Document ID: EPA-HQ-OAR-2009-0865-7636
Agency: epa
Document Type: Supporting & Related Material
Title: 
Posted Date: 2011-05-24T04:00Z

Final

Supporting Statement

for

Information Collection Request

Fuel Economy Labeling of Motor Vehicles (Final Rule)

EPA ICR 2392.02

Compliance and Innovative Strategies Division

Transportation and Climate Division

and

Assessment and Standards Division

Office of Transportation and Air Quality

Office of Air and Radiation

U.S. Environmental Protection Agency

Part A SUBMISSION Section 1: Identification Of The Information
Collection

1(a) Title And Number Of The Information Collection

	Fuel Economy Labeling of Motor Vehicles (Final Rule), EPA ICR number
2392.02, 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 2013 cars and trucks.  This action will also develop new
labels for advanced technology vehicles 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 2013 and later
vehicles. The normal time horizon of ICRs is three years from the date
of clearance. Consequently, this ICR should cover the startup period and
approximately the first year 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 conformity with the Clean Air Act. These costs in
turn are broken down into startup costs for information technology and
testing-related equipment, testing 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 required new
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 and hours for manufacturers
to obtain these numbers are included in this analysis.  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. 

	Over the next several model years, 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 likely to
appear in the next three years indicates that the number 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; beyond that any increases in
burden are speculative and will have to await the next collection
authority renewal.   

	This ICR estimates that 35 manufacturers will incur up to $4,986,806
yearly in 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 And Use of the Collection 

2(a) Need/Authority For The Collection

	Under Title II of the Clean Air Act (42 U.S.C. 7521 et seq.), EPA is
charged with issuing certificates of conformity for motor vehicle
designs that comply with applicable emission standards.  A manufacturer
must have a certificate before vehicles may be legally introduced into
commerce.  Provisions in the Energy Policy 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 economy ratings to be
determined and vehicles to be labeled.  To insure compliance with these
statutes, EPA reviews product information and manufacturer test results;
EPA also tests some vehicles to confirm manufacturer results. 
Information is also shared with other agencies: the Internal Revenue
Service for “gas guzzler” taxes and NHTSA for CAFE requirements. 

In the Energy Independence and Security Act of 2007 (EISA; P.L.
110-140), Congress required that NHTSA, in consultation 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 economy
and greenhouse gas and other emissions” over the automobile’s useful
life.  NHTSA must also develop a rating system that would make it easy
for consumers to compare the fuel economy and 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 fuel economy provisions 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 certification
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 economy for each manufacturer that is
weighted by the number of units of each of its vehicle models in that
year.  This “harmonic mean” calculation is statutory (49 U.S.C.
32904).  In the previous, “five-cycle” label rulemaking (71 FR
77872, December 27, 2006) 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 economy (CAFE) standards for new cars, sport
utility vehicles, minivans, and pickup trucks. 

In a separate program, the fuel economy ratings, used to comply with the
labeling requirements for new vehicles (40 CFR Part 600, Subpart D), are
listed 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 harmonic mean of the
configurations/subconfigurations within each base level.  This procedure
is intended to insure that the most representative fuel economy values
are posted on new vehicles, which are sold by the manufacturer’s model
designation rather than 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:
city and 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 year, 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 year, and the amount of
the automobile fuel efficiency tax (“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 ways of
measuring fuel economy based on exhaust emissions need to be modified. 
Second, the rule suggests possible modifications of the label format
that are intended to comply with the Congressional mandate  to provide
consumers information on performance with respect to “fuel economy and
greenhouse gas and other emissions” over the automobile’s useful
life and display a rating system that would make it easy for consumers
to compare the fuel economy and 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. 

Section 3: Nonduplication, Consultations, and Other Collection Criteria 

3(a) Nonduplication

	Efforts have been made to eliminate duplication in this information
collection.  The mandating statutes give both EPA and NHTSA authority
over labeling requirements related to fuel economy and environmental
information under EPCA and EISA, respectively.  In order to implement
that authority in the most coordinated and efficient way, the agencies
are jointly finalizing the revised label that give rise to this
collection request. 

	

	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
J1634 (16 CFR 309.22(a)(2)). Consequently, EV manufacturers selling
vehicles in the United States have already been subject for several
years to the SAE J1634 testing requirements in the rule. It is expected
that tests conducted to satisfy FTC labeling requirements in previous
years will be carried over to EPA certification applications under the
new rule, so that this overlap is primarily an 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 expensive than the 1999 version suggested by EPA in its
existing testing guidance and contemplated by the EV testing provisions
in the rule. Second, The FTC label displays the cruising range of the
vehicle on each 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 may be
somewhat duplicative of the information on the FTC label, and could
potentially lead 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 displayed on the EPA label.  EPA is required by statute to
consult with the FTC regarding changes to the fuel economy label, and
EPA has had this consultation.   

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,  2010, 75 Federal
Register 58078; a copy can be found at   HYPERLINK
"http://www.epa.gov/fueleconomy/regulations.htm" 
http://www.epa.gov/fueleconomy/regulations.htm .

3(c) Consultations

	The regulations 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 by a
nine-member expert panel, consultations with environmental groups, a
three-stage focus group effort that was the subject of ICRs 2343.01 and
2390.01 (OMB 2060-NEW), and an internet-based survey discussed in ICR
2060-0643.  Numerous public comments were received 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

	As required by the Clean Air Act (42 USC 7525(a)), emission and fuel
economy information is submitted on a yearly basis coinciding with the
manufacturer’s “model year.”  EPA allows applicants to define
their own “model year”, thus granting some flexibility in this
regard.  In connection with certification application, the manufacturer
submits along with emissions data the projected sales and the definition
of carlines corresponding to the models that will be for sale; this
information is used to calculate the values and gas guzzler information
that appears on the fuel economy label. (After the end of the model
year, 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 inextricably linked to the
annual model year timeframe. For this reason, a collection frequency
longer than a model year is not possible. However, testing results are
frequently “carried over” when there are no substantial
emissions-related changes from one model year to the next.  

3(e) General Guidelines

	Manufacturers are required to keep some EPA fuel economy related
records for periods longer than three years (for example, 40 CFR
600.005(a)(3)).  This requirement stems from the statutory requirement
that manufacturers warrant some items for periods longer than 3 years. 

	This information collection activity complies with the remaining
guidelines in 5 CFR 1320.5.  The rule makes no changes in the reporting
and recordkeeping provisions that impact any of the guidelines for
information collections as approved in the existing approved collection.

3(f) Confidentiality

	Information submitted by manufacturers is held as confidential until
the specific vehicle to which it pertains is available for purchase. 
After vehicles 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 publicly available. 
Proprietary information 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 sensitive 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/NAICS Codes

	The respondents are involved in the industries shown in the following
table:

Category	NAICS Codes A	Examples of Potentially Regulated Entities

Industry	336111

336112	Motor vehicle manufacturers.

Industry	811112

811198

541514	Commercial Importers of Vehicles and Vehicle Components.

A North American Industry Classification System (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 manufacturers 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 conformity is issued. 

	Some of the product information used to verify emission 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 comply with the new labeling
requirements for new vehicles are listed 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 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 insure that the most representative fuel
economy 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 economy data. 

	The rule contemplates no changes in the methodology for the
sales-weighted calculations based on configurations of vehicles and
projected sales summarized in the preceding paragraph. 

(ii) Respondent Activities

	Respondents are  car and truck manufacturers and ICIs who submit
certification applications to EPA via its Verify certification and
information management system. The applications contain the results of
testing conducted according to EPA regulations that, in addition to
providing emissions information, yield fuel economy values for the
tested vehicles. These data, along with projected sales and carline
details, allow EPA to calculate the values that apply to the
manufacturer’s vehicle label. With this fuel economy and other
label-related information approved by EPA, the manufacturer prints the
labels consistent with the format required by EPA and NHTSA and attaches
them to the vehicles before they are sent from the manufacturing plant
(or ICI facility) for sale. Manufacturers must retain records related to
this information submitted to EPA and appearing on the label.  These
tasks are repeated for each model year, although typically previous data
and information can be “carried over” when no significant changes
have occurred.  If, during the course of a model year, a product change
is made (a “running change”), EPA must be notified.  Under some
circumstances additional test data may be required.  After the end of
the model year, 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. 

Section 5: The Information Collected—Agency Activities, Collection
Methodology, and Information Management

Agency Activities

	The test data used by EPA to determine the fuel economy estimates
posted on the fuel economy labels 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 year, 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 programs.  DOE publishes the annual fuel economy
label values in the annual Fuel Economy Guide and on the fuel economy
web site at http://www.fueleconomy.gov.  NHTSA receives the
manufacturers' fleet average fuel economy from EPA, and determines if
manufacturers are complying with the CAFE standards.  EPA provides IRS
with the fuel economy data for vehicles that may be subject to the Gas
Guzzler tax penalty.  IRS is responsible for collecting those taxes from
manufacturers.

5(b) Collection Methodology and Management

	As of model year 2010, EPA collects all fuel economy related
information exclusively through its Verify information collection and
management system (MY 2009 information was collected through VERIFY in
CFEIS format and ICIs were not yet in the Verify system).  The rule
makes no changes in this reporting system, only changing the format and
content of some of the information reported within it. 

	All information received by EPA is subject to review.  Except for
projected sales and a very limited amount of proprietary product
information (typically catalyst 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 analysis of the rule prepared in response to the Regulatory
Flexibility Act, 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 24 manufacturers and all of the 11 ICIs identified by EPA 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 ICIs, a significant flexibility added by the
regulation is to eliminate the requirement for 5-cycle testing of
vehicles that would otherwise apply starting in 2011.  Under the rule,
ICIs would be allowed to continue predicting their 5-cycle fuel economy
estimates from data collected over the FTP and HFET driving cycles. ICIs
and any new small entity entrants 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

	Information must be submitted for each “model year” that a
manufacturer intends to build (or import) vehicles.  For fuel economy
purposes, a “model year” is statutorily defined in EPCA as the
annual production period of a manufacturer, as decided by the
Administrator, which includes January 1 of that calendar year; or that
calendar year 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 years, 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 analysis contained in the preamble of this rule. The
analysis uses the cost assumptions in previous ICRs in this series,
modified and updated as detailed below. As an aid to the analysis and to
help articulate the range of uncertainty, we estimated both low and high
cost estimates for each of these cost and labor hour elements. These
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 numbers reported. 

 

6(a) Estimating Respondent Burden 

	Labor hours are associated, first, with startup costs for installing
(updating) information technology systems to incorporate the new
information to be reported, and for label redesign.  As these labor
costs are all associated with capital/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 systems is
deemed to apply to manufacturers of EVs and PHEVs and to entail four
weeks for four IT staff for analysis 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 by 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 analysis. 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 by 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 family needing both for
certification. EV fuel economy testing under this rule is also treated
as an entirely 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 hybrid vehicles (see below). Hybrid 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 would be conducted in what is denominated as
the “charge sustain” operation. Following this the vehicle will be
recharged  if necessary by running any appropriate test cycle followed
by HFET cycles in “charge depleting” operation, followed by a cycle
in “charge sustain” operation.

For purposes of this cost analysis the charge sustain FTP and HFET
cycles along with potential other cycles mandated by emissions and fuel
economy testing requirements are considered to be continuations of
existing requirements. The cost increment due to this rule consequently
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 cycles.  These together
add 27.6 to 115.375 labor hours per test group to existing hybrid
testing costs.  

6(b) Estimating Respondent Costs

Estimating labor costs

	 Information technology specialists for analysis 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
cycles for EVs and PHEVs and for EV preparation is based on the cost
assumptions of ICR 0783.47, 0783.51, 0783.54 and 0783.57. This labor
cost estimate in these renewals and revisions the certification ICR
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 current
estimate is based on this figure with an adjustment from the  BLS
Employment Cost Index for total compensation, by occupational group and
industry,   HYPERLINK "http://www.bls.gov/news.release/eci.t01.htm" 
http://www.bls.gov/news.release/eci.t01.htm  , 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 2060-0104, ICR 0783 series will be similarly incremented.

(ii) Estimating Capital and Operations and Maintenance Costs

	New 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 measuring fuel
economy. To date, EPA has performed some fuel economy testing connected
with certification applications for electric vehicles using the
procedures developed by the Society of Automotive Engineers (SAE),
specifically SAE J1634. This rule spells out 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 satisfying
federal requirements, because existing fuel economy measurements are
entirely specified in terms of exhaust and greenhouse gasses emissions.
For purposes of the analysis, we therefore assume these EV costs are
entirely new costs rather than increments to pre-existing costs. Here
and in the facility costs 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 “alternative 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 hybrids. Estimated cruising
range for an EV is the range determined according to SAE J1634 (16 CFR
309.22(a)(2)). Consequently, EV manufacturers selling vehicles in the
United States have already been subject for several years to SAE J1634
testing requirements similar to those in the rulemaking. However, for
purposes of the analysis in this ICR we treat the costs of compliance
for manufacturers subject to the rule as new costs  in order to insure
that they are fully considered in this rulemaking. It is not clear from
the cost analysis in the FTC final rule preamble (at 26954-26955) or in
the final rule ICR ((OMB 3084-0094) that the FTC considered the cost of
testing in its analysis. 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 satisfying the FTC labeling
requirements will have its testing data carried over to the model year
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. 

The salient feature of SEA J1634 for cost purposes is that it requires,
similar to a conventional vehicle, the Federal Test Procedure (FTP or
City Test), preceded by vehicle preparation. This is followed by the
Highway Test (HFET); the off-cycle tests (USO6, SCO3, cold FTP) are
optional under EPA’s rule. Furthermore, cruising range determination
requires that the FTP be repeated until the battery system 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”) cycles until that point is reached. Non-labor preparation
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 250
miles. (The cost of the FTP is not incremented to reflect the extra
phase 2 compared to the normal three phase cycle 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 non-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 by 10.3 (the distance of the normal HFET).
These costs total $15,060 to $60,848 per test group/engine family
complying with the label requirements . 

For PHEVs, the EPA test procedure is an extension of the existing test
procedure for hybrid vehicles. Off-cycle tests are already required for
test groups that do not meet the “litmus test”; others would use the
derived 5-cycle adjustment. Hybrid 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 would be conducted in what is denominated as the
“charge sustain” operation. Following this the vehicle will be
recharged  if necessary by running any appropriate test cycle followed
by HFET cycles in “charge depleting” operation, followed by a cycle
in “charge sustain” operation.

For purposes of this cost analysis the charge sustain FTP and HFET
cycles along with potential other cycles mandated by emissions and fuel
economy testing requirements are considered to be continuations of
existing requirements. The cost increment due to this rule consequently
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 cycles.  These together
add an estimated $1,706 to $10,070 in non-labor O&M costs to each test
group/engine family conservatively assuming no carryovers.

The proposed labels in the NPRM included different colors, reflecting
either different technologies or differences in fuel economy 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 already 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 final 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 printing 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 requirements can be
harmonized, the cost of complying with the FTC ‘s and EPA/NHTSA’s
requirements as they apply to alternative fueled vehicles could be
lowered. 

(iii) Facility Capital 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 facility capacity is highly
dependent on manufacturer-specific factors (the costs of capital, the
availability of 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 facility capable of performing 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 years and amortized at 7% interest
compounded monthly. This is likely a conservative assumption since it
does not attempt to account for the excess capacity that exists in
manufacturers’ current test facilities.  We assume that there is no
excess capacity in our analysis.  Note that other features of the EV and
PHEV test cycles, 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 costs (i.e., as the facilities
depreciate they are continually being replaced), another conservative
assumption.  Applied to a low and high estimate of 5 to 8 EV families
and 5 to 8 PHEV families per year, this yields an annualized cost of
$25,278 to $175,649 per year in facility costs.

(iii)  Start-up Costs

	“Startup” costs are one-time costs to implement the new
requirements in the rule beginning with model year 2013.  Startup costs
are accounted as one-time costs that are annualized and amortized or
discounted at an interest rate of 7% over ten years. The startup cost
elements identified in this analysis are for updating information
systems and testing equipment and label redesign.  

The estimate includes the cost of upgrading information systems 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 system
that gets it to EPA and the label.  Both low and high estimates use 4
weeks for four IT staff for analysis and code, and 4 weeks for two IT
staff for testing, at $100 per hour, for each manufacturer. Similarly,
each of these manufacturers is assumed to need new testing equipment
costing $25,000 for 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 system, 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 analysis, EPA is using these two estimates as upper and
lower bounds.  These estimates are then applied to the universe of
separate manufacturer entities subject to the rule.  Many 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 (ICIs) importing nonconforming vehicles
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 by
EPA’s Compliance and Innovative Strategies Division and Laboratory
Operations Division.  Approximately 26 full time employee equivalents
are directly involved in the combined emission and fuel economy
programs; their cost is approximately $2.9 million, including benefits
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 agency that are not performed by EPA employees. 
The cost associated with these persons who work directly on the combined
emission and fuel economy program 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), yielding an estimated total agency cost of $5.44
million. 

	Implementation of the new fuel economy rule will be carried out by
existing staff and by information technology contracts for the Verify
information system.  One-time startup costs including overhead for
implementing the new rule include 300 hours and $12,318 for public
outreach, and $500,000 in contracts without hour allocation for added
computer database system development, for a total of 300 hours and
$512,318; annualized over ten years with 7% depreciation this cost
burden comes to $72,943.  Ongoing agency burden added by the rule is
estimated as 183 hours and $100,000 annually in database management
labor. Combined labor and annual startup plus continuing costs therefore
total 483 hours (startup hours not annualized) and $172,943. Other
ongoing database management, oversight, and certification activities are
part of the fuel economy and emissions program Agency baseline.  All EPA
labor estimates, are based on Office of Personnel Management annual 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 prior to the effective date of the rule,
such as costs of developing the rule and preliminary consultations with
manufacturers on database issues. 

6(d) Estimating the Respondent Universe and Total Burden and Costs

	The relevant respondents or actions to which the above costs and labor
hours apply 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 PHEVs 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 capacity costs; and 4) the number of EV
and PHEV test groups likely to be tested under the modified 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 most relevant
respondent unit for label redesign. Allowing for these relationships,
the best guess is that the rule would apply to 24 manufacturers  and 11
independent commercial importers (ICIs) importing nonconforming vehicles
into the U.S. for sale. The manufacturer list is based on determinations
that are underway for the 2010 Fuel Economy Trends Report (for Trends
Reports see   HYPERLINK "http://www.epa.gov/otaq/fetrends.htm%20" 
http://www.epa.gov/otaq/fetrends.htm  ). The count of ICIs is from a
search for light-duty ICIs listed in the 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
Economy Performance (    HYPERLINK
"http://www.nhtsa.gov/staticfiles/rulemaking/pdf/cafe/CAFE_Performance_R
eport_April_2010.pdf" 
http://www.nhtsa.gov/staticfiles/rulemaking/pdf/cafe/CAFE_Performance_Re
port_April_2010.pdf  , 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 estimates 5 to 8 EV manufacturers and 5 to 8 PHEV manufacturers
in the next three years and a combined 8 to 10 manufacturers needing to
update testing equipment and/or information systems. This is an estimate
based on information of existing, pending, and contemplated 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 families 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 year, leading to testing and facility cost
estimates that conservatively add these together to contemplate 10 to 16
test groups a year. 

6(e) Bottom Line Burden Hours and Cost

	The results of adding these unit and respondent costs to the total
units 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.

(i)  Respondent Tally

RESPONDENTS	35

BURDEN HOURS	8,548

LABOR COST	$525,635

OPERATING COST	$567,348

FACILITY CAPITAL	$210,779

STARTUP CAPITAL	$4,208,679

TOTAL CAP & O&M	$4,986,806

TOTAL COST WITH LABOR	$5,512,441

(ii)  Agency Tally

EMPLOYEES	26

STARTUP 	$72,943

OPERATING	$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
the draft based on the analysis 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 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.     

	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 ICR under Docket ID Number
EPA-HQ-OAR-2009-0865, which is available for online viewing at  
HYPERLINK "http://www.regulations.gov"  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
open from 8:30 a.m. to 4:30 p.m., Monday through Friday, excluding legal
holidays. The telephone number for the Public Reading Room is (202)
566–1744. An electronic version of the public docket is available at  
HYPERLINK "http://www.regulations.gov"  www.regulations.gov .  This site
can be used to submit or view public comments, access the index listing
of the contents of the public docket, and to access those documents in
the public docket that are available electronically.  When in the
system, select “search,” then key in the Docket ID Number identified
above.  Also, you 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 the EPA Docket ID Number EPA-HQ-OAR-2009-0865 and OMB Control
Number 2060-NEW in any correspondence.

TOTAL ANNUAL COST AND HOURS INCREASE

COST BURDEN	 	 	 

 	 	 	Min	Max

O&M: testing and label	$83,828 	$567,348 

Facility Capital	$25,278 	$210,779 

Startup: one-time IT, label redesign, and reg familiarization, 10 yrs 7%
$612,472 	$4,208,679 

Total 

	$721,578 	$4,986,806 

 	 	 	 

HOURS BURDEN	 	 

 	 	 	Min	Max

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 	$5,512,441 

TESTING COSTS (LABOR AND O&M COSTS FOR RUNNING THE TESTS)

Vehicle Type/Test Cycle	Increase In Number of Tests	Increase in Hours

	Min Tests	Min Cost Increase	Max Tests	Max Cost Increase	Min	Max

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

INCREASE IN TEST FACILITIES

 	 	 

Undepreciated capital costs	Minimum	Maximum

EV test distance increase	$154,210	$1,233,683

PHEV test distance increase	$22,977	$246,737

Total	$177,188	$1,480,420

Amortized, 10yrs @ 7 %	$25,278	$210,779

STARTUP COSTS

 	 	 

 Item	Cost

	Minimum	Maximum

Updating Information systems	$768,000	$960,000

Ammeter/stabilizer	$375,000	$600,000

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

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