Final Supporting Statement for In formation Collection Request Fuel Econom y Labeling of Motor Vehicles ( Final Rule)

EPA I CR 2392.0 2

C ompliance and Innovative Strategies Division Transportation and Climate Division

and Assessme nt and Standards Division Office of Transportation and Air Quality Office of Air and Radiation U.S. Environmental Protection Agency2 Part A SUBMISSION Section 1: Identification Of T he I nformation Collection 1(a) Title A nd Number Of T he I nformation Collecti on Fuel Econom y Labeling of Motor Vehicles ( Final Rule) , EPA IC R number 2392.0 2 , OMB control number 2060

- NEW

. The burden for this ICR will be transferred to the ICR 0783 series (OMB 2060

- 0104) after other pending adjustments have received clearance. 1(b) Short Characterization/Abstract EPA and the National Highway Traffic Safety Administration are conducting a joint rulemaking to redesign the current fuel economy label that is posted on the window sticker of all new cars and trucks sold in the U.S. The redesigned label will provide new information to American consumers about the fuel economy and consumption, fuel costs, and environmental impacts associated with purchasing new vehicles beginning with model year 201 3 cars and trucks. This action will als o develop new labels for advanced technologyvehicles which are poised to enter the U.S. market, in particular plug

- in hybrid electric vehicles (PHEVs) and electric vehicles (EVs)

. These new requirements will apply to model year 201 3 and later vehicles. The normal time horizon of ICRs is three y ears from the date of clearance. Consequently , this IC R should cover the startup period and approximately the first y ear of operation of the new requirements. The information costs associated with this rulemaking arise in part from the new testing requirements that generate the data on fuel economy that manufacturers of EVs and PHEVs must submit to EPA in applications for certification of conformitywith the Clean Air Act. These costs in turn are broken down into startup costs for information technology and testing

- related equipment , t esting operations costs, and a component to reflect increased capital facility costs. The rulemaking also entails costs for redesigning and printing the new label under the require d n ew format. The label itself is not reported to EPA; it is deemed to be an information collection for disclosure to the public falling within the definition in 40 CFR 1320.3(c)

. The numbers that go on the label , however, are reported to EPA, and the costs a nd hours for manufacturers to obtain these numbers are included in this analy sis. Because the data are reported to EPA, the burden associated with the new label, which is mandated by statute upon NHTSA, is here treated as an EPA burden for simplicity

. O ver the next several model y ears, the agencies expect to see increasing numbers of EVs and PHEVs entering the marketplace. A count of current such vehicles and EPA’s information about those likelyto appear in the next three y ears indicates that the numbe r of manufacturers and test groups is likely to be more limited in the near term . This ICR is written to accommodate all those families in existence or contemplated plus a margin of error; bey ond that anyincreases in burden are speculative and will have t o await the next3

collection authorityrenewal. This ICR estimates that 3 5 manufacturers will incur up to $ 4,986,806 yearlyin new startup, facility , and operations and maintenance costs and 8,548 in annual labor hours as a result of the rule. Section 2: Need For A nd Use of the Collection 2(a) Need/Authority For T he Collection Unde r Title II of the Clean Air Act (42 U.S.C. 7521 et seq.), EPA is charged with issuing certificates of conformityfor motor vehicle designs that compl y with applicable emi ssion standards. A manufacturer must have a certificate before vehicles maybe legally introduced into commerce. P rovisions in the EnergyPolicy Conservation Act ( EPCA; codified as Title III of the Motor Vehicle Information and Cost Savings Act, 15 U.S.C

. 2001 et seq.) require fuel economyratings to be determined and vehicles to be labeled. To i nsure compliance with these statutes, EPA reviews product information and manufacturer test results; EPA also tests some vehicles to confirm manufacturer results

. In formation is also shared with other agencies: the In ternal Revenue Service for “gas g uzzler ” t ax es and NHTSA for CAFE requirements.
In the EnergyI ndependence and SecurityAct of 2007 (EISA ; P.L. 110

- 140 ), Congress required that NHTSA, in consultati on with EPA and the Department of Energy , establish regulations to implement several new labeling requirements for new automobiles ( see 49 U.S.C. 32908(g) ) . Based on criteria provided by EPA, NHTSA must develop a program to require manufacturers to label new automobiles with information reflecting an automobile’s performance with respect to “fuel economyand greenhouse gas and other emissions” over the automobile’s useful life. NHTSA must also develop a rating sy stem that would make it easy for consumers to compare the fuel economyand greenhouse gas and other emissions of automobiles at the point of purchase, including designations of automobiles with the lowest GHG emissions over the useful life of the vehicles, and the highest fuel economy

. The present joint EPA

- NHTSA rulemaking is intended to respond to these requirements by developing a single label that will also accommodate emerging technologies. The regulations dealing with LDV emission control can be found in 40 CFR Parts 85 and 86. EPA’s LDV f uel economyprovisions are found in 40 CFR Part 600. The regulations are not attached to this statement due to their length and technical nature. 2(b) Practical Utility

/Users of the Data Emissions data submitted to EPA as a part of the existing certi fication and compliance program are used, in conjunction with additional tests and projected sales, to establish fuel economy ratings. Based on test results, EPA calculates a fuel economy number for each vehicle model. EPA then computes an average fuel e conomy for each manufacturer that is weighted by the number of units of each of its vehicle models in that4

year. This “harmonic mean” calculation is statutory(49 U.S.C. 32904). In the previous, “five

- cy cle” label rulemaking (71 FR 77872, December 27, 20 06) EPA extended the required fuel economy labels to certain heavier vehicles up to 10,000 pounds gross vehicle weight, such as larger SUVs and vans, beginning with the 2011 model year. In a recent joint rulemaking (75 FR 25324, May 7, 2010) EPA and NHTSA established harmonized federal greenhouse gas (GHG) emissions and corporate average fuel econom y (C AFE) standards for new cars, sport utility

vehicles, minivans, and pickup trucks.
In a separate program, t he fuel economyratings , used to complywith the labeling requirements for new vehicles (40 CFR Part 600, Subpart D) , are l isted by model type. These ratings are computed as the sales weighted harmonic mean of the “base levels” within each model type, which in turn are calculated as the sales weighted h armonic mean of the configurations/subconfigurations w ithin each base level. This procedure is intended to i nsure that the most representative fuel economyvalues are posted on new vehicles, which are sold by the manufacturer’s model designation rather th an categories that correspond to the test groups that are used for generating fuel economy data as a part of the certification process. The current fuel economy label required on all new cars and other personal vehicles contains the following information: cityand highway fuel economy values in miles per gallon, how the vehicle’s combined city /highway fuel economy compares to a range of comparable vehicles, the estimated fuel cost to operate the vehicle for one y ear , a statement that a booklet is available from the dealer to assist in making a comparison of fuel economy of other automobiles manufactured by all manufacturers in that model y ear, and the amount of the automobile fuel efficiencytax (“gas guzzler tax”) imposed on the sale of the automobile under section 4064 of the Internal Revenue Code

. This joint rule is designed to update the current label in two main respects. First, it would also bring EVs and PHEVs into the labeling scheme in a manner which accounts for the fact that the normal way s of mea suring fuel economy based on exh au st emissions need to be modified. Second, the rule suggests possible modifications of the label format that are intended to complywith the Congressional mandate to provide consumers information on performance with respe ct to “fuel economyand greenhouse gas and other emissions” over the automobile’s useful life and display a rating sy stem that would make it easy for consumers to compare the fuel economy and greenhouse gas and other emissions of automobiles at the point o f purchase, including designations of automobiles with the lowest GHG emissions over the useful life of the vehicles, and the highest fuel economy

. Section 3: Nonduplication, Consultations, and Other Collection Criteria
3 (a) Nonduplication Efforts ha ve been made to eliminate duplication in this information collection. The mandating statutes give both EPA and NHTSA authority over labeling requirements related to fuel economyand environmental information under EPCA and EISA, respectively . I n order to implement that authorityin the most coordinated and efficient way , the agencies are jointly finalizing the revised label that give rise to this collection request.5

The rule also raises two duplication issues with respect to the existing FTC labeling requirement for “alternative fuel vehicles” including EVs and flexible fuel vehicles (FFVs) ( 69 FR 26926, April 9, 2004; 16 CFR part 309, subpart C). First, the FTC label requires that the cruising range of EVs be determined using the procedures in SAE J16 34 (16 CFR 309.22(a)(2)). Consequently , EV manufacturers selling vehicles in the United States have alreadybeen subject for several y ears to the SAE J1634 testing requirements in th e rule . I t is expected that tests conducted to satisfy FTC labeling requir ements in previous y ears will be carried over to EPA certification applications under the new rule, so that this overlap is primarilyan information cost accounting issue, discussed below. In addition, however, the FTC regulations specify the 1993 version of the SAE J8634, which is more elaborate and ex pensive than the 1999 version suggested by EPA in its existing testing guidance and contemplated bythe EV testing provisions in the rule. Second, The FTC label display s the cruising range of the vehicle on e ach fuel ; the rule would similarly require fuel economy information to be displayed not just for the diesel or gasoline fuel but the alternative fuel as well. In both these latter respects EPA believes this might present information on the EPA fuel economy label that maybe somewhat duplicative of the information on the FTC label, and could potentiallylead to a review by the FTC and a determination that the FTC label is no longer needed in cases where information regarding both fuels is display ed on the EP A label. EPA is required by statute to consult with the FTC regarding changes to the fuel economy label, and EPA has had this consult ation

. 3(b) Public Notice Prior to ICR Submission to OMB EPA solicited public comment by means of a Federal Register Notice of Proposed Rulemaking published on September 23 , 20 10 , 75 Federal Register 58078 ; a cop y can be found at h ttp://www.epa.gov/fueleconomy /regulations.htm

. 3 (c) Consultations The reg ulations were developed with extensive consultation with the affected industry , expert opinion, and the public. This included consultations with ten or more major manufacturers, the National Automobile Dealers Association, the convening of and report bya nine

- member expert panel, consultations with environmental groups, a three

stage focus group effort that was the subject of ICR s 2343.01 and 2390.01 (OMB 2060

- NEW) , and an internet

- based survey discussed in ICR 2060

- 0643

. Numerous public comments were rec eived on the proposed rule and can be found at www.regulations.gov, docket number EPA

- HQ

- OAR

- 2009

- 0865. 3(d) Effects of Less Frequent Collection
A s required by the Clean Air Act (42 USC 7525(a)), emission and fuel economy information is submitted on a y earlybasis coinciding with the manufacturer ’ s “ model year. ” EPA allows applicants to define their own “ model y ear ” , thus granting some flexibilityin this regard. In connection with certification application, the manufacturer submits along with emission s data the projected sales and the definition of carlines corresponding to the models that will be for sale; this information is used to calculate the6

values and gas guzzler information that appears on the fuel economy label. (After the end of the model y e ar, manufacturers send actual sales data that is used to calculate CAFE fleet

- wide averages, but this is a separate program not involved in this collection.) Consequently , the label information collection, printing, and application to vehicles is inextrica bl y linked to the annual model y ear timeframe. For th i s reason, a collection frequency longer than a model y ear is not possible . However, testing results are frequently “carried over” when there are no substantial emissions

- related changes from one model y ear to the next.
3 (e) General Guidelines Manufacturers are required to keep some EPA fuel economy related records for periods longer than three y ears (for example, 40 CFR 600.005(a)( 3 ) )

. This requirement stems from the statutory requirement that manu facturer s warrant some items for periods longer than 3 y ears. This information collection activitycomplies with the remaining guidelines in 5 CFR 1320.5

. The rule makes no changes in the reporting and recordkeeping provisions that impact anyof the gu idelines for information collections as approved in the existing approved collection.
3 (f) Confidentiality
In formation submitted bymanufacturers is held as confidential until the specific vehicle to which it pertains is available for purchase. After v ehicles are available, most information associated with the manufacturer/importer ’ s application is available to the public. Under section 208 of the Clean Air Act (42 USC 7542 (c) ) all information, other than trade secret processes or methods, must be publ icly available. P roprietaryinformation is granted confidentiality in accordance with the Freedom of Information Act, EPA regulations at 40 CFR Part 2, and class determinations issued by EPA ’ s Office of General Counsel. 3(g) Sensitive Questions
No sens itive questions are asked in this information collection. This collection complies with the Privacy Act and OMB Circular A

- 108. Section 4: Respondents and Information Requested 4(a) Respondents/ NA IC S Codes The respondents are involved in the industrie s shown in the following table:7

Category NAI CS Codes A Examples of Potentially Regulated Entities Industry 336111

336112 Motor vehicle manufacturers.

Industry 811112

811198
541514 Commercial I mporters of Vehicles and Vehicle

Components.

A North American I ndustry Classification Sy stem (NAICS)
4 (b) Information Requested (i) Data items The information and reporting burden associated with this rule occurs within the context of EPA’s motor vehicle certification program. Current regulations require manufa cturers to submit fuel economy and greenhouse gasses information to EPA in conjunction with this program. Manufacturers must submit an application for certification prior to production. The application describes the major aspects of the proposed product line, technical details of the emission control systems, and the results of tests to indicate compliance with the emissions limitations. The application and supporting test results are reviewed and, if appropriate, a certificate of conformityis issued. Some of the product information used to verifyemission compliance is also used, in conjunction with additional tests and projected sales, to establish fuel economy ratings for purposes of the fuel economy label

. The fuel economy ratings used to compl y with the new labeling requirements for new vehicles are listed bymodel type. These ratings are computed as the sales weighted harmonic mean of the “base levels” within each model type, which in turn are calculated as the sales weighted harmonic mean of the configurations/sub

- configurations within each base level. The criteria for determining a configuration, sub

- configuration, and base level are set forth in the regulations. This procedure is intended to i nsure that the most representative fuel econom y values are posted on new vehicles. New vehicles are sold and therefore labeled and rated by the manufacturer’s model designation rather than the categories that correspond to the test groups and fuel economy vehicles that are used for generating fuel ec onomy data. The rule contemplate s no changes in the methodologyfor the sales

- weighted calculations based on configurations of vehicles and projected sales summarized in the preceding paragraph.8

(ii) Respondent Activities Respondents are car and tr uck manufacturers and ICIs who submit certification applications to EPA via its Verify certification and information management sy stem. The applications contain the results of testing conducted according to EPA regulations that, in addition to providing em issions information, yield fuel economy valu es for the tested vehicles. These data , along with projected sales and carline details , allow EPA to calculate the values that applyto the manufacturer’s vehicle label. With this fuel economyand other label

- rel ated information approved byEPA, the manufacturer prints the labels consistent with the format required byEPA and NHTSA and attaches them to the vehicles before they are sent from the manufacturing plant (or ICI facility ) for sale. Manufacturers must ret ain records related to this information submitted to EPA and appearing on the label

. These tasks a re repeated for each model y ear, although typicallyprevious data and information can be “ carried over ” when no significant changes have occurred. If, durin g the course of a model y ear , a product change is made ( a “ running change ” ), EPA must be notified. Under some circumstances additional test data maybe required. After the end of the model y ear, final sales numbers are submitted to EPA and NHTSA for use in CAFE calculations, but this does not affect the fuel economy labeling program that is the subject of this collection request. Sectio n 5: The Information Collected

— Agency

Activities, Collection Methodology , and I nformation Management 5(a) Agency Activities The test data used byEPA to determine the fuel economyestimates posted on the fuel economylabels and to calculate a manufacturer's CAFE are derived from vehicle testing done by vehicle manufacturers who report their own test data to EPA , and at EPA's National Vehicle and Fuel Emissions Laboratory in Ann Arbor, Michigan

. Each y ear, EPA provides fuel economy data to the Department of Energy (DOE), NHTSA, and the Internal Revenue Service (IRS) so that they can administer their fuel economy

- related progr ams. DOE publishes the annual fuel economylabel values in the annual Fuel EconomyGuide and on the fuel economy web site at http://www.fueleconomy .gov. NHTSA receives the manufacturers' fleet average fuel economyfrom EPA, and determines if manufacturer s are comply ing with the CAFE standards. EPA provides IRS with the fuel economy data for vehicles that maybe subject to the Gas Guzzler tax penalty

. IR S is responsible for collecting those taxes from manufacturers. 5(b) Collection Methodology and Manag ement As of model y ear 2010, EPA collects all fuel economyrelated information ex clusivelythrough its Verifyinformation collection and management sy stem (MY 2009 information was collected through VERIFY in CFEIS format and ICIs were not y et in the Veri fy sy stem)

. The rule makes no changes in this reporting sy stem , onlychanging the format and content of some of the information reported within it

.9

All information received by EPA is subject to review

. Ex cept for projected sales and a very limited amo unt of proprietaryproduct information (typicallycataly st formulations), all information is available to the public as soon as the vehicle is offered for sale. Emission and fuel economy data are posted on the internet; other information is available upon request under the Freedom of Information Act

. 5 (c) Small Entity

Flexibility The analy sis of the rule prepared in response to the Regulatory FlexibilityAct, as amended by the Small Business Regulatory Enforcement Fairness Act of 1996 concluded that the regulations will not have a significant economic impact on a substantial number of small entities. One of the 2 4 manufacturers and all of the 11 ICIs identified byEPA as subject to the rule can be considered small entities under the definition in 13 CFR 121.201. It is anticipated that the one manufacturer, with one EV test group, will be able to carry over its previous test results in compliance with the new label EV testing requirements. For IC Is , a significant flexibilityadded by the regulation is to e liminate the requirement for 5

- cy cle testing of vehicles that would otherwise applystarting in 2011. Under the rule , I CI s would be allowed to continue predicting their 5

- cy cle fuel economyestimates from data collected over the FTP and HFET driving cy cle s. IC Is and any new small entityentrants into the market will need to design and post labels in conformance with the regulations and perform the necessary tests to generate the information on the labels. 5(d) Collection Schedule
In formation must be su bmitted for each “ model y ear ” that a manufacturer intends to build (or import) vehicles. For fuel economypurposes, a “ model y ear ” is statutorily defined in EPCA as the annual production period of a manufacturer, as decided bythe Administrator, which inc ludes Janua ry 1 of that calendar y ear; or that calendar y ear if the manufacturer does not have an annual production period. At the time of application, the manufacturer submits the information that goes on the label that is the subject of this ICR. If a product is unchanged between model y ears, much of the information can be “ carried over. ” Section 6: Estimating the Burden and Cost of the Collection The following estimates of increased burden are derived from the economic impact analy sis contained in the preamble of this rule

. The analy sis uses the cost assumptions in previous ICRs in this series, modified and updated as detailed below. As an aid to the analy sis and to help articulate the range of uncertainty , we estimated both low and high cost estima tes for each of these cost and labor hour elements. T hese ranges also help indicate the extent to which the dollar and hour estimates should not be deemed to have the same number of significant digits as the unrounded number s reported. 6(a) Estimating R espondent Burden Labor hours are associated, first, with startup costs for installing (updating)10

information technology sy stems to incorporate the new information to be reported, and for label redesign. As these labor costs are all associated with capit al/startup costs, they are included under that heading, following EPA guidance (EPA ICR Handbook, Rev. 11/05, p. A

31). Label redesign startup costs are based on comments from manufacturers on the proposed rule. Updating information sy stems is deemed to ap ply to manufacturers of EVs and PHEVs and to entail four weeks for four IT staff for anal ys is and coding, and four weeks for two IT staff for testing, or 960 hours per affected manufacturer. Second, there are labor hours associated with increased testing times for EVs and PHEVs. These test protocols would increase the testing time depending on the operating range of the vehicles (see 6(b)(ii) below) . The high and low O&M labor hours are developed b y multiplying the baseline hours by this increment in time . The baseline assumption is that an FTP/HFET test pair takes 30 hours of labor, divided 70% to FTP (21 hours) and 30% to HFET(9 hours) for purposes of analy sis. For EVs, the range that must be tested could be from 50 to 250 miles, depending on the vehicle , so the FTP hour burden per test group is increased b y 50 to 250 divided by

7.45 (the normal length of an FTP), and the HFET by 50 to 250 divided by

10.3. This calculation adds 107 to 704.75 labor hours per FTP and 43.6 to 218.5 per HFET , with each EV fam ily needing both for certification

. EV fuel economy testing under this rule is also treated as an entirel y new testing cost (see below) which therefore entails 30 hours per test group in preparation costs. Preparation includes several coast downs, a UDDS (two of the four phases of a full FTP) , and a soak period. The EPA test procedure for PHEVs is an extension of the existing test procedure for hy brid vehicles (see below) . Hy brid vehicles already

do FTP and HFET tests for fuel economy determination. The new FTP procedure would essentially run repeated FTPs until the charge is depleted . This is the “charge depleting” operation when the vehicle is mainly running on its battery . The battery

would then be recharged and a single additional four

- phase FTP wou ld be conducted in what is denominated as the “charge sustain” operation. Following this the vehicle will be recharged if necessary by running an y appropriate test cycle followed by HFET cycles in “charge depleting” operation, followed by a cy cle in “char ge sustain” operation. For purposes of this cost anal ys is the charge sustain FTP and HFET cy cles along with potential other cy cles mandated b y emissions and fuel econom y testing requirements are considered to be continuations of existing requirements. The cost increment due to this rule consequentl y derives entirely from the increased testing time in depleting mode. The duration of the depleting modes estimated as 7.45 to 50 miles over the repeated 7.45 or 10.3 mile FTP and HFET test cy cles. These togeth er add 27.6 to 115.375 labor hours per test group to existing hy brid testing costs. 6(b) Estimating Respondent Costs (i) Estimating labor costs
In formation technology

specialists for anal ys is and coding and label redesign are priced at $100 per hour, although the results are budgeted as startup capital costs. Labor costs for revised FTP and HFET testing cy cles for EVs and PHEVs and for EV preparation is based on the cost assump tions of I CR 0783.47, 0783.51, 0783.54 and 0783.57. This labor cost estimate i n11

these renewal s and revisions the certification I CR series are based on laboratory labor costs at EPA’s motor vehicle and engine testing facility in mid

- 2005, which averaged $55 an hour for all of management, technical and secretarial plus overhead. The c urrent estimate is based on this figure with an adjustment from the BLS Employment Cost I ndex for total compensation, by occupational group and industry , http://www.bls.gov/news.release/eci.t01.h tm , of 111.8 percent for all civilian workers, taking December , 2005 , as baseline adjusting to March, 2010. This raises the cost per hour to $61.49

. Future renewal requests in the OMB 2 0 60

- 010 4 , I CR 0783 series will be similarly

incremented. (ii) Estim ating Capital and Operations and Maintenance Costs
N ew O&M costs come from new label

- related fuel economy testing requirements for EVs and PHEVs and from printing costs for the new labels

. For EVs, EPA currently has no federal test procedure for measu ring fuel economy

. To date, EPA has performed some fuel economy testing connected with certification applications for electric vehicles using the procedures developed bythe Societyof Automotive Engineers (SAE), specificallySAE J1634. This rule spells ou t EV testing requirements that are similar to SAE J1634 and allows continued use of that procedure (as cancelled in 2002).
In estimating the costs of this action, there is no clear existing default cost that manufacturers of EVs would have incurred in s atisfy ing federal requirements, because ex isting fuel economy measurements are entirelyspecified in terms of exhaust and greenhouse gasses emissions. For purposes of the analy sis, we therefore assume these EV costs are entirelynew costs rather than incre ments to pre

- existing costs. Here and in the facilitycosts section, this also means we (conservatively ) assume no carry

- over applications for EVs. EPA is cognizant of the fact that in 2004 the Federal Trade Commission promulgated a rule requiring “altern ative fueled vehicles” to include a consumer label indicating their estimated cruising ranges (69 FR 26926, April 9, 2004; 16 CFR part 309, subpart C). The covered vehicles include electric vehicles but not hy brids. Estimated cruising range for an EV is t he range determined according to SAE J1634 (16 CFR 309.22(a)(2)). Consequentl y, EV manufacturers selling vehicles in the United States have alread y been subject for several ye ars to SAE J1634 testing requirements similar to those in the rulemaking. However , for purposes of the anal ys is in this I CR we treat the costs of compliance for manufacturers subject to the rule as new costs in order to insure that they

are full y considered in this rulemaking. It is not clear from the cost anal ys is in the FTC final ru le preamble (at 26954

- 26955) or in the final rule I CR ((OMB 3084

- 0094) that the FTC considered the cost of testing in its analy sis. The entire cost for the industry was estimated as 30 minutes each for 58 members of the alt fuel vehicle industry . Including the full cost of EV testing for each estimated test group subject to the rule is therefore conservative in that it ignores the likelihood that any EV test group previously satisfy ing the FTC labeling requirements will have its testing data carried over to the model y ear certification applications subject to this rule, but has the advantage of insuring that information collection

- driven testing costs are included in OMB’s information budget.12

The salient feature of SEA J1634 for cost purposes is that it re quires, similar to a conventional vehicle, the Federal Test Procedure (FTP or City Test), preceded byvehicle preparation. This is followed by t he Highway Test (HFET); the off

- cy cle tests (USO6, SCO3, cold FTP) are optional under EPA’s rule . Furthermore, c ruising range determination requires that the FTP be repeated until the batterysy stem is no longer able to maintain the FTP speed tolerances; the FTP in question is the full four

- phase FTP , repeated as cold and hot start “UDDS” (or “LA

- 4” ) cy cles until that point is reached. Non

- labor p reparation costs are estimated to be $3,163 per vehicle, per ICR 0783.54 (OMB 2060

- 0104), the certification ICR for conventional vehicles. The low and high EV test distances for FTP and HFET tests is estimated as 50 to 2 50 miles. (The cost of the FTP is not incremented to reflect the extra phase 2 compared to the normal three phase cy cle because that would be double counting in view of the 50 or 250 divided by 7.45 conversion factor.) For purposes of this estimate, the no n - labor cost of an FTP/HFET pair is $1,860, allocated 70% to the FTP and 30% to the HFET and incremented by 50 or 250 divided by 7.45 (the distance of a normal FTP) or 50 or 250 divided by10.3 (the distance of th e normal HFET). These costs total $15,060 t o $60,848 per test group/engine family comply ing with the label requirements .
For PHEVs , the EPA test procedure is an extension of the existing test procedure for hybrid vehicles. Off

- cy cle tests are already required for test groups that do not meet the “litmus test”; others would use the derived 5

- cy cle adjustment. Hybrid vehicles alreadydo FTP and HFET tests for fuel economy determination. The new FTP procedure would essentiallyrun repeated FT Ps until the charge is depleted . This is the “charge deple ting ” operation when the vehicle is mainlyrunning on its battery . The battery would then be recharged and a single additional four

- phase FTP would be conducted in what is denominated as the “charge sustain” operation. Following this the vehicle will be re charged if necessary byrunning anyappropriate test cy cle followed by HFET cycles in “charge depleting” operation, followed by a cy cle in “charge sustain” operation. For purposes of this cost analy sis the charge sustain FTP and HFET cycles along with po tential other cy cles mandated byemissions and fuel economy testing requirements are considered to be continuations of existing requirements. The cost increment due to this rule consequentlyderives entirelyfrom the increased testing time in depleting mod e. The duration of the depleting modes estimated as 7.45 to 50 miles over the repeated 7.45 or 10.3 mile FTP and HFET test cy cles. These together add an estimated $ 1,706 to $ 10,070 in non - labor O&M costs to each test group/engine family conservatively as suming no carry overs. The proposed labels in the NPRM included different colors, reflecting either different technologies or differences in fuel econom y and greenhouse gas emissions. For the final rule, the agencies have decided to use one color that can be pre

- printed on the feedstock that will go into the printers used for the vehicle labels. The printing itself will be entirely in black and white, as with current labels. The Monroney labels for many

automakers alread y include pre

printed color. The acceptance of this approach from most auto manufacturers who commented on the proposal suggests that the addition of color in a manner that allows it to be pre

- printed on feedstock does not have a material effect on costs. Thus, printing costs associated with the final13

label are not expected to change from the baseline costs. Because of this change in label requirements from the proposal, the agencies believe that there will be no additional costs associated with label printing. Thus, the additional prin ting costs estimated in the proposal to be $294,690 to $1,274,634 per year are now estimated to be zero

. Note that the new label will include information already required for EVs by the FTC label rule. If these overlapping requir e ments can be harmonized, the cost of comply ing with the FTC ‘s and EPA/NHTSA’s requirements as they apply to alternative fueled vehicles could be lowered. (iii) FacilityCapital Costs
In addition to new equipment (treated as a startup cost, below) the new testing requirements for EVs and PHEVs will in theory require expanded testing facilities for those manufacturers choosing to produce and sell them in the U.S. Because the cost of new facilitycapacityis highly dependent on manufacturer

- specific factors (the costs of capital, the availabilityof land, the structure of work shifts, the existing excess capacity , contractual arrangements with third

- party testing contractors, etc.), we use the approximation of unitizing increased test costs by assuming that a facilitycapable of p erforming 750 FTP/HFET pairs would cost $4 million. Here, the new tests are deemed to require these facilities in proportion to the increases in test time, and the costs are then annualized over ten y ears and amortized at 7% interest compounded monthly . Th is is likely a conservative assumption since it does not attempt to account for the excess capacitythat ex ists in manufacturers’ current test facilities. We assume that there is no excess capacity in our analy sis. Note that other features of the EV and PHEV test cy cles, such as recharging times, have been harmonized with existing test protocols. Furthermore, consistent with other information burden analyses for the emissions and fuel economy programs, we consider these as ongoing rather than startup cos ts (i.e., as the facilities depreciate theyare continuallybeing replaced), another conservative assumption. Applied to a low and high estimat e of 5 to 8 EV families and 5 to 8 PHEV families per y ear, this yi elds an annualized cost of $25,278 to $175,649 per y ear in facilitycosts. (iii) Start

- up Costs “Startup” costs are one - time costs to implement the new requirements in the rule beginning with model ye ar 20 1 3

. Startup costs are accounted as one

- time costs that are annualized and amortized or disco unted at an interest rate of 7% over ten years. The startup cost elements identified in this analy sis are for updating information sy stems and testing equipment and label redesign. The estimate includes the cost of upgrading information sy stems for the manufacturers who will need to comply

with the new EV and PHEV testing requirements, such as recording multiple tests, recording battery charge data, and communicating the resulting data to the information sy stem that gets it to EPA and the label. Both l ow and high estimates use 4 weeks for four IT staff for anal ysis and code, and 4 weeks for two IT staff for testing, at $100 per hour, for each manufacturer. Similarly , e ach of these manufacturers is assumed to need new testing14

equipment costing $25,000 fo r an ammeter and $50,000 for voltage stabilizers. In comments on the proposed rule, GM and Suzuki provided estimates for the startup costs for the label redesign . GM stated that its “initial estimate,” which includes designing, releasing, testing, and validating the s ys tem, would cost “more than $800,000.” Suzuki estimated its costs as $70,000 for software, $111,144 for printers, and $20,250 for IT costs, for a total of $201,394. Because color printers are no longer required, these costs are therefore estimated to be $90,250. For this cost anal ys is, EPA is using these two estimates as upper and lower bounds. Th ese estimates are then applied to the universe of separate manufacturer entities subject to the rule. Man y specific automotive brands are parts of marketing groups or are owned and managed by other, parent companies. Allowing for these relationships, the best guess is that the rule would apply

to 24 manufacturers and 11 independent commercial importers (I CI s) importing nonconforming vehicle s into the U.S. for sale. Applied to 35 companies, then, the label redesign cost is estimated to be between $3.2 million and $28 million

. 6(c) Estimating Agency Burden The emission and fuel economy compliance programs are administered byEPA ’ s Complia nce and Innovative Strategies Division and Lab oratory Operations Division

. Approximately 26 full time employ ee equivalents are directlyinvolved in the combined emission and fuel economyprograms; their cost is approximately$ 2.9 million, including benefi ts but not overhead. EPA also participates in a program whereby the agency contracts with an organization that provides qualified persons to perform duties for the agencythat are not performed byEPA employ ees. The cost associated with these persons who work directlyon the combined em ission and fuel economyprogram for the two divisions is approximately $ 0 .5 million, including overhead. Overhead percentage for the entire division is approximately 60 (i.e., the baseline labor costs are multiplied by 1.6 ) , yi elding an estimated total agencycost of $ 5.4 4 million.
Im plementation of the new fuel economy rule will b e carried out byexisting staff and by information technologycontracts for the Verifyinformation sy ste m
. One

- time startup costs including o verhead for implementing the new rule include 300 h ours and $ 12,318 for public outreach, and $ 500,000 in contracts without hour allocation for added computer database sy stem development, for a total of 300 hours and $ 512,318 ; annualized over ten y ears with 7% depreciation this cost burden comes to $ 72,943

. Ongoing agency burden added by the rule is estimated as 1 83 hours and $1 00,000 annuallyin database management labor. Combined labor and annual startup plus continuing costs therefore total 483 hours ( st artup hours not annualized ) and $ 172,943 . Other ongoing database management, oversight, and certification activities are part of the fuel economyand emissions program Agency baseline. All EPA labor estimates , are based on Office of Personnel Management a nnual pay rates effective January , 2006, with a 1.6 multiplier for overhead based on EPA’s latest fees cost allocation study (1.37 indirect program cost overhead times 1.16 overall EPA overhead)

. This estimate does not include Agency burdens incurred prio r to the effective date of the rule, such as costs of developing the rule15

and preliminaryconsultations with manufacturers on database issues. 6(d) Estimating the Respondent Universe and Total Burden and Costs The relevant respondents or actions to whi ch the above costs and labor hours appl y are the following: 1) the number of manufacturers who will have to redesign their labels, print them, and apply them to vehicles; 2) the number of such vehicles; 3) the number of manufacturers producing EVs or P H EVs for sale in the United States, who will need to redesign information systems, purchase testing equipment, and undergo increased testing O&M costs and facility capacitycosts; and 4) the number of EV and P H EV test groups likelyto be tested under the modif ied testing requirements. 1) For the number of manufacturers, many specific automotive brands are parts of marketing groups or are owned and managed by other, parent companies. These parent groups were considered the mo st relevant respondent unit for la bel redesign. Allowing for these relationships, the best guess is that the rule would apply to 2 4 manufacturers and 11 independent commercial importers (ICIs) importing nonconforming vehicles into the U.S. for sale. The manufacturer list is based on deter minations that are underway for the 2010 Fuel Economy Trends Report (for Trends Reports see http://www.epa.gov/otaq/fetrends.htm ). The count of ICIs is from a search for light

- duty IC Is listed in th e Verify database. 2) For the number of labels, we estimate the subject fleet from the April 20, 2010, U.S. Department of Transportation’s Summary of Fuel EconomyPerformance ( http://www.nhtsa.gov/staticfiles/rulemaking/pdf/cafe/CAFE_Performance_Report_April_2010.p df , accessed June 17, 2010 ), taking MY2009’s 9.82 million as the low and MY2005’s 15.9 million as the high estimate. 3) EPA est imates 5 to 8 EV manufacturers and 5 to 8 PHEV manufacturers in the next three ye ars and a combined 8 to 10 manufacturers needing to update testing equipment and/or information sy stems. This is an estimate based on information of existing, pending, and con templated near

- term actions as opposed to speculation about possible future directions for these industries. This is considered a conservative estimate with a margin of error both at the low and high cost estimates. 4) The number of test groups/engine f amilies subject to new EV and PHEV testing requirements is similarly

estimated as 5 to 8 for EVs and 5 to 8 for PHEVs over the next y ear , leading to testing and facility cost estimates that conservativel y add these together to contemplate 10 to 16 test gro ups a y ear. 6(e) Bottom L ine Burden Hours and Cost The results of adding these unit and respondent costs to the total unit s and respondents is summarized in the following tallies for the high estimate and in the tables presented at the end of the text. These are annualized estimates.16

(i) Respondent Tall y RESPONDENTS 3 5 BURDEN HOURS 8,548 LABOR COST $ 5 25,635 OPERATI

NG COST $ 56 7 ,348 FACILITY CAPI TAL $210,779 STARTUP CAPITAL $ 4,208,679 TOTAL CAP & O&M $ 4,986,806 TOTAL COST WI TH LABOR $ 5,512,441 (ii) A gency

Tally
EMPL OYEES 26 STARTUP $72,943 OPERATI

NG $ 100,000 LABOR HOURS 483 (f) Reasons for change in burden The burden change is from startup costs associated with implementing the new label requirements and related testing requirements detailed in t he draft based on the analy sis above. 6(g) Burden Statement The annual public reporting and recordkeeping burden for this collection of information is estimated to average 279.3 hours per response. Burden means the total time, effort, or financial r esources expended by persons to generate, maintain, retain, or disclose or provide information to or for a Federal agency . This includes the time needed to review instructions; develop, acquire, install, and utilize technology and sy stems for the purposes of collecting, validating, and verify ing information, processing and maintaining information, and disclosing and providing information; adjust the existing ways to comply with an y previously

applicable 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 may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it display s a currently valid OMB control number. The OMB control numbers for EPA's regulations are listed in 40 CFR part 9 and 48 CFR chapter 15. To comment on the Agency 's need for this information, the accuracy of the provided burden estimates, and any suggested methods for minimizing respondent burden, including the use of automated collection techniques, EPA has established a public docket for this I CR under Docket ID Number EPA

- HQ

- OAR

- 2009

- 0865 , which is avail able for online viewing at www.regulations.gov , or in person viewing at the [ EPA Docket Center, EPA/DC, EPA West, Room 3334, 1301 Constitution Ave., NW., Washington, DC. The Public Reading Room is open17

from 8:30 a.m. to 4:30 p.m., Monday through Friday , excluding legal holiday s. The telephone number for the Public Reading Room is (202) 566

– 1744. An electronic version of the public docket is available at www.regulations.g ov . 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 k ey

in the Docket ID Number identified above. Also, y ou can send comments to the Office of Information and Regulatory Affairs, Office of Management and Budget, 725 17th Street, NW, Washington, D.C. 20503, Attention: Desk Officer for EPA. Please include th e EPA Docket ID Number EPA

- HQ

- OAR

- 2009

- 0865 and OMB Control Number 2060

- NEW in any correspondence.

TOTA L A NNUA L COST AND HOURS INCREA SE COST BURDEN Mi n Ma x O&M : testing and label $83,828 $567,348 Facility Capital $25,278 $210,779 Star tup: one - time IT, label redesign, and reg familiarization, 10 yrs 7% $612,472 $4,208,679 Total $721,578 $4,986,806
HOURS BURDEN Mi n Ma x O&M : testing and label 1,211 8,548 Facility Capital 0 0 Startup: one - time IT, equipment, label redesign, and reg familiarization, 10 yrs 7% 0 0 Total 1,211 8,548
Labor Cost $74,446 $525,635
Total Cost $796,024 $5,512,44118 TESTING COSTS (LA BOR A ND O&M COSTS FOR RUNNING THE TESTS)

Vehicle Ty pe/Test Cy cle Increase In Number of Tests Increase in Hours
Mi n Tests Mi n Cost

Increase Ma x Tests Ma x Cost Increase Mi n Ma x EV Prep 5.0 $18,065 8.0 $28,904 150 240 FTP 5.0 $43,691 8.0 $349,530 705 5,638 HW 5.0 $13,544 8.0 $108,350 218 1 ,748 PHEV 5.0 FTP 5.0 $6,510 8.0 $50,563 105 705 HW 5.0 $2,018 8.0 $30,001 33 218 Total $83,828 $567,348 1,211 8,548

INCREA SE IN TEST F ACILITIES Undepreciated capital costs Mi nimum Ma ximum EV test distance increase $154,210 $1 ,233,683 PHEV test distance increase $22,977 $246,737 Total $177,188 $1,480,420 Am ortized, 10yrs @ 7 % $25,278 $210,779

ST ART UP COSTS

Item Cost Mi nimum Ma ximum Updating Information systems $768,000 $960,000 Ammeter/stabilizer $375,000 $6 00,000 Label redesign $3,158,750 $28,000,000
TOTAL $1,199,000 $1,644,000 Depreciate 10 years at 7% $612,472 $4,208,679