Supporting Statement for In formation Collection Request Emissions Certification and Compliance Requirements for Nonroad Compression - ignition and On - highway Heavy Duty Engines

(Proposed Rule for Alternative Fuel Conversions of Heavy - Duty Engines)

EPA I CR 1864.15 OMB Control Number 2060
- 0287

May 2010

C ompliance and Innovative Strategies Division Office of Transportation and Air Quality Office of Air and Radiation U.S. Environmental Protection Agency2

1. Identification of the Info rmation Collection 1(a) Title A nd Number Of T he Information Collect ion Emissions Certification and Compliance Requirements for Nonroad Compression
ignition and On
- highway Heav y Dut y Engines (Proposed Rule for Alternative Fuel Conversions of Heav y - Duty

Engines) ; EPA IC R number 1684.15, OMB Control N umber 2060
- 0287. 1(b) Short Characterization/Abstract The Environmental Protection Agency is proposing changes designed to simplify and lessen the burdens for manufacturers seeking approval to introduc e into commerce in the U.S. light
- dut y vehicles , light
- dut y trucks , medium
- duty passenger vehicles, and heavy
dutyvehicles and engines that have been converted for use of fuels that the original models were not designed for, such as from gasoline to liqui d propane gas (LPG) or compressed natural gas (CNG)
. This ICR covers the heavy
- dutyportion of the proposal. These changes would start taking effect with 20 1 1 model y ear light
- duty vehicles and trucks or upon the effective date of the final rule
. Starti ng then , manufacturers will be given expanded options for submitting simplified applications. IC Rs normallyhave a three year time horizon. T his ICR w ill cover the expected paperwork burden changes for the three y ears after the effective date of the final rule
. Under previous iterations of this ICR, EPA analy zed the cost of obtaining a certificate of conformity under current regulations and used that as a baseline cost. This Supporting Statement addresses onlythe anticipated paperwork burden of the prop osed rule in relation to the existing baseline. It is important to note that HD conversions have not received as much interest as LD conversions. As a result, EPA’s experience with and data available on HD conversions is limited. For example, in model ye ar (MY) 2008, EPA onlyreceived seven certification applications from four different converters. In 2009, the number drop to three applications from three different manufacturers. Despite limited historical data on HD conversions, EPA has evaluated the cost a converter would incur to fullycertifya HD engine that has been converted at each of three stages in the life of the engine: (1) beginning of useful life, (2) mid
- useful life, and (3) outside the useful life. Th ese costs are then compared to the b aseline
-- the current cost of certification. It has been estimated that a total of 8 manufacturers will respond to this collection (proposed rule onl y) with an approximate cost of $753,786

.3

Section 2: Need Fo r A nd Use of the Collection 2(a) Ne ed/Authority For T he Collection Unde r Title II of the Clean Air Act ( CAA, 42 U.S.C. 7521 et seq.), EPA is charged with issuing certificates of conformityfor motor vehicle designs that complywith applicable emission standards set under section 202(a)(1) of the Act
. A manufacturer must have a certificate before vehicles maybe legally introduced into commerce. To i nsure compliance with the Act , EPA reviews product information and manufacturer test results; EPA also tests some vehicles to confirm manufac turer results. Section 203 of the CAA contains “anti
- tampering” provisions prohibiting alteration of OEM vehicle components relevant to the vehicle’s certification under the Act. Regulations at 40 CFR, Part 85, Subpart F , provide exemption for afterma rket conversion sy stems from these tampering prohibitions for those converters complying with the regulations of that Part. Under Subpart F, these exemptions are currently administered through a certification process that is modeled on the OEM certificatio n provisions: converters submit certification requests for engine families, and those that satisfyEPA’s regulations upon review are granted certificates of conformityfor one model y ear. 2(b) Practical Utility

/Users of the Data EPA uses certification information to verify that the proper engine protot ypes have been selected and that the necessary testing has been performed to assure compliance with emission standards. EPA uses the information requested to support various enforcement actions as manda ted by the CAA. This information collection enables EPA to ensure that engine manufacturers are comply ing with applicable emission regulations, measure the impact of nonroad engines ' emissions on air quality , and take corrective actions as needed. The information will be received and used b y HDNEG /C IS D/OTAQ/OAR. Non
confidential portions of the information submitted to HDNEG is available to and used by importers, environmental groups, members of the public and local, state and federal government organi zations. Section 3: Nonduplication, Consultations, and Other Collection Criteria 3 (a) Nonduplication The information requested under this I CR is required by statute. Because of its specialized (and sometimes confidential) nature, and the fact that it must be submitted to EPA prior to the start of production, the information collected is not available from any other source.4

3(b) Public Notice Prior to ICR Submission to OMB An announcement of the public comment period for this I CR renewal w ill be published in the Federal Register on May 26, 2010. This document may be accessed through the Federal Register's website at http://www.gpoaccess.gov/fr/index.html
. 3 (c) Consultations The burd en estimates described in this ICR is based on the HD certification program burden already approved byOMB under ICR 1684 . EPA is currentlyseeking comment on these estimates through the FR notice mentioned in Section 3(b). EPA plans to seek comment on H D conversions from various converters before this ICR is finalized. The final ICR will contain information about anycomments received. 3(d) Effects of Less Frequent Collection The CAA states that emission certification must be done on a ye arl y basis ( CAA 206(a)(1)), coinciding with the industry ' s ' model year .' Major product changes t ypically occur at the start of a model ye ar. For these reasons, a collection frequency of less than a model y ear is not possible. However, when an engine design is " carr ied over " to a subsequent model y ear, the amount of new information required is substantially reduced. 3 (e) General Guidelines Accordin g to 40 CFR 86.098
- 7, certification related records must be maintained for eight ye ars. Note that " records may be retained as hard copy

or reduced to microfilm, ADP film, etc., depending on the manufacturer ' s record retention procedure, provided that in every case all the information contained in the hard cop y is retained. " These recordkeeping requirements stem, in l arge part, from the statutory requirement to warrant some items for long periods of time. In addition, the manufacturers must comply with requirements to recall vehicles and engines failing to meet emission standards during their useful lives. Manufacturers are required to submit confidential business information such as sales projections and certain sensitive technical descriptions (Please see section 4(b)(i) for reference). This information is kept confidential in accordance with the Freedom of Inform ation Act, EPA regulations at 40 CFR Part 2, and class determinations issued by EPA ' s Office of General Counsel. Also, non
- proprietary information submitted by manufacturers is held as confidential until the specific vehicle or engine to which it pertains is available for purchase. This information collection activitycomplies with the remaining guidelines in 5 CFR 1320.5 . The proposal makes no changes in the reporting and recordkeeping provisions that impact anyof the guidelines for information collec tions as approved in the ex isting approved collection.5

3 (f) Confidentiality Manufacturers are allowed to assert a claim of confidentiality over information provided to EPA. Confidentiality

is provided in accordance with the Freedom of Information Act a nd EP A regulations at 40 CFR Part 2. For further detail, refer to section 3(e). 3(g) Sensitive Questions No sensitive questions are asked in this information collection.
Section 4: Respondents and Information Requested 4(a) Respondents/ NA IC S Cod es Respondents are manufacturers of non
- road engines within the following North American Industry Classification Sy stem (NAICS) codes: 336312 Gasoline Engine and Engine Parts Manufacturing 4 (b) Information Requested (i) Data items The information a nd reporting burden associated with this rule occurs within the context of EPA’s motor vehicle and engine certification and compliance program s . Currentlyrequested data items related to heavy
- dutyengine certification are discussed in detail in ICR 1684. 12. Converters seeking certification for engines converted at the beginning of their useful lives are expected to go through current certification procedures. However, under the proposed rule, the amount of information collected from converters will be r educed due to the proposed provision that will allow the grouping of multiple engine families into a larger one. Currently , engine manufacturers and converters must submit one certification application per engine family , as currentlydefined in the regula tions. Under the proposed rule, converters of beginning
- of
- useful life engines will be able to obtain one certificate for a group of engine families. Engine families must share certain characteristics before theycan be combined into a larger family. Th is provision mayreduce converters reporting burden byup to 50%. Converters of intermediate age engines will be able to submit a simplified testing demonstration without the burdens of the formal cer tification application process. Since EPA will not iss ue a certificate of conformity , intermediate age engine converters will also benefit from not having to paythe certification fee currentlyrequired under the authorit y of6

Section 217 of the CAA and the Independent Offices App ropriation Act (31 U.S.C. 9701 )
. Converters of engines outside their useful life will also benefit from a reduced burden. EPA is currentlyseeking comment from the public on the suitabilityof three proposed options to provide adequate demonstration of compliance. In general, r eporting formats will describe the major aspects of the proposed product line, technical details of the emission control systems, and the results of anyrequired tests to indicate compliance with the emissions limitations. The following is a list of da ta items added or revised bythe proposed rule
. As mentioned above, IC R 1864. 12 lists the rest of the data items currently required for certification and that would applyto converters of beginning
- of
- useful
- life engines
. For all vehicles :  ex panded con version test or " demonstration " groups  ex emption from HCHO testing for conversions to CNG and LPG  conversion factors for calculating NMOG for conversions to CNG and LPG  new VECI label requirement describin g test group, mileage, and date For intermedia te - age and outside useful
- life age vehicles (25%)

 online notification and test result report rather than application for certification (savings in “paperwork” burden) or compliance “demonstration” for outside useful
- life conversions  description of OBD com pliance strategyor OBD demonstration rather than current OBD test results  In termediate
- age and outside useful
- life engine families will not be required to paya certification fee. (ii) Respondent Activities While there is no “ typical ” converter respon dent, all converters must submit a descri ption of their product and test data t o verifycompliance. As described in Section 4(b)(i), i n some cases the proposal would replace the current application and certification process with an alternative , simpler pro cess. Converters of beginning
- of
- useful life engines will carry
- out the same activities as other engine manufacturers currentlyseeking certification. Sectio n 5: The Information Collected
— Agency Activities, Collection Methodology, and I nformation Manage ment 5(a) AgencyActivities7

In general , EPA officials carry out the following activities:

 Review and interpret regulations, provide guidance;  Review the applications for completeness and accuracy ;  Verify

that the correct engines have been selected and test ed;  Verify

compliance with applicable provisions;  Request additional information if needed;  Answer questions from manufacturers and the public;  Issue appropriate certificates of conformity , as applicable ;  Periodically

perform maintenance or enhance the dat abase;  Make data av ailable to the public ;  Analyze and manage requests for confidentiality ;  Determining if "carry over" of data from a previous model y ear is appropriate or if n ew testing will be required; and  Store, file and maintain data. 5(b) Collectio n Methodology and Management EPA currentl y makes extensive use of electronic media in gathering and evaluating information from engine manufacturers. Manufac turers submit Certification, AB T , PLT and SEA data in electronic formats. Once the data are re ceived, the information is entered into a database and reviewed for completeness. If the manufacturer chooses to make hard cop y submittals, then EPA manually enters the information into the database. The certification reviewer anal ys es the information to ensure compliance with the CAA and applicable regulations. The public can access non
- confidential portions of the certification applications and test data b y contacting HDNEG or through the Engine Certification Information Center at http://www.epa.gov/otaq/certdata.htm
. 5 (c) Small Entity

Flexibility Small on
- highway

engine manufacturers may use optional procedures outlined in 86.098 to demonstrate compliance with the general standards and spec ific emission requirements. These procedures , also available to HD converters, apply to manufacturers with US sales of fewer than 10,000 units. The alternate procedures reduce small manufacturers' burden associated with durability data requirements, test ing, determination of deterioration factors and certification test data. Converters may

also request EPA to assign deterioration factors, thus eliminating that burden completel y. Small volume manufacturers are also exempt from some reporting and recordke eping requirements associated to the certification of evaporative families (86.098
- 22(m)).8

EPA can also approve a reduction in the certification application fee upon request by the manufacturer. A fee waiver could be granted if: (1) the certificate i s to be used to sell engines within the United States; and (2) the full fee exceeds 1% of the aggregate projected retail sales price of all vehicles covered b y the certificate of conformity. Although this is a provision available to all manufacturers, it is beneficial to some small manufacturers. Section 6(b)(ii) provides more details. 5(d) Collection Schedule Collection of certification data (or demonstration data when applicable) on a per engine family basis occurs on occasion. Overall c ollection f requency is largel y determined b y the convert er ' s marketing and product plans. Information must be submitted for each ' model y ear ' that a converter intends to build engines and a certificate of conformity must be obtained before the start of production. Taking these two considerations into account, manufacturers normall y submit information on an annual basis and submit their applications at their earliest convenience. Running change and correction applications are submitted by manufacturers as the need occurs. Section 6: Estimating the Burden and Cost of the Collection 6(a) Estimating Respondent Burden (Hours) Since the current process for certifying an engine family will remain basically

unchanged for converted families, b urden estimates were take n from the previous supporting statement in this I CR series
. Costs have been updated and reflect the impact of the new, broader definition of engine famil y proposed by this rule. Tables 1 through 3 summarize the respondents’ overall burden associated with this I CR. 6(b) Estimating Respondent Costs (i ) Estimating labor costs To estimate labor costs, EPA used the Bureau of Labor Statistics ' May 2008 industry specific occupational hourly wage estimates for the Motor Vehicle Manufacturing I ndustry (NAICS 336100 ) . EPA then increased the hourl y wage estimates by a factor of 2.1 to account for benefits and overhead. The specific rates used are listed below. These are mean hourly rates.9 Table 4 Labor Costs Estimate s Occupation SOC Code Number Mean Hourly Rate

(BLS) 2.1 Factor for

Overhead and Benefits Mechanical Engineers 17
- 2141 $37.59 $78.94 Engineering Managers 11
- 9041 $54.56 $114.58 Lawyers 23
- 1011 $67.14 $140.99 Secretaries, Except Legal, Medical an d Executive 43
- 6014 $19.76 $41.50 (ii) Estimating Capital and Operations and Maintenance Costs The Operation and Maintenance costs (O&M Costs) in this I CR look somewhat differ ent from those explained in the rule preamble. The language in the preamble sought to explain all the costs a converter may incur in its effort to obtain new exhaust emissions certification and new evaporative emissions certification for its products. Since manufacturers can “carry
- over” test data from one model year to the ne xt, converters need to test their engine families only once unless major changes are made to the engines. In this I CR, one time costs such as testing have been annualized. So far, all HD converters are small businesses . EPA believes this will still be th e case after this rule is finalized. Small businesses contract outside laboratories to perform testing. There fore, there are no capital start
- up costs associated with this collection. EPA has estimated that testing at a private facility costs, on avera ge , $ 30 ,0 0 0. Evaporative testing costs, on average , $7,050. Testing cost, however, is a one
- time cost per engine famil y since manufacturers can carry over emissions data from one model year to the next. This cost has been annualized over the approval pe riod requested for this I CR (3 y ears)
. Heav y - D uty

and Large N onroad CI: $ 10,000 Evaporative testing : $ 2,350 Converters of beginning
- of
- useful
- life engines are required to pay a fee every

model y ear when submitting an application for a certificate of c onformity . This fee is requested under the authority of the CAA Section 217. EPA published a revision to its 2010 schedule of fees in the document CI SD
- 0 9
- 0 5 . The rele vant fees for calendar y ear 2010 are :

Federal Exhaust Certificate: $ 35,967 Evaporati ve - onl y: $ 51110

The fees rule provides for a reduction in fee when " the full fee exceeds 1.0 percent of the projected aggregate retail price of all vehicles or engines covered by that certificate " (69 FR 26226, Section F). The reduced fee must not exceed one percent of the aggregate retail price of the vehicles and engines covered b y the certificate. Since all respondents are small businesses and no laboratories will be built or modified to comply with the new rule, there are no capital start
- up co sts associated with this collection. Other O&M Costs associated with this information collection include CDs , photocopy ing, postage and other shipping expenses, calls, and testing costs
. C Ds are used b y manufacturers to submit their electronic applicati ons and to keep records. (iii) Start
- up Costs There are no capital start
- up costs associated with the renewal of this I CR. (iv) Annualizing capital costs There are no capital start
- up costs associated with this information collection. 6(c) Esti mating Agency Burden Table 5 summarize s EPA ' s overall additional burden associated with th e proposed rule
. Table 6 below summarizes EPA ' s labor. These costs are based on 2010 hourly wage rates obtained from the Office of Personnel Management and adjust ed by a factor of 1.6 to account for benefits and overhead. Table 6 Agency Labor Costs Occupation Hourly Rate 160% Engineer (GS - 13/10) $55.46 $88.74 Lawy ers (GS - 13/10) $55.46 $88.74 Managers (GS - 15) $65.23 $104.37 SES - 1 $99.00 $158.40 Seni or ( SEE Program ) $13.81 $20.72 (see text below) The salary

of a senior from the Senior Environmental Employ ment (SEE) Program for clerical support is $13.81 per hour plus approximately 150% increase for benefits, for a total of $20.72. EPA also pay s $2,151.83 as an administrative fee to the Senior Services America, Inc., the organization from which EPA’s SEE Employ ees are obtained. These data were obtained from11

HDNEG’s financial officer. 6(d) Estimating the Respondent Universe and Total Burden and Costs Interest in HD conversions has been low in the past. In model y ear 2008, EPA received only seven applications for certification from a total of four converters; while in 2009, only three of those converters submitted one application each. EPA unde rstands that this is in part due to converters not submitting an application until they find a market for the engines. The amount of engines in a HD engine family is ty pically lower than the amount of engines in a L D test group. Since the cost of certific ation is spread over a smaller pool of engines, it is more expensive to certify a HD famil y on a per engine basis. This fact discourages man y companies from seeking certification for heav y - duty products. Based on the experience of EPA certification revie wers, the Agency estimates that interest in heav y - dut y conversions certification may double as a result of the proposed rule. This is due to the ability

to combine engine families into a larger group that could be certified as one family with onl y one emis sions test. EPA estimates that eight converters will seek certification for 12 converted heavy
- duty engine families (under the new, expanded definition) after the rule becomes final. Since the process for demonstrating compliance with emission requireme nts differ depending on the age of the engines being converted, EPA has accounted for each stage separately
. i. Beginning
- of

- Useful
-Life Engine Conversions Converters of beginning
- of
- useful
- life engines must seek full certification. There are three distinct costs these converters will incur in.

 Exhaust emissions certification: Table 1 summarizes burden and costs for exhaust certification of these families.  Evaporative emissions certification: Converters will also need to obtain a certificate of conformit y with evaporative emission requirements. Table 2 summarizes costs and burden associated with evaporative certification.  OBD compliance demonstration. Currently , alternative fuel converters are required to submit test data to demonstrate compliance with OBD regulations. However, 40 CFR 86.010
- 18(o) provides exemptions for small volume and alternative fueled engines used in applications over 14,000 lbs. All HD converters who have sought EPA certification in recent ye ars have been able to claim one of th ese exemptions. In an effort to also reduce costs for those HD manufacturers who are not able to claim this exemption, EPA is accepting through 2013 approval issued b y either the California Air Resource Board (CARB) or the EPA L ig ht
- dut y (LD) Certificat ion Program as proof of12

compliance
. Manufacturers must demonstrate how the OBD sy stem they have designed to comply with California OBD requirements also complies with the intent of federal requirements
. So far, HD manufacturers have been able to either c laim the exemption or submit approval from CARB or the LD Team. Therefore, EPA does not have historical data to use as basis for OBD demonstrations specifically related to HD conversions. Based on past experience with both HD engine and converted engine certification, EPA estimates that all converters will be able to use one the provisions described above to avoid the cost of HD OBD compliance through the period covered b y this ICR. The cost of LD OBD compliance demonstration is alread y accounted for i n I CR series 783. If we needed to account for these costs now , EPA considers it appropriate to adopt for HD, the estimates developed by the LD program described in ICR 783.55 : $26,317. ii. Intermediate age Engine Conversions Under the proposed rule, conver ters of intermediate age engines will be required to gather and submit all required data, including test data. However, the proposed rule does not require EPA to issue a certificate of conformit y for intermediate age engines. Instead, the Agency will col lect the data and audit it from time to time. In addition, OBD testing will not be required for intermediate conversions. The submission of the complete emissions data demonstrating compliance will in itself cover the manufacturer from certain enforcement actions. Since EPA will not issue a certificate of conformity , fees will not be collected. As a result, the cost of demonstrating compliance for intermediate age engine conversions will be the same as for beginning
- of
- life engine conversions with the exception of fees and OBD demonstration costs. Table 3 shows these costs and burden. EPA believes that there is little interest in intermediate age engine conversions. Therefore, EPA has estimated that two manufacturers will demonstrate compliance for on e engine famil y each. iii. Outside
- useful
- life conversions Burden and costs associated with demonstrating compliance for outside useful life applications will depending on which option is selected in the final rulemaking. EPA would expect the maximum testing costs for Option #1 to be equivalent to those costs incurred for intermediate age vehicle compliance, since conducting all testing required for the intermediate age engine program would always be an acceptable demonstration of good engineering judg ment. Maximum testing costs for Option #2 would be double that of the intermediate age engine program, since two sets of emissions test data would be required. However, the costs13

would still be less than the baseline costs because no OBD demonstration t esting would be required. Maximum testing costs for Option #3 would be sum of the cost for Option #1 and about $300. An OBD scan tool with capabilities for printing via a computer and printer can be acquired for less than $300. Based on past experience, EPA does not expect to have an y respondents interested in outside
- useful
- life conversions. Therefore, no burden is allocated for these conversions in this ICR. 6(e) Bottom L ine Burden Hours and Cost (i ) Respondent Tally Table 6 Total Estimated Re spondent Burden a nd Cost Summary
Program (Age of Converted Engine) Number of Respond ents Number

of Activities Total

Hours Per Year Total Labor

Cost Per Year Total

Annual Capital Costs Total

Annual O&M Costs Total Costs Beginning - of- Usefu l Life 8 12 1,002 $ 86,279 - $ 562,744 $ 649,023 Evaporative Cert 8 8 354 $ 29,177 - $ 34,408 $ 63,585 Intermediate Age 2 11 219 $ 19,307 - $ 21,871 $ 41,178 Outside Useful Life - - - - - - -

Total: 8 31 1,575 $ 134,763 - $ 619,023 $ 753,78614

(ii) The Agency Tally Table 7

Total Esti mated Age ncy Burden a nd Cost Summary
Program (Age of Converted Engine) Number of Respondents Number

of Activities Total

Hours Per Year Total Labor

Cost Per Year Total

Annual Capital Costs Total

Annual O&M Costs Total Costs All programs 8 12 3,101 $ 237,382 $ - $ 604 $

237,986
6(f) Reasons for change in burden The burden described in this ICR adds to the existing inventoryfor this ICR series. This increase is due to the expected increase in respondents. 6(g) Burden Statement The annual public reporting and recordkeeping burden for this collection of information is, on average, 197 hours per responde n t (1,575 total hours/8 respondents). Burden means the total time, effort, or financial resources expend ed bypersons to generate, maintain, retain, or disclose or provide information to or for a Federal agency
. This includes the time needed to review instructions; develop, acquire, install, and utilize technologyand sy stems for the purposes of collecting, validating, and verify ing information, processing and maintaining information, and disclosing and providing information; adjust the existing way s to complywith any previouslyapplicable instructions and requirements; train personnel to be able to respond to a collection of information; search data sources; complete and review the collection of information; and transmit or otherwise disclose the information. An agency maynot conduct or sponsor, and a person is not required to respond to, a collection of information unless it display s a currentlyvalid OMB control number. The OMB control numbers for EPA ’ s regulations are listed in 40 CFR Part 9
. To comment on the Agency 's need for this information, the accuracyof the provided burden estimates, and any suggested methods for minimizing respondent burden, including the use of automated collection techniques, EPA has established a public docket for this IC R under Docket ID number EPA
- HQ
- OAR
- 200 9
- 0299 , which is available for online viewing at www.regulations.gov , or in person viewing at the Air And Radiation Docket in the EPA Docket Cent er (EPA/DC), EPA West, Room 3334 , 1301 Constitution Ave., NW, Washington, DC. The EPA Doc ket Center Public Reading Room is open fro m 8:30 a.m. to 4:30 p.m., Mondaythrough Friday , excluding legal holiday s. The telephone number for the Reading Room is (202) 566
- 1744, and the telephone number for the Air and Radiation15

Docket is also (202) 566
- 1742 . An electronic version of the public docket is available at www.regulations.gov. This 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 sy stem, select “search,” then keyin the Docket ID Number identified above. Also, y ou can send comments to the Office of I nformation and RegulatoryAffairs, Office of Management and Budget, 725 17th Street, NW, Washington, D.C. 20503, Attention: D esk Officer for EPA. Please include the EPA Docket ID Number EPA
- HQ
- OAR
- 200 9
- 0299 and OMB Cont rol Number 2060
- 0287 in anycorrespondence.