive and marine diesel fuel (NRLM) and heating oil (HO). Most of the information collected under this I CR is used to evaluate compliance with the requirements of the regulations. Since virtually all MV diesel fuel was required to meet a 15 part per million (ppm) standard as of June 1, 2010, very little reporting related to MV diesel fuel remains. However, reporting related to NRLM and HO wil l continue throughout the course of this proposed I CR renewal. The activities associated with this I CR include: registration (all parties have registered; updates to existing registrations are still possible); compliance reports (mostly covering NRLM and HO; updates to prior compliance reports for MV diesel are still possible); research and development (R&D) exemptions; generation and retention of quality assurance (QA) records; foreign refiner recordkeeping and reporting; placement of PTD codes (a ty pically automated process, to indicate the presence of dye in tax

- exempt fuel and/or sulfur content). This I CR renewal contains provisions related to qualification of laboratories on performance

- based test methods. Virtually all applications have already been received from laboratories and acted upon by EPA.

2. NEED FOR AND USE OF THE COLLECTI ON 2(a) Need/Authority

for the Collection2

This supporting statement covers the recordkeeping and reporting requirements and the associated costs to variou s parties (e.g., refiners, importers, distributors, and retailers of diesel fuel). These general recordkeeping and requirements are necessary to enable the Administrator to: (1) I dentify

the sources of diesel fuel; and (2) Ensure that these sources co mply with the standards and limitations of the rules. An effective enforcement scheme is necessary to ensure that the environmental goals of the diesel program are met, and that those complying with the requirements in good faith are not disadvantaged by non - complying parties. The diesel program requirements create a significant economic incentive for noncompliance.

For performance

- based qualification of test methods for diesel fuel, reported data will enable EPA to: 1) Qualify

laboratories to us e test methods based upon accuracy and precision criteria supported by

industry

. 2) Ensure that diesel fuel and heating oil meet the standards required under the regulations at 40 CFR Part 80 and that the associated benefits to human health and the envi ronment are realized.
2(b) Practical Utility

/Users of the Data EPA will use the information contained in the reports required by this information collection to evaluate the compliance of parties involved in the production and importation of diesel with the diesel fuel requirements. These reports will also be used by EPA to target compliance investigations. PTDs maintained by

parties in the diesel fuel distribution system and records related to diesel blending will be used to evaluate the compliance of the parties that maintain the records, and to help evaluate upstream compliance. PTDs are normally generated and retained in the course of business (i.e., they are customary

business practices or “ CBP ” ). There is a small burden associated with the plac ement of sulfur content and/or dye notices, a process which is ty pically automated. The automatically

printed notice on tax

- exempt highway diesel product transfer documents (which EPA allows to be stated in coded form to save space), allows EPA to determine if dyed product is intended for highway use or is high sulfur diesel for off

- road use3

only . It also helps industry to make this determination. The EPA's Office of Enforcement and Compliance Assurance, Air Enforcement Division is the governmental user of the information contained in the required records.

3. NONDUPLICATION, CONSULTATIONS, AND OTHER COLLECTION CRITERIA 3(a) Non

- Duplication Efforts have been made to eliminate duplicatio n in this information collection. Where possible, information requirements from various organizations within the Agency have been combined to minimize the submittal of duplicate information in different formats. The information in this collection will not be available from another source.
3(b) Public Notice Prior to Submission to OMB We are publishing a Federal Register notifying parties that announces are intention to renew this information collection, which will expire on December 31, 2011

. 3(c) Consultations EPA will discuss this information collection with representatives of regulated industry

. We are soliciting comments via the Federal Register notice, as well. This proposed supporting statement and our proposed estimates are being pl aced in the public docket. 3(d) Effect of Less Frequent Collection The diesel rule requires refiners and importers to submit annual reports which will, by the information contained therein, demonstrate a party ’s compliance with the applicable sulfur standards. L ess frequent submittal of such reports would severely hinder EPA’s ability

to monitor compliance, and would likely lead to noncompliance. In the case of the dye requirements, a less frequent collection is not practical, since the information must appear on product transfer documents at the time custody is transferred 3(e) General Guidelines The requirement requires record retention for five (5) years. The Agency believes this is important to the success of the program. With the large eco nomic incentive to not comply that exists because of the substantial difference in price that can exist between low sulfur diesel and high sulfur diesel, it is imperative that EPA maintain deterrence by assuring that all parties know that EPA will be able to distinguish the difference between high sulfur and low sulfur deliveries4

via a review of records generated in the normal course of business (i.e., CBP). The requirement to retain for five ( 5 ) ye ars is consistent with other record retention periods in the fuels regulations, with the applicable 5 year statute of limitations, and CBP. Most entities already keep these records for 5 or more years for tax and other business purposes. 3(f) Confidentiality Proprietary

information is routinely

submitted by

refiners and importers as part of annual reports and as part of requests for research and development or hardship exemptions. Confidentiality

for such information is covered by established Agency

procedure s and the regulations at 40 CFR Part 2. 3(g) Sensitive Questions No questions of a sensitive nature are asked in this information collection. 4. THE RESPONDENTS AND THE I NFORMATI ON COLLECTED 4(a) Respondents/SI C Codes The respondents to this infor mation collection are:

- Refiners (both domestic and foreign refiners who manufacture diesel for use in the U.S.)

- Importers of diesel into the U. S.

- Diesel distributors, carriers, wholesale purchaser

- consumers, and retailers

- Testing laboratories Recordkeeping and, in some cases, reporting is required by the following industries, with SI C Code/2002 NAI CS Code indicated : Refiners (2911/324110), Importers (5172/424720), P ipelines (4613), P etroleum marketers and other distributors (5171 , 5172 /42 4710, 424720), T erminals (5171/424710), F uel oil dealers (5172/424720), F uel additive manufacturers (2911/424720), P etroleum retailers and wholesale purchaser

- consumer s (5171, 5172/424710 , 424720 ) L aboratories (8734/541380).
4(b) In formation Requested 1. Data Items5

Knowledge of the following definitions at 40 CFR Part 2 is important for a thorough understanding of the reporting and recordkeeping requirements: “Diesel fuel” means any

fuel sold in any

state or Territory

of the Un ited States and suitable for use in diesel motor vehicles, diesel motor vehicle engines or diesel non

- road engines, and which is commonly

or commercially

known or sold as diesel fuel. “Motor vehicle diesel fuel” means any diesel fuel, or any

distillate product, that is used, intended for use, or made available for use, as a fuel in diesel motor vehicles or diesel motor vehicle engines. “Refinery” means a plant in the United States at which gasoline or diesel fuel is produced. “Foreign refinery” means a refinery that is located outside the United States. “Refiner” means any

person who owns leases, operates, controls, or supervises a refinery

. “Importer” means a person who imports gasoline, gasoline blending stocks or components, or diesel from a foreign country into the United States (including the Commonwealth of Puerto Rico, the Virgin I slands, Guam, American Samoa, and the Northern Mariana I slands.

“ Sulfur percentage” is the percentage of sulfur in diesel fuel by weight, as determined using one of the test methods specified in the regulations. “Parts per million (ppm)” is a ty pical method of expressing sulfur content in diesel fuel.

“ Batch of motor vehicle diesel fuel” means a quantity of diesel fuel which is homogenous with regard to those properties that are specified for motor vehicle diesel fuel under 40 CFR subpart I

.
2. Recordkeeping and Reporting Requirements Tabl e Isummarizes the information to be collected by form and respondent. I f no form exists, the information item is identified by party

.
5. THE I NFORMATI ON COLLECTED

- AGENCY ACTIVITIES, COLLECTION METHODOLOGY, AND I NFORMATI ON MANAGEMENT 5(a) Agency

A ctivities6

 All reported compliance data will be reviewed by EPA.
 EPA will contact submitters about problem submissions.
 Where appropriate, we will prepare a written response to the submitter.
 The data will be stored. 5(b) Collection M ethodology and Management EPA accepts common electronic formats for most of the reporting requirements

- for example, annual reports may be submitted in any

of several commercial spreadsheet formats or, more simply, as comma - delimited text/comma

- separated value fields. The product transfer document information can be included on standard transfer documentation customarily used in the ordinary

course of business (i.e., CBP) . EPA allows the information to be encoded by upstream parties (refiners, imp orters, and terminals) to facilitate reporting and save space. The information is carefully reviewed for compliance with the requirements. Most of the compliance information submitted to the Agency is claimed as business confidential. It is store d in a secure area and i n a secure database. 5(c) Small Entity

Flexibility The information collection reduces (to the extent practicable and appropriate ) the burden on respondents, including small entities. The major reporting requirements apply to re finers and importers of diesel, which are not usually small businesses. 6. ESTIMATI

NG THE BURDEN AND COST OF THE COLLECTI ON

a. Estimating the Respondent Universe We drew upon experience implementing similar regulations among the same and similar entities to develop estimates of the burden associated with this collection.

b. Estimating Respondent Costs (i) Estimating L abor Costs Indiscussions with industry , four labor categories were identified as having involvement: managerial, legal, professional/technical (prof/tech) and clerical. According to the Bureau of Labor Statistics, May

2008 National Industry

- Specific Occupational Employ ment and Wage7

Estimates, mean wages were: Wages Managerial $60.42 per hour Legal $84.56 per hour Prof/Tech $60.05 per hour Clerical $17.34 per hour Doubling for company

overhead and employing a 2% annual inflation factor to bring the rates to the year 2011, and, for convenience, rounding to the nearest dollar, gives the following rates that will be u sed for this I CR: Total Employer Cost Managerial $128 Legal $179 Prof/Tech $127 Clerical $ 36 The labor mix for each task is assumed to be about 0.05 hour managerial, 0.05 hour legal, 0.7 hour professional/technical, and 0.2 hour technical. This gives an average labor cost of about $110 per hour, which will be used in this I CR. Our estimates are summarized in the following table:8



## TABLE I **- PROPOSED ESTIMATES**  **EPA ICR 1718.09 (Renewal. Expires 12** 
**- 31**  **- 2011.)** 

**Collection Type of**  **No. of No. of**  **Total No. of Time Per**  **Cost Per Total**  **Hours Total** 

**Cost** Assumes: **Ac tivity**  **Party Parties**  **Responses Responses**  **Response Hour**  **per Party Hours**  **REPORTING DSF0100 Form:**  **NRLM Diesel Fuel Sulfur**  **refiners 100**  **1 100**  **1 110**  **100 11000**  95 NRLM **Credit Banking and** refiners, **Generation Report** rounded **importers 50**  **1 50**  **1 110**  **50 5500**  up to 100.

**MV resub -**  **5 1**  **5 1**  **100 5**  **500** Nearly all **missions** MV reporting **DSF0200 Form: NRLM**  ends **Diesel Fuel Sulfur refiners**  **100 1**  **100 1**  **110 100**  **11000** with full **Credit Transfer** 15 ppm **Report** fully **importers 50**  **1 50**  **1 110**  **50 5500**  in place June 2010. **MV resub -**  **5 1**  **5 1**  **100 5**  **500 missions**  "All **DSF0301 Form: NRLM**  Other"9

**Diesel Fuel Sulfur refiners**  **100 1**  **100 1**  **110 100**  **11000** includes **Facility** terminals **Report** and **importers 50**  **1 50**  **1 110**  **50 5500**  pipeline facilities. **MV resub -**  **5 1**  **5 1**  **100 5**  **500 missions**  For DSF0200 **DSF0401 Form: NRLM**  and **Diesel Fuel Sulfur refiners**  **100 1**  **100 1**  **110 100**  **11000** DSF0504, **Batch** multiple **Report** transaction s **importers 50**  **1 50**  **1 110**  **50 5500**  may be reported on **MV resub -**  **5 1**  **5 1**  **110 5**  **550** one form. **missions**

**DSF0504 Form: NRLM**  **Designate and refiners**  **100 1**  **100 1**  **110 100**  **11000 Track Handoff**  **Report importers**  **50 1**  **50 1**  **110 50**  **5500**

**MV resub -**  **5 1**  **5 1**  **110 5**  **550 missions** 

**Al l other**  **1,000 1**  **1000 1**  **100 1000**  **100000**

**DSF0601 NRLM** 10

**Designate and refiners**  **100 1**  **100 1**  **110 100**  **11000 Track Tot. Vol.**  **Report importers**  **50 1**  **50 1**  **110 50**  **5500**

**MV resub -**  **5 1**  **5 1**  **110 5**  **550 missions** 

**Al l other**  **1,000 1**  **1000 1**  **100 1000**  **100000 parties** 

**DSF0700 NRLM**  **Designate and refiners**  **100 1**  **100 1**  **110 100**  **11000 Track Facility**  **Compliance Report**  **importers 50**  **1 50**  **1 110**  **50 5500** 

**MV resub -**  **5 1**  **5 1**  **110 5**  **550 missions** 

**Al l other**  **1,000 1**  **1000 1**  **100 1000**  **100000 parties** 

**DSE0700 NRLM**  **Designate and refiners**  **100 1**  **100 1**  **110 100**  **11000 Track Entity**  **Compliance Report**  **importers 50**  **1 50**  **1 110**  **50 5500** 11 **MV resub -**  **5 1**  **5 1**  **110 5**  **550 missions** 

**Al l other**  **1,000 1**  **1000 1**  **100 1000**  **100000 parties** 

**DSF0900 Form: MV resub**  **- 5**  **1 5**  **1 100**  **5 500**  **Motor Vehicle missions**  **Diesel Sulfur Pre**  **- Compliance**  **Report**

**DSF0951 Form: NRLM**  **NRLM refiners**  **100 1**  **100 1**  **110 100**  **11000 Diesel Sulfur**  **Pre -**  **Compliance Report**  **importers 50**  **1 50**  **1 110**  **50 5500** 

**DLQ001 Form: Testing**  **(Used for labs**  **1 1**  **1 180**  **110 180**  **19800 lab/test method**  **qualification.)**

**DFM001 Form: Testing**  **(Used for labs**  **1 1**  **1 180**  **110 180**  **19800 solvent/die**  **qualification.)**

**REGISTRA**

**TION & OTHER ITEMS**12

**Updates to**  **Existing Registrations**  **An y**  **party 2**  **1 2**  **0.5 110**  **1 110**  Includes MV and **R&D Exemptions Refiners**  **2 1**  **2 1**  **110 2**  **220** NRLM refiners, for **QA Refiners**  **150 100**  **15000 0.25**  **110 3750**  **412500** a total of **(Record Importers**  **50 100**  **5000 0.25**  **110 1250**  **137500** 150 parties. **Generation and Retention)** 
**Foreign Refiners**  **5 1**  **5 40**  **110 200**  **22000 refiners**  **record**   ** keeping** **and reporting** 

**Placement Various**  **1,200 200**  **240000 0.0333**  **110 7992**  **879120** "Various **of PTD codes parties in**  parties" **(dy e/content)**  **distribution** may incl. **sy stem**  refiners, importers, and others such as terminals and distributors.13



## TOTA **LS** 6806 265406 18950 2044300 Parties Responses Hours Cost ($)14

6(c) Estimating Agency Burden and Cost The Agency

activities listed in 5(a) are part of an overall gasoline and diesel reporting system (including reformulated gasoline, conventional gasoline , and diesel). We estimate that this system costs approximately $1 2 0,000 in personnel costs per year (i.e. approximately 3⁄4 of a GS

- 13 employee with consideration of overhead and benefits). 6(d) and (e) Estimating the Respondent Universe and Total Burden and Costs, and

Bottom Line Burden Hours and Costs This was incorporated into 6(a) and (b). 6(f) Reasons for Change in Burden For this renewal, we estimate a total annual burden of 265,406 responses, taking 18,950 hours, and costing $2,044,30 0

. For the expiring approval, we had estimated 426,075 responses, taking 264,150 hours, and costing $2,626,000. Most MV diesel reporting has now ended, which was expected to reduce the responses, hours, and costs. Likewise, laboratory qualifications hav e virtually all been submitted already . However, please note that we have changed how we accounted for the burden for this renewal. We have modeled our estimates for this renewal to match the in

- use forms in order to assist interested parties in providing comments. Therefore, some of the change is associated with the difference between how we calculated the 2008 IC R renewal (expiring approval) and this one

. The Agency

burden has decreased because of a reduction in the number of reports filed. Inthe e xpiring approval, we estimated a total cost of $668,000. We estimate that the cost associated with this renewal is approximately $120,000. Most of the reduction in burden is related to the fact that MV diesel reporting has been phased out and because vir tually all laboratory

qualification applications for test methods have already been received and acted upon.
6(g) Burden Statement The public reporting burden for this Environmental Protection Agency (EPA) collection of information is estimated to average less than one hour per response. This includes time for reviewing instructions and regulations, searching company records, gathering the needed data, and completi ng, reviewing, copying, and transmitting the collection of information. Burden means the total time, effort, or financial resources expended by persons to generate, maintain, retain, or disclose or provide information to or for a Federal ag ency . This includes the time needed to review instructions; develop, acquire, install, and utilize technology and systems for the purposes of collecting, validating, and verify ing information, processing and maintaining information, and disclosing and pro viding information; adjust the existing ways to comply with any previously

applicable instructions or requirements; train personnel to be able to response to a15

collection of information; search data sources; complete and review the collection of informatio n; and transmit or otherwise disclose the information. An Agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a currently

valid OMB control number. The OMB control numbers for EPA’ s regulations are listed in 40 CFR Part 9 and 48 CFR Chapter 15. To comment on the Agency's need for this information, the accuracy o f the provided burden estimates, and any s uggested methods for minimizing respondent burden, including the use of automated collection techniques, EPA has established a public docket for this IC R under Docket ID Number EPA

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- 1121 , which is available for online viewing at www.regulations.gov, or in person viewing at the Air and Radiation Docket and In formation Cent er in the EPA Docket Center (EPA/DC), EPA West, Room 3334, 1301 Constitution Avenue, NW, Washington, D.C. The EPA Docket Center Public Reading Room is open from 8:30 a.m. to 4:30 p.m., Monday through Friday, excluding legal holidays. The telephone number for the Reading Room is (202) 566

- 1744, and the telephone number for the Air and Radiation Docket and In formation Center is (202) 566

- 1742. An electronic version of the public docket is available at www.regulations.gov. Thi s site can be used to submit or view public comments, access the index listing of the contents of the public docket, and to access those documents in the public docket that are available electronically

. When in the system, select "search," then key i n the Docket ID Number identified above. A lso, yo u can send comments to the Office of In formation and Regulatory A ffairs, Office of Management and Budget, 725 17th Street, NW, Washington, D.C. 20503, Attention: Desk Officer for EPA. P lease include the EPA Docket ID Number EPA

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- 1121 and OMB Control Number 2060

- 03 08 in any correspondence.