`[Federal Register Volume 63, Number 78 (Thursday, April 23, 1998)]
[Proposed Rules]
[Pages 20159-20162]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-10152]


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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 88

[FRL-5994-6]
RIN 2060-AH56


Clean Fuel Fleet Program

AGENCY: Environmental Protection Agency.

ACTION: Notice of proposed rulemaking; delay of implementation date.

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SUMMARY: The provisions of subpart C of Title II of the Clean Air Act 
require states with certain ozone and carbon monoxide (CO) 
nonattainment areas to revise their State Implementation Plans (SIP) to 
incorporate a Clean Fuel Fleet Program. Under this program, specified 
percentages of new vehicles acquired by covered fleet operators in 
certain ozone and CO nonattainment areas must meet EPA's clean-fuel 
vehicle (CFV) emissions standards. In this action, EPA proposes to 
delay by one model year, the requirement that a covered area's State 
Implementation Plan implement a Clean Fuel Fleet Program (CFFP) fleet 
operator purchase requirement. As a result, EPA would approve a CFFP 
SIP revision which provides that covered fleet operators must include a 
certain percentage of CFVs in their fleet vehicle purchases each year 
beginning with model year 1999. This proposal is intended to ensure 
successful implementation of the CFFP, and to ensure that an adequate 
supply of appropriate vehicles is available for fleet operators to 
purchase and use once the program is underway, so that compliance with 
the mandatory purchase requirements will be possible and economically 
feasible for covered fleet operators.

DATES: Written comments on this proposal must be received no later than 
May 26, 1998.

ADDRESSES: Interested parties may submit written comments in response 
to this rule (in duplicate if possible) to Public Docket No. A-97-53. 
It is requested that a duplicate copy may be submitted to Sally 
Newstead at the address in the FOR FURTHER INFORMATION CONTACT section 
below. The docket is located at the Air Docket, Room M-1500 (6102), 
Waterside Mall SW, Washington, DC 20460. The docket may be inspected 
between 8:00 a.m. and 5:30 p.m. on weekdays, excluding holidays. A 
reasonable fee may be charged for copying docket material.

FOR FURTHER INFORMATION CONTACT: Sally Newstead, Office of Mobile 
Sources, National Vehicle and Fuel Emissions Laboratory, 2565 Plymouth 
Road, Ann Arbor, Michigan, 48105. Telephone (734) 668-4474.

SUPPLEMENTARY INFORMATION:

Statutory Authority

    The statutory authority for this action is provided by sections 246 
and 301 of the Clean Air Act.

Background

    In the Rules and Regulations section of this Federal Register, EPA 
is adopting this provision as a direct final rule without prior 
proposal because the Agency views this as a noncontroversial action and 
anticipates no adverse comments. A detailed rationale for this action 
is set forth in the direct final rule. If no adverse comments are 
received in response to this proposed rule, no

[[Page 20160]]

further activity is contemplated in relation to this rule. If EPA 
receives adverse comments, the direct final rule will be withdrawn and 
all public comments received will be addressed in a subsequent final 
rule based on this proposed rule. EPA will not institute a second 
comment period on this action.
    The Clean Air Act, as amended in 1990 (``CAA'' or ``the Act''), 
requires certain states to adopt and submit to EPA a State 
Implementation Plan (SIP) containing a CFFP for nonattainment areas 
with 1980 populations greater than 250,000 that are classified as 
Serious or worse for ozone, or with a design value of at least 16.0 ppm 
for carbon monoxide (CO). The nonattainment areas currently covered by 
the requirement to adopt and submit a CFFP are Atlanta, Washington DC 
metropolitan area, Chicago-Gary-Lake Counties, Milwaukee-Racine, Baton 
Rouge, and Denver-Boulder.1
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    \1\ States with covered nonattainment areas may opt out of the 
CFFP with an adequate substitute program. See CAA Section 
182(c)(4)(B). Eleven states have opted out of the CFFP pursuant to 
this provision. Areas reclassified for ozone, that have a 1980 
population of at least 250,000, must also submit a SIP revision with 
a CFFP within one year of such reclassification. See CAA Section 
246(a)(3).
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    Section 246 of the CAA provides that a states' SIP submission must 
require fleet operators with 10 or more vehicles that are centrally 
fueled or capable of being centrally fueled, to include a specified 
percentage of clean-fuel vehicles (CFVs) in their new vehicle purchases 
each year. In addition, states CFFP SIP submissions must comply with 
other specifications in Section 246, including the requirement that 
covered fleet operators must operate their CFVs in covered 
nonattainment areas on a clean alternative fuel, defined as a fuel on 
which the vehicle meets EPA's CFV standards when using such fuel. EPA 
promulgated emissions standards for CFVs in September 1994. See 40 CFR 
Part 88. EPA estimates that demand for CFVs by covered fleets in model 
year 2 1998 would be approximately 47,000 light duty 
vehicles and 12,000 heavy duty vehicles.
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    \2\ A ``model year'' for purposes of fleet operators'' 
compliance with CFFP purchase requirements, and as used in this 
notice, is not the same as ``model year'' as defined for purposes of 
motor vehicle production. The definition of ``model year'' for the 
CFFP means September 1 of the preceding year through August 31 of 
the named year. Therefore, model year 1998 for the CFFP runs from 
September 1, 1997 through August 31, 1998. See 40 CFR 88.302-94.
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Start Date for CFFP Purchase Requirement

    Section 246(c) of the CAA provides that the specified percentage of 
new light duty vehicle purchases by covered fleet operators that must 
be CFVs in a given model year shall be 30% in model year 1998, 50% in 
model year 1999, and 70% in model year 2000 and later years, if certain 
categories of new vehicles (light duty trucks (LDTs) below 6000 lbs 
gross vehicle weight rating (GVWR) and light duty vehicles (LDVs)) 
certified to the Phase II CFV exhaust emissions standards are offered 
for sale in California.3 In March 1993, EPA stated its 
expectation that the vehicles specified in Section 246(c) would be 
offered for sale in California by model year 1997, and therefore 
states' SIP submissions should provide for implementation of the CFFP 
purchase requirement beginning in model year 1998. EPA also stated its 
intent to delay this implementation date if it later determined that 
the requisite vehicles would not be offered for sale in California in 
model year 1997. See 58 FR 11888 (March 1, 1993).
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    \3\ The Phase II CFV exhaust emissions standards are found in 
CAA Section 243(a)(2) and 243(b)(2), and include standards for non-
methane organic gases (NMOG), CO, oxides of nitrogen 
(NOX), particulate matter (PM), and formaldehyde that are 
identical to California's Low Emission Vehicle (LEV) exhaust 
emissions standards.
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    EPA cannot mandate that vehicle manufacturers produce CFVs for 
fleets to purchase to meet the CFFP requirements--Congress intended 
that the creation of a market for CFVs would provide an incentive for 
vehicle manufacturers to produce and sell such vehicles outside 
California, ultimately resulting in broader market penetration. The 
specification in section 246 (c) that certain vehicles meeting CFV 
exhaust emissions standards must be available for sale in California 
for implementation of the CFFP purchase requirement to begin in model 
year 1998 was intended to provide a minimum level of reasonable 
assurance that complying vehicle technology was available and being 
produced.4 Without some such evidence of vehicle 
availability, fleet operators cannot realistically be expected to 
comply with the CFFP purchase requirements. However, Section 246 is not 
clear on the issue of how many of the vehicles specified in Section 
246(c) must be offered for sale in California before triggering 
implementation of the CFFP purchase requirements.
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    \4\ See A Legislative History of the Clean Air Act Amendments of 
1990, Volume 1 at 903.
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    EPA is proposing to delay the start date that the SIP must contain 
for implementation of the CFFP purchase requirements from model year 
1998 to model year 1999, and would approve state SIP submissions with 
CFFPs that start in model year 1999. EPA has received information from 
various stakeholders, including states, covered fleet operators, and 
vehicle manufacturers on this issue, and has concluded that a delay 
until model year 1999 will result in a successful, effective fleet 
program that advances the penetration of CFVs and clean alternative 
fuels into the national market, and is consistent with the provisions 
of Section 246(c) and with Congress' intent in adopting the CFFP 
provisions of the Act.
    The legislative history of the 1990 amendments to the CAA indicates 
that, in adopting the CFFP, Congress made a clear choice between two 
alternatives: requiring auto manufacturers to produce and sell CFVs, or 
creating a market for CFVs and for clean alternative fuels by requiring 
fleet operators to purchase such vehicles and operate on such fuels. In 
choosing the latter option, Congress attempted to minimize the burden 
on fleet operators by requiring some evidence of vehicle availability 
in California as a precondition to implementation of the purchase 
requirement before model year 2001. However, the Act does not provide a 
clear indication of Congressional intent regarding the number of 
vehicles in each weight category specified in Section 246(c) that must 
be offered for sale in California to trigger the fleet operators' 
purchase requirement. Because the CAA is silent on this particular 
issue, and in the absence of a clear indication of Congressional 
intent, it is appropriate for EPA to reasonably exercise its discretion 
in a way that furthers the goals of the CFFP provisions, and determine 
whether a sufficient number of requisite vehicle models are offered for 
sale in California to require that other states SIPs implement the CFFP 
in MY1998.
    Auto manufacturers have certified a number of vehicle models to the 
LEV standards in California on California reformulated gasoline, and 
EPA expects these vehicles could be certified as federal CFVs. However, 
because of the Act's requirement that fleet operators operate CFVs on 
clean alternative fuels, as defined in Section 241(b), fleet operators 
who purchase such CFVs to meet CFFP purchase requirements may have to 
operate these vehicles on California reformulated gasoline, which is 
generally not available outside California. EPA cannot conclude at this 
time that federal reformulated gasoline or federal conventional 
gasoline qualify as clean alternative fuels for CFVs certified to LEV 
standards on California reformulated gasoline, due to potential 
emissions differences resulting from differences in fuel composition 
between

[[Page 20161]]

California reformulated gasoline and federal fuels. EPA expects that 
manufacturers could certify LEVs that have been certified to California 
LEV standards on California reformulated gasoline as federal CFVs on 
federal fuels--if manufacturers did so, fleet operators could purchase 
such vehicles to meet CFFP purchase requirements, and operate them on 
federal fuels in covered nonattainment areas without violating the fuel 
use requirement of the CFFP. Certain new light duty trucks (LDTs) below 
6000 pounds GVWR and new light duty vehicles (LDVs) certified to LEV 
exhaust emissions standards are currently being offered for sale in 
California. However, only a limited number of LDTs below 6000 lbs. GVWR 
were certified to California's LEV standards and offered for sale in 
California in MY1997 as indicated in the following chart.

                                            List of Certified CA LEVs Offered for Sale in California in MY97                                            
                                                                   [As of April 1997]                                                                   
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           Manufacturer               Certification number              Models                  Type                 Standard                 Fuel      
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Ford.............................  FORD-LDV-97-01-00........  Escort, Escort Wagon.....  LDV                 LEV                       CA RFG.          
                                   FORD-LDV-97-38-00........  Sable, Sable Wagon,        LDV                 LEV                       CA RFG.          
                                                               Taurus, Taurus Wagon.                                                                    
General Motors...................  GM-LDT-97-29-00..........  Astro AWD (C&P)*           LDT                 LEV                       CA RFG.          
                                                               Passenger.                                                                               
                                   GM-LDT-97-40-00..........  Safari AWD (P), Astro AWD  LDT                 LEV                       CA RFG.          
                                                               (C&P).                                                                                   
Honda............................  HONDA-LDV-97-19-00.......  Civic, del Sol...........  LDV                 LEV                       CA RFG.          
                                   HONDA-LDV-97-20-00.......  Civic....................  LDV                 LEV                       CA RFG.          
                                   HONDA-LDV-97-21-00.......  Civic, del Sol...........  LDV                 LEV                       CA RFG.          
                                   HONDA-LDV-97-22-00.......  Civic....................  LDV                 LEV                       CA RFG.          
Nissan...........................  NISSN-LDV-97-06-00.......  Sentra/200SX.............  LDV                 LEV                       CA RFG.          
Suzuki...........................  SUZUK-LDV-97-05-00.......  Metro....................  LDV                 LEV                       CA RFG.          
                                   SUZUK-LDV-97-06-00.......  Metro, Swift.............  LDV                 LEV                       CA RFG.          
Toyota...........................  TOYOT-LDV-97-11-00.......  Camry....................  LDV                 LEV                       CA RFG.          
                                   TOYOT-LDV-97-12-00.......  Camry....................  LDV                 LEV                       CA RFG.          
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*P=Passenger, C=Cargo.                                                                                                                                  

    In order to meet the MY98 purchase requirements, fleet operators 
must have placed vehicle orders in April, 1997; however, the supply of 
federally certified CFVs at this time was limited. Based on the limited 
numbers of light duty vehicles and trucks offered for sale in 
California in MY1997, and particularly the limited number of LDTs <6000 
pounds GVWR, EPA believes that a short delay of the required 
implementation date of the CFFP for one model year is reasonable to 
avoid the potential for serious disruption of the initial 
implementation of this program from an inadequate supply of vehicles. 
Given the list of current federally certified CFVs, the available 
choices for passenger cars, pick-up trucks, vans and sport utility 
vehicles is limited to the following:

                                                     List of Certified CFVs Offered for Sale in MY97                                                    
                                                                 [As of April 30, 1997]                                                                 
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           Manufacturer               Certification number              Models                  Type                 Standard                 Fuel      
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IMPCO Tech.......................  IMPCO-LDCNGT-97-01.......  Sierra C Pickup..........  LDT                 LEV                       CNG.             
Chrysler.........................  CHRYSLER-LDCLT-97-01-00..  Caravan(2WD),              LDCLT               ILEV + ULEV               CNG.             
                                                               Voyager(2WD).                                                                            
                                   CHRYS-ZEV-97-01..........  Caravan(2WD),              LDT                 ZEV                       Electricity.     
                                                               Voyager(2WD).                                                                            
Ford.............................  FORD-LDCNGV-97-01........  Crown Victoria...........  LDV                 ILEV + ULEV               CNG.             
                                   FORD-LDCNGT-97-01........  F250(2WD)................  LDT                 ILEV + ULEV               CNG.             
                                   FORD-LDCNGT-97-02........  E250(2WD), E350(2WD).....  LDT                 ILEV + ULEV               CNG.             
General Motors...................  GM-ZEV-97-01.............  EV1......................  LDV                 ILEV + ZEV                Electricity.     
                                   GN-ZEV-LDT-97-01.........  S10 Pickup...............  LDT                 ILEV + ZEV                Electricity.     
Honda............................  HN-ZEV-97-01.............  EV Plus..................  LDV                 ILEV + ZEV                Electricity.     
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           Manufacturer                     Certification number                       Models                        Standard                 Fuel      
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Cummins...........................  CUMMINS-NGE(MHDD)-97-18.............  B5.9-195G.......................  LEV                        CNG.             
                                    CUMMINS-NGE(MHDD)-97-19.............  B5.9-195F.......................  LEV                        CNG.             
                                    CUMMINS-NGE(MHDD)-97-22.............  C8.3-250G.......................  LEV                        CNG.             
                                    CUMMINS-NGE(MHDE)-97-01.............  B5.9-195G.......................  ULEV                       CNG              
Detroit Diesel....................  DDC-NGE(LHDDE)-97-01................  Series 30G......................  LEV                        CNG.             
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SIP Revisions

    In light of this proposal, states with adopted CFFP SIPs would 
revise their SIPs to provide for a model year 1999 start date for the 
CFFP purchase requirements. Fleet operators could still earn credits 
for early purchase of CFVs that meet all applicable requirements, 
including the requirement that fleet operators operate their CFVs on 
clean alternative fuels when in the covered nonattainment area. The EPA 
believes this proposed delay would provide states and fleet

[[Page 20162]]

owners the necessary flexibility in those areas that are unable to meet 
the CFF purchase requirements cited in the CAA.

Administrative Requirements

A. Administrative Designation

    Under Executive Order 12866, (58 FR 51735 (October 4, 1993)), the 
Agency must determine whether the regulatory action is ``significant'' 
and therefore subject to Office of Management and Budget (OMB) review 
and the requirements of the Executive Order. The Order defines 
``significant regulatory action'' as one that is likely to result in a 
rule that may:
    (1) Have an annual effect on the economy of $100 million or more or 
adversely affect in a material way the economy, a sector of the 
economy, productivity, competition, jobs, the environment, public 
health or safety, or State, local, or tribal governments or 
communities;
    (2) Create a serious inconsistency or otherwise interfere with an 
action taken or planned by another Agency;
    (3) Materially alter the budget impact of entitlement, grants, user 
fees, or loan programs or the rights and obligations of recipients 
thereof; or
    (4) Raise novel legal or policy issues arising out of legal 
mandates, the President's priorities, or the principles set forth in 
the Executive Order.
    Pursuant to the terms of Executive Order 12866, EPA believes that 
this proposed action is not a significant regulatory action and 
therefore not subject to OMB review. Approvals of SIP submittals under 
section 110 and subchapter I, part D of the Clean Air Act do not create 
any new requirements but simply approve requirements that the State is 
already imposing. This proposed action simply revises regulations 
governing the requirements states' CFFP SIP submissions must meet. It 
serves to delay states' required implementation of CFFP purchase 
requirements. Therefore, it has been determined that this proposal does 
not constitute a ``major'' regulation.

B. Reporting and Recordkeeping Requirement

    There are no information requirements in this proposed rule which 
require the approval of the Office of Management and Budget under the 
Paperwork Reduction Act 44 U.S.C. 3501 et seq.

C. Regulatory Flexibility

    The Regulatory Flexibility Act (RFA) generally requires an agency 
to conduct a regulatory flexibility analysis of any rule subject to 
notice and comment rulemaking requirements unless the agency certifies 
that the rule will not have a significant economic impact on a 
substantial number of small entities. Small entities include small 
businesses, small not-for-profit enterprises, and small governmental 
jurisdictions. This proposed rule would not have a significant impact 
on a substantial number of small entities. This is based on the fact 
that this proposed action would not impose any new requirements, but 
simply would delay the applicable start date of the CFFP purchase 
requirements that must be included in certain state's SIPs, pursuant to 
the CAA. Thus, the impact created by the proposed action would not 
increase the preexisting burden of the existing rules which this 
proposal seeks to amend. Therefore, this proposed action would not have 
a significant economic impact on a substantial number of small 
entities.

D. Unfunded Mandates Act

    Under section 202 of the Unfunded Mandates Reform Act of 1995 
(``Unfunded Mandates Act''), signed into law on March 22, 1995, EPA 
must prepare a budgetary impact statement to accompany any proposed or 
final rule where the estimated costs to State, local, or tribal 
governments, or to the private sector, will be $100 million or more. 
Under section 205, EPA must select the most cost-effective and least 
burdensome alternative that achieves the objective of the rule and is 
consistent with statutory requirements. Section 203 requires EPA to 
establish a plan for informing and advising any small governments that 
may be significantly impacted by the rule. To the extent that the rules 
being proposed in this action would impose any mandate at all as 
defined in section 101 of the Unfunded Mandates Act upon the state, 
local, or tribal governments, or the private sector, as explained 
above, this proposal is not estimated to impose costs in excess of $100 
million. EPA has determined that today's proposed action would simply 
delay the purchase requirements under state CFFPs and would not impose 
additional costs or regulatory burdens. In fact, the one-year delay of 
implementation of the purchase requirements is expected to reduce costs 
of compliance and ease regulatory burdens.

List of Subjects in 40 CFR Part 88

    Environmental protection, Labeling, Motor vehicle pollution, 
Reporting and recordkeeping requirements.

    Dated: April 3, 1998.
Carol M. Browner,
Administrator.
[FR Doc. 98-10152 Filed 4-22-98; 8:45 am]
BILLING CODE 6560-50-P`