Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), 2 U.S.C.
1531-1538 for State, local, or tribal governments or the private
sector. The action imposes no enforceable duty on any State, local or
tribal governments or the private sector. Therefore, this action is not
subject to the requirements of sections 202 or 205 of the UMRA.
    This action is also not subject to the requirements of section 203
of UMRA because it contains no regulatory requirements that might
significantly or uniquely affect small governments.

F. Executive Order 13132: Federalism

    This action 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. This direct final rule merely
corrects and clarifies regulatory provisions. Thus, Executive Order
13132 does not apply to this action.

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

    This action does not have tribal implications, as specified in
Executive Order 13175 (65 FR 67249, November 9, 2000). This direct
final rule merely corrects and clarifies regulatory provisions. Tribal
governments would be affected only to the extent they purchase and use
regulated vehicles. Thus, Executive Order 13175 does not apply to this
action.

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

    This action is not subject to Executive Order 13045 (62 FR 19885,
April 23, 1997) because it is not economically significant as defined
in Executive Order 12866, and because EPA and NHTSA do not believe the
environmental health or safety risks addressed by this action present a
disproportionate risk to children. This direct final rule merely
corrects and clarifies regulatory provisions.

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

    This action is not subject to Executive Order 13211 (66 FR 28355,
May 22, 2001), because it is not likely to have a significant adverse
effect on the supply, distribution, or use of energy. This direct final
rule merely corrects and clarifies regulatory provisions.

J. National Technology Transfer Advancement Act

    Section 12(d) of the National Technology Transfer and Advancement
Act of 1995 (``NTTAA''), Public Law 104-113, 12(d) (15 U.S.C. 272 note)
directs EPA to use voluntary consensus standards in its regulatory
activities unless to do so would be inconsistent with applicable law or
otherwise impractical. Voluntary consensus standards are technical
standards (e.g., materials specifications, test methods, sampling
procedures, and business practices) that are developed or adopted by
voluntary consensus standards bodies. NTTAA directs agencies to provide
Congress, through OMB, explanations when the Agency decides not to use
available and applicable voluntary consensus standards.
    This action slightly expands the use of voluntary consensus
standards by adding a reference standard under 40 CFR 1048.105. Other
amendments in this direct final rule do not involve application of new
technical standards. However, the underlying regulations in many cases
rely on voluntary consensus standards. For example, EPA and NHTSA
included several voluntary consensus standards in the development of
the Greenhouse Gas Emissions Standards and Fuel Efficiency Standards
for Medium- and Heavy-Duty Engines and Vehicles (76 FR 57106, September
15, 2011).

K. Executive Order 12898: Federal Actions To Address Environmental
Justice in Minority Populations and Low-Income Populations

    Executive Order 12898 (59 FR 7629, February 16, 1994) establishes
federal executive policy on environmental justice. Its main provision
directs federal agencies, to the greatest extent practicable and
permitted by law, to make environmental justice part of their mission
by identifying and addressing, as appropriate, disproportionately high
and adverse human health or environmental effects of their programs,
policies, and activities on minority populations and low-income
populations in the United States.
    EPA and NHTSA have determined that this rule will not have
disproportionately high and adverse human health or environmental
effects on minority or low-income populations because it merely
corrects provisions for manufacturers to use to demonstrate compliance
of heavy-duty engines and vehicles.

L. Congressional Review Act

    The Congressional Review Act, 5 U.S.C. 801 et seq., as added by the
Small Business Regulatory Enforcement Fairness Act of 1996, generally
provides that before a rule may take effect, the agency promulgating
the rule must submit a rule report, which includes a copy of the rule,
to each House of the Congress and to the Comptroller General of the
United States. EPA and NHTSA will submit reports containing this rule
and other required information to the U.S. Senate, the U.S. House of
Representatives, and the Comptroller General of the United States prior
to publication of the rule in the Federal Register. A Major rule cannot
take effect until 60 days after it is published in the Federal
Register. This action is not a ``major rule'' as defined by 5 U.S.C.
804(2). This rule will be effective on August 16, 2013.

M. Executive Order 12988 (Civil Justice Reform)

    This direct final rule meets applicable standards in sections 3(a)
and 3(b)(2) of Executive Order 12988, Civil Justice Reform, to minimize
litigation, eliminate ambiguity, and reduce burden.

IV. Statutory Authority

A. EPA

    Statutory authority for the vehicle controls is found in Clean Air
Act section 202(a) (which authorizes standards for emissions of
pollutants from new motor vehicles which emissions cause or contribute
to air pollution which may reasonably be anticipated to endanger public
health or welfare), sections 202(d), 203-209, 216, and 301 (42 U.S.C.
7521(a), 7521(d), 7522, 7523, 7524, 7525, 7541, 7542, 7543, 7550, and
7601).

B. NHTSA

    Statutory authority for the fuel consumption standards is found in
section 103 (which authorizes a fuel efficiency improvement program,
designed to achieve the maximum feasible improvement to be created for
commercial medium- and heavy-duty on-highway vehicles and work trucks,
to include appropriate test methods, measurement metrics, standards,
and compliance and enforcement protocols that are appropriate, cost-
effective and technologically feasible) of the Energy Independence and
Security Act of 2007, 49 U.S.C. 32902(k).

List of Subjects

40 CFR Part 85

    Confidential business information, Imports, Labeling, Motor vehicle
pollution, Reporting and recordkeeping requirements, Research,
Warranties.

40 CFR Part 86

    Administrative practice and procedure, Confidential business
information, Labeling, Motor vehicle pollution, Reporting and
recordkeeping requirements.

40 CFR Part 1036

    Administrative practice and procedure, Air pollution control,
Confidential business information, Environmental protection, Labeling,
Motor vehicle pollution, Reporting and recordkeeping requirements,
Warranties.

40 CFR Part 1037

    Administrative practice and procedure, Air pollution control,
Confidential business information, Environmental protection,
Incorporation by reference, Labeling, Motor vehicle pollution,
Reporting and recordkeeping requirements, Warranties.

40 CFR Part 1039

    Environmental protection, Administrative practice and procedure,
Air pollution control, Confidential business information, Imports,
Labeling, Penalties, Reporting and recordkeeping requirements,
Warranties.

40 CFR Part 1042

    Environmental protection, Administrative practice and procedure,
Air pollution control, Confidential business information, Imports,
Labeling, Penalties, Vessels, Reporting and recordkeeping requirements,
Warranties.

40 CFR Part 1048

    Environmental protection, Administrative practice and procedure,
Air pollution control, Confidential business information, Imports,
Incorporation by reference, Labeling, Penalties, Reporting and
recordkeeping requirements, Warranties.

40 CFR Part 1054

    Environmental protection, Administrative practice and procedure,
Air pollution control, Confidential business information, Imports,
Labeling, Penalties, Reporting and recordkeeping requirements,
Warranties.

40 CFR Part 1065 and 1066

    Administrative practice and procedure, Air pollution control,
Reporting and recordkeeping requirements, Research.

40 CFR Part 1068

    Environmental protection, Administrative practice and procedure,
Confidential business information, Imports, Motor vehicle pollution,
Penalties, Reporting and recordkeeping requirements, Warranties.

49 CFR Parts 523 and 535

    Fuel economy.
    For the reasons set forth in the preamble, the Environmental
Protection Agency is amending title 40, chapter I of the Code of
Federal Regulations as follows:

PART 85--CONTROL OF AIR POLLUTION FROM MOBILE SOURCES

0
1. The authority citation for part 85 continues to read as follows:

    Authority: 42 U.S.C. 7401-7671q.

Subpart F--[Amended]

0
2. Section 85.525 is amended by revising paragraph (a)(2)(i)
introductory text and adding paragraph (a)(2)(iii) to read as follows:

Sec.  85.525  Applicable standards.

* * * * *
    (a) * * *
    (2) * * *
    (i) Subject to the following exceptions and special provisions,
compliance with light-duty vehicle greenhouse gas emission standards is
demonstrated by complying with the N2O and CH4
standards and provisions set forth in 40 CFR 86.1818-12(f)(1) and the
in-use CO2 exhaust emission standard set forth in 40 CFR
86.1818-12(d) as determined by the OEM for the subconfiguration that is
identical to the fuel conversion emission data vehicle (EDV):
* * * * *
    (iii) Subject to the following exceptions and special provisions,
compliance with greenhouse gas emission standards for heavy-duty
vehicles subject to 40 CFR 1037.104 is demonstrated by complying with
the N2O and CH4 standards and provisions set
forth in 40 CFR 1037.104 and the in-use CO2 exhaust emission
standard set forth in 40 CFR 1037.104(b) as determined by the OEM for
the subconfiguration that is identical to the fuel conversion emission
data vehicle (EDV):
    (A) If the OEM complied with alternate standards for N2O
and/or CH4, as allowed under 40 CFR 1037.104(c) you may
demonstrate compliance with the same alternate standards.
    (B) If you are unable to meet either the N2O or
CH4 standards and your fuel conversion CO2
measured value is lower than the in-use CO2 exhaust emission
standard, you may also convert the difference between the in-use
CO2 exhaust emission standard and the fuel conversion
CO2 measured value into GHG equivalents of CH4
and/or N2O, using 298 g CO2 to represent 1 g
N2O, and 25 g CO2 to represent 1 g
CH4. You may then subtract the applicable converted values
from the fuel conversion measured values of CH4 and/or
N2O to demonstrate compliance with the CH4 and/or
N2O standards.
    (C) You may alternatively comply with the greenhouse gas emission
requirements by comparing emissions from the vehicle before and after
the fuel conversion. This comparison must be based on FTP test result
from the emission data vehicle (EDV) representing the pre-conversion
test group. The sum of CO2, CH4, and
N2O shall be calculated for pre- and post-conversion FTP
test results, where CH4 and N2O are weighted by
their global warming potentials of 25 and 298, respectively. The post-
conversion sum of these emissions must be lower than the pre-conversion
greenhouse gas emission result. Calculate CO2 emissions as
specified in 40 CFR 600.113. If we waive N2O measurement
requirements based on a statement of compliance, disregard
N2O for all measurements and calculations under this
paragraph (a)(2)(iii)(C).
* * * * *

PART 86--CONTROL OF EMISSIONS FROM NEW AND IN-USE HIGHWAY VEHICLES
AND ENGINES

0
3. The authority citation for part 86 continues to read as follows:

    Authority: 42 U.S.C. 7401-7671q.

Subpart A--[Amended]

Sec.  86.007-23  [Amended]

0
4. Section 86.007-23 is amended by removing paragraph (n).
0
5. Section 86.010-18 is amended by adding paragraph (q)(6) to read as
follows:

Sec.  86.010-18  On-board Diagnostics for engines used in applications
greater than 14,000 pounds GVWR.

* * * * *
    (q) * * *
    (6) Manufacturers that modify the engine's diagnostic system from
the approved configuration to be compatible with a hybrid powertrain
system under this paragraph (q) must add the following compliance
statement to the ECI label: ``for use in hybrid applications only''.

Subpart S--[Amended]

Sec.  86.1844-01  [Amended]

0
6. Section 86.1844-01 is amended by removing paragraph (j).
0
7. Section 86.1865-12 is amended by:
0
a. Revising paragraph (a)(1) introductory text and adding paragraph
(a)(1)(ii):
0
b. Revising paragraphs (j)(4)(i), (k)(4) introductory text, and
(k)(8)(iv)(A); and
0
c. Revising paragraphs (l)(1)(i) introductory text, (l)(1)(ii)
introductory text, and (l)(3).
    The revisions and additions read as follows:

Sec.  86.1865-12  How to comply with the fleet average CO2
standards.

    (a) * * *
    (1) Unless otherwise exempted under the provisions of Sec.
86.1801-12(j) or (k), CO2 fleet average exhaust emission
standards of this subpart apply to:
* * * * *
    (ii) Heavy-duty vehicles subject to standards under 40 CFR
1037.104.
* * * * *
    (j) * * *
    (4) * * *
    (i) Manufacturers must report in their annual reports to the Agency
that they met the relevant corporate average standard by showing that
their production-weighted average CO2 emission levels of
passenger automobiles, light trucks, and heavy-duty vehicles, as
applicable, are at or below the applicable fleet average standards; or
* * * * *
    (k) * * *
    (4) Credits are earned on the last day of the model year.
Manufacturers must calculate, for a given model year and separately for
passenger automobiles, light trucks, and heavy-duty vehicles (as
specified in 40 CFR 1037.104), the number of credits or debits it has
generated according to the following equation rounded to the nearest
megagram:
* * * * *
    (8) * * *
    (iv) * * *
    (A) If a manufacturer ceases production of passenger automobiles,
light trucks, or heavy-duty vehicles subject to the standards of 40 CFR
1037.104, the manufacturer continues to be responsible for offsetting
any debits outstanding within the required time period. Any failure to
offset the debits

will be considered a violation of paragraph (k)(8)(i) of this section
and may subject the manufacturer to an enforcement action for sale of
vehicles not covered by a certificate, pursuant to paragraphs
(k)(8)(ii) and (iii) of this section.
* * * * *
    (l) * * *
    (1) * * *
    (i) Manufacturers producing any light-duty vehicles, light-duty
trucks, or medium-duty passenger vehicles subject to the provisions in
this subpart or any heavy-duty vehicles subject to the standards of 40
CFR 1037.104 must establish, maintain, and retain all the following
information in adequately organized records for each model year:
* * * * *
    (ii) Manufacturers producing any passenger automobiles or light
trucks subject to the provisions in this subpart and vehicles subject
to the standards of 40 CFR 1037.104 must establish, maintain, and
retain all the following information in adequately organized records
for each passenger automobile or light truck subject to this subpart:
* * * * *
    (3) Notice of opportunity for hearing. Any voiding of the
certificate under paragraph (l)(1)(vi) of this section will be made
only after EPA has offered the affected manufacturer an opportunity for
a hearing conducted in accordance with Sec.  86.614 and, if a
manufacturer requests such a hearing, will be made only after an
initial decision by the Presiding Officer.

PART 1036--CONTROL OF EMISSIONS FROM NEW AND IN-USE HEAVY-DUTY
HIGHWAY ENGINES

0
8. The authority citation for part 1036 continues to read as follows:

    Authority: 42 U.S.C. 7401-7671q.

Subpart A--[Amended]

0
9. Section 1036.5 is amended by revising paragraph (b) to read as
follows:

Sec.  1036.5  Which engines are excluded from this part's requirements?

* * * * *
    (b) Engines installed in heavy-duty vehicles that do not provide
motive power are nonroad engines. The provisions of this part therefore
do not apply to these engines. See 40 CFR part 1039, 1048, or 1054 for
other requirements that apply for these auxiliary engines. See 40 CFR
part 1037 for requirements that may apply for vehicles using these
engines.
* * * * *

Subpart B--[Amended]

0
10. Section 1036.150 is amended by revising paragraphs (d), (g)(2), and
(g)(3) to read as follows:

Sec.  1036.150  Interim provisions.

* * * * *
    (d) Small manufacturers. Manufacturers meeting the small business
criteria specified for ``Gasoline Engine and Engine Parts
Manufacturing'' or ``Other Engine Equipment Manufacturers'' in 13 CFR
121.201 are not subject to the greenhouse gas emission standards in
Sec.  1036.108. Qualifying manufacturers must notify the Designated
Compliance Officer before importing or introducing into U.S. commerce
excluded engines. This notification must include a description of the
manufacturer's qualification as a small business under 13 CFR 121.201.
You must label your excluded engines with the statement: ``THIS ENGINE
IS EXCLUDED UNDER 40 CFR 1036.150(d).''
* * * * *
    (g) * * *
    (2) You may use an assigned additive DF of 0.020 g/hp-hr for
N2O emissions from any engine.
    (3) You may use an assigned additive DF of 0.020 g/hp-hr for
CH4 emissions from any engine.
* * * * *

Subpart C--[Amended]

0
11. Section 1036.205 is amended by revising paragraph (e) to read as
follows:

Sec.  1036.205  What must I include in my application?

* * * * *
    (e) Identify the CO2 FCLs with which you are certifying
engines in the engine family; also identify any FELs that apply for
CH4 and N2O. The actual U.S.-directed production
volume of configurations that have CO2 emission rates at or
below the FCL and CH4 and N2O emission rates at
or below the applicable standards or FELs must be at least one percent
of your actual (not projected) U.S.-directed production volume for the
engine family. Identify configurations within the family that have
emission rates at or below the FCL and meet the one percent
requirement. For example, if your U.S.-directed production volume for
the engine family is 10,583 and the U.S.-directed production volume for
the tested rating is 75 engines, then you can comply with this
provision by setting your FCL so that one more rating with a U.S.-
directed production volume of at least 31 engines meets the FCL. Where
applicable, also identify other testable configurations required under
Sec.  1036.230(b)(2).
* * * * *

0
12. Section 1036.225 is amended by revising paragraph (f) introductory
text to read as follows:

Sec.  1036.225  Amending my application for certification.

* * * * *
    (f) You may ask us to approve a change to your FEL in certain cases
after the start of production, but before the end of the model year. If
you change an FEL for CO2, your FCL for CO2 is
automatically set to your new FEL divided by 1.03. The changed FEL may
not apply to engines you have already introduced into U.S. commerce,
except as described in this paragraph (f). You may ask us to approve a
change to your FEL in the following cases:
* * * * *

Subpart F--[Amended]

0
13. Section 1036.525 is amended by revising paragraph (a) to read as
follows:

Sec.  1036.525  Hybrid engines.

    (a) If your engine system includes features that recover and store
energy during engine motoring operation test the engine as described in
paragraph (d) of this section. For purposes of this section, features
that recover energy between the engine and transmission are considered
related to engine motoring.
* * * * *

Subpart G--[Amended]

0
14. Section 1036.615 is amended by revising paragraphs (a) introductory
text and (c) to read as follows:

Sec.  1036.615  Engines with Rankine cycle waste heat recovery and
hybrid powertrains.

* * * * *
    (a) Pre-transmission hybrid powertrains. Test pre-transmission
hybrid powertrains with the hybrid engine test procedures of 40 CFR
part 1065 or with the post-transmission test procedures in 40 CFR
1037.550. Pre-transmission hybrid powertrains are those engine systems
that include features to recover and store energy during engine
motoring operation but not from the vehicle's wheels.
* * * * *
    (c) Calculating credits. Calculate credits as specified in subpart
H of this part. Credits generated from engines and powertrains
certified under this section

may be used in other averaging sets as described in Sec.  1036.740(c).
* * * * *

Subpart I--[Amended]

0
15. Section 1036.801 is amended by adding a definition for
``Preliminary approval'' in alphabetical order to read as follows:

Sec.  1036.801  Definitions.

* * * * *
    Preliminary approval means approval granted by an authorized EPA
representative prior to submission of an application for certification,
consistent with the provisions of Sec.  1036.210.
* * * * *

PART 1037--CONTROL OF EMISSIONS FROM NEW HEAVY-DUTY MOTOR VEHICLES

0
16. The authority citation for part 1037 continues to read as follows:

    Authority: 42 U.S.C. 7401-7671q.

Subpart A--[Amended]

0
17. Section 1037.15 is amended by revising paragraph (c) to read as
follows:

Sec.  1037.15  Do any other regulation parts apply to me?

* * * * *
    (c) Part 86 of this chapter applies for certain vehicles as
specified in this part. For example, the test procedures and most of
part 86, subpart S, apply for vehicles subject to Sec.  1037.104;
including the following paragraphs of 40 CFR 86.1865-12 apply: (a),
(h)(1), (h)(3), (j)(1), (j)(4), (k)(1) through (4), (k)(7)(ii), (k)(8),
(k)(9), (l)(1), (l)(2)(i), (l)(2)(ii), (l)(2)(vi) through (viii), and
(l)(3).
* * * * *

Subpart B--[Amended]

0
18. Section 1037.104 is amended by revising paragraphs (a)(2)
introductory text, (d)(2), (d)(4), (d)(6), (d)(9), (d)(12), (d)(13),
and (g) and adding paragraph (d)(15) to read as follows:

Sec.  1037.104  Exhaust emission standards for CO2,
CH4, and N2O for heavy-duty vehicles at or below
14,000 pounds GVWR.

* * * * *
    (a) * * *
    (2) Using the appropriate work factor, calculate a target value for
each vehicle subconfiguration (or group of subconfigurations allowed
under paragraph (a)(4) of this section) you produce using one of the
following equations, or the phase-in provisions in Sec.  1037.150(b),
rounding to the nearest 0.1 g/mile:
* * * * *
    (d) * * *
    (2) The following general credit provisions apply:
    (i) Credits you generate under this section may be used only to
offset credit deficits under this section. You may bank credits for use
in a future model year in which your average CO2 level
exceeds the standard. You may trade credits to another manufacturer
according to 40 CFR 86.1865-12(k)(8). Before you bank or trade credits,
you must apply any available credits to offset a deficit if the
deadline to offset that credit deficit has not yet passed.
    (ii) Vehicles subject to the standards of this section are included
in a single greenhouse gas averaging set separate from any averaging
set otherwise included in 40 CFR part 86.
    (iii) Banked CO2 credits keep their full value for five
model years after the year in which they were generated. Unused credits
expire at the end of this fifth model year.
* * * * *
    (4) The CO2, N2O, and CH4
standards apply for a weighted average of the city (55%) and highway
(45%) test cycle results. Note that this differs from the way the
criteria pollutant standards apply for heavy-duty vehicles.
* * * * *
    (6) Credits are calculated using the useful life value (in miles)
in place of ``vehicle lifetime miles'' specified in 40 CFR part 86,
subpart S. Calculate a total credit or debit balance in a model year by
adding credits and debits from 40 CFR 86.1865-12(k)(4), subtracting any
CO2-equivalent debits for N2O or CH4
calculated according to Sec.  1037.104(c), and adding any of the
following credits:
    (i) Advanced technology credits according to paragraph (d)(7) of
this section and Sec.  1037.150(i).
    (ii) Innovative technology credits according to paragraph (d)(13)
of this section.
    (iii) Early credits according to Sec.  1037.150(a)(2).
* * * * *
    (9) Calculate your fleet-average emission rate consistent with good
engineering judgment and the provisions of 40 CFR 86.1865. The
following additional provisions apply:
    (i) Unless we approve a lower number, you must test at least ten
subconfigurations. If you produce more than 100 subconfigurations in a
given model year, you must test at least 25 subconfigurations or ten
percent of your subconfigurations (whichever is less). For purposes of
this paragraph (d)(9)(i), count carryover tests, but do not include
analytically derived CO2 emission rates, data substitutions,
or other untested allowances. We may approve a lower number of tests
for manufacturers that have limited product offerings or low sales
volumes. Note that good engineering judgment and other provisions of
this part may require you to test more subconfigurations than these
minimum values.
    (ii) The provisions of paragraph (g) of this section specify how
you may use analytically derived CO2 emission rates.
    (iii) All final production volume at the subconfiguration level
must be represented by test data (real, data substituted, or
analytical).
    (iv) Perform fleet-average CO2 calculations as described
in 40 CFR 86.1865 and 40 CFR part 600, with the following exceptions:
    (A) Use CO2 emissions values for all test results,
intermediate calculations, and fleet average calculations instead of
the carbon-related exhaust emission (CREE) values specified in 40 CFR
parts 86 and 600.
    (B) Perform intermediate CO2 calculations for
subconfigurations within each configuration using the subconfiguration
and configuration definitions in paragraph (d)(12) of this section.
    (C) Perform intermediate CO2 calculations for
configurations within each test group and transmission type (instead of
configurations within each base level and base levels within each model
type). Use the configuration definition in paragraph (d)(12)(i) of this
section.
    (D) Do not perform intermediate CO2 calculations for
each base level or for each model type. Base level and model type
CO2 calculations are not applicable to heavy-duty vehicles
subject to standards in this section.
    (E) Determine fleet average CO2 emissions for heavy-duty
vehicles subject to standards in this section as described in 40 CFR
600.510-12(j), except that the calculations must be performed on the
basis of test group and transmission type (instead of the model-type
basis specified in the light-duty vehicle regulations), and the
calculations for dual fuel, multi-fuel, and flexible fuel vehicles must
be consistent with the provisions of paragraph (d)(10)(i) of this
section.
* * * * *
    (12) The following definitions apply for the purposes of this
section:
    (i) Configuration means a subclassification within a test group
based on engine code, transmission type and gear ratios, final drive
ratio, and

other parameters we designate. Transmission type means the basic type
of the transmission (e.g., automatic, manual, automated manual, semi-
automatic, or continuously variable) and does not include the drive
system of the vehicle (e.g., front-wheel drive, rear-wheel drive, or
four-wheel drive). Engine code means the combination of both ``engine
code'' and ``basic engine'' as defined in 40 CFR 600.002. Note that
this definition differs from the one in 40 CFR 86.1803.
    (ii) Subconfiguration means a unique combination within a vehicle
configuration (as defined in this paragraph (d)(12)) of equivalent test
weight, road-load horsepower, and any other operational characteristics
or parameters that we determine may significantly affect CO2
emissions within a vehicle configuration. Note that for vehicles
subject to standards of this section, equivalent test weight (ETW) is
based on the ALVW of the vehicle as outlined in paragraph (d)(11) of
this section.
    (iii) The terms ``complete vehicle'' and ``incomplete vehicle''
have the meanings given for ``complete heavy-duty vehicle'' and
``incomplete heavy-duty vehicle'', respectively, in 40 CFR 86.1803.
    (13) This paragraph (d)(13) applies for CO2 reductions
resulting from technologies that were not in common use before 2010
that are not reflected in the specified test procedures. We may allow
you to generate emission credits consistent with the provisions of 40
CFR 86.1869-12(c) and (d). You do not need to provide justification for
not using the 5-cycle methodology.
* * * * *
    (15) You must submit a final report within 90 days after the end of
the model year. Unless we specify otherwise, include applicable
information identified in 40 CFR 86.1865-12(l), 40 CFR 600.512, and 49
CFR 535.8(e). The final report must include at least the following
information:
    (i) Model year.
    (ii) Applicable fleet-average CO2 standard.
    (iii) Calculated fleet-average CO2 value and all the
values required to calculate the CO2 value.
    (iv) Number of credits or debits incurred and all values required
to calculate those values.
    (v) Resulting balance of credits or debits.
    (vi) N2O emissions.
    (vii) CH4 emissions.
    (viii) HFC leakage score.
* * * * *
    (g) Analytically derived CO2 emission rates (ADCs). This
paragraph (g) describes an allowance to use estimated (i.e.,
analytically derived) CO2 emission rates based on baseline
test data instead of measured emission rates for calculating fleet-
average emissions. Note that these ADCs are similar to ADFEs used for
light-duty vehicles. Note also that F terms used in this paragraph (g)
represent coefficients from the following road load equation:

Force - (mass)(acceleration) = F0 + F1 [middot] (velocity) + F2
[middot] (velocity)\2\

    (1) Except as specified in paragraph (g)(2) of this section, use
the following equation to calculate the ADC of a new vehicle from road
load force coefficients (F0, F1, F2), axle ratio, and test weight:

ADC = CO2base + 2.18 [middot] [Delta]F0 + 37.4 [middot]
[Delta]F1 + 2257 [middot] [Delta]F2 + 189 [middot] [Delta]AR +
0.0222 [middot] [Delta]ETW

Where:

ADC = Analytically derived combined city/highway CO2
emission rate (g/mile) for a new vehicle.
CO2base = Combined city/highway CO2 emission
rate (g/mile) of a baseline vehicle.
[Delta]F0 = F0 of the new vehicle--F0 of the baseline vehicle.
[Delta]F1 = F1 of the new vehicle--F1 of the baseline vehicle.
[Delta]F2 = F2 of the new vehicle--F2 of the baseline vehicle.
[Delta]AR = Axle ratio of the new vehicle--axle ratio of the
baseline vehicle.
[Delta]ETW = ETW of the new vehicle--ETW of the baseline vehicle.

    (2) The purpose of this section is to accurately estimate
CO2 emission rates.
    (i) You must apply the provisions of this section consistent with
good engineering judgment. For example, do not use the equation in
paragraph (g)(1) of this section where good engineering judgment
indicates that it will not accurately estimate emissions. You may ask
us to approve alternate equations that allow you to estimate emissions
more accurately.
    (ii) The analytically derived CO2 equation in paragraph
(g)(1) of this section may be periodically updated through publication
of an EPA guidance document to more accurately characterize
CO2 emission levels' for example, changes may be appropriate
based on new test data, future technology changes, or to changes in
future CO2 emission levels. Any EPA guidance document will
determine the model year that the updated equation takes effect. We
will issue guidance no later than eight months before the effective
model year. For example, for 2014 models, the model year may start
January 2, 2013, so guidance would be issued by May 1, 2012 for model
year 2014.
    (3) You may select, without our advance approval, baseline test
data if they meet all the following criteria:
    (i) Vehicles considered for the baseline test must comply with all
applicable emission standards in the model year associated with the
ADC.
    (ii) You must include in the pool of tests considered for baseline
selection all official tests of the same or equivalent basic engine,
transmission class, engine code, transmission code, engine horsepower,
dynamometer drive wheels, and compression ratio as the ADC
subconfiguration. Do not include tests in which emissions exceed any
applicable standard.
    (iii) Where necessary to minimize the CO2 adjustment,
you may supplement the pool with tests associated with worst-case
engine or transmission codes and carryover or carry-across engine
families. If you do, all the data that qualify for inclusion using the
elected worst-case substitution (or carryover or carry-across) must be
included in the pool as supplemental data (i.e., individual test
vehicles may not be selected for inclusion). You must also include the
supplemental data in all subsequent pools, where applicable.
    (iv) Except with our advance approval, tests previously used during
the subject model year as baseline tests in 20 other ADC
subconfigurations must be eliminated from the pool.
    (v) Select the tested subconfiguration with the smallest absolute
difference between the ADC and the test CO2 emission rate
for combined emissions. Use this as the baseline test for the target
ADC subconfiguration.
    (4) You may ask us to allow you to use baseline test data not fully
meeting the provisions of paragraph (g)(3) of this section.
    (5) Calculate the ADC rounded to the nearest 0.1 g/mile. Except
with our advance approval, the downward adjustment of ADC from the
baseline is limited to ADC values 20 percent below the baseline
emission rate. The upward adjustment is not limited.
    (6) You may not submit an ADC if an actual test has been run on the
target subconfiguration during the certification process or on a
development vehicle that is eligible to be declared as an emission-data
vehicle.
    (7) [Reserved]
    (8) Keep the following records for at least five years, and show
them to us if we ask to see them:
    (i) The pool of tests.
    (ii) The vehicle description and tests chosen as the baseline and
the basis for the selection.
    (iii) The target ADC subconfiguration.
    (iv) The calculated emission rates.

    (9) We may perform or order a confirmatory test of any
subconfiguration covered by an ADC.
    (10) Where we determine that you did not fully comply with the
provisions of this paragraph (g), we may require that you comply based
on actual test data and that you recalculate your fleet-average
emission rate.
* * * * *

0
19. Section 1037.115 is amended by revising paragraph (c) introductory
text and removing and reserving paragraph (c)(2) to read as follows:

Sec.  1037.115  Other requirements.

* * * * *
    (c) Air conditioning leakage. Loss of refrigerant from your air
conditioning systems may not exceed 1.50 percent per year, except as
allowed by paragraph (c)(3) of this section. Calculate the total
leakage rate in g/year as specified in 40 CFR 86.1867-12(a). Calculate
the percent leakage rate as: [total leakage rate (g/yr)] / [total
refrigerant capacity (g)] x 100. Round your leakage rate to the nearest
one-hundredth of a percent. See Sec.  1037.150 for vocational vehicles.
* * * * *

0
20. Section 1037.135 is amended by revising paragraphs (c)(5) and
(c)(9) to read as follows:

Sec.  1037.135  Labeling.

* * * * *
    (c) * * *
    (5) State the date of manufacture [DAY (optional), MONTH, and
YEAR]. You may omit this from the label if you stamp, engrave, or
otherwise permanently identify it elsewhere on the vehicle, in which
case you must also describe in your application for certification where
you will identify the date on the vehicle.
* * * * *
    (9) Include the following statement for vehicles with an
evaporative canister for controlling diurnal emissions: ``THIS VEHICLE
IS DESIGNED TO COMPLY WITH EVAPORATIVE EMISSION STANDARDS WITH UP TO x
GALLONS OF FUEL TANK CAPACITY.'' Complete this statement by identifying
the maximum specified fuel tank capacity associated with your
certification.
* * * * *

0
21. Section 1037.150 is amended by revising paragraphs (a)(2), (l)
introductory text, and (l)(1) to read as follows:

Sec.  1037.150  Interim provisions.

* * * * *
    (a) * * *
    (2) This paragraph (a)(2) applies for regulatory sub-categories
subject to the standards of Sec.  1037.104. To generate early credits
under this paragraph (a)(2) for any vehicles other than electric
vehicles, you must certify your entire U.S.-directed fleet to these
standards. If you calculate a separate fleet average for advanced-
technology vehicles under Sec.  1037.104(c)(7), you must certify your
entire U.S.-directed production volume of both advanced and
conventional vehicles within the fleet. Except as specified in
paragraph (a)(4) of this section, if some test groups are certified
after the start of the model year, you may generate credits only for
production that occurs after all test groups are certified. For
example, if you produce three test groups in an averaging set and you
receive your certificates for those test groups on January 4, 2013,
March 15, 2013, and April 24, 2013, you may not generate credits for
model year 2013 for vehicles from any of the test groups produced
before April 24, 2013. Calculate credits relative to the standard that
would apply in model year 2014 using the applicable equations in 40 CFR
part 86 and your model year 2013 U.S.-directed production volumes.
These credits may be used to show compliance with the standards of this
part for 2014 and later model years. We recommend that you notify us of
your intent to use this provision before submitting your applications.
* * * * *
    (l) Optional certification under Sec.  1037.104. You may certify
certain complete or cab-complete vehicles to the standards of Sec.
1037.104. All vehicles optionally certified under this paragraph (l)
are deemed to be subject to the standards of Sec.  1037.104. Note that
for vehicles above 14,000 pounds GVWR and at or below 26,000 pounds
GVWR, certification under this paragraph (l) does not affect how you
may or may not certify with respect to criteria pollutants. For
example, certifying a Class 4 vehicle under this paragraph (l) does not
allow you to chassis-certify these vehicles with respect to criteria
pollutants.
    (1) You may certify any complete or cab-complete spark-ignition
vehicles above 14,000 pounds GVWR and at or below 26,000 pounds GVWR to
the standards of Sec.  1037.104 even though Sec.  1037.104 specifies
that you may certify vehicles to the standards of that section only if
they are chassis-certified for criteria pollutants.
* * * * *

Subpart C--[Amended]

0
22. Section 1037.201 is amended by revising paragraph (g) to read as
follows:

Sec.  1037.201  General requirements for obtaining a certificate of
conformity.

* * * * *
    (g) We may perform confirmatory testing on your vehicles; for
example, we may test vehicles to verify drag areas or other GEM inputs.
This includes vehicles used to determine Falt-aero under
Sec.  1037.521. We may require you to deliver your test vehicles to a
facility we designate for our testing. Alternatively, you may choose to
deliver another vehicle that is identical in all material respects to
the test vehicle. Where certification is based on testing components
such as tires, we may require you to deliver test components to a
facility we designate for our testing.

0
23. Section 1037.230 is amended by revising paragraph (a)(1)(xiii) and
adding paragraph (a)(1)(xiv) to read as follows:

Sec.  1037.230  Vehicle families, sub-families, and configurations.

    (a) * * *
    (1) * * *
    (xiii) Vocational tractors above 26,000 pounds GVWR and at or below
33,000 pounds GVWR. Note that vocational tractor provisions do not
apply for vehicles at or below 26,000 pounds GVWR.
    (xiv) Vocational tractors above 33,000 pounds GVWR.
* * * * *

Subpart F--[Amended]

0
24. Section 1037.501 is amended by revising paragraph (g)(1)(iv) to
read as follows:

Sec.  1037.501  General testing and modeling provisions.

* * * * *
    (g) * * *
    (1) * * *
    (iv) It includes dual 22.5 inch wheels, standard mudflaps, and
standard landing gear. The centerline of the rear tandem axle must be
146 +/- 4 inches from the rear of the trailer.
* * * * *

0
25. Section 1037.520 is amended by revising the section heading, the
introductory text, Table 1 in paragraph (b)(2), and paragraph (e)(1)
before the table to read as follows:

Sec.  1037.520  Modeling CO[bdi2] emissions to show compliance.

    This section describes how to use the Greenhouse gas Emissions
Model (GEM) simulation tool (incorporated by

reference in Sec.  1037.810) to show compliance with the CO2
standards of Sec. Sec.  1037.105 and 1037.106. Use good engineering
judgment when demonstrating compliance using the GEM.
* * * * *
    (b) * * *
    (2) * * *

       Table 1 to Sec.   1037.520--High-Roof Day and Sleeper Cabs
------------------------------------------------------------------------
                                              If your
                                           measured CDA    Then your  CD
                Bin level                  (m\2\) is . .  input is . . .
                                                 .
------------------------------------------------------------------------
                           High-Roof Day Cabs
------------------------------------------------------------------------
Bin I...................................          >= 8.0            0.79
Bin II..................................         7.1-7.9            0.72
Bin III.................................         6.2-7.0            0.63
Bin IV..................................         5.6-6.1            0.56
Bin V...................................          <= 5.5            0.51
------------------------------------------------------------------------
                         High-Roof Sleeper Cabs
------------------------------------------------------------------------
Bin I...................................          >= 7.6            0.75
Bin II..................................         6.8-7.5            0.68
Bin III.................................         6.3-6.7            0.60
Bin IV..................................         5.6-6.2            0.52
Bin V...................................           <=5.5            0.47
------------------------------------------------------------------------

* * * * *
    (e) * * *
    (1) Vehicle weight reduction inputs for wheels are specified
relative to dual-wide tires with conventional steel wheels. For
purposes of this paragraph (e)(1), a light-weight aluminum wheel is one
that weighs at least 21 pounds less than a comparable conventional
steel wheel. The inputs are listed in Table 3 to this section. For
example, a tractor with aluminum steer wheels and eight (4 x 2) dual-
wide aluminum drive wheels would have an input of 210 pounds (2 x 21 +
8 x 21).
* * * * *

0
26. Section 1037.525 is amended by revising the introductory text to
read as follows:

Sec.  1037.525  Special procedures for testing hybrid vehicles with
power take-off.

    This section describes the procedure for quantifying the reduction
in greenhouse gas emissions as a result of running power take-off (PTO)
devices with a hybrid powertrain. The procedures are written to test
the PTO by ensuring that the engine produces all of the energy with no
net change in stored energy. The full test for the hybrid vehicle is
from a fully charged renewable energy storage system (RESS) to a
depleted RESS and then back to a fully charged RESS. These procedures
may be used for testing any hybrid architecture for which you are
requesting a vehicle certificate using either chassis testing or
powertrain testing. You must include all hardware for the PTO system.
You may ask us to modify the provisions of this section to allow
testing hybrid vehicles other than electric-battery hybrids, consistent
with good engineering judgment.
* * * * *

0
27. Section 1037.550 is amended by revising the section heading, the
introductory text, and paragraphs (d) through (g) to read as follows:

Sec.  1037.550  Special procedures for testing hybrid systems.

    This section describes the procedure for simulating a chassis test
with a pre-transmission or post-transmission hybrid system for A to B
testing. These procedures may also be used to perform A to B testing
with non-hybrid systems.
* * * * *
    (d) Calculate the transmission output shaft's angular speed target
for the driver model, fnref,driver, from the linear speed associated
with the vehicle cycle using the following equation:
[GRAPHIC] [TIFF OMITTED] TR17JN13.001

Where:

vcyclei = vehicle speed of the test cycle for each point, i,
starting from i=1.
kd = final drive ratio (the angular speed of the transmission output
shaft divided by the angular speed of the drive axle), as declared
by the manufacturer.
r = radius of the loaded tires, as declared by the manufacturer.

    (e) Use speed control with a loop rate of at least 100 Hz to
program the dynamometer to follow the test cycle, as follows:
    (1) Calculate the transmission output shaft's angular speed target
for the dynamometer, fnref,dyno, from the measured linear speed at the
dynamometer rolls using the following equation:
[GRAPHIC] [TIFF OMITTED] TR17JN13.002

Where:

[GRAPHIC] [TIFF OMITTED] TR17JN13.003

T = instantaneous measured torque at the transmission output shaft.
Fbrake = instantaneous brake force applied by the driver model to
add force to slow down the vehicle.
t = elapsed time in the driving schedule as measured by the
dynamometer, in seconds.

    (2) For each test, validate the measured transmission output
shaft's speed with the corresponding reference values according to 40
CFR 1065.514(e). You may delete points when the vehicle is stopped.
Perform the validation based on speed values at the transmission output
shaft. For steady-state tests (55 mph and 65 mph cruise), apply cycle-
validation criteria by treating the sampling periods from the two tests
as a continuous sampling period. Perform this validation based on the
following parameters:

  Table 1 of Sec.   1037.550--Statistical Criteria for Validating Duty
                                 Cycles
------------------------------------------------------------------------
                 Parameter                          Speed control
------------------------------------------------------------------------
Slope, a1.................................  0.950 <= a1 <= 1.030.
Absolute value of intercept,                <= 2.0% of maximum test
 [verbarlm]a0[verbarlm].                     speed.
Standard error of estimate, SEE...........  <= 5% of maximum test speed.
Coefficient of determination, r\2\........  >= 0.970.
------------------------------------------------------------------------

    (f) Send a brake signal when throttle position is equal to zero and
vehicle speed is greater than the reference vehicle speed from the test
cycle. Set a delay before changing the brake state to prevent the brake
signal from dithering, consistent with good engineering judgment.
    (g) The driver model should be designed to follow the cycle as
closely as possible and must meet the requirements of Sec.  1037.510
for steady-state testing and 40 CFR 1066.430(e) for transient testing.
The driver model should be designed so that the brake and throttle are
not applied at the same time.
* * * * *

Subpart G--[Amended]

0
28. Section 1037.615 is amended by revising paragraph (b)(1),
redesignating paragraph (b)(3) as (b)(4), and adding a new paragraph
(b)(3) to read as follows:

Sec.  1037.615  Hybrid vehicles and other advanced technologies.

* * * * *
    (b) * * *
    (1) Measure the effectiveness of the advanced system by chassis
testing a vehicle equipped with the advanced system and an equivalent
conventional vehicle, or by testing the hybrid systems and the
equivalent non-hybrid systems as described in Sec.  1037.550. Test the
vehicles as specified in subpart F of this part. For purposes of this
paragraph (b), a conventional vehicle is considered to be equivalent if
it has the same footprint (as defined in 40 CFR 86.1803), vehicle
service class, aerodynamic drag, and other relevant factors not
directly related to the hybrid powertrain. If you

use Sec.  1037.525 to quantify the benefits of a hybrid system for PTO
operation, the conventional vehicle must have the same number of PTO
circuits and have equivalent PTO power. If you do not produce an
equivalent vehicle, you may create and test a prototype equivalent
vehicle. The conventional vehicle is considered Vehicle A and the
advanced vehicle is considered Vehicle B. We may specify an alternate
cycle if your vehicle includes a power take-off.
* * * * *
    (3) If you apply an improvement factor to multiple vehicle
configurations using the same advanced technology, use the vehicle
configuration with the smallest potential reduction in greenhouse gas
emissions resulting from the hybrid capability.
* * * * *

0
29. Section 1037.620 is amended by revising paragraph (a)(3) to read as
follows:

Sec.  1037.620  Shipment of incomplete vehicles to secondary vehicle
manufacturers.

* * * * *
    (a) * * *
    (3) Uncertified vehicles that will be certified by secondary
vehicle manufacturers. Manufacturers may introduce into U.S. commerce
partially complete vehicles for which they do not hold a certificate of
conformity only as allowed by paragraph (b) of this section; however,
the requirements of this section do not apply if vehicles produced by a
secondary vehicle manufacturer are excluded from the standards of this
part under Sec.  1037.150(c).
* * * * *

0
30. Section 1037.660 is amended by revising the introductory text and
paragraph (c) to read as follows:

Sec.  1037.660  Automatic engine shutdown systems.

    This section specifies requirements that apply for certified
automatic engine shutdown (AES) systems modeled under Sec.  1037.520.
It does not apply for AES systems you do not model under Sec.
1037.520.
* * * * *
    (c) Adjustments to AES systems. (1) The AES system may include an
expiration point (in miles) after which the AES system may be disabled.
If your vehicle is equipped with an AES system that expires before
1,259,000 miles, adjust the model input as follows, rounded to the
nearest 0.1 g/ton-mile: AES Input = 5 g CO2/ton-mile x
(miles at expiration/1,259,000 miles)
    (2) For AES systems designed to limit idling to a specific number
of hours less than 1,800 hours over any 12-month period, calculate an
adjusted AES input using the following equation, rounded to the nearest
0.1 g/ton-mile: AES Input = 5 g CO2/ton-mile x (1-(maximum
allowable number of idling hours per year/1,800 hours)). This is an
annual allowance that starts when the vehicle is new and resets every
12 months after that. Manufacturers may propose an alternative method
based on operating hours or miles instead of years.
* * * * *

Subpart H--[Amended]

0
31. Section 1037.745 is amended by revising the section heading and
adding paragraph (d) to read as follows:

Sec.  1037.745  End-of-year CO2 credit deficits.

* * * * *
    (d) For purposes of calculating the statute of limitations, the
following actions are all considered to occur at the expiration of the
deadline for offsetting debits as specified in paragraph (a) of this
section:
    (1) Failing to meet the requirements of paragraph (a) of this
section.
    (2) Failing to satisfy the conditions upon which a certificate was
issued relative to offsetting debits.
    (3) Selling, offering for sale, introducing or delivering into U.S.
commerce, or importing vehicles that are found not to be covered by a
certificate as a result of failing to offset debits.

Subpart I--[Amended]

0
32. Section 1037.801 is amended by adding a definition for
``Preliminary approval'' in alphabetical order and revising the
definition for ``Regulatory sub-category'' to read as follows:

Sec.  1037.801  Definitions.

* * * * *
    Preliminary approval means approval granted by an authorized EPA
representative prior to submission of an application for certification,
consistent with the provisions of Sec.  1037.210.
* * * * *
    Regulatory sub-category means one of the following groups:
    (1) All vehicles subject to the standards of Sec.  1037.104. Note
that this category includes most gasoline-fueled and diesel-fueled
heavy-duty pickup trucks and vans.
    (2) [Reserved]
    (3) Vocational vehicles at or below 19,500 pounds GVWR.
    (4) Vocational vehicles above 19,500 pounds GVWR but at or below
33,000 pounds GVWR.
    (5) Vocational vehicles over 33,000 pounds GVWR.
    (6) Low-roof tractors above 26,000 pounds GVWR but at or below
33,000 pounds GVWR.
    (7) Mid-roof tractors above 26,000 pounds GVWR but at or below
33,000 pounds GVWR.
    (8) High-roof tractors above 26,000 pounds GVWR but at or below
33,000 pounds GVWR.
    (9) Low-roof day cab tractors above 33,000 pounds GVWR.
    (10) Low-roof sleeper cab tractors above 33,000 pounds GVWR.
    (11) Mid-roof day cab tractors above 33,000 pounds GVWR.
    (12) Mid-roof sleeper cab tractors above 33,000 pounds GVWR.
    (13) High-roof day cab tractors above 33,000 pounds GVWR.
    (14) High-roof sleeper cab tractors above 33,000 pounds GVWR.
* * * * *

0
33. Section 1037.805 is amended by adding an entry for ``AES'' in
alphabetical order to read as follows:

Sec.  1037.805  Symbols, acronyms, and abbreviations.

* * * * *
AES Automatic engine shutdown.
* * * * *

0
34. Section 1037.810 is amended by revising paragraph (c)(1) to read as
follows:

Sec.  1037.810  Incorporation by reference.

* * * * *
    (c) * * *
    (1) Greenhouse gas Emissions Model (GEM) simulation tool, Version
2.0.1, September 2012; IBR approved for Sec.  1037.520. The computer
code for this model is available as noted in paragraph (a) of this
section. A working version of this software is also available for
download at http://www.epa.gov/otaq/climate/gem.htm.
* * * * *

PART 1039--CONTROL OF EMISSIONS FROM NEW AND IN-USE NONROAD
COMPRESSION-IGNITION ENGINES

0
35. The authority citation for part 1039 continues to read as follows:

    Authority: 42 U.S.C. 7401-7671q.

Subpart B--[Amended]

0
36. Section 1039.104 is amended by revising paragraph (g) to read as
follows:

Sec.  1039.104  Are there interim provisions that apply only for a
limited time?

* * * * *

    (g) Alternate FEL caps. You may certify engines to the FEL caps in
Table 1 of this section instead of the otherwise applicable FEL caps in
Sec.  1039.101(d)(1), Sec.  1039.102(e), or Sec.  1039.102(g)(2) for
the indicated model years, subject to the following provisions:
    (1) [Reserved]
    (2) If your engine is not certified to transient emission standards
under the provisions of Sec.  1039.102(a)(1)(iii), you must adjust your
FEL upward by a temporary compliance adjustment factor (TCAF) before
calculating your negative emission credits under Sec.  1039.705, as
follows:
    (i) The temporary compliance adjustment factor for NOX
and for NOX + NMHC is 1.1.
    (ii) The temporary compliance adjustment factor for PM is 1.5.
    (iii) The adjusted FEL (FELadj) for calculating emission
credits is determined from the steady-state FEL (FELss)
using the following equation:

FELadj = (FELss) x (TCAF)

    (iv) The unadjusted FEL (FELss) applies for all purposes
other than credit calculation.
    (3) These alternate FEL caps may not be used for phase-in engines.
    (4) Do not apply TCAFs to gaseous emissions for phase-out engines
that you certify to the same numerical standards (and FELs if the
engines are certified using ABT) for gaseous pollutants as you
certified under the Tier 3 requirements of 40 CFR part 89.

                                 Table 1 of Sec.   1039.104--Alternate FEL Caps
----------------------------------------------------------------------------------------------------------------
                                                                    Model years                     Model years
                                                  PM FEL cap,  g/     for the      NOX FEL cap,       for the
              Maximum engine power                     kW-hr       alternate PM     g/kW-hr \1\    alternate NOX
                                                                      FEL cap                         FEL cap
----------------------------------------------------------------------------------------------------------------
19 <= kW < 56...................................            0.30   \2\ 2012-2015
56 <= kW < 130 \3\..............................            0.30       2012-2015             3.8   \4\ 2012-2015
130 <= kW <= 560................................            0.20       2011-2014             3.8   \5\ 2011-2014
kW > 560 \6\....................................            0.10       2015-2018             3.5       2015-2018
----------------------------------------------------------------------------------------------------------------
\1\ The FEL cap for engines demonstrating compliance with a NOX + NMHC standard is equal to the previously
  applicable NOX + NMHC standard specified in 40 CFR 89.112 (generally the Tier 3 standards).
\2\ For manufacturers certifying engines under Option 1 of Table 3 of Sec.   1039.102, these alternate
  FEL caps apply to all 19-56 kW engines for model years from 2013 through 2016 instead of the years indicated
  in this table. For manufacturers certifying engines under Option 2 of Table 3 of Sec.   1039.102,
  these alternate FEL caps do not apply to 19-37 kW engines except in model years 2013 to 2015.
\3\ For engines below 75 kW, the FEL caps are 0.40 g/kW-hr for PM emissions and 4.4 g/kW-hr for NOX emissions.
\4\ For manufacturers certifying engines in this power category using a percentage phase-in/phase-out approach
  instead of the alternate NOX standards of Sec.   1039.102(e)(1), the alternate NOX FEL cap in the table
  applies only in the 2014-2015 model years if certifying under Sec.   1039.102(d)(1), and only in the 2015
  model year if certifying under Sec.   1039.102(d)(2).
\5\ For manufacturers certifying engines in this power category using the percentage phase-in/phase-out approach
  instead of the alternate NOX standard of Sec.   1039.102(e)(2), the alternate NOX FEL cap in the table applies
  only for the 2014 model year.
\6\ For engines above 560 kW, the provision for alternate NOX FEL caps is limited to generator-set engines.

    (5) You may certify engines under this paragraph (g) in any model
year provided for in Table 1 of this section without regard to whether
or not the engine family's FEL is at or below the otherwise applicable
FEL cap. For example, a 200 kW engine certified to the NOX +
NMHC standard of Sec.  1039.102(e)(3) with an FEL equal to the FEL cap
of 2.8 g/kW-hr may nevertheless be certified under this paragraph (g).
    (6) For engines you produce under this paragraph (g) after the Tier
4 final standards take effect, you may certify based on a
NOX + NMHC FEL as described in Table 1 of this section.
Calculate emission credits for these engines relative to the applicable
NOX standard in Sec.  1039.101 or Sec.  1039.102, plus 0.1
g/kW-hr.
* * * * *

Subpart G--[Amended]

0
37. Section 1039.625 is amended by revising paragraphs (e), (j), and
(m) to read as follows:

Sec.  1039.625  What requirements apply under the program for
equipment-manufacturer flexibility?

* * * * *
    (e) Standards. If you produce equipment with exempted engines under
this section, the engines must meet emission standards specified in
this paragraph (e), or more stringent standards. Note that we consider
engines to be meeting emission standards even if they are certified
with a family emission limit that is higher than the emission standard
that would otherwise apply.
    (1) If you are using the provisions of paragraph (d)(4) of this
section, engines must meet the applicable Tier 1 or Tier 2 emission
standards described in 40 CFR 89.112.
    (2) If you are using the provisions of paragraph (a)(2) of this
section, engines must be identical in all material respects to engines
certified under this part 1039 as follows:

------------------------------------------------------------------------
                                             Must meet all standards and
 Engines in the  following power  category  requirements that applied in
                   . . .                    the following model year . .
                                                          .
------------------------------------------------------------------------
(i) 19 <= kW < 56.........................  2008 (Option 1, where
                                             applicable).
(ii) 56 <= kW < 130.......................  2012 (Phase-out).
(iii) 130 <= kW <= 560....................  2011 (Phase-out).
(iv) kW > 560.............................  2011.
------------------------------------------------------------------------

    (3) In all other cases, engines at or above 56 kW and at or below
560 kW must meet the appropriate Tier 3 standards described in 40 CFR
89.112. Engines below 56 kW and engines above 560 kW must meet the
appropriate Tier 2 standards described in 40 CFR 89.112.
* * * * *
    (j) Provisions for engine manufacturers. As an engine manufacturer,
you may produce exempted engines as needed under this section. You do
not have to request this exemption for your engines, but you must have
written assurance from equipment manufacturers that they need a certain
number of exempted engines under this section. Send us an annual report
of the engines you produce under this section, as described in Sec.
1039.250(a). Exempt engines must meet the emission standards in
paragraph (e) of this section and you must meet all the requirements of
40 CFR 1068.265, except that engines produced under the provisions of
paragraph (a)(2) of this section must be identical in all material
respects to engines previously certified under this part 1039. If you
show under 40 CFR 1068.265(c) that the engines are identical in all
material respects to engines that you have previously

certified to one or more FELs above the standards specified in
paragraph (e) of this section, you must supply sufficient credits for
these engines. Calculate these credits under subpart H of this part
using the previously certified FELs and the alternate standards. You
must meet the labeling requirements in 40 CFR 89.110 or Sec.  1039.135,
as applicable, with the following exceptions:
* * * * *
    (m) Additional exemptions for technical or engineering hardship.
You may request additional engine allowances under paragraph (b) of
this section; however, you may use these extra allowances only for
those equipment models for which you, or an affiliated company, do not
also produce the engine. Additional allowances under this paragraph (m)
must be used within the specified seven-year period. After considering
the circumstances, we may permit you to introduce into U.S. commerce
equipment with such engines that do not comply with Tier 4 emission
standards, as follows:
    (1) We may approve additional exemptions if extreme and unusual
circumstances that are clearly outside your control and that could not
have been avoided with reasonable discretion have resulted in technical
or engineering problems that prevent you from meeting the requirements
of this part. You must show that you exercised prudent planning and
have taken all reasonable steps to minimize the scope of your request
for additional allowances.
    (2) To apply for exemptions under this paragraph (m), send the
Designated Compliance Officer a written request as soon as possible
before you are in violation. In your request, include the following
information:
    (i) Describe your process for designing equipment.
    (ii) Describe how you normally work cooperatively or concurrently
with your engine supplier to design products.
    (iii) Describe the engineering or technical problems causing you to
request the exemption and explain why you have not been able to solve
them. Describe the extreme and unusual circumstances that led to these
problems and explain how they were unavoidable.
    (iv) Describe any information or products you received from your
engine supplier related to equipment design--such as written
specifications, performance data, or prototype engines--and when you
received it.
    (v) Compare the design processes of the equipment model for which
you need additional exemptions and that for other models for which you
do not need additional exemptions. Explain the technical differences
that justify your request.
    (vi) Describe your efforts to find and use other compliant engines,
or otherwise explain why none is available.
    (vii) Describe the steps you have taken to minimize the scope of
your request.
    (viii) Include other relevant information. You must give us other
relevant information if we ask for it.
    (ix) Estimate the increased percent of production you need for each
equipment model covered by your request, as described in paragraph
(m)(3) of this section. Estimate the increased number of allowances you
need for each equipment model covered by your request, as described in
paragraph (m)(4) of this section.
    (3) We may approve your request to increase the allowances under
paragraph (b)(1) of this section, subject to the following limitations:
    (i) You must use up the allowances under paragraph (b)(1) of this
section before using any additional allowance under this paragraph (m).
    (ii) You may use these allowances only for the specific equipment
models covered by your request.
    (4) We may approve your request to increase the small-volume
allowances under paragraph (b)(2) of this section, subject to the
following limitations:
    (i) You are eligible for additional allowances under this paragraph
(m)(4) only if you do not use the provisions of paragraph (m)(3) of
this section to obtain additional allowances within a given power
category.
    (ii) We may approve additional allowances in the form of waiving
the annual limits specified in paragraph (b)(2) of this section instead
of or in addition to increasing the total number of allowances under
this paragraph (m)(4).
    (iii) If we increase the total number of allowances, you may use
these allowances only for the specific equipment models covered by your
request.

PART 1042--CONTROL OF EMISSIONS FROM NEW AND IN-USE MARINE
COMPRESSION-IGNITION ENGINES AND VESSELS

0
38. The authority citation for part 1042 continues to read as follows:

    Authority:  42 U.S.C. 7401-7671q.

Subpart B--[Amended]

0
39. Section 1042.145 is amended by adding paragraph (j) to read as
follows:

Sec.  1042.145  Interim provisions.

* * * * *
    (j) Vessel manufacturers and marine equipment manufacturers may
apply the provisions of Sec.  1042.605 to land-based engines with
maximum engine power at or above 19 kW and below 600 kW produced under
the allowances provided in 40 CFR 1039.625 for model year 2013 marine
engines. All the provisions of Sec.  1042.605 apply as if those engines
were certified to emission standards under 40 CFR part 1039. Similarly,
engine manufacturers, vessel manufacturers, and marine equipment
manufacturers must comply with all the provisions of 40 CFR 1039.625 as
if those engines were installed in land-based equipment.

Subpart G--[Amended]

0
40. Section 1042.615 is amended as follows:
0
a. By revising the introductory text and paragraphs (a) introductory
text and (a)(1).
0
b. By redesignating paragraphs (b) through (d) as paragraphs (c)
through (e).
0
c. By adding a new paragraph (b).

Sec.  1042.615  Replacement engine exemption.

    For Category 1 and Category 2 replacement engines, the provisions
of 40 CFR 1068.240 apply except as described in this section. In
unusual circumstances, you may ask us to allow you to apply these
provisions for a new Category 3 engine.
    (a) This paragraph (a) applies instead of the provisions of 40 CFR
1068.240(b)(2). The prohibitions in 40 CFR 1068.101(a)(1) do not apply
to a new replacement engine if all the following conditions are met:
    (1) You use good engineering judgment to determine that no engine
certified to the current requirements of this part is produced by any
manufacturer with the appropriate physical or performance
characteristics to repower the vessel. We have determined that engines
certified to Tier 4 standards do not have the appropriate physical or
performance characteristics to replace uncertified engines or engines
certified to emission standards that are less stringent than the Tier 4
standards.
* * * * *
    (b) The 25-year limit specified in 40 CFR 1068.240(a) does not
apply for engines subject to this part 1042. You may accordingly omit
the statement on the permanent labels specified in 40 CFR 1068.240
describing this limitation.
* * * * *

PART 1048--CONTROL OF EMISSIONS FROM NEW, LARGE NONROAD SPARK-
IGNITION ENGINES

0
41. The authority citation for part 1048 continues to read as follows:

    Authority: 42 U.S.C. 7401-7671q.

Subpart B--[Amended]

0
42. Section 1048.105 is amended by revising paragraph (a) to read as
follows:

Sec.  1048.105  What evaporative emission standards and requirements
apply?

* * * * *
    (a) Fuel line permeation. For nonmetallic fuel lines, you must
specify and use products that meet the Category 1 specifications for
permeation in the November 1996 or November 2004 versions of SAE J2260
(both incorporated by reference in Sec.  1048.810).
* * * * *

Subpart I--[Amended]

0
43. Section 1048.810 is revised to read as follows:

Sec.  1048.810  What materials does this part reference?

    (a) Certain material is incorporated by reference into this part
with the approval of the Director of the Federal Register under 5
U.S.C. 552(a) and 1 CFR part 51. To enforce any edition other than that
specified in this section, the Environmental Protection Agency must
publish a notice of the change in the Federal Register and the material
must be available to the public. All approved material is available for
inspection at U.S. EPA, Air and Radiation Docket and Information
Center, 1301 Constitution Ave. NW., Room B102, EPA West Building,
Washington, DC 20460,<PHONE_NUMBER>, and is available from the sources
listed below. It is also available for inspection at the National
Archives and Records Administration (NARA). For information on the
availability of this material at NARA, call<PHONE_NUMBER>, or go to
http://www.archives.gov/federal_register/code_of_federal_regulations/ibr_locations.html.
    (b) Society of Automotive Engineers, 400 Commonwealth Dr.,
Warrendale, PA 15096-0001,<PHONE_NUMBER> (U.S. and Canada) or (724)
776-4970 (outside the U.S. and Canada), http://www.sae.org.
    (1) SAE J2260, Nonmetallic Fuel System Tubing with One or More
Layers, November 2004; IBR approved for Sec.  1048.105(a).
    (2) SAE J2260, Nonmetallic Fuel System Tubing with One or More
Layers, November 1996; IBR approved for Sec.  1048.105(a).
    (c) International Organization for Standardization, Case Postale
56, CH-1211 Geneva 20, Switzerland, (41) 22749 0111, http://www.iso.org, or<EMAIL_ADDRESS>    (1) ISO 9141-2 Road vehicles--Diagnostic systems-- Part 2: CARB
requirements for interchange of digital information, February 1994; IBR
approved for Sec.  1048.110(g).
    (2) ISO 14230-4 Road vehicles--Diagnostic systems--Keyword Protocol
2000--Part 4: Requirements for emission-related systems, June 2000; IBR
approved for Sec.  1048.110(g).

PART 1054--CONTROL OF EMISSIONS FROM NEW, SMALL NONROAD SPARK-
IGNITION ENGINES AND EQUIPMENT

0
44. The authority citation for part 1054 continues to read as follows:

    Authority:  42 U.S.C. 7401-7671q.

Subpart B--[Amended]

0
45. Section 1054.145 is amended by revising paragraphs (c)(3) and (n)
to read as follows:

Sec.  1054.145  Are there interim provisions that apply only for a
limited time?

* * * * *
    (c) * * *
    (3) Engines subject to Phase 3 emission standards must meet the
standards at or above barometric pressures of 96.0 kPa in the standard
configuration and are not required to meet emission standards at lower
barometric pressures. This is intended to allow testing under most
weather conditions at all altitudes up to 1,100 feet above sea level.
In your application for certification, identify the altitude above
which you rely on an altitude kit and describe your plan for making
information and parts available such that you would reasonably expect
that altitude kits would be widely used at all such altitudes.
* * * * *
    (n) California test fuel. Through model year 2019, you may perform
testing with a fuel meeting the requirements for certifying the engine
in California instead of the fuel specified in Sec.  1054.501(b)(2), as
follows:
    (1) You may certify individual engine families using data from
testing conducted with California Phase 2 test fuel. Any EPA testing
with such an engine family may use either this same certification fuel
or the test fuel specified in Sec.  1054.501.
    (2) Starting in model year 2013, you may certify individual engine
families using data from testing conducted with California Phase 3 test
fuel. Any EPA testing with such an engine family may use either this
same certification fuel or the test fuel specified in Sec.  1054.501,
unless you certify to the more stringent CO standards specified in this
paragraph (n)(2). If you meet these alternate CO standards, we will
also use California Phase 3 test fuel for any testing we perform with
engines from that engine family. The following alternate CO standards
apply instead of the CO standards specified in Sec.  1054.103 or Sec.
1054.105:

   Table 1 to Sec.   1054.145--Alternate CO Standards for Testing With
                      California Phase 3 Test Fuel
                                [g/kW-hr]
------------------------------------------------------------------------
                                                           Alternate CO
                       Engine type                           standard
------------------------------------------------------------------------
Class I.................................................             549
Class II................................................             549
Class III...............................................             536
Class IV................................................             536
Class V.................................................             536
Marine generators.......................................             4.5
------------------------------------------------------------------------

* * * * *

Subpart F--[Amended]

0
46. Section 1054.501 is amended by revising paragraph (b)(2) to read as
follows:

Sec.  1054.501  How do I run a valid emission test?

* * * * *
    (b) * * *
    (2) Use the appropriate fuels and lubricants specified in 40 CFR
part 1065, subpart H, for all the testing we require in this part.
Except as specified in paragraph (d) of this section, use gasoline
specified for general testing. For service accumulation, use the test
fuel or any commercially available fuel that is representative of the
fuel that in-use engines will use. Note that Sec.  1054.145(n) allows
for testing with gasoline test fuels specified by the California Air
Resources Board for any individual engine family through model year
2019.
* * * * *

PART 1065--Engine-Testing Procedures

0
47. The authority citation for part 1065 continues to read as follows:

    Authority:  42 U.S.C. 7401-7671q.

Subpart C--[Amended]

0
48. Section 1065.275 is amended by revising the section heading to read
as follows:

Sec.  1065.275  N2O measurement devices.

* * * * *

Subpart G--[Amended]

0
49. Section 1065.610 is amended by revising paragraph (c)(3) to read as
follows:

Sec.  1065.610  Duty cycle generation.

* * * * *
    (c) * * *
    (3) Intermediate speed. If your normalized duty cycle specifies a
speed as ``intermediate speed,'' use your torque-versus-speed curve to
determine the speed at which maximum torque occurs. This is peak torque
speed. If maximum torque occurs in a flat region of the torque-versus-
speed curve, your peak torque speed is the midpoint between the lowest
and highest speeds at which the trace reaches the flat region. For
purposes of this paragraph (c)(3), a flat region is one in which
measured torque values are within 2% of the maximum recorded value.
Identify your reference intermediate speed as one of the following
values:
    (i) Peak torque speed if it is between (60 and 75) % of maximum
test speed.
    (ii) 60% of maximum test speed if peak torque speed is less than
60% of maximum test speed.
    (iii) 75% of maximum test speed if peak torque speed is greater
than 75% of maximum test speed.
* * * * *

PART 1066--VEHICLE-TESTING PROCEDURES

0
50. The authority citation for part 1066 continues to read as follows:

    Authority:  42 U.S.C. 7401-7671q.

Subpart D--[Amended]

0
51. Section 1066.310 is amended by:
0
a. Revising the section heading and the introductory text;
0
b. Revising paragraphs (b)(2), (b)(3) introductory text, and (b)(3)(i);
0
c. Removing and reserving paragraph (b)(3)(ii);
0
d. Revising paragraphs (b)(6) and (b)(7); and
0
e. Adding paragraph (b)(8) to read as follows:

Sec.  1066.310  Coastdown procedures for vehicles with GVWR above
14,000 lbs.

    This section describes coastdown procedures that are unique to
heavy-duty vehicles with GVWR above 14,000 lbs. These procedures are
valid for calculating road-load coefficients for chassis and post-
transmission powerpack testing and for calculating drag area
(CDA) for use in the Greenhouse gas Emissions Model (GEM)
simulation tool under 40 CFR part 1037.
* * * * *
    (b) * * *
    (2) Operate the vehicle at a top speed above 70 mph, or at its
maximum achievable speed if it cannot reach 70 mph. If a vehicle is
equipped with a vehicle speed limiter that is set for a maximum speed
below 70 mph, you must disable the vehicle speed limiter. Start the
test at or above 70 mph or at the vehicle's maximum achievable speed if
it cannot reach 70 mph. Data collection must occur through a minimum
speed at or below 15 mph. Data analysis for valid coastdown runs must
include a maximum speed as described in this paragraph (b)(2) and a
minimum speed of 15 mph.
    (3) Gather data regarding wind speed and direction, in coordination
with time-of-day data, using at least one stationary electro-mechanical
anemometer and suitable data loggers meeting the specifications of SAE
J1263, as well as the following additional specifications for the
anemometer placed adjacent to the test surface:
    (i) Calibrate the equipment by running the zero-wind and zero-angle
calibrations within 24 hours before conducting the coastdown
procedures. If the coastdown procedures are not complete 24 hours after
calibrating the equipment, repeat the calibration for another 24 hours
of data collection.
    (ii) [Reserved]
* * * * *
    (6) All valid coastdown run times in each direction must be within
2.0 standard deviations of the mean of the valid coastdown run times
(from 70 mph down to 15 mph) in that direction. Eliminate runs outside
this range. After eliminating these runs you must have at least eight
valid runs in each direction. You may use coastdown run times that do
not meet these standard deviation requirements if we approve it in
advance. In your request, describe why the vehicle is not able to meet
the specified standard deviation requirements and propose an
alternative set of requirements.
    (7) Analyze data for chassis and post-transmission powerpack
testing or for use in the GEM simulation tool as follows:
    (i) Follow the procedures specified in Section 10 of SAE J1263 or
Section 11 of SAE J2263 to calculate coefficients for chassis and post-
transmission powerpack testing.
    (ii) For the GEM simulation tool, determine drag area,
CDA, as follows instead of using the procedure specified in
Section 10 of SAE J1263:
    (A) Measure vehicle speed at fixed intervals over the coastdown run
(generally at 10 Hz), including speeds at or above 15 mph and at or
below 70 mph. Establish the height or altitude corresponding to each
interval as described in SAE J2263 if you need to incorporate the
effects of road grade.
    (B) Calculate the vehicle's effective mass, Me, in kg by
adding 56.7 kg to the vehicle mass for each tire making road contact.
This accounts for the rotational inertia of the wheels and tires.
    (C) Calculate the road-load force for each measurement interval,
Fi, using the following equation:
[GRAPHIC] [TIFF OMITTED] TR17JN13.004

Where:

Me = the vehicle's effective mass, expressed to the
nearest 0.1 kg.
v = vehicle speed at the beginning and end of the measurement
interval. Let v0 = 0 m/s.
[Delta]t = elapsed time over the measurement interval, in seconds.

    (D) Plot the data from all the coastdown runs on a single plot of
Fi vs. vi\2\ to determine the slope correlation,
D, based on the following equation:
[GRAPHIC] [TIFF OMITTED] TR17JN13.005

Where:

g = gravitational acceleration = 9.81 m/s\2\.
[Delta]h = change in height or altitude over the measurement
interval, in m. Assume [Delta]h = 0 if you are not correcting for
grade.
[Delta]s = distance the vehicle travels down the road during the
measurement interval, in m.
Am = the calculated value of the y-intercept based on the
curve-fit.
(E) Calculate drag area, CDA, in m\2\ using the following
equation:
[GRAPHIC] [TIFF OMITTED] TR17JN13.006

Where:

[rho] = air density at reference conditions = 1.17 kg/m\3\.
[GRAPHIC] [TIFF OMITTED] TR17JN13.007

T = average ambient temperature during testing, in K.
PB = average ambient pressuring during the test, in kPa.

    (8) Determine the A, B, and C coefficients identified in Sec.
1066.210 as follows:
    (i) For chassis and post-transmission powerpack testing, follow the
procedures specified in Section 10 of SAE J1263 or Section 12 of SAE
J2263.
    (ii) For the GEM simulation tool, use the following values:

A = Am
B = 0
C = Dadj

PART 1068--GENERAL COMPLIANCE PROVISIONS FOR HIGHWAY, STATIONARY,
AND NONROAD PROGRAMS

0
52. The authority citation for part 1068 continues to read as follows:

    Authority:  42 U.S.C. 7401-7671q.

Subpart A--[Amended]

0
53. Section 1068.1 is amended by revising paragraph (b) to read as
follows:

Sec.  1068.1  Does this part apply to me?

* * * * *
    (b) This part does not apply to any of the following engine or
vehicle categories:
    (1) Light-duty motor vehicles (see 40 CFR part 86).
    (2) Highway motorcycles (see 40 CFR part 86).
    (3) Heavy-duty motor vehicles and motor vehicle engines, except as
specified in 40 CFR parts 85 and 86.
    (4) Aircraft engines, except as specified in 40 CFR part 87.
    (5) Land-based nonroad compression-ignition engines we regulate
under 40 CFR part 89.
    (6) Small nonroad spark-ignition engines we regulate under 40 CFR
part 90.
    (7) Marine spark-ignition engines we regulate under 40 CFR part 91.
    (8) Locomotive engines we regulate under 40 CFR part 92.
    (9) Marine compression-ignition engines we regulate under 40 CFR
parts 89 or 94.
* * * * *

Subpart C--[Amended]

0
54. Section 1068.240 is revised to read as follows:

Sec.  1068.240  What are the provisions for exempting new replacement
engines?

    The prohibitions in Sec.  1068.101(a)(1) do not apply to a new
engine if it is exempt under this section as a replacement engine. For
purposes of this section, a replacement engine is a new engine that is
used to replace an engine that has already been placed into service
(whether the previous engine is replaced in whole or in part with a new
engine).
    (a) General provisions. You are eligible for the exemption for new
replacement engines only if you are a certificate holder. Note that
this exemption does not apply for locomotives (40 CFR 1033.601) and
that unique provisions apply to marine compression-ignition engines (40
CFR 1042.615).
    (1) Paragraphs (b), (c), and (d) of this section describe different
approaches for exempting new replacement engines where the engines are
specially built to correspond to an engine model from an earlier model
year that was subject to less stringent standards than those that apply
for current production (or is no longer covered by a certificate of
conformity).
    (2) Paragraph (e) of this section describes a simpler approach for
exempting partially complete new replacement engines that are built
under a certificate of conformity that is valid for producing engines
for the current model year.
    (3) For all the different approaches described in paragraphs (b)
through (e) of this section, the exemption applies only for equipment
that is 25 years old or less at the time of installation.
    (b) Previous-tier replacement engines with tracking. You may
produce any number of new engines to replace an engine already placed
into service in a piece of equipment, as follows:
    (1) The engine being replaced must have been either not originally
subject to emission standards or originally subject to less stringent
emission standards than those that apply to a new engine meeting
current standards. The provisions of this paragraph (b) also apply for
engines that were originally certified to the same standards that apply
for the current model year if you no longer have a certificate of
conformity to continue producing that engine configuration.
    (2) The following requirements and conditions apply for engines
exempted under this paragraph (b):
    (i) You must determine that you do not produce an engine certified
to meet current requirements that has the appropriate physical or
performance characteristics to repower the equipment. If the engine
being replaced was made by a different company, you must make this
determination also for engines produced by this other company.
    (ii) In the case of premature engine failure, if the old engine was
subject to emission standards, you must make the new replacement engine
in a configuration identical in all material respects to the old engine
and meet the requirements of Sec.  1068.265. You may alternatively make
the new replacement engine in a configuration identical in all material
respects to another certified engine of the same or later model year as
long as the engine is not certified with a family emission limit higher
than that of the old engine.
    (iii) For cases not involving premature engine failure, you must
make a separate determination for your own product line addressing
every tier of emission standards that is more stringent than the
emission standards for the engine being replaced. For example, if the
engine being replaced was built before the Tier 1 standards started to
apply and engines of that size are currently subject to Tier 3
standards, you must also consider whether any Tier 1 or Tier 2 engines
that you produce have the appropriate physical and performance
characteristics for replacing the old engine; if you produce a Tier 2
engine with the appropriate physical and performance characteristics,
you must use it as the replacement engine.
    (iv) You must keep records to document your basis for making the
determinations in paragraphs (b)(2)(i) and (iii) of this section.
    (3) The old engine block may be reintroduced into U.S. commerce as
part of an engine that meets either the current standards for new
engines, the provisions for new replacement engines in this section, or
another valid exemption. Otherwise, you must destroy the old engine
block or confirm that it has been destroyed.
    (4) If the old engine was subject to emission standards, the
replacement engine must meet the appropriate emission standards as
specified in Sec.  1068.265. This generally means you must make the new
replacement engine in a previously certified configuration.
    (5) Except as specified in paragraph (d) of this section, you must
add a permanent label, consistent with Sec.  1068.45, with your
corporate name and trademark and the following additional information:
    (i) Add the following statement if the new engine may only be used
to replace an engine that was not subject to any emission standards
under this chapter:
    THIS REPLACEMENT ENGINE IS EXEMPT UNDER 40 CFR 1068.240. SELLING OR
INSTALLING THIS ENGINE FOR ANY PURPOSE OTHER THAN TO REPLACE AN
UNREGULATED ENGINE MAY BE A VIOLATION OF FEDERAL LAW SUBJECT TO CIVIL
PENALTY. THIS ENGINE MAY NOT BE INSTALLED IN

EQUIPMENT THAT IS MORE THAN 25 YEARS OLD AT THE TIME OF INSTALLATION.
    (ii) Add the following statement if the new engine may replace an
engine that was subject to emission standards:
    THIS ENGINE COMPLIES WITH U.S. EPA EMISSION REQUIREMENTS FOR
[Identify the appropriate emission standards (by model year, tier, or
emission levels) for the replaced engine] ENGINES UNDER 40 CFR
1068.240. SELLING OR INSTALLING THIS ENGINE FOR ANY PURPOSE OTHER THAN
TO REPLACE A [Identify the appropriate emission standards for the
replaced engine, by model year(s), tier(s), or emission levels)] ENGINE
MAY BE A VIOLATION OF FEDERAL LAW SUBJECT TO CIVIL PENALTY. THIS ENGINE
MAY NOT BE INSTALLED IN EQUIPMENT THAT IS MORE THAN 25 YEARS OLD AT THE
TIME OF INSTALLATION.
    (6) Engines exempt under this paragraph (b) may not be introduced
into U.S. commerce before you make the determinations under paragraph
(b)(2) of this section, except as specified in this paragraph (b)(6).
We may waive this restriction for engines excluded under paragraph
(c)(5) of this section that you ship to a distributor. Where we waive
this restriction, you must take steps to ensure that the engine is
installed consistent with the requirements of this paragraph (b). For
example, at a minimum you must report to us annually whether engines we
allowed you to ship to a distributor under this paragraph (b)(6) have
been placed into service or remain in inventory. After an engine is
placed into service, your report must describe how the engine was
installed consistent with the requirements of this paragraph (b). Send
these reports to the Designated Compliance Officer by the deadlines we
specify.
    (c) Previous-tier replacement engines without tracking. You may
produce a limited number of new replacement engines that are not from a
currently certified engine family under the provisions of this
paragraph (c). If you produce new engines under this paragraph (c) to
replace engines subject to emission standards, the new replacement
engine must be in a configuration identical in all material respects to
the old engine and meet the requirements of Sec.  1068.265. You may
make the new replacement engine in a configuration identical in all
material respects to another certified engine of the same or later
model year as long as the engine is not certified with a family
emission limit higher than that of the old engine. The provisions of
this paragraph (c) also apply for engines that were originally
certified to the same standards that apply for the current model year
if you no longer have a certificate of conformity to continue producing
that engine configuration. This would apply, for example, for engine
configurations that were certified in an earlier model year but are no
longer covered by a certificate of conformity. You must comply with the
requirements of paragraph (b) of this section for any number of
replacement engines you produce in excess of what we allow under this
paragraph (c). Engines produced under this paragraph (c) may be
redesignated as engines subject to paragraph (b) of this section, as
long as you meet all the requirements and conditions of paragraph (b)
of this section before the deadline for the report specified in
paragraph (c)(3) of this section. The following provisions apply to
engines exempted under this paragraph (c):
    (1) You may produce a limited number of replacement engines under
this paragraph (c) representing 0.5 percent of your annual production
volumes for each category and subcategory of engines identified in
Table 1 to this section (1.0 percent through 2013). Calculate this
number by multiplying your annual U.S.-directed production volume by
0.005 (or 0.01 through 2013) and rounding to the nearest whole number.
Determine the appropriate production volume by identifying the highest
total annual U.S.-directed production volume of engines from the
previous three model years for all your certified engines from each
category or subcategory identified in Table 1 to this section, as
applicable. In unusual circumstances, you may ask us to base your
production limits on U.S.-directed production volume for a model year
more than three years prior. You may include stationary engines and
exempted engines as part of your U.S.-directed production volume.
Include U.S.-directed engines produced by any parent or subsidiary
companies and those from any other companies you license to produce
engines for you.
    (2) Count every exempted new replacement engine from your total
U.S.-directed production volume that you produce in a given calendar
year under this paragraph (c), including partially complete engines,
except for the following:
    (i) Engines built to specifications for an earlier model year under
paragraph (b) of this section.
    (ii) Partially complete engines exempted under paragraph (e) of
this section.
    (3) Send the Designated Compliance Officer a report by March 31 of
the year following any year in which you produced exempted replacement
engines under this paragraph (c). In your report include the total
number of replacement engines you produce under this paragraph (c) for
each category or subcategory, as appropriate, and the corresponding
total production volumes determined under paragraph (c)(1) of this
section. If you send us a report under this paragraph (c)(3), you must
also include the total number of replacement engines you produced under
paragraphs (b), (d), and (e) of this section. You may include this
information in production reports required under the standard-setting
part.
    (4) Add a permanent label as specified in paragraph (b)(5) of this
section. For partially complete engines, you may alternatively add a
permanent or removable label as specified in paragraph (d) of this
section.
    (5) You may not use the provisions of this paragraph (c) for any
engines in the following engine categories or subcategories:
    (i) Land-based nonroad compression-ignition engines we regulate
under 40 CFR part 1039 with a per-cylinder displacement at or above 7.0
liters.
    (ii) Marine compression-ignition engines we regulate under 40 CFR
part 1042 with a per-cylinder displacement at or above 7.0 liters.
    (iii) Locomotive engines we regulate under 40 CFR part 1033.
    (d) Partially complete engines. The following requirements apply if
you ship a partially complete replacement engine under this section:
    (1) Provide instructions specifying how to complete the engine
assembly such that the resulting engine conforms to the applicable
certificate of conformity or the specifications of Sec.  1068.265.
Where a partially complete engine can be built into multiple different
configurations, you must be able to identify all the engine models and
model years for which the partially complete engine may properly be
used for replacement purposes. Your instructions must make clear how
the final assembler can determine which configurations are appropriate
for the engine they receive.
    (2) You must label the engine as follows:
    (i) If you have a reasonable basis to believe that the fully
assembled engine will include the original emission control information
label, you may add a removable label to the engine with your corporate
name and trademark and the statement: ``This replacement engine is
exempt under 40 CFR 1068.240.'' This

would generally apply if all the engine models that are compatible with
the replacement engine were covered by a certificate of conformity and
they were labeled in a position on the engine or equipment that is not
included as part of the partially complete engine being shipped for
replacement purposes. Removable labels must meet the requirements
specified in Sec.  1068.45.
    (ii) If you do not qualify for using a removable label in paragraph
(d)(1) of this section, you must add a permanent label in a readily
visible location, though it may be obscured after installation in a
piece of equipment. Include on the permanent label your corporate name
and trademark, the engine's part number (or other identifying
information), and the statement: ``THIS REPLACEMENT ENGINE IS EXEMPT
UNDER 40 CFR 1068.240; IT MAY NOT BE INSTALLED IN EQUIPMENT THAT IS
MORE THAN 25 YEARS OLD AT THE TIME OF INSTALLATION.'' If there is not
enough space for this statement, you may alternatively add:
``REPLACEMENT'' or ``SERVICE ENGINE''. For purposes of this paragraph
(d)(2), engine part numbers permanently stamped or engraved on the
engine are considered to be included on the label.
    (e) Partially complete current-tier replacement engines. The
provisions of paragraph (d) of this section apply for partially
complete engines you produce from a current line of certified engines
or vehicles. This applies for engine-based and equipment-based
standards as follows:
    (1) Where engine-based standards apply, you may introduce into U.S.
commerce short blocks or other partially complete engines from a
currently certified engine family as replacement components for in-use
equipment powered by engines you originally produced. You must be able
to identify all the engine models and model years for which the
partially complete engine may properly be used for replacement
purposes.
    (2) Where equipment-based standards apply, you may introduce into
U.S. commerce engines that are identical to engines covered by a
current certificate of conformity by demonstrating compliance with
currently applicable standards where the engines will be installed as
replacement engines. These engines might be fully assembled, but we
would consider them to be partially complete engines because they are
not yet installed in the equipment.
    (f) Emission credits. Replacement engines exempted under this
section may not generate or use emission credits under the standard-
setting part nor be part of any associated credit calculations.

  Table 1 to Sec.   1068.240--Engine Categories and Subcategories for New Replacement Engines Exempted Without
                                                    Tracking
----------------------------------------------------------------------------------------------------------------
                                        Standard-setting part
           Engine category                       \1\                          Engine subcategories
----------------------------------------------------------------------------------------------------------------
Highway CI...........................  40 CFR part 86.........  disp. < 0.6 L/cyl.
                                                                0.6 <= disp. < 1.2 L/cyl.
                                                                disp. >= 1.2 L/cyl.
----------------------------------------------------------------------------------------------------------------
Nonroad CI, Stationary CI, and Marine  40 CFR part 1039, or 40  disp. < 0.6 L/cyl.
 CI.                                    CFR part 1042.          0.6 <= disp. < 1.2 L/cyl.
                                                                1.2 <= disp. < 2.5 L/cyl.
                                                                2.5 <= disp. < 7.0 L/cyl.
----------------------------------------------------------------------------------------------------------------
Marine SI............................  40 CFR part 1045.......  outboard.
                                                                personal watercraft.
Large SI, Stationary SI, and Marine    40 CFR part 1048 or 40   all engines.
 SI (sterndrive/inboard only).          CFR part 1045.
----------------------------------------------------------------------------------------------------------------
Recreational vehicles................  40 CFR part 1051.......  off-highway motorcycle.
                                                                all-terrain vehicle.
                                                                snowmobile.
Small SI and Stationary SI...........  40 CFR part 1054.......  handheld.
                                                                Class I.
                                                                Class II.
----------------------------------------------------------------------------------------------------------------
\1\ Include an engine as being subject to the identified standard-setting part if it will eventually be subject
  to emission standards under that part. For example, if you certify marine compression-ignition engines under
  part 94, count those as if they were already subject to part 1042.

    For the reasons set forth in the preamble, the National Highway
Traffic Safety Administration is amending title 49, chapter V of the
Code of Federal Regulations as follows:

PART 523--VEHICLE CLASSIFICATION

0
55. The authority citation for part 523 is revised to read as follows:

    Authority:  49 U.S.C. 32901, delegation of authority at 49 CFR
1.95

0
56. Section 523.2 is amended by revising the definitions of ``Complete
vehicle'' and ``Incomplete vehicle'' to read as follows:

Sec.  523.2  Definitions.

* * * * *
    Complete vehicle means a vehicle, other than in Sec.  523.7, that
requires no further manufacturing operations to perform its intended
function and is a functioning vehicle that has the primary load
carrying device or container (or equivalent equipment) attached or that
is designed to pull a trailer. Examples of equivalent equipment would
include fifth wheel trailer hitches, firefighting equipment, and
utility booms.
* * * * *
    Incomplete vehicle means a vehicle, other than in Sec.  523.7,
which does not have the primary load carrying device or container
attached when it is first sold as a vehicle or any vehicle that does
not meet the definition of a complete vehicle. This may include
vehicles sold to secondary vehicle manufacturers. Incomplete vehicles
include cab-complete vehicles.
* * * * *

0
57. Section 523.7 is revised to read as follows:

Sec.  523.7  Heavy-duty pickup trucks and vans.

    Heavy-duty pickup trucks and vans are pickup trucks and vans with a
gross vehicle weight rating between 8,501 pounds and 14,000 pounds
(Class 2b

through 3 vehicles) manufactured as complete vehicles by a single or
final stage manufacturer or manufactured as incomplete vehicles as
designated by a manufacturer. A manufacturer may also optionally
designate as a heavy-duty pickup truck or van any cab-complete or
complete vehicle having a GVWR over 14,000 pounds and below 26,001
pounds equipped with a spark ignition engine or any spark ignition
engine certified and sold as a loose engine manufactured for use in a
heavy-duty pickup truck or van. See references in 49 CFR 535.5(a), 40
CFR 1037.104 and 40 CFR 1037.150. Complete and incomplete vehicles
between 8,501 pounds and 14,000 pounds have the meaning for complete
and incomplete heavy-duty vehicles given in 40 CFR 86.1803.

PART 535--MEDIUM- AND HEAVY-DUTY VEHICLE FUEL EFFICIENCY PROGRAM

0
58. The authority citation for part 535 is revised to read as follows:

    Authority:  49 U.S.C 32901, delegation of authority at 49 CFR
1.95.

0
56. Revise Sec.  535.3(b) and (c) to read as follows:

Sec.  535.3  Applicability.

* * * * *
    (b) Complete vehicle manufacturers, for the purpose of this part,
include primary and secondary stage manufacturers meeting the criteria
in 40 CFR 1037.620 that produce heavy-duty pickup trucks and vans or
truck tractors as complete vehicles and, that hold the EPA certificate
of conformity.
    (c) Chassis manufacturers, for the purpose of this part, include
primary and secondary stage manufacturers meeting the criteria in 40
CFR 1037.620 that produce incomplete vehicles constructed for use as
heavy-duty pickup trucks or vans or heavy-duty vocational vehicles and
that hold the EPA certificate of conformity. Some vocational vehicle
manufacturers are both chassis and complete vehicle manufacturers.
These manufacturers will be regulated as chassis manufacturers under
this program.
* * * * *

0
57. Amend Sec.  535.4 by adding a definition of ``Credit holder'' in
alphabetical order and revising the definitions for ``Configuration''
and ``Subconfiguration'' to read as follows:

Sec.  535.4  Definitions.

* * * * *
    Configuration means a subclassification within a test group which
is based on engine code, transmission type and gear ratios, final drive
ratio and other parameters which EPA designates. Transmission type
means the basic type of the transmission (e.g. automatic, manual,
automated manual, semi-automatic, or continuously variable) and does
not include the drive system of the vehicle (e.g. front-wheel drive,
rear-wheel drive, and four-wheel drive). Engine code means the
combination of both ``engine code'' and ``basic engine'' as defined in
the provisions of 40 CFR 600.002.
    Credit holder (or holder) means a legal person that has credits,
either because they are the manufacturer who earned the credits by
exceeding the applicable fuel consumption standard and are the
certificate holder, or because they are a designated recipient who has
received credits from another holder. Credit holders need not be
manufacturers but credit holders that are not manufacturers may only
purchase and hold credits for the purpose of retiring them as specified
in 40 CFR 1036.701(h) and 1037.701(e).
* * * * *
    Subconfiguration means a unique combination within a vehicle
configuration of equivalent test weight, road-load horsepower, and any
other operational characteristics or parameters that EPA determines may
significantly affect CO2 emissions within a vehicle
configuration. Note that for vehicles subject to heavy-duty pickup
truck and van standards, equivalent test weight (ETW) is based on the
ALVW of the vehicle as outlined in paragraph 40 CFR 1037.104(d)(11).
* * * * *

0
58. Amend Sec.  535.5 by:
0
a. Revising paragraph (a)(4)(i) and adding paragraphs (a)(4)(v) and
(vi);
0
b. Revising paragraph (a)(6);
0
c. Revising paragraph (b)(2)(i) and adding paragraphs (b)(2)(iii) and
(iv); and
0
d. Revising paragraph (c)(2)(i) and adding paragraphs (c)(2)(iii),
(c)(2)(iv), and (c)(5).
    The revisions and additions read as follows:

Sec.  535.5  Standards.

    (a) * * *
    (4) * * *. (i) Manufacturers may choose voluntarily to comply early
with fuel consumption standards for model years 2013 through 2015, as
determined in paragraphs (a)(4)(iii) and (iv) of this section, for
example, in order to begin accumulating credits through over-compliance
with the applicable standard. A manufacturer choosing early compliance
must comply with all the vehicles and engines it manufactures in each
regulatory category for a given model year except as provided in
paragraphs (a)(4)(v) and (vi) of this section.
* * * * *
    (v) For model year 2013, a manufacturer can choose to comply with
the standards in paragraph (a) of this section and generate early
credits under Sec.  535.7(b) by using the entire U.S.-directed
production volume of vehicles other than electric vehicles as specified
in 40 CFR 1037.150. The model year 2014 standards in paragraph (a) of
this section apply for vehicles complying in model year 2013. If some
test groups are certified by EPA after the start of the model year, the
manufacturer may only generate credits under Sec.  535.7(b) for the
production that occurs after all test groups are certified in
accordance with 40 CFR 1037.150 (a)(2).
    (vi) For model year 2014, a manufacturer producing model year 2014
vehicles before January 1, 2014, may optionally elect to comply with
these standards for a partial model year that begins on January 1,
2014, and ends on the day the manufacturer's model year would normally
end if it meets the provisions in 40 CFR 1037.150(g).
* * * * *
    (6) Optional certification under this section. A manufacturer may
optionally certify any spark ignition (or gasoline) cab-complete or
complete vehicle weighing over 14,000 pounds GVWR and below 26,001
pounds GVWR to the requirements under this paragraph (a) that applies
to a comparable complete sister vehicle as determined in accordance
with 40 CFR 1037.150(l). Calculate the target standard value under
paragraph (a)(2) of this section based on the same work factor value
that applies for the complete sister vehicle.
* * * * *
    (b) * * *
    (2) * * * (i) For model years 2013 through 2015, a manufacturer may
choose voluntarily to comply early with the fuel consumption standards
provided in paragraph (b)(3) of this section. For example, a
manufacturer may choose to comply early in order to begin accumulating
credits through over-compliance with the applicable standards. A
manufacturer choosing early compliance must comply with all the
vehicles and engines it manufacturers in each regulatory category for a
given model year except as provided in paragraphs (b)(2)(iii) through
(iv) of this section.
* * * * *

    (iii) For model year 2013, a manufacturer can choose to comply with
the standards in paragraph (b) of this section and generate early
credits under 535.7(c) by using the entire U.S.-directed production
volume within any of its regulatory sub-categories of vehicles other
than electric vehicles as specified in 40 CFR 1037.150. The model year
2014 standards in paragraph (b) of this section apply for vehicles
complying in model year 2013. If some vehicle families within a
regulatory subcategory are certified by EPA after the start of the
model year, manufacturers may generate credits under Sec.  535.7(c)
only for production that occurs after all families are certified in
accordance with 40 CFR 1037.150(a)(1).
    (iv) For model year 2014, a manufacturer producing model year 2014
vehicles before January 1, 2014, may optionally elect to comply with
these standards for a partial model year that begins on January 1,
2014, and ends on the day the manufacturer's model year would normally
end if it meets the provisions in 40 CFR 1037.150(g).
* * * * *
    (c) * * *
    (2) * * * (i) For model years 2013 through 2015, a manufacturer may
choose voluntarily to comply early with the fuel consumption standards
provided in paragraph (c)(3) of this section. For example, a
manufacturer may choose to comply early in order to begin accumulating
credits through over-compliance with the applicable standards. A
manufacturer choosing early compliance must comply with all the
vehicles and engines it manufacturers in each regulatory category for a
given model year except as provided in paragraphs (c)(2)(iii) through
(iv) of this section.
* * * * *.
    (iii) For model year 2013, a manufacturer can choose to comply with
the standards in paragraph (c) of this section and generate early
credits under Sec.  535.7(c) by using the entire U.S.-directed
production volume within any of its regulatory sub-categories of
vehicles other than electric vehicles as specified in 40 CFR 1037.150.
The model year 2014 standards in paragraph (c) of this section apply
for vehicles complying in model year 2013. If some vehicle families
within a regulatory subcategory are certified by EPA after the start of
the model year, manufacturers may generate credits under Sec.  535.7(c)
only for production that occurs after all families are certified in
accordance with 40 CFR 1037.150(a)(1).
    (iv) For model year 2014, a manufacturer producing model year 2014
vehicles before January 1, 2014, may optionally elect to comply with
these standards for a partial model year that begins on January 1,
2014, and ends on the day the manufacturer's model year would normally
end if it meets the provisions in 40 CFR 1037.150(g).
* * * * *
    (5) Vocational tractors. Tractors meeting the definition of
vocational tractors in 49 CFR 523.2 for purposes of certifying vehicles
to fuel consumption standards, are divided into families of vehicles as
specified in 40 CFR 1037.230(a)(1) and must comply with standards for
heavy-duty vocational vehicles and engines of the same weight class
specified in paragraphs (b) and (d) of this section. Class 7 and Class
8 tractors certified or exempted as vocational tractors are limited in
production to no more than 21,000 vehicles in any three consecutive
model years. If a manufacturer is determined as not applying this
allowance in good faith by the EPA in its applications for
certification in accordance with 40 CFR 1037.205 and 1037.630, a
manufacturer must comply with the tractor fuel consumption standards in
paragraph (c)(3) of this section. Vocational tractors generating
credits can trade and transfer credits in the same averaging sets as
tractors and vocational vehicles in the same weight class.
* * * * *

0
59. Revise Sec.  535.6(b)(3) to read as follows:

Sec.  535.6  Measurement and calculation procedures.

* * * * *
    (b) * * *
    (3) From the GEM results, select the CO2 family
emissions level (FEL) and equivalent fuel consumption values for
vocational vehicle and tractor families in each regulatory
subcategories for each model year. Equivalent fuel consumption FELs are
derived in GEM from the CO2 FEL value rounded to the nearest
whole number and are expressed to the nearest 0.1 gallons per 1000 ton-
mile. For families containing multiple subfamilies, identify the FELs
for each subfamily.
* * * * *

0
60. Amend Sec.  535.7 by revising paragraphs (a), (b)(9), (c)(11)(i),
(d)(11)(i), (e)(1)(i), (e)(1)(ii)(A) introductory text,
(e)(1)(ii)(A)(1), (e)(1)(ii)(A)(2), and (e)(1)(ii)(B) to read as
follows:

Sec.  535.7  Averaging, banking, and trading (ABT) program.

    (a) Fuel consumption credits (FCC). At the end of each model year,
primary and secondary manufacturers as specified in Sec.  535.3 may
earn credits for heavy-duty vehicles and engines exceeding the fuel
consumption standards in Sec.  535.5 or by using one or more of the
flexibilities in this paragraph (a) to gain credits. Manufacturers may
average, bank, and trade fuel consumption credits for purposes of
complying with fuel consumption standards. The following criteria and
restrictions apply to averaging, banking and trading FCC.
    (1) Averaging. Averaging is the exchange of FCC among a
manufacturer's engines or vehicle families or test groups within an
averaging set. With the exception of FCC earned for advance
technologies as further clarified below, a manufacturer may average FCC
only within the same averaging set. The principle averaging sets are
defined in Sec.  535.4.
    (2) Banking. Banking is the retention of surplus FCC by the
manufacturer generating the credits for use in future model years for
averaging or trading. Banked FCC retain the designation from the
averaging set and model year in which they were generated and expire
after five model years.
    (3) Trading. Trading is a transaction that moves FCC between
manufacturers for averaging, banking, or further trading transactions.
Traded FCC, other than advanced technology credits, may be used by a
manufacturer only within the averaging set in which they were
generated. Entities other than manufacturers may only obtain traded FCC
for the purpose of retiring them.
    (b) * * *
    (9) Calculate the value of credits generated in a model year for
this regulatory subcategory or averaging set using the following
equation:

Total MY Fleet FCC (gallons) = (Std - Act) x (Volume) x (UL) x
(10-2)

Where:

Std = Fleet average fuel consumption standard (gal/100 mile).
Act = Fleet average actual fuel consumption value (gal/100 mile).
Volume = the total U.S.-directed production of vehicles in the
regulatory subcategory.
UL = the useful life for the regulatory subcategory (120,000 miles).
* * * * *
    (c) * * *
    (11) * * *
    (i) Calculate the value of credits generated in a model year for
each vehicle family or subfamily within an averaging set using the
following equation:

Vehicle Family FCC (gallons) = (Std - FEL) x (Payload) x (Volume) x
(UL) x (10-3)

Where:

Std = the standard for the respective vehicle family regulatory
subcategory (gal/1000 ton-mile).
FEL = family emissions limit for the vehicle family or subfamily
(gal/1000 ton-mile).
Payload = the prescribed payload in tons for each regulatory
subcategory as shown in the following table:

------------------------------------------------------------------------
                                                              Payload
                 Regulatory subcategory                       (tons)
------------------------------------------------------------------------
LHD Vocational Vehicles.................................            2.85
MHD Vocational Vehicles.................................            5.60
HHD Vocational Vehicles.................................            7.5
Class 7 Tractor.........................................           12.50
Class 8 Tractor.........................................           19.00
------------------------------------------------------------------------

Volume = the number of U.S. directed production volume of vehicles
in the corresponding vehicle family.
UL = the useful life for the regulatory subcategory (miles) as shown
in the following table:

------------------------------------------------------------------------
                 Regulatory subcategory                     UL  (miles)
------------------------------------------------------------------------
LHD Vocational Vehicles.................................         110,000
MHD Vocational Vehicles.................................         185,000
HHD Vocational Vehicles.................................         435,000
Class 7 Tractor.........................................         185,000
Class 8 Tractor.........................................         435,000
------------------------------------------------------------------------

* * * * *
    (d) * * *
    (11) * * *
    (i) The value of credits generated in a model year for each engine
family within a regulatory subcategory equals:

Engine Family FCC (gallons) = (Std - FCL) x (CF) x (Volume) x (UL) x
(10-\2\)

Where:
Std = the standard for the respective engine regulatory subcategory
(gal/100 bhp-hr).
FCL = family certification level for the engine family (gal/100 bhp-
hr).
CF = a transient cycle conversion factor in bhp-hr/mile which is the
integrated total cycle brake horsepower-hour divided by the
equivalent mileage of the applicable test cycle. For spark-ignition
heavy-duty engines, the equivalent mileage is 6.3 miles. For
compression-ignition heavy-duty engines, the equivalent mileage is
6.5 miles.
Volume = the number of engines in the corresponding engine family.
UL = the useful life of the given engine family (miles) as shown in
the following table:

------------------------------------------------------------------------
                 Regulatory subcategory                     UL  (miles)
------------------------------------------------------------------------
Class 2b-5 Vocational Vehicles, Spark Ignited (SI), and          110,000
 Light Heavy-Duty Diesel Engines........................
Class 6-7 Vocational Vehicles and Medium Heavy-Duty              185,000
 Diesel Engines.........................................
Class 8 Vocational Vehicles and Heavy Heavy-Duty Diesel          435,000
 Engines................................................
------------------------------------------------------------------------

------------------------------------------------------------------------
                 Regulatory subcategory                     UL  (miles)
------------------------------------------------------------------------
Class 7 Tractors and Medium Heavy-Duty Diesel Engines...         185,000
Class 8 Tractors and Heavy Heavy-Duty Diesel Engines....         435,000
------------------------------------------------------------------------

* * * * *
    (e) * * *
    (1) * * *
    (i) Heavy-duty vehicles. (A) This paragraph (e)(1)(i) specifies how
to generate advanced technology-specific fuel consumption credits for
hybrid vehicles, vehicles equipped with Rankine-cycle engines and fuel
cell vehicles (or other vehicle specific advanced technologies) for
which the manufacturer is requesting a vehicle certificate from EPA.
Calculate the advanced technology credits as follows:
    (1) Determine the equivalent fuel consumption for hybrid systems
with power take-off devices either from chassis or powertrain testing
emissions rates derived in accordance with 40 CFR 1037.525. Determine
the equivalent fuel consumption for hybrid systems with pre- or post-
transmissions and for vehicles with other non-hybrid advanced
technology systems from chassis testing emissions rates derived in
accordance with 40 CFR 1037.550. Determine the equivalent fuel
consumption in accordance with this paragraph unless EPA approves an
alternative test procedure for the manufacturer. Measure the
effectiveness of the advanced system by chassis testing a vehicle
equipped with the advanced system and an equivalent conventional system
in accordance with 40 CFR 1037.525, 1037.550 and 1037.615.
    (2) For purposes of this paragraph (e)(1)(i) a conventional vehicle
is considered to be equivalent if it has the same footprint, intended
vehicle service class, aerodynamic drag, and other relevant factors not
directly related to the advanced system powertrain. If there is no
equivalent vehicle, the manufacturer may create and test a prototype
equivalent vehicle. The conventional vehicle is considered Vehicle A,
and the advanced technology vehicle is considered Vehicle B.
    (3) The benefit associated with the advanced system for fuel
consumption is determined from the weighted fuel consumption results
from the chassis tests of each vehicle using the following equation:

Benefit (gallon/1000 ton mile) = Improvement Factor x GEM Fuel
Consumption Result--B

Where:

Improvement Factor = (Fuel Consumption--A - Fuel Consumption--B)/
(Fuel Consumption--A)
Fuel Consumption Rates A and B are the gallons per 1000 ton-mile of
the conventional and advanced vehicles, respectively as measured
under the test procedures specified by EPA.
GEM Fuel Consumption Result B is the estimated gallons per 1000 ton-
mile rate resulting from emission modeling of the advanced vehicle
as specified in 40 CFR 1037.520 and Sec.  535.6(b).

    (4) The manufacturer may apply the improvement factor to multiple
vehicle configurations, if it uses the vehicle configuration with the
smallest potential reduction in fuel consumption performance as a
result of the hybrid capability.
    (5) Calculate the benefit in credits using the equation in
paragraph (c)(11) of this section and replacing the term (Std-FEL) with
the benefit.
    (B) For electric vehicles calculate the fuel consumption credits
using an FEL of 0 g/1000 ton-mile.
    (ii) Heavy-duty engines. (A) This paragraph (e)(1)(ii) specifies
how to generate advanced technology-specific fuel consumption credits
for hybrid engines and for engines that include Rankine-cycle (or other
bottoming cycle) exhaust energy recovery systems for which the
manufacturer is requesting an engine certificate from EPA. Calculate
the advanced technology credits as follows:
    (1) Determine the equivalent fuel consumption for hybrid engine
systems

with features that recover and store energy during engine motoring
operation from the emissions rates derived in accordance with 40 CFR
1036.525.
    (2) Determine the equivalent fuel consumption for hybrid pre-
transmission powertrains that include energy storage systems and
regenerative braking (including regenerative engine braking) and for
engines that include Rankine-cycle exhaust energy recovery systems from
the emissions rates derived in accordance with 40 CFR 1036.615. Hybrid
pre-transmission powertrains are engine systems that include features
that recover and store energy during engine motoring operation but not
from the vehicle wheels. Determine the equivalent fuel consumption of
hybrid engines in accordance with this paragraph unless EPA approves an
alternative test procedure for the manufacturer.
* * * * *
    (B) Calculate credits as specified in paragraph (d) of this
section. Credits generated from engines complying with this section may
be used in other averaging sets as described in 40 CFR 1036.740(d).
* * * * *

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61. Amend Sec.  535.8 by:
0
a. Adding paragraph (a)(4); and
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b. Revising paragraphs (d) introductory text, (d)(2), (e) introductory
text, and (e)(2).
    The additions and revisions read as follows:

Sec.  535.8  Reporting requirements.

    (a) * * *
    (4) Manufacturers submitting petitions for the off-road exemption
in paragraph (h) of this section should consider the timing to submit
petitions early enough in advance of the model year to ensure that a
determination can be made by the agencies and should a vehicle fail to
be excluded the manufacturer has sufficient time to submit and obtain
approval from EPA for the certificate of conformity required in 40 CFR
1037.201 prior to first commercial sale of the vehicle.
* * * * *
    (d) End-of-the-year-report. Heavy-duty vehicle and engine
manufacturers participating and not-participating in the ABT program
are required to submit an end-of-the-year (EOY) report containing
information for NHTSA as specified in paragraph (d)(2) of this section
and in accordance with 40 CFR 1036.250, 1036.730, 1037.104, 1037.250
and 1037.730. The EOY reports are used to review a manufacturer's
preliminary or final compliance information and to identify
manufacturers that might have a credit deficit for the given model