Document ID: EPA-HQ-OAR-2005-0173-0001
Agency: epa
Document Type: Proposed Rule
Title: SAFETEA-LU High Occupancy Vehicle Facilities Exemption Rule
Posted Date: 2007-05-24T04:00Z

[Federal Register: May 24, 2007 (Volume 72, Number 100)]
[Proposed Rules]               
[Page 29102-29119]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr24my07-19]                         

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

ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 601

[EPA-HQ-OAR-2005-0173; FRL-8317-2]
RIN 2060-AN68

 
SAFETEA-LU High Occupancy Vehicle Facilities Exemption Rule

AGENCY: Environmental Protection Agency (EPA).

ACTION: Notice of proposed rulemaking.

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

SUMMARY: The Safe, Accountable, Flexible, Efficient Transportation 
Equity Act: A Legacy for Users Act, which was signed into law on August 
10, 2005, contains provisions which apply to state High Occupancy 
Vehicle (HOV) facilities. Among other exceptions, SAFETEA-LU Section 
1121, which is codified at 23 United States Code (U.S.C.) 166 now 
allows an exemption from the HOV facility occupancy requirement for 
vehicles certified as ``low emission and energy-efficient.'' As 
directed by the 2005 Transportation Act, EPA must issue regulations for 
certifying vehicles as ``low emission and energy-efficient.'' 
Specifically, this action proposes the requirements for ``low emission 
and energy-efficient'', including procedures for making fuel economy 
comparisons and the requirements for labeling these vehicles. As the 
Department of Transportation (DOT) is responsible for the planning and 
implementation of HOV programs, any changes to HOV programs as a result 
of this action would also be implemented by DOT and enforced by the 
individual states that choose to adopt these requirements. As directed 
by the 2005 Transportation Act, the HOV multiple-occupancy exemption 
for low emission and energy-efficient vehicle expires September 30, 
2009.

DATES: Comments on this Notice of Proposed Rulemaking must be submitted 
on or before July 9, 2007. A public hearing will be held on June 8, 
2007. Requests to present oral testimony must be received on or before 
June 1, 2007. If EPA receives no requests to present oral testimony by 
this date, the hearing will be canceled.

ADDRESSES: Submit your comments, identified by Docket ID No. EPA-HQ-
OAR-2005-0173, by one of the following methods:
     http://www.regulations.gov: Follow the on-line instructions for 

submitting comments.
     E-mail: pugliese.holly@epa.gov.
     Fax: 734-214-4053.
     Mail: EPA-OAR-2005-0173, Environmental Protection Agency, 
2000 Traverwood, Ann Arbor, MI 48105
     Hand Delivery: Docket, EPA/DC, EPA West, Room 3334, 1301 
Constitution Ave., NW., Washington, DC. Such deliveries are only 
accepted during the Docket's normal hours of operation, and special 
arrangements should be made for deliveries of boxed information.
    Instructions: Direct your comments to Docket ID No. EPA-HQ-OAR-
2005-0173. EPA's policy is that all comments received will be included 
in the public docket without change and may be made available online at 
http://www.regulations.gov, including any personal information provided, 

unless the comment includes information claimed to be Confidential 
Business Information (CBI) or other information whose disclosure is 
restricted by statute. Do not submit information that you consider to 
be CBI or otherwise protected through http://www.regulations.gov or e-mail. 

The http://www.regulations.gov Web site is an ``anonymous access'' system, 

which means EPA will not know your identity or contact information 
unless you provide it in the body of your comment. If you send an e-
mail comment directly to EPA without going through http://www.regulations.gov, 

your e-mail address will be automatically captured and included as part 
of the comment that is placed in the public docket and made available 
on the Internet. EPA recommends that you include your name and other 
contact information in the body of your comment if you submit an 
electronic comment or with any disk or CD-ROM you submit. If EPA cannot 
read your comment due to technical difficulties and cannot contact you 
for clarification, EPA may not be able to consider your comment. 
Electronic files should avoid the use of special characters, any form 
of encryption, and be free of any defects or viruses.
    Docket: All documents in the docket are listed in the 
http://www.regulations.gov index. Although listed in the index, some 

information is not publicly available, e.g., CBI or other information 
whose disclosure is restricted by statute. Certain other material, such 
as copyrighted material, will be publicly available only in hard copy. 
Publicly available docket materials are available either electronically 
in http://www.regulations.gov or in hard copy at the Docket, 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.

FOR FURTHER INFORMATION CONTACT: Holly Pugliese, Compliance and 
Innovative Strategies Division, Office of Transportation and Air 
Quality, Environmental Protection Agency, 2000 Traverwood, Ann Arbor, 
MI 48105; telephone number: 734-214-4288; fax number: 734-214-4053; e-
mail address: pugliese.holly@epa.gov.
    Access to Rulemaking Documents Through the Internet: This action is 
available electronically on the date of publication from EPA's Federal 
Register Web site listed below. Electronic versions of this preamble, 
regulatory language, and other documents associated with this proposal 
rule are available from the EPA Office of Transportation and Air 
Quality Web site, listed below, shortly after the rule is signed by the 
Administrator. These services are free of charge, except any cost that 
you already incur for connecting to the Internet. EPA Federal Register 
Web site: http://www.epa.gov/docs/fedrgstr/epa-air/ (either select a 

desired date or use the Search feature).
    EPA Office of Transportation and Air Quality Web site: http://www.epa.gov/otaq/
 (look in What's New or under specific rulemaking 

topic).
    Please note that due to differences between the software used to 
develop the documents and the software into

[[Page 29103]]

which the documents may be downloaded, changes in format, page length, 
etc., may occur.

SUPPLEMENTARY INFORMATION:

I. General Information

A. Does This Action Apply to Me?

    Regulated categories and entities covered by this proposal are 
described in the following table:

----------------------------------------------------------------------------------------------------------------
                                                                                       Examples of potentially
              Category                    NAICS codes a            SIC codes b            regulated parties
----------------------------------------------------------------------------------------------------------------
State governments..................  92 (Public Admin).....  9131 (Exec and          State governments involved
                                                              Legislative Offices     with transportation and/or
                                                              Cmb).                   high occupancy vehicle
                                                                                      facilities.
----------------------------------------------------------------------------------------------------------------
a North American Industry Classification System (NAICS).
b Standard Industrial Classification (SIC) System.

    This list is not intended to be exhaustive, but rather provides a 
guide regarding entities likely to be regulated by this action. To 
determine whether particular activities may be regulated by this 
action, you should carefully examine the proposed regulations. You may 
direct questions regarding the applicability of this action to the 
person listed in FOR FURTHER INFORMATION CONTACT.

B. What Should I Consider as I Prepare My Comments for EPA?

1. Submitting Comments With Confidential Business Information (CBI)
    Commenters who wish to submit proprietary information or CBI for 
consideration should clearly separate such information from other 
comments by (1) labeling proprietary information ``Confidential 
Business Information'' and (2) sending proprietary information directly 
to the contact person listed (see FOR FURTHER INFORMATION CONTACT). Do 
not submit CBI to EPA through the docket, regulations.gov or e-mail. 
Clearly mark the part or all of the information that you claim to be 
CBI. For CBI information in a disk or CD-ROM that you mail to EPA, mark 
the outside of the disk or CD-ROM as CBI and then identify 
electronically within the disk or CD-ROM the specific information that 
is claimed as CBI. In addition to one complete version of the comment 
that includes information claimed as CBI, a copy of the comment that 
does not contain the CBI must be submitted for inclusion in the public 
docket.
    Information covered by 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, the submission may be made available to the 
public without notifying the commenters.
2. Tips for Preparing Your Comments
    When submitting comments, remember to:
     Identify the rulemaking by docket number and other 
identifying information (subject heading, Federal Register date and 
page number).
     Follow directions--The agency may ask you to respond to 
specific questions or organize comments by referencing a Code of 
Federal Regulations (CFR) part or section number.
     Explain why you agree or disagree, suggest alternatives, 
and substitute language for your requested changes.
     Describe any assumptions and provide any technical 
information and/or data that you used.
     If you estimate potential costs or burdens, explain how 
you arrived at your estimate in sufficient detail to allow for it to be 
reproduced.
     Provide specific examples to illustrate your concerns, and 
suggest alternatives.
     Explain your views as clearly as possible, avoiding the 
use of profanity or personal threats.
     Make sure to submit your comments by the comment period 
deadline identified.

Table of Contents

I. Why Is This Action Being Taken?
II. What Are EPA's Proposed Requirements for the Certification of 
Low Emission and Energy-Efficient Vehicles?
    A. How Is EPA Proposing To Determine a Low Emission Vehicle?
    B. How Is EPA Proposing To Determine an Energy-Efficient 
Vehicle?
    1. What Fuel Economy Values Are Being Used To Determine if a 
Vehicle Is Energy-Efficient?
    2. How Is EPA Proposing To Determine a ``Comparable Vehicle''?
    3. What Other Methods Did EPA Consider for Determining a 
``Comparable Vehicle''?
    C. Will All Hybrid Vehicles Qualify for the HOV Facilities 
Exemption?
    D. What Alternative Fuel Vehicles Could Qualify for the HOV 
Facilities Exemption?
    E. How Will EPA Make Available the List of Eligible Vehicles?
    F. What Labeling Requirements Is EPA Proposing for Low Emission 
and Energy-Efficient Vehicles?
    G. What Impacts Are Associated With This Rulemaking?
III. Request for Comments
IV. What Are the Opportunities for Public Participation?
    A. Copies of This Proposal and Other Related Information
    B. Public Hearing
V. What Are the Administrative Requirements for This Proposed Rule?
    A. Executive Order 12866: Regulatory Planning and Review
    B. Paperwork Reduction Act
    C. Regulatory Flexibility Act
    D. Unfunded Mandates Reform Act
    E. Executive Order 13132: Federalism
    F. Executive Order 13175: Consultation and Coordination With 
Indian Tribal Governments
    G. Executive Order 13045: Protection of Children From 
Environmental Health and Safety Risks
    H. Executive Order 13211: Actions That Significantly Affect 
Energy Supply, Distribution, or Use
    I. National Technology Transfer Advancement Act
VI. What Are the Statutory Provisions and Legal Authority for This 
Proposed Rule?

I. Why Is This Action Being Taken?

    On August 10, 2005, President Bush signed into law the Safe, 
Accountable, Flexible, Efficient Transportation Equity Act: A Legacy 
for Users (SAFETEA-LU) (Pub. L. 109-59). In general, SAFETEA-LU builds 
on the Intermodal Surface Transportation Efficiency Act of 1991 (ISTEA) 
and the Transportation Equity Act for the 21st Century (TEA-21) to 
supply funds and improve the programmatic framework for investments 
needed to maintain and grow the U.S. transportation infrastructure. 
SAFETEA-LU specifically covers Federal surface transportation programs 
for highways, highway safety, and transit from 2005 until 2009. The HOV 
facilities provisions of Section 1121 of SAFETEA-LU, which are codified 
at 23 U.S.C. 166, are the subject of this proposal.
    With a number of exceptions described more fully in Section 1121 of 
SAFETEA-LU, vehicles using HOV facilities must have two or more 
occupants. One of those exceptions is contained in 23 U.S.C. 166 and 
provides

[[Page 29104]]

an exemption to this occupancy requirement for ``inherently low 
emission'' vehicles and other `low emission and energy-efficient' 
vehicles. Specifically, SAFETEA-LU added section 166(b)(5)(A) to title 
23 of the U.S.C., which permits states to allow vehicles certified as 
``inherently low emission'' vehicles to be exempted from the HOV 
facility occupancy requirements. ``Inherently low emitting'' vehicles 
are defined in title 40 section 88.311-93 of the Code of Federal 
Regulations (CFR). In addition, 23 U.S.C. 166 allows, but does not 
require, states to include a new occupancy exemption for the use of 
``low emission and energy-efficient'' vehicles that do not meet the 
minimum occupancy requirement in HOV facilities. Section 166(e) of 23 
U.S.C. lays the groundwork for this proposal. Specifically, it directs 
EPA to issue regulations for certifying ``low emission and energy-
efficient vehicles,'' establishing procedures for making fuel economy 
comparisons in order to determine qualifying vehicles, and providing 
requirements for labeling these vehicles. States with HOV facilities 
may optionally adopt this exemption, which expires September 30, 2009. 
This expiration date means that, unless Congress issues a 
reauthorization for the provisions in 23 U.S.C. 166, state programs 
allowing low emission and energy-efficient vehicles that do not meet 
the minimum occupancy requirement to use HOV facilities will no longer 
be federally permitted and low emission and energy-efficient vehicles 
that do not meet the established occupancy requirement will no longer 
be eligible to use HOV facilities.
    According to section 1121(c) of SAFETEA-LU, it is the sense of 
Congress to provide additional incentives (including the use of HOV 
facilities on State and Interstate highways) for the purchase and use 
of hybrid and other fuel efficient vehicle technologies, which have 
been proven to reduce exhaust emissions and decrease fossil fuel 
consumption by the transportation sector.
    EPA believes that this proposed rulemaking appropriately meets the 
requirements of 23 U.S.C. 166 by providing a useful methodology for 
designating vehicles as low emission and energy-efficient, thereby 
furthering the intent of Congress.

II. What Are EPA's Proposed Requirements for the Certification of Low 
Emission and Energy-Efficient Vehicles?

    To fulfill the requirements of 23 U.S.C. 166, a low emission and 
energy-efficient vehicle must meet the definition provided in 23 U.S.C. 
166(f)(3). This definition includes separate components for emissions 
and energy efficiency. The sections below discuss EPA's proposed 
criteria for determining a ``low emission'' and ``energy-efficient'' 
vehicle, based on the statutory definition.

A. How Is EPA Proposing To Determine a Low Emission Vehicle?

    Section 166(f)(3)(A) defines the ``low emission'' component of a 
``low emission and energy-efficient'' vehicle to be a vehicle that has 
been certified by EPA as meeting ``the Tier II emission level 
established in regulations prescribed by the EPA under section 202(i) 
of the Clean Air Act (CAA) for that vehicle's make, model, and model 
year'' (``Tier II'' will hereafter be referred to as ``Tier 2''). The 
Tier 2 emission certification standards phase in over time and by 
vehicle classification. The standards took effect beginning in model 
year 2004 and will be fully implemented for light-duty vehicles and 
light light-duty trucks, up to 6000 pounds (lbs.) gross vehicle weight 
rating (GVWR), in 2007 (40 CFR 86.1811-04(k)). The standards for heavy 
light-duty trucks, 6000 to 8500 lbs. GVWR, will not be fully 
implemented until the 2009 model year. The Tier 2 standards also apply 
to medium-duty passenger vehicles, 8501 to 10,000 lbs. GVWR, but these 
vehicles are not included in this proposal, as vehicles weighing over 
8500 lbs. GVWR are statutorily exempted from federal fuel economy 
requirements until 2011,\1\ as described in 49 U.S.C. 32908(a).
---------------------------------------------------------------------------

    \1\ The National Highway Traffic Safety Administration recently 
finalized a rulemaking, ``Average Fuel Economy Standards for Light 
Trucks Model Years 2008-2011'' (March 29, 2005), that extends fuel 
economy provisions for CAFE for medium-duty passenger vehicles 
weighing 8501-10,000 lbs. GVWR. However, these provisions do not 
take effect until 2011 and thus will not impact this notice. http://www.nhtsa.dot.gov/staticfiles/DOT/NHTSA/Rulemaking/Rules/Associated%20Files/2006FinalRule.pdf
, last viewed 4/5/06.

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

    The Tier 2 emission standards are based on a system of emission 
bins in which light-duty vehicles and light-duty trucks are certified 
in one of eight bins; \2\ Bin 1 represents the cleanest or lowest 
emitting vehicles, and Bin 8 represents the highest emitting vehicles 
of the Tier 2 bins. Thus, some Tier 2 vehicles will be more polluting 
than others. The emission standards for a manufacturer's vehicle fleet 
must comply on average with the Tier 2 Bin 5 level. Thus, the Tier 2 
Bin 5 emission certification levels are the average of the Tier 2 
emission levels with lower bins (i.e. 4, 3, 2, or 1) representing lower 
emitting vehicles and higher bins (i.e. 6, 7, or 8) representing 
vehicles that are more polluting.
---------------------------------------------------------------------------

    \2\ In actuality, there are up to 11 Bins for Tier 2. However, 
Bins 9-11 are only interim phase-in bins that expired at the end of 
the 2006 model year for cars and light trucks.
---------------------------------------------------------------------------

    In addition, while 23 U.S.C. 166 specifically mentions the Federal 
emission certification levels of Tier 2, not all vehicles are certified 
to comply with federal standards. California has separate emission 
standards (along with a number of states that have adopted California's 
emission standards as permitted under Section 177 of the Clean Air Act 
(42 U.S.C. 7507.), which are generally equivalent to the Tier 2 
standards. The current California emission standards are known as Low 
Emission Vehicle-II (LEV-II) standards (Final Regulation Order as Filed 
with the Secretary of State, October 28, 1999).\3\ California-certified 
vehicles were required to begin phasing-in to the LEV-II standards in 
2004.
---------------------------------------------------------------------------

    \3\ http://www.arb.ca.gov/msprog/levprog/levii/levii.htm, last 

viewed 4/5/06.
---------------------------------------------------------------------------

    The LEV-II standards are grouped in the following categories 
(listed in order of least to most stringent): Low emission vehicle 
(LEV), ultra low emission vehicle (ULEV), super low emission vehicle 
(SULEV), partial zero emission vehicle (PZEV), and zero emission 
vehicle (ZEV). There are separate emission standards under each of 
these categories for passenger cars,\4\ up to 8500 lbs. GVWR and 
medium-duty vehicles, 8501-14,000 lbs. GVW. As discussed above, this 
proposal applies only to vehicles with vehicle weight at or below 8500 
lbs. GVWR, so the standards for medium-duty vehicles are not relevant 
to the proposal.
---------------------------------------------------------------------------

    \4\ California passenger cars include light-duty vehicles and 
light-duty trucks, including most sport utility vehicles and most 
large pickup trucks.
---------------------------------------------------------------------------

    Since 23 U.S.C. 166 specifies that vehicles meet ``the Tier II 
emission level'', and since Tier 2 Bin 5 represents the required 
manufacturer fleet average, this action proposes that in order to be 
considered as a ``low emission vehicle,'' a vehicle must comply with 
Tier 2 Bin 5 or better (Bins 5, 4, 3, 2 and 1). For the purpose of this 
proposal, we are considering vehicles certified to the California LEV 
II standards (13 CCR 1961(a)(1)) for passenger cars and light trucks 
(LEV II, ULEV II, SULEV II, PZEV, and ZEV) as meeting the Tier 2 
emission level, because the emission levels required by those standards 
are equivalent to or more stringent than the Tier 2 Bin 5 level (13 CCR 
1961(a)(1)).
    There are several reasons why EPA believes it is appropriate to 
propose that

[[Page 29105]]

a vehicle must meet EPA Tier 2 Bin 5 or better to be designated as 
``low emission.'' First, these standards meet the 23 U.S.C. 166 
requirement that vehicles meet the Tier 2 emission level, which is best 
understood to mean the average level. Second, EPA believes it is 
appropriate to limit the bins to Tier 2 Bin 5 or cleaner, because Bin 5 
represents the required manufacturer fleet average emission standard. 
Any vehicle certified to comply with a less stringent bin would have 
emission levels higher than the required fleet average, and thus is not 
reasonably considered a ``low emission'' vehicle. Third, this proposal 
is generally consistent with a separate statutory requirement in the 
Energy Policy Act of 2005 (hereafter referred to as ``Energy Act'') 
(Pub. L. 109-58, August 8, 2005) which requires a vehicle to meet, at a 
minimum, the Tier 2 Bin 5 emission levels, along with a minimum fuel 
economy, in order to qualify for a motor vehicle tax credit.
    Therefore, based on the rationale described above, this action 
proposes that a ``low emission'' vehicle must be certified to the EPA 
Tier 2 Bin 5 or cleaner, or California LEV-II, ULEV-II, SULEV-II, PZEV, 
and ZEV emission levels for light-duty vehicles and light-duty trucks 
up to 8500 lbs. GVWR.

B. How Is EPA Proposing To Determine an Energy-Efficient Vehicle?

    23 U.S.C. 166 states that a vehicle must be ``energy-efficient'' in 
order to be eligible for exemption from the HOV facility occupancy 
requirements. In particular, section 166(f)(3)(B) states that the term 
``energy-efficient'' vehicle means:
    (1) A vehicle that achieves a 50 percent increase in city fuel 
economy at a minimum or a 25 percent increase in combined city-highway 
fuel economy at a minimum relative to a comparable gasoline-fueled 
vehicle, excluding gasoline-hybrid technologies; or
    (2) An alternative fuel vehicle.
    EPA's proposed methodology for determining a comparable gasoline-
fueled vehicle (excluding hybrid technology), and thus determining 
eligibility for an HOV occupancy exemption based on a fuel economy 
comparison, is described below. In addition, to help ensure HOV 
facility performance would not be degraded as a result of the occupancy 
exemption, 23 U.S.C. 166 provides states with the discretion to require 
more stringent fuel economy criteria (that is, a greater city or city-
highway fuel economy percent increase) for their HOV programs.
    In addition to defining an energy-efficient vehicle based on the 
fuel economy criteria referenced above, 23 U.S.C. 166 allows specified 
alternative fuel vehicles to be considered as energy-efficient. The 
specified alternative fuels that are covered by 23 U.S.C. 166, and 
hence this proposal, are listed in section D below.
1. What Fuel Economy Values Are Being Used To Determine if a Vehicle Is 
Energy-Efficient?
    To ensure that there is no added test burden imposed on 
manufacturers, we are proposing that the fuel economy values to be used 
to determine if a vehicle is energy-efficient are the unadjusted city, 
highway and combined fuel economy values obtained during the fuel 
economy testing required under the Energy Policy and Conservation Act 
of 1975 (EPCA). Under EPCA, EPA is required to determine the test 
methods and calculations for two major fuel economy programs: Corporate 
Average Fuel Economy (CAFE) and consumer-friendly fuel economy 
information (city and highway estimates posted on new vehicle labels). 
The underlying tests specified by EPA are the same for both programs; 
however, the resulting city, highway, and combined fuel economy results 
are different.
    The CAFE values are based on two tests--the city test and the 
highway test. The test results are combined by harmonically averaging 
them, with city weighted 55 percent and highway weighted 45 percent. 
The combined city-highway fuel economy value is then put through a 
series of complex calculations to determine the manufacturers' average 
fuel economy values separately for their entire car and truck fleets.
    The label values for 2007 and earlier models are likewise based on 
the same two city and highway tests. However, the results are adjusted 
downward (the city by 10 percent and the highway by 22 percent), to 
better match a driver's real-world fuel economy experience. For 2008 
and later models, EPA recently finalized new regulations removing those 
adjustment factors and instead requiring data from three additional 
tests to be included in the calculations to bring the estimates even 
closer to drivers' experience. (71 FR 77872, December 27, 2006). The 
fuel economy of 2008 and later models will not be able to be easily 
compared to that of earlier models. Not only would this be more complex 
to administer, it would create the possibility for consumer confusion 
in that a 2008 vehicle may not qualify whereas its identical 2007 
counterpart would (or vice versa). For that reason, it is less 
desirable to use the label values as the basis for determining if a 
vehicle is ``energy efficient'' under the meaning of 23 U.S.C. 166.
    For these reasons, we are therefore proposing that the fuel economy 
values to be used are the unadjusted city, highway and combined values 
used to determine CAFE (referred to hereafter as ``unadjusted'' city, 
highway, and combined fuel economy). These values provide a more 
constant baseline for comparison.
2. How Is EPA Proposing To Determine a ``Comparable Vehicle''?
    The Transportation Act did not specify what criteria EPA should use 
in determining what a ``comparable'' vehicle is. There are considerable 
challenges in determining a ``comparable'' vehicle. There are infinite 
parameters against which a comparison could be made. For instance, 
should the comparison parameters consider similar vehicle weights, 
similar body designs, similar power ratings, similar make/model names, 
similar transmission types, similar drive trains, etc. Moreover, EPA, 
as well as other government agencies, has described, either by 
regulation or by policy, so-called ``comparable'' vehicle classes in 
which vehicles are lumped together based on some sorts of similarities. 
For the purpose of this proposed rule, we considered three different 
methods to look at ``comparable'' vehicles. These are: (1) A hybrid-to-
gasoline vehicle comparison (the method we are proposing in this 
action), (2) a grouping of vehicles into inertia weight classes as 
specified in the 2005 Energy Act, and (3) a comparison to the ``Best in 
Class'', using the comparable classes used by EPA's annual Fuel Economy 
Guide, which is jointly published by EPA and DOE. Further detail can be 
found in the Draft Technical Support Document, which has been placed in 
the docket for this rulemaking (EPA-HQ-OAR-2005-0173).
    In choosing a comparison strategy for this proposal, we considered 
the intent of Congress which, according to 23 U.S.C. 166, was to 
``provide additional incentives (including the use of HOV facilities on 
State and Interstate highways) for the purchase and use of hybrid and 
other fuel efficient vehicles'' (23 U.S.C. 166(c)). We also considered 
the potential for lane degradation caused by allowing more vehicles in 
HOV facilities as determined by the number of vehicles that would 
qualify for the occupancy exemption under the comparison strategy. A 
shorter, more conservative list that highlights truly energy-efficient 
vehicles would help to minimize any additional vehicle volume added to 
HOV facilities.

[[Page 29106]]

    Based on our evaluation of each potential ``comparison vehicle'' 
methodology, we are proposing to compare hybrid-electric vehicles to 
their gasoline counterparts, that is, those of the same or similar make 
and model type, to see if the fuel economy of the hybrid had the 
prescribed percent increase over the gasoline model. This method only 
compares hybrid vehicles to gasoline vehicles, and does not compare any 
gasoline, diesel, or flexible-fuel vehicles to a gasoline vehicle.\5\
---------------------------------------------------------------------------

    \5\ Alternate fuel vehicles are considered ``energy-efficient,'' 
but not subject to this comparison criterion.
---------------------------------------------------------------------------

    This methodology appears to best reflect the intent of Congress 
expressed in 23 U.S.C. 166(c) and in the legislative history of this 
provision.\6\
---------------------------------------------------------------------------

    \6\ See House Report 109-203, pp. 852-53:
    With respect to the determination of fuel economy performance 
requirements for a low emission or energy efficient vehicle not 
meeting occupancy requirements that is propelled by on-board hybrid 
technologies, the conferees have agreed to accept language in the 
Senate-passed legislation. Under this subsection, a low emission or 
energy efficient vehicle propelled by hybrid technology may access 
the HOV lane if the EPA certifies that it has achieved not less than 
a 50-percent increase in city fuel economy or not less than a 25-
percent increase in combined city-highway fuel economy * * *
---------------------------------------------------------------------------

(1) How does EPA propose to develop baseline fuel economy values for 
the hybrid-to-gasoline vehicle comparison methodology?
    In this method, hybrid vehicles would be compared to their gasoline 
namesake counterparts (e.g. the Ford Escape Hybrid would be compared to 
the Ford Escape gasoline model).
    However, there are some hybrids that do not have similar gasoline 
counterparts (e.g. the Honda Insight and the Toyota Prius). For those 
vehicles, EPA is proposing that the comparison be based on gasoline 
vehicles within the same comparable class as used EPA's annual Fuel 
Economy Guide, which is jointly published by EPA and DOE. The median 
unadjusted fuel economy of all the gasoline vehicles in that class 
would be determined, and then compared against the hybrid's fuel 
economy. This comparison would be done separately for each model year. 
For example, the Honda Insight is classified as a ``two-seater.'' For 
each model year, we would identify all of the ``two-seater'' gasoline 
vehicles and determine the median unadjusted city and unadjusted 
combined city-highway fuel economy values. These fuel economy values 
would form the baseline fuel economy values to be used for the Honda 
Insight comparison.
    As fuel economy can vary from year to year, these comparisons must 
be made separately for each model year.
(2) How is the comparison determined, based on a percent increase in 
vehicle fuel economy value?
    We are proposing the following process for making a fuel economy 
comparison using the hybrid-to-gasoline vehicle comparison methodology:
    (1) Determine the list of all hybrid vehicles (separately for each 
model year) emission-certified by EPA prior to September 30, 2009.
    (2) For hybrid vehicles with a similar gasoline counterpart, 
compare the unadjusted city and unadjusted combined city-highway fuel 
economy values to the similar gasoline counterpart.
    (3) For hybrid vehicles with no similar gasoline counterpart, 
calculate the median unadjusted city and/or unadjusted combined city-
highway fuel economy values for all gasoline vehicles in the same EPA 
comparable vehicle class and then compare the hybrid vehicle fuel 
economy values to the median unadjusted city fuel economy value and the 
unadjusted city-highway value for the comparison gasoline vehicle.
    (4) Evaluate the results according to the following criteria:
    [cir] If the candidate hybrid vehicle's city fuel economy is 50 
percent greater than the city fuel economy value of its gasoline 
counterpart then the vehicle would qualify as energy-efficient;
    [cir] If the candidate hybrid vehicle's combined city-highway fuel 
economy is 25 percent greater than the combined city/fuel economy of 
its gasoline counter part, then the vehicle would qualify as energy-
efficient; or
    [cir] Conversely, if the hybrid vehicles do not meet either of 
these required fuel economy thresholds relative to their gasoline 
counterparts, then the vehicle would not qualify as energy-efficient.
    Based on the low emission and energy-efficient vehicle criteria 
using the hybrid-to-gasoline vehicle comparison methodology described 
above, the potential lists of vehicles eligible for an HOV occupancy 
exemption are shown in Tables 1 and 2 below. These lists are based on 
the most recent certification data available to EPA through model year 
2007. This list will be expanded as necessary to include additional 
2007-2010 model year vehicles certified by EPA. It is also important to 
note that an individual state's list may differ from these lists, since 
states have the option to increase the stringency of the designated 
fuel economy percent increase values. States do not have the option to 
increase the emission standard stringency.

            Table 1.--List of Eligible Low Emission and Energy-Efficient Vehicles Using the Hybrid-to-Gasoline Vehicle Comparison Methodology
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                          City FE                Cmb FE
                                                                                    Fuel economy     Tier 2     Unadj     Inc over  Unadj Cmb   Inc over
    MY             Mfr            Vehicle model       Engine family      Tran       guide class        std     city FE    baseline   FE (mpg)   baseline
                                                                                                                (mpg)       (%)                   (%)
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                          CARS
--------------------------------------------------------------------------------------------------------------------------------------------------------
2003.....  Honda.............  Civic Hybrid......  3HNXV01.36CV......  AV......  Compact..........  B5......       52.6         52       56.0         75
2003.....  Honda.............  Civic Hybrid......  3HNXV01.36CV......  M5......  Compact..........  B5......       50.0         59       55.7         74
2003.....  Honda.............  Insight...........  3HNXV01.0PCE......  AV......  Two-seater.......  B5......       62.8        249       66.4         66
2004.....  Honda.............  Civic Hybrid......  4HNXV01.37CP......  AV......  Compact..........  B5......       52.6         50       56.0         75
2004.....  Honda.............  Civic Hybrid......  4HNXV01.37CP......  M5......  Compact..........  B5......       50.0         42       55.7         74
2004.....  Honda.............  Insight...........  4HNXV01.0NCE......  AV......  Two-seater.......  B5......       62.8        214       66.4         66
2004.....  Toyota............  Prius.............  4TYXV01.5MC1......  AV......  Midsize..........  B3......       66.6        200       65.8        106
2005.....  Honda.............  Civic Hybrid......  5HNXV01.3YCV......  AV......  Compact..........  B2......       52.6         50       56.0         41
2005.....  Honda.............  Civic Hybrid......  5HNXV01.3YCV......  M5......  Compact..........  B2......       50.0         42       55.7         40
2005.....  Honda.............  Insight...........  5HNXV01.0XCE......  AV......  Two-seater.......  B5......       62.8        224       66.4        185
2005.....  Honda.............  Accord Hybrid.....  5HNXV03.01B4......  L5......  Midsize..........  B5......       32.2         37      37.48         32
2005.....  Toyota............  Prius.............  5TYXV01.5MC1......  AV......  Midsize..........  B3......       66.6        201       65.8        140

[[Page 29107]]

2006.....  Honda.............  Civic Hybrid......  6HNXV01.3XCP......  AV......  Compact..........  B2......       54.6         62       58.8         51
2006.....  Honda.............  Insight...........  6HNXV01.0VK5......  AV......  Two-seater.......  B5......       62.8        211       66.4        173
2006.....  Toyota............  Prius.............  6TYXV01.5MC1......  AV......  Midsize..........  B3......       66.6        200       65.8        144
2007.....  Honda.............  Accord Hybrid.....  7HNXV03.0ZMC......  L5......  Midsize..........  B2......       31.3         37       36.3         31
2007.....  Honda.............  Civic Hybrid......  7HNXV01.3JCP......  AV......  Compact..........  B2......       54.6         67       58.8         51
2007.....  Toyota............  Camry Hybrid......  7TYXV02.4HC1......  AV......  Midsize..........  B3......       44.2         66       45.9         44
2007.....  Toyota............  Prius.............  7TYXV01.5HC1......  AV......  Midsize..........  B3......       66.6        210       65.8        154
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                         TRUCKS
--------------------------------------------------------------------------------------------------------------------------------------------------------
2005.....  Ford..............  Escape Hybrid 2WD.  5FMXT02.31EE......  AV......  SUV..............  B4......       39.6         65       39.5         46
2005.....  Ford..............  Escape Hybrid 4WD.  5FMXT02.31EE......  AV......  SUV..............  B4......       36.6         78       36.7         57
2006.....  Ford..............  Escape Hybrid 4WD.  6FMXT02.32EE......  AV......  SUV..............  B4......       36.6         59       36.7         41
2006.....  Ford..............  Escape Hybrid FWD.  6FMXT02.32EE......  AV......  SUV..............  B4......       39.6         59       39.5         42
2006.....  Lexus.............  RX 400H 2WD.......  6TYXT03.3CC1......  AV......  SUV..............  B3......       36.8        141       36.2         96
2006.....  Lexus.............  RX 400H 4WD.......  6TYXT03.3CC1......  AV......  SUV..............  B3......       34.3        124       34.3         86
2006.....  Lexus.............  Tribute Hybrid 4WD  6FMXT02.32EE......  AV......  SUV..............  B4......       36.6         59       36.7         41
2006.....  Mercury...........  Mariner Hybrid 4WD  6FMXT02.32EE......  AV......  SUV..............  B4......       36.6         75       36.7         53
2006.....  Toyota............  Highlander Hybrid   6TYXT03.3CC1......  AV......  SUV..............  B3......       36.8         72       36.2         45
                                2WD.
2006.....  Toyota............  Highlander Hybrid   6TYXT03.3CC1......  AV......  SUV..............  B3......       34.3         67       34.3         42
                                4WD.
2007.....  Ford..............  Escape Hybrid 2WD.  7FMXT02.32ZE......  AV......  SUV..............  B3......       35.8         55       36.5         39
2007.....  Ford..............  Escape Hybrid FWD.  7FMXT02.32ZE......  AV......  SUV..............  B3......       41.1         64       40.6         45
2007.....  Lexus.............  RX 400H 2WD.......  7TYXT03.3CC1......  AV......  SUV..............  B3......       35.7        135       35.0         95
2007.....  Lexus.............  RX 400H 4WD.......  7TYXT03.3CC1......  AV......  SUV..............  B3......       34.3        126       34.3         91
2007.....  Mercury...........  Mariner Hybrid 4WD  7FMXT02.32ZE......  AV......  SUV..............  B3......       35.8         55       36.5         39
2007.....  Toyota............  Highlander Hybrid   7TYXT03.3CC1......  AV......  SUV..............  B3......       35.7         67       35.0         40
                                2WD.
2007.....  Toyota............  Highlander Hybrid   7TYXT03.3CC1......  AV......  SUV..............  B3......       34.3         52       34.3         32
                                4WD.
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                        DEDICATED ALTERNATIVE FUEL (CNG) VEHICLES
--------------------------------------------------------------------------------------------------------------------------------------------------------
2003.....  Honda.............  Civic--CNG........  3HNXV01.73W3......              N/A              B2......  DEDICATED ALTERNATIVE FUEL (CNG) VEHICLE.
2004.....  Honda.............  Civic--CNG........  4HNXV01.74W0......              N/A              B2......  DEDICATED ALTERNATIVE FUEL (CNG) VEHICLE.
2005.....  Honda.............  Civic--CNG........  5HNXV01.7BF3......              N/A              B2......  DEDICATED ALTERNATIVE FUEL (CNG) VEHICLE.
2003.....  Ford..............  Crown Victoria--    3FMXV04.6VP5......              N/A              B3......  DEDICATED ALTERNATIVE FUEL (CNG) VEHICLE.
                                CNG.
2004.....  Ford..............  Crown Victoria--    4FMXV04.6VP5......              N/A              B3......  DEDICATED ALTERNATIVE FUEL (CNG) VEHICLE.
                                CNG.
--------------------------------------------------------------------------------------------------------------------------------------------------------
Unless noted as a dedicated alternative fuel vehicle, all of the listed vehicles operate on gasoline, and some may also be flexible-fuel vehicles.
MY = Model Year
Mfr = Manufacturer
Tran = Transmission type
Int Wgt = Inertia Weight Class
Std = Standard
Unadj = Unadjusted
FE = Fuel Economy
Inc = Increase
Cmb = Combined city-highway
B = Bin

    For states that have adopted the California emission certification 
standards, based on the California LEV-II (LEV-II, ULEV-II, SULEV-II, 
and ZEV) emission standards for passenger vehicles and a comparison 
based on the

[[Page 29108]]

hybrid-to-gasoline vehicle comparison methodology or a dedicated 
alternative fuel vehicle, the proposed list of vehicles eligible for 
the HOV occupancy exemption is as follows:

                      Table 2.--List of California-Certified Eligible Low Emission and Energy-Efficient Vehicles Using the Hybrid-to-Vehicle Vehicle Comparison Methodology
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                                                  City FE                Cmb FE
                                                                                                                    Fuel economy guide                  Unadj     Inc over  Unadj Cmb   Inc over
                MY                          Mfr              Vehicle model          Engine family         Tran             class          LEV-II std   city FE    baseline   FE (mpg)   baseline
                                                                                                                                                        (mpg)       (%)                   (%)
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                              CARS
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
2003..............................  Honda..............  Civic Hybrid.........  3HNXV01.36CV........  AV.........  Compact.............  S2.........       52.6         52       56.0         45
2003..............................  Honda..............  Civic Hybrid.........  3HNXV01.36CV........  M5.........  Compact.............  S2.........       50.0         59       55.7         46
2003..............................  Honda..............  Insight..............  3HNXV01.0PCE........  AV.........  Two-Seater..........  S2.........       62.8        249       66.4        201
2004..............................  Honda..............  Civic Hybrid.........  4HNXV01.37CP........  AV.........  Compact.............  S2.........       52.6         50       56.0         41
2004..............................  Honda..............  Civic Hybrid.........  4HNXV01.37CP........  M5.........  Compact.............  S2.........       50.0         42       55.7         40
2004..............................  Honda..............  Insight..............  4HNXV01.0NCE........  AV.........  Two-seater..........  S2.........       62.8        214       66.4        177
2004..............................  Toyota.............  Prius................  4TYXV01.5MC1........  AV.........  Midsize.............  S2.........       66.6        200       65.8        139
2005..............................  Honda..............  Civic Hybrid.........  5HNXV01.3YCV........  AV.........  Midsize.............  S2.........       52.6         50       56.0         41
2005..............................  Honda..............  Civic Hybrid.........  5HNXV01.3YCV........  M5.........  Compact.............  S2.........       50.0         42       55.7         40
2005..............................  Honda..............  Insight..............  5HNXV01.0XCE........  AV.........  Compact.............  S2.........       62.8        224       66.4        185
2005..............................  Honda..............  Accord Hybrid........  5HNXV03.01B4........  L5.........  Midsize.............  S2.........       32.2         37      37.48         32
2005..............................  Toyota.............  Prius................  5TYXV01.5MC1........  AV.........  Two-seater..........  S2.........       66.6        201       65.8        140
2006..............................  Honda..............  Civic Hybrid.........  6HNXV01.3XCP........  AV.........  Midsize.............  S2.........       54.6         62       58.8         51
2006..............................  Honda..............  Insight..............  6HNXV01.0VK5........  AV.........  Compact.............  S2.........       62.8        211       66.4        173
2006..............................  Toyota.............  Prius................  6TYXV01.5MC1........  AV.........  Two-seater..........  S2.........       66.6        200       65.8        144
2007..............................  Honda..............  Accord Hybrid........  7HNXV03.0ZMC........  L5.........  Midsize.............  S2.........       31.3         37       36.3         31
2007..............................  Honda..............  Civic Hybrid.........  7HNXV01.3JCP........  AV.........  Midsize.............  S2.........       54.6         67       58.8         51
2007..............................  Toyota.............  Camry Hybrid.........  7TYXV02.4HC1........  AV.........  Midsize.............  S2.........       44.2         66       45.9         44
2007..............................  Toyota.............  Prius................  7TYXV01.5HC1........  AV.........  Midsize.............  S2.........       66.6        210       65.8        154
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                             TRUCKS
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
2005..............................  Ford...............  Escape Hybrid 2WD....  5FMXT02.31EE........  AV.........  4000................  S2.........       39.6         65       39.5         46
2005..............................  Ford...............  Escape Hybrid 4WD....  5FMXT02.31EE........  AV.........  4000................  S2.........       36.6         78       36.7         57
2006..............................  Ford...............  Escape Hybrid 4WD....  6FMXT02.32EE........  AV.........  SUV.................  S2.........       36.6         59       36.7         41
2006..............................  Ford...............  Escape Hybrid FWD....  6FMXT02.32EE........  AV.........  SUV.................  S2.........       39.6         59       39.5         42
2006..............................  Lexus..............  RX 400H 2WD..........  6TYXT03.3CC1........  AV.........  SUV.................  S2.........       36.8        141       36.2         96
2006..............................  Lexus..............  RX 400H 4WD..........  6TYXT03.3CC1........  AV.........  SUV.................  S2.........       34.3        124       34.3         86
2006..............................  Mazda..............  Tribute Hybrid 4WD...  6FMXT02.32EE........  AV.........  SUV.................  S2.........       36.6         59       36.7         41
2006..............................  Mercury............  Mariner Hybrid 4WD...  6FMXT02.32EE........  AV.........  SUV.................  S2.........       36.6         75       36.7         53
2006..............................  Toyota.............  Highlander Hybrid 2WD  6TYXT03.3CC1........  AV.........  SUV.................  S2.........       36.8         72       36.2         45
2006..............................  Toyota.............  Highlander Hybrid 4WD  6TYXT03.3CC1........  AV.........  SUV.................  S2.........       34.3         67       34.3         42
2007..............................  Ford...............  Escape Hybrid 4WD....  7FMXT02.32ZE........  AV.........  SUV.................  S2.........       35.8         55       36.5         39
2007..............................  Ford...............  Escape Hybrid FWD....  7FMXT02.32ZE........  AV.........  SUV.................  S2.........       41.1         64       40.6         45
2007..............................  Lexus..............  RX 400H 2WD..........  7TYXT03.3CC1........  AV.........  SUV.................  S2.........       35.7        135         35         95
2007..............................  Lexus..............  RX 400H 4WD..........  7TYXT03.3CC1........  AV.........  SUV.................  S2.........       34.3        126       34.3         91
2007..............................  Mercury............  Mariner Hybrid.......  7FMXT02.32ZE........  AV.........  SUV.................  S2.........       35.8         55       36.5         39
2007..............................  Toyota.............  Highlander Hybrid 2WD  7TYXT03.3CC1........  AV.........  SUV.................  S2.........       35.7        103         35         69
2007..............................  Toyota.............  Highlander Hybrid 4WD  7TYXT03.3CC1........  AV.........  SUV.................  S2.........       34.3         52       34.3         32
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                            DEDICATED ALTERNATIVE FUEL (CNG) VEHICLES
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
2004..............................  Honda..............  Civic--CNG...........  4HNXV01.74W2........                 N/A                 S2.........  DEDICATED ALTERNATIVE FUEL (CNG) VEHICLE.
2005..............................  Honda..............  Civic--CNG...........  5HNXV01.7BF4........                 N/A                 S2.........  DEDICATED ALTERNATIVE FUEL (CNG) VEHICLE.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Unless noted as a dedicated alternative fuel vehicle, all of the listed vehicles operate on gasoline, and some may also be flexible-fuel vehicles.
MY = Model Year
Mfr = Manufacturer
Tran = Transmission

[[Page 29109]]

Int Wgt = Inertia Weight Class
Std = Standard
Unadj = Unadjusted
FE = Fuel Economy
Inc = Increase
Cmb = Combined city-highway
S2 = SULEVII
U2 = ULEVII

3. What Other Methods Did EPA Consider for Determining a ``Comparable 
Vehicle''?
(a) Inertia Weight Class Methodology
    EPA also considered using inertia weight classes to determine 
comparable vehicles. This approach would consider all vehicles, 
regardless of fuel type or technology, as potentially energy-efficient, 
rather than just hybrid vehicles, as under the hybrid-to-gasoline 
vehicle comparison method. Thus, any gasoline, diesel, flexible-fuel, 
or hybrid vehicle could be considered energy-efficient, as long as it 
meets the fuel economy criteria referenced above.
    EPA considered this fuel-neutral approach because, while the 
legislative history of SAFETEA-LU indicates an intent by Congress to 
limit this provision to hybrid and alternative fuel vehicles, the 
statutory provisions enacted by Congress do not explicitly limit this 
option to those types of vehicles. Additionally, a fuel-neutral 
approach would encourage fuel efficiency for all types of vehicles, not 
just hybrid vehicles. On the other hand, this approach would increase 
the number of vehicles potentially eligible to use HOV facilities under 
this provision, which could create the potential for substantial HOV 
lane degradation. We are not proposing this method, but request comment 
on it.
    With the inertia weight class methodology, a comparable vehicle 
would be based on vehicle inertia weight classes,\7\ which are 
consistent with those prescribed by the 2005 Energy Act. As the inertia 
weight classes are already defined in the 2005 Energy Act,\8\ with an 
associated baseline city fuel economy value, the definition of a 
comparable vehicle would be based on the average fuel economy of all 
gasoline vehicles within the same inertia weight class for a vehicle 
type (car or truck). A baseline city fuel economy value and a baseline 
combined city-highway fuel economy value would then be used as the 
basis for the fuel economy comparison for each inertia weight class, 
separately for cars and trucks.
---------------------------------------------------------------------------

    \7\ Inertia weight classes are determined by EPA regulations at 
40 CFR 86.129-94. Inertia weight class is the class into which a 
vehicle is grouped for testing purposes based on its loaded vehicle 
weight (nominal empty vehicle weight plus 300 lbs. used for cars and 
for light-duty trucks up through 6000 lbs. GVWR) or adjusted loaded 
vehicle weight (average of nominal empty weight and gross vehicle 
weight rating used for light-duty trucks greater than 6000 lbs. 
GVWR).
    \8\ Sec.  30B.1(b)(2)(B)(i) of Internal Revenue Code, 26 U.S.C.
---------------------------------------------------------------------------

    The baseline city fuel economy value would be the unadjusted CAFE 
city fuel economy as described above in section B.1 for the 2002 model 
year, as specified in the 2005 Energy Act. EPA believes that the 
baseline city fuel economy in the 2005 Energy Act was derived from 
gasoline vehicles only (excluding any gasoline-fueled hybrids) based on 
reverse-calculations using a sales-weighted harmonic average. Further 
detail on how these calculations were performed can be found in the 
Draft Technical Support Document, which has been placed in the docket 
for this rulemaking (EPA-HQ-OAR-2005-0173).
    With regard to the baseline model for comparison using the inertia 
weight class method, we considered it most appropriate to use the model 
year 2002 data as a baseline for fuel economy comparisons for two 
reasons. First, the model year 2002 data was chosen in the 2005 Energy 
Act for alternative motor vehicle tax credit purposes. Second, the EPA 
Fuel Economy Trends Report (EPA420-R-06-011, July 2006) shows that 
overall fuel economy has been relatively constant over the past eight 
model years, except for light truck fuel economy, which has increased 
for two years. This increase is likely due, at least in part, to higher 
light-truck CAFE standards. Overall, fuel economy has been influenced 
by marginal changes in gasoline technology prior to the introduction of 
hybrid technology.\9\ Thus, choosing a 2002 baseline can still be 
considered an appropriate baseline value for vehicle fuel economy 
comparisons, as it was calculated with gasoline vehicles whose overall 
fuel economy performance has remained somewhat constant for many years, 
except for the increase seen in light trucks over the last two years. 
Furthermore, applying one baseline for all model year comparisons would 
reduce time spent generating annual baselines and reduces the need to 
analyze annual sales data, which is often provided later in the model 
year than the date when a baseline would be required. Overall, EPA 
believes this approach would have a benefit of streamlining the 
implementation of the rule without impacting its effectiveness.
---------------------------------------------------------------------------

    \9\ Hellman, Karl, and Robert Heavenrich. ``Light-Duty 
Automotive Technology and Fuel Economy Trends: 1975 Through 2004'' 
(FE Trends). EPA420-R-04-001, 2004.
---------------------------------------------------------------------------

    For the inertia weight class methodology, the following process 
would be used for making a fuel economy comparison:
    (1) Sort the list of all potential vehicles (all model years 
available for sale prior to September 30, 2009) into two categories--
car and light-duty truck.
    (2) Sort both the car list and the light-duty truck list by inertia 
weight classes.
    (3) Compare each vehicle's unadjusted city and unadjusted combined 
city-highway fuel economy values to the baseline values separately for 
cars and trucks.
    (4) Calculate the percent increase in fuel economy for a candidate 
vehicle compared to the baseline for its given inertia weight class.
    (5) Evaluate the results according to the following criteria:
    a. If the percent increase for city fuel economy is greater than 50 
percent over the baseline city fuel economy for the given inertia 
weight class, then the vehicle would qualify as energy-efficient;
    b. If the percent increase for combined city-highway fuel economy 
is greater than 25 percent over the baseline combined city-highway fuel 
economy for the given inertia weight class, then the vehicle would 
qualify as energy-efficient; or
    c. Conversely, if the candidate vehicle's fuel economy does not 
meet these required thresholds when compared to the baseline fuel 
economy for that inertia weight class category of that vehicle, then 
the vehicle would not qualify as energy-efficient.
    Therefore, to qualify under the inertia weight class methodology, a 
candidate vehicle must achieve 25 percent or better city fuel economy 
or 50 percent or better combined city-highway fuel economy than the 
average of all vehicles in its inertia weight class.
    Using this approach, the lists of potentially qualifying vehicles 
include a few models that fail to achieve the level of the CAFE 
standard. Therefore, we

[[Page 29110]]

believe that an additional criterion is necessary to determine if a 
vehicle is fuel efficient, not only on a relative basis, but on an 
absolute basis as well. Thus it is appropriate to add an additional 
comparison criterion, to be used as a ``floor'' to prevent the 
inclusion of vehicles which may be fuel efficient relative to others in 
the same inertia weight class, but which fail to have a combined fuel 
economy that is higher than 25 percent above the applicable CAFE car or 
truck standard. For example, the 2007 CAFE standard for light trucks is 
22.2 miles per gallon (MPG). In order for a light truck to qualify for 
use in HOV facilities using the inertia weight class method, it would 
have to meet a minimum fuel economy of 27.75 MPG in order to qualify. 
We believe that this additional criterion is in keeping with the 
Transportation Act requirement that the combined fuel economy be 25 
percent better than a comparable gasoline vehicle.
    A complete discussion of the inertia weight class methodology, 
including the list of vehicles that would qualify using this approach, 
can be found in the Draft Technical Support Document located in the 
docket for this rulemaking.
    EPA requests comment on using the inertia weight class methodology 
as a means for defining a comparable vehicle.
(b) ``Best in Class'' Methodology
    EPA also considered defining a ``comparable vehicle'' as the 
vehicle with the best fuel economy of a particular class of vehicles as 
defined by the annual Fuel Economy Guide, which is jointly published by 
EPA and DOE. This approach is not a fuel and technology neutral 
approach, meaning that it only considers hybrid vehicles. No gasoline, 
diesel, or flexible-fuel would be considered for an HOV facilities 
exemption using this methodology. The primary benefit of this approach 
is that it would result in the smallest list of eligible vehicles and 
thus have the least potential impact on traffic congestion.
    For the ``best in class'' methodology, the following process would 
be used for making a fuel economy comparison:
    (1) Sort the list of all hybrid vehicles (all model years certified 
for sale prior to September 30, 2009) by the vehicle classes defined in 
the annual Fuel Economy Guide (http://www.fueleconomy.gov/feg/feg2000.htm
) for each model year. The vehicle classes are defined in 

the Fuel Economy Guide as follows: Two-seater, Minicompact Vehicle, 
Subcompact Vehicle, Compact Vehicle, Midsize Vehicle, Large Vehicle, 
Small Station Wagon, Midsize Station Wagon, Large Station Wagon, Small 
Pickup Truck, Standard Pickup Truck, Passenger Van, Cargo Van, Minivan, 
Sport Utility Vehicle (SUV), and Special Purpose Vehicle.
    (2) For each model year and each vehicle class, determine which 
gasoline vehicle has the highest unadjusted city and unadjusted city-
highway combined fuel economy values. For example, for the 2006 model 
year, the compact vehicle with the highest unadjusted city and 
unadjusted combined city-highway fuel economy values is the Toyota 
Corolla. The Toyota Corolla would be the comparison vehicle for any 
2006 hybrid vehicle that is classified as a compact car. In this case, 
the 2006 Honda Civic hybrid is the only hybrid classified as a compact 
car.
    (3) Compare the hybrid vehicle fuel unadjusted economy values to 
the unadjusted city fuel economy value and the unadjusted city-highway 
fuel economy value for the comparison gasoline vehicle.
    (4) Evaluate the results according to the following criteria:
    [cir] If the percent increase for city fuel economy is greater than 
50 percent over the baseline city fuel economy for the given specific 
vehicle, then the vehicle would qualify as energy-efficient;
    [cir] If the percent increase for combined city-highway fuel 
economy is greater than 25 percent over the baseline combined city-
highway fuel economy for the given specific vehicle, then the vehicle 
would qualify as energy-efficient; or
    [cir] Conversely, if the candidate vehicle's fuel economy does not 
meet these required thresholds when compared to the baseline fuel 
economy for that class of vehicle, then the vehicle would not qualify 
as energy-efficient.
    A complete discussion of the ``best in class'' methodology, 
including the list of vehicles that would qualify using this approach, 
can be found in the technical support document located in the docket 
for this rulemaking.
    EPA requests comment on using the ``best in class'' methodology as 
a means for defining a comparable vehicle.

C. Will All Hybrid Vehicles Qualify for the HOV Facilities Exemption?

(1) Hybrids That Do Not Meet the Low Emission Criterion
    As discussed in this proposal, in order for a vehicle to qualify 
for HOV exemptions, that vehicle must be considered both low-emission 
and energy-efficient. As discussed above, EPA is proposing that 
vehicles must be certified to comply with EPA's Tier 2 Bin 5 or cleaner 
emission standards (or the equivalent CARB emissions standards) in 
order to be considered as ``low emission.'' When we apply this 
criterion, there are some hybrid electric vehicles which do not meet 
the Tier 2 Bin 5 or better threshold. The 2003 Toyota Prius would not 
qualify for the HOV exemption because it does not meet the Tier 2 Bin 5 
or better criterion for ``low emission'' as proposed in this action. In 
addition, some versions of the Honda Insight and Honda Civic Hybrid in 
specific model years would not qualify. To distinguish which versions 
of the Insight and Civic Hybrid would qualify from those that would 
not, it is necessary to know the EPA engine family name (also referred 
to as ``test group name''), which is the unique EPA identifier pointing 
to the manufacturer's emission certification for that vehicle. This 
identifier is required to be printed on the emission information label 
located under the hood of every vehicle.
    Table 3 below shows the Honda Civic Hybrid and Insight models which 
would not comply with Tier 2 Bin 5 or better emission standards, along 
with their model year counterparts which are Bin 5 or better and would 
therefore qualify for an HOV facilities exemption. These vehicles would 
not qualify regardless of which fuel efficiency methodology is applied.

Table 3.--Comparison of Engine Families/Test Groups That Would or Would Not Qualify Based on the Tier 2 Bin 5 or
                                                Better Criterion
----------------------------------------------------------------------------------------------------------------
                                                        Engine family/test groups     Engine family/test group
                 Model year and name                       that do not qualify           that would qualify
----------------------------------------------------------------------------------------------------------------
2003 Honda Civic Hybrid.............................                  3HNXV01.34A5                  3HNXV01.36CV
2004 Honda Civic Hybrid.............................                  4HNXV01.35A6                  4HNXV01.37CP
2005 Honda Civic Hybrid.............................                  5HNXV01.33A6                  5HNXV01.3YCV
2003 Honda Insight..................................                  3HNXV01.01A4                  3HNXV01.0PCE

[[Page 29111]]

2004 Honda Insight..................................                  4HNXV01.02A6                  4HNXV01.0NCE
2005 Honda Insight..................................                  5HNXV01.02A6                  5HNXV01.0XCE
2006 Honda Insight..................................                  6HNXV01.0YJV                  6HNXV01.0VK5
----------------------------------------------------------------------------------------------------------------

(2) Hybrids That Would Not Meet the Fuel Efficiency Criteria
    With the hybrid-to-gasoline vehicle comparison methodology, the 
2006 Honda Accord Hybrid would not qualify because its unadjusted city 
and unadjusted city-highway fuel economy values are not above the 25 
percent and 50 percent thresholds when compared to the closest Honda 
Accord gasoline counterpart. In addition, the 2007 Lexus GS450H would 
not qualify either. Because the 2007 Lexus GS450H, which is classified 
as a compact car, does not have an identical gasoline counterpart, EPA 
compared its unadjusted city and unadjusted city-highway fuel economy 
to the median fuel economy values of all gasoline-fueled 2007 compact 
cars. When making this comparison, the GS 450H unadjusted city and 
unadjusted city-highway fuel economy values are not above the 25 
percent and 50 percent thresholds and therefore would not qualify for 
an HOV facilities exemption.

D. What Alternative Fuel Vehicles Could Qualify for the HOV Facilities 
Exemption?

    Alternative fuel vehicles would also qualify as energy-efficient 
vehicles under the HOV provisions in 23 U.S.C. 166. Congress specified 
that an alternative fuel vehicle must be operating on the alternative 
fuel in order to be eligible for an exemption from the HOV facility 
occupancy requirement. According to Section 166(f)(1) of 23 U.S.C. 166, 
the term ``alternative fuel vehicle'' means a vehicle that is operating 
on:
    (1) Methanol, denatured ethanol, or other alcohols;
    (2) A mixture containing at least 85 percent of methanol, denatured 
ethanol, and other alcohols by volume with gasoline or other fuels;
    (3) Natural gas;
    (4) Liquefied petroleum gas;
    (5) Hydrogen;
    (6) Coal derived liquid fuels;
    (7) Fuels (except alcohol) derived from biological materials;
    (8) Electricity (including electricity from solar energy); or
    (9) Any other fuel that the Secretary prescribes by regulation that 
is not substantially petroleum and that would yield substantial energy 
security and environmental benefits, including fuels regulated under 
section 490 of title 10, Code of Federal Regulations (or successor 
regulations).
    There are, however, typically three different types of vehicles 
that might be considered alternative fuel vehicles--flexible-fuel 
vehicles, which can operate on a designated alternative fuel (such as 
85 percent ethanol, 15 percent gasoline, known as E85), on a 
conventional fuel (such as gasoline), or any blend of the two; dual-
fuel vehicles, which have two separate fuel systems allowing them to 
operate on either an alternative fuel (such as compressed natural gas) 
or on a conventional fuel (such as gasoline); or dedicated alternative 
fuel vehicles, which operate solely on a designated alternative fuel.
    Since the statute specifies that the vehicle must be operating on 
the alternative fuel to qualify for the HOV facilities exemption, and 
there is no way to determine that flex-fuel and dual-fuel vehicles are 
actually using the designated alternative fuel while they are being 
operated in an HOV facility, we are proposing to exclude dual-fuel and 
flex-fuel vehicles from the HOV exemption as ``alternative fuel'' 
vehicles. While the computer systems on flex-fuel vehicles are 
calibrated to operate in different manners depending on what type of 
fuel the vehicle is operating, a state official trying to enforce the 
HOV facility exemptions would not be able to visually determine which 
fuel a flexible-fuel or dual-fuel vehicle is operating on at any given 
time. Since current enforcement of HOV requirements relies on vehicle 
labels that can be easily viewed from a distance, verifying that a 
vehicle is operating on a flexible fuel at any given time would require 
a more detailed (and potentially traffic-disrupting) interaction 
between enforcement officials and the driver, such as requiring a 
receipt showing recent proof of purchase of the alternative fuel. It is 
also important to note that the actual usage rate of an alternative 
fuel in a flexible or dual-fuel vehicle is estimated at somewhat less 
than one percent.\10\ Furthermore, while there are around five million 
flexible-fuel vehicles on the road today, the majority of alternative 
fuel refueling stations are located in the midwestern states, while the 
majority of HOV facilities reside in urban areas of Eastern and Western 
states, making it even more unlikely that these vehicles would actually 
be using the alternative fuel while in the HOV facilities. There is a 
national effort underway to increase the availability of alternative 
fueling stations, especially E85, but it is unlikely that the numbers 
will increase significantly before the expiration of these HOV 
exemption provisions.
---------------------------------------------------------------------------

    \10\ National Highway and Traffic Safety Administration. 
``Analysis of the Effects of on Energy Conservation and the 
Environment.'' http://www.nhtsa.gov/cars/rules/rulings/CAFE/alternativefuels/analysis.htm
.

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

    Therefore, to ensure the enforceability of the HOV occupancy 
exemption, this notice proposes to allow only dedicated alternative 
fuel vehicles to be eligible under the ``energy-efficient'' provision, 
provided that they also meet the proposed minimum ``low-emission'' 
criteria of Tier 2 Bin 5 or cleaner, as described in section II.A.1 
above.
    The dedicated alternative fuel vehicles that qualify are show above 
in Tables 1 and 2.

E. How Will EPA Make Available the List of Eligible Vehicles?

    EPA is proposing to annually update the list of vehicles which it 
certifies would be eligible for exemption from the HOV facility 
requirement based on the low emission and energy-efficient 
requirements. This list of eligible vehicles would be provided to the 
Department of Transportation, which is responsible for implementation 
of HOV facilities, including these new HOV exemption provisions. EPA 
would also consider the most appropriate way to make the information 
available to the general public including posting the list on EPA's and 
DOT's web sites and/or publishing a notice in the Federal Register. It 
is important to note that while states have the flexibility to 
incorporate this HOV occupancy exemption for low emission and energy-
efficient vehicles into their HOV facility

[[Page 29112]]

programs, they are not required to offer it. In addition, because 
states have the option to increase the stringency of the designated 
fuel economy percent increase values, an individual state's list may 
differ from the list of eligible vehicles made available by EPA. 
Therefore, a vehicle on EPA's list may not qualify in one or more 
states depending on how DOT and the states choose to implement these 
regulations. Vehicle owners interested in the HOV facilities exemption 
must consult with their state and local transportation authorities to 
ensure that a particular vehicle qualifies in his or her particular 
state.

F. What Labeling Requirements Is EPA Proposing for Low Emission and 
Energy-Efficient Vehicles?

    Under 23 U.S.C. 166(e)(1), EPA must supply requirements for 
labeling low emission and energy-efficient vehicles that are eligible 
for the HOV occupancy exemption. To date, there are 22 states (AZ, CA, 
CO, CT, FL, GA, HI, IL, MA, MD, MN, NC, NJ, NY, NV, OR, PA, TN, TX, UT, 
VA, and WA) in addition to Washington DC with existing HOV facilities.
    Under TEA-21 (Pub. L. 105-178, June 9, 1998), states were 
authorized to temporarily allow single-occupant clean fuel (i.e., 
alternative fuel) vehicles to use HOV facilities. As a result, many 
states already have labels. Label formats include decals and license 
plates, and these labels are used to identify the vehicle as eligible 
for the HOV occupancy exemption.
    An example of California's 2005 decal is depicted in Figure 1. This 
decal is one of four California decals placed on a vehicle and is 
color-coded to represent either an alternative fuel (white) or hybrid 
vehicle (yellow). The sticker has a box where a vehicle identification 
or registration number is located (``XXXXXXXX'' in Figure 1). This 
number links the vehicle to the decal so that decals cannot be 
transferred from vehicle to vehicle. Since a vehicle that does not meet 
the minimum occupancy requirements for use in HOV facilities must have 
a special designation, the decal registration number provides the state 
with a method for tracking how many vehicles have qualified for use in 
HOV facilities. In addition, these existing formats are important for 
each state's ability to enforce the occupancy exemption allowance of 
vehicles in its HOV facilities.
[GRAPHIC] [TIFF OMITTED] TP24MY07.000

    We are proposing that vehicles allowed in the HOV facilities which 
do not meet the minimum occupancy requirement be labeled to identify 
this special occupancy exemption. We are also proposing to allow states 
to use their existing decals or license plates, provided the format 
requires the vehicle to be registered within the state of use. Other 
formats may also be deemed appropriate by the Department of 
Transportation if they meet all labeling requirements.
    We are not proposing to require a single standardized label for a 
number of reasons. First, EPA does not believe that a federally imposed 
label would be appropriate, since 23 U.S.C. 166 does not require states 
to allow low emission and energy-efficient vehicles that do not meet 
the established occupancy requirements in their HOV facilities. Thus, 
the requirements for labeling vehicles need to be limited to locales 
where they are eligible for use in HOV facilities. Moreover, since 23 
U.S.C. 166 allows states to increase the stringency of the fuel economy 
comparison criteria, thereby decreasing the Federal list of eligible 
vehicles to use HOV facilities, states need flexibility to label only 
the eligible vehicles, as opposed to labeling all federally eligible 
vehicles.
    Second, since certain states already have labeling methods, they 
have a developed knowledge and local experience enforcing HOV 
facilities based on their current labeling method. As a result, it 
would be potentially time consuming and costly to require states to 
revise or replace any current labeling method. It would also place an 
unnecessary inconvenience to vehicle owners to have to change labels.
    Third, the most important purpose of the label is to facilitate a 
state's ability to enforce proper use of its HOV facilities, as well as 
monitor any degraded operational performance, by ensuring that only 
eligible low emission and energy-efficient vehicles are permitted in 
that state's HOV facilities. Thus, the format for a label must provide 
flexibility for each state to adopt what it believes is most 
enforceable.
    This notice proposes that states would be responsible for printing 
and/or distributing the labels and, as a result, states could charge a 
registration fee for issuing a label to an owner. In addition, states 
would be responsible for tracking the labels by linking each label to a 
specific vehicle, through a registration number such as that depicted 
on Figure 1 or by the license plate number on

[[Page 29113]]

license plate formats. States would have to include information on the 
label that distinguishes a vehicle as low emission and as energy-
efficient; wording such as that on California's decal (such as ``Clean 
Air Vehicle'') in addition to color coding to distinguish between 
alternative fuel and meeting fuel economy requirements would be deemed 
acceptable. Thus options that states may want to consider for 
designating a vehicle as an eligible low emission and energy-efficient 
vehicle may include, but are not limited to, wording or color coding.
    EPA requests comment on how states with HOV facilities that border 
other states with HOV facilities (e.g. Virginia and Maryland), would 
address implementation and enforcement of the HOV facilities exemption.
    In summary, with respect to vehicle labeling requirements, this 
action proposes that:
     Low emission and energy-efficient vehicles would be 
required to be labeled for the use in HOV facilities with easily 
visible labels for enforcement purposes;
     Labels already implemented by States would be acceptable 
for continued use. Any state with an HOV facility that does not have an 
existing label would be required to develop one based on the formats 
already accepted or create a new format which includes all proposed 
requirements and subject to approval by the Department of 
Transportation;
     Labels have a registration number that would link the 
label to the particular vehicle so that labels could not be 
transferred;
     States are responsible for printing and/or distributing 
the labels;
     Labels easily identify low emission and energy-efficient 
vehicles that are exempted from the HOV occupancy requirements and 
therefore permitted to use HOV facilities, based on factors such as, 
location, color, and wording that designates the vehicle as low 
emission and energy-efficient; and
     States must include an expiration date on their labels.
    We believe it would be most appropriate for states to develop 
labels for purposes of identifying vehicles that qualify to be used in 
HOV facilities. However, we are seeking comment on the potential use of 
a federally-developed labeling program. By way of example, EPA has 
developed a voluntary ``SmartWay'' program that includes a variety of 
ways to reduce greenhouse gas and air pollution across a number of 
different industry sectors. While the program success to date has 
primarily been in the heavy-duty sector, SmartWay criteria have been 
established to designate light-duty vehicles that are environmental 
leaders, in terms of greenhouse gas and air pollution. There are two 
stringency levels for SmartWay vehicles: SmartWay and SmartWay Elite. 
Currently, these designations are used only on EPA's Green Vehicle 
Guide web site, which is targeted at car-buyers. The SmartWay logo used 
is shown in Figure 2 below.
[GRAPHIC] [TIFF OMITTED] TP24MY07.001

    There are currently no ``decals'' or ``stickers'' to place on 
vehicles, nor has EPA established guidelines to car makers to do so. 
However, if EPA were to specify a format, the SmartWay logo could 
potentially serve this purpose.
    EPA seeks comment on the usefulness and feasibility of a permanent 
federal SmartWay label on eligible vehicles as a potential component of 
the HOV labeling requirement.

G. What Impacts Are Associated With This Rulemaking?

    The main impact associated with this rulemaking is the impact 
consistent with the Congressional intent to provide non-financial 
incentives to increase the purchase of hybrids and other fuel efficient 
vehicles (23 U.S.C. 166(c)) as an alternative to higher emitting and 
less fuel efficient vehicles. There is some evidence supporting 
Congress' intent that this incentive would help increase interest in 
purchasing low emission and fuel efficient vehicles. For instance, in 
the State of Virginia, the HOV allowance for hybrid-electric vehicles 
that do not meet the established occupancy requirement proved to 
increase the use of hybrids by threefold from 2003 to 2004.\11\ In 
Virginia, for 2004, an increase of 4300 hybrid vehicles means a 
reduction in carbon dioxide of 430-1720 lbs. per mile. Even after the 
occupancy exemption for low emission and energy-efficient vehicles in 
HOV facilities expires in September 2009, the benefit of introducing 
these vehicles into each state's fleet remain due to the improved fuel 
efficiency. Thus, 23 U.S.C. 166 has predetermined that there are 
benefits to this allowance. There are no foreseen adverse economic or 
air quality impacts associated with providing a comparison methodology 
through this rulemaking, as described below.
---------------------------------------------------------------------------

    \11\ Second Report of the High Occupancy Vehicle Enforcement 
Task Force, January 4, 2005, http://www.vdot.virginia.gov/infoservice/news/newsrelease.asp?ID=NOVA-NR05-02
.

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

1. What Are the Economic Impacts?
    There are no anticipated economic impacts of this proposal as there 
are no associated costs. The HOV exemption for low emission and energy-
efficient vehicles is an optional exemption. 23 U.S.C. 166 is explicit 
that states are not required to implement this exemption, but may 
voluntarily choose to implement this exemption. Thus, there are no 
required costs for any state to implement an HOV exemption. While 
states that voluntarily choose to implement the HOV facility exemption 
are responsible for ensuring that HOV facilities do not become 
overcrowded; enforcing the use of HOV facilities by the exempted 
vehicles; and issuing labels for the vehicles, there are compensation 
mechanisms in place. For instance, states could charge for the label, 
and enforcement provisions can result in collected fines. Moreover, as 
23

[[Page 29114]]

U.S.C. 166 prescribed, states have authority to charge a toll for low 
emission and energy-efficient vehicles that do not meet the occupancy 
requirement in HOV facilities.
2. What Are the Congestion Impacts on HOV Facilities?
    Since there are relatively few HOV facilities that currently allow 
environmentally-friendly vehicles, data on the potential impact of 
hybrid vehicles on HOV facilities is limited.
    The best publicly available information comes from a report by the 
Virginia Department of Transportation's High-Occupancy Vehicle 
Enforcement Task Force dated January 4, 2005. This report illustrates 
that the growth in the number of clean special fuel license plates 
issued in Virginia has increased significantly since hybrid vehicles 
became available. In fall 2003, hybrid vehicles accounted for between 
two percent and 12 percent of the peak-period volumes in the HOV lanes 
in northern Virginia. In the fall of 2004, hybrid vehicles accounted 
for between 11 percent and 17 percent of vehicles in the I-95 HOV lanes 
during the three-hour morning peak-period. The actual number of hybrids 
during the morning peak period ranged from 844 to 1,422 and the 
corresponding total vehicle volumes in the HOV lane ranged from 7,994 
to 8,450. While we do not have more current data, we would expect that 
these percentages have continued to grow over the last two years.
    The Task Force report concluded that, ``The rapid growth in hybrids 
has helped push the I-95 HOV lanes beyond the recommended HOV operating 
capacity, which is 1,500 to 1,800 vehicles per lane, per hour. The Task 
Force recommends that only the cleanest hybrid vehicles be allowed to 
use the HOV lanes and that the current hybrid exemption from HOV 
restrictions expire in 2006, as provided in the current Virginia law.'' 
\12\ Subsequent to the report, Virginia did not let the hybrid 
exemption expire, but instead capped the number of hybrid vehicle 
plates.
---------------------------------------------------------------------------

    \12\ Second Report of the High Occupancy Vehicle Enforcement 
Task Force, January 4, 2005, http://www.vdot.virginia.gov/infoservice/news/newsrelease.asp?ID=NOVA-NR05-02
.

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

    For demonstration purposes, EPA has also estimated the potential 
number of vehicles that are projected to be available for sale 
nationwide in the 2007 model year for each of the comparable vehicle 
methodologies described above (see Table 4 below).

      Table 4.--Potential Number of Eligible Vehicles Based on Nationwide Sales for Each Vehicle Comparison
                                                   Methodology
----------------------------------------------------------------------------------------------------------------
                                                                                                    Hybrid-to-
                                                                    Hybrid-to-    Inertia weight     ``Best in
                           Model year                                Gasoline       comparison        Class''
                                                                    comparison                      comparison
----------------------------------------------------------------------------------------------------------------
2003............................................................           33593           33593            1011
2004............................................................           71334           71334           48513
2005............................................................          105505          238424           79773
2006............................................................          213338          328250          124536
2007............................................................          326245          665157          147583
                                                                 -----------------------------------------------
    Total.......................................................          750015         1336758          401416
----------------------------------------------------------------------------------------------------------------

    These values include actual sales data whenever it is available. In 
cases where actual sales data is unavailable, we used projected sales 
data that are provided to EPA by each manufacturer. In addition, these 
values reflect nationwide sales data. Without state by state vehicle 
registration data, it is not possible to estimate with any accuracy the 
actual vehicles that are used in areas with HOV occupancy exemptions.
3. What Are the Other Impacts?
    There are no associated adverse air quality impacts of this 
proposal. 23 U.S.C. 166 requires EPA to codify a procedure for 
certifying low emission and energy-efficient vehicles and places the 
responsibility on individual states to determine if an HOV exemption 
for low emission and energy-efficient vehicles benefits or impedes the 
air quality goals of that state. As a result, 23 U.S.C. 166 provides 
mechanisms to ensure that such an exemption does not adversely impact 
air quality.
    First, 23 U.S.C. 166 designates the HOV exemption for low emission 
and energy-efficient vehicles as a voluntary program. Thus, a state 
chooses whether this exemption meets its needs or not. Second, 23 
U.S.C. 166 allows states to increase the fuel economy thresholds per 
the energy-efficient designation in order to further minimize the 
number of vehicles which qualify as low emission and energy-efficient, 
thereby managing the number of exempted vehicles using the limited 
excess capacity of HOV facilities. Third, 23 U.S.C. 166 requires states 
that choose to implement this HOV exemption to ensure that the HOV 
facilities are not overburdened by the addition of exempted vehicles 
and provides minimum operating speed guidelines for assessing HOV 
facility degradation. Finally, EPA is proposing regulations to ensure 
that only the ``cleanest'' of the Tier 2 fleet qualify as ``low 
emission'' and the minimum number of truly energy-efficient vehicles 
qualify as ``energy-efficient.'' Therefore, these four safeguards form 
our belief that there would be no adverse environmental impacts due to 
the HOV exemption for low emission and energy-efficient vehicles.

III. Request for Comments

    Although EPA requests comments on all aspects of this proposal, we 
are specifically requesting comment on the following topics proposed in 
this action:
     Eligibility for a low emission vehicle based on Tier 2 Bin 
5 or cleaner for light-duty vehicles, or comparable California LEV-II 
or cleaner for passenger vehicles to comply with the 23 U.S.C. 166 Tier 
2 requirements.
     Use of a hybrid-to-gasoline vehicle comparison methodology 
to determine vehicle eligibility.
     Use of a ``best in class'' methodology to determine 
vehicle eligibility.
     Eligibility for an energy-efficient vehicle based on 
operating on an alternative fuel limited to dedicated alternative fuel 
vehicles only.
     Necessity of a Federal versus state-by-state labeling 
system.
     Proposed labeling requirements, as well as any necessary 
enforcement

[[Page 29115]]

provisions that should be required on a label.
    The following topics were not proposed in this action, but EPA is 
specifically requesting comment on them:
     Use of an inertia weight class methodology to determine 
vehicle eligibility.
     For the inertia weight class methodology, the usefulness 
of requiring an additional criterion that any vehicle which meets the 
low emissions and criteria must also have an unadjusted combined fuel 
economy that is at least 25 percent higher than the applicable car or 
truck CAFE standard.
     The availability of technology or other methodology that 
can demonstrate when a flexible-fuel vehicle is operating on an 
alternative fuel versus a conventional fuel.
     Data indicating the extent to which flexible-fuel vehicles 
are operating on the alternative fuel in an area or region.

IV. What Are the Opportunities for Public Participation?

    We request comment on all aspects of this proposal. This section 
describes how you can participate in this process.
    We are opening a formal comment period by publishing this document. 
We will accept comments for the period indicated under DATES above. If 
EPA receives requests to present oral testimony, a public hearing will 
be scheduled. Information regarding the timing for requesting a public 
hearing is indicated under DATES above.
    Your comments will be most useful if you include appropriate and 
detailed supporting rationale, data, and analysis. If you disagree with 
parts of the proposal, we encourage you to suggest and analyze 
alternate approaches to meeting the goals described in this proposal. 
You should send all comments, except those containing proprietary 
information, to our Docket (see ADDRESSES) before the end of the 
comment period.

A. Copies of This Proposal and Other Related Information

1. Docket
    EPA has established an official public docket for this action under 
Docket ID No. EPA-HQ-OAR-2005-0173. The official public docket consists 
of the documents specifically referenced in this action, any public 
comments received, and other information related to this action. 
Although a part of the official docket, the public docket does not 
include confidential business information (CBI) or other information 
whose disclosure is restricted by statute. The official public docket 
is the collection of materials that is available for public viewing by 
referencing Docket No. EPA-HQ-OAR-2005-0173 (see ADDRESSES).
    You may submit comments electronically, by mail, or through hand 
delivery/courier as described below. To ensure proper receipt by EPA, 
identify the appropriate docket identification number in the subject 
line on the first page of your comment. Please ensure that your 
comments are submitted within the specified comment period. Comments 
received after the close of the comment period will be marked late. EPA 
is not required to consider these late comments. If you wish to submit 
CBI or information that is otherwise protected by statute, please 
follow the instructions in Section IV.C. Do not use EPA Dockets or e-
mail to submit CBI or information protected by statute.
2. Electronic Access
    You may access this Federal Register document electronically 
through the EPA Internet under the Federal Register listings at http://www.epa.gov/fedrgstr/.
 An electronic version of the public docket is 

available through EPA's electronic public docket and comment system, 
EPA Dockets. You may use EPA Dockets at http://www.epa.gov/edocket/ to 

submit or view public comments, access the index listing of the 
contents of the official public docket, and to access those documents 
in the public docket that are available electronically. Once in the 
system, select search, then key in the appropriate docket 
identification number.
    Certain types of information will not be placed in the EPA Dockets. 
Information claimed as CBI and other information whose disclosure is 
restricted by statute, which is not included in the official public 
docket, will not be available for public viewing in EPA's electronic 
public docket. EPA's policy is that copyrighted material will not be 
placed in EPA's electronic public docket but will be available only in 
printed, paper form in the official public docket. To the extent 
feasible, publicly available docket materials will be made available in 
EPA's electronic public docket. When a document is selected from the 
index list in EPA Dockets, the system will identify whether the 
document is available for viewing in EPA's electronic public docket. 
Although not all docket materials may be available electronically, you 
may still access any of the publicly available docket materials through 
the docket facility. EPA intends to work towards providing electronic 
access to all of the publicly available docket materials through EPA's 
electronic public docket.
    For public commenters, it is important to note that EPA's policy is 
that public comments, whether submitted electronically or in paper, 
will be made available for public viewing in EPA's electronic public 
docket as EPA receives them and without change, unless the comment 
contains copyrighted material, CBI, or other information whose 
disclosure is restricted by statute. When EPA identifies a comment 
containing copyrighted material, EPA will provide a reference to that 
material in the version of the comment that is placed in EPA's 
electronic public docket. The entire printed comment, including the 
copyrighted material, will be available in the public docket.
    Public comments submitted on computer disks that are mailed or 
delivered to the docket will be transferred to EPA's electronic public 
docket. Public comments that are mailed or delivered to the Docket will 
be scanned and placed in EPA's electronic public docket. Where 
practical, physical objects will be photographed, and the photograph 
will be placed in EPA's electronic public docket along with a brief 
description written by the docket staff.

B. Public Hearing

    Anyone wishing to present testimony about this proposal at the 
public hearing (see DATES) should notify the general contact person 
(see FOR FURTHER INFORMATION CONTACT) no later than five days prior to 
the day of the hearing. The contact person should be given an estimate 
of the time required for the presentation of testimony and notification 
of any need for audio/visual equipment. Testimony will be scheduled on 
a first come, first served basis. A sign-up sheet will be available at 
the registration table the morning of the hearing for scheduling those 
who have not notified the contact earlier. This testimony will be 
scheduled on a first come, first served basis following the previously 
scheduled testimony.
    EPA requests that approximately 50 copies of the statement or 
material to be presented be brought to the hearing for distribution to 
the audience. In addition, EPA would find it helpful to receive an 
advance copy of any statement or material to be presented at the 
hearing at least one week before the scheduled hearing date. This is to 
give EPA staff adequate time to review such material before the 
hearing. Such advance copies should be submitted to the contact person 
listed.

[[Page 29116]]

    The official records of the hearing will be kept open for 30 days 
following the hearing to allow submission of rebuttal and supplementary 
testimony. All such submissions should be directed to Docket No. EPA-
HQ-OAR-2005-0173 (see ADDRESSES). The hearing will be conducted 
informally, and technical rules of evidence will not apply. A written 
transcript of the hearing will be placed in the above docket for 
review. Anyone desiring to purchase a copy of the transcript should 
make individual arrangements with the court reporter recording the 
proceedings.

V. What Are the Administrative Requirements for This Proposed Rule?

A. Executive Order 12866: Regulatory Planning and Review

    Under Executive Order (EO) 12866 (58 FR 51735, October 4, 1993), 
this action is a ``significant regulatory action.'' Accordingly, EPA 
submitted this action to the Office of Management and Budget (OMB) for 
review under EO 12866 and any changes made in response to OMB 
recommendations have been documented in the docket for this action.

B. Paperwork Reduction Act

    This action does not impose an information collection burden under 
the provisions of the Paperwork Reduction Act, 44 U.S.C. 3501 et seq. 
This action does not require any state to implement the provisions of 
this action. In addition, this action does not require that any 
information is collected, but rather supplies guidance and a comparison 
methodology for generating a list of eligible low emission and energy-
efficient vehicles that are exempted from the HOV occupancy 
requirements.
    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 in 40 CFR are listed in 40 CFR part 9.

C. Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA) generally requires an agency 
to prepare a regulatory flexibility analysis of any rule subject to 
notice and comment rulemaking requirements under the Administrative 
Procedure Act or any other statute 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 organizations, and small governmental jurisdictions.
    For purposes of assessing the impacts of this proposal on small 
entities, small entity is defined as: (1) A small business as defined 
by the Small Business Administration regulations at 13 CFR 121.201; (2) 
a small governmental jurisdiction that is a government of a city, 
county, town, school district or special district with a population of 
less than 50,000; and (3) a small organization that is any not-for-
profit enterprise which is independently owned and operated and is not 
dominant in its field.
    After considering the economic impacts of this proposed rule on 
small entities, EPA certifies that this action would not have a 
significant economic impact on a substantial number of small entities. 
This proposed rule would not impose any requirements on small entities. 
This action proposes regulations for defining low emission and energy-
efficient vehicles and for labeling these vehicles in HOV facilities, 
according to the provisions defined by Congress in SAFETEA-LU. As also 
prescribed by Congress, these definitions and comparison strategies are 
implemented optionally by the states; there is no requirement that a 
state would have to allow low emission and energy-efficient vehicles to 
use the HOV facilities. Furthermore, this action proposes a flexible 
format for labeling vehicles, so as to minimize the burden on states 
with existing HOV programs and labeling strategies. We have therefore 
concluded that this proposed rule would not impact, or would have a 
neutral impact on, burden for all small entities.
    We continue to be interested in the potential impacts of the 
proposed rule on small entities and welcome comments on issues related 
to such impacts.

D. Unfunded Mandates Reform Act

    Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Public 
Law 104-4, establishes requirements for Federal agencies to assess the 
effects of their regulatory actions on state, local, and tribal 
governments and the private sector. Under section 202 of the UMRA, EPA 
generally must prepare a written statement, including a cost-benefit 
analysis, for proposed and final rules with ``Federal mandates'' that 
may result in expenditures to State, local, and tribal governments, in 
the aggregate, or to the private sector, of $100 million or more in any 
one year. Before promulgating an EPA rule for which a written statement 
is needed, section 205 of the UMRA generally requires EPA to identify 
and consider a reasonable number of regulatory alternatives and adopt 
the least costly, most cost-effective or least burdensome alternative 
that achieves the objectives of the rule. The provisions of section 205 
do not apply when they are inconsistent with applicable law. Moreover, 
section 205 allows EPA to adopt an alternative other than the least 
costly, most cost-effective or least burdensome alternative if the 
Administrator publishes with the final rule an explanation why that 
alternative was not adopted. Before EPA establishes any regulatory 
requirements that may significantly or uniquely affect small 
governments, including tribal governments, it must have developed under 
section 203 of the UMRA a small government agency plan. The plan must 
provide for notifying potentially affected small governments, enabling 
officials of affected small governments to have meaningful and timely 
input in the development of EPA regulatory proposals with significant 
Federal intergovernmental mandates, and informing, educating, and 
advising small governments on compliance with the regulatory 
requirements.
    This proposal contains no Federal mandates (under the regulatory 
provisions of Title II of the UMRA) for state, local, or tribal 
governments or the private sector. This action proposes to implement 
mandates specifically and explicitly set forth by the Congress in 
SAFETEA-LU without the exercise of any policy discretion by EPA, and 
the proposal would impose no enforceable duty on any state, local or 
tribal governments or the private sector. This proposal provides 
clarification on determining whether a vehicle is low emission and 
energy-efficient and a comparison strategy for designating a comparable 
vehicle for performing fuel economy percent increase calculations. This 
action was prescribed by Congress,

[[Page 29117]]

and SAFETEA-LU is explicit that states are not required to adopt these 
provisions. Instead, participation in this program would be voluntary 
and would allow voluntary measures to increase the stringency of the 
comparison strategy to meet individual state's needs.
    EPA has determined that this proposal does not contain a Federal 
mandate that may result in expenditures of $100 million or more for 
State, local, and tribal governments, in the aggregate, or the private 
sector in any one year. EPA has determined that this rule contains no 
regulatory requirements that might significantly or uniquely affect 
small governments. These provisions are applicable for states with 
existing HOV facilities and do not require any state to install HOV 
facilities. In addition, the labeling requirements have been proposed 
as flexible in order to avoid causing expenditures on a new method of 
labeling vehicles in states where labeling systems already exists. 
Thus, this proposal is not subject to the requirements of sections 202 
and 205 of the UMRA.

E. Executive Order 13132: Federalism

    Executive Order 13132, entitled ``Federalism'' (64 FR 43255, August 
10, 1999), requires EPA to develop an accountable process to ensure 
``meaningful and timely input by state and local officials in the 
development of regulatory policies that have federalism implications.'' 
``Policies that have federalism implications'' is defined in the 
Executive Order to include regulations that have ``substantial direct 
effects on the states, on the relationship between the national 
government and the states, or on the distribution of power and 
responsibilities among the various levels of government.''
    This proposed rule does not have federalism implications. It will 
not have substantial direct effects on the states, on the relationship 
between the national government and the states, or on the distribution 
of power and responsibilities among the various levels of government, 
as specified in Executive Order 13132. The provisions in this proposed 
rule do not require that a state implement them, and the stringency of 
the provisions can be optionally increased. This proposed rule defines 
requirements that could be used to implement HOV occupancy exemptions 
for low emission and energy-efficient vehicles, but provides ample 
flexibility for states to decide whether or not to implement and/or 
whether or not to increase stringency. Thus, Executive Order 13132 does 
not apply to this proposal. Although section 6 of Executive Order 13132 
does not apply to this proposal, EPA did consult with representatives 
of state and local governments in developing it. The conversations 
resulted in requests for flexibility in labeling and allowing states to 
determine any implementation or enforcement provisions. This action 
would allow both.
    In the spirit of Executive Order 13132, and consistent with EPA 
policy to promote communications between EPA and state and local 
governments, EPA specifically solicits comment on this proposed rule 
from State and local officials.

F. Executive Order 13175: Consultation and Coordination With Indian 
Tribal Governments

    Executive Order 13175, entitled ``Consultation and Coordination 
with Indian Tribal Governments'' (65 FR 67249, November 9, 2000), 
requires EPA to develop an accountable process to ensure ``meaningful 
and timely input by tribal officials in the development of regulatory 
policies that have tribal implications.'' This proposed rule would not 
have tribal implications, as specified in Executive Order 13175. This 
proposed rule would apply to state highways with HOV facilities, and 
involves state governments and/or transportation entities if a state 
chooses to implement the rule. Thus, Executive Order 13175 does not 
apply to this proposed rule.

G. Executive Order 13045: Protection of Children From Environmental 
Health and Safety Risks

    Executive Order 13045: ``Protection of Children from Environmental 
Health Risks and Safety Risks'' (62 FR 19885, April 23, 1997) applies 
to any rule that: (1) Is determined to be ``economically significant'' 
as defined under Executive Order 12866, and (2) concerns an 
environmental health or safety risk that EPA has reason to believe may 
have a disproportionate effect on children. If the regulatory action 
meets both criteria, the Agency must evaluate the environmental health 
or safety effects of the planned rule on children, and explain why the 
planned regulation is preferable to other potentially effective and 
reasonably feasible alternatives considered by the Agency. EPA 
interprets EO 13045 as applying only to those regulatory actions that 
concern health or safety risks, such that the analysis required under 
section 5-501 of the EO has the potential to influence the regulation. 
This proposed rule is not subject to EO 13045 because it does not 
establish an environmental standard intended to mitigate health or 
safety risks.

H. Executive Order 13211: Actions That Significantly Affect Energy 
Supply, Distribution, or Use

    This rule is not a ``significant energy action'' as defined in 
Executive Order 13211, ``Actions Concerning Regulations That 
Significantly Affect Energy Supply, Distribution, or Use'' (66 FR 28355 
(May 22, 2001)) because it is not likely to have a significant adverse 
effect on the supply, distribution, or use of energy. This rule is the 
result of a directive by 23 U.S.C. 166 to codify the certification of 
low emission and energy-efficient vehicles. The sense of Congress is to 
``provide additional incentives (including the use of high occupancy 
vehicle facilities on State and Interstate highways) for the purchase 
and use of hybrid and other fuel efficient vehicles, which have been 
proven to minimize air emissions and decrease consumption of fossil 
fuels'' (Section 1121(c) of 23 U.S.C. 166). This intent demonstrates 
Congress's belief that this rule would not have adverse effects on the 
supply, distribution, or use of energy. In fact, the HOV occupancy 
exemption provision for ``low emission and energy-efficient'' vehicles 
should have a positive effect, reducing the effect on the supply, 
distribution, or use of energy by encouraging the purchase and use of 
fuel efficient vehicles. Thus, we have concluded that this rule is not 
likely to have any adverse energy effects.

I. National Technology Transfer Advancement Act

    Section 12(d) of the National Technology Transfer and Advancement 
Act of 1995 (``NTTAA''), Public Law No. 104-113, 12(d) (15 U.S.C. 272 
note) directs EPA to use voluntary consensus standards in its 
regulatory activities unless to do so would be inconsistent with 
applicable law or otherwise impractical. Voluntary consensus standards 
are technical standards (e.g., materials specifications, test methods, 
sampling procedures, and business practices) that are developed or 
adopted by voluntary consensus standards bodies. The NTTAA directs EPA 
to provide Congress, through OMB, explanations when the Agency decides 
not to use available and applicable voluntary consensus standards. This 
proposed rulemaking does not involve technical standards. Therefore, 
EPA is not considering the use of any voluntary consensus standards.
    EPA welcomes comments on this aspect of the proposed rulemaking 
and, specifically, invites the public to identify potentially-
applicable voluntary consensus standards and to

[[Page 29118]]

explain why such standards should be used in this regulation.

VI. What Are the Statutory Provisions and Legal Authority for This 
Proposed Rule?

    Statutory authority for this action is found in 23 U.S.C. 166. This 
action is being proposed under the administrative and procedural 
provisions of the Administrative Procedures Act, 5 U.S.C. 553.

List of Subjects in 40 CFR Part 601

    Environmental protection, Administrative practice and procedure, 
Fuel economy, Reporting and recordkeeping requirements.

    Dated: May 16, 2007.
Stephen L. Johnson,
Administrator.

    For the reasons set forth in the preamble, title 40 Chapter I of 
the Code of Federal Regulations is proposed to be amended by adding a 
new part 601 as follows:

PART 601--QUALIFICATION CRITERIA FOR LOW EMISSION AND ENERGY-
EFFICIENT VEHICLES

Sec.
601.1 General applicability.
601.2 Definitions.
601.3 Abbreviations.
601.4 Criteria for qualifying as a low emission and energy-efficient 
vehicle.
601.5 Criteria for qualifying as a low emission vehicle.
601.6 Criteria for qualifying as an energy-efficient vehicle.
601.7 Criteria for determining a comparable gasoline-fueled vehicle 
based upon the unadjusted city fuel economy.
601.8 Criteria for determining a comparable gasoline-fueled vehicle 
based upon the unadjusted combined city-highway fuel economy.
601.9 How to determine if a candidate vehicle meets the ``energy-
efficient'' criteria based on fuel economy.
601.10 Certification requirements.
601.11 Labeling requirements for low emission and energy-efficient 
vehicles.

    Authority: 23 U.S.C. 166.

Sec.  601.1  General applicability.

    The provisions of this part are applicable to 2002 and later model 
year vehicles that may qualify for use in high occupancy vehicle 
facilities in states that elect to allow such use. These provisions 
expire on September 30, 2009.

Sec.  601.2  Definitions.

    Any terms defined in 40 CFR parts 86 and 600 and not defined in 
this part shall have the meaning given them in Sec. Sec.  86.1803 and 
600.002 of this chapter.
    Alternative fuel vehicle means a vehicle that is operating on--
    (1) Methanol, denatured ethanol, or other alcohols;
    (2) A mixture containing at least 85 percent of methanol, denatured 
ethanol, and other alcohols by volume with gasoline or other fuels;
    (3) Natural gas;
    (4) Liquefied petroleum gas;
    (5) Hydrogen;
    (6) Coal derived liquid fuels;
    (7) Fuels (except alcohol) derived from biological materials;
    (8) Electricity (including electricity from solar energy); or
    (9) Any other fuel that the Secretary of Transportation prescribes 
by regulation that is not substantially petroleum and that would yield 
substantial energy security and environmental benefits, including fuels 
regulated under section 490 of title 10, Code of Federal Regulations 
(or successor regulations).
    Unadjusted city fuel economy means the model type city fuel economy 
as calculated in 40 CFR 600.207-93.
    Unadjusted combined city-highway fuel economy means the model type 
combined fuel economy as calculated in 40 CFR 600.207-93.

Sec.  601.3  Abbreviations.

    The abbreviations of 40 CFR parts 86 and 600 also apply to this 
part. The abbreviations in this section apply to this part only.
    HOV means High Occupancy Vehicle.

Sec.  601.4  Criteria for qualifying as a low emission and energy-
efficient vehicle.

    In order to meet the criteria for being certified as a low emission 
and energy-efficient vehicle under this part, a vehicle must meet the 
criteria for qualifying as a low emission vehicle under Sec.  601.5 and 
must meet the criteria for qualifying as an energy-efficient vehicle 
under Sec.  601.6. A state that elects to allow low emission and 
energy-efficient vehicles to use HOV facilities may require that a 
vehicle meet a level of comparative percentage increase in fuel economy 
that is greater than the percentages in Sec.  601.6(b) and (c) in order 
to qualify as a low emission and energy-efficient vehicle in that 
state.

Sec.  601.5  Criteria for qualifying as a low emission vehicle.

    Light-duty vehicles and light-duty trucks up to 8500 lbs. GVWR must 
be certified by the U.S. Environmental Protection Agency as meeting 
emission standards that are as or more stringent than the Tier 2 Bin 5 
emission standard as specified in Table S04-1 of 40 CFR 86.1811-04.

Sec.  601.6  Criteria for qualifying as an energy-efficient vehicle.

    Light-duty vehicles and light-duty trucks up to 8500 lbs. GVWR must 
be certified by the U.S. Environmental Protection Agency as meeting the 
criteria of either paragraph (a) or (b) of this section:
    (a) It is an alternative fuel vehicle. This does not include 
flexible-fuel or dual-fuel vehicles.
    (b) It meets one of the unadjusted fuel economy criteria in this 
paragraph:
    (1) The unadjusted city fuel economy of the vehicle must be at 
least 50 percent higher than the city fuel economy of a comparable 
gasoline-fueled vehicle, as determined in Sec.  601.7; or
    (2) The unadjusted combined city-highway fuel economy of the 
vehicle must be at least 25 percent higher than the unadjusted combined 
city-highway fuel economy of a comparable gasoline-fueled vehicle, as 
determined in Sec.  601.8.

Sec.  601.7  Criteria for determining a comparable gasoline-fueled 
vehicle based upon unadjusted city fuel economy.

    (a) For hybrid vehicles with a similar gasoline counterpart (e.g. 
same make/model), the Administrator will compare the unadjusted city 
fuel economy value as determined under 40 CFR 600.207-93 of a candidate 
hybrid vehicle, to the unadjusted city fuel economy value of the 
similar gasoline counterpart.
    (b) For hybrid vehicles with no similar gasoline counterpart, the 
Administrator will determine the candidate vehicle by calculating the 
median unadjusted city fuel economy values for all gasoline vehicles in 
the same comparable vehicle class as defined in EPA's annual Fuel 
Economy Guide, which is jointly published by EPA and DOE. The 
Administrator will then compare the unadjusted city fuel economy value 
of the candidate hybrid vehicle, as determined under 40 CFR 600.207-93, 
to the median unadjusted city fuel economy value for the comparison 
gasoline vehicle in same vehicle class.

Sec.  601.8  Criteria for determining a comparable gasoline-fueled 
vehicle based upon the unadjusted combined city-highway fuel economy.

    (a) For hybrid vehicles with a similar gasoline counterpart (e.g. 
same make/model), the Administrator will compare the unadjusted 
combined city-highway fuel economy value of the candidate hybrid 
vehicle, as determined under 40 CFR 600.207-93, to the unadjusted 
combined city-highway fuel economy value of the similar gasoline 
counterpart.

[[Page 29119]]

    (b) For hybrid vehicles with no similar gasoline counterpart, the 
Administrator will determine the candidate vehicle by calculating the 
median unadjusted combined city-highway fuel economy values for all 
gasoline vehicles in the same comparable vehicle class as used in the 
annual Fuel Economy Guide published jointly by EPA and the Department 
of Energy. The Administrator will then compare the unadjusted combined 
city-highway fuel economy value of the candidate hybrid vehicle, as 
determined under 40 CFR 600.207-93, to the median unadjusted combined 
city-highway fuel economy value for the comparison gasoline vehicle in 
same vehicle class.

Sec.  601.9  How to determine if a candidate vehicle meets the 
``energy-efficient'' criteria based on fuel economy.

    (a) The Administrator will compare the candidate vehicle's 
unadjusted city fuel economy and unadjusted combined city-highway fuel 
economy to the city fuel economy values and combined-city highway fuel 
economy values for the applicable gasoline comparable vehicle as 
described in Sec. Sec.  601.7 and 601.8.
    (b) A candidate vehicle qualifies as energy-efficient if it meets 
either of the following fuel economy criteria:
    (1) The percent increase for the unadjusted city fuel economy is 
greater than 50 percent over the baseline city fuel economy of the 
comparable vehicle; or
    (2) The percent increase for the unadjusted combined city-highway 
fuel economy is greater than 25 percent over the baseline combined 
city-highway fuel economy of the comparable vehicle.

Sec.  601.10  Certification requirements.

    The Administrator will annually certify those vehicles that qualify 
as low emission and energy-efficient vehicles, as determined in Sec.  
601.4 and provide a list of certified vehicles to the Department of 
Transportation.

Sec.  601.11  Labeling requirements for low emission and energy-
efficient vehicles.

    (a) States that elect to allow low emission and energy-efficient 
vehicles to use HOV facilities must label low emission and energy-
efficient vehicles for usage in HOV facilities in a manner that allows 
state enforcement officials to easily identify these vehicles.
    (b) States with existing programs to allow the use of low emission 
and energy-efficient vehicles in HOV facilities may continue to use the 
labels they have designed for use in such programs, as long as they 
meet the other requirements of this section. States without labels must 
develop labels based on existing formats, i.e., decals or license 
plates, and the criteria in Sec.  601.11.
    (c) States are responsible for printing and/or distributing the 
labels and may charge a registration fee for issuing a label to an 
owner.
    (d) Labels must identify the vehicle as low emission and energy-
efficient by such means as specific wording and/or color coding.
    (e) Labels must contain an identifier that is unique to the 
specific vehicle such that they could not be transferred.

[FR Doc. E7-9821 Filed 5-23-07; 8:45 am]

BILLING CODE 6560-50-P