Document ID: EPA-HQ-OAR-2002-0023-0001
Agency: epa
Document Type: Proposed Rule
Title: Motor Vehicle and Engine Compliance Program Fees for: 
Light-Duty Vehicles; Light-Duty Trucks; Heavy-Duty 
Vehicles and Engines; Nonroad Engines and Motorcycles; 
Proposed Rule
Posted Date: 2002-08-07T04:00Z

Wednesday,

August
7,
2002
Part
III
Environmental
Protection
Agency
40
CFR
Parts
85
and
86
Motor
Vehicle
and
Engine
Compliance
Program
Fees
for:
Light­
Duty
Vehicles;
Light­
Duty
Trucks;
Heavy­
Duty
Vehicles
and
Engines;
Nonroad
Engines
and
Motorcycles;
Proposed
Rule
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Federal
Register
/
Vol.
67,
No.
152
/
Wednesday,
August
7,
2002
/
Proposed
Rules
ENVIRONMENTAL
PROTECTION
AGENCY
40
CFR
Parts
85
and
86
[AMS–
FRL–
7250–
1]

RIN
2060–
AJ62
Motor
Vehicle
and
Engine
Compliance
Program
Fees
for:
Light­
Duty
Vehicles;
Light­
Duty
Trucks;
Heavy­
Duty
Vehicles
and
Engines;
Nonroad
Engines;
and
Motorcycles
AGENCY:
Environmental
Protection
Agency.
ACTION:
Notice
of
proposed
rulemaking.

SUMMARY:
Today's
action
proposes
to
update
the
current
Motor
Vehicle
and
Engine
Compliance
Program
(MVECP)
fees
regulation
under
which
fees
are
collected
for
certification
and
compliance
activities
related
to
lightduty
vehicles
and
trucks,
heavy­
duty
highway
vehicles
and
engines,
and
highway
motorcycles.
Today's
action
proposes
to
update
the
fees
regulations
to
reflect
increased
costs
of
administering
the
compliance
programs
already
covered
within
the
existing
MVECP
fee
program.
In
addition,
EPA
is
proposing
to
add
a
fee
program
for
the
nonroad
compliance
programs
that
have
been
implemented
since
the
initial
MVECP
fees
regulation
including
certain
nonroad
compression
ignition,
locomotive,
and
small
spark
ignition
engines.
EPA
is
also
proposing
to
add
a
fee
program
for
other
nonroad
categories
including
recreational
vehicles
(including
snowmobiles,
off­
road
motorcycles
and
all­
terrain
vehicles),
recreational
marine
compression
ignition
engines
and
the
remaining
nonroad
large
spark
ignition
engines
(engines
over
37
kW)
compliance
programs
for
which
emission
standards
have
been
proposed
but
not
yet
finalized.
Also
included
in
this
proposal
are
fees
for
marine
spark
ignition/
inboard
sterndrive
engines;
the
emission
standards
for
these
engines
are
under
development
but
not
yet
proposed.

DATES:
Comments:
Send
written
comments
on
this
document
by
October
19,2002.
Hearings:
We
will
hold
a
public
hearing
on
September
19,
2002.
The
hearing
will
begin
at
10
a.
m.
and
continue
until
all
testimony
has
been
presented.
If
you
want
to
testify
at
the
hearing,
notify
either
contact
person
below
by
September
12,
2002.
See
Section
VII.
A.
and
B.
of
the
SUPPLEMENTARY
INFORMATION
section
of
this
document
for
more
information
about
public
hearings
and
comment
procedures.

ADDRESSES:
Comments:
You
may
send
written
comments
in
paper
form
or
by
e­
mail.
We
must
receive
them
by
the
date
indicated
under
DATES
above.
Send
paper
copies
of
written
comments
(in
duplicate,
if
possible)
to
either
contact
person
listed
below
or
by
e­
mail
to
``
otaqfees@
epa.
gov''.
In
your
correspondence,
refer
to
Docket
A–
2001–
09.
EPA's
air
docket
makes
materials
related
to
this
rulemaking
available
for
review
in
EPA
Air
Docket
No.
A–
2001–
09.
Until
August
26,
2002,
the
docket
is
located
at
The
Air
Docket,
401
M.
Street,
SW.,
Washington,
DC
20460,
and
may
be
viewed
in
room
M1500
between
8
a.
m.
and
5:
30
p.
m.,
Monday
through
Friday.
The
telephone
number
is
(202)
260–
7548
and
the
facsimile
number
is
(202)
260–
4400.
After
August
26,
2002,
the
Air
Docket
will
be
located
at
room
B–
108,
1301
Constitution
Avenue,
NW.,
Washington,
DC
20460.
A
reasonable
fee
may
be
charged
by
EPA
for
copying
docket
material.
Hearings:
We
will
hold
a
public
hearing
at
the
Towsley
Auditorium,
Morris
Lawrence
Building,
Washtenaw
Community
College,
Ann
Arbor,
MI.
See
Section
VII.
A.
and
B.
for
more
information
about
public
hearings
and
comment
procedures.

FOR
FURTHER
INFORMATION
CONTACT:
Lynn
Sohacki,
Certification
and
Compliance
Division,
U.
S.
Environmental
Protection
Agency,
2000
Traverwood,
Ann
Arbor,
Michigan
48105,
Telephone
734–
214–
4851,
Internet
e­
mail
``
sohacki.
lynn@
epa.
gov,
''
or
Trina
D.
Vallion,
734–
214–
4449,
Internet
e­
mail
``
vallion.
trina@
epa.
gov.
''

SUPPLEMENTARY
INFORMATION:

Regulated
Entities
Entities
potentially
regulated
by
this
action
are
those
which
manufacture
or
seek
certification
(``
manufacturer''
or
``
manufacturers'')
of
new
motor
vehicles
and
engines
(including
both
highway
and
nonroad).
The
table
below
shows
the
category,
North
American
Industry
Classification
System
(NAICS)
Codes,
Standard
Industrial
Classification
(SIC)
Codes
and
examples
of
the
regulated
entities:

Category
NAICS
Codes
1
SIC
Codes
2
Examples
of
potentially
regulated
entities
Industry
.................................................................
333111
3523
Farm
Machinery
and
Equipment
Manufacturing.
Industry
.................................................................
333112
3524
Lawn
and
Garden
Tractor
and
Home
Lawn
and
Garden
Equipment
Manufacturing.
Industry
.................................................................
333120
3531
Construction
Machinery
Manufacturing.
Industry
.................................................................
333131
3532
Mining
Machinery
and
Equipment
Manufacturing.
Industry
.................................................................
333132
3533
Oil
&
Gas
Field
Machinery.
Industry
.................................................................
333210
3553
Sawmill
&
Woodworking
Machinery.
Industry
.................................................................
333924
3537
Industrial
Truck,
Tractor,
Trailer,
and
Stacker
Machinery
Manufacturing
Industry
.................................................................
333991
3546
Power
Driven
Handtool
Manufacturing.
Industry
.................................................................
336111
3711
Automotive
and
Light­
Duty
Motor
Vehicle
Manufacturing.
Industry
.................................................................
336120
3711
Heavy
Duty
Truck
Manufacturing.
Industry
.................................................................
336213
3716
Motor
Home
Manufacturing.
Industry
.................................................................
336311
3592
Motor
Vehicle
Gasoline
Engine
and
Engine
Parts
Manufacturing
Industry
.................................................................
336312
3714
Gasoline
Engine
&
Engine
Parts
Manufacturing.
Industry
.................................................................
336991
3751
Motorcycle,
Bicycle,
and
Parts
Manufacturing.
Industry
.................................................................
336211
3711
Motor
Vehicle
Body
Manufacturing.
Industry
.................................................................
333618
3519
Gasoline,
Diesel
&
dual­
fuel
engine
Manufacturing.
Industry
.................................................................
811310
7699
Commercial
&
Industrial
Engine
Repair
and
Maintenance.
Industry
.................................................................
336999
3799
Other
Transportation
Equipment
Manufacturing.
Industry
.................................................................
421110
....................
Independent
Commercial
Importers
of
Vehicles
and
Parts.
Industry
.................................................................
333612
3566
Speed
Changer,
Industrial
High­
speed
Drive
and
Gear
Manufacturing
Industry
.................................................................
333613
3568
Mechanical
Power
Transmission
Equipment
Manufacturing.

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Federal
Register
/
Vol.
67,
No.
152
/
Wednesday,
August
7,
2002
/
Proposed
Rules
1
Nonroad
engines
are
defined
in
40
CFR
89.2.
It
is
a
general
term
which
encompasses
all
the
regulated
subclasses
including,
but
not
limited
to,
both
CI
and
SI
engines
used
in:
farm
and
construction
equipment,
marine
applications,
recreation
applications,
and
locomotives.
2
Manufacturer,
as
used
in
this
NPRM,
means
all
entities
or
individuals
requesting
certification,
including,
but
not
limited
to,
Original
Equipment
Manufacturers,
ICIs,
and
vehicle
or
engine
converters.
Category
NAICS
Codes
1
SIC
Codes
2
Examples
of
potentially
regulated
entities
Industry
.................................................................
333618
3519
Other
Engine
Equipment
Manufacturing.

1
North
American
Industry
Classification
System
(NAICS)
2
Standard
Industrial
Classification
(SIC)
system
code.

This
table
is
not
intended
to
be
exhaustive,
but
rather
provides
a
guide
for
readers
regarding
entities
EPA
is
now
aware
could
potentially
be
regulated
by
this
proposed
action.
Other
types
of
entities
not
listed
in
the
table
could
also
be
regulated.
To
determine
whether
your
product
would
be
regulated
by
this
proposed
action,
you
should
carefully
examine
the
applicability
criteria
in
title
40
of
the
Code
of
Federal
Regulations,
parts
86,
89,
90,
91,
92
and
94;
also
parts
1045,
1048,
and
1051
when
those
Parts
are
finalized.
If
you
have
questions
regarding
the
applicability
of
this
proposed
action
to
a
particular
product,
consult
the
person
listed
in
the
preceding
FOR
FURTHER
INFORMATION
CONTACT
section.

Obtaining
Rulemaking
Documents
Through
the
Internet
The
preamble
and
regulatory
language
of
today's
proposal,
and
the
Motor
Vehicle
and
Engine
Compliance
Program
Cost
Analysis
document
(which
is
an
explanation
how
we
determined
EPA's
costs
to
conduct
the
MVECP
and
the
proposed
fees
to
cover
the
program)
are
also
available
electronically
from
the
EPA
Internet
Web
site.
This
service
is
free
of
charge.
The
official
EPA
version
is
made
available
on
the
day
of
publication
on
the
primary
Web
site
listed
below.
The
EPA
Office
of
Transportation
and
Air
Quality
also
publishes
these
notices
on
the
secondary
Web
site
listed
below.
(1)
http://
www.
epa.
gov/
docs/
fedrgstr/
EPA–
AIR/
(either
select
desired
date
or
use
Search
feature)
(2)
http://
www.
epa.
gov/
OTAQ/
(look
in
``
What's
New''
or
under
the
specific
rulemaking
topic)
Please
note
that
due
to
differences
between
the
software
used
to
develop
the
document
and
the
software
into
which
the
document
may
be
downloaded,
changes
in
format,
page
length,
etc.
may
occur.

Table
of
Contents
I.
Introduction
A.
Overview
B.
What
Programs
Are
Covered
by
the
Fees?
II.
Background
A.
Basis
for
Action
under
the
Clean
Air
Act
and
Other
Legal
Authority
B.
How
Do
EPA's
Compliance
Programs
Work?
C.
How
Does
this
Rulemaking
Affect
the
Proposed
Recreational
Vehicles
Rule
and
Future
Rules?
D.
How
Does
the
Fuel
Economy
Program
Work?
III.
Proposed
Fee
System
A.
What
Agency
Costs
Are
Recoverable
by
Fees?
B.
What
OTAQ
Activities
Are
Not
Included
in
the
Agency's
Proposed
Fee
Program?
C.
How
did
the
Agency
Analyze
the
Costs
of
the
Compliance
Programs?
D.
Proposed
Fee
Schedule
E.
Will
the
Fees
Automatically
Increase
to
Reflect
Future
Inflation?
F.
Comments
on
the
Proposed
Fee
System
IV.
Fee
Collection
and
Transactions
A.
Procedure
for
Paying
Fees
B.
What
is
the
Implementation
Schedule
for
Fees?
C.
What
Happens
to
the
Money
That
Is
Collected
by
the
Fees
Program?
D.
Can
I
Qualify
for
a
Reduced
Fee?
E.
What
Is
the
Refund
Policy?
V.
What
Other
Options
Were
Considered
by
EPA
When
Proposing
this
Rule?
A.
Separate
Fees
for
Other
ICI
Categories
Beyond
Light­
Duty
B.
Start
Updating
Fees
for
Cost
of
Inflation
in
2004
Model
Year
VI.
What
Is
the
Economic
Impact
of
this
Proposed
Rule?
VII.
How
Can
I
Participate
in
the
Rulemaking
Process?
A.
How
to
Make
Comments
and
Use
the
Public
Docket
B.
Public
Hearings
VIII.
What
are
the
Administrative
Requirements
for
this
Proposal?
A.
Executive
Order
12866:
Administrative
Designation
and
Regulatory
Analysis
B.
Regulatory
Flexibility
Act
(RFA),
as
amended
by
the
Small
Business
Regulatory
Enforcement
Fairness
Act
of
1996
(SBREFA),
5
USC
601
et.
seq
C.
Paperwork
Reduction
Act
D.
Unfunded
Mandates
Reform
Act
E.
National
Technology
Transfer
and
Advancement
Act
F.
Executive
Order
13045:
Children's
Health
Protection
G.
Executive
Order
13132:
Federalism
H.
Executive
Order
13211:
Energy
Effects
I.
Executive
Order
13175:
Consultation
and
Coordination
with
Indian
Tribal
Governments
I.
Introduction
A.
Overview
EPA
is
proposing
to
update
the
current
MVECP
fees
regulation
which
assesses
fees
for
the
EPA's
certification
and
compliance
activities
related
to
highway
vehicles
and
engines
and
to
incorporate
new
fees
for
certification
and
compliance
activities
related
to
nonroad
1
engines.
Currently,
fees
are
collected
for
certification
and
compliance
activities
related
to
lightduty
vehicles
and
trucks,
heavy­
duty
highway
vehicles
and
engines,
and
highway
motorcycles.
Today's
action
proposes
to
update
the
fees
regulations
to
reflect
the
increased
costs
of
administering
the
compliance
programs
already
covered
within
the
existing
MVECP
fee
program
and
to
add
a
fee
program
for
the
nonroad
compliance
programs
we
have
implemented
since
the
initial
MVECP
fees
regulation
including
nonroad
compression
ignition,
marine
spark
ignition
outboard/
personal­
water­
craft,
locomotive,
and
small
spark
ignition
(less
than
or
equal
to
19
kW)
engines.
We
are
also
proposing
to
add
a
fee
program
for
recreational
vehicles
(including,
but
not
limited
to,
snowmobiles,
off­
road
motorcycles
and
all
terrain
vehicles),
recreational
marine
compression
ignition
engines
and
large
spark
ignition
nonroad
engines
(over
19
kW)
compliance
programs.
Also
included
in
this
proposal
are
fees
for
marine
spark
ignition/
inboardsterndrive
engines.
Hence,
under
this
new
proposal
all
manufacturers
and
Independent
Commercial
Importers
(ICIs)
of
light­
duty
vehicles
(LDVs),
light­
duty
trucks
(LDTs),
heavy­
duty
vehicles
(HDVs),
heavy­
duty
highway
engines
(HDEs),
nonroad
spark
and
compression
ignition
engines
(NR),
marine
compression
and
spark
ignition
engines
(including
recreational
applications),
locomotives,
highway
and
off­
road
motorcycles
(MCs),
and
recreational
vehicles
would
be
subject
to
fees.
Table
II–
B.
1
below
lists
the
vehicle
and
engine
classes
that
are
affected
by
today's
proposed
action.
A
certificate
of
conformity
is
generally
required
when
a
manufacturer
2
decides
to
market
new
vehicles
or
engines
in
the
United
States
(see
discussion
below
for
complete
discussion
of
when
a
certificate
of
conformity
is
required).

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Vol.
67,
No.
152
/
Wednesday,
August
7,
2002
/
Proposed
Rules
3
Part
C
of
the
CAA,
as
amended,
pertains
to
Clean
Fuel
Vehicles.
4
A
certification
request
is
defined
as
a
manufacturer's
request
for
certification
evidenced
by
the
submission
of
an
application
for
certification,
Engine
System
Information
(ESI)
data
sheet,
or
ICI
Carry­
Over
data
sheet.
Before
issuing
that
certificate,
EPA
must
perform
certain
activities
necessary
to
ensure
compliance
with
regulations
implemented
within
the
Motor
Vehicle
and
Engine
Compliance
Program
(MVECP).
The
MVECP
includes
all
activities
conducted
by
EPA
that
are
associated
with
certification,
fuel
economy,
Selective
Enforcement
Auditing
(SEA),
and
in­
use
compliance
monitoring
and
audits.
Such
MVECP
activities
include:
Providing
certification
assistance
during
the
preproduction
phase;
pre­
certification
confirmatory
testing
of
vehicles;
laboratory
correlation;
certification
compliance
audits
and
investigations;
conducting
fuel
economy
selection,
testing,
and
labeling;
selective
enforcement
audits
(SEA);
providing
manufacturers
and
ICIs
with
CAFE
calculations;
monitoring
of
in­
use
vehicles
and
engines;
monitoring/
data
review
of
mandatory
production
line
(PLT)
and
in­
use
testing;
and
Agencyrun
in­
use
surveillance
and/
or
recall
tests.
In
accordance
with
the
Clean
Air
Act,
as
amended
in
1990
(CAA),
and
the
Independent
Office
of
Appropriations
Act
(IOAA),
EPA
is
authorized
to
collect
fees
for
specific
services
it
provides
to
manufacturers.
Section
217
of
the
CAA
(42
U.
S.
C.
7552)
permits
the
EPA
to
establish
fees
to
recover
all
reasonable
costs
associated
with
(1)
new
vehicle
or
engine
certification
under
section
206(
a)
or
part
C,
3
(2)
new
vehicle
or
engine
compliance
monitoring
and
testing
under
section
206(
b)
or
part
C,
and
(3)
in­
use
vehicle
or
engine
compliance
monitoring
under
section
207(
c)
or
part
C.
Secondly,
the
authority
to
collect
fees
is
also
provided
by
the
IOAA
(31
U.
S.
C.
9701)
which
permits
a
government
agency
to
establish
fees
for
a
service
or
thing
of
value
provided
by
the
agency
to
an
identifiable
recipient.
Finally,
Office
of
Management
and
Budget
(OMB)
Circular
No.
A–
25
Revised,
establishes
Federal
policy
regarding
fees
assessed
for
Government
services
and
for
the
sale
or
use
of
Government
goods
or
resources
and
provides
guidance
for
agency
implementation
of
charges
and
the
deposition
of
collections.
The
MVECP
fees
have
been
in
existence
since
1992.
The
first
fees
regulations
(57
FR
30055)
were
published
on
July
7,
1992,
establishing
MVECP
fees
to
recover
all
reasonable
costs
associated
with
certification
and
compliance
programs
within
the
Office
of
Transportation
and
Air
Quality
(OTAQ),
then
called
Office
of
Mobile
Sources
(OMS).
In
1999,
under
the
Compliance
Assurance
Program
(CAP
2000)
regulations
(64
FR
23906),
the
provisions
for
fees
were
updated
to
reflect
several
changes
in
the
costs
of
the
MVECP.
The
fees
regulations
were
further
modified
by
a
regulatory
amendment
published
on
March
7,
2000
(65
FR
11904).
This
amendment,
which
is
applicable
to
original
equipment
manufacturers
(OEMs)
and
aftermarket
conversion
manufacturers,
allows
a
fee
waiver
for
small
volume
engine
families
of
alternatively
fueled
vehicles
that
are
certified
to
the
Clean­
Fuel
Vehicle
standards
for
model
years
(MY)
2000
through
2003.
Since
the
initial
MVECP
fees
regulation,
EPA
has
incurred
additional
costs
and
will
continue
to
incur
cost
in
supporting
these
current
light­
duty
and
heavy­
duty
compliance
programs
(including
Tier
2
and
new
heavy­
duty
engine
regulations),
and
new
compliance
programs
and
testing
requirements
for
nonroad.
Today's
action
proposes
to
update
the
MVECP
fee
provisions
to
reflect
these
changes.
Manufacturers
receive
certification
and
compliance
services
by
initiating
a
certification
request
and
an
application
for
certification.
4
By
determining
the
EPA
activities
and
associated
costs
within
the
MVECP,
we
calculated
a
fee
for
each
certification
request
type.
The
certification
request
types
are
described
in
more
detail
later
in
this
proposal.
Each
request
for
a
certificate
of
conformity
within
a
certification
request
type
is
potentially
subject
to
an
equal
amount
of
EPA
expenditure
related
to
the
applicable
certification,
fuel
economy,
SEA,
and
in­
use
compliance
monitoring
and
audit
programs,
thus
EPA
believes
it
is
fair
and
equitable
to
calculate
fees
in
a
manner
whereby
the
cost
for
each
certificate
within
a
certification
request
type
is
the
same.
In
summary,
today
we
are
proposing
to
collect
fees
under
the
authority
of
the
IOAA
and
section
217
of
the
CAA
to
ensure
that
the
MVECP
is
self­
sustaining
to
the
extent
possible.
In
essence,
this
proposed
regulation
will
require
those
manufacturers
specially
benefitting
from
the
services
provided
under
the
MVECP
to
bear
the
EPA's
cost
of
administering
the
program
on
their
behalf.

B.
What
Programs
Are
Covered
by
the
Fees?
EPA
has
a
number
of
different
services
it
provides
under
the
MVECP.
Under
the
MVECP,
fees
are
collected
to
recover
the
cost
of
services
associated
with:
(1)
New
vehicle
or
engine
certification;
(2)
new
vehicle
or
engine
compliance
monitoring
(including
selective
enforcement
auditing
(SEA)
and
production
line
testing
(PLT));
(3)
in­
use
vehicle
or
engine
compliance
monitoring
and
testing;
and
(4)
the
fuel
economy
program.
These
services
include:
pre­
production
certification
assistance;
confirmatory
testing
of
vehicles;
laboratory
correlation;
certification
compliance
audits
and
investigations;
conducting
fuel
economy
selection,
testing,
and
labeling;
selective
enforcement
audits
(SEA);
providing
manufacturers
and
ICIs
with
CAFE
´
calculations;
monitoring
of
in­
use
vehicles
and
engines;
monitoring/
data
review
of
mandatory
production
line
and
in­
use
testing;
and
Agency­
run
inuse
surveillance
and/
or
recall
tests.
The
proposed
fees
reflect
the
cost
of
these
activities.
In
addition
to
those
services
just
mentioned,
EPA
also
conducts
activities
for
which
a
fee
is
not
being
proposed
at
this
time.
These
activities
include
regulation
development
and
policy,
emission
factors
determination,
air
quality
assessment
and
analysis,
air
quality
initiatives,
and
support
of
state
inspection
and
maintenance
(I/
M)
programs.
Under
the
currentMVECP
fees
regulation
these
activities
are
not
covered.

II.
Background
A.
Basis
for
Action
Under
the
Clean
Air
Act
and
Other
Legal
Authority
We
are
amending
current
fees
and
setting
new
fees
within
the
MVECP
fees
regulation
under
the
authority
of
section
217
of
the
Clean
Air
Act
(CAA).
EPA
is
authorized
under
section
217
of
the
CAA,
as
amended
by
Public
Law
101–
549,
section
225,
to
establish
fees
for
specific
services
it
provides
to
vehicle
and
engine
manufacturers.
The
CAA
provides
in
pertinent
part:
(a)
Fee
Collection.—
Consistent
with
section
9701
of
title
31,
United
States
Code,
the
Administrator
may
promulgate
(and
from
time
to
time
revise)
regulations
establishing
fees
to
recover
all
reasonable
costs
to
the
Administrator
associated
with—
(1)
New
vehicle
or
engine
certification
under
section
206(
a)
or
part
C,
(2)
New
vehicle
or
engine
compliance
monitoring
and
testing
under
section
206(
b)
or
part
C,
and
(3)
In­
use
vehicle
or
engine
compliance
monitoring
and
testing
under
section
207(
c)
or
part
C;
The
Administrator
may
establish
for
all
foreign
and
domestic
manufacturers
a
fee
schedule
based
on
such
factors
as
the
Administrator
finds
appropriate
and
equitable
and
nondiscriminatory,

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Federal
Register
/
Vol.
67,
No.
152
/
Wednesday,
August
7,
2002
/
Proposed
Rules
5
See
http://
www.
whitehouse.
gov/
omb/
circulars/
a025/
a025.
html
the
text
of
which
is
also
contained
in
the
EPA
Air
Docket
No.
A–
2001–
09.
6
See
57
FR
30055
(July
7,
1992).
7
See
Engine
Manufacturers
Association
v.
EPA,
20
F.
3d
1177
(D.
C.
Cir.
1994).
8
42
U.
S.
C.
7547.
including
the
number
of
vehicles
or
engines
produced
under
a
certificate
of
conformity.
In
the
case
of
heavy­
duty
and
vehicle
manufacturers,
fees
shall
not
exceed
a
reasonable
amount
to
recover
an
appropriate
portion
of
such
reasonable
costs.
EPA
is
also
authorized
under
the
Independent
Offices
Appropriation
Act
of
1952
to
establish
fees
for
Government
services
and
things
of
value
that
it
provides.
This
provision,
originally
designated
as
31
U.
S.
C.
483(
a),
was
codified
into
law
on
September
13,
1982,
at
31
U.
S.
C.
9701.
This
provision
encourages
Federal
regulatory
agencies
to
recover,
to
the
fullest
extent
possible,
costs
provided
to
identifiable
recipients.
The
relevant
text
states:
(a)
It
is
the
sense
of
Congress
that
each
service
or
thing
of
value
provided
by
an
agency
*
*
*
to
a
person
*
*
*
is
to
be
self­
sustaining
to
the
extent
possible.
(b)
The
head
of
an
agency
*
*
*
may
prescribe
regulations
establishing
the
charge
for
a
service
or
thing
of
value
provided
by
the
agency.
Regulations
prescribed
by
the
heads
of
executive
agencies
are
subject
to
policies
prescribed
by
the
President
and
shall
be
uniform
as
practicable.
Each
charge
shall
be—
(1)
Fair;
and
(2)
Based
on—
(A)
Costs
to
the
Government;
(B)
The
value
of
the
service
or
thing
to
the
recipient;
(C)
Public
policy
or
interest
served;
and
(D)
Other
relevant
facts.
EPA
also
intends
to
follow,
and
is
guided
by,
the
Office
of
Management
and
Budget's
Circular
No.
A–
25
(Revised),
5
which
establishes
Federal
policy
regarding
fees
assessed
for
Government
services
and
for
the
sale
or
use
of
Government
goods
or
resources
and
was
issued
under
the
authority
of
the
IOAA.
Included
in
the
Circular's
objectives
are
ensuring
that
each
service
provided
by
an
agency
to
a
specific
recipient
be
self­
sustaining,
and
to
promote
the
efficient
allocation
of
the
Nation's
resources
by
establishing
charges
for
special
benefits
provided
to
a
recipient
that
are
at
least
as
great
as
costs
to
the
Government
of
providing
the
special
benefits.
Subsequent
to
EPA's
initial
rulemaking
that
set
forth
the
fees
for
the
MVECP,
6
the
U.
S.
Court
of
Appeals
for
the
D.
C.
Circuit,
upon
reviewing
EPA's
authority
to
collect
fees
under
the
IOAA
and
section
217,
held
that
for
the
regulated
industry,
a
certificate
of
conformity
is
deemed
a
benefit
specific
to
the
recipient,
for
purposes
of
the
provision
of
the
Independent
Offices
Appropriation
Act
(IOAA);
thus
authorizing
a
federal
agency
to
collect
fees
from
a
beneficiary
of
service
or
thing
of
value
the
federal
agency
provides
in
order
to
make
the
service
self­
sustaining
to
the
extent
possible.
7
The
court
held
that
because
the
Compliance
Program
confers
a
specific,
private
benefit
upon
the
manufacturers,
the
EPA
can
lawfully
recoup
from
them
the
reasonable
cost
of
the
program.
Court
decisions
have
also
provided
guidance
on
the
criteria
to
be
used
in
implementing
fee
schedules
under
the
IOAA
when
user
fees
are
being
charged
for
special
benefits.
See
National
Cable
Television
Ass'n
v.
Federal
Communications
Comm'n,
554
F.
2d
1094
(D.
C.
Cir.
1976);
Electronic
Industries
Association
v.
Federal
Communications
Comm'n,
554
F.
2d
1109
(D.
C.
Cir.
1976);
and
Capital
Cities
Communications,
Inc.
v.
Federal
Communications
Comm'n,
554
F.
2d
1135
(D.
C.
Cir.
1976).
These
decisions
indicate
the
following
factors
are
relevant
in
developing
a
fee
program:
1.
An
agency
may
impose
a
reasonable
charge
on
recipients
for
an
amount
of
work
from
which
the
recipients
benefit.
The
fees
must
be
for
specific
services
to
specific
persons.
2.
The
fees
may
not
exceed
the
cost
to
the
agency
in
rendering
the
service.
3.
An
agency
may
recover
the
full
cost
of
providing
a
service
to
an
identifiable
beneficiary
regardless
of
the
incidental
public
benefits
which
may
flow
from
the
service.
An
agency,
when
it
proposes
a
fee
pursuant
to
the
IOAA
to
recover
special
benefits,
should
also
address
the
following
matters
set
out
in
Electronic
Industries
Ass'n
v.
Federal
Communications
Comm'n,
554
F.
2d
at
1117:
1.
The
agency
must
justify
the
assessment
of
a
fee
by
a
clear
statement
of
the
particular
service
or
benefit
for
which
it
seeks
reimbursement.
2.
The
agency
must
calculate
the
cost
basis
for
each
fee
by:
a.
Allocating
specific
expenses
of
the
cost
basis
of
the
fee
to
the
smallest
practical
unit;
b.
Excluding
expenses
that
serve
an
independent
public
interest;
and
c.
Providing
public
explanation
of
the
specific
expenses
included
in
the
cost
basis
for
a
particular
fee,
and
an
explanation
of
the
criteria
used
to
include
or
exclude
a
particular
item.
3.
The
fee
must
be
set
to
return
the
cost
basis
at
a
rate
that
reasonably
reflects
the
cost
of
the
services
performed
and
valued
conferred
on
the
payor.
As
detailed
in
today's
proposal
and
in
the
Motor
Vehicle
and
Engine
Compliance
Program
Cost
Analysis,
EPA
believes
it
has
fulfilled
all
of
these
aims
in
developing
this
proposal.
EPA
believes
that
all
the
fees
included
in
this
proposal
are
justified
based
on
the
tests
for
fee
recovery
relating
to
special
benefits
applicable
under
IOAA.
In
addition,
EPA
believes
that
CAA
section
217
gives
EPA
additional
support
for
imposing
fees
for
the
programs
specified
in
that
section.
Section
217
authorizes
EPA
to
establish
fees
``[
c]
onsistent''
with
the
IOAA
``
to
recover
all
reasonable
costs
to
the
Administrator
associated''
with
certification,
SEA
testing
and
in­
use
compliance
programs.
This
section
establishes
Congress'
position
that
the
specified
programs
provide
the
type
of
benefit
and
have
the
type
of
costs
that
are
appropriately
recoverable
under
the
IOAA.
In
addition
to
collecting
fees
for
new
highway
vehicles
and
engines,
EPA
believes
section
217
also
authorizes
the
collection
of
fees
for
EPA
certification
and
compliance
activities
related
to
new
nonroad
vehicles
and
engines.
As
noted
above,
section
217
sets
forth
the
authority
for
EPA
to
collect
fees
for:
new
vehicle
or
engine
certification
activities
conducted
under
section
206(
a)
of
the
CAA,
new
vehicle
or
engine
compliance
monitoring
and
testing
under
section
206(
b)
of
the
CAA
(including
such
activities
as
SEA
and
PLT
testing),
and
in­
use
vehicle
or
engine
compliance
monitoring
and
testing
under
section
207(
c)
of
the
CAA.
Section
213
of
the
CAA
8
creates
a
statutory
program
which
mirrors
that
Congress
created
for
the
regulation
of
new
highway
vehicles
and
engines.
The
nonroad
standards
created
under
section
213
are
in
fact
subject
to
the
same
requirements
(e.
g.,
sections
206,
207,
208,
and
209)
and
implemented
in
the
same
manner
(including
certification,
SEA,
and
in­
use
testing)
under
the
same
sections
(as
those
referenced
in
section
217)
as
regulations
for
new
highway
vehicles
and
engines
under
section
202
(with
modifications
to
the
implementing
nonroad
regulations
as
the
Administrator
deems
appropriate).
Therefore,
because
EPA's
certification
and
compliance
activities
related
to
new
nonroad
vehicles
and
engines
are
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Federal
Register
/
Vol.
67,
No.
152
/
Wednesday,
August
7,
2002
/
Proposed
Rules
9
CAA
Sec.
213(
d)
requires
that
the
standards
for
nonroad
engines
or
vehicles
under
Sec.
213
be
enforced
in
the
same
manner
as
standards
prescribed
under
section
202.
As
such,
EPA
applies
the
provisions
of
Sec.
203
to
nonroad
vehicles
and
engines.
10
See
CAA
Sec.
202(
b)(
3).
It
is
also
defined
in
the
applicable
Title
40
regulations
for
the
applicable
class
of
vehicle
or
engine
covered.
pursuant
to
sections
206
and
207
and
because
the
text
of
section
217
authorizes
the
collection
of
fees
for
activities
under
such
sections
without
limiting
it
to
new
highway
vehicles
and
engines,
EPA
believes
collecting
fees
for
new
nonroad
vehicles
and
engines
certification
and
compliance
activities
under
section
217
is
appropriate
as
an
additional
compliance
requirement.
EPA
also
believes
that
the
IOAA
creates
an
additional
and
independent
authority
for
EPA
to
collect
such
fees
due
to
the
same
special
and
unique
benefits
that
manufacturers
of
both
new
highway
and
nonroad
vehicle
and
engine
manufacturers
receive
from
EPA
under
the
certification
and
compliance
services.
Moreover,
by
providing
authority
to
recover
``
all
reasonable
costs
*
*
*
associated''
with
the
programs,
Congress
has
given
EPA
authority
to
impose
fees
on
a
basis
that
can
extend
beyond
the
specific
criteria
used
in
interpreting
the
IOAA.
See
Florida
Power
&
Light
Co.
v.
United
States,
846
F.
2d
765
(DC
Cir.
1988),
cert
denied,
109
S.
Ct.
1952
(1989).
If
any
commenters
believe
that
any
fee
proposed
by
EPA
for
recovery
for
the
programs
identified
in
CAA
section
217
is
not
recoverable
under
the
IOAA,
the
commenters
are
requested
to
discuss
whether,
in
their
view,
the
fees
would
be
recoverable
under
the
``
all
reasonable
costs
associated''
test
found
in
section
217
and
should
do
so
in
light
of
the
court
decision
noted
above.
Additionally,
if
any
commenters
believe
that
any
fee
proposed
by
EPA
for
recovery
is
not
identified
or
authorized
by
section
217,
the
commenters
are
requested
to
identify
which
portions
of
the
fee
program
are
not
identified
or
authorized
and
why
the
provisions
of
the
IOAA
would
not
provide
such
authorization.
As
noted
in
more
detail
in
the
reduced
fee
section
of
today's
preamble,
EPA
also
believes
that
section
217
and
the
IOAA
allow
the
Agency
to
set
fees
for
specific
small
volume
engine
families
and
invites
comments
on
this
as
well.
B.
How
Do
EPA's
Compliance
Programs
Work?

Certification
Section
203(
a)
9
of
the
CAA
requires
that
a
manufacturer
of
new
motor
vehicles
and
new
motor
vehicle
engines
obtain
a
certificate
of
conformity
prior
to
the
distribution
into
commerce,
sale,
or
offering
for
sale,
or
the
introduction,
or
delivery
for
introduction,
into
commerce,
within
the
United
States
of
such
new
motor
vehicles
or
engines.
The
certificate
of
conformity
covers
a
defined
group
of
vehicles
or
engines
and
has
a
specified
duration
referred
to
as
the
model
year
(MY).
``
Model
year''
is
defined
in
the
CAA
10
to
be
the
manufacturer's
annual
production
period
(as
determined
by
the
Administrator)
which
includes
January
1
of
the
calendar
year.
If
the
manufacturer
has
no
annual
production
period,
the
term
``
model
year''
means
the
calendar
year.
For
some
industries,
such
as
the
light
duty
vehicle
industry,
the
model
year
typically
begins
before
the
calendar
year;
for
example,
the
2003
model
year
might
run
from
August
1,
2002
to
July
31,
2003.
For
other
industries
it
is
synonymous
with
the
calendar
year
and
runs
from
January
1
to
December
31.
In
some
cases
a
model
year
may
be
longer
than
twelve
months.
However,
in
all
cases
the
model
year
refers
to
an
annual
production
period.
Consequently
new
certificates
must
be
issued
each
year.
For
marine
vessels
covered
under
the
voluntary
IMO
program,
a
letter
of
compliance
is
issued
instead
of
a
certificate
of
compliance.
For
purposes
of
the
fee
rulemaking,
the
letter
of
compliance
will
be
treated
the
same
as
a
certificate
of
compliance.
In
this
case
a
request
for
certification
shall
mean
a
request
for
the
voluntary
IMO
letter
of
compliance.
Although
such
letters
of
compliance
are
not
a
requirement
under
title
II
of
the
CAA,
EPA
believes
that
it
provides
special
and
unique
benefits
to
the
manufacturers
of
marine
vessels
that
seek
and
receive
EPA
services
in
order
to
receive
letters
of
compliance.
As
explained
above,
EPA
believes
that
the
IOAA
provides
the
basis
by
which
to
collect
fees
for
this
activity.
As
further
discussed
below,
EPA
is
also
considering
and
inviting
comment
on
whether
to
finalize
fees
for
industry
categories
that
may
not
yet
have
final
emission
standards
regulations,
as
part
of
the
overall
final
fees
regulation
promulgated
from
today's
proposal
or
to
issue
such
fees
requirements
at
the
time
the
emission
standards
themselves
become
final.
EPA
anticipates
promulgating
fees
for
marine
vessels
covered
under
the
voluntary
IMO
program
as
part
of
final
fees
regulation
associated
with
today's
proposal.
The
group
of
vehicles
or
engines
covered
by
a
certificate
of
conformity
is
called
either
an
``
engine
family''
or
a
``
test
group''
depending
on
the
applicable
class
of
vehicles
or
engines.
While
the
terminology
changes
between
classes,
the
basic
certification
unit
(or
group)
is
designed
to
accomplish
the
same
purpose.
Only
vehicles
or
engines
which
are
expected
to
exhibit
similar
emission
characteristics
and
deterioration
are
combined
together
into
a
single
group.
Table
II.
B–
1,
below,
summarizes
the
name
of
these
basic
certification
groups,
the
location
of
the
general
certification
and
compliance
program
rules,
and
the
typical
number
of
certificates
which
are
issued
for
each
class
of
vehicles
and
engines
covered
by
this
proposal.
The
number
of
certificates
in
the
following
table
are
projections.
If
there
is
a
certification
program
currently
active
for
the
class,
the
number
of
certificates
are
based
on
latest
actual
numbers.
For
other
industries,
the
number
of
certificates
is
based
on
projections
gathered
from
the
discussions
with
manufacturers
and
information
presented
when
the
Agency
proposed
and/
or
finalized
the
rules
pertaining
to
the
industry.

TABLE
II.
B–
1.—
CLASSES
OF
CERTIFICATES,
THEIR
UNIT,
NUMBER
OF
CERTIFICATES
AND
REGULATIONS
Class
of
vehicles/
engines
Basic
certification
unit
Number
of
certs
Location
or
future
location
of
general
certification
regulations
Light
Duty
Vehicles
&
Trucks
(LD)
....................................
Test
Group
.........................................
411
40
CFR
Part
86,
Subpart
S.
Highway
motorcycles
(MC)
................................................
Engine
Family
.....................................
174
40
CFR
Part
86,
Subpart
E
Heavy­
duty
Highway
Engines
............................................
Engine
Family
.....................................
130
40
CFR
Part
86,
Subpart
A.
Nonroad
CI
Engines
...........................................................
Engine
Family
.....................................
603
40
CFR
Part
89.
Heavy­
duty
Vehicle
Evap
...................................................
Evap
Family
........................................
42
40
CFR
Part
86,
Subpart
M.
Marine
SI
Outboard/
PWC
..................................................
Engine
Family
.....................................
155
40
CFR
Part
91.

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/
Vol.
67,
No.
152
/
Wednesday,
August
7,
2002
/
Proposed
Rules
TABLE
II.
B–
1.—
CLASSES
OF
CERTIFICATES,
THEIR
UNIT,
NUMBER
OF
CERTIFICATES
AND
REGULATIONS—
Continued
Class
of
vehicles/
engines
Basic
certification
unit
Number
of
certs
Location
or
future
location
of
general
certification
regulations
Marine
CI
a
>
37
kW
..........................................................
Engine
Family
.....................................
40
40
CFR
Part
94.
International
Maritime
Organization
b
.................................
Engine
Family
.....................................
9
Small
Nonroad
SI
...............................................................
Engine
Family
.....................................
546
40
CFR
Part
90
Locomotives
&
Locomotive
Engines
..................................
Engine
Family
.....................................
10
40
CFR
Part
92.
Large
Nonroad
SI
(>
19
kW)
c
............................................
Engine
Family
.....................................
50
40
CFR
Part
1048.
Recreational
Marine
CI>
37
kW
c
........................................
Engine
Family
.....................................
25
40
CFR
Part
94.
Marine
SI
Inboard
/Sterndrive
d
..........................................
Engine
Family
.....................................
50
40
CFR
Part
1045.
Recreational
c
(including
Off­
road
MC,
ATV's,
Snowmobiles
Engine
Family
.....................................
100
40
CFR
Part
1051.

(
a
The
rules
for
these
classes
are
finalized
but
not
yet
implemented;
numbers
are
estimates.
(
b
The
International
Maritime
Organization
(IMO)
has
established
procedures
for
obtaining
a
letter
of
compliance
with
the
MARPOL
73/
78
Annex
6
which
have
not
yet
been
ratified
by
the
U.
S.
A.
Manufacturers
of
such
engines
may
voluntarily
comply
with
these
requirements.
EPA
has
agreed
to
issue
a
letter
of
compliance
for
such
manufacturers
who
voluntarily
comply
with
the
MARPOL
73/
78
Annex
6
emission
requirements.
(
c
The
rules
for
these
classes
are
proposed
but
not
yet
finalized;
numbers
are
estimates.
(
d
The
rules
for
these
classes
are
under
development
but
not
yet
finalized;
numbers
are
estimates.

To
obtain
a
certificate,
the
manufacturers
must
perform
the
required
testing
and
fulfill
other
requirements
specified
in
the
applicable
regulations
listed
in
the
above
table.
When
the
manufacturer
has
satisfied
itself
that
it
has
complied
with
all
the
requirements,
it
submits
an
application
for
certification
for
review
by
the
Agency.
EPA
processes
these
applications
and
makes
a
determination
of
conformance
with
the
CAA
and
the
applicable
regulations.
If
the
vehicle
or
engine
satisfies
the
prescribed
emission
standards
and
otherwise
complies
with
the
applicable
provisions
of
the
regulations,
EPA
issues
a
certificate
of
conformity
for
the
group
(e.
g.,
engine
family).
The
certification
process
includes,
but
is
not
limited
to,
review
of
the
application
for
certification,
review
of
the
manufacturer's
durability
and
deterioration
determination,
review
of
emission­
data
for
test
engine
selection,
review
of
the
manufacturer's
justification
that
auxiliary
emission
control
devices
(AECDs)
are
not
defeat
devices,
and
certification
request
processing
and
computer
support.
Other
activities
related
to
the
certification
process
include
auditing
the
applicant's
testing
and
data
collection
procedures,
laboratory
correlation,
and
EPA
confirmatory
testing
and
compliance
inspections
and
investigations
related
to
certification.
The
certification
program
also
covers
ICI
manufacturers
review
and
processing
and
approval
for
final
importation
of
vehicles
and
engines.

SEA
and
PLT
EPA
conducts
new
vehicle
or
engine
compliance
monitoring
in
the
form
of
Agency­
conducted
Selective
Enforcement
Audits
(SEA)
or
manufacturer­
conducted
production
line
testing
(PLT)
programs.
The
purpose
of
these
programs
is
to
assure
that
the
vehicles
that
are
actually
being
produced
comply
with
the
emission
standards.
The
certification
portion
of
the
MVEPC
demonstrates
that
the
vehicles
are
designed
to
pass
the
standards
for
the
vehicles'
useful
life
through
testing
of
pre­
production
prototype
vehicles
or
engines.
The
SEA
or
PLT
testing
also
serves
as
some
additional
proof
of
in­
use
compliance
for
certain
programs
(where
in­
use
testing
is
more
difficult)
by
addressing
the
prototype
to
production
effects
on
emissions.
SEA
activities
include
the
selection
and
testing
of
vehicles
and
engines
off
the
assembly
line
at
various
production
plants
around
the
world
to
determine
compliance
with
emission
standards.
PLT
programs
require
the
manufacturer
(rather
than
EPA)
to
test
a
percentage
of
engines
as
they
leave
the
production
line.
In
either
case,
if
a
substantial
number
of
vehicles
or
engines
fail
to
meet
the
emission
standards
the
manufacturer
could
be
required
to
cease
production
of
the
failing
vehicles
until
the
manufacturer
had
demonstrated
that
a
new
version
of
the
vehicle
complied
with
the
standard.
The
manufacturer
may
also
be
required
to
recall
(see
discussion
below
for
the
meaning
of
a
recall)
failing
vehicles
or
engines
which
have
been
introduced
into
commerce.

In­
Use
Programs
EPA
further
ensures
compliance
with
the
CAA
through
a
variety
of
in­
use
testing
and
in­
use
defect
investigations.
These
activities
include
investigations
into
potential
emission­
related
defects
vehicles
and
engines
and
various
types
of
in­
use
compliance
programs.
In­
use
compliance
activities
ensure
that
vehicles
and
engines
continue
to
meet
emission
standards
throughout
their
useful
life.
The
type
of
in­
use
programs
conducted
by
the
Agency
vary
between
the
classes
of
vehicles
and
engines.
These
variations
contribute
to
the
different
fee
amounts
which
the
Agency
is
proposing
for
different
classes.
(See
Section
IV
of
the
Motor
Vehicle
and
Engine
Compliance
Program
Cost
Analysis,
available
in
the
docket,
for
details
of
how
the
Agency
calculated
the
fee
amounts).
In
all
cases,
should
the
Administrator
of
EPA
determine,
by
whatever
means,
that
a
substantial
number
of
any
class
or
category
of
vehicles
or
engines,
although
properly
maintained
and
used,
do
not
comply
with
their
applicable
regulations
when
in
actual
use
throughout
their
useful
life,
the
Agency
requires
the
manufacturer
to
submit
a
plan
to
remedy
the
nonconformity
of
the
vehicles
or
engines.
The
implementation
of
the
plan
to
remedy
vehicles
is
called
a
recall.
The
Agency
uses
data
from
Selective
Enforcement
Audits
(SEA),
manufacturer­
supplied
production
line
testing
(PLT),
Agency­
run
in­
use
surveillance
and/
or
recall
tests
conducted
on
a
dynamometer
and/
or
on
the
road
,
manufacturer­
run
in­
use
verification
program
(IUVP)
testing,
manufacturer­
run
engine
testing
and
manufacturer­
supplied
defect
reports
to
evaluate
in­
use
emissions
performance
for
the
various
classes
of
engines
and
vehicles
which
are
certified.
For
recall
and
surveillance
testing,
the
Agency
recruits
vehicles
from
their
owners
and
conducts
tests
either
on
a
dynamometer
or
on
the
road
using
mobile
emission
measurement
equipment.
The
IUVP
program
only
applies
to
light­
duty
vehicles
and
medium­
duty
passenger
vehicles;
it
requires
manufacturers
to
conduct
a
specified
amount
of
testing
on
in­
use
vehicles
which
they
procure
from
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Federal
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/
Vol.
67,
No.
152
/
Wednesday,
August
7,
2002
/
Proposed
Rules
11
Current
CAFE
´
standards
are
27.5
mpg
for
cars
and
20.7
mpg
for
trucks.
12
Current
fines
are
$5.50
per
tenth
of
an
mpg
beneath
the
standard
multiplied
by
the
total
number
of
vehicles
in
the
fleet
average.
Manufacturers
are
allowed
to
carry­
forward
or
carry­
back
credits
up
to
three
years
to
offset
short
falls
calculated
in
other
years.
owners.
Defect
reporting
(DR)
generally
requires
manufacturers
to
notify
the
Agency
when
an
emission
related
defect
occurs
on
more
than
25
vehicles
or
engines
in
use.
The
specific
programs
currently
employed
by
the
Agency
to
assure
inuse
compliance
for
the
various
classes
of
vehicles
and
engines
are
summarized
in
the
following
paragraphs.
This
list
is
being
provided
to
document
the
activities
considered
in
the
analysis
for
proposed
fees.
The
Agency
may
at
any
time
perform
other
investigations
and/
or
use
other
sources
of
data
to
make
compliance
determinations
of
in
use
vehicles
and
engines.
The
selection
of
which
in­
use
tools
are
used
by
the
Agency
for
each
industry
is
based
on
the
in­
use
compliance
needs.
Each
of
the
industries
are
subject
to
different
regulations
which
establish
different
requirements.
When
the
applicable
regulations
require
the
manufacturer
to
supply
some
form
of
in­
use
data,
production
line
data,
or
aged
engine
testing;
this
information
makes
it
easier
for
the
Agency
to
monitor
compliance
in
actual
use.
Consequently
for
those
industries
the
Agency
can
spend
less
of
its
own
effort
to
collect
data.
For
the
light­
duty
and
highway
motorcycle
programs,
the
Agency
conducts
an
in­
use
surveillance
and
recall
program
where
individual
owner's
vehicles
are
recruited
and
tested
by
the
Agency.
This
data
is
augmented
by
manufacturer­
run
in­
use
data
to
fulfill
the
requirements
of
the
inuse
verification
program
(IUVP)
for
light
duty
vehicles.
The
Agency
also
reviews
defect
reports
submitted
by
the
manufacturers
for
potential
in­
use
problems.
Although
there
is
authority
for
the
Agency
to
conduct
SEA
testing,
EPA
does
not
currently
conduct
SEA
testing
for
light­
duty
vehicles.
For
heavy­
duty
highway
vehicles
and
nonroad
vehicles,
the
Agency
conducts
SEAs
and
on­
the­
road
emission
measurements
of
engines
installed
in
inuse
vehicles.
EPA
may
also
remove
engines
from
heavy­
duty
highway
and
nonroad
vehicles
for
laboratory
testing
when
problems
are
found
using
onvehicle
measurement
equipment.
For
other
classes
of
engines
such
as
marine
SI
outboards
and
personal
water
craft
(PWC),
manufacturers
are
required
to
age
engines
in
fleets
and
then
perform
testing
on
the
engine.

C.
How
Does
This
Rulemaking
Affect
the
Proposed
Recreational
Vehicles
Rule
and
Future
Rules?
We
are
proposing
fees
for
Large
Nonroad
SI
(>
19
kW),
Recreational
Marine
CI,
Marine
SI
Inboard
and
Sterndrive
engines,
Recreational
engines
(including
Off­
Road
Motorcycles
(MC),
All­
terrain
Vehicles
(ATVs),
and
Snowmobiles)
even
though
emission
regulations
currently
do
not
exist
for
those
classes.
As
discussed
previously,
the
Agency
has
proposed
and
is
in
the
process
of
finalizing
emission
standards
(See
66
FR
51098,
(October
10,
2001))
or
is
in
the
process
of
preparing
to
propose
emission
standards
for
these
industries.
The
fees
listed
in
the
Table
III.
D–
1,
below,
will
apply
only
after
the
applicable
regulations
are
effective
for
these
classes
of
engines.
The
fees
are
due
only
when
a
manufacturer
is
making
a
request
for
certification.
We
are
proposing
fees
for
these
classes
at
this
time
because
enough
is
known
of
the
anticipated
Agency
costs
for
the
MVECP
for
these
programs
and
the
projected
number
of
certificates
to
accurately
calculate
proposed
fees.
The
fees
proposed
for
these
programs
represent
a
reasonable
but
somewhat
conservative
and
low
estimate
Agency
cost
and
assume
either
low
levels
of
EPA
monitoring
or
monitoring
through
manufacturer­
run
PLT
and
in­
use
testing.
In
the
event
that
the
programs
for
these
classes
of
engines
significantly
change,
the
Agency
will
revise
the
applicable
fee
by
a
separate
regulation.
Today's
proposal
of
potential
fees
for
these
classes
in
no
way
prejudges
the
outcome
of
the
ongoing
emission
standards
rulemakings.

D.
How
Does
the
Fuel
Economy
Program
Work?
The
Agency
is
proposing
to
continue
the
current
provisions
which
incorporate
the
fuel
economy
program
costs
into
a
single
fee
due
at
the
time
of
certification
for
light
duty
vehicles.
The
fuel
economy
program
applies
to
light
duty
vehicles
only.
There
are
three
separate
programs:
fuel
economy
labeling
and
Guide
publication,
gas
guzzler
tax,
and
corporate
average
fuel
economy
(CAFE
´
).
The
fuel
economy
labeling
program
is
a
public
information
program
which
is
designed
to
provide
the
public
accurate
fuel
economy
information
for
comparison
purposes.
All
light
duty
vehicles
are
required
to
have
a
fuel
economy
label
before
they
can
be
introduced
into
commerce.
The
label
values
are
also
published
in
the
Fuel
Economy
Guide
(a
joint
publication
with
the
Department
of
Energy,
DOE)
and
published
on
the
internet
on
two
web
sites
(http://
www.
fueleconomy.
gov
and
http://
www.
epa.
gov/
autoemissions).
EPA
reviews
manufacturers'
testing,
conducts
confirmatory
testing,
audits
the
manufacturers'
label
calculations,
and
determines
the
classification
of
vehicles.
EPA
receives
approximately
1000
label
calculations
in
a
typical
model
year.
The
fuel
economy
label
program
is
mandated
by
the
Energy
Policy
and
Conservation
Act
(EPCA),
42
U.
S.
C.
620,
and
is
codified
in
regulations
in
40
CFR
part
600.
The
gas
guzzler
tax
program
is
designed
to
discourage
the
purchase
of
vehicles
with
particularly
poor
fuel
economy
through
a
tax
program
administered
by
the
Internal
Revenue
Service
(IRS).
Vehicles
with
a
combined
fuel
economy
value
below
22.5
mpg
must
pay
a
tax
which
starts
at
the
rate
of
$1000
per
vehicle.
EPA
determines
potential
gas
guzzlers
as
part
of
the
labeling
process;
the
final
determination
of
the
tax
liability
is
made
by
the
IRS.
The
gas
guzzler
program
is
mandated
by
the
Gas
Guzzler
Tax
Law
and
is
codified
in
regulations
in
40
CFR
part
600.
The
CAFE
´
program
is
designed
to
reduce
fuel
consumption,
reduce
dependence
on
foreign
oil,
and
to
reduce
greenhouse
gas
emissions
from
new
light
duty
vehicles.
Manufacturers
are
required
to
meet
specified
average
fuel
economy
values.
Separate
values
are
specified
for
cars
and
trucks.
11
If
manufacturers
fail
to
meet
the
specified
standards
they
are
required
to
pay
a
fine.
12
The
Department
of
Transportation
(DOT)
administers
the
CAFE
´
program
and
collects
the
fines.
Many
additional
vehicle
tests
are
required
to
calculate
the
CAFE
´
values.
EPA
reviews
manufacturers'
testing
and
conducts
confirmatory
testing
as
necessary.
EPA
also
calculates
the
CAFE
´
values;
typically
50
CAFE
´
are
processed
each
year.
The
CAFE
´
program
is
mandated
by
the
Energy
Policy
and
Conservation
Act
(EPCA),
42
U.
S.
C.
620,
and
is
codified
in
regulations
in
40
CFR
part
600.
The
fuel
economy
and
light­
duty
certification
program
have
substantial
overlap.
Both
programs
collect
fuel
economy
and
emissions
data.
Emissiondata
vehicles
provide
both
emissions
and
fuel
economy
data
on
engine
families
for
which
the
manufacturer
submits
a
certification
request.
Further,
fuel
economy­
data
vehicles
are
tested
for
emissions
and
must
comply
with
the
emission
standards.
Only
then
can
the
fuel
economy
data
be
used
in
the
fuel
economy
program.
Thus,
each
program
generates
data
to
support
the
other
and
to
support
decisions
on
both
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Federal
Register
/
Vol.
67,
No.
152
/
Wednesday,
August
7,
2002
/
Proposed
Rules
13
The
Motor
Vehicle
and
Engine
Compliance
Program
cost
is
contained
the
EPA
Air
docket
No.
A–
2001–
09
and
is
on
the
EPA
OTAQ
website.
certification
and
fuel
economy.
This
interrelationship
has
allowed
EPA
to
streamline
the
certification
program
and
procedures,
thereby
minimizing
costs
directly
incurred
by
the
industry
as
well
as
by
EPA.
Every
vehicle
that
is
certified
must
also
receive
a
fuel
economy
label
and
will
ultimately
be
included
in
the
CAFE
´
for
that
manufacturer.
For
these
reasons,
it
is
unnecessary,
for
fee
purposes,
to
distinguish
between
the
efforts
expended
on
fuel
economy
and
certification.
Consequently,
the
Agency
is
proposing
to
continue
its
current
practice
of
assessing
light
duty
vehicle
fees
based
on
certification
of
test
groups
and
including
the
costs
for
the
fuel
economy
activities
in
that
single
fee.

III.
Proposed
Fee
System
A.
What
Agency
Costs
Are
Recoverable
by
Fees?

Today's
notice
proposes
a
fee
program
to
recover
those
costs
incurred
by
EPA
in
conducting
the
MVECP
as
authorized
under
the
CAA
and
the
IOAA.
These
costs,
incurred
by
EPA
while
conducting
new
vehicle
and
engine
certification
which
includes
EPA
precertification
testing,
certification
compliance
audits
and
investigations,
fuel
economy
labeling,
CAFE
´
calculations
and
certificate
processing;
new
vehicle
and
engine
compliance
monitoring
and
testing
which
includes
SEAs
and
review
of
manufacturer
production
line
test
data;
and
in­
use
vehicle
or
engine
compliance
monitoring
which
includes
testing
of
inuse
vehicles
and
engines,
in­
use
audits
and
reviewing
manufacturers'
in­
use
test
data.
The
proposed
fees
are
based
on
all
recoverable
direct
and
indirect
costs
associated
with
administering
these
activities.
Recoverable
costs
include
all
labor,
operating
and
program
costs
associated
with
the
activities
listed
above.
Direct
labor
costs
consist
of
the
personnel
compensation
or
pay
and
benefits
for
the
people
that
directly
administer
the
MVECP.
Indirect
labor
costs
consist
of
the
personnel
compensation
or
pay
and
benefits
for
the
people
that
support
the
employees
that
directly
administer
the
MVECP.
This
includes
support
staff,
computer
technicians
in
the
lab,
managers,
etc.
Operating
costs
include
all
costs
for
contracts,
parts,
supplies
and
infrastructure,
excluding
labor
costs
that
are
used
to
support
the
MVECP.
Examples
of
these
costs
include
travel
costs,
building
space,
computer
support
and
training
for
people
who
work
directly
on
the
MVECP.
Program
Costs
are
those
of
specific
compliance
activities
conducted
for
individual
industries.
These
include
the
costs
of
testing
either
at
the
NVFEL
or
at
a
contracted
facility,
engine
procurement
for
testing,
equipment
for
testing
and
equipment
used
in
analyzing
the
test
data.
The
overall
EPA
overhead
cost
is
also
included
in
the
analysis.
The
overall
EPA
overhead
costs
are
costs
incurred
by
other
parts
of
the
EPA
that
support
the
people
working
directly
on
the
MVECP.
See
the
Motor
Vehicle
and
Engine
Compliance
Program
Cost
Analysis
13
for
further
discussion.
These
costs
are
all
costs
of
providing
a
certificate
of
conformity
and
the
related
compliance
activities
which
allows
vehicle
and
engine
manufacturers
an
opportunity
to
introduce
such
vehicles
and
engines
into
commerce
within
the
United
States,
and
are,
therefore,
recoverable
by
fees
as
stated
in
the
Independent
Offices
Appropriation
Act
and
the
Office
of
Management
and
Budget's
Circular
No.
A–
25
discussed
in
Section
II.
A
above.
A
more
complete
description
of
the
agency
costs
that
are
recoverable
by
fees
is
in
the
Motor
Vehicle
and
Engine
Compliance
Program
Cost
Analysis,
Section
III.
A.

B.
What
OTAQ
Activities
Are
Not
Included
in
the
Agency's
Proposed
Fee
Program?

EPA
conducts
numerous
activities
related
to
certification
and
mobile
source
air
pollution
control,
in
general,
for
which
it
is
not
proposing
to
charge
a
fee
at
this
time.
These
activities
include
but
are
not
limited
to:
regulation
development,
emission
factor
testing,
air
quality
assessment,
support
of
state
inspection
and
maintenance
programs
and
research.
For
a
more
complete
description
of
OTAQ's
programs,
see
Section
II.
D
of
the
Motor
Vehicle
and
Engine
Compliance
Program
Cost
Analysis.

C.
How
Did
the
Agency
Analyze
the
Costs
of
the
Compliance
Programs?

The
proposed
fees
were
based
on
the
Agency's
projected
costs
of
providing
certification
and
related
compliance
programs
to
manufacturers
in
the
2003
model
year.
To
determine
these
projected
costs,
we
conducted
an
indepth
analysis
and
detailed
all
of
the
direct
and
indirect
costs
incurred
by
EPA
to
operate
the
MVECP.
Budget
data
from
2001
was
used
as
a
baseline
since
it
is
the
most
current
data
available.
Cost
estimates
for
future
compliance
programs
are
based
on
estimates
for
the
equipment,
labor
and
contract
needs
required
to
support
new
compliancerelated
programs
and
regulations
and
was
collected
through
discussions
with
senior
management.
The
full
discussion
of
the
methods
and
numbers
used
in
the
analysis
is
contained
in
the
``
Motor
Vehicle
and
Engine
Compliance
Program
Fees
Cost
Analysis.
''
EPA
determined
that
by
2003,
significant
laboratory
equipment
modernization
will
be
required
to
satisfactorily
test
vehicle
and
engines
at
the
lower
emission
levels
associated
with
Tier
2
and
new
diesel
engine
emission
standards.
Consequently,
an
appropriate
portion
of
the
cost
of
this
laboratory
upgrade
($
10
million
dollars
of
the
total
$14
million
dollar
upgrade)
was
included
in
the
cost
analysis
that
supports
this
proposal.
The
10
million
dollar
projected,
recoverable
cost
was
amortized
over
10
years
for
an
annual
cost
of
1
million
dollars.
Refer
to
the
Motor
Vehicle
and
Engine
Compliance
Program
Fees
Cost
Analysis
for
a
complete
discussion
of
the
laboratory
upgrade
costs.
EPA
is
exploring
the
possibility
of
a
partnership
with
industry
through
a
Cooperative
Research
and
Development
Agreement
(CRADA)
that
would
fully
develop
and
deploy
the
National
Low
Emission
Vehicle
Compliance/
Correlation
Test
Site
at
the
National
Vehicle
and
Fuel
Emissions
Laboratory.
A
CRADA
agreement
may
reduce
the
cost
of
the
laboratory
modernization.
In
the
event
the
EPA
enters
into
such
a
CRADA
and
the
agreement
results
in
a
significant
cost
savings,
EPA
may
adjust
the
fees
in
a
future
rulemaking.
However,
at
this
time
EPA
believes
it
is
appropriate
to
include
in
the
costs
to
be
recovered
by
today's
proposal,
those
projected
actual
costs
associated
with
the
laboratory
equipment
modification,
as
such
modification
is
necessary
to
conduct
the
MVECP.
Another
cost
that
was
projected
for
2003
is
the
cost
of
a
robust
highway
and
nonroad
engine
compliance
program,
discussed
in
more
detail
in
Section
V.
B
of
Motor
Vehicle
and
Engine
Compliance
Program
Cost
Analysis
available
in
the
docket.
These
costs
and
the
laboratory
modernization
costs
were
projected
for
2003
and
are
included
in
the
cost
study
because
they
will
be
incurred
by
the
EPA
as
part
of
the
MVECP
in
2003.

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Federal
Register
/
Vol.
67,
No.
152
/
Wednesday,
August
7,
2002
/
Proposed
Rules
D.
Proposed
Fee
Schedule
Today's
action
proposes
the
following
fees
for
each
certification
request:

TABLE
III.
D–
1—
PROPOSED
FEE
SCHEDULE
Category
Certificate
type
a
Fee
LD,
excluding
ICIs
.........................................................................
Fed
Certificate
.............................................................................
$33,911
LD,
excluding
ICIs
.........................................................................
Cal­
only
Certificate
......................................................................
16,958
MDPV,
excluding
ICIs
...................................................................
Fed
Certificate
.............................................................................
33,911
MDPV,
excluding
ICIs
...................................................................
Cal­
only
Certificate
......................................................................
16,958
Complete
SI
HDVs,
excluding
ICIs
...............................................
Fed
Certificate
.............................................................................
33,911
Complete
SI
HDVs,
excluding
ICIs
...............................................
Cal­
only
Certificate
......................................................................
16,958
ICIs
for
the
following
industries:
LD,
MDPV,
or
Complete
SI
HDVs.
All
Types
......................................................................................
8,394
MC
HW,
including
ICIs
..................................................................
All
Types
......................................................................................
2,416
HD
HW,
including
ICIs
..................................................................
Fed
Certificate
.............................................................................
30,437
HD
HW,
including
ICIs
..................................................................
Cal­
only
Certificate
......................................................................
827
HDV
(evap),
including
ICIs
...........................................................
Evap
Certificate
...........................................................................
827
NR
CI,
including
ICIs,
but
excluding
Locomotives,
Marine
and
Recreational
engines.
All
Types
......................................................................................
2,156
NR
SI,
including
ICIs
.....................................................................
All
Types
......................................................................................
827
All
Marine,
including
ICIs
..............................................................
All
Types
and
IMO
.......................................................................
827
All
Recreational
b
,
including
ICIs,
but
excluding
marine
engines
All
Types
......................................................................................
827
Locomotives,
including
ICIs
..........................................................
All
Types
......................................................................................
827
a
Fed
and
Cal­
only
Certificate
and
IMO
is
defined
in
40
CFR
85.2402
b
Recreational
means
the
engines
subject
to
40
CFR
1051
which
includes
off
road
motorcycles,
all­
terrain
vehicles
and
snowmobiles.

The
Agency
is
proposing
fees
for
Large
Nonroad
SI
(>
19
kW),
Recreational
Marine
CI,
Marine
SI
Inboard
and
Sterndrive
engines,
Recreational
engines
(including
Off
Road
MC,
ATV's,
and
Snowmobiles)
even
though
emission
regulations
currently
do
not
exist
for
those
classes.
The
Agency
has
proposed
(See
66FR
51098,
published
on
October
5,
2001)
or
is
in
the
process
of
proposing
regulations
for
these
classes.
The
fees
listed
in
the
above
table
will
apply
only
after
the
applicable
regulations
are
effective
for
these
classes
of
engines.
The
fees
are
due
only
when
a
manufacturer
is
making
a
request
for
certification.
It
may
be
worth
noting
again,
that
we
are
considering
whether
to
finalize
the
fees
for
these
yet
to
be
regulated
industries
within
the
final
rule
based
on
today's
fee
proposal
or
to
finalize
the
fees
associated
with
these
yet
to
be
regulated
industries
in
the
emission
regulations
covering
such
industries.

E.
Will
the
Fees
Automatically
Increase
To
Reflect
Future
Inflation?

One
factor
that
could
keep
EPA
from
recovering
the
full
cost
of
conducting
the
MVECP
is
inflation.
To
help
mitigate
the
effects
of
inflation,
the
Agency
is
proposing
that
fees
be
automatically
adjusted
annually
by
the
change
in
the
Consumer
Price
Index
starting
with
the
2005
model
year.
The
Agency
is
proposing
a
formula
for
manufacturers
to
use
to
calculate
the
applicable
calculate
beginning
with
the
2005
model
year.
Starting
with
the
2005
model
year,
fees
will
be
calculated
using
the
following
equation:
FeesMY
=
Feesbase
×
(CPIMY
¥
2/
CPI2002)
Where:
FeesMY
is
the
applicable
fee
for
the
model
year
of
the
certification
request.
Feesbase
is
the
applicable
fee
from
paragraph
(a)
of
this
section.
CPIMY
¥
2
is
the
consumer
price
index
for
all
U.
S.
cities
using
the
``
U.
S.
city
average''
area,
``
all
items''
and
``
not
seasonally
adjusted''
numbers
calculated
by
the
Department
of
Labor
listed
for
the
month
of
July
of
the
year
two
years
before
the
model
year.
(e.
g.,
for
the
2005
MY
the
CPI
used
in
the
equation
will
be
calculated
based
on
the
date
of
July,
2003).
CPI2002
is
the
consumer
price
index
for
all
U.
S.
cities
using
the
``
U.
S.
city
average''
area,
``
all
items''
and
``
not
seasonally
adjusted''
numbers
calculated
by
the
Department
of
Labor
for
December,
2002.
The
applicable
CPI
results
calculated
by
the
Department
of
Labor
are
currently
published
on
the
following
internet
address:
http://
stats.
bls.
gov/
cpihome.
htm
by
choosing
the
data
option
link
for
``
Consumer
Price
Index—
All
Urban
Consumers
(Current
Series)
'',
then
selecting
``
U.
S.
city
average''
area,
``
all
items''
and
``
not
seasonally
adjusted''.
The
Agency
invites
comment
on
alternate
ways
to
adjust
fees
for
inflation.
As
a
convenience
for
manufacturers
and
to
avoid
errors
in
calculation,
the
Agency
intends
to
provide,
via
a
guidance
letter,
a
listing
of
applicable
fees
calculated
from
the
above
equation
for
each
model
year
beginning
with
the
2005
model
year.
The
Agency
invites
comments
regarding
potential
procedures
for
notification
of
the
new
fee
amounts.

F.
Comments
on
the
Proposed
Fee
System
The
Agency
requests
comments
on
the
proposed
fee
system
including
the
``
Vehicle
and
Engine
Compliance
Program
Fees
Cost
Analysis,
''
recoverable
costs,
costs
not
recovered,
the
allocation
of
recoverable
costs
by
compliance
industry,
and
the
fees
per
certificate.
Comments
can
refer
to
this
preamble,
the
proposed
regulations
and
the
cost
analysis.

IV.
Fee
Collection
and
Transactions
A.
Procedure
for
Paying
Fees
Fees
must
be
paid
in
advance
of
receiving
a
certificate.
For
each
certification
request,
evidenced
by
an
application
for
certification,
ESI
data
sheet,
or
ICI
Carryover
data
sheet,
manufacturers
and
ICIs
will
submit
a
MVECP
Fee
Filing
Form
(filing
form)
and
the
appropriate
fee
in
the
form
of
a
corporate
check,
money
order,
bank
draft,
certified
check,
or
electronic
funds
transfer
[wire
or
Automated
Clearing
House
(ACH)],
payable
in
U.
S.

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/
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7,
2002
/
Proposed
Rules
14
Typically,
this
will
be
the
first
February
15
after
a
certificate
expires.
Certificates
generally
expire
on
December
31
of
the
model
year.
dollars,
to
the
order
of
the
U.
S.
Environmental
Protection
Agency.
The
filing
form
and
accompanying
fee
will
be
sent
to
the
address
designated
on
the
filing
form.
EPA
will
not
be
responsible
for
fees
received
in
other
than
the
designated
location.
Applicants
will
continue
to
submit
the
application
for
certification
to
the
National
Vehicle
and
Fuel
Emission
Laboratory
(NVFEL)
in
Ann
Arbor,
Michigan
or
to
the
Engine
Programs
Group
in
Washington,
DC.
To
ensure
proper
identification
and
handling,
the
check
or
electronic
funds
transfer
and
the
accompanying
filing
form
will
indicate
the
manufacturer's
corporate
name,
the
EPA
standardized
test
group
or
engine
family
name.
The
full
fee
is
to
accompany
the
filing
form.
Partial
payments
or
installment
payments
will
not
be
permitted.
If
submitting
a
wire
or
an
ACH
payment
the
full
fee
payment
does
not
include
the
extra
fee
a
banking
institution
may
charge
to
process
the
wire
or
ACH.
The
Agency
invites
comment
on
methods
of
streamlining
the
fee
payment
process
while
maintaining
the
requirement
that
fees
are
paid
in
advance
of
certification
services.

B.
What
Is
the
Implementation
Schedule
for
Fees?
The
fee
schedule
proposed
today
will
apply
to
2003
and
later
model
year
vehicles
and
engines.
This
proposal
will
not
apply
to
2003
model
year
certification
requests
received
by
EPA
prior
to
the
effective
date
of
the
regulations,
providing
that
they
are
complete
and
include
all
required
data.

C.
What
Happens
to
the
Money
That
Is
Collected
by
the
Fees
Program?
Any
fees
collected
for
administering
the
MVECP
will
be
deposited
in
a
special
fund
in
the
United
States
Treasury.

D.
Can
I
Qualify
for
a
Reduced
Fee?
EPA
believes
that
an
expansive
fee
reduction
policy
could
violate
the
very
premise
underlying
section
217
of
the
CAA:
to
reimburse
the
government
for
the
specific
regulatory
services
provided
to
an
applicant.
Nevertheless,
EPA
recognizes
that
there
may
be
instances,
in
the
case
of
small
engine
families,
where
the
full
proposed
fee
may
represent
an
unreasonable
economic
burden.
Therefore,
EPA
is
proposing
to
continue
the
current
two
part
test
which,
if
met,
would
qualify
an
applicant
for
a
reduction
of
a
portion
of
the
certification
fee.
A
reduced
fee
is
available
when:
(1)
The
certificate
is
to
be
used
for
the
sale
of
vehicles
or
engines
within
the
U.
S.;
and
(2)
The
full
fee
for
the
certification
request
exceeds
1%
of
the
projected
aggregate
retail
value
of
all
vehicles
or
engines
covered
by
that
certificate.
The
proposed
requirement
that
the
certificate
request
pertain
to
U.
S.
vehicle/
engine
sales
is
intended
to
exclude
fee
reductions
for
certificates
used
to
support
foreign
vehicle
or
engine
sales.
This
provision
is
carried
over
from
the
current
fees
rules.
These
certificates
are
not
required
and
represent
extra
effort
expended
by
the
Agency
beyond
that
which
is
mandated
in
U.
S.
laws
or
regulations.
Further,
the
Certificate
of
Conformity
does
not
distinguish
between
U.
S.
and
foreign
sales,
therefore,
although
the
manufacturer's
intention
may
be
to
certify
vehicles
for
a
foreign
market,
there
is
nothing
to
prohibit
the
sale
of
these
vehicles
in
the
U.
S.
Consequently,
the
Agency
is
proposing
that
it
is
inappropriate
to
reduce
the
cost
of
these
certificates
below
the
actual
cost
to
the
Agency.
For
the
first
time
EPA
is
also
proposing
that
the
reduced
fee
will
be
the
larger
of
1%
of
the
aggregate
retail
value
of
the
vehicles
and
engines
covered
by
the
certificate
or
a
minimum
fee
of
$300.
The
$300
minimum
fee
represents
the
lowest
level
of
fee
that
is
cost
effective
for
the
Agency
to
collect
and
still
represents
actual
costs
incurred
by
the
Agency
in
providing
services.
As
noted
below,
the
Agency
is
proposing
two
potential
``
pathways''
by
which
a
manufacturer
can
seek
to
pay
a
reduced
fee.
Under
either
pathway
the
minimum
that
a
manufacturer
will
be
required
to
pay
is
$300.
The
Agency
invites
comment
on
the
concept
of
a
minimum
fee
and
the
amount
of
the
minimum
fee.
The
Agency
is
proposing
two
separate
pathways
by
which
a
manufacturer
can
request
and
pay
a
reduced
fee
amount.
One
of
the
purposes
of
these
pathways
is
to
clarify
when
manufacturers
are
required
to
determine
the
value
of
the
vehicles
or
engines
actually
sold
under
a
certificate
and
to
either
pay
additional
fees
or
seek
a
refund
if
necessary.
Under
the
first
pathway,
the
Agency
is
proposing
that
manufacturers
seeking
a
reduced
fee
include
in
their
certification
application
a
statement
that
the
reduced
fee
is
appropriate
under
the
criteria
and
a
calculation
of
the
amount
of
the
reduced
fee.
The
manufacturer's
evaluation
and
submission
of
a
fee
amount
under
this
reduced
fee
provision
is
subject
to
EPA
review
or
audit.
A
manufacturer's
statement
that
it
is
eligible
for
a
reduced
fee
can
be
rejected
by
EPA
if
the
Agency
finds
that
manufacturer's
evaluation
does
not
meet
the
eligibility
requirements
for
a
reduced
fee,
the
amount
of
the
reduced
fee
was
improperly
calculated,
the
manufacturer
failed
to
meet
the
requirements
to
calculate
a
final
reduced
fee
using
actual
sales
data,
or
the
manufacturer
failed
to
pay
the
net
balance
due
between
the
initial
and
final
reduce
fee
calculation
(see
below
for
discussion
of
the
final
fee
calculation,
reporting
and
payment
proposals).
If
the
manufacturer's
statement
of
eligibility
or
request
of
a
reduced
fee
is
rejected
by
EPA
then
EPA
may
require
the
manufacturer
to
pay
the
full
fee
normally
applicable
to
it
or
EPA
may
adjust
the
amount
of
the
reduced
fee
that
is
due
or
EPA
may
require
the
manufacturer
to
utilize
the
special
fee
provisions
(the
second
pathway)
which
are
explained
below.
To
aid
our
review,
the
Agency
is
proposing
that
the
applicant
for
a
reduced
fee
also
provide
EPA
with
a
report
(called
a
``
report
card'').
This
report
shall
include
the
total
number
of
vehicles
ultimately
covered
by
the
certificate
(the
report
card
shall
include
information
on
all
certificates
held
by
the
manufacturer
that
were
issued
with
a
reduced
fee),
a
calculation
of
the
actual
final
reduced
fee
due
for
each
certificate
which
is
derived
by
adding
up
the
total
number
of
vehicles
and
their
sales
prices,
a
statement
of
the
total
initial
fees
paid
by
the
manufacturer
and
the
total
final
fees
due
for
the
manufacturer.
Manufacturers
will
be
required
to
submit
the
report
card
within
30
days
of
the
end
of
the
model
year,
14
EPA
believes
this
is
reasonable
as
manufacturers
should
have
final
figures
for
each
certificate
by
this
time.
Manufacturers
will
be
required
to
``
true
­up''
or
submit
the
final
reduced
fee
due
as
calculated
within
the
report
card
within
45
days
of
the
end
of
the
model
year.
The
Agency
is
proposing
to
not
require
payment
of
the
balance
when
the
amount
is
less
than
$500
for
a
manufacturer.
(The
Agency
requests
comment
on
these
special
provisions.)
In
addition,
EPA
may
require
that
manufacturers
submit
a
report
card,
with
the
same
or
similar
information
as
noted
above,
for
previous
model
years.
The
purpose
of
such
report
card
would
be
to
give
EPA
assurance
that
the
manufacturer
has
demonstrated
a
continuous
capability
of
submitting
the
necessary
year
to
year
report
cards
and
that
appropriate
fees
have
been
paid.
This
will
assist
EPA
in
its
determination
as
to
whether
a
manufacturer
is
capable
of
adequately
projecting
its
annual
sales
for
reduced
fee
purposes
and
whether
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2002
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Proposed
Rules
the
manufacturer
shall
remain
eligible
for
the
reduced
fee
provisions.
Under
the
second
pathway,
EPA
is
also
proposing
special
provisions
for
fee
payment
that
are
available
for
manufacturers
which,
due
to
the
nature
of
their
business,
may
be
unable
to
make
good
estimates
of
the
aggregate
projected
retail
value
of
all
the
vehicles
or
engines
to
be
covered
by
the
requested
certificate.
Examples
of
manufacturers
that
may
be
unable
to
estimate
the
number
of
vehicles
and
engines
covered
by
a
certificate
are
those
that
modify
customer­
owned
vehicles
(as
done
by
some
ICIs
and
aftermarket
alternative
fuel
converters)
that
are
uncertain
how
many
owners
will
approach
them
to
perform
this
service.
Under
the
special
provisions,
manufacturers
that
obtain
prior
approval
from
the
Agency
may
pay
1.0%
of
the
retail
selling
price
of
5
vehicles,
engines
or
conversions
when
applying
for
a
certificate.
Manufacturers
under
this
pathway
will
be
required
to
submit
the
same
report
card
and
true­
up
the
actual
amount
of
reduced
fee
that
is
due
in
the
same
manner
as
described
above
under
the
first
pathway.
Under
either
pathway,
if
a
manufacturer
fails
to
report
within
30
days
or
pay
the
balance
due
by
45
days
of
the
end
of
the
model
year,
then
EPA
may
refuse
to
approve
future
reduced
fee
requests
from
that
manufacturer.
In
addition,
if
a
manufacturer
fails
to
report
within
30
days
and
pay
the
balance
due
by
45
days
of
the
end
of
the
model
year
as
noted
above
then
the
Agency
may
deem
the
applicable
certificate
as
void
ab
initio.
In
the
case
of
vehicles
or
engines
which
have
originally
been
certified
by
an
OEM
but
are
being
modified
to
operate
on
an
alternative
fuel,
EPA
is
proposing
that
the
cost
basis
for
the
reduced
fee
amount
be
the
value­
added
by
the
conversion,
not
the
full
cost
of
the
vehicle
or
engine.
On
the
other
hand,
ICI
vehicles
or
engines
certificates
cover
vehicles
or
engines
which
are
imported
into
the
U.
S.
A.
and
that
were
not
originally
certified
by
an
OEM.
As
such,
EPA
costs
associated
with
proving
various
MVECP
services
for
these
vehicles
has
not
yet
been
recovered.
Since
the
Agency
has
not
received
a
fee
payment
for
the
``
base
vehicle''
or
the
vehicle
imported
before
its
conversion
to
meet
U.
S.
emissions
requirements,
we
are
proposing
that
the
cost
basis
for
calculating
a
reduced
fee
for
an
ICI
certification
shall
be
based
upon
the
full
cost
of
the
vehicle
or
engine
rather
than
the
cost
or
value
of
the
conversion.
As
noted
above,
EPA
is
already
proposing
a
fee
of
$8,394
for
certain
types
of
ICI
certificates
as
EPA
has
determined
the
costs
of
MVECP
services
provided
for
such
certificates
regardless
of
the
number
of
vehicles
included
under
such
certificates.
However,
we
recognize
that
this
fee
or
the
full
fee
associated
with
other
types
of
certificates
may
represent
an
unreasonable
economic
burden
on
smaller
businesses
or
on
the
price
of
vehicles
in
smaller
classes
under
a
certificate.
Therefore,
EPA
is
proposing
to
retain
its
current
requirement
that
manufacturers
pay
a
fee
based
on
1%
of
the
aggregate
retail
sales
price
(or
value)
of
the
vehicles
covered
by
a
certificate
as
EPA
believes
this
best
represents
the
proper
balance
between
recovering
the
MVECP
costs
without
imposing
an
unreasonable
economic
burden.
EPA
invites
comment
on
the
continued
use
of
the
1%
multiplier.
For
ICI
requests
EPA
proposes
to
continue
the
current
requirement
to
calculate
the
full
cost
of
a
vehicle
based
on
a
vehicle's
average
retail
price
listed
in
the
National
Automobile
Dealer's
Association
(NADA)
price
guide.
By
using
the
NADA
price
guide
to
establish
a
vehicle's
retail
sales
price
(or
value),
EPA
ensures
uniformity
and
fairness
in
charging
fees.
Further,
it
avoids
problems
associated
with
abuse,
such
as
falsification
of
entry
documents,
in
particular,
sales
receipts.
Where
the
NADA
price
guide
does
not
provide
the
retail
price
of
a
vehicle,
and
in
the
case
of
engines,
the
applicant
for
a
reduced
fee
must
demonstrate
to
the
satisfaction
of
the
Administrator,
the
actual
market
value
of
the
vehicle
or
engine
in
the
United
States
at
the
time
of
final
importation.
When
calculating
the
aggregate
retail
sales
price
of
vehicles
or
engines
under
the
reduced
fee
provisions
such
calculation
must
not
only
include
vehicles
and
engines
actually
sold
but
also
those
modified
under
the
modification
and
test
options
in
40
CFR
85.1509
and
40
CFR
89.609
and
those
imported
on
behalf
of
a
private
or
another
owner.
EPA
is
continuing
the
current
exemption
of
fees
for
small
volume
certification
requests
for
vehicles
using
alternative
fuels
through
the
2003
model
year.
EPA
believes
that
this
program
has
completed
its
purpose
of
providing
a
short­
term
relief
for
alternative
fuel
conversion
manufacturers.
Therefore,
starting
with
the
2004
model
year,
EPA
is
no
longer
including
this
exemption
for
alternative
fuel
convertors,
and
such
convertors
shall
be
subject
to
the
same
fee
provisions
as
other
manufacturers.
This
includes
the
reduced
fee
provisions.
We
believe
that
this
fee
reduction
proposal
will
provide
adequate
relief
for
small
entities
that
would
otherwise
have
been
harmed
by
a
standardized
fee.
It
is
important
to
note
that
this
fee
reduction
does
not
raise
the
fees
for
other
manufacturers;
EPA
will
simply
collect
less
funds.
The
Agency
invites
comment
on
the
necessity
of
a
reduced
fee
provision.

E.
What
Is
the
Refund
Policy?

Instances
may
occur
in
which
an
applicant
submits
a
filing
form
with
the
appropriate
fee,
has
an
engine­
system
combination
undergo
a
portion
of
the
certification
process,
but
fails
to
receive
a
signed
certificate.
Under
the
current
rules,
the
Agency
offers
the
manufacturer
a
partial
refund
in
those
situations.
The
Agency
retains
a
portion
of
the
fee
to
pay
for
the
work
which
has
already
been
done.
This
policy
has
been
difficult
to
administer
and
required
substantial
Agency
oversight.
Consequently,
we
have
included
a
simplified
refund
policy
in
today's
proposal.
When
a
certificate
has
not
been
issued,
the
applicant
will
be
eligible
to
receive,
upon
request,
a
full
refund
of
the
fee
paid.
Optionally,
in
lieu
of
a
refund,
the
manufacturer
may
apply
the
fee
to
another
certification
request.
The
new
refund
policy
will
not
reduce
the
money
collected
by
the
Agency
because
the
fee
schedule
proposed
today
is
based
on
the
number
of
certificates
actually
issued
rather
than
the
number
of
certification
requests.
The
Agency
also
considered
not
allowing
any
refunds
if
the
manufacturer
overpaid
based
on
their
own
projections.
However,
the
Agency
was
concerned
there
could
be
cases
where
sales
were
significantly
lower
than
expected
and
the
overpayment
amount
would
be
significant.
Also,
the
Agency
does
not
want
to
encourage
manufacturers
to
systematically
underproject
the
reduced
fees
on
the
fear
that
they
might
significantly
overpay
and
be
unable
to
obtain
a
refund.
On
the
other
hand,
processing
refunds
costs
the
Agency
time
and
money
and
there
is
a
potential
for
a
large
number
of
small
refunds
that
would
be
not
be
cost
effective
for
EPA
to
process
or
for
the
manufacturer
to
request.
Therefore,
the
Agency
is
proposing
to
only
consider
refund
requests
for
a
minimum
of
$500
overpayment.
The
Agency
invites
comment
on
this
issue.

V.
What
Other
Options
Were
Considered
by
EPA
When
Proposing
This
Rule?

A.
Separate
Fees
for
Other
ICI
Categories
Beyond
Light­
Duty
EPA
considered
continuing
the
current
provisions
which
charge
the
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/
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August
7,
2002
/
Proposed
Rules
same
fee
for
ICI
and
OEM
manufacturers.
However,
when
the
Agency
examined
the
costs
associated
with
ICI
and
OEM
manufacturers,
we
found
the
costs
associated
with
administering
the
light­
duty
ICI
program
was
lower
than
for
light­
duty
OEM
manufacturers.
Consequently,
today's
proposal
includes
lower
fees
for
lightduty
ICI
certificate
requests.
EPA
considered
calculating
separate
fees
for
other
ICI
industries
beyond
light­
duty.
Currently,
EPA
has
issued
ICI
certificates
only
for
highway
motorcycles
in
addition
to
light­
duty.
In
this
case,
the
costs
to
the
Agency
for
the
MVECP
for
motorcycles
and
ICI
motorcycles
are
essentially
the
same.
EPA
expects
that
when
other
industries
have
ICI
certification
requests
that
the
Agency
will
a
similar
amount
of
effort
on
the
ICI
manufacturers
as
the
OEM
manufacturers.
Consequently,
the
Agency
believes
that
ICI
and
OEM
fees
would
be
similar
for
all
the
categories
other
than
light­
duty.
For
that
reason,
today's
proposal
does
not
establish
separate
fees
for
ICI
manufacturers
other
than
the
for
the
light­
duty
ICIs.

B.
Start
Updating
Fees
for
Cost
of
Inflation
in
2004
Model
Year
EPA
considered
updating
MVECP
fees
for
the
cost
of
inflation
at
the
start
of
model
year
(MY)
2004.
We
also
considered
waiting
one
year
to
apply
inflation
costs
to
fees.
We
are
proposing
to
postpone
this
update
for
one
year
and
apply
inflation
costs
in
2005
MY.
The
Agency
invites
comment
on
updating
the
fees
before
the
start
of
MY
2005.

VI.
What
Is
the
Economic
Impact
of
This
Proposed
Rule?

This
proposed
rule
will
not
have
a
significant
impact
on
the
majority
of
vehicle
and
engine
manufacturers.
The
cost
to
industry
will
be
a
relatively
small
value
per
unit
manufactured
for
most
engine­
system
combinations.
EPA
expects
to
collect
about
18
million
dollars
annually.
This
averages
out
to
approximately
50
cents
per
vehicle
or
engine
sold
annually.
However,
for
engine­
system
combinations
with
low
annual
sales
volume,
the
cost
per
unit
could
be
higher.
To
remove
the
possibility
of
serious
financial
harm
on
companies
producing
only
low
sales
volume
designs,
the
regulations
adopted
today
include
a
reduced
fee
provision
for
small
volume
engine
families
to
reduce
the
burden
of
fees.
These
provisions
should
alleviate
concerns
about
undue
economic
hardship
on
small
volume
manufacturers.
Refer
to
the
Regulatory
Flexibility
Act
section,
Section
VIII.
B,
below,
for
more
discussion
on
this
topic.

VII.
How
Can
I
Participate
in
the
Rulemaking
Process?

A.
How
To
Make
Comments
and
Use
the
Public
Docket
EPA
welcomes
comments
on
all
aspects
of
this
proposed
rulemaking.
Commenters
are
especially
encouraged
to
give
suggestions
for
changing
any
aspects
of
the
proposal.
All
comments,
with
the
exception
of
proprietary
information
should
be
addressed
to
the
EPA
Air
Docket
Section,
Docket
No.
A–
2001–
09
(see
ADDRESSES).
Commenters
who
wish
to
submit
proprietary
information
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)
and
not
to
the
public
docket.
This
will
help
insure
that
proprietary
information
is
not
inadvertently
placed
in
the
docket.
If
a
commenter
wants
EPA
to
use
a
submission
labeled
as
confidential
business
information
as
part
of
the
basis
for
the
final
rule,
then
a
nonconfidential
version
of
the
document,
which
summarizes
the
key
data
or
information,
should
be
sent
to
the
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
EPA
receives
it,
the
submission
may
be
made
available
to
the
public
without
notifying
the
commenters.

B.
Public
Hearings
Anyone
wishing
to
present
testimony
about
this
proposal
at
the
public
hearing
(see
DATES)
should,
if
possible,
notify
the
contact
person
(see
FOR
FURTHER
INFORMATION
CONTACT)
by
September
12,
2002.
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
serve
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
serve
basis
to
follow
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
advanced
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
advanced
copies
should
be
submitted
to
the
contact
person
listed.
The
comment
period
will
be
kept
open
until
October
19,
2002,
and
therefore
will
remain
open
for
30
days
following
the
hearing.
All
such
submittals
should
be
directed
to
the
Air
Docket
Section,
Docket
No.
A–
2001–
09
(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.

VIII.
What
Are
the
Administrative
Requirements
for
This
Proposal?

A.
Executive
Order
12866:
Administrative
Designation
and
Regulatory
Analysis
Under
Executive
Order
12866
(58
FR
51735
October
4,
1993),
EPA
must
determine
whether
this
proposed
regulatory
action
is
``
significant''
and
therefore
subject
to
Office
of
Management
and
Budget
(OMB)
review
and
the
requirements
of
this
Executive
Order.
The
Order
defines
a
``
significant
regulatory
action''
as
one
that
is
likely
to
result
in
a
rule
that
may:
(1)
Have
an
annual
effect
on
the
economy
of
$100
million
or
more
or
adversely
affect
in
a
material
way
the
economy,
a
sector
of
the
economy,
productivity,
competition,
jobs,
the
environment,
public
health
or
safety,
or
State,
Local,
or
Tribal
governments
or
communities;
(2)
Create
a
serious
inconsistency
or
otherwise
interfere
with
an
action
taken
or
planned
by
another
agency;
(3)
Materially
alter
the
budgetary
impact
of
entitlements,
grants,
user
fees,
or
loan
programs,
or
the
rights
and
obligations
of
recipients
thereof;
or
(4)
Raise
novel
legal
or
policy
issues
arising
out
of
legal
mandates,
the
President's
priorities,
or
the
principles
set
forth
in
the
Executive
Order.
Pursuant
to
the
terms
of
the
Executive
Order
12866,
it
has
been
determined
that
this
rule
is
a
``
significant
regulatory
action''
because
this
rulemaking
materially
alters
user
fees.
As
such,
this
action
was
submitted
to
OMB
for
review.
Changes
made
in
response
to
OMB
suggestions
or
recommendations
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Federal
Register
/
Vol.
67,
No.
152
/
Wednesday,
August
7,
2002
/
Proposed
Rules
15
The
average
costs
of
the
fees
per
vehicle
or
engine
(fee
per
unit)
for
the
specific
fee
categories
of
Highway
Motorcycle,
Light­
Duty,
Light­
Duty
ICI,
Heavy­
Duty
Highway
CI
and
SI
and
Nonroad
CI
categories
are
shown
in
Worksheet
2,
Appendix
C,
of
the
Motor
Vehicle
and
Engine
Compliance
Program
Cost
Analysis
available
in
EPA
Air
Docket
No.
A–
2001–
09.
will
be
documented
in
the
public
record.

B.
Regulatory
Flexibility
Act
(RFA),
as
Amended
by
the
Small
Business
Regulatory
Enforcement
Fairness
Act
of
1996
(SBREFA),
5
U.
S.
C.
601
et
seq
The
RFA
generally
requires
an
agency
to
prepare
a
regulatory
flexibility
analysis
of
any
rule
subject
to
notice
and
comment
rulemaking
requirements
under
the
Administrative
Procedures
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
today's
proposed
rule
on
small
entities,
small
entity
is
defined
as:
(1)
A
small
business
that
meets
the
definition
for
business
based
on
SBA
size
standards;
(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.
Table
VIII.
B–
1
provides
an
overview
of
the
primary
SBA
small
business
categories
potentially
affected
by
this
regulation.
This
list
is
not
intended
to
be
exhaustive,
but
rather
provides
a
guide
regarding
entities
likely
to
be
regulated
by
this
proposed
action.

TABLE
VIII.
B–
1.—
PRIMARY
SBA
SMALL
BUSINESS
CATEGORIES
POTENTIALLY
AFFECTED
BY
THIS
PROPOSED
REGULATION
Industry
NAICS
a
Codes
Defined
by
SBA
as
a
small
business
If:
b
Farm
Machinery
and
Equipment
Manufacturing
.............................................................................................
333111
<500
employees.
Lawn
and
Garden
Tractor
and
Home
Lawn
and
Garden
Equipment
Manufacturing
.....................................
333112
<500
employees.
Construction
Machinery
Manufacturing
...........................................................................................................
333120
<750
employees.
Mining
Machinery
and
Equipment
Manufacturing
...........................................................................................
333131
<500
employees.
Turbine
and
Turbine
Generator
Set
Unit
Manufacturing
.................................................................................
333611
<1,000
employees.
Speed
Changer,
Industrial
High­
speed
Drive
and
Gear
Manufacturing
.........................................................
333612
<500
employees.
Mechanical
Power
Transmission
Equipment
Manufacturing
..........................................................................
333613
<500
employees.
Other
Engine
Equipment
Manufacturing
.........................................................................................................
333618
<1,000
employees.
Nonroad
SI
engines
.........................................................................................................................................
333618
<1,000
employees.
Internal
Combustion
Engines
..........................................................................................................................
333618
<1,000
employees.
Industrial
Truck,
Tractor,
Trailer,
and
Stacker
Machinery
...............................................................................
333924
<750
employees.
Power­
Driven
Handtool
Manufacturing
............................................................................................................
333991
<500
employees.
Automobile
Manufacturing
...............................................................................................................................
336111
<1000
employees.
Light
Truck
and
Utility
Vehicle
Manufacturing
.................................................................................................
336112
<1000
employees.
Heavy­
Duty
Truck
Manufacturing
....................................................................................................................
336120
<1000
employees.
Fuel
Tank
Manufacturers
.................................................................................................................................
336211
<1000
employees.
Gasoline
Engine
and
Engine
Parts
Manufacturing
.........................................................................................
336312
<750
employees.
Aircraft
Engine
and
Engine
Parts
Manufacturing
............................................................................................
336412
<1000
employees.
Railroad
Rolling
Stock
Manufacturing
.............................................................................................................
336510
<1000
employees.
Boat
Building
and
Repairing
............................................................................................................................
336612
<
500
employees.
Motorcycles
and
motorcycle
parts
manufacturers
...........................................................................................
336991
<500
employees.
Snowmobile
and
ATV
manufacturers
..............................................................................................................
336999
<500
employees.
Independent
Commercial
Importers
of
Vehicles
and
parts
.............................................................................
421110
<100
employees.
Engine
Repair
and
Maintenance
.....................................................................................................................
811310
<$
5
million
annual
receipts

Notes:
a
North
American
Industry
Classification
System.
b
According
to
SBA's
regulations
(13
CFR
part
121),
businesses
with
no
more
than
the
listed
number
of
employees
or
dollars
in
annual
receipts
are
considered
``
small
entities''
for
purposes
of
a
regulatory
flexibility
analysis.

After
considering
the
economic
impacts
of
today's
proposed
rule
on
small
entities,
I
certify
that
this
proposed
action
will
not
have
a
significant
economic
impact
on
a
substantial
number
of
small
entities.
A
review
of
rulemakings
that
set
emissions
standards
for
the
industries
affected
by
today's
proposed
rule,
including
those
manufacturers
affected
by
the
recreational
vehicle
proposed
rule,
showed
that
approximately
108
small
businesses
that
will
be
paying
fees.
EPA
examined
the
cost
of
the
proposed
fees
and
determined
that
the
average
cost
for
manufacturers
of
all
sizes,
across
industry
sectors,
is
approximately
$.
41
per
vehicle
or
engine.
15
In
addition,
under
the
reduced
fee
provisions
described
above
in
Section
IV.
D.,
the
fee
a
manufacturer
would
pay
will
not
exceed
1.0
percent
of
the
aggregate
retail
sales
price
of
the
vehicles
or
engines
covered
by
a
certificate
request
or
a
minimum
fee
of
$300.
The
reduced
fee
provision
limits
the
impact
of
this
proposed
rule
on
small
entities
to
1.0
percent
of
the
aggregate
retail
sales
price
or
a
minimum
fee
of
$300.
EPA
believes
that
in
a
very
small
number
of
cases,
the
1.0
percent
reduced
fee
amount
will
be
less
than
the
$300
minimum
fee.
The
minimum,
$300
fee
is
a
modest
amount
and
will
only
be
required
when
engine
families
have
less
than
$30,000
aggregate
retail
sales
price.
While
the
minimum
fee
would
represent
an
impact
greater
than
1.0
percent
of
the
aggregate
retail
sales
price,
the
$300
amount
will
not
have
a
significant
economic
impact
on
the
manufacturers
that
pay
it.
This
amount
would
represent
a
modest
cost
of
doing
business.
The
following
is
an
example
of
a
reduced
fee
calculation:
If
a
light­
duty
vehicle
manufacturer
has
an
engine
family
of
2
vehicles
that
are
sold
for
$35,000
per
vehicle,
under
the
proposed
fee
schedule
the
full
fee
would
be
$33,911,
or
$16,958
per
engine
family
($
16,956
or
$8,479
per
vehicle,
respectively),
depending
upon
whether
the
engine
family
is
certified
as
a
Federal
vehicle
or
California­
only
engine
family.
Under
the
proposal,
the
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Proposed
Rules
reduced
fee
would
be
1.0
percent
of
the
aggregate
retail
sales
price
of
the
vehicles
($
70,000),
or
$700
(or
$350
per
vehicle)
as
shown
below:
2
*
$35,000
*
0.01
=
$700
In
another
example,
a
manufacturer
of
small
nonroad
spark
ignition
engines
certifies
an
engine
family
of
500
engines
that
are
sold
for
$50
apiece.
In
this
case,
under
the
proposed
fee
schedule
the
full
fee
would
be
$827.
Under
the
reduced
fee
provisions,
the
manufacturer
would
determine
1
percent
of
the
total
retail
sales
price
of
the
engines
and
determine
whether
this
amount
is
less
than
the
full
fee
or
the
minimum
fee
of
$300.
The
aggregated
retail
sales
price
of
the
engines
is
$25,000;
1.0
percent
of
that
is
$250.
Therefore,
the
manufacturer
pays
the
minimum
fee
of
$300
(or
$.
60
per
engine).
500
*
$50
*
.01
=
$250
$250
<
$300
minimum
fee
Fee
=
$300
EPA
also
had
a
fees
rule
briefing
which
was
offered
in
Ann
Arbor,
MI,
to
regulated
industries
on
August
29,
2001.
The
purpose
of
the
briefing
was
to
give
businesses
enough
time
to
plan
for
fees
in
their
2003
FY
budgets.
We
continue
to
be
interested
in
the
potential
impacts
of
the
proposed
fees
on
small
entities
and
welcome
comments
on
issues
related
to
such
impacts.

C.
Paperwork
Reduction
Act
The
information
collection
requirements
in
this
proposed
rule
have
been
submitted
for
approval
to
the
Office
of
Management
and
Budget
(OMB)
under
the
Paperwork
Reduction
Act,
44
U.
S.
C.
3501
et
seq.
An
Information
Collection
Request
(ICR)
document
has
been
prepared
by
EPA
(ICR
No.
)
and
a
copy
may
be
obtained
from
Susan
Auby
by
mail
at
Collection
Strategies
Division;
U.
S.
Environmental
Protection
Agency
(2822);
1200
Pennsylvania
Ave.,
NW,
Washington,
DC
20460,
by
email
at
farmer.
sandy@
epamail.
epa.
gov,
or
by
calling
(202)
260–
4901.
A
copy
may
also
be
downloaded
off
the
internet
at
http://
www.
epa.
gov/
icr.
The
information
to
be
collected
is
necessary
to
assure
that
the
fees
collected
are
properly
credited
to
the
both
the
firm
paying
them
and
the
specific
product
to
be
certified.
In
addition,
under
some
circumstances,
a
fee
may
be
reduced
or
refunded;
information
collected
will
be
used
to
verify
that
such
action
is
appropriate.
Except
for
reduced
fees
and
refunds,
the
submission
of
information
is
mandatory.
The
collection
is
authorized
by
the
Clean
Air
Act
(42
U.
S.
C.
7552)
and
the
Independent
Offices
Appropriations
Act
(31
U.
S.
C.
9701).
Information
collected
will
be
available
to
the
public.
EPA
estimates
that
1600
certifications
will
be
requested
annually
of
which
180
will
qualify
for
a
reduced
fee.
In
addition,
approximately
50
fee
refunds
will
be
processed
each
year.
The
total
burden
of
these
projected
responses
per
year
is
500
hours;
an
average
of
18
minutes
per
response.
There
are
no
capital,
start­
up,
operation,
maintenance
or
other
costs
associated
with
this
collection.
Burden
means
the
total
time,
effort,
or
financial
resources
expended
by
persons
to
generate,
maintain,
retain,
or
disclose
or
provide
information
to
or
for
a
Federal
agency.
This
includes
the
time
needed
to
review
instructions;
develop,
acquire,
install,
and
utilize
technology
and
systems
for
the
purposes
of
collecting,
validating,
and
verifying
information,
processing
and
maintaining
information,
and
disclosing
and
providing
information;
adjust
the
existing
ways
to
comply
with
any
previously
applicable
instructions
and
requirements;
train
personnel
to
be
able
to
respond
to
a
collection
of
information;
search
data
sources;
complete
and
review
the
collection
of
information;
and
transmit
or
otherwise
disclose
the
information.
An
Agency
may
not
conduct
or
sponsor,
and
a
person
is
not
required
to
respond
to
a
collection
of
information
unless
it
displays
a
currently
valid
OMB
control
number.
The
OMB
control
numbers
for
EPA's
regulations
are
listed
in
40
CFR
part
9
and
48
CFR
Chapter
15.
Comments
are
requested
on
the
Agency's
need
for
this
information,
the
accuracy
of
the
provided
burden
estimates,
and
any
suggested
methods
for
minimizing
respondent
burden,
including
through
the
use
of
automated
collection
techniques.
Send
comments
on
the
ICR
to
the
Director,
Collection
Strategies
Division;
U.
S.
Environmental
Protection
Agency
(2822);
1200
Pennsylvania
Ave.,
NW.,
Washington,
DC
20460;
and
to
the
Office
of
Information
and
Regulatory
Affairs,
Office
of
Management
and
Budget,
725
17th
St.,
NW.,
Washington,
DC
20503,
marked
``
Attention:
Desk
Officer
for
EPA.
''
Include
the
ICR
number
in
any
correspondence.
Since
OMB
is
required
to
make
a
decision
concerning
the
ICR
between
30
and
60
days
after
August
7,
2002,
a
comment
to
OMB
is
best
assured
of
having
its
full
effect
if
OMB
receives
it
by
September
6,
2002.
The
final
rule
will
respond
to
any
OMB
or
public
comments
on
the
information
collection
requirements
contained
in
this
proposal.
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
action
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
by
state,
local,
and
tribal
governments,
in
the
aggregate,
or
by
the
private
sector,
of
$100
million
or
more
in
any
one
year.
Before
promulgation
of
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
we
establish
any
regulatory
requirement
that
may
significantly
or
uniquely
affect
small
governments,
including
tribal
governments,
we
must
develop,
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
our
regulatory
proposals
with
significant
federal
intergovernmental
mandates.
The
plan
must
also
provide
for
informing,
educating,
and
advising
small
governments
on
compliance
with
the
regulatory
requirements.
Today's
proposed
rule
contains
no
Federal
mandates
for
state,
local,
or
tribal
governments.
Nor
does
this
proposed
rule
have
Federal
mandates
that
may
result
in
the
expenditures
of
$100
million
or
more
in
any
year
by
the
private
sector
as
defined
by
the
provisions
of
Title
II
of
the
UMRA
as
the
total
cost
of
the
fee
program
is
estimated
to
be
below
20
million
dollars.
Nothing
in
the
proposed
rule
would
significantly
or
uniquely
affect
small
governments.

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Vol.
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152
/
Wednesday,
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7,
2002
/
Proposed
Rules
E.
National
Technology
Transfer
and
Advancement
Act
Section
12(
d)
of
the
National
Technology
Transfer
and
Advancement
Act
of
1995
(NTTAA),
Public
Law
104–
113,
12(
d)
(15
U.
S.
C.
272),
directs
the
EPA
to
use
voluntary
consensus
standards
(VCS)
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,
business
practices,
etc.)
that
are
developed
or
adopted
by
voluntary
consensus
standard
bodies.
The
NTTAA
requires
EPA
to
provide
Congress,
through
OMB,
explanations
when
the
Agency
decides
not
to
use
available
and
applicable
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
explain
why
such
standards
should
be
used
in
this
regulation.

F.
Executive
Order
13045:
Children's
Health
Protection
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
believes
this
proposed
rule
is
not
subject
to
the
Executive
Order
because
it
is
not
an
economically
significant
regulatory
action
as
defined
by
Executive
Order
12866.
In
addition,
this
proposed
rule
is
not
subject
to
the
Executive
Order
because
it
does
not
involve
decisions
based
on
environmental
health
or
safety
risks
that
may
disproportionately
affect
children.
Today's
proposed
rule
seeks
to
implement
a
fees
program
and
is
expected
to
have
no
impact
on
environmental
health
or
safety
risks
that
would
affect
the
public
or
disproportionately
affect
children.
G.
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
will
not
have
federalism
implications.
It
will
not
have
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.
This
proposed
rule
will
impose
no
direct
compliance
costs
on
states.
Thus,
the
requirements
of
section
6
of
Executive
Order
13132
do
not
apply
to
this
rule.
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.

H.
Executive
Order
13211:
Energy
Effects
This
proposed
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
will
not
have
a
significant
adverse
effect
on
the
supply,
distribution,
or
use
of
energy.
Further,
we
have
determined
that
this
proposed
rule
is
not
likely
to
have
any
adverse
energy
effects.

I.
Executive
Order
13175:
Consultation
With
Indian
Tribal
Governments
Executive
Order
13175,
entitled
``
Consultation
and
Coordination
with
Indian
Tribal
Governments''
(65
FR
67249,
November
6,
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
does
not
have
tribal
implications.
It
will
not
have
substantial
direct
effects
on
tribal
governments,
on
the
relationship
between
the
Federal
government
and
Indian
tribes,
or
on
the
distribution
of
power
and
responsibilities
between
the
Federal
government
and
Indian
tribes,
as
specified
in
Executive
Order
13175.
The
requirements
proposed
by
this
action
impact
private
sector
businesses,
particularly
the
vehicle
and
engine
manufacturing
industries.
Thus,
Executive
Order
13175
does
not
apply
to
this
rule.

List
of
Subjects
40
CFR
Part
85
Environmental
protection,
Confidential
business
information,
Imports,
Labeling,
Motor
vehicle
pollution,
Reporting
and
recordkeeping
requirements,
Research,
Warranties.

40
CFR
Part
86
Environmental
protection,
Administrative
practice
and
procedure,
Air
Pollution
Control,
Confidential
business
information,
Diesel,
Gasoline,
Fees,
Imports,
Incorporation
by
reference,
Labeling,
Motor
vehicle
pollution,
Motor
vehicles,
Reporting
and
recordkeeping
requirements.

Dated:
July
17,
2002.

Christine
Todd
Whitman,

Administrator.

For
the
reasons
set
forth
in
the
preamble,
title
40,
chapter
I
of
the
Code
of
Federal
Regulations
is
proposed
to
be
amended
as
follows:

PART
85—
CONTROL
OF
AIR
POLLUTION
FROM
MOBILE
SOURCES
1.
The
Authority
for
part
85
continues
to
read
as
follows:

Authority:
42
U.
S.
C.
7401–
7671q.

2.
Add
a
new
Subpart
Y
to
Part
85
to
read
as
follows:

Subpart
Y—
Fees
for
the
Motor
Vehicle
and
Engine
Compliance
Program
Sec.
85.2401
To
whom
do
these
requirements
apply?
85.2402
[Reserved]
85.2403
What
definitions
apply
to
this
subpart?
85.2404
What
abbreviations
apply
to
this
subpart?
85.2405
How
much
are
the
fees?
85.2406
Can
I
qualify
for
reduced
fees?
85.2407
Can
I
get
a
refund
if
I
don't
get
a
certificate
or
overpay?
85.2408
How
do
I
make
a
fee
payment?
85.2409
Deficiencies
85.2410
Special
provisions
applicable
to
the
2003
model
year
only.

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Proposed
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Subpart
Y—
Fees
for
the
Motor
Vehicle
and
Engine
Compliance
Program
§
85.2401
To
whom
do
these
requirements
apply?

(a)
This
subpart
prescribes
fees
manufacturers
must
pay
for
the
motor
vehicle
and
engine
compliance
program
(MVECP)
activities
performed
by
the
EPA.
The
prescribed
fees
and
the
provisions
of
this
subpart
apply
to
manufacturers
of:
(1)
Light­
duty
vehicles
(cars
and
trucks)
(See
40
CFR
Part
86);
(2)
Medium
Duty
Passenger
Vehicles
(See
40
CFR
Part
86);
(3)
Complete
gasoline­
fueled
highway
heavy
duty
vehicles
(See
40
CFR
Part
86);
(4)
Heavy­
duty
highway
diesel
and
gasoline
engines
(See
40
CFR
Part
86);
(5)
On­
highway
motorcycles
(See
40
CFR
Part
86);
(6)
Nonroad
compression
ignition
engines
(See
40
CFR
Part
89);
(7)
Locomotives
(See
40
CFR
Part
92);
(8)
Marine
diesel
and
gasoline
engines
(See
40
CFR
Parts
91,
94,
or
1045
and
MARPOL
73/
78,
as
applicable);
(9)
Small
nonroad
spark
ignition
engines
(engines
 
19kW)
(See
40
CFR
Part
90);
(10)
Recreational
vehicles
(including,
but
not
limited
to,
snowmobiles,
allterrain
vehicles
and
off­
highway
motorcycles)
(See
40
CFR
Part
1051);
(11)
Heavy­
duty
highway
gasoline
vehicles
(evaporative
emissions
certification
only)
(See
40
CFR
Part
86);
and
(12)
Large
nonroad
spark
ignition
engines
(engines
>
19
kW)
(See
40
CFR
Part
1048).
(b)
This
subpart
applies
to
manufacturers
that
submit
2003
and
later
model
year
certification
requests
received
on
or
after
[60
days
after
the
date
of
publication
of
the
final
rule].
(c)
Certification
requests
for
the
2003
model
year
which
are
complete,
contain
all
required
data,
and
are
received
prior
to
[60
days
after
the
date
of
publication
of
the
final
rule]
are
subject
to
the
provisions
of
40
CFR
part
86,
subpart
J.
(d)
Nothing
in
this
subpart
will
be
construed
to
limit
the
Administrator's
authority
to
require
manufacturer
or
confirmatory
testing
as
provided
in
the
Clean
Air
Act,
including
authority
to
require
manufacturer
in­
use
testing
as
provided
in
section
208
of
the
Clean
Air
Act.

§
85.2402
[Reserved]

§
85.2403
What
definitions
apply
to
this
subpart?
(a)
The
following
definitions
apply
to
this
subpart:
Agency
or
EPA
means
the
U.
S.
Environmental
Protection
Agency.
Body
Builder
means
a
manufacturer,
other
than
the
OEM,
who
installs
certified
on­
highway
HD
engines
into
equipment
such
as
trucks.
California­
only
certificate
is
a
Certificate
of
Conformity
issued
by
EPA
which
only
signifies
compliance
with
the
emission
standards
established
by
California.
Certification
request
means
a
manufacturer's
request
for
certification
evidenced
by
the
submission
of
an
application
for
certification,
ESI
data
sheet,
or
ICI
Carryover
data
sheet.
A
single
certification
request
covers
one
test
group,
engine
family,
or
engine
system
combination
as
applicable.
For
HDV
evaporative
certification,
the
certification
request
covers
one
evaporative
family.
Consumer
Price
Index
means
the
consumer
price
index
for
all
U.
S.
cities
using
the
``
U.
S.
city
average''
area
,
``
all
items''
and
``
not
seasonally
adjusted''
numbers
calculated
by
the
Department
of
Labor.
Federal
certificate
is
a
Certificate
of
Conformity
issued
by
EPA
which
signifies
compliance
with
emission
requirements
in
40
CFR
part
85,
86,
89,
90,
91,
92,
94,
1045,
1048,
and/
or
1051
as
applicable.
Filing
form
means
the
MVECP
Fee
Filing
Form
to
be
sent
with
payment
of
the
MVECP
fee.
Fuel
economy
basic
engine
means
a
unique
combination
of
manufacturer,
engine
displacement,
number
of
cylinders,
fuel
system,
catalyst
usage,
and
other
characteristics
specified
by
the
Administrator.
MARPOL
73/
78
is
the
international
treaty
regulating
disposal
of
wastes
generated
by
normal
operation
of
vessels
(Title:
International
Convention
for
the
Prevention
of
Pollution
from
Ships).
Recreational
means
the
engines
subject
to
40
CFR
1051
which
includes
off
road
motorcycles,
all­
terrain
vehicles,
and
snowmobiles.
(b)
The
definitions
contained
in
the
following
parts
also
apply
to
this
subpart.
If
the
term
is
defined
in
paragraph
(a)
of
this
section
then
that
definition
will
take
precedence.
(1)
40
CFR
Part
85;
(2)
40
CFR
Part
86;
(3)
40
CFR
Part
89;
(4)
40
CFR
Part
90;
(5)
40
CFR
Part
91;
(6)
40
CFR
Part
92;
(7)
40
CFR
Part
94;
(8)
40
CFR
Part
1045;
(9)
40
CFR
Part
1048;
and
(10)
40
CFR
Part
1051.

§
85.2404
What
abbreviations
apply
to
this
subpart?

The
abbreviations
in
this
section
apply
to
this
subpart
and
have
the
following
meanings:
Cal—
California;
CI—
Compression
Ignition
(Diesel)
cycle
engine;
CPI—
Consumer
Price
Index;
ESI—
Engine
System
Information;
EPA—
U.
S.
Environmental
Protection
Agency;
Evap—
Evaporative
Emissions;
Fed—
Federal;
HD—
Heavy­
duty
engine;
HDV—
Heavy­
duty
vehicle;
HW—
On
Highway
versions
of
a
vehicle
or
engine;
ICI—
Independent
Commercial
Importer;
IMO—
International
Maritime
Organization;
LD—
Light­
Duty
including
both
LDT
and
LDV;
LDT—
Light­
duty
truck;
LDV—
Light­
duty
vehicle;
MARPOL—
An
IMO
treaty
for
the
control
of
marine
pollution;
MC—
Motorcycle;
MDPV—
Medium­
Duty
Passenger
Vehicle;
MVECP—
Motor
Vehicle
and
Engine
Compliance
Program;
MY—
Model
Year;
NR—
Nonroad
version
of
a
vehicle
or
engine;
OEM—
Original
equipment
manufacturer;
SI—
Spark
Ignition
(Otto)
cycle
engine.

§
85.2405
How
much
are
the
fees?

(a)
Fees
for
the
2003
and
2004
model
years.
The
fee
for
each
certification
request
is
in
the
following
table:

Category
Certificate
type
Fee
(1)
LD,
excluding
ICIs
...................................................................
Fed
Certificate
.............................................................................
33,911
(2)
LD,
excluding
ICIs
...................................................................
Cal­
only
Certificate
......................................................................
16,958
(3)
MDPV,
excluding
ICIs
.............................................................
Fed
Certificate
.............................................................................
33,911
(4)
MDPV,
excluding
ICIs
.............................................................
Cal­
only
Certificate
......................................................................
16,958
(5)
Complete
SI
HDVs,
excluding
ICIs
.........................................
Fed
Certificate
.............................................................................
33,911
(6)
Complete
SI
HDVs,
excluding
ICIs
.........................................
Cal­
only
Certificate
......................................................................
16,958
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7,
2002
/
Proposed
Rules
Category
Certificate
type
Fee
(7)
ICIs
for
the
following
industries:
LD,
MDPV,
or
Complete
SI
HDVs.
All
Types
......................................................................................
8,394
(8)
MC
HW,
including
ICIs
............................................................
All
Types
......................................................................................
2,416
(9)
HD
HW,
including
ICIs
............................................................
Fed
Certificate
.............................................................................
30,437
(10)
HD
HW,
including
ICIs
..........................................................
Cal­
only
Certificate
......................................................................
827
(11)
HDV
(evap),
including
ICIs
....................................................
Evap
Certificate
...........................................................................
827
(12)
NR
CI,
including
ICIs,
but
excluding
Locomotives,
Marine
and
Recreational
engines.
All
Types
......................................................................................
2,156
(13)
NR
SI,
including
ICIs
.............................................................
All
Types
......................................................................................
827
(14)
All
Marine,
including
ICIs
.......................................................
All
Types
and
IMO
.......................................................................
827
(15)
All
Recreational,
including
ICIs,
but
excluding
marine
engines
All
Types
......................................................................................
827
(16)
Locomotives,
including
ICIs
...................................................
All
Types
......................................................................................
827
(b)
Fees
for
2005
model
year
and
beyond.
(1)
Starting
with
the
2005
model
year,
the
fees
due
for
each
certification
request
will
be
calculated
using
an
equation
which
adjusts
the
fees
in
paragraph
(a)
of
this
section
for
the
change
in
the
consumer
price
index.
(2)
Fees
for
2005
model
year
and
later
certification
requests
will
be
calculated
using
the
following
equation.
FeesMY
=
Feesbase
×
(CPIMY–
2
/
CPI2002)
Where:
FeesMY
is
the
applicable
fee
for
the
model
year
of
the
certification
request.
Feesbase
is
the
applicable
fee
from
paragraph
(a)
of
this
section.
CPIMY–
2
is
the
consumer
price
index
for
all
U.
S.
cities
using
the
``
U.
S.
city
average''
area
,
``
all
items''
and
``
not
seasonally
adjusted''
numbers
calculated
by
the
Department
of
Labor
listed
for
the
month
of
July
of
the
year
two
years
before
the
model
year.
(e.
g.,
for
the
2005
MY
use
the
CPI
based
on
the
date
of
July,
2003).
CPI2002
is
the
consumer
price
index
for
all
U.
S.
cities
using
the
``
U.
S.
city
average''
area
,
``
all
items''
and
``
not
seasonally
adjusted''
numbers
calculated
by
the
Department
of
Labor
for
December,
2002.
(c)
A
single
fee
will
be
charged
when
a
manufacturer
seeks
to
certify
multiple
evaporative
families
within
a
single
engine
family
or
test
group.
(d)
A
body
builder,
who
exceeds
the
maximum
fuel
tank
size
for
a
HDV
that
has
been
certified
by
an
OEM
and
consequently
makes
a
request
for
HDV
certification,
must
pay
a
separate
fee
for
each
certification
request.
The
fee
will
be
that
listed
in
paragraphs
(a)
and
(b)
of
this
section,
paragraph
(c)
does
not
apply.

§
85.2406
Can
I
qualify
for
reduced
fees?

(a)
Eligibility
Requirements.
To
be
eligible
for
a
reduced
fee,
the
following
conditions
must
be
satisfied:
(1)
The
certificate
is
to
be
used
for
sale
of
vehicles
or
engines
within
the
United
States;
and
(2)
The
full
fee
for
certification
request
for
a
MY
exceeds
1.0%
of
the
aggregate
projected
retail
sales
price
of
all
vehicles
or
engines
covered
by
that
certificate.
(b)
Initial
Reduced
Fee
Calculation.
(1)
If
the
requirements
of
paragraph
(a)
of
this
section
are
satisfied,
the
fee
to
be
paid
by
the
applicant
(the
``
initial
reduced
fee'')
will
be
the
greater
of:
(i)
1.0%
of
the
aggregate
projected
retail
sales
price
of
all
the
vehicles
or
engines
to
be
covered
by
the
certification
request;
or
(ii)
A
minimum
fee
of
$300.
(2)
For
vehicles
or
engines
that
are
converted
to
operate
on
an
alternative
fuel
using
as
the
basis
for
the
conversion
a
vehicle
or
engine
which
is
covered
by
an
existing
OEM
certificate
of
conformity,
the
cost
basis
used
in
this
section
must
be
the
aggregate
projected
retail
value­
added
to
the
vehicle
or
engine
by
the
conversion
rather
than
the
full
cost
of
the
vehicle
or
engine.
To
qualify
for
this
provision,
the
applicable
OEM
certificate
must
cover
the
same
sales
area
and
model
year
as
requested
certificate
for
the
converted
vehicle
or
engine.
(3)
For
ICI
certification
requests,
the
cost
basis
of
this
section
must
be
the
aggregate
projected
retail
cost
of
the
entire
vehicle(
s)
or
engine(
s),
not
just
the
value
added
by
the
conversion.
If
the
vehicles/
engines
covered
by
an
ICI
certificate
are
not
being
offered
for
sale,
the
manufacturer
shall
use
the
fair
retail
market
value
of
the
vehicles/
engines
as
the
retail
sale
price
required
in
this
section.
For
an
ICI
certification
request,
the
retail
sales
price
(or
fair
retail
market
value)
must
be
based
on
the
applicable
National
Automobile
Dealer's
Association
(NADA)
appraisal
guide
and/
or
other
evidence
of
the
actual
market
value.
(4)
The
aggregate
cost
used
in
this
section
must
be
based
on
the
total
projected
sales
of
all
vehicles
and
engines
under
a
certificate,
including
vehicles
and
engines
modified
under
the
modification
and
test
option
in
40
CFR
85.1509
and
89.609.
The
projection
of
the
number
of
vehicles
or
engines
to
be
covered
by
the
certificate
and
their
projected
retail
selling
price
must
be
based
on
the
latest
information
available
at
the
time
of
the
fee
payment.
(5)
A
manufacturer
may
submit
a
reduced
fee
as
described
in
paragraphs
(a)
and
(b)(
1)
through
(b)(
4)
of
this
section
if
it
is
accompanied
by
a
certification
from
the
manufacturer
that
the
reduced
fee
is
appropriate
under
this
section.
The
reduced
fee
shall
be
deemed
approved,
unless
EPA
determines
that
the
criteria
of
this
section
have
not
been
met.
The
Agency
may
make
such
determination
either
before
or
after
EPA
issues
a
certificate
of
conformity.
If
the
Agency
determines
that
the
requirements
of
this
section
have
not
been
met,
EPA
may:
(i)
Require
that
future
reduced
fee
eligibility
determinations
be
made
by
the
Agency;
(ii)
Require
that
the
manufacturer
for
future
reduced
fee
requests
use
the
special
provisions
contained
in
paragraph
(b)
(7);
or
(iii)
Deny
future
reduced
fee
requests
and
require
submission
of
the
full
fee
payment
until
such
time
as
the
manufacturer
demonstrates
to
the
satisfaction
of
the
Administrator
that
its
reduced
fee
submissions
are
based
on
accurate
date
and
that
final
fee
payments
are
made
within
45
days
of
the
end
of
the
model
year.
(6)
If
the
reduced
fee
is
denied
by
the
Administrator,
the
applicant
will
have
30
days
from
the
date
of
notification
of
the
denial
to
submit
the
appropriate
fee
to
EPA
or
appeal
the
denial.
(7)
The
following
special
provisions
are
available
for
manufacturers
which
meet
the
requirements
of
paragraph
(a)
of
this
section
but,
due
to
the
nature
of
their
business,
are
unable
to
make
good
estimates
of
the
aggregate
projected
retail
sales
price
of
all
the
vehicles
or
engines
to
be
covered
by
the
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Federal
Register
/
Vol.
67,
No.
152
/
Wednesday,
August
7,
2002
/
Proposed
Rules
certification
request
as
required
in
paragraph
(b)(
1)
of
this
section.
EPA
may
also
require
a
manufacturer
to
use
these
special
provisions
rather
than
the
process
described
in
paragraph
(b)(
5)
of
this
section
if
EPA
makes
such
a
determination
under
paragraph
(b)(
5)(
ii)
of
this
section.
(i)
A
manufacturer's
request
to
use
of
these
provisions
requires
advance
Agency
approval
and
will
be
based
on
a
determination
of
whether
the
requirements
of
this
section
have
been
met.
The
request
to
use
these
provisions
shall
be
made
prior
to
the
submission
of
its
application
for
certification.
The
manufacturer
shall
provide
as
part
of
this
request:
(A)
A
statement
that
the
eligibility
requirements
of
paragraph
(a)
of
this
section
are
satisfied;
and
(B)
The
reasons
why
it
is
unable
to
make
a
good
estimate
of
the
aggregate
projected
retail
sales
price
of
all
the
vehicles
or
engines
to
be
covered
by
the
certification
request
as
required
in
paragraph
(b)(
1)
of
this
section.
(ii)
If
the
request
is
approved,
the
initial
reduced
fee
is
the
greater
of:
(A)
1%
of
the
retail
selling
price
of
5
vehicles,
engines,
or
conversions,
as
appropriate;
or
(B)
A
minimum
fee
of
$300.
(c)
Final
Reduced
Fee
Calculation
and
Adjustment.
(1)
Within
30
days
of
the
end
of
the
model
year,
the
manufacturer
shall
submit
a
model
year
reduced
fee
payment
report
covering
all
certificates
issued
in
the
model
year
for
which
the
manufacturer
has
paid
a
reduced
fee.
This
report
will
include:
(i)
The
fee
amount
paid
at
certification
time;
(ii)
The
total
actual
number
of
vehicles
covered
by
the
certificate;
(iii)
A
calculation
of
the
actual
final
reduced
fee
due
for
each
certificate;
and
(iv)
A
difference
between
the
total
fees
paid
and
the
total
final
fees
due
for
the
manufacturer.
(2)
The
final
reduced
fee
shall
be
calculated
using
the
procedures
of
paragraph
(b)
of
this
section
but
using
actual
numbers
rather
than
projections.
(3)
If
the
difference
calculated
in
paragraph
(c)(
1)(
iv)
of
this
section
exceeds
$500
which
is
due
to
the
Agency,
then
the
manufacturer
shall
pay
any
difference
due
between
the
initial
reduced
fee
and
the
final
reduced
fee
using
the
provisions
of
§
85.2408.
This
payment
shall
be
paid
within
45
days
of
the
end
of
the
model
year.
The
total
fees
paid
for
a
certificate
shall
not
exceed
the
applicable
full
fee
of
§
85.2405.
If
a
manufacturer
fails
to
make
complete
payment
within
45
days
or
to
submit
the
report
under
paragraph
(c)(
1)
of
this
section
then
the
Agency
may
void
ab
initio
the
applicable
certificate.
EPA
may
also
refuse
to
grant
reduced
fee
requests
submitted
under
paragraph
(b)(
5)
or
(b)(
7)
of
this
section.
(4)
If
the
initial
reduced
fee
paid
exceeds
the
final
reduced
fee
then
the
manufacturer
may
request
a
refund
using
the
procedures
of
§
85.2407.
(5)
Manufacturers
must
retain
in
their
records
the
basis
used
to
calculate
the
projected
sales
and
fair
retail
market
value
and
the
actual
sales
and
retail
price
for
the
vehicles
and
engines
covered
by
each
certificate
that
is
issued
under
the
reduced
fee
provisions
of
this
section.
This
information
must
be
retained
for
a
period
of
at
least
three
years
after
the
issuance
of
the
certificate
and
must
be
provided
to
the
Agency
within
30
days
of
request.
Manufacturers
are
also
subject
to
the
applicable
maintenance
of
records
requirements
of
Part
86,
Subpart
A.
If
a
manufacturer
fails
to
maintain
the
records
or
provide
such
records
to
EPA
as
required
by
this
paragraph
then
EPA
may
void
ab
initio
the
certificate
for
which
such
records
shall
be
kept.

§
85.2407
Can
I
get
a
refund
if
I
don't
get
a
certificate
or
overpay?

(a)
Full
Refund.
The
Administrator
may
refund
the
total
fee
imposed
by
§
85.2405
if
the
applicant
fails
to
obtain
a
certificate
and
requests
a
refund.
(b)
Partial
Refund.
The
Administrator
may
refund
a
portion
of
a
reduced
fee,
paid
under
§
85.2406,
due
to
a
decrease
in
the
aggregate
projected
retail
sales
price
of
the
vehicles
or
engines
covered
by
the
certification
request.
(1)
Partial
refunds
are
only
available
for
certificates
which
were
used
for
the
sale
of
vehicles
or
engines
within
the
United
States.
(2)
Requests
for
a
partial
refund
may
only
be
made
once
the
model
year
for
the
applicable
certificate
has
ended.
Requests
for
a
partial
refund
must
be
submitted
no
later
than
six
months
after
the
model
year
has
ended.
(3)
EPA
will
only
consider
requests
which
result
in
at
least
a
$500
refund.
Smaller
amounts
of
money
will
not
be
refunded,
nor
can
they
be
credited
to
other
certification
fee
payments
due
to
the
Agency.
(4)
Requests
for
a
partial
refund
must
include
all
the
following:
(i)
A
statement
that
the
applicable
certificate
was
used
for
the
sale
of
vehicles
or
engines
within
the
United
States.
(ii)
A
statement
of
the
fee
amount
paid
(the
reduced
fee)
under
the
applicable
certificate.
(iii)
The
actual
number
of
vehicles
or
engines
produced
under
the
certificate
(whether
or
not
the
vehicles/
engines
have
been
actually
sold).
(iv)
The
actual
retail
selling
or
asking
price
for
the
vehicles
or
engines
produced
under
the
certificate.
(v)
The
calculation
of
the
reduced
fee
amount
using
actual
production
levels
and
retail
prices.
The
calculated
reduced
fee
amount
may
not
be
less
than
$300
under
the
provisions
of
§
85.2406(
b)(
1)(
ii).
(vi)
The
calculated
amount
of
the
refund.
Refund
requests
for
less
than
$500
will
not
be
considered
under
the
provisions
of
paragraph
(b)(
3)
of
this
section.
(c)
Refunds
due
to
errors
in
submission.
The
Agency
will
approve
requests
from
manufacturers
to
correct
errors
in
the
amount
or
application
of
fees
if
the
manufacturer
provides
satisfactory
evidence
that
the
change
is
due
to
an
accidental
error
rather
than
a
change
in
plans.
Requests
to
correct
errors
must
be
made
to
the
Administrator
as
soon
as
possible
after
identifying
the
error.
The
Agency
will
not
consider
requests
to
reduce
fee
amounts
due
to
errors
that
are
reported
more
than
90
days
after
the
issuance
of
the
applicable
certificate
of
conformity.
(d)
In
lieu
of
a
refund,
the
manufacturer
may
apply
the
refund
amount
to
the
amount
due
on
another
certification
request.
(e)
A
request
for
a
full
or
partial
refund
of
a
fee
or
a
report
of
an
error
in
the
fee
payment
or
its
application
must
be
submitted
in
writing
to:
U.
S.
Environmental
Protection
Agency,
Vehicle
Programs
and
Compliance
Division,
Fee
Program
Specialist,
National
Vehicle
and
Fuel
Emission
Laboratory,
2000
Traverwood,
Ann
Arbor,
MI
48105.

§
85.2408
How
do
I
make
a
fee
payment?
(a)
All
fees
required
by
this
subpart
must
be
paid
by
money
order,
bank
draft,
certified
check,
corporate
check,
or
electronic
funds
transfer
payable
in
U.
S.
dollars
to
the
order
of
the
Environmental
Protection
Agency.
(b)
A
completed
fee
filing
form
must
be
sent
to
the
address
designated
on
the
form
for
each
fee
payment
made.
(c)
Fees
must
be
paid
prior
to
submission
of
an
application
for
certification.
The
Agency
will
not
process
applications
for
which
the
appropriate
fee
(or
reduced
fee
amount)
has
not
been
fully
paid.
(d)
If
EPA
denies
a
reduced
fee,
the
proper
fee
must
be
submitted
within
30
days
after
the
notice
of
denial,
unless
the
decision
is
appealed.
If
the
appeal
is
denied,
then
the
proper
fee
must
be
submitted
within
30
days
after
the
notice
of
the
appeal
denial.

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Federal
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/
Vol.
67,
No.
152
/
Wednesday,
August
7,
2002
/
Proposed
Rules
§
85.2409
Deficiencies.
(a)
Any
filing
pursuant
to
this
subpart
that
is
not
accompanied
by
a
completed
fee
filing
form
and
full
payment
of
the
appropriate
fee
is
deemed
to
be
deficient.
(b)
A
deficient
filing
will
be
rejected
and
the
amount
paid
refunded,
unless
the
full
appropriate
fee
is
submitted
within
a
time
limit
specified
by
the
Administrator.
(c)
EPA
will
not
process
a
request
for
certification
associated
with
any
filing
that
is
deficient
under
this
section.
(d)
The
date
of
filing
will
be
deemed
the
date
on
which
EPA
receives
the
full
appropriate
fee
and
the
completed
fee
filing
form.

§
85.2410
Special
provisions
applicable
to
the
2003
model
year
only.
(a)
For
the
2003
model
year,
the
fees
specified
in
sec.
85.2405
of
this
part
will
be
waived
for
any
light­
duty
vehicle,
light­
duty
truck,
or
heavy­
duty
engine
certification
request
that
meets
the
small
volume
sales
requirements
of
40
CFR
86.1838–
01
or
86.098–
14,
as
applicable,
and:
(1)
Is
a
dedicated
gaseous­
fueled
vehicle
or
engine;
or
(2)
Receives
a
certificate
of
conformity
with
the
LEV,
ILEV,
ULEV,
or
ZEV
emissions
standards
in
40
CFR
part
88.
(b)
This
section
does
not
apply
to
2004
model
year
and
later
vehicles
or
engines.

PART
86—
CONTROL
OF
EMISSIONS
FROM
NEW
AND
IN­
USE
HIGHWAY
VEHICLES
AND
ENGINES
3.
The
Authority
for
Part
86
continues
to
read
as
follows:

Authority:
42
U.
S.
C.
7401–
7671q.

Subpart
J—[
Amended]

4.
Section
86.903–
93
is
revised
to
read
as
follows:

§
86.903–
93
Applicability.
(a)
This
subpart
prescribes
fees
to
be
charged
for
the
MVECP
for
the
1993
through
2003
model
year.
The
fees
charged
will
apply
to
all
manufacturers'
and
ICIs',
LDVs,
LDTs,
HDVs,
HDEs,
and
MCs.
Nothing
in
this
subpart
shall
be
construed
to
limit
the
Administrator's
authority
to
require
manufacturer
or
confirmatory
testing
as
provided
in
the
Clean
Air
Act,
including
authority
to
require
manufacturer
in­
use
testing
as
provided
in
section
208
of
the
Clean
Air
Act.
(b)
The
fees
prescribed
in
this
subpart
are
replaced
by
the
requirements
of
40
CFR
part
85,
subpart
Y
for
2003
and
later
certification
requests
received
on
or
after
[60
days
after
the
date
of
publication
of
the
final
rule].
(c)
The
fees
prescribed
in
this
subpart
will
only
apply
to
those
2003
model
year
certification
requests
which
are
complete,
include
all
data
required
by
this
title,
and
are
received
by
the
Agency
prior
to
[60
days
after
the
date
of
publication
of
the
final
rule].

[FR
Doc.
02–
19563
Filed
8–
6–
02;
8:
45
am]

BILLING
CODE
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