[Federal Register Volume 61, Number 2 (Wednesday, January 3, 1996)]
[Proposed Rules]
[Pages 139-145]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-104]



=======================================================================
-----------------------------------------------------------------------

[[Page 140]]


ENVIRONMENTAL PROTECTION AGENCY

40 CFR Parts 85, 86, and 88

[AMS-FRL-5347-2]
RIN 2060-AF87


Sales Volume Limit Provisions for Small-Volume Manufacturers 
Certification of Clean-Fuel and Conventional Vehicle Conversions and 
Related Provisions

AGENCY: Environmental Protection Agency (EPA).

ACTION: Notice of proposed rulemaking (NPRM).

-----------------------------------------------------------------------

SUMMARY: On September 21, 1994, EPA published a final rule establishing 
emission standards for natural gas- and liquified petroleum gas-fueled 
vehicles and engines (``Gaseous Fuels Rule''). On September 30, 1994, 
EPA published the final rule establishing emission standards for clean-
fuel vehicles (CFVs) and engines and requirements for CFV conversions 
(``CFV Standards Rule''). Included in each rule were provisions 
intended to extend the applicability of the existing vehicle sales 
volume limit under EPA's Small-Volume Manufacturers (SVM) certification 
program (10,000 vehicles) to aftermarket vehicle converters. In the 
case of the Gaseous Fuels Rule, the existing 10,000-vehicle volume 
limit was promulgated for aftermarket conversions as a final rule. In 
the case of the CFV Standards Rule, the 10,000 vehicle limit was 
presented as a direct final rule, to become final only in the absence 
of adverse comment.
    Since adverse comments were received within the allotted time, the 
vehicle limit provision is not effective, and EPA is removing this 
provision elsewhere in today's Federal Register. In its place, this 
action proposes to establish the basic 10,000 vehicle/engine total 
annual sales eligibility limit for vehicle converters seeking CFV 
certification under the Small-Volume Manufacturers provisions. In 
addition, EPA proposes to implement a short-term mechanism which would 
allow converters of alternative fuel vehicles to petition EPA for an 
increase in the allowable volume limit when the nature of their 
business operations are substantially different than that of original 
equipment manufacturers.
    To encourage the production of Inherently-Low Emission Vehicles 
(ILEVs), this action also proposes to allow additional options for 
external ILEV label dimensions. In this action, EPA is also proposing 
to amend two California Pilot Program (CPP) requirements: the method 
for determining a manufacturer's CFV sales quota and the method for 
administering CPP credits. Finally, this proposal includes several 
additional technical amendments to the regulations issued under Clean 
Fuel Fleet Program and California Pilot Program final rules (40 CFR 
part 86, subparts A and N, and 40 CFR part 88, subparts A, B, and C). 
In the Final Rules section of this Federal Register, EPA is finalizing 
these technical amendments to the Clean Fuel Fleet Program and 
California Pilot Program as a direct final rule without prior proposal 
because the Agency views these technical amendments as noncontroversial 
and anticipates no adverse comments. A detailed description of these 
technical amendments is set forth in the direct final rule. If no 
adverse comments are received in response to that direct final rule, no 
further activity is contemplated in relation to the technical 
amendments in this proposed rule. If EPA receives adverse comments, the 
affected portions of 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 proposed rule.
    This proposal would reduce the regulatory burden for industry 
(especially the aftermarket conversion industry), and it is highly 
accommodating to their concerns. In addition, this proposal would 
clarify and streamline existing regulations for certifiers and 
purchasers of clean-fuel and/or alternative fuel vehicles.

DATES: Comments on this proposal will be accepted until February 2, 
1996. Additional information on the procedure for submitting comments 
can be found under ``Public Participation'' in the SUPPLEMENTARY 
INFORMATION section.

ADDRESSES: Interested parties may submit written comments in response 
to this action (in duplicate if possible) to Public Docket Nos. A-92-30 
and A-92-14 for conversion provisions and Public Docket No. A-92-69 for 
CPP provisions, at: Air Docket Section, U.S. Environmental Protection 
Agency, Attention: Docket Nos. A-92-30, A-92-14, or A-92-69, First 
Floor, Waterside Mall, Room M-1500, 401 M Street SW., Washington, DC 
20460. A copy of the comments should also be sent to Mr. Bryan Manning 
(SRPB-12), U.S. EPA, Regulation Development and Support Division, 2565 
Plymouth Road, Ann Arbor, MI 48105.
    Materials relevant to this action have been placed in Docket Nos. 
A-92-30 and A-92-14 or A-92-69 by EPA. The docket is located at the 
above address and may be inspected from 8:00 a.m. to 5:30 p.m. on 
weekdays. EPA may charge a reasonable fee for copying docket materials.

FOR FURTHER INFORMATION CONTACT: Mr. Bryan Manning (SRPB-12), U.S. EPA, 
Regulation Development and Support Division, 2565 Plymouth Road, Ann 
Arbor, MI 48105, Telephone: (313) 741-7832; FAX: 313-741-7816.

SUPPLEMENTARY INFORMATION:

I. Introduction

A. Accessing Electronic Copies of Rulemaking Documents through the 
Technology Transfer Network Bulletin Board System (TTNBBS)

    A copy of this action is available through TTNBBS under OMS, 
Rulemaking and Reporting, Alternative Fuels, Clean Fuel Fleets. TTNBBS 
is available 24 hours a day, 7 days a week except Monday morning from 
8-12 EST, when the system is down for maintenance and backup. For help 
in accessing the system, call the systems operator at 919-541-5384 in 
Research Triangle Park, North Carolina, during normal business hours 
EST.

B. Background

    1. The Small-Volume Manufacturers (SVM) Certification Program.
    As is shown in 40 CFR 86.094-14, the Small-Volume Manufacturers 
(SVM) certification program exempts entities seeking a Certificate of 
Conformity with total annual vehicle/engine sales less than 10,000 from 
EPA's full certification program. Specifically, the SVM provisions 
relieve such entities from some elements otherwise required to 
demonstrate the durability of emissions over the life of the vehicle. 
Instead of accumulating mileage on actual prototype vehicles, the SVM 
program in some cases permits the use of EPA-assigned values for 
emission deterioration. This can be of significant economic benefit to 
entities manufacturing or converting relatively few vehicles.
    In the Gaseous Fuels (59 FR 48472) and the CFV Standards (59 FR 
50042) rules, EPA intended to apply the SVM program to aftermarket 
converters in the same way the Agency has applied it to manufacturers 
of complete ``original equipment'' vehicles (OEMs), including the sales 
volume limit of 10,000 annual sales. Discussions of EPA's perspective 
on this regulatory provision were presented in Section II, Part B of 
the CFV Emission Standards Final Rule (See 

[[Page 141]]
59 FR 50063-50064; September 30, 1994) and Section III.I. of the 
Gaseous Fuels Final Rule (See 59 FR 48486; September 21, 1994).
    2. Comments and EPA Responses.
    In response to the SVM program volume limit provisions of the CFV 
Standards Final Rule and the Gaseous Fuels Final Rule, EPA received 
comments from the Natural Gas Vehicle Coalition (NGVC) objecting to an 
annual sales volume limit of 10,000 vehicles applying to converters 
seeking to certify under the provisions for small volume manufacturers. 
NGVC's primary comments were based on the concept that, in general, the 
nature and the economics of the conversion business is fundamentally 
different than the nature and economics of the OEM industry. 
Specifically, NGVC stated that the sale price of the respective 
products are very different. The OEM sells a complete vehicle, usually 
for well over $10,000. By comparison, an aftermarket converter begins 
with existing vehicles and adds new fueling technology, using equipment 
that typically costs around $1500, according to NGVC. From an economic 
perspective, this difference means that an OEM producing a certain 
number of vehicles will generally have more ability to absorb 
certification costs than a converter producing a similar number of 
vehicles. This is because the OEM could usually allocate part of the 
certification cost to each vehicle with less relative impact on the 
overall sale price than can a converter selling only the add-on 
equipment and installation.
    NGVC requested the limit under the SVM provisions be raised to 
30,000 for alternative fuel converters. This higher limit, NGVC 
believes, would remove the incentive for converters to limit sales to 
10,000 or less in order to qualify for the SVM program (i.e., 10,000 
sales volume limit is a detriment to the sales of alternative fuel 
conversions). NGVC's suggested 30,000 volume limit is based on their 
expectation that, within the next few years, a typical conversion 
system manufacturer will wish to offer certified kits for between 15 
and 30 engine families, and average sales are likely to be 1,000 to 
2,000 per engine family. According to NGVC's estimates of certification 
costs, the added cost of durability testing for engine families 
certified under the basic (non-SVM) program could double the total 
development and certification costs. NGVC believes that as sales of 
certified kits grow beyond 30,000, sales of the more popular engine 
families can be expected to reach 4,000 to 5,000 per engine family. At 
this level of sales, NGVC believes that the per-vehicle cost of full 
certification would become more reasonable.
    NGVC also expressed concerns about other aspects of EPA's full 
certification program as they apply to conversions. They commented that 
certification on an engine family-by-family basis should be replaced by 
a grouping of engine families, since certification costs for low-
production families are high on a per-vehicle basis. Second, NGVC 
presented their view that durability testing of conversion prototypes 
is duplicative of the OEM durability testing that would have already 
been done on the base vehicle.
    EPA has considered each of these comments and proposes provisions 
in today's action which we believe addresses each concern. In general, 
EPA believes that there is and will continue to be a useful role for 
certified alternative fuel conversions in environmental and energy 
policy in the coming years. Further, EPA understands NGVC's argument 
that the economic nature of the conversion business differs 
substantially from that of the OEM business and that certification 
costs, whether under full certification or not, will tend to be 
relatively more burdensome for converters than for OEMs. Thus, in many 
cases, EPA believes that equity in terms of economic burden for 
certification for converters as compared to OEMs may warrant different 
treatment under the certification protocols for the two types of 
business activity.
    However, the justification provided by NGVC for the specific sales 
volume limit of 30,000 lacked sufficient data and analysis to prove or 
disprove the appropriateness of any specific sales level. The cost of 
certification per vehicle is a function of whether relief from some 
certification protocols is available and the number of vehicles 
produced under a certificate. These variable factors exist in the 
context of the likely variety of business situations of future 
converters, some of which will be better able to recover additional 
costs from their customers than others. All of these factors will 
affect the level of sales at which the certification burden for an 
individual converter might become low enough to approach that of a 
typical OEM SVM. EPA is thus not prepared at this time to propose a 
specific volume limit for all converters beyond the existing 10,000 
unit limit.
    Regarding the comments relating to the burden of the broader 
certification process, EPA is also proposing in today's action to 
reduce certification burden for converters by providing flexibility in 
the regulations for determining deterioration factors. (See section 
II.B. for further description of this proposed action.) In addition, 
EPA is acting administratively, independent of this action, to provide 
additional flexibility to gaseous-fueled converters for determining 
their deterioration factors. EPA recently assigned deterioration 
factors for vehicles converted to operate on gaseous fuels.<SUP>1 
Manufacturers may use mathematically derived assigned deterioration 
factors or generate their own deterioration factors using an 
abbreviated durability protocol (shortened-durability test of only 
25,000 miles of operation). EPA believes that these temporary measures 
would greatly reduce the effort and expense required by this emerging 
industry.

    \1\  The assigned deterioration factors and the abbreviated 
durability protocol are expected to be specified in a ``Dear 
Manufacturer'' letter that would be available in docket A-92-14 and 
A-92-30 and on TTNBBS.
---------------------------------------------------------------------------

II. Description of Action

A. Sales Volume Limit Provisions

    Today's proposal is presented in two parts. First, to be consistent 
with the SVM provisions for OEM's and conventional conversions, EPA 
proposes to establish the 10,000 vehicle/engine sales volume limit for 
CFV converters under the small volume manufacturers provisions.
    In addition, EPA proposes to make a waiver process available to 
alternative fuel vehicle converters which provides the opportunity for 
a converter to petition EPA to permit the use of SVM certification 
provisions at annual sales levels of 10,000 and above. This provision 
would be available for manufacturers converting vehicles/engines which 
meet 40 CFR 85 requirements (conventional conversions) and for those 
converting vehicles which meet 40 CFR 88 requirements (CFV 
conversions). Converters would need to demonstrate the need for a 
higher limit based on, but not limited to, data such as company sales 
projections and cost analysis or other information indicating that 
certification costs on a per-vehicle basis will be substantially 
greater than those for an OEM vehicle manufacturer. An analysis 
indicating why the specific volume limit requested is appropriate would 
also be necessary. In no case could the limit for any manufacturer 
exceed 30,000 total units. Converters would have to apply for a new 
waiver each model year.
    EPA is proposing that this waiver process be available for a period 
of 5 years, through model year (MY) 2000. However, EPA also asks 
comment on whether a longer time period is more 

[[Page 142]]
appropriate, and if so, what period of time and why.
    EPA believes that having the petition process end by a specific 
date is necessary since the future conversion market is uncertain. This 
provision is most critical during the next several years as the 
alternate fuel vehicle conversion industry begins business in earnest 
in response to CAA, Energy Policy Act, and other alternative fuel fleet 
and vehicle programs at the state and local levels. With the 
anticipated sales growth in the industry as a whole and for the 
individual certifiers of conversions, the ability to recover 
certification costs increases over time. Conversely, since the 
difference in business activity and economics between converters and 
OEMs will not totally disappear with time, a longer term petition 
process may provide greater parity in certification cost between 
converters and OEMs. In any event, since certification costs tend to be 
relatively more burdensome for converters than for OEMs and EPA 
believes in equity in terms of economic burden for certification, the 
proposed petition process would only apply to aftermarket conversions 
and not producers of complete OEM vehicles.

B. Technical Amendments to the Clean Fuel Fleet Program and California 
Pilot Program

    The technical amendments to the Clean Fuel Fleet Program and 
California Pilot Program that EPA considers to be noncontroversial will 
be finalized as a direct final rule (entitled, ``Requirements for 
Determining Assigned Deterioration Factors for Alternative Fuel 
Vehicles, Amendments to Labelling Requirements for Inherently Low-
Emission Vehicles, and Related Provisions'') in the final rules section 
of today's Federal Register. These technical amendments pertain to 40 
CFR part 86, subparts A and N, and 40 CFR part 88, subparts A, B, and 
C. See the information provided in the direct final rule for a detailed 
description of these technical amendments.

III. Environmental and Economic Impacts

    The nature of today's proposed approach to the sales volume limit 
for the Small-Volume Manufacturers certification program is such that 
no impact on air quality should result. Given that there are no 
converters which have received a certificate as yet, it appears 
unlikely that any such entity will approach the 10,000 vehicle level 
for a few years. If and when that does occur, the result of a 
successful petition by a converter to increase the SVM sales volume 
limit will not seriously compromise EPA's confidence that certified 
emission levels are being met in use. The SVM provisions, while 
providing some relief in the requirements for durability demonstration, 
still do require an assessment of durability. While some loss of 
control could theoretically occur if the reduced durability 
demonstration were in serious error, the Agency does not believe that 
this is likely to be common and in any event the numbers of vehicles 
involved is not large in comparison to conventional vehicle production.
    Today's proposed action may have a substantial economic benefit for 
converters. Depending on the sales level, the result of a successful 
petition by a converter to increase the SVM sales volume limit and thus 
be exempt from durability testing, could cut in half an engine family's 
development and certification costs.
    For the relaxed ILEV labelling requirements, EPA believes that if 
the smaller but distinctive ILEV labels are used on an ILEV, they would 
still be able to be clearly identified by law enforcement officials. 
EPA expects that these changes would help encourage manufacturers to 
develop and produce ILEVs, which would in turn have a positive 
environmental impact relative to conventional vehicles.
    With these proposed changes to the CPP program, EPA would ease the 
certification burden for manufacturers with no effect on air quality. 
This result would occur because the same number of vehicles will be 
sold under the CPP industry-wide; only the relative allocations among 
manufacturers might change.
    In today's proposal, EPA would reduce the regulatory burden on 
industry without effecting air quality. EPA believes this proposal is 
highly accommodating to industry's concerns.

IV. Public Participation

    EPA desires full public participation in arriving at its final 
decisions, and therefore solicits comments on all aspects of today's 
proposal. Wherever applicable, full supporting data and detailed 
analysis should be submitted to allow EPA to make maximum use of the 
comments. Commenters are especially encouraged to provide specific 
suggestions for any changes to any aspect of the regulations that they 
believe need to be modified or improved. All comments should be 
directed to EPA Air Docket, Docket No. A-92-30 and A-92-14 for the 
conversion provisions and Docket No. A-92-69 for the CPP provisions 
(See ADDRESSES). The official comment period will last for 30 days 
following publication of today's proposal.
    Commenters desiring to submit proprietary information for 
consideration should clearly distinguish such information from other 
comments to the greatest possible extent, and clearly label it 
``Confidential Business Information.'' Submissions containing such 
proprietary information should be sent directly to the contact person 
listed above, and not to the public docket, to ensure that proprietary 
information is not inadvertently placed in the docket.
    Information covered by such a claim of confidentiality will be 
disclosed by EPA only to the extent allowed and by the procedures set 
forth in 40 CFR part 2. If no claim of confidentiality accompanies the 
submission when it is received by EPA, it may be made available to the 
public without further notice to the commenter.

V. Statutory Authority

    The statutory authority for this action is granted by Sections 202, 
203, 206, 207, 241, 242, 243, 244, 245, 246, 247, 249, and 301(a) of 
the Clean Air Act.

VI. Administrative Designation and Regulatory Analysis

    Under Executive Order 12866 (58 FR 51735 (October 4, 1993)), the 
Agency must determine whether this 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 budgetary impact of entitlements, 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 proposal is not a ``significant regulatory action'' within the 
meaning of the Executive Order. This proposal provides greater 
flexibility for converters seeking to certify under the small volume 

[[Page 143]]
manufacturers provisions, thus eliminating some of the certification 
burden for nearly all converters. ILEV labelling requirements have been 
proposed to be relaxed, reducing some of the certification burden for 
certifiers of alternative fuel vehicles. Today's proposal also reduces 
the certification burden for manufactures required to produce CFVs 
under the CPP, by providing more flexibility in CFV production planning 
and credit reporting.

VII. Compliance with Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA) of 1980 requires federal 
agencies to examine the effects of federal regulations and to identify 
significant adverse impacts on a substantial number of small entities. 
Because the RFA does not provide concrete definitions of ``small 
entity'', ``significant impact'', or ``substantial number'', EPA has 
established guidelines setting the standards to be used in evaluating 
impacts on small businesses.<SUP>2 Section 604 of the Regulatory 
Flexibility Act requires EPA to prepare a Regulatory Flexibility 
Analysis when the Agency determines that there is a significant adverse 
impact on a substantial number of small entities.

    \2\  U.S. Environmental Protection Agency Memorandum to 
Assistant Administrators, ``Compliance With the Regulatory 
Flexibility Act'', EPA Office of Policy, Planning, and Evaluation, 
1984. In addition, U.S. Environmental Protection Agency, Memorandum 
to Assistant Administrators, ``Agency's Revised Guidelines for 
Implementing the Regulatory Flexibility Act'', EPA Office of Policy, 
Planning, and Evaluation, 1992.
---------------------------------------------------------------------------

    Today's proposal will allow many if not all converters to certify 
their conversions under the small volume certification provisions. EPA 
has evaluated the effects of today's proposed regulation and the 
Administrator of EPA certifies that there would not be an adverse 
impact on a substantial number of small entities; in fact, most small 
converters will experience an economic benefit. Therefore, a Regulatory 
Flexibility Analysis has not been performed for this rule.

VIII. Unfunded Mandates

    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 written 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 in any one year. 
Under section 205, EPA must select the most cost-effective and least 
burdensome alternative that achieves the objective of the rule and that 
is consistent with statutory requirements. Section 203 requires EPA to 
establish a plan for informing and advising any small governments that 
may be significantly and uniquely impacted by the rule.
    EPA estimates that the costs to State, local, or tribal 
governments, or the private sector, from this proposal would be less 
than $100 million. EPA has determined that this proposal would reduce 
the regulatory burden imposed on certifiers of clean-fuel and/or 
alternative fuel vehicles (especially converters of such vehicles). EPA 
has determined that an unfunded mandates statement therefore is 
unnecessary.

IX. Paperwork Reduction Act

    The information collection requirements for converters in this 
proposed rule have been submitted for approval to the Office of 
Management and Budget (OMB) under the Paper Reduction Act, 44 U.S.C. 
3501 et seq. An Information Collection Request (ICR) document has been 
prepared by EPA (ICR No. 783.34) and a copy may be obtained from Sandy 
Farmer, OPPE Regulatory Information Division; U.S. Environmental 
Protection Agency (2136); 401 M St., S.W.; Washington, DC 20460 or by 
calling (202) 260-2740.
    Today's proposal does not add any mandatory information collection 
requirements for converters or any other entity, but EPA has prepared 
an Information Collection Request document for this proposal since the 
collection of information would be needed for some converters to obtain 
or retain the benefit of SVM certification (collection of information 
required to obtain or retain a benefit). (Under section 301(a) of the 
Clean Air Act, the Administrator has the general authority ``... to 
prescribe such regulations as are necessary to carry out his functions 
under this Act.) For aftermarket converters who choose to petition EPA 
to be included under the SVM provisions at a higher sales volume, basic 
data on the projected sales, cost of certification, and why the 
specific volume limit requested is appropriate would need to be 
included in the petition to demonstrate economic hardship of the 
current sales volume limit. This ICR would be an amendment to the base 
Certification Program ICR, and the same confidentiality provisions in 
the base Certification Program ICR would apply to this ICR as well.
    For this ICR, the projected annual average cost and hour burden 
(reporting and recordkeeping) for respondents would be $4,800 and 80 
hours, respectively for the five year period 1996 through 2000 model 
year. For five respondents at five hours per response, the annual 
average reporting burden would be 60 hours. This converter ICR does not 
include capital and start-up costs, operation and maintenance costs, 
and purchases of services costs for the following reasons: there is not 
any testing burden associated with this ICR and prior to certification 
the respondents would have collected the necessary information for 
their own planning purposes. Burden means the total time, effort, or 
financial resources expended by persons to generate, maintain, retain, 
or disclose or provide information to or for a Federal agency. This 
includes the time needed to review instructions; develop, acquire, 
install, and utilize technology and systems for the purposes of 
collecting, validating, and verifying information, processing and 
maintaining information, and disclosing and providing information; 
adjust the existing ways to comply with any 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 displays a 
currently valid OMB control number. The OMB control numbers for EPA's 
regulations are listed in 40 CFR Part 9 and 48 CFR Chapter 15.
    Comments are requested on the Agency's need for this information, 
the accuracy of the provided burden estimates, and any suggested 
methods for minimizing respondent burden, including through the use of 
automated collection techniques. Send comments on the ICR to the 
Director, OPPE Regulatory Information Division; U.S. Environmental 
Protection Agency (2136); 401 M. St., S.W.; Washington, DC 20460; and 
to the Office of Information and Regulatory Affairs, Office of 
Management and Budget, 725 17th St., N.W., Washington, DC 20503, marked 
``Attention: Desk Officer for EPA.'' Include the ICR number in any 
correspondence. Since OMB is required to make a decision concerning the 
ICR between 30 and 60 days after Janaury 3, 1996, a comment to OMB is 
best assured of having its full effect if OMB receives it by February 
2, 1996. The final rule will respond to any OMB or public comments on 
the information collection requirements contained in this proposal.
    The information collection requirements of the Credit Program for 

[[Page 144]]
    California Pilot Test Program have been amended to reflect today's 
relaxation of the credit reporting requirements. These amended 
requirements have been approved by the Office of Management and Budget 
(OMB) under the provisions of the Paperwork Reduction Act, 44 U.S.C. 
3501 et seq., and have been assigned OMB control number 2060-0229. A 
copy of the Information Collection Request document (ICR No. 1590) may 
be obtained from Sandy Farmer, OPPE Regulatory Information Division, 
U.S. Environmental Protection Agency (2136); 401 M St. S.W.; 
Washington, DC 20460 or by calling (202) 260-2740.
    Send comments regarding this collection of information to the 
Director, OPPE Regulatory Information Division; U.S. Environmental 
Protection Agency (2136); 401 M. St., S.W.; Washington, DC 20460; and 
to the Office of Information and Regulatory Affairs, Office of 
Management and Budget, 725 17th St., N.W., Washington, DC 20503, marked 
``Attention: Desk Officer for EPA.'' Include the ICR number in any 
correspondence.

List of Subjects

40 CFR Part 85

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

40 CFR Part 86

    Environmental protection, Administrative practice and procedures, 
Confidential business information, Labeling, Motor vehicle pollution, 
Reporting and recordkeeping requirements.

40 CFR Part 88

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

    Dated: November 27, 1995.
Carol M. Browner,
Administrator.
    For the reasons set forth in the preamble, parts 85 and 88 of title 
40 of the Code of Federal Regulations are proposed to be amended as 
follows:

PART 85--[AMENDED]

    1. The authority citation for part 85 is revised to read as 
follows:

    Authority: 42 U.S.C. 7507, 7521, 7522, 7524, 7525, 7541, 7542, 
7543, 7547, 7601(a).

    2. Section 85.501 of Subpart F is revised to read as follows:


Sec. 85.501  General applicability.

    Sections 85.501 through 85.506 are applicable to aftermarket 
conversion systems for which an enforcement exemption is sought from 
the tampering prohibitions contained in section 203 of the Act.
    3. Section 85.503 of subpart F is amended by revising paragraphs 
(a) and (b)(1) to read as follows:


Sec. 85.503  Conditions of exemption.

    (a) As a condition of receiving an enforcement exemption from the 
tampering prohibitions contained in section 203 of the Act, an 
aftermarket conversion certifier must certify the aftermarket 
conversion system, using the applicable procedures in part 86 of this 
chapter, and meeting the applicable standards and requirements in 
Secs. 85.504, 85.505 and 85.506, and accept liability for in-use 
performance of the aftermarket conversion system as outlined in this 
part.
    (b) * * *
    (1) Install a conversion which has been certified as a new vehicle 
or engine, using the applicable procedures in part 86 of this chapter, 
and meeting the applicable standards and requirements in Secs. 85.504, 
85.505 and 85.506; and
* * * * *
    4. A new Sec. 85.506 is added to subpart F, to read as follows:


Sec. 85.506  Sales volume limit for the aftermarket conversion 
certifier under the small-volume manufacturers certification program.

    (a) The optional small-volume manufacturers certification 
procedures as described in 40 CFR 86.092-14 apply to aftermarket 
conversions assembled by aftermarket conversion certifiers with U.S. 
sales of fewer than 10,000 units. An aftermarket conversion certifier 
with sales greater than 10,000 per year may petition the Administrator 
for permission to use the small-volume manufacturers certification 
procedures for conversions certified on or before December 31, 2000.
    (1) The aftermarket conversion certifier shall demonstrate to the 
Administrator economic hardship of the 10,000 sales volume limit. At a 
minimum, the aftermarket conversion certifier shall provide to the 
Administrator the following data: company sales projections (by engine 
family), cost analysis indicating that certification costs on a per-
vehicle basis will be substantially greater than those for an OEM 
vehicle manufacturer (i.e., incremental cost of full durability testing 
per vehicle), and an analysis indicating why the specific volume limit 
requested is appropriate. The Administrator may require additional data 
as he may deem necessary to demonstrate economic hardship of the 10,000 
sales volume limit. The aftermarket conversion certifier must receive 
approval from the Administrator on a case by case basis to waive the 
10,000 sales volume limit, and the certifier shall apply for a new 
waiver each model year. In no case shall the sales volume limit for any 
petitioner exceed 30,000.
    (2) For aftermarket conversions certified after December 31, 2000, 
the 10,000 sales volume limit in 40 CFR 86.094-14(b)(1) shall apply.
    (b) The sales volume limit provided in paragraph (a) of this 
section shall apply to the aggregate total of all vehicles sold by a 
given aftermarket conversion certifier at all of its installation 
facilities without regard to the model year of the original vehicles 
upon which the conversions are based. All vehicle sales will be 
included in calculating the aftermarket conversion certifier's 
aggregate total, including vehicle conversions performed under the 
requirements of this part 85 and 40 CFR part 88 (clean-fuel vehicle 
conversions), and all other vehicle conversions. Vehicle conversions 
not covered by this part 85 will be counted if they occur within the 
model year for which certification is sought.

PART 88-CLEAN-FUEL VEHICLES

    5. The authority citation for Part 88 continues to read as follows:

    Authority: 42 U.S.C. 7410, 7418, 7581, 7582, 7583, 7584, 7586, 
7588, 7589, 7601(a).

    6. Section 88.306-94 of subpart C is amended by revising paragraph 
(b)(3) to read as follows:


Sec. 88.306-94  Requirements for a converted vehicle to qualify as a 
clean-fuel fleet vehicle.

* * * * *
    (b) * * *
    (3) For the purpose of determining whether certification under the 
Small-Volume Manufacturers Certification Program pursuant to the 
requirements of 40 CFR 86.092-14 is permitted for the clean-fuel 
vehicle aftermarket conversion certifier, the 10,000 sales volume limit 
in 40 CFR 86.094-14(b)(1) shall apply. A clean-fuel vehicle aftermarket 
conversion certifier with sales greater than 10,000 per year may 
petition the Administrator for permission to use the small-volume 
certification procedures for conversions certified on or before 
December 31, 2000. 

[[Page 145]]

    (i) The clean-fuel vehicle aftermarket conversion certifier shall 
demonstrate to the Administrator economic hardship of the 10,000 sales 
volume limit. At a minimum, the clean-fuel vehicle aftermarket 
conversion certifier shall provide to the Administrator the following 
data: company sales projections (by engine family), cost analysis 
indicating that certification costs on a per-vehicle basis will be 
substantially greater than those for an OEM vehicle manufacturer (i.e., 
incremental cost of full durability testing per vehicle), and an 
analysis indicating why the specific volume limit requested is 
appropriate. The Administrator may require additional data as he may 
deem necessary to demonstrate economic hardship of the 10,000 sales 
volume limit. The clean-fuel vehicle aftermarket conversion certifier 
must receive approval from the Administrator on a case by case basis to 
waive the 10,000 sales volume limit, and the certifier shall apply for 
a new waiver each model year. In no case shall the sales volume limit 
for any petitioner exceed 30,000.
    (ii) For clean-fuel vehicle aftermarket conversion configurations 
certified after December 31, 2000, the 10,000 sales volume limit in 40 
CFR 86.094-14(b)(1) shall apply.
    (iii) The sales volume limit provided in paragraphs (b)(3)(i) and 
(b)(3)(ii) of this section shall apply to the aggregate total of all 
vehicles sold by a given clean-fuel vehicle aftermarket conversion 
certifier at all of its installation facilities without regard to the 
model year of the original vehicles upon which the conversion 
configurations are based. All vehicle sales will be included in 
calculating the clean-fuel vehicle aftermarket conversion certifier's 
aggregate total, including vehicle conversions performed under the 
requirements of this part 88, and all other vehicle conversions. 
Vehicle conversions not covered by this part 88 will be counted if they 
occur within the model year for which certification is sought.
* * * * *
[FR Doc. 96-104 Filed 1-2-96; 8:45 am]
BILLING CODE 6560-50-P