7. Nonconformance Penalties Clean Air Act section 206( g) (42 U. S. C. 7525( g)), allows EPA to issue a certificate of conformity for heavyduty engines or for highway motorcycles that exceed an applicable section 202( a) emissions standard, but do not exceed an upper limit associated with that standard, if the manufacturer pays a nonconformance penalty established by rulemaking. Congress adopted section 206( g) in the Clean Air Act Amendments of 1977 as a response to perceived problems with technologyforcing heavy duty engine emissions standards. If strict standards were maintained, then some manufacturers, `` technological laggards, '' might be unable to comply initially and would be forced out of the marketplace. Nonconformance penalties were intended to remedy this potential problem. The laggards would have a temporary alternative that would permit them to sell their engines or vehicles by payment of a penalty. There are three criteria for determining the eligibility of emission standards for nonconformance penalties in any given model year. First, the emission standard in question must become more difficult to meet, either by becoming more stringent itself or by its interaction with another emission standard that has become more stringent. Second, substantial work must be required to meet the emission standard. We consider `` substantial work'' to mean the application of technology not previously used in that vehicle or engine class/ subclass, or a significant modification of existing technology, to bring that vehicle/ engine into compliance. We do not consider minor modifications or calibration changes to be classified as substantial work. Third, it must be likely that a company will become a technological laggard. A technological laggard is defined as a manufacturer who cannot meet a particular emission standard due to technological (not economic) difficulties and who, in the absence of nonconformance penalties, might be forced from the marketplace. Nonconformance penalties have been offered on occasion as a compliance option for several heavy duty engine emission standards, but they have never been offered for highway motorcycles. However, as noted above, the Clean Air Act provides us with the authority to provide nonconformance penalties for highway motorcycles if they can be justified. While we do not currently believe that the three criteria established by rulemaking could be satisfied with respect to the Tier 1 standard (the `` substantial work'' criterion may not be applicable), there is a greater possibility that the criteria could be satisfied with respect to the Tier 2 standard. We request comment on whether the three criteria noted above could apply to the Tier 1 or Tier 2 standard, and if so, whether nonconformance penalties should be considered as an option. Typically, however, it is impossible at the time of a rulemaking to make the finding that a technological laggard has emerged with respect to a standard taking effect well into the future. For example, the proposed program would provide eight years of lead time to meet the Tier 2 standard, and making a judgment in this rulemaking regarding the existence of a technological laggard is impossible. It would be likely, for example, that we revisit this issue in the context of California ARB's 2006 progress review, or even later. However,

VerDate Aug< 2,> 2002 18: 43 Aug 13, 2002 Jkt 197001 PO 00000 Frm 00036 Fmt 4701 Sfmt 4702 E:\ FR\ FM\ 14AUP2. SGM pfrm17 PsN: 14AUP2 53085 Federal Register / Vol. 67, No. 157 / Wednesday, August 14, 2002 / Proposed Rules 42 The manufacturer taht had certified this twostroke for highway use has typically certified 4Ð 5 other Class I or II engine families; therefore, a basic averaging program could enable them to continue to market their two stroke dual sport. However, other manufacturers may not have adequate additional engine families in these classes, making a basic average standard less useful to them. 43 Aprilia webstie, http:// www. apriliausa. com/ ridezone/ ing/ models/ scarabeo50dt/ moto. htm. Available in the public docket for review. 44 Improving Urban Air Quality in South Asia by Reducing Emissions from Two Stroke Engine Vehicles. Masami Kojima, Carter Brandon, and Jitendra Shah. December 2000. Prepared for the World Bank. Available in the public docket for review (Docket AÐ 2000Ð 01; document IIÐ DÐ 191), or on the internet at: http:// www. worldbank. org/ html/ fpd/ esmpa/ publication/ airquality. html. we request comment nevertheless on whether nonconformance penalties would be a desirable option, should conditions develop that warrant them. We also request comment on, given the availability of the hardship provisions described above, whether nonconformance penalties would potentially be needed.

E. Technological Feasibility of the Standards 1. Class I and Class II Motorcycles Between 50 and 180cc As noted above, we are proposing to adopt the current California standards for Class I and Class II motorcycles. These standards have been in place in California since 1982. The question of whether or not these standards are technically feasible has been answered in the affirmative, since 21 of the 22 EPA certified 2001 model year motorcycle engine families in these classes are already certified to these standards, and all 24 of the 2002 model year engine families meet these standards. These 24 engine families are all powered by four stroke engines, with a variety of emission controls applied, including basic engine modifications on almost all engine families, secondary air injection on three engine families, and a two way oxidation catalyst on one engine family. In past model years, but not in the 2002 model year, an engine family that does not meet the California standards had certified to the existing federal standards and not sold in California. It was a 100cc dual sport motorcycle powered by a two stroke engine, with an HC certification level of 3.9 g/ km. This motorcycle no longer appears to be available as of the 2002 model year. Adopting the California standards for these motorcycle classes could preclude this motorcycle or others like it from being certified and sold federally, unless the federal program includes additional flexibility relative to the California program. As discussed above, we are proposing that the HC standard for Class I and Class II motorcycles be an averaging standard, in a departure from California's treatment of these motorcycle classes. This in itself could be of limited use given the low number of Class I and Class II engine families, but, as discussed in Section V. C. 2 above, we are also proposing to allow credits accumulated by certifying Class III engine families to a level lower than the standard to be used to offset Class I or Class II engine families certified to levels above the fleet average standard. 42 2. Class I Motorcycles Under 50cc As we have described earlier we are proposing to apply the current California standard for Class I motorcycles to motorcycles with displacements of less than 50cc (e. g., most motor scooters). These motorcycles are currently not subject to regulation by the U. S. EPA or by the State of California. They are, however, subject to emission standards in Europe and much of the rest of the world. Historically these motorcycles have been powered by 2 stroke engines, but a trend appears to be developing that would result in most of these being replaced by 4 stroke engines or possibly by advanced technology 2 stroke engines, in some cases with catalysts. The 4 stroke engine is capable of meeting our proposed standards. Class I motorcycles above 50cc are already meeting it, most of them employing nothing more than a 4 stroke engine. For example, the existing Class I scooters certify at levels ranging from 0.4 to 0.8 grams per kilometer HC. All of these achieve the standards with 4 stroke engine designs, and only one incorporates additional technology (a catalyst). These engines range from 80 to 151cc in displacement, indicating that a smaller engine should encounter few problems meeting the proposed standards. In order to meet more stringent standards being implemented worldwide, manufacturers are developing and implementing a variety of options. Honda, perhaps the largest seller of scooters in the U. S., has entirely eliminated 2 stroke engines from their scooter product lines as of the 2002 model year. They continue to offer a 50cc model, but with a 4 stroke engine. Both of Aprilia's 49cc scooters available in the U. S. have incorporated electronic direct injection technology, which, in the case of one model, enables it to meet the `` Euro 2'' standards of 1.2 grams per kilometer HC and 0.3 grams per kilometer NOX, without use of a catalytic converter. 43 Piaggio, while currently selling a 49cc basic 2 stroke scooter in the U. S., expects to begin production of a direct injection version in 2002, and a 4 stroke 50cc scooter is also in development. Numerous 49cc models marketed by Piaggio in Europe are available either as a 4 stroke or a 2 stroke with a catalyst. Piaggio, also an engine manufacturer and seller, is already offering a 50cc 4 stroke engine to its customers for incorporation into scooters. The U. S. represents a very small portion of the market for small motorcycles and scooters. There are few, if any, manufacturers that develop a small displacement motorcycle exclusively for the U. S. market; the domestic sales volumes do not appear large enough at this time to support an industry of this kind. The Italian company Piaggio (maker of the Vespa scooters), for example, sold about as many scooters worldwide in 2000 (about 480,000) as the entire volume of highway motorcycles of all sizes sold in the U. S. in that year. U. S. sales of Vespas in 2000 amounted to about 4800. The largest scooter markets today are in South Asia and Europe, where millions are sold annually. In Taiwan alone almost 800,000 motorcycles were sold domestically. More than one third of these were powered by 2 stroke engines. Two and three wheelers constitute a large portion of the transportation sector in Asia, and in some urban areas these vehiclesÑ many of them powered by 2 stroke enginesÑ can approach 75 percent of the vehicle population. According to a World Bank report, twostroke gasoline engine vehicles are estimated to account for about 60 percent of the total vehicle fleet in South Asia. 44 Many nations are now realizing that the popularity of these vehicles and the high density of these vehicles in urban areas are contributing to severe air quality problems. As a consequence, some of the larger small motorcycle markets in Asia and India are now placing these vehicles under fairly strict regulation. It is clear that actions in these nations will move the emission control technology on small motorcycles, including those under 50cc, in a positive direction. For example, according to the World Bank report, as of 2000 catalytic converters are installed in all new two stroke engine motorcycles in India, and 2003 standards in Taiwan will effectively ban new two strokes with emission VerDate Aug< 2,> 2002 18: 43 Aug 13, 2002 Jkt 197001 PO 00000 Frm 00037 Fmt 4701 Sfmt 4702 E:\ FR\ FM\ 14AUP2. SGM pfrm17 PsN: 14AUP2 53086 Federal Register / Vol. 67, No. 157 / Wednesday, August 14, 2002 / Proposed Rules standards so stringent that only a fourstroke engine is capable of meeting them. Given the emerging international picture regarding emission standards for scooters, we believe that scooter manufacturers will be producing scooters of less than 50cc displacement that meet our proposed standards well in advance of the 2006 model year, the first year we propose to subject this category of motorcycle to U. S. emission standards. We would expect that small entities that import scooters into the U. S. from the larger scooter markets would be able to import complying vehicles. We request comment on this assessment. There are other numerous factors in the international arena that may affect the product offerings in the less than 50cc market segment. For example, the European Union recently changed the requirements regarding insurance and helmet use for under 50cc scooters and mopeds. Previously, the insurance discounts and lack of helmet requirements in Europe provided two relatively strong incentives to purchasers to consider a 49cc scooter. Recently, however, the provisions were changed such that helmets are now required and the insurance costs are comparable to larger motorcycles. The result was a drop of about 30% in European sales of 49cc scooters in 2001 due to customers perceiving little benefit from a 49cc scooter relative to a larger displacement engine.

3. Class III motorcycles a. Tier 1 standards. In the short term, the proposed Tier 1 HC+ NOX standard of 1.4 g/ km HC+ NOX reflects the goal of achieving emission reductions that could be met with reasonably available control technologies, primarily involving engine modifications rather than catalytic converters. As noted earlier, we are proposing that this standard be effective for the 2006 model year. Based on current certification data, a number of existing engine families already comply with this standard or would need relatively simple modifications to comply. In other cases, the manufacturers will need to use control technologies that are available but are not yet used on their particular vehicles (e. g., electronic fuel injection to replace carburetors, changes to cam lobes/ timing, etc.). For the most part, manufacturers will not need to use advanced technologies such as closecoupled closed loop three way catalysts. While manufacturers will use various means to meet the Tier 1 standard, there are four basic types of existing, non catalyst based, emission control systems available to manufacturers. The most important of these is the use of secondary pulse air injection. Other engine modifications and systems include more precise fuel control, better fuel atomization and delivery, and reduced engine out emission levels from engine changes. The combinations of low emission technologies ultimately chosen by motorcycle manufacturers are dependent on the engine out emission levels of the vehicle, the effectiveness of the prior emission control system, and individual manufacturer preferences. Secondary pulse air injection, as demonstrated on current motorcycles, is applied using a passive system (i. e., no air pump involved) that takes advantage of the flow of gases (`` pulse'') in the exhaust pipes to draw in fresh air that further combusts unburned hydrocarbons in the exhaust. Engine modifications include a variety of techniques designed to improve fuel delivery or atomization; promote `` swirl'' (horizontal currents) and `` tumble'' (vertical currents); maintain tight control on air to fuel (A/ F) ratios; stabilize combustion (especially in lean A/ F mixtures); optimize valve timing; and retard ignition timing. Secondary pulse air injection involves the introduction of fresh air into the exhaust pipe immediately after the gases exist the engine. The extra air causes further combustion to occur, thereby controlling more of the hydrocarbons that escape the combustion chamber. This type of system is relatively inexpensive and uncomplicated because it does not require an air pump; air is drawn into the exhaust through a oneway reed valve due to the pulses of negative pressure inside the exhaust pipe. Secondary pulse air injection is one of the most effective non catalytic emission control technologies; compared to engines without the system, reductions of 10 to 40 percent for HC are possible with pulse air injection. Sixty five of the 151 2001 model year Class III engine families certified for sale in the U. S employ secondary pulse air injection to help meet the current California standards. We anticipate that most of the remaining engine families will use this technique to help meet the Tier 1 and Tier 2 standards. Improving fuel delivery and atomization primarily involves the replacement of carburetors, currently used on most motorcycles, with more precise fuel injection systems. There are several types of fuel injection systems and components manufacturers can choose. The most likely type of fuel injection manufacturers will choose to help meet the Tier 1 standard is sequential multi point fuel injection (SFI). Unlike conventional multi point fuel injection systems that deliver fuel continuously or to paired injectors at the same time, sequential fuel injection can deliver fuel precisely when needed by each cylinder. With less than optimum fuel injection timing, fuel puddling and intake manifold wall wetting can occur, both of which hinder complete combustion. Use of sequentialfuel injection systems help especially in reducing cold start emissions when fuel puddling and wall wetting are more likely to occur and emissions are highest. Motorcycle manufacturers are already beginning to use sequential fuel injection (SFI). Of the 152 Class III motorcycle engine families certified for sale this year, 36 employ SFI systems. We anticipate increased applications of this or similar fuel injection systems to achieve the more precise fuel delivery needed to help meet the Tier 1 and Tier 2 standards. In addition to the techniques mentioned above, various engine modifications can be made to improve emission levels. Emission performance can be improved, for example, by reducing crevice volumes in the combustion chamber. Unburned fuel can be trapped momentarily in crevice volumes before being subsequently released. Since trapped and re released fuel can increase engine out emissions, the elimination of crevice volumes would be beneficial to emission performance. To reduce crevice volumes, manufacturers can evaluate the feasibility of designing engines with pistons that have reduced, top `` land heights'' (the distance between the top of the piston and the first ring). Lubrication oil which leaks into the combustion chamber also has a detrimental effect on emission performance since the heavier hydrocarbons in oil do not oxidize as readily as those in gasoline and some components in lubricating oil may tend to foul the catalyst and reduce its effectiveness. Also, oil in the combustion chamber may trap HC and later release the HC unburned. To reduce oil consumption, manufacturers can tighten the tolerances and improve the surface finish on cylinders and pistons, piston ring design and materials, and exhaust valve stem seals to prevent excessive leakage of lubricating oil into the combustion chamber. Increasing valve overlap is another engine modification that can help reduce emissions. This technique helps VerDate Aug< 2,> 2002 18: 43 Aug 13, 2002 Jkt 197001 PO 00000 Frm 00038 Fmt 4701 Sfmt 4702 E:\ FR\ FM\ 14AUP2. SGM pfrm17 PsN: 14AUP2 53087 Federal Register / Vol. 67, No. 157 / Wednesday, August 14, 2002 / Proposed Rules reduce NOX generation in the combustion chamber by essentially providing passive exhaust gas recirculation (EGR). When the engine is undergoing its pumping cycle, small amounts of combusted gases flow past the intake valve at the start of the intake cycle. This creates what is essentially a passive EGR flow, which is then either drawn back into the cylinder or into another cylinder through the intake manifold during the intake stroke. These combusted gases, when combined with the fresh air/ fuel mixture in the cylinder, help reduce peak combustion temperatures and NOX levels. This technique can be effected by making changes to cam timing and intake manifold design to optimize NOX reduction while minimizing impacts to HC emissions. Secondary pulse air injection and engine modifications already play important parts in reducing emission levels; we expect increased uses of these techniques to help meet the Tier 1 standard. Direct evidence of the extent these technologies can help manufacturers meet the Tier 1 standard can be found in EPA's highway motorcycle certification database. This database is comprised of publiclyavailable certification emission levels as well as some confidential data reported by the manufacturers pursuant to existing motorcycle emission certification requirements. We do not expect any of these possible changes to adversely affect performance. Indeed, the transition to some of these technologies (e. g., advanced fuel injection) would be expected to improve performance, fuel economy, and reliability. A direct comparison of several motorcycle models in the EPA certification database between the `` California'' model (where one is offered; it is the exception rather than the rule that a manufacturer offers a separate engine system for California) and the model sold in the rest of the U. S. reveals no change in the performance characteristics in the database (e. g., rated horsepower, torque). We request comment on the impact these anticipated changes might have on performance related factors. b. Tier 2 standards. In the long term, the proposed Tier 2 HC+ NOX standard of 0.8 g/ km would ensure that manufacturers will continue to develop and improve emission control technologies. We are proposing the Tier 2 standard to be effective by the 2010 model year. We believe this standard is technologically feasible, though it will present some challenges for manufacturers. Several manufacturers are, however, already using some of the technologies that will be needed to meet this standard. In addition, our proposed implementation time frame gives manufacturers two years of experience in meeting this standard in California before having to meet it on a nationwide basis. At least one manufacturer already uses closed loop, three way catalysts on several of its product lines. One manufacturer has already certified a large touring motorcycle to the Tier 2 standards for sale in California. Depending on assumptions regarding NOX levels, other manufacturers have products currently in the market with emission levels close to the Tier 2 standards using two way catalysts, fuel injection, secondary pulse air injection, and other engine modifications. The current average HC certification level for Class III motorcycles is just under 1.0 g/ km, with a number of motorcycles from a variety of manufacturers at levels of 0.5 g/ km or lower. We expect that the proposed eight years of lead time prior to meeting these standards on a nationwide basis would allow manufacturers to optimize these and other technologies to meet the Tier 2 standard. To meet the proposed Tier 2 standard for HC+ NOX, manufacturers would likely use more advanced engine modifications and secondary air injection. Specifically, we believe manufacturers would use computercontrolled secondary pulse air injection (i. e., the injection valve would be connected to a computer controlled solenoid). In addition to these systems, manufacturers would probably need to use catalytic converters on some motorcycles to meet the proposed Tier 2 standards. There are two types of catalytic converters currently in use: two way catalysts (which control only HC and CO) and three way catalysts (which control HC, CO, and NOX). Under the proposed Tier 2 standard, manufacturers would need to minimize levels of both HC and NOX. Therefore, to the extent catalysts are used, manufacturers would likely use a threeway catalyst in addition to engine modifications and computer controlled, secondary pulse air injection. As discussed previously, improving fuel control and delivery provides emission benefits by helping to reduce engine out emissions and minimizing the exhaust variability which the catalytic converter experiences. One method for improving fuel control is to provide enhanced feedback to the computer controlled fuel injection system through the use of heated oxygen sensors. Heated oxygen sensors (HO2S) are located in the exhaust manifold to monitor the amount of oxygen in the exhaust stream and provide feedback to the electronic control module (ECM). These sensors allow the fuel control system to maintain a tighter band around the stoichiometric A/ F ratio than conventional oxygen sensors (O2S). In this way, HO2S assist vehicles in achieving precise control of the A/ F ratio and thereby enhance the overall emissions performance of the engine. At least one manufacturer is currently using this technology on several 2001 engine families. In order to further improve fuel control, some motorcycles with electronic controls may utilize software algorithms to perform individual cylinder fuel control. While dual oxygen sensor systems are capable of maintaining A/ F ratios within a narrow range, some manufacturers may desire even more precise control to meet their performance needs. On typical applications, fuel control is modified whenever the O2S determines that the combined A/ F of all cylinders in the engine or engine bank is `` too far'' from stoichiometric. The needed fuel modifications (i. e., inject more or less fuel) are then applied to all cylinders simultaneously. Although this fuel control method will maintain the `` bulk'' A/ F for the entire engine or engine bank around stoichiometric, it would not be capable of correcting for individual cylinder A/ F deviations that can result from differences in manufacturing tolerances, wear of injectors, or other factors. With individual cylinder fuel control, A/ F variation among cylinders will be diminished, thereby further improving the effectiveness of the emission controls. By modeling the behavior of the exhaust gases in the exhaust manifold and using software algorithms to predict individual cylinder A/ F, a feedback fuel control system for individual cylinders can be developed. Except for the replacement of the conventional front O2S with an HO2S sensor and a more powerful engine control computer, no additional hardware is needed in order to achieve individual cylinder fuel control. Software changes and the use of mathematical models of exhaust gas mixing behavior are required to perform this operation. In order to maintain good driveability, responsive performance, and optimum emission control, fluctuations of the A/ F must remain small under all driving conditions including transient operation. Virtually all current fuel systems in automobiles incorporate an adaptive fuel control system that automatically adjusts the system for component wear, varying environmental VerDate Aug< 2,> 2002 18: 43 Aug 13, 2002 Jkt 197001 PO 00000 Frm 00039 Fmt 4701 Sfmt 4702 E:\ FR\ FM\ 14AUP2. SGM pfrm17 PsN: 14AUP2 53088 Federal Register / Vol. 67, No. 157 / Wednesday, August 14, 2002 / Proposed Rules conditions, varying fuel composition, etc., to more closely maintain proper fuel control under various operating conditions. For some current fuel control systems, this adaptation process affects only steady state operating conditions (i. e., constant or slowly changing throttle conditions). However, most vehicles are now being introduced with adaptation during `` transient'' conditions (e. g., rapidly changing throttle, purging of the evaporative system). Accurate fuel control during transient driving conditions has traditionally been difficult because of the inaccuracies in predicting the air and fuel flow under rapidly changing throttle conditions. Because of air and fuel dynamics (fuel evaporation in the intake manifold and air flow behavior) and the time delay between the air flow measurement and the injection of the calculated fuel mass, temporarily lean A/ F ratios can occur during transient driving conditions that can cause engine hesitation, poor driveability and primarily an increase in NOX emissions. However, by utilizing fuel and air mass modeling, vehicles with adaptive transient fuel control are more capable of maintaining accurate, precise fuel control under all operating conditions. Virtually all cars will incorporate adaptive transient fuel control software; motorcycles with computer controlled fuel injection can also benefit from this technique at a relatively low cost. Three way catalytic converters traditionally utilize rhodium and platinum as the catalytic material to control the emissions of all three major pollutants (hydrocarbons (HC), CO, NOX). Although this type of catalyst is very effective at converting exhaust pollutants, rhodium, which is primarily used to convert NOX, tends to thermally deteriorate at temperatures significantly lower than platinum. Recent advances in palladium and tri metal (i. e., palladium platinum rhodium) catalyst technology, however, have improved both the light off performance (light off is defined as the catalyst bed temperature where pollutant conversion reaches 50 percent efficiency) and high temperature durability over previous catalysts. In addition, other refinements to catalyst technology, such as higher cell density substrates and adding a second layer of catalyst washcoat to the substrate (dual layered washcoats), have further improved catalyst performance from just a few years ago. Typical cell densities for conventional catalysts used in motorcycles are less than 300 cells per square inch (cpsi). To meet the Tier 2 standard, we expect manufacturers to use catalysts with cell densities of 300 to 400 cpsi. If catalyst volume is maintained at the same level (we assume volumes of up to 60 percent of engine displacement), using a higher density catalyst effectively increases the amount of surface area available for reacting with pollutants. Catalyst manufacturers have been able to increase cell density by using thinner walls between each cell without increasing thermal mass (and detrimentally affecting catalyst light off) or sacrificing durability and performance. In addition to increasing catalyst volume and cell density, we believe that increased catalyst loading and improved catalyst washcoats will help manufacturers meet the Tier 2 standard. In general, increased precious metal loading (up to a certain point) will reduce exhaust emissions because it increases the opportunities for pollutants to be converted to harmless constituents. The extent to which precious metal loading is increased will be dependent on the precious metals used and other catalyst design parameters. We believe recent developments in palladium/ rhodium catalysts are very promising since rhodium is very efficient at converting NOX, and catalyst suppliers have been investigating methods to increase the amount of rhodium in catalysts for improved NOX conversion. Double layer technologies allow optimization of each individual precious metal used in the washcoat. This technology can provide reduction of undesired metal metal or metal base oxide interactions while allowing desirable interactions. Industry studies have shown that durability and pollutant conversion efficiencies are enhanced with double layer washcoats. These recent improvements in catalysts can help manufacturers meet the Tier 2 standard at reduced cost relative to older three way catalysts. New washcoat formulations are now thermally stable up to 1050 ° C. This is a significant improvement from conventional washcoats, which are stable only up to about 900 ° C. With the improvements in light off capability, catalysts may not need to be placed as close to the engine as previously thought. However, if placement closer to the engine is required for better emission performance, improved catalysts based on the enhancements described above would be more capable of surviving the higher temperature environment without deteriorating. The improved resistance to thermal degradation will allow closer placement to the engines where feasible, thereby providing more heat to the catalyst and allowing them to become effective quickly. It is well established that a warmedup catalyst is very effective at converting exhaust pollutants. Recent tests on advanced catalyst systems in automobiles have shown that over 90 percent of emissions during the Federal Test Procedure (FTP) are now emitted during the first two minutes of testing after engine start up. Similarly, the highest emissions from a motorcycle occur shortly after start up. Although improvements in catalyst technology have helped reduce catalyst light off times, there are several methods to provide additional heat to the catalyst. Retarding the ignition spark timing and computer controlled, secondary air injection have been shown to increase the heat provided to the catalyst, thereby improving its cold start effectiveness. In addition to using computercontrolled secondary air injection and retarded spark timing to increase the heat provided to the catalyst, some vehicles may employ warm up, precatalysts to reduce the size of their main catalytic converters. Palladium only warm up catalysts (also known as `` pipe catalysts'' or `` Hot Tubes'') using ceramic or metallic substrates may be added to further decrease warm up times and improve emission performance. Although metallic substrates are usually more expensive than ceramic substrates, some manufacturers and suppliers believe metallic substrates may require less precious metal loading than ceramic substrates due to the reduced light off times they provide. Improving insulation of the exhaust system is another method of furnishing heat to the catalyst. Similar to closecoupled catalysts, the principle behind insulating the exhaust system is to conserve the heat generated in the engine for aiding catalyst warm up. Through the use of laminated thin wall exhaust pipes, less heat will be lost in the exhaust system, enabling quicker catalyst light off. As an added benefit, the use of insulated exhaust pipes will also reduce exhaust noise. Increasing numbers of manufacturers are expected to utilize air gap exhaust manifolds (i. e., manifolds with metal inner and outer walls and an insulating layer of air sandwiched between them) for further heat conservation. Besides the hardware modifications described above, motorcycle manufacturers may borrow from other current automobile techniques. These include using engine calibration changes such as a brief period of substantial ignition retard, increased VerDate Aug< 2,> 2002 18: 43 Aug 13, 2002 Jkt 197001 PO 00000 Frm 00040 Fmt 4701 Sfmt 4702 E:\ FR\ FM\ 14AUP2. SGM pfrm17 PsN: 14AUP2 53089 Federal Register / Vol. 67, No. 157 / Wednesday, August 14, 2002 / Proposed Rules 45 See written testimony of the Manufacturers of Emission Controls Association on the Proposed Rulemaking on Control of Emissions from Nonroad Large Spark Ignited Engines and Recreational Engines. Available in the public docket for review (Docket AÐ 2000Ð 01; document IVÐ DÐ 213). cold idling speed, and leaner air fuel mixtures to quickly provide heat to a catalyst after cold starts. Only software modifications are required for an engine which already uses a computer to control the fuel delivery and other engine systems. For these engines, calibration modifications provide manufacturers with an inexpensive method to quickly achieve light off of catalytic converters. When combined with pre catalysts, computer controlled secondary air injection, and the other heat conservation techniques described above, engine calibration techniques may be very effective at providing the required heat to the catalyst for achieving the Tier 2 standard. These techniques are currently in use on most low emission vehicle (LEV) automobiles and may have applications in on road motorcycles. The nature of motorcycling makes riders particularly aware of the many safety issues that confront them. Many riders that submitted comments to us following the publication of the ANPRM in December of 2000 questioned whether catalytic converters could be implemented on motorcycles without increasing the risk of harm to the rider and/ or passenger. The primary concern is regarding the close proximity of the riders to hot exhaust pipes and the catalytic converter. Protecting the rider from the excessive heat is a concern for both riders and manufacturers. The current use of catalytic converters on a number of motorcycles (accounting for tens of thousands of motorcycles in the current U. S. fleet and over 15 million worldwide) already indicates that these issues are not insurmountable on a variety of motorcycle styles and engine sizes. Countries that have successfully implemented catalyst based emission control programs for motorcycles (some of which have many years of experience) do not report any safety issues associated with the use of catalytic converters on motorcycles under real world conditions. 45 A number of approaches to shielding the rider from the heat of the catalytic converter are possible, such as exterior pipe covers, shielded foot rests, and similar components. Some manufacturers have found that placing the converter on the underside of the engine can keep it adequately distant from the rider. Others may use doublepipe systems that reduce overall heat loss while remaining cooler on the exterior. Based on the significant lead time proposed that would be allowed for meeting these standards, as well as on the two years of prior experience in California before meeting the requirements federally, we believe that these issues can be satisfactorily resolved for the proportion of motorcycles for which catalytic converters would likely be used to meet the proposed standards. We do not expect any of these possible changes to adversely affect performance. Indeed, the transition to some of these technologies (e. g., advanced fuel injection) would be expected to improve performance, fuel economy, and reliability. A direct comparison of several motorcycle models in the EPA certification database between the `` California'' model (where one is offered; it is the exception rather than the rule that a manufacturer offers a separate engine system for California) and the model sold in the rest of the U. S. reveals no change in the performance characteristics in the database (e. g., rated horsepower, torque). We request comment on the impact these anticipated changes might have on performance related factors.

VI. Projected Impacts This section summarizes the projected impacts of the proposed emission standards. The anticipated environmental benefits are compared with the projected cost of the program for an assessment of the cost per ton of reducing emissions for this proposal.

A. Environmental Impact Diurnal evaporative emission factors from marine vessels were developed using established equations for determining evaporative emission factors as a function of ambient conditions and fuel tank size. Permeation emissions were developed based on known material permeation rates as a function of surface area and temperature. Other inputs for these calculations were taken from the latest version of our NONROAD model. Emission estimates for highway motorcycles were developed using information on the emission levels of current motorcycles and updated information on motorcycle use provided by the motorcycle industry. A more detailed description of the methodology used for projecting inventories and projections for additional years can be found in the Chapter 6 of the Draft Regulatory Support Document. We request comment on all aspects of the emission inventory analysis, including the usage rates and other inputs used in the analysis. Tables V. AÐ 1 and V. AÐ 2 contain the projected emission inventories for the years 2010 and 2020, respectively, from the engines and vehicles subject to this proposal. The inventories are presented for the base case which assumes no change from current conditions (i. e., without the proposed standards taking effect) and assuming the proposed standards take effect. The inventories for 2010 and 2020 include the effect of growth. The percent reductions based on a comparison of estimated emission inventories with and without the proposed emission standards are also presented.

TABLE VI. A– 1.— 2010 PROJECTED EMISSIONS INVENTORIES [Thousand short tons]

Category NOX HC*

Base case With proposed standards Percent reduction Base case With proposed standards Percent reduction Marine SI Evap ................................................................ 0 0 0 106 91 14 Highway motorcycles ....................................................... 11 10 9 46 41 11 Total ...................................................................... 11 10 9 152 132 13 *Evaporative HC for marine SI; exhaust HC for highway motorcycles.

VerDate Aug< 2,> 2002 18: 43 Aug 13, 2002 Jkt 197001 PO 00000 Frm 00041 Fmt 4701 Sfmt 4702 E:\ FR\ FM\ 14AUP2. SGM pfrm17 PsN: 14AUP2 53090 Federal Register / Vol. 67, No. 157 / Wednesday, August 14, 2002 / Proposed Rules 46 For further information on learning curves, see previous final rules for Tier 2 highway vehicles (65 FR 6698, February 10, 2000), marine diesel engines (64 FR 73300, December 29, 1999), nonroad diesel engines (63 FR 56968, October 23, 1998), and highway diesel engines (62 FR 54694, October 21, 1997). TABLE VI. A– 2.— 2020 PROJECTED EMISSIONS INVENTORIES [Thousand short tons]

Category NOX HC*

Base case With proposed standards Percent reductions Base case With proposed standards Percent reduction Marine SI Evap ................................................................ 0 0 0 114 50 56 Highway motorcycles ....................................................... 14 7 50 58 29 50 Total ...................................................................... 14 7 50 172 79 53 *Evaporative HC for marine SI; exhaust HC for highway motorcycles.

As described in Section II, there will also be environmental benefits associated with reduced haze in many sensitive areas. Finally, anticipated reductions in hydrocarbon emissions will correspond with reduced emissions of the toxic air emissions referenced in Section II. In 2020, the projected reduction in hydrocarbon emissions should result in an equivalent percent reduction in air toxic emissions.

B. Economic Impact In assessing the economic impact of setting emission standards, we have made a best estimate of the technologies and their associated costs to meet the proposed standards. In making our estimates we have relied on our own technology assessment, which includes information supplied by individual manufacturers and our own in house testing. Estimated costs include variable costs (for hardware and assembly time) and fixed costs (for research and development, retooling, and certification). We projected that manufacturers will recover the fixed costs over the first five years of production and used an amortization rate of 7 percent in our analysis. The analysis also considers total operating costs, including maintenance and fuel consumption. Cost estimates based on the projected technologies represent an expected change in the cost of engines as they begin to comply with new emission standards. All costs are presented in 2001 dollars. Full details of our cost analysis can be found in Chapter 5 of the Draft Regulatory Support Document. We request comment on this cost information. Cost estimates based on the current projected costs for our estimated technology packages represent an expected incremental cost of vehicles in the near term. For the longer term, we have identified factors that would cause cost impacts to decrease over time. First, as noted above, we project that manufacturers will spread their fixed costs over the first five years of production. After the fifth year of production, we project that the fixed costs would be retired and the per unit costs would be reduced as a result. For highway motorcycles above 50cc, the analysis also incorporates the expectation that manufacturers and suppliers will apply ongoing research and manufacturing innovation to making emission controls more effective and less costly over time. Research in the costs of manufacturing has consistently shown that as manufacturers gain experience in production and use, they are able to apply innovations to simplify machining and assembly operations, use lower cost materials, and reduce the number or complexity of component parts. 46 (see the Draft Regulatory Support Document for additional information). The cost analysis generally incorporates this learning effect by decreasing estimated variable costs by 20 percent starting in the third year of production and an additional 20 percent starting in the sixth year of production. Long term impacts on costs are expected to decrease as manufacturers fully amortize their fixed costs and learn to optimize their designs and production processes to meet the standards more efficiently. The learning curve has not been applied to the marine evaporative controls or the motorcycles under 50cc because we expect manufacturers to use technologies that will be well established prior to the start of the program. We request comment on the methodology used to incorporate the learning curve into the analysis. Evaporative emission controls for boats with marine SI engines have an average projected cost of about $36 per boat. While manufacturers may choose from a wide variety of technologies to meet emission standards, we base these cost estimates on all boats using limited flow orifices for diurnal emission control, fluorination for fuel tank permeation control and low permeability barrier for fuel hose permeation control. Under the proposed emission credit program, manufacturers would have the option of offering different technologies to meet emission standards. Where there is a current demand for more sophisticated fuel tank technology, we would expect a greater cost impact than from the lower cost, high production models. Emissions are reduced by preventing evaporation of fuel, so these controls translate directly into a fuel savings, which we have estimated to be about $27 per boat (net present value at the point of sale). Therefore, we get an average cost of $9 per boat when the fuel savings are considered. We project average costs of $26 per Class III highway motorcycle to meet the Tier 1 standard and $35 to meet the Tier 2 standards. We anticipate the manufacturers will meet the proposed emission standards with several technology changes, including electronic fuel injection, catalysts, pulse air systems, and other general improvements to engines. For motorcycles with engines of less than 50cc, we project average costs of $44 per motorcycle to meet the proposed standards. We anticipate the manufacturers of these small motorcycles (mostly scooters) will meet the proposed emission standards by transitioning any remaining two stroke engines to four strokes. The costs are based on the conversion to 4 stroke because we believe this to be the most likely technology path for the majority of scooters. Manufacturers could also choose to employ advanced technology two stroke (e. g., direct injection and/ or catalysts) designs. The process of developing clean technologies is very much underway already as a result of regulatory actions in Europe and the rest of world where the primary markets for VerDate Aug< 2,> 2002 18: 43 Aug 13, 2002 Jkt 197001 PO 00000 Frm 00042 Fmt 4701 Sfmt 4702 E:\ FR\ FM\ 14AUP2. SGM pfrm17 PsN: 14AUP2 53091 Federal Register / Vol. 67, No. 157 / Wednesday, August 14, 2002 / Proposed Rules small motorcycles exist. Chapter 4 of the Draft Regulatory Support Document describes these technologies further. Because several models are already available with the anticipated long term emission control technologies, we believe that manufacturers and consumers will be able to bear the added cost associated with the new emission standards. The above analysis presents unit cost estimates for each engine type. These costs represent the total set of costs the engine manufacturers will bear to comply with emission standards. With current and projected estimates of engine and equipment sales, we translate these costs into projected direct costs to the nation for the new emission standards in any year. A summary of the annualized costs to manufacturers by equipment type is presented in Table VI. BÐ 1. (The annualized costs are determined over the first twenty years that the proposed standards would be effective.) The annual cost savings for marine vessels and highway motorcycles (< 50cc only) are due to reduced fuel costs. The total fleetwide fuel savings start slowly, then increase as greater numbers of compliant vessels or motorcycles (< 50cc only) enter the fleet. Table VI. BÐ 1 presents a summary of the annualized reduced operating costs as well.

TABLE VI. B– 1.— ESTIMATED ANNUAL COST TO MANUFACTURERS AND ANNUAL FUEL SAVINGS DUE TO THE PROPOSED STANDARDS [Millions/ year]

Category Annualized cost to manufacturers Annual fuel savings Marine SI Evap ....... $27.5 $15.6 Highway Motorcycles .................. 18.8 0.2 Aggregate* .............. 42.0 13.3 * Because of the different proposed implementation dates for the two classes, the aggregate is based on a 22 year (rather than 20 year) annualized cost. Therefore, the aggregate is not equal to the sum of the costs for the two engine types. C. Cost per Ton of Emissions Reduced We calculated the cost per ton of emission reductions for the proposed standards. For these calculations, we attributed the entire cost of the proposed program to the control of ozone precursor emissions (HC or NOX or both). Table VI. CÐ 1 presents the discounted cost per ton estimates for this proposal. Reduced operating costs offsets a portion of the increased cost of producing the cleaner marine vessels and highway motorcycles (< 50cc only).

TABLE VI. C– 1.— ESTIMATED COST PER TON OF THE PROPOSED EMISSION STANDARDS Category Effective date Discounted reductions per engine (short tons) Pollutants Discounted cost per ton Without fuel savings With fuel savings Marine SI: Diurnal .......................................................................... 2008 0.01 Evaporative HC .................. $745 $382 Tank permeation .......................................................... 0.02 523 160 Hose permeation ......................................................... 0.04 367 4 Aggregate .................................................................... 0.07 478 115 Highway motorcycles >50cc ............................................... 2006 0.03 Exhaust HC+ NOX ............... 970 970 Highway motorcycles >50cc ............................................... 2010 0.03 Exhaust HC+ NOX ............... 1,230 1,230 Highway motorcycles >50cc ............................................... 2006 0.02 Exhaust HC ........................ 2,130 1,750 Because the primary purpose of costeffectiveness is to compare our program to alternative programs, we made a comparison between the cost per ton values presented in this chapter and the cost effectiveness of other programs. Table VI. CÐ 2 summarizes the cost effectiveness of several recent EPA actions for controlled emissions from mobile sources. Additional discussion of these comparisons is contained in the Regulatory Impact Analysis.

TABLE VI. C– 2— COST EFFECTIVENESS OF PREVIOUSLY IMPLEMENTED MOBILE SOURCE PROGRAMS [Costs adjusted to 2001 dollars]

Program $/ ton Tier 2 vehicle/ gasoline sulfur 1,437– 2,423 2007 Highway HD diesel ...... 1,563– 2,002 2004 Highway HD diesel ...... 227– 444 Off highway diesel engine .... 456– 724 TABLE VI. C– 2— COST EFFECTIVENESS OF PREVIOUSLY IMPLEMENTED MOBILE SOURCE PROGRAMS— Continued [Costs adjusted to 2001 dollars]

Program $/ ton Tier 1 vehicle ........................ 2,202– 2,993 NLEV .................................... 2,069 Marine SI engines ................ 1,255– 1,979 On board diagnostics ........... 2,480 Marine CI engines ................ 26– 189 D. Additional Benefits For the marine evaporative emission standards, we expect there will be a fuel savings as manufacturers redesign their vessels to comply with the proposed standards. This savings is the result of preventing fuel from evaporating into the atmosphere. Overall, the fuel savings associated with the anticipated changes in technology are estimated to be about 31 million gallons per year once the program is fully phased in. For the motorcycle emission standards, we expect there will be a fuel savings as manufacturers redesign their engines to comply with the proposed standards. This savings is the result of converting motorcycles <50cc from 2 stroke designs to more fuel efficient 4 stroke designs. Overall, the fuel savings associated with the anticipated changes in technology are estimated to be about 0.3 million gallons per year once the program is fully phased in. The controls in this rule are a highly cost effective means of obtaining reductions in HC and NOX emissions. A related subject concerns the value of the health and welfare benefits these reductions might produce. While we have not conducted a formal benefitcost analysis for this rule, we believe the benefits of this rule clearly will greatly outweigh any cost.

VerDate Aug< 2,> 2002 18: 43 Aug 13, 2002 Jkt 197001 PO 00000 Frm 00043 Fmt 4701 Sfmt 4702 E:\ FR\ FM\ 14AUP2. SGM pfrm17 PsN: 14AUP2 53092 Federal Register / Vol. 67, No. 157 / Wednesday, August 14, 2002 / Proposed Rules Ozone causes a range of health problems related to breathing, including chest pain, coughing, and shortness of breath Exposure to PM (including secondary PM formed in the atmosphere from NOX and NMHC emissions) is associated with premature death, increased emergency room visits, and increased respiratory symptoms and disease Children, the elderly, and individuals with pre existing respiratory conditions are most at risk regarding both ozone and PM. In addition, ozone, NOX, and PM adversely affect the environment in various ways, including crop damage, acid rain, and visibility impairment. In two recent mobile source control rules, for light duty vehicles (the Tier 2/ Gasoline Sulfur rule) and for highway heavy duty engines and diesel fuel, we conducted a full analysis of the expected benefits once the rules were fully implemented. These rules, which primarily reduced NOX and NMHC emissions, were seen to yield health and welfare benefits far exceeding the costs. Besides reducing premature mortality, there were large projected reductions in chronic bronchitis cases, hospital admissions for respiratory and cardiovascular causes, asthma attacks and other respiratory symptoms, and a variety of other effects. Given the similarities in pollutants being controlled, we would expect this rule to produce substantial benefits compared to its cost.

VII. Public Participation This rule was proposed under the authority of section 307( d) of the Clean Air Act. We request comment on all aspects of this proposal. This section describes how you can participate in this process.

A. How Do I Submit Comments?

We are opening a formal comment period by publishing this document. We will accept comments for the period indicated under DATES above. If you have an interest in the program described in this document, we encourage you to comment on any aspect of this rulemaking. We request comment on various topics throughout this proposal. We attempted to incorporate all the comments received in response to the Advance Notice of Proposed Rulemaking, though not all comments are addressed directly in this document. Anyone who has submitted comments on the Advance Notice, or any previous publications related to this proposal, and feels that those comments have not been adequately addressed is encouraged to resubmit comments as appropriate. Your comments will be most useful if you include appropriate and detailed supporting rationale, data, and analysis. If you disagree with parts of the proposed program, we encourage you to suggest and analyze alternate approaches to meeting the air quality goals described in this proposal. You should send all comments, except those containing proprietary information, to our Air Docket (see ADDRESSES) before the end of the comment period. If you submit proprietary information for our consideration, you should clearly separate it from other comments by labeling it `` Confidential Business Information. '' You should also send it directly to the contact person listed under FOR FURTHER INFORMATION CONTACT instead of the public docket. This will help ensure that no one inadvertently places proprietary information in the docket. If you want us to use your confidential information as part of the basis for the final rule, you should send a nonconfidential version of the document summarizing the key data or information. We will disclose information covered by a claim of confidentiality only through the application of procedures described in 40 CFR part 2. If you don't identify information as confidential when we receive it, we may make it available to the public without notifying you.

B. Will There Be a Public Hearing?

We will hold a public hearing for issues related to highway motorcycles on July 16 in Dulles, VA. We will hold a public hearing for issues related to marine vessels on July 18 in Ann Arbor, MI. The hearings will start at 9: 30 a. m. and continue until testimony is complete. See ADDRESSES above for location and phone information. If you would like to present testimony at a public hearing, we ask that you notify the contact person listed above at least ten days before the hearing. You should estimate the time you need for your presentation and identify any needed audio/ visual equipment. We suggest that you bring copies of your statement or other material for the EPA panel and the audience. It would also be helpful if you send us a copy of your statement or other materials before the hearing. We will make a tentative schedule for the order of testimony based on the notification we receive. This schedule will be available on the morning of each hearing. In addition, we will reserve a block of time for anyone else in the audience who wants to give testimony. We will conduct the hearing informally, and technical rules of evidence won't apply. We will arrange for a written transcript of the hearing and keep the official record of the hearing open for 30 days to allow you to submit supplementary information. You may make arrangements for copies of the transcript directly with the court reporter.

VII. Administrative Requirements A. Administrative Designation and Regulatory Analysis (Executive Order 12866) Under Executive Order 12866 (58 FR 51735, October 4, 1993), the Agency must determine whether the regulatory action is `` significant'' and therefore subject to review by the Office of Management and Budget (OMB) and the requirements of this Executive Order. The Executive Order defines a `` significant regulatory action'' as any regulatory action that is likely to result in a rule that may:   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;   Create a serious inconsistency or otherwise interfere with an action taken or planned by another agency;   Materially alter the budgetary impact of entitlements, grants, user fees, or loan programs, or the rights and obligations of recipients thereof; or   Raise novel legal or policy issues arising out of legal mandates, the President's priorities, or the principles set forth in the Executive Order. A Draft Regulatory Support Document has been prepared and is available in the docket for this rulemaking and at the internet address listed under ADDRESSES above. Pursuant to the terms of Executive Order 12866, OMB has notified EPA that it considers this a `` significant regulatory action'' within the meaning of the Executive Order. EPA has submitted this action to OMB for review. Changes made in response to OMB suggestions or recommendations will be documented in the public record.

B. Regulatory Flexibility Act 1. Overview 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 Procedure Act or any other statute unless the agency VerDate Aug< 2,> 2002 18: 43 Aug 13, 2002 Jkt 197001 PO 00000 Frm 00044 Fmt 4701 Sfmt 4702 E:\ FR\ FM\ 14AUP2. SGM pfrm17 PsN: 14AUP2 53093 Federal Register / Vol. 67, No. 157 / Wednesday, August 14, 2002 / Proposed Rules 47 `` Nonroad Engine and Vehicle Emission StudyÑ Report and Appendices, '' EPAÐ 21AÐ 201, November 1991 (available in Air docket AÐ 91Ð 24). It is also available through the National Technical Information Service, referenced as document PB 92Ð 126960. 48 59 FR 31306 (July 17, 1994). 49 See Final Finding, `` Control of Emissions from New Nonroad Spark Ignition Engines Rated above 19 Kilowatts and New Land Based Recreational Spark Ignition Engines'' for EPA's finding for Large SI engines and recreational vehicles (65 FR 76790, December 7, 2000). EPA's findings for marine engines are contained in 61 FR 52088 (October 4, 1996) for gasoline engines and 64 FR 73299 (December 29, 1999) for diesel engines. certifies that the rule will not have a significant economic impact on a substantial number of small entities. Small entities include small businesses, small organizations, and small governmental jurisdictions. For purposes of assessing the impacts of this action on small entities, small entity is defined as: (1) A small business that meet 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 forprofit enterprise which is independently owned and operated and is not dominant in its field. The following table provides an overview of the primary SBA small business categories potentially affected by this regulation.

TABLE VIII. B– 1.— PRIMARY SBA SMALL BUSINESS CATEGORIES POTENTIALLY AFFECTED BY THIS PROPOSED REGULATION Industry NAICS 1 codes Defined by SBA as a small business If: 2 Motorcycles and motorcycle parts manufacturers .............................................................................. 336991 <500 employees. Independent Commercial Importers of Vehicles and parts ................................................................ 421110 <100 employees. Boat Building and Repairing ............................................................................................................... 336612 < 500 employees. Fuel Tank Manufacturers .................................................................................................................... 336211 <1000 employees.

1 North American Industry Classification System. 2 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.

2. Background In accordance with Section 603 of the RFA, EPA prepared an initial regulatory flexibility analysis (IRFA) that examines the impact of the proposed rule on small entities along with regulatory alternatives that could reduce that impact. In preparing this IRFA, we looked at both the effect of this proposal and the October 5, 2001 proposal for other nonroad categories (66 FR 51098). The IRFA is available for review in the docket and is summarized below. The process of establishing standards for nonroad engines began in 1991 with a study to determine whether emissions of carbon monoxide (CO), oxides of nitrogen (NOX), and volatile organic compounds (VOCs) from new and existing nonroad engines, equipment, and vehicles are significant contributors to ozone and CO concentrations in more than one area that has failed to attain the national ambient air quality standards for ozone and CO. 47 In 1994, EPA finalized its finding that nonroad engines as a whole `` are significant contributors to ozone or carbon monoxide concentrations'' in more than one ozone or carbon monoxide nonattainment area. 48 Upon this finding, the Clean Air Act (CAA or the Act) requires EPA to establish standards for all classes or categories of new nonroad engines that cause or contribute to air quality nonattainment in more than one ozone or carbon monoxide (CO) nonattainment area. Since the finding in 1994, EPA has been engaged in the process of establishing programs to control emissions from nonroad engines used in many different applications. Nonroad categories already regulated include:   Land based compression ignition (CI) engines (e. g., farm and construction equipment),   Small land based spark ignition (SI) engines (e. g., lawn and garden equipment, string trimmers),   Marine engines (outboards, personal watercraft, CI commercial, CI engines <37kW), and   Locomotive engines. On December 7, 2000, EPA issued an Advance Notice of Proposed Rulemaking (ANPRM) for the control of emissions from nonroad large SI engines, recreational vehicles (marine and land based), and highway motorcycles. As discussed in the ANPRM, the proposal under development will be a continuation of the process of establishing standards for nonroad engines and vehicles, as required by CAA section 213( a)( 3). If, as expected, standards for these engines and vehicles are established, essentially all new nonroad engines will be required to meet emissions control requirements. This proposal is the second part of an effort to control emissions from nonroad engines that are currently unregulated and for updating Federal emissions standards for highway motorcycles. The first part of this effort was a proposal published on October 5, 2001 for emission control from large sparkignition engines such as those used in forklifts and airport tugs; recreational vehicles using spark ignition engines such as off highway motorcycles, allterrain vehicles, and snowmobiles; and recreational marine diesel engines. EPA found that the nonroad engines described above cause or contribute to air quality nonattainment in more than one ozone or carbon monoxide (CO) nonattainment area. 49 CAA section 213 (a)( 3) requires EPA to establish standards that achieve the greatest degree of emissions reductions achievable taking cost and other factors into account. EPA plans to propose emissions standards and related programs consistent with the requirements of the Act. In addition to proposing standards for the nonroad vehicles and engines noted above, this proposal reviews EPA requirements for highway motorcycles. The emissions standards for highway motorcycles were established twentythree years ago. These standards allow motorcycles to emit about 100 times as much per mile as new cars and light trucks. California recently adopted new emissions standards for highway motorcycles, and new standards and testing cycles are being considered internationally. There may be opportunities to reduce emissions in a cost effective way. The program under consideration will cover engines and vehicles that vary in design and use, and many readers may only be interested in one or two of the applications. There are various ways EPA could group the engines and present information. For purposes of the proposed rule EPA has chosen to group engines by common applications (e. g, recreational land based engines, marine VerDate Aug< 2,> 2002 18: 43 Aug 13, 2002 Jkt 197001 PO 00000 Frm 00045 Fmt 4701 Sfmt 4702 E:\ FR\ FM\ 14AUP2. SGM pfrm17 PsN: 14AUP2 53094 Federal Register / Vol. 67, No. 157 / Wednesday, August 14, 2002 / Proposed Rules engines, large spark ignition engines used in commercial applications).

3. Summary of Regulated Small Entities The small entities directly regulated by this proposed rule are the following: a. Highway Motorcycles. Of the numerous manufacturers supplying the U. S. market for highway motorcycles, Honda, Harley Davidson, Yamaha, Kawasaki, Suzuki, and BMW are the largest, accounting for 95 percent or more of the total U. S. sales. All of these companies except Harley Davidson and BMW also manufacture off road motorcycles and ATVs for the U. S. market. Harley Davidson is the only company manufacturing highway motorcycles exclusively in the U. S. for the U. S. market. Since highway motorcycles have had to meet emission standards for the last twenty years, EPA has good information on the number of companies that manufacture or market highway motorcycles for the U. S. market in each model year. In addition to the big six manufacturers noted above, EPA finds as many as several dozen more companies that have operated in the U. S. market in the last couple of model years. Most of these are U. S. companies that are either manufacturing or importing motorcycles, although a few are U. S. affiliates of larger companies in Europe or Asia. Some of the U. S. manufacturers employ only a few people and produce only a handful of custom motorcycles per year, while others may employ several hundred and produce up to several thousand motorcycles per year. The proposed emission standards impose no new development or certification costs for any company producing compliant engines in California. If fact, implementing the California standards with a two year delay also allows manufacturers to streamline their production to further reduce the cost of compliance. The estimated hardware costs are less than one percent of the cost of producing a highway motorcycle, so none of these companies should have a compliance burden greater than one percent of revenues. We expect that a small number of companies affected by EPA emission standards will not already be certifying products in California. For these companies, the modest effort associated with applying established technology will add compliance costs representing between 1 and 3 percent of revenues. The flexible approach we are proposing to limit testing, reporting, and recordkeeping burden prevent excessive costs for all these companies. b. Marine Vessels. Marine vessels include the boat, engine, and fuel system. The evaporative emission controls discussed above may affect the boat builders and/ or the fuel tank manufacturers. Exhaust emission controls including NTE requirements, as addressed in the August 29, 1999 SBAR Panel Report, would affect the engine manufacturers and may affect boat builders. EPA has less precise information about recreational boat builders than is available about engine manufacturers. EPA has utilized several sources, including trade associations and Internet sites when identifying entities that build and/ or sell recreational boats. EPA has also worked with an independent contractor to assist in the characterization of this segment of the industry. Finally, EPA has obtained a list of nearly 1,700 boat builders known to the U. S. Coast Guard to produce boats using engines for propulsion. At least 1,200 of these companies install engines that use gasoline fueled engines and would therefore be subject to the evaporative emission control program discussed above. More than 90% of the companies identified so far would be considered small businesses as defined by SBA. EPA continues to develop a more complete picture of this segment of the industry and will provide additional information as it becomes available. Based on information supplied by a variety of recreational boat builders, fuel tanks for boats using SI marine engines are usually purchased from fuel tank manufacturers. However, some boat builders construct their own fuel tanks. The boat builder provides the specifications to the fuel tank manufacturer who helps match the fuel tank for a particular application. It is the boat builder's responsibility to install the fuel tank and connections into their vessel design. For vessels designed to be used with small outboard engines, the boat builder may not install a fuel tank; therefore, the end user would use a portable fuel tank with a connection to the engine. EPA has determined that total sales of tanks for gasoline marine applications is approximately 550,000 units per year. The market is broken into manufacturers that produce plastic tanks and manufacturers that produce aluminum tanks. EPA has determined that there are at least seven companies that make plastic fuel tanks with total sales of approximately 440,000 units per year. EPA has determined that there at least four companies that make aluminum fuel tanks with total sales of approximately 110,000 units per year. All but one of these plastic and aluminum fuel tank manufacturers is a small business as defined under SBA. EPA has determined that there are at least 16 companies that manufacture CI diesel engines for recreational vessels. Nearly 75 percent of diesel engines sales for recreational vessels in 2000 can be attributed to three large companies. Six of the 16 identified companies are considered small businesses as defined by SBA. Based on sales estimates for 2000, these six companies represent approximately 4 percent of recreational marine diesel engine sales. The remaining companies each comprise between two and seven percent of sales for 2000. EPA has determined that there are at least 24 companies that manufacture SD/ I gasoline engines (including airboats and jet boats) for recreational vessels. Seventeen of the identified companies are considered small businesses as defined by SBA. These 17 companies represent approximately 6 percent of recreational gasoline marine engines sales for 2000. Approximately 70Ð 80 percent of gasoline SD/ I engines manufactured in 2000 can be attributed to one company. The next largest company is responsible for about 10Ð 20 percent of 2000 sales. For any boat builders that would certify to the proposed requirements, the costs of compliance would be much less than one percent of their revenues. Incremental costs of fuel tanks are dwarfed by the capital and variable costs associated with manufacturing power boats. Of the six known small businesses producing plastic fuel tanks for gasoline powered marine vessels, these companies would have costs approaching 10 percent of revenues. While this is a large percentage, it comes predominantly from increasing variable costs to upgrade the fuel tanks. Capital expenses to upgrade to compliant products are relatively small. Also, to the extent that tank manufacturers certify their products, they will be increasing the value of their product for their customers, who would otherwise need to assume certification responsibilities. As a result, we believe that these companies will be able to largely recover their compliance costs over time. The net cost absorbed by tank manufacturers will be much less than one percent. For this proposal as a whole, there are hundreds of small businesses that will have total compliance costs less than 1 percent of their annual revenues. We estimate that three companies will have compliance costs between 1 and 3 percent of revenues and six companies VerDate Aug< 2,> 2002 18: 43 Aug 13, 2002 Jkt 197001 PO 00000 Frm 00046 Fmt 4701 Sfmt 4702 E:\ FR\ FM\ 14AUP2. 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4. Potential Reporting, Recordkeeping, and Compliance For any emission control program, EPA must have assurances that the regulated engines will meet the standards. Historically, EPA programs have included provisions placing manufacturers responsible for providing these assurances. The program that EPA is considering for manufacturers subject to this proposal may include testing, reporting, and record keeping requirements. Testing requirements for some manufacturers may include certification (including deterioration testing), and production line testing. Reporting requirements would likely include test data and technical data on the engines including defect reporting. Manufacturers would likely have to keep records of this information.

5. Related Federal Rules The Panel is aware of several other current Federal rules that relate to the proposed rule under development. During the Panel's outreach meeting, SERs specifically pointed to Consumer Product Safety Commission (CPSC) regulations covering ATVs, and noted that they may be relevant to crafting an appropriate definition for a competition exclusion in this category. The Panel recommends that EPA continue to consult with the CPSC in developing a proposed and final rule in order to better understand the scope of the Commission's regulations as they may relate to the competition exclusion. Other SERs, representing manufacturers of marine engines, noted that the U. S. Coast Guard regulates vessel tanks, most notably tank pressure and anti siphoning requirements for carburetted engines. Tank manufacturers would have to take these requirements into account in designing evaporative control systems. The Panel recommends that EPA continue to work with the Coast Guard to evaluate the safety implications of any proposed evaporative emissions standards and to avoid interference with Coast Guard safety regulations. The Panel is also aware of other Federal rules that relate to the categories that EPA would address with the proposed rule, but are not likely to affect policy considerations in the rule development process. For example, there are now EPA noise standards covering off road motorcycles; however, EPA expects that most emission control devices are likely to reduce, rather than increase, noise, and that therefore the noise standards are not likely to be important in developing a proposed rule. OTAQ is currently developing a proposal that would revise the rule assigning fees to be paid by parties required to certify engines in return for continuing Government oversight and testing. Among other options, EPA could propose to extend the fee structure to several classes of non road engines for which requirements are being established for the first time under the Recreation Rule. The Panel understands that EPA will carefully examine the potential impacts of the Fees Rule on small businesses. The Panel also notes that EPA's Office of Air Quality, Planning, and Standards (OAQPS) is preparing a Maximum Achievable Control Technology (MACT) standard for Engine Testing Facilities, which is a related matter.

6. Significant Panel Findings The Panel considered a wide range of options and regulatory alternatives for providing small businesses with flexibility in complying with the proposed emissions standards and related requirements. As part of the process, the Panel requested and received comment on several ideas for flexibility that were suggested by SERs and Panel members. The major options recommended by the Panel are summarized below. The complete set of recommendations can be found in Section 9 of the Panel's full Report. The panel recommendations for motorcycles described below were developed for the exhaust emission standards. Potential controls for permeation emissions from motorcycles were not part of the panel process, because review of the need for such controls resulted from comments received on the related recreational vehicles proposal and further investigation by EPA following the end of the panel process. However, EPA believes that the potential permeation emission controls on motorcycles would not, if promulgated, have a significant effect on the burdens of this rule on regulated entities, or on small entities in particular, due to the relatively low cost and the availability of materials and treatment support by outside vendors. Low permeation fuel hoses are available from vendors today, and we would expect that surface treatment for tanks would be applied through an outside company. We request comment on the need for flexibilities for the potential permeation standards, if they are adopted. If the comments or other information the Agency receives indicate that flexibilities similar to (or the same as) those for the motorcycle exhaust standards are appropriate for the motorcycle permeation standards, then we will adopt such flexibilities as part of our final rule if we adopt such permeation standards. Many of the flexible approaches recommended by the Panel can be applied to either marine vessels or highway motorcycles. These approaches are listed below: 1. Additional lead time for compliance. 2. Hardship provisions. 3. Certification flexibility. 4. Broadly defined product certification families. 5. Averaging, banking, and trading. Based on consultations with SERs, the Panel believes that the first two provisions listed above are likely to provide the greatest flexibility for many small entities. These provisions are likely to be most valuable because they either provide more time for compliance (e. g., additional lead time and hardship provisions). The remaining three approaches have the potential to reduce near term and even long term costs once a small entity has a product it is preparing to certify. These are important in that the reducing costs of testing several emission families and/ or developing deterioration factors. Small businesses could also meet an emission standard on average or generate credits for producing engines which emit at levels below the standard; these credits could then be sold to other manufacturers for compliance or banked for use in future model years. During the consultation process, it became evident that, in a few situations, it could be helpful to small entities if unique provisions were available. Two such provisions are described below. a. Marine Vessel Tanks. Most of this sector involves small fuel tank manufacturers and small boat builders. The Panel recommends that the program be structured with longer lead times and an early credit generation program to enable the fuel tank manufacturers to implement controls on tanks on a schedule consistent with their normal turnover of fuel tank molds. Also, the panel recommends that the program allow small businesses have the option of certifying to the evaporative emission performance standards based on fuel tank design characteristics designed to reduce emissions. b. Highway Motorcycles. The California Air Resources Board (CARB) has found that California's Tier 2 standard is potentially infeasible for small manufacturers. Therefore, the Panel recommends that EPA delay making decisions on the applicability to small businesses of Tier 2 or other such VerDate Aug< 2,> 2002 18: 43 Aug 13, 2002 Jkt 197001 PO 00000 Frm 00047 Fmt 4701 Sfmt 4702 E:\ FR\ FM\ 14AUP2. SGM pfrm17 PsN: 14AUP2 53096 Federal Register / Vol. 67, No. 157 / Wednesday, August 14, 2002 / Proposed Rules revisions to the federal regulations until California's 2006 review is complete.

7. Summary of SBREFA Process and Panel Outreach As required by section 609( b) of the RFA, as amended by SBREFA, EPA also conducted outreach to small entities and convened a Small Business Advocacy Review Panel to obtain advice and recommendations of representatives of the small entities that potentially would be subject to the rule's requirements. On May 3, 2001, EPA's Small Business Advocacy Chairperson convened this Panel under Section 609( b) of the Regulatory Flexibility Act (RFA) as amended by the Small Business Regulatory Enforcement Fairness Act of 1996 (SBREFA). In addition to the Chair, the Panel consisted of the Director of the Assessment and Standards Division (ASD) within EPA's Office of Transportation and Air Quality, the Chief Counsel for Advocacy of the Small Business Administration, and the Deputy Administrator of the Office of Information and Regulatory Affairs within the Office of Management and Budget. As part of the SBAR process, the Panel met with small entity representatives (SERs) to discuss the potential emission standards and, in addition to the oral comments from SERs, the Panel solicited written input. In the months preceding the Panel process, EPA conducted outreach with small entities from each of the five sectors as described above. On May 18, 2001, the Panel distributed an outreach package to the SERs. On May 30 and 31, 2001, the Panel met with SERs to hear their comments on preliminary alternatives for regulatory flexibility and related information. The Panel also received written comments from the SERs in response to the discussions at this meeting and the outreach materials. The Panel asked SERs to evaluate how they would be affected under a variety of regulatory approaches, and to provide advice and recommendations regarding early ideas for alternatives that would provide flexibility to address their compliance burden. SERs representing companies in each of the sectors addressed by the Panel raised concerns about the potential costs of complying with the rules under development. For the most part, their concerns were focused on two issues: (1) The difficulty (and added cost) that they would face in complying with certification requirements associated with the standards EPA is developing, and (2) the cost of meeting the standards themselves. SERs observed that these costs would include the opportunity cost of deploying resources for research and development, expenditures for tooling/ retooling, and the added cost of new engine designs or other parts that would need to be added to equipment in order to meet EPA emission standards. In addition, in each category, the SERs noted that small manufacturers (and in the case of one category, small importers) have fewer resources and are therefore less well equipped to undertake these new activities and expenditures. Furthermore, because their product lines tend to be smaller, any additional fixed costs must be recovered over a smaller number of units. Thus, absent any provisions to address these issues, new emission standards are likely to impose much more significant adverse effects on small entities than on their larger competitors. The Panel discussed each of the issues raised in the outreach meetings and in written comments by the SERs. The Panel agreed that EPA should consider the issues raised by the SERs and that it would be appropriate for EPA to propose and/ or request comment on various alternative approaches to address these concerns. The Panel's key discussions centered around the need for and most appropriate types of regulatory compliance alternatives for small businesses. The Panel considered a variety of provisions to reduce the burden of complying with new emission standards and related requirements. Some of these provisions would apply to all companies (e. g., averaging, banking, and trading), while others would be targeted at the unique circumstances faced by small businesses. A complete discussion of the regulatory alternatives recommended by the Panel can be found in the Final Panel Report. Copies of the Final Report can be found in the docket for this rulemaking or at http:// www. epa. gov/ sbrefa. Summaries of the Panel's recommended alternatives for each of the sectors subject to this action can be found in the respective sections of the preamble. As required by section 609( b) of the RFA, as amended by SBREFA, EPA also conducted outreach to small entities and convened a Small Business Advocacy Review Panel to obtain advice and recommendations of representatives of the small entities that potentially would be subject to the rule's requirements. EPA's Small Business Advocacy Chairperson convened this on May 3, 2001. In addition to the Chair, the Panel consisted of the Director of the Assessment and Standards Division (ASD) within EPA's Office of Transportation and Air Quality, the Chief Counsel for Advocacy of the Small Business Administration, and the Deputy Administrator of the Office of Information and Regulatory Affairs within the Office of Management and Budget. The proposal being developed includes marine sterndrive and inboard (SD/ I) engines and boats powered by SI marine engines. In addition, EPA also intends to update EPA requirements for highway motorcycles. Finally, the proposal being developed included evaporative emission control requirements for gasoline fuel tanks and systems used on marine vessels. The Panel met with Small Entity Representatives (SERs) to discuss the potential emissions standards and, in addition to the oral comments from SERs, the Panel solicited written input. In the months preceding the Panel process, EPA conducted outreach with small entities from each of the five sectors as described above. On May 18, 2001, the Panel distributed an outreach package to the SERs. On May 30 and 31, 2001, the Panel met with SERs to hear their comments on preliminary options for regulatory flexibility and related information. The Panel also received written comments from the SERs in response to the discussions at this meeting and the outreach materials. The Panel asked SERs to evaluate how they would be affected under a variety of regulatory approaches, and to provide advice and recommendations regarding early ideas to provide flexibility. See Section 8 of the Panel Report for a complete discussion of SER comments, and Appendices A and B for summaries of SER oral comments and SER written comments. Consistent with the RFA/ SBREFA requirements, the Panel evaluated the assembled materials and small entity comments on issues related to the elements of the IRFA. A copy of the Panel report is included in the docket for this proposed rule. The following are Panel recommendations adopted by the Agency. Please note all Panel recommendations were adopted for this proposal. a. Related Federal Rules. The Panel recommends that EPA continue to consult with the CPSC in developing a proposed and final rule in order to better understand the scope of the Commission's regulations as they may relate to the competition exclusion. In addition, the Panel recommends that EPA continue to work with the Coast Guard to evaluate the safety implications of any proposed evaporative emissions standards and to avoid interference with Coast Guard safety regulations.

VerDate Aug< 2,> 2002 18: 43 Aug 13, 2002 Jkt 197001 PO 00000 Frm 00048 Fmt 4701 Sfmt 4702 E:\ FR\ FM\ 14AUP2. SGM pfrm17 PsN: 14AUP2 53097 Federal Register / Vol. 67, No. 157 / Wednesday, August 14, 2002 / Proposed Rules b. Regulatory Flexibility Alternatives. The Panel recommends that EPA consider and seek comments on a wide range of alternatives, including the flexibility options described below. (i) Marine Vessels. (A) Smooth Transition to Proposed Standards. The Panel recommends that EPA propose an approach that would implement any evaporative standards five years after a regulation for marine engines takes effect. The Panel also recommends that EPA seek comment on this five year period and on whether there are small entities whose product line is dominated by tanks that turn over at a time rate slower time than five years. (B) Design Based Certification. The Panel recommends that EPA propose to grant small businesses the option of certifying to the evaporative emission performance requirements based on fuel tank design characteristics that reduce emissions. The Panel also recommends that EPA seek comment on and consider proposing an approach that would allow manufacturers to use this averaging approach with designs other than those listed in the final rule. (C) ABT of Emission Credits with Design Based Certification. The Panel recommends that EPA allow manufacturers using design based certification to generate credits. The Panel also recommends that EPA provide adequately detailed design specifications and associated emission levels for several technology options that could be used to certify. (D) Broadly Defined Product Certification Families. The Panel recommends that EPA take comment on the need for broadly defined emission families and how these families should be defined. (E) Hardship Provisions. The Panel recommends that EPA propose two types of hardship programs for marine engine manufacturers, boat builders and fuel tank manufacturers: (1) Allow small businesses to petition EPA for additional lead time to comply with the standards; and (2) allow small businesses to apply for hardship relief if circumstances outside their control cause the failure to comply (i. e. supply contract broken by parts supplier) and if the failure to sell the subject fuel tanks or boats would have a major impact on the company's solvency. The Panel also recommends that EPA work with small manufacturers to develop these criteria and how they would be used. (ii) Highway Motorcycles. The Panel recommends that EPA include the flexibilities described below for small entities with highway motorcycle annual sales of less than 3,000 units per model year (combined Class I, II, and III motorcycles) and fewer than 500 employees. (A) Delay of Proposed Standards. The Panel recommends that EPA propose to delay compliance with the Tier 1 standard of 1.4 g/ km HC+ NOX until the 2008 model year for small volume manufacturers. The Panel also recommends that EPA seek comment on whether additional time is needed for small businesses to comply with the Federal program. The Panel recommends that EPA participate with CARB in the 2006 progress review as these provisions are revisited, and delay making decisions on the applicability to small businesses of Tier 2 or other revisions to the federal regulations that are appropriate following the review. The Panel also recommends that any potential Tier 2 requirements for small manufacturer motorcycles consider potential test procedure changes arising from the ongoing World Motorcycle Test Cycle work described in the Panel Report. (B) Broader Engine Families. The Panel recommends that EPA keep the current existing regulations for small volume highway motorcycle manufacturers. (C) Exemption from Production Line Testing. The Panel recommends that EPA keep the current provisions for no mandatory production line testing requirement for highway motorcycles and allow the EPA to request production vehicles from any certifying manufacturer for testing. (D) Averaging, Banking, and Trading (ABT). The Panel recommends that EPA propose an ABT program for highway motorcycles. (E) Hardship Provisions. The Panel recommends that EPA propose two types of hardship programs for highway motorcycles: (1) Allow small businesses to petition EPA for additional lead time to comply with the standards; and (2) allow small businesses to apply for hardship relief if circumstances outside their control cause the failure to comply (i. e. supply contract broken by parts supplier) and if failure to sell the subject engines or vehicles would have a major impact on the company's solvency. The Panel also recommends that EPA request comment on the California requirements, which do not include hardship provisions. (F) Reduced Certification Data Submittal and Testing Requirements. The Panel recommends that EPA keep current EPA regulations allow significant flexibility for certification by manufacturers who project fewer than 10,000 unit sales of combined Class I, II, and III motorcycles. We invite comments on all aspects of the proposal and its impacts on small entities.

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. Information Collection Requests (ICR No. 1897.03 for marine vessels and 0783.43 for highway motorcycles) have been prepared by EPA, and a copy may be obtained from Susan Auby, Collection Strategies Division; U. S. Environmental Protection Agency (2822); 1200 Pennsylvania Ave., NW., Washington, DC 20460, by e mail at auby. susan@ epamail. epa. gov, or by calling (202) 566Ð 1672. A copy may also be downloaded off the internet at http:/ /www. epa. gov. icr. The information being collected is to be used by EPA to ensure that new marine vessels and fuel systems and new highway motorcycles comply with applicable emissions standards through certification requirements and various subsequent compliance provisions. For marine vessels, the annual public reporting and recordkeeping burden for this collection of information is estimated to average 6 hours per response, with collection required annually. The estimated number of respondents is 810. The total annual cost for the first 3 years of the program is estimated to be $230,438 year and includes no annualized capital costs, $14,000 in operating and maintenance costs, at a total of 4,838 hours per year. For highway motorcycles, the annual public reporting and recordkeeping burden for this collection of information is estimated to average 228 hours per response, with collection required annually. The estimated number of respondents is 73. The total annual cost for the first 3 years of the program is estimated to be $3,430,908 per year and includes no annualized capital costs, $2,728,000 in operating and maintenance costs, at a total of 16,647 hours per year. Burden means the total time, effort, or financial resources expended by persons to generate, maintain, retain, 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; adjusting the VerDate Aug< 2,> 2002 18: 43 Aug 13, 2002 Jkt 197001 PO 00000 Frm 00049 Fmt 4701 Sfmt 4702 E:\ FR\ FM\ 14AUP2. SGM pfrm17 PsN: 14AUP2 53098 Federal Register / Vol. 67, No. 157 / Wednesday, August 14, 2002 / Proposed Rules existing ways to comply with any previously applicable instructions and requirements; train personnel to be able 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 displayed 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 14, 2002, a comment to OMB is best ensured of having its full effect if OMB receives it by September 13, 2002. The final rule will respond to any OMB or public comments on the information collection requirements contained in this proposal.

D. Intergovernmental Relations 1. Unfunded Mandates Reform Act Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Pub. L. 104Ð 4, establishes requirements for federal agencies to assess the effects of their regulatory actions on state, local, and tribal governments and the private sector. Under section 202 of the UMRA, EPA generally must prepare a written statement, including a cost benefit analysis, for proposed and final rules with `` federal mandates'' that may result in expenditures to state, local, and tribal governments, in the aggregate, or to the private sector, of $100 million or more in any one year. Before promulgating an EPA rule for which a written statement is needed, section 205 of the UMRA generally requires EPA to identify and consider a reasonable number of regulatory alternatives and adopt the least costly, most cost effective, or least burdensome alternative that achieves the objectives of the rule. The provisions of section 205 do not apply when they are inconsistent with applicable law. Moreover, section 205 allows EPA to adopt an alternative other than the least costly, most cost effective, or least burdensome alternative if the Administrator publishes with the final rule an explanation of why that alternative was not adopted. Before EPA establishes any regulatory requirements that may significantly or uniquely affect small governments, including tribal governments, it must have developed under section 203 of the UMRA a small government agency plan. The plan must provide for notifying potentially affected small governments, enabling officials of affected small governments to have meaningful and timely input in the development of EPA regulatory proposals with significant Federal intergovernmental mandates, and informing, educating, and advising small governments on compliance with the regulatory requirements. This rule contains no Federal mandates for state, local, or tribal governments as defined by the provisions of Title II of the UMRA. The rule imposes no enforceable duties on any of these governmental entities. Nothing in the rule would significantly or uniquely affect small governments. EPA has determined that this rule contains federal mandates that may result in expenditures of less than $100 million to the private sector in any single year. EPA believes that the proposal represents the least costly, most cost effective approach to achieve the air quality goals of the rule. The costs and benefits associated with the proposal are discussed in Section VI and in the Draft Regulatory Support Document.

2. Executive Order 13175 (Consultation and Coordination With Indian Tribal Governments)

Executive Order 13175, entitled `` Consultation and Coordination with Indian Tribal Governments'' (65 FR 67249, November 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. '' `` Policies that have tribal implications'' is defined in the Executive Order to include regulations that have `` substantial direct effects on one or more Indian tribes, on the relationship between the Federal government and the Indian tribes, or on the distribution of power and responsibilities between the Federal government and Indian tribes. '' 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. This rule contains no federal mandates for tribal governments. Thus, Executive Order 13175 does not apply to this rule. However, in the spirit of Executive Order 13175, and consistent with EPA policy to promote communications between EPA and tribal governments, we specifically solicit additional comment on this proposed rule from tribal officials.

E. National Technology Transfer and Advancement Act Section 12( d) of the National Technology Transfer and Advancement Act of 1995 (`` NTTAA''), Public Law 104Ð 113, § 12( d) (15 U. S. C. 272 note) directs EPA to use voluntary consensus standards in its regulatory activities unless doing so would be inconsistent with applicable law or otherwise impractical. Voluntary consensus standards are technical standards (e. g., materials specifications, test methods, sampling procedures, and business practices) that are developed or adopted by voluntary consensus standards bodies. NTTAA directs EPA to provide Congress, through OMB, explanations when the Agency decides not to use available and applicable voluntary consensus standards. This proposed rule involves technical standards. The following paragraphs describe how we specify testing procedures for engines subject to this proposal. We are proposing to test highway motorcycles with the Federal Test Procedure, a chassis based transient test. There is no voluntary consensus standard that would adequately address engine or vehicle operation for suitable emission measurement. For marine vessels, we are proposing to use an evaporative emission test procedure based on the highway Federal Test Procedure. There is no voluntary consensus standard for testing evaporative emission from marine vessels. In addition, we are proposing the option of using design based certification.

F. Protection of Children (Executive Order 13045) Executive Order 13045, `` Protection of Children from Environmental Health Risks and Safety Risks'' (62 FR 19885, April 23, 1997) applies to any rule that VerDate Aug< 2,> 2002 18: 43 Aug 13, 2002 Jkt 197001 PO 00000 Frm 00050 Fmt 4701 Sfmt 4702 E:\ FR\ FM\ 14AUP2. SGM pfrm17 PsN: 14AUP2 53099 Federal Register / Vol. 67, No. 157 / Wednesday, August 14, 2002 / Proposed Rules (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, Section 5Ð 501 of the Order directs the Agency to 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. This proposed rule is not subject to the Executive Order because it does not involve decisions on environmental health or safety risks that may disproportionately affect children. The effects of ozone and PM on children's health were addressed in detail in EPA's rulemaking to establish the NAAQS for these pollutants, and EPA is not revisiting those issues here. EPA believes, however, that the emission reductions from the strategies proposed in this rulemaking will further reduce air toxics and the related adverse impacts on children's health.

G. Federalism (Executive Order 13132) 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. '' Under Section 6 of Executive Order 13132, EPA may not issue a regulation that has federalism implications, that imposes substantial direct compliance costs, and that is not required by statute, unless the Federal government provides the funds necessary to pay the direct compliance costs incurred by State and local governments, or EPA consults with State and local officials early in the process of developing the proposed regulation. EPA also may not issue a regulation that has federalism implications and that preempts State law, unless the Agency consults with State and local officials early in the process of developing the proposed regulation. Section 4 of the Executive Order contains additional requirements for rules that preempt State or local law, even if those rules do not have federalism implications (i. e., the rules will not have substantial direct effects on the States, on the relationship between the national government and the states, or on the distribution of power and responsibilities among the various levels of government). Those requirements include providing all affected State and local officials notice and an opportunity for appropriate participation in the development of the regulation. If the preemption is not based on express or implied statutory authority, EPA also must consult, to the extent practicable, with appropriate State and local officials regarding the conflict between State law and Federally protected interests within the agency's area of regulatory responsibility. This proposed rule does not have federalism implications. It will not have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government, as specified in Executive Order 13132. Although Section 6 of Executive Order 13132 does not apply to this rule, EPA did consult with representatives of various State and local governments in developing this rule. EPA has also consulted representatives from STAPPA/ ALAPCO, which represents state and local air pollution officials. 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. Energy Effects (Executive Order 13211) This rule is not a `` significant energy action'' as defined in Executive Order 13211, `` Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use'' (66 FR 28355 (May 22, 2001)) because it is not likely to have a significant adverse effect on the supply, distribution or use of energy. The proposed standards have for their aim the reduction of emission from certain nonroad engines, and have no effect on fuel formulation, distribution, or use. Generally, the proposed program leads to reduced fuel usage due to the reduction of wasted fuel through evaporation.

I. Plain Language This document follows the guidelines of the June 1, 1998 Executive Memorandum on Plain Language in Government Writing. To read the text of the regulations, it is also important to understand the organization of the Code of Federal Regulations (CFR). The CFR uses the following organizational names and conventions. Title 40Ñ Protection of the Environment Chapter IÑ Environmental Protection Agency Subchapter CÑ Air Programs. This contains parts 50 to 99, where the Office of Air and Radiation has usually placed emission standards for motor vehicle and nonroad engines. Subchapter UÑ Air Programs Supplement. This contains parts 1000 to 1299, where we intend to place regulations for air programs in future rulemakings. Part 1045Ñ Control of Emissions from Marine Spark ignition Engines and Vessels Part 1068Ñ General Compliance Provisions for Engine Programs. Provisions of this part apply to everyone. Each part in the CFR has several subparts, sections, and paragraphs. The following illustration shows how these fit together. Part 1045 Subpart A Section 1045.1 (a) (b) (1) (2) (i) (ii) (A) (B) A cross reference to § 1045.1( b) in this illustration would refer to the parent paragraph (b) and all its subordinate paragraphs. A reference to ``§ 1045.1( b) introductory text'' would refer only to the single, parent paragraph (b).

List of Subjects 40 CFR Part 86 Environmental protection, Administrative practice and procedure, Confidential business information, Labeling, Motor vehicle pollution, Reporting and recordkeeping requirements 40 CFR Part 90 Environmental protection, Administrative practice and procedure, Air pollution control, Confidential business information, Imports, Labeling, Reporting and recordkeeping requirements, Research, Warranties 40 CFR Part 1045 Environmental protection, Administrative practice and procedure,

VerDate Aug< 2,> 2002 18: 43 Aug 13, 2002 Jkt 197001 PO 00000 Frm 00051 Fmt 4701 Sfmt 4702 E:\ FR\ FM\ 14AUP2. SGM pfrm17 PsN: 14AUP2 53100 Federal Register / Vol. 67, No. 157 / Wednesday, August 14, 2002 / Proposed Rules Air pollution control, Confidential business information, Imports, Labeling, Penalties, Reporting and recordkeeping requirements, Research, Warranties 40 CFR Part 1051 Environmental protection, Administrative practice and procedure, Air pollution control, Confidential business information, Imports, Labeling, Penalties, Reporting and recordkeeping requirements, Warranties.

40 CFR Part 1068 Environmental protection, Administrative practice and procedure, Confidential business information, Imports, Motor vehicle pollution, Reporting and recordkeeping requirements, Warranties.

Dated: July 25, 2002. Christine Todd Whitman, Administrator.

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

PART 86— CONTROL OF EMISSIONS FROM NEW AND IN USE HIGHWAY VEHICLES AND ENGINES 1. The authority citation for part 86 continues to read as follows:

Authority: 42 U. S. C. 7401Ð 7521( l) and 7521( m)Ð 7671q.

Subpart E—[ Amended]

2. A new § 86.401Ð 2006 is added to subpart E to read as follows:

§ 86.401– 2006 General applicability. This subpart applies to 1978 and later model year, new, gasoline fueled motorcycles built after December 31, 1977, and to 1990 and later model year, new methanol fueled motorcycles built after December 31, 1989, and to 1997 and later model year, new natural gasfueled and liquefied petroleum gasfueled motorcycles built after December 31, 1996, and to 2006 and later model year new motorcycles, regardless of fuel. 3. Section 86.402Ð 78( a) is amended by adding a definition for `` Motor vehicle'' in alphabetical order to read as follows:

§ 86.402– 78 Definitions. (a) * * * Motor vehicle has the meaning we give in 40 CFR 85.1703. * * * * * 4. A new § 86.410Ð 2006 is added to subpart E to read as follows:

§ 86.410– 2006 Emission standards for 2006 and later model year motorcycles. (a)( 1) Exhaust emissions from Class I and Class II motorcycles shall not exceed the standards listed in the following table:

TABLE E.— 2006.1 CLASS I AND II MOTORCYCLE EMISSION STANDARDS Model year Emission standards (g/ km)

HC CO 2006 and later .......... 1.0 12.0 (2) Exhaust emissions from Class III motorcycles shall not exceed the standards listed in the following table:

TABLE E.— 2006.2 CLASS III MOTORCYCLE EMISSION STANDARDS Tier Model year Emission standards (g/ km)

HC+ NOX CO 1 ....... 2006– 2009 1.4 12.0 2 ....... 2010 and later. 0.8 12.0 (b) The standards set forth in paragraphs (a) (1) and (2) of this section refer to the exhaust emitted over the driving schedule as set forth in subpart F and measured and calculated in accordance with those procedures. (c) Compliance with the HC+ NOX standards set forth in paragraph (a)( 2) of this section may be demonstrated using the averaging provisions of § 86.449. (d) No crankcase emissions shall be discharged into the ambient atmosphere from any new motorcycle subject to this subpart. (e) Manufacturers with fewer than 500 employees and producing fewer than 3000 motorcycles per year are considered small volume manufacturers for the purposes of this section. The following provisions apply for these small volume manufacturers: (1) Small volume manufacturers are not required to comply with the Tier 1 standards until model year 2008. (2) Small volume manufacturers are not required to comply with the Tier 2 standards. 5. A new § 86.419Ð 2006 is added to subpart E to read as follows:

§ 86.419– 2006 Engine displacement, motorcycle classes.

(a)( 1) Engine displacement shall be calculated using nominal engine values and rounded to the nearest whole cubic centimeter, in accordance with ASTM E 29Ð 67 (incorporated by reference in § 86.1). (2) For rotary engines, displacement means the maximum volume of a combustion chamber between two rotor tip seals, minus the minimum volume of the combustion chamber between those two rotor tip seals, times three times the number of rotors, according to the following formula: cc = (max. chamber volume ¥ min. chamber volume) × 3 × no. of rotors (b) Motorcycles will be divided into classes based on engine displacement. (1) Class IÑ 0 to 169 cc (0 to 10.4 cu. in.). (2) Class IIÑ 170 to 279 cc (10.4 to 17.1 cu. in.). (3) Class IIIÑ 280 cc and over (17.1 cu. in. and over). (c) At the manufacturer's option, a vehicle described in an application for certification may be placed in a higher class (larger displacement). All procedures for the higher class must then be complied with, compliance withemission standards will be determined on the basis of engine displacement. 6. A new § 86.445Ð 2006 is added to subpart E to read as follows:

§ 86.445– 2006 What temporary provisions address hardship due to unusual circumstances? (a) After considering the circumstances, we may permit you to introduce into commerce highway motorcycles that do not comply with emission standards if all the following conditions and requirements apply: (1) Unusual circumstances that are clearly outside your control and that could not have been avoided with reasonable discretion prevent you from meeting requirements from this chapter. (2) You exercised prudent planning and were not able to avoid the violation; you have taken all reasonable steps to minimize the extent of the nonconformity. (3) Not having the exemption will jeopardize the solvency of your company. (4) No other allowances are available under the regulations to avoid the impending violation. (b) To apply for an exemption, you must send the Designated Officer a written request as soon as possible before you are in violation. In your request, show that you meet all the conditions and requirements in paragraph (a) of this section. (c) Include in your request a plan showing how you will meet all the applicable requirements as quickly as possible. (d) You must give us other relevant information if we ask for it. (e) We may include reasonable additional conditions on an approval granted under this section, including provisions to recover or otherwise address the lost environmental benefit or VerDate Aug< 2,> 2002 22: 38 Aug 13, 2002 Jkt 197001 PO 00000 Frm 00052 Fmt 4701 Sfmt 4702 E:\ FR\ FM\ 14AUP2. SGM pfrm20 PsN: 14AUP2 53101 Federal Register / Vol. 67, No. 157 / Wednesday, August 14, 2002 / Proposed Rules paying fees to offset any economic gain resulting from the exemption. For example, we may require that you meet standards less stringent than those that currently apply. 7. A new § 86.446Ð 2006 is added to subpart E to read as follows:

§ 86.446– 2006 What are the provisions for extending compliance deadlines for smallvolume manufacturers under hardship?

(a) After considering the circumstances, we may extend the compliance deadline for you to meet new or revised emission standards, as long as you meet all the conditions and requirements in this section. (b) To be eligible for this exemption, you must qualify as a small volume manufacturer under § 86.410Ð 2006( e). (c) To apply for an extension, you must send the Designated Officer a written request. In your request, show that all the following conditionsand requirements apply: (1) You have taken all possible business, technical, and economic steps to comply. (i) In the case of importers, show that you are unable to find a manufacturer capable of supplying complying products. (ii) For all other manufacturers, show that the burden of compliance costs prevents you from meeting the requirements of this chapter. (2) Not having the exemption will jeopardize the solvency of your company. (3) No other allowances are available under the regulations to avoidthe impending violation. (d) In describing the steps you have taken to comply under paragraph (c)( 1) of this section, include at least the following information: (1) Describe your business plan, showing the range of projects active or under consideration. (2) Describe your current and projected financial standing, with and without the burden of complying with regulations. (3) Describe your efforts to raise capital to comply with regulations. (4) Identify the engineering and technical steps you have taken or planto take to comply with regulations. (5) Identify the level of compliance you can achieve. For example, you may be able to produce engines that meet a somewhat less stringent emission standard than the regulations require. (e) Include in your request a plan showing how you will meet all the applicable requirements as quickly as possible. (f) You must give us other relevant information if we ask for it. (g) An authorized representative of your company must sign the request andinclude the statement: `` All the information in this request is true andaccurate, to the best of my knowledge. '' (h) Send your request for this extension at least nine months before new standards apply. Do not send your request before the regulations in question apply to other manufacturers. (i) We may include reasonable requirements on an approval granted underthis section, including provisions to recover or otherwise address the lostenvironmental benefit. For example, we may require that you meet a less stringent emission standard or buy and use available emission credits. (j) We will approve extensions of up to one year. We may review and revisean extension as reasonable under the circumstances. 8. A new § 86.447Ð 2006 is added to subpart E to read as follows:

§ 86.447– 2006 What are the provisions for exempting motorcycles under 50 cc from the requirements of this part if they use engines you certify under other programs? (a) This section applies to you if you manufacture engines under 50 cc for installation in a highway motorcycle. See § 86.448Ð 2006 if you are not the engine manufacturer. (b) The only requirements or prohibitions from this part that apply to a motorcycle that is exempt under this section are in this section and § 86.448Ð 2006. (c) If you meet all the following criteria regarding your new engine, itis exempt under this section: (1) You must produce it under a valid certificate of conformity for one of the following types of engines or vehicles: (i) Class II engines under 40 CFR part 90. (ii) Recreational vehicles under 40 CFR part 1051. (2) You must not make any changes to the certified engine that we could reasonably expect to increase its exhaust emissions. For example, if you make any of the following changes to one of these engines, you do not qualify for this exemption: (i) Change any fuel system parameters from the certified configuration. (ii) Change any other emission related components. (iii) Modify or design the engine cooling system so that temperatures or heat rejection rates are outside the original engine's specified ranges. (3) You must make sure the engine has the emission label we require under 40 CFR part 90 or part 1051. (4) You must make sure that fewer than 50 percent of the engine model'stotal sales, from all companies, are used in highway motorcycles. (d) If you produce only the engine, give motorcycle manufacturers anynecessary instructions regarding what they may or may not change under paragraph (c)( 2) of this section. (e) If you produce both the engine and motorcycle under this exemption, you must do all of the following to keep the exemption valid: (1) Make sure the original emission label is intact. (2) Add a permanent supplemental label to the engine in a position where it will remain clearly visible after installation in the vehicle. In your engine's emission label, do the following: (i) Include the heading: `` Highway Motorcycle Emission ControlInformation''. (ii) Include your full corporate name and trademark. (iii) State: `` THIS ENGINE WAS ADAPTED FOR HIGHWAY USE WITHOUT AFFECTING ITS EMISSION CONTROLS. ''. (iv) State the date you finished installation (month and year). (3) Send the Designated Officer a signed letter by the end of each calendar year (or less often if we tell you) with all the following information: (i) Identify your full corporate name, address, and telephone number. (ii) List the models you expect to produce under this exemption in the coming year. (iii) State: `` We produce each listed model as a highway motorcycle without making any changes that could increase its certified emission levels, as described in 40 CFR 86.447.''. (f) If your vehicles do not meet the criteria listed in paragraph (c) of this section, they will be subject to the standards and prohibitions of this part. Producing these vehicles without a valid exemption or certificate of conformity would violate the prohibitions in Clean Air Act section 203 (42 U. S. C. 7522). (g) If we request it, you must send us emission test data on the duty cycle for Class I motorcycles. You may include the data in your application for certification or in your letter requesting the exemption. (h) Vehicles exempted under this section are subject to all the requirements affecting engines and vehicles under 40 CFR part 90 or part 1051, as applicable. The requirements and restrictions of 40 CFR part 90 or 1051 apply to anyone manufacturing these engines, anyone manufacturing vehicles that use these engines, and all other persons in the same manner as if VerDate Aug< 2,> 2002 18: 43 Aug 13, 2002 Jkt 197001 PO 00000 Frm 00053 Fmt 4701 Sfmt 4702 E:\ FR\ FM\ 14AUP2. SGM pfrm17 PsN: 14AUP2 53102 Federal Register / Vol. 67, No. 157 / Wednesday, August 14, 2002 / Proposed Rules these engines were used in a nonroad application. 9. A new § 86.448Ð 2006 is added to subpart E to read as follows:

§ 86.448– 2006 What are the provisions for producing motorcycles under 50 cc with engines already certified under other programs?

(a) You may produce a highway motorcycle under 50 cc using a nonroad engine if you meet three criteria: (1) The engine or vehicle is certified to 40 CFR part 90 or part 1051. (2) The engine is not adjusted outside the manufacturer's specifications, as described in § 86.447Ð 2006( c)( 2) and (d). (3) The engine or vehicle is not modified in any way that may affect its emission control. (b) This section does not apply if you manufacture the engine yourself; see § 86.447Ð 2006. 10. A new § 86.449 is added to subpart E to read as follows:

§ 86.449 Averaging provisions.

(a) Compliance with the HC+ NOX standards set forth in § 86.410Ð 2006( a)( 2) may be demonstrated using the averaging provisions of this section. To do this you must show that your average emission levels are at or below the applicable standards in § 86.410Ð 2006. Family emission limits (FELs) may not exceed 5.0 g/ km. (b) Do not include any exported vehicles in the certification averaging program. Include only motorcycles certified under this subpart. (c) To use the averaging program, do the following things: (1) Certify each vehicle to a family emission limit. (2) Calculate a preliminary average emission level according to paragraph (d) of this section using projected production volumes for your application for certification. (3) After the end of your model year, calculate a final average emission level according to paragraph (d) of this section for each type of recreational vehicle or engine you manufacture or import. Use actual production volumes. (d) Calculate your average emission level for each type of recreational vehicle or engine for each model year according to the following equation and round it to the nearest tenth of a g/ km. Use consistent units throughout the calculation. (1) Calculate the average emission level as: