[Federal Register Volume 87, Number 176 (Tuesday, September 13, 2022)]
[Proposed Rules]
[Pages 56156-56202]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-17134]



[[Page 56155]]

Vol. 87

Tuesday,

No. 176

September 13, 2022

Part II





Department of Transportation





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National Highway Traffic Safety Administration





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49 CFR Part 535





Improvements for Heavy-Duty Engine and Vehicle Fuel Efficiency Test 
Procedures, and Other Technical Amendments; Proposed Rule

  Federal Register / Vol. 87 , No. 176 / Tuesday, September 13, 2022 / 
Proposed Rules  

[[Page 56156]]


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DEPARTMENT OF TRANSPORTATION

National Highway Traffic Safety Administration

49 CFR Part 535

[NHTSA-2020-0079]
RIN 2127-AM28


Improvements for Heavy-Duty Engine and Vehicle Fuel Efficiency 
Test Procedures, and Other Technical Amendments

AGENCY: National Highway Traffic Safety Administration, Department of 
Transportation.

ACTION: Proposed rule.

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SUMMARY: The National Highway Traffic Safety Administration (NHTSA) is 
proposing minor technical amendments to the test procedures for heavy-
duty engines and vehicles to improve accuracy and reduce testing 
burden. These amendments affect the certification procedures for fuel 
efficiency standards and related requirements. These proposed 
amendments increase compliance flexibility, harmonize with other 
requirements, add clarity, correct errors, and streamline the 
regulations. Given the nature of the proposed changes, NHTSA does not 
expect either significant environmental impacts or significant economic 
impacts for any sector.

DATES: Comments: Comments are requested on or before November 14, 2022.

ADDRESSES: You may send comments, identified by Docket No. NHTSA-2020-
0079 by any of the following methods:
     Federal eRulemaking Portal: https://www.regulations.gov. 
Follow the instructions for sending comments.
     Fax: NHTSA: (202) 493-2251.
     Mail:
    [cir] Docket Management Facility, M-30, U.S. Department of 
Transportation, West Building, Ground Floor, Rm. W12-140, 1200 New 
Jersey Avenue SE, Washington, DC 20590.
     Hand Delivery:
    [cir] West Building, Ground Floor, Rm. W12-140, 1200 New Jersey 
Avenue SE, Washington, DC 20590, between 9 a.m. and 4 p.m. Eastern 
Time, Monday through Friday, except Federal holidays.
    Instructions: All submissions received must include the agency name 
and docket number or Regulatory Information Number (RIN) for this 
rulemaking. All comments received will be posted without change to 
https://www.regulations.gov, including any personal information 
provided.
    Docket: For access to the dockets to read background documents or 
comments received, go to https://www.regulations.gov, and/or: Docket 
Management Facility, M-30, U.S. Department of Transportation, West 
Building, Ground Floor, Rm. W12-140, 1200 New Jersey Avenue SE, 
Washington, DC 20590. The Docket Management NHTSA: Docket Management 
Facility, M-30, U.S. Department of Transportation (DOT), West Building, 
Ground Floor, Rm. W12-140, 1200 New Jersey Ave. SE, Washington, DC 
20590. The DOT Docket Management Facility is open between 9 a.m. and 5 
p.m. Eastern Time, Monday through Friday, except Federal holidays. 
However, due to current COVID-19 restrictions, access to the office is 
limited. Please call ahead if you plan to drop off or pick up a 
document to ensure someone is available to assist them. The Docket 
Management Facility can be reached at (202) 366-9826 or (202) 366-9317 
to arrange a drop off/pick up.

FOR FURTHER INFORMATION CONTACT: Gregory Powell, Office of Rulemaking, 
Fuel Economy Division, National Highway Traffic Safety Administration, 
1200 New Jersey Avenue SE, Washington, DC 20590; telephone number: 
(202) 493-0515.

SUPPLEMENTARY INFORMATION: 

Table of Contents

I. General Information
    A. Does this action apply to me?
    B. What action is the Agency taking?
    C. What are the incremental costs and benefits of this action?
II. Medium and Heavy-Duty Fuel Efficiency Program Technical 
Amendments
    A. Overview
    B. Greenhouse Gas Emission Model Supplemental Notice of Proposed 
Rulemaking
    C. 49 CFR 535.3 Applicability
    D. 49 CFR 535.4 Definitions
    E. 49 CFR 535.5 Standards
    F. 49 CFR 535.6 Measurement and Calculation Procedures
    G. 49 CFR 535.7 Averaging, Banking, and Trading (ABT) Credit 
Program
    H. 49 CFR 535.8 Reporting and Recordkeeping Requirements
    I. 49 CFR 535.9 Enforcement Approach
    J. 49 CFR 535.10 How do manufacturers comply with fuel 
consumption standards?
III. Statutory Authority and Executive Order Reviews
    A. Executive Order 12866: Regulatory Planning and Review and 
Executive Order 13563: Improving Regulation and Regulatory Review
    B. Paperwork Reduction Act (PRA)
    C. Regulatory Flexibility Act (RFA)
    D. Unfunded Mandates Reform Act (UMRA)
    E. Executive Order 13132: Federalism
    F. Executive Order 13175: Consultation and Coordination With 
Indian Tribal Governments
    G. Executive Order 13045: Protection of Children From 
Environmental Health Risks and Safety Risks
    H. Executive Order 13211: Actions Concerning Regulations That 
Significantly Affect Energy Supply, Distribution or Use
    I. National Technology Transfer and Advancement Act (NTTAA)
    J. Executive Order 12898: Federal Actions To Address 
Environmental Justice in Minority Populations and Low-Income 
Populations
IV. Regulatory Text

I. General Information

A. Does this action apply to me?

    This action would affect companies that manufacture, sell, or 
import into the United States new heavy-duty engines and new Class 2b 
through 8 trucks, including combination tractors, all types of buses, 
vocational vehicles including municipal, commercial, recreational 
vehicles, and \3/4\-ton and 1-ton pickup trucks and vans. The heavy-
duty category incorporates all motor vehicles with a gross vehicle 
weight rating of 8,500 lbs. or greater, and the engines that power 
them, except for medium-duty passenger vehicles already covered by the 
corporate average fuel economy standards and greenhouse gas standards 
issued for light-duty vehicles.\1\
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    \1\ https://www.ecfr.gov/cgi-bin/text-idx?SID=7031ab132d93d2ab3729f7c3b8e412f0&mc=true&node=pt49.6.535&rgn=div5.
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    Regulated categories and entities include the following:

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                                                         Examples of
           Category               NAICS codes \A\        potentially
                                                      regulated entities
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Industry.....................  333618, 336111,       Motor vehicle
                                336112, 336120,       manufacturers and
                                336211, 336212,       engine
                                336611, 336911,       manufacturers.
                                336999.
Industry.....................  811111, 811112,       Commercial
                                811198, 423110.       importers of
                                                      vehicles and
                                                      vehicle
                                                      components.
Industry.....................  335312, 811198......  Alternative fuel
                                                      vehicle
                                                      converters.
Industry.....................  326199, 332431......  Portable fuel
                                                      container
                                                      manufacturers.
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\A\ North American Industry Classification System (NAICS).

    This list is not intended to be exhaustive, but rather provides a 
guide for readers regarding entities likely to be regulated by this 
action. If you have questions regarding the applicability of this 
action to a particular entity, consult the person listed in the FOR 
FURTHER INFORMATION CONTACT section.

B. What action is the Agency taking?

    This action proposes to amend the regulations that implement our 
fuel efficiency standards for engines and vehicles. The proposed 
amendments are technical in nature and include corrections and 
clarifications to a variety of existing regulatory provisions to 
improve consistency with related EPA standards and with NHTSA's 
original intent for those provisions. In other words, this proposal 
comprises a variety of small changes for multiple types of engines and 
vehicles.
    These amendments parallel similar ones in a rulemaking conducted by 
the EPA under RIN 2060-AU62. The proposed technical amendments are 
intended to maintain the alignment of EPA's Medium and Heavy-Duty 
Vehicle Greenhouse Gas Emissions and NHTSA's Fuel Efficiency Standards. 
The technical amendments to NHTSA regulations contained in this 
proposal are both necessary and completely align with the technical 
amendments finalized by EPA under the parallel rulemaking referenced in 
this paragraph.
    The majority of the amendments being proposed would modify existing 
test procedures for heavy-duty highway engines and vehicles. These test 
procedure changes would improve accuracy, and in some cases, reduce 
test burden.
    Other heavy-duty highway amendments would update NHTSA regulations 
to enhance implementation of existing fuel efficiency standards. For 
example, some changes would reduce the likelihood that manufacturers 
would need to conduct unique certification testing for compliance with 
NHTSA, Canadian, and Californian standards. Some amendments would make 
it easier for manufacturers to more fully account for the fuel 
efficiency benefits of advanced fuel efficiency improving technology, 
which could provide them the opportunity to generate additional fuel 
consumption improvements for compliance. These amendments are described 
in Section II.
    Additionally, as a matter of housekeeping, NHTSA is proposing to 
remove portions of its regulations that were vacated by the United 
States Court of Appeals for the District of Columbia Circuit. In 
November 2021, that Court ``vacate[d] all portions of the [2016 joint 
NHTSA and EPA] rule that apply to trailers.'' Truck Trailer Mfrs. 
Ass'n, Inc. v. EPA, 17 F.4th 1198, 1200 (D.C. Cir. 2021). The 
underlying statute authorizes NHTSA to examine the fuel efficiency of 
and prescribe fuel economy standards for ``commercial medium-duty [and/
or] heavy-duty on-highway vehicles.'' 49 U.S.C. 32902(b)(1)(C); 49 
U.S.C. 32902(k)(2). The Court reasoned that trailers do not qualify as 
``vehicles'' when that term is used in the fuel economy context because 
trailers are motorless and use no fuel. Truck Trailer Mfrs. Ass'n, 
Inc., 17 F.4th at 1200, 1204-08. Accordingly, the Court held that NHTSA 
does not have the authority to regulate the fuel economy of trailers. 
Id. at 1208.\2\ NHTSA is therefore proposing to remove the vacated 
trailer provisions from its regulations
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    \2\ For similar reasons, the Court also held that the statute 
authorizing EPA to regulate the emissions of ``motor vehicles'' does 
not encompass trailers. Id. at 1200-03. The Court affirmed, however, 
that both agencies still ``can regulate tractors based on the 
trailers they pull.'' Id. at 1208. Moreover, NHTSA is still 
authorized to regulate trailers in other contexts, such as under 49 
U.S.C. Chapter 301. See 49 U.S.C. 30102(a)(7) (defining ``motor 
vehicle'' to include ``a vehicle . . . drawn by mechanical power''); 
Truck Trailer Mfrs. Ass'n, Inc., 17 F.4th at 1207 (``A trailer is 
`drawn by mechanical power.' '').
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C. What are the incremental costs and benefits of this action?

    This action would be limited in scope and is not intended to 
include amendments that would have significant economic or 
environmental impacts. NHTSA has not drafted a Regulatory Impact 
Analysis.

II. Medium and Heavy-Duty Fuel Efficiency Program Technical Amendments

A. Overview

    In September 2011, NHTSA and EPA finalized Phase 1 of the 
Greenhouse Gas Emissions and Fuel Efficiency Standards for Medium- and 
Heavy-Duty Engines and Vehicles. The Phase 1 program covered new 
commercial heavy-duty vehicles and work trucks manufactured in model 
years 2014 to 2018 and beyond, with unique standards for combination 
tractors, heavy-duty pickup trucks and vans, and vocational vehicles, 
as well as separate standards for engines in tractors and vocational 
vehicles. NHTSA and EPA finalized Phase 2 of the standards in October 
2016. Besides standards being more stringent, the Phase 2 program also 
incorporated enhanced test procedures that (among other things) allow 
individual drivetrain and powertrain performance to be reflected in the 
vehicle certification process; and included an expanded and improved 
compliance simulation model.
    Since the promulgation of the Phase 2 regulations, manufacturers 
have been revising their internal test procedures for compliance with 
the new requirements that begin in model year 2021. In doing so, they 
have identified to the agencies several areas in which the test 
procedure regulations could be improved (in terms of overall accuracy, 
repeatability and clarity) without changing the effective stringency of 
the standards.
    In its May 12, 2020 NPRM, EPA proposed numerous changes to the test 
procedure regulations to address manufacturers' concerns and to address 
other issues it had identified. EPA sought comment on those changes and 
issued a final rule on December 28, 2020 responding to the comments and 
adjusting the regulatory changes as appropriate. NHTSA has carefully 
reviewed all technical amendments in the EPA proposal, public comments 
to the proposal, and the technical amendments that EPA finalized, and 
is proposing to make technical amendments that parallel the technical 
amendments that EPA finalized. NHTSA's proposed regulatory changes

[[Page 56158]]

described below consist primarily of references and definitions 
contained in NHTSA regulations which were impacted by the technical 
amendments finalized by the EPA. This proposal also includes various 
minor editorial changes to NHTSA regulations that simply correct 
typographical/formatting errors or revise NHTSA's regulatory text to 
improve clarity or to update references to EPA regulations that have 
changed as a result of the EPA technical amendments.

B. Greenhouse Gas Emission Model Supplemental Notice of Proposed 
Rulemaking

    In conjunction with its final rule issued on December 28, 2020, EPA 
issued a supplemental notice of proposed rulemaking (SNPRM) proposing 
further revisions to the Greenhouse Gas Emissions Model (GEM). In the 
supplemental notice of proposed rulemaking, EPA proposed to revise GEM 
after consideration of comments solicited and received on the Technical 
Amendments proposed rule. The details of these changes to the GEM and 
other considerations are provided on EPA's website.\3\
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    \3\ ``Greenhouse Gas Emissions Model (GEM) for Medium- and 
Heavy-Duty Vehicle Compliance.'' (n.d.). https://www.epa.gov/regulations-emissions-vehicles-and-engines/greenhouse-gas-emissions-model-gem-medium-and-heavy-duty. Accessed May 18, 2022.
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C. 49 CFR 535.1 Scope

    NHTSA is proposing to amend the scope provision of 49 CFR part 535 
to remove the reference to trailers, consistent with the 2021 D.C. 
Circuit decision as discussed above.

D. 49 CFR 535.3 Applicability

1. 535.3 (a) Enforcement Action Related to Compliance With NHTSA 
Standards
    NHTSA is proposing clarifications to its MDHD fuel efficiency 
program's applicability and compliance. More specifically, NHTSA is 
adding the clarification that manufacturers found not to comply with 
NHTSA's standards or regulations which apply to the construction of new 
and incomplete vehicles in 49 CFR parts 566 through 568 due to 
incorrect or fraudulent information will be subject to enforcement in 
accordance with Chapter 301 of Title 49 and deemed as not complying 
with Part 535. For example, if a manufacturer is unregistered with 
NHTSA as a manufacturer, as required by Part 566, or fails to affix an 
accurate certification label to a complete or incomplete vehicle, then 
the manufacturer concurrently violates both NHTSA's safety and fuel 
efficiency regulations. If the manufacturer is unable to correct its 
noncompliance(s), the manufacturer fails to comply with NHTSA's fuel 
efficiency program and is unable to earn fuel efficiency credits or 
must forfeit its credits, if already issued by NHTSA.
2. 535.3(d)(5) Exclusion of Heavy-Duty Trailers
    NHTSA is proposing to delete 535.3(d)(5) consistent with the 2021 
D.C. Circuit decision, discussed above.
3. 535.3(e)(1)(i) Vocational Vehicle Tire Speed Rating Exemption
    NHTSA is proposing to update this section with a new applicability 
provision for vocational vehicles, to reflect the rulemaking intention 
and to be consistent with EPA regulations. The added provision allows 
for vocational vehicles with a date of manufacture before January 1, 
2021 to automatically qualify for an exemption under 40 CFR 1037.631 if 
the tires installed on the vehicle have a maximum speed rating at or 
below 55 miles per hour.
4. 535.3(e)(1)(ii) Request for Exemption
    NHTSA is proposing to add a second exemption clause to this section 
where vehicle manufacturers may request exemption under the EPA defined 
provisions found in 40 CFR 1037.631 and based on other criteria that 
are equivalent to those specified in 40 CFR 1037.631(a).
5. 535.3(e)(2)(ii) Early Certification for Small Manufacturers
    Vehicle manufacturers that qualify as small businesses are exempt 
from the Phase 1 standards, but must meet the Phase 2 standards 
beginning January 1, 2022.\4\ However, some vehicle families have been 
certified voluntarily to Phase 1 standards by small manufacturers. In 
an effort to encourage more voluntary early certification to Phase 1 
standards, EPA finalized a new interim provision in 40 CFR 
1037.150(y)(4) for small manufacturers that certify their entire U.S.-
directed production volume to the Phase 1 standards for calendar year 
2021 (see 85 FR at 28150). These small manufacturers would be allowed 
to certify to the Phase 1 standards for model year 2022, instead of the 
otherwise applicable Phase 2 standards. The agencies believe that early 
compliance with the Phase 1 standards should more than offset any 
reduction in benefits that would otherwise be achieved from meeting 
Phase 2 standards starting January 1, 2022.\5\
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    \4\ In December 2020, EPA proposed further revisions to the 
Phase 2 GEM Simulation Model in the December 2020 Notice of Proposed 
Rulemaking (NRPM) for technical amendments to the GHG Emissions 
Standards and Fuel Efficiency Standards for Medium- and Heavy-Duty 
VehicleS. EPA's GEM model is released and can be found https://www.epa.gov/regulations-emissions-vehicles-and-engines/greenhouse-gas-emissions-model-gem-medium-and-heavy-duty which incorporates the 
revisions being considered.'' (last accessed: May 11, 2022)
    \5\ EPA stated that it believed that the magnitude of any impact 
on air quality would be small because of the low production volumes 
from these small business manufacturers.
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    The finalized provision also allows the Phase 1 compliance credits 
that small manufacturers generate from model year 2018 through 2022 
vocational vehicles to be used through model year 2027. Under the 
existing regulations, all manufacturers that generate vehicle credits 
under the Phase 1 program can use these credits for compliance in the 
Phase 2 averaging, banking, and trading program, but these credits are 
only subject to a five-year credit life. As EPA stated in its final 
rule, the agencies believe that the limit on credit life can be 
problematic for small manufacturers with limited product lines which 
allows them less flexibility in averaging, and the longer credit life 
will provide them additional flexibility to ensure all their products 
are fully compliant by the time the Phase 2 standards are fully phased 
in for model year 2027.
    EPA received no adverse comment to either proposal for small 
manufacturers in Sec.  1037.150(y)(4) and, therefore, finalized the 
provisions. NHTSA is proposing to implement parallel changes by 
updating Sec.  535.5(e)(2)(ii) with the same provisions which can be 
found at Sec.  535.5(e)(2)(ii)(A) and Sec.  535.5(e)(2)(ii)(B), 
respectively. These changes would also maintain program alignment 
across both agencies.
6. 535.3(e)(3)--Transitional Allowance for Trailers
    NHTSA is proposing to delete 535.3(e)(3) consistent with the 2021 
D.C. Circuit decision, discussed above.
7. 535.3(j) Potential Enforcement Actions for Incomplete, Incorrect or 
Fraudulent Information
    NHTSA is proposing to add a new section to the program 
applicability regulations. This new section provides clarifications and 
potential outcomes under the NHTSA fuel efficiency program, if EPA 
denies, suspends or revokes, a manufacturer's certificate of conformity 
in accordance with 40 CFR 1036.255 or 1037.225, due to incomplete, 
incorrect or fraudulent information.

[[Page 56159]]

E. 49 CFR Part 535.4 Definitions

    NHTSA is proposing adding and modifying several definitions to 
clarify the meaning of certain terms. Almost all of these definitions 
reference EPA regulatory definitions to ensure alignment of the NHTSA 
and EPA programs.
1. Adjustable Parameter
    NHTSA is proposing to add the definition for adjustable parameter 
as having the meaning given in 40 CFR 1037.801.
2. Alternative Fuel Conversion
    NHTSA is proposing to add the definition for alternative fuel 
conversion as having the meaning given in 40 CFR 85.502.
3. Averaging Sets
    NHTSA is proposing to delete ``long trailer'' and ``short trailer'' 
in reference to averaging sets definition in HD program, consistent 
with the 2021 D.C. Circuit decision.
4. Certificate of Conformity
    After receiving no adverse comments, EPA finalized clarifying 
statements related to the information submitted in an application for a 
certificate of conformity. These clarifying statements are related to 
determining the date of application submission and the submission date 
for any potential changes to applications that are deemed incomplete or 
amended. NHTSA is proposing to update its Certificate of Conformity 
definition in Part 535 to include the same language finalized by EPA 
because the clarifications are also applicable to NHTSA's fuel 
efficiency program. These changes would also maintain program alignment 
across the agencies.
5. Hybrid Engine, Hybrid Powertrain, and Hybrid Vehicle
    NHTSA is proposing to revise its definition of hybrid engine or 
hybrid powertrain in 49 CFR part 535.4 to reference directly the EPA 
definition for these powertrain types found in 1037.801. EPA changed 
its definitions for ``hybrid engine or powertrain'' and ``hybrid 
vehicle'' to be consistent with the revised hybrid powertrain test 
procedures it recently finalized in part 1036 subpart F, and the 
definitions of ``hybrid powertrain'' and ``mild hybrid'' added to 40 
CFR part 1036. NHTSA is proposing corresponding revisions to the Part 
535 definitions that add examples of systems that qualify as hybrid 
engines or powertrains, specifically systems that recover kinetic 
energy and use it to power an electric heater in the aftertreatment.
6. Emission Data Engine
    NHTSA is proposing to add the definition for emission data engine 
as having the meaning given in 40 CFR 1036.801.
7. Engine Configuration
    NHTSA is proposing to add the definition for engine configuration 
as having the meaning given in 40 CFR 1036.801.
8. Flatbed Trailer
    NHTSA is proposing to delete the definition of flatbed trailer, 
consistent with the 2021 D.C. Circuit decision.
9. Flexible Fuel
    NHTSA is proposing to add the definition for flexible fuel as 
having the meaning given in 40 CFR 1036.801.
10. Fuel Type
    NHTSA is proposing to add the definition for fuel type as having 
the meaning given in 40 CFR 1036.801.
11. Gear Ratio
    NHTSA is proposing to add the definition for gear ratio as having 
the meaning given in 40 CFR 1036.801.
12. Greenhouse Gas
    NHTSA is proposing to add the definition for greenhouse gas as 
having the meaning given in 40 CFR 1036.801.
13. Good Engineering Judgment
    NHTSA is proposing to add the definition for good engineering 
judgement as having the meaning given in 40 CFR 1068.30.
14. Heavy-Duty Engine
    NHTSA is proposing to add the definition for heavy-duty engine as 
having the meaning given in 40 CFR 1036.801 and 49 CFR part 523.
15. Hybrid
    NHTSA is proposing to add the definition for hybrid as having the 
meaning given in 40 CFR 1036.801.
16. Identification Number
    NHTSA is proposing to add the definition for identification number 
as having the meaning given in 40 CFR 1037.801.
17. Manufacturer
    NHTSA is proposing to add the definition for manufacturer as having 
the meaning given in 40 CFR 1037.801.
18. Model Year
    NHTSA is proposing revisions to the definition for model year as it 
pertains to vehicles and engine installations. NHTSA is also proposing 
to delete references to trailers in this definition, consistent with 
the 2021 D.C. Circuit decision.
19. Motor Vehicle
    NHTSA is proposing to add the definition for motor vehicle as 
having the meaning given in 49 U.S.C. 32901.
20. Multi-Purpose
    NHTSA is proposing to add the definition for multi-purpose as 
having the meaning given in 40 CFR 1037.801.
21. Neutral-Idle
    NHTSA is proposing to add the definition for neutral idle as having 
the meaning given in 40 CFR 1037.801.
22. New Vehicles
    NHTSA is proposing to add the definition for new vehicles as having 
the meaning given to ``new motor vehicle'' given in 40 CFR 1037.801.
23. Percent
    NHTSA is proposing to add the definition for percent as having the 
meaning given in 40 CFR 1037.801.
24. Placed Into Service
    NHTSA is proposing to add the definition for placed into service as 
having the meaning given in 40 CFR 1037.801.
25. Phase 2
    NHTSA is proposing to delete reference to fuel efficiency and 
greenhouse gas emissions standards for trailer regulations, consistent 
with the 2021 D.C. Circuit decision.
26. Regulatory Subcategory
    NHTSA is proposing to delete the section (4) reference to trailer 
subcategory, consistent with the 2021 D.C. Circuit decision.
27. Relating
    NHTSA is proposing to add the definition for relating as having the 
meaning given in 40 CFR 1037.801.
28. Round
    NHTSA is proposing to add the definition for round as having the 
meaning given in 40 CFR1065.1001.
29. Standard Payload
    NHTSA is proposing to remove the definition of standard payload for 
trailers, consistent with the 2021 D.C. Circuit decision.
30. Standard Tractor
    NHTSA is proposing to correct the definition for standard tractor 
as having

[[Page 56160]]

the meaning given in 40 CFR 1037.801 versus the currently defined 40 
CFR 1037.501.
31. Standard Trailer
    NHTSA is proposing to correct the definition for standard trailer 
as having the meaning given in 40 CFR 1037.801 versus the currently 
defined 40 CFR 1037.501.
32. Suspend
    NHTSA is proposing to add the definition for suspend as having the 
meaning given in 40 CFR 1037.801.
33. Vehicle Service Class
    NHTSA is proposing to revise the vehicle service class definition 
found in 49 CFR part 535.4 to directly reference EPA regulation 40 CFR 
1037.140. NHTSA is proposing this revision to avoid redundancy across 
the agencies and align directly with EPA revisions finalized in their 
recent technical amendments rulemaking.
    The recent EPA technical amendments clarify that the classification 
for tractors, where provisions are the same as vocational vehicles, are 
applicable to both hybrid and non-hybrid vehicles. The amendments also 
clarify that Class 8 hybrid and electric vehicles are Heavy HDVs while 
all other vehicles are classified by GVWR classes.
    EPA explained in its final rule that prior to these revisions, 
manufacturers had expressed concern that the Phase 2 regulations were 
not specific enough regarding how to classify hybrid vocational 
vehicles, because vocational vehicles are generally classified by the 
class of the engines (as opposed to tractors, which are classified 
based on GVW), which was not applicable to electrically driven vehicles 
that have no engine.
34. Void
    NHTSA is proposing to add the definition for void as having the 
meaning given in 40 CFR 1037.801.

F. 49 CFR Part 535.5 Standards

1. 49 CFR Part 535.5(a)
    NHTSA is proposing to add clarification to the regulatory standards 
relating to heavy-duty pickup trucks and vans. More specifically, the 
agency is proposing adding language that ensures manufacturer options 
for EPA and NHTSA vehicle standards are aligned. Please refer to the 
proposed regulatory text for additional details.
2. 49 CFR Part 535.5(b)
    NHTSA is proposing to add clarification to the regulatory standards 
relating to heavy-duty vocational vehicles. More specifically, the 
agency is proposing adding language that ensures manufacturer options 
for EPA and NHTSA vehicle standards are aligned. Please refer to the 
proposed regulatory text under this section for additional details.
3. 49 CFR Part 535.5(b)(1)
    NHTSA is proposing deletion of the mandatory requirements for all 
heavy-duty vocational vehicles to be equipped tire pressure monitoring 
systems. The proposed revision, however, does not include removal of 
this mandatory requirement for motorhomes, as specified under 49 CFR 
part 535.5 (b)(6)(vi) and 49 CFR 571.138.
4. 49 CFR Part 535.5(b)(4)
    NHTSA is proposing to correct the Vocational HHD Vehicle Regional 
compression ignition (CI) standards. The current published standard for 
this vehicle class is incorrect, and does not align with EPA GHG 
standards for this vehicle type. The incorrect values resulted from an 
incorrect calculation during the Phase 2 rulemaking which intended to 
maintain alignment of the NHTSA and EPA standards. The proposed 
corrected value for this regulatory class is 20.1375 gallons per 1000-
ton miles vs. the currently published standard of 20.2358.
5. 49 CFR Part 535.5(c)
    NHTSA is proposing to add clarification to the regulatory standards 
relating to truck tractors. More specifically, the agency is proposing 
adding language that ensures manufacturer options for EPA and NHTSA 
vehicle standards are aligned across both agencies. Please refer to the 
proposed regulatory text for additional details.
6. 49 CFR Part 535.5(c)(5)
    NHTSA is proposing to revise its Alternate Fuel Consumption 
Standards for Tractors above 120,000 GCWR for 2021 model year and 
later. The revised standards are directly aligned with the revised GHG 
standards for this class of vehicles proposed and finalized by EPA as 
part of its technical amendments rulemaking.\6\ The revised standards 
provide additional clarity on this vehicle class along with fuel 
efficiency standards that increase in three increments, model years 
2021-2023, model years 2024-2026, model years 2026 and later.
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    \6\ In December 2020, EPA proposed further revisions to the 
Phase 2 GEM Simulation Model in the December 2020 Notice of Proposed 
Rulemaking (NRPM) for technical amendments to the GHG Emissions 
Standards and Fuel Efficiency Standards for Medium- and Heavy-Duty 
Vehicles and is soliciting comments on these revisions. S. The 
latest EPA's GEM model is released and can be found https://www.epa.gov/regulations-emissions-vehicles-and-engines/greenhouse-gas-emissions-model-gem-medium-and-heavy-duty which incorporates the 
revisions being considered.'' (last accessed: May 11, 2022)
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    As described in EPA's final rulemaking action, the agencies 
originally defined these alternate fuel consumption and greenhouse-gas 
standards during the Phase 2 rulemaking, to enable Environment and 
Climate Change Canada (ECCC) to fully harmonize with the U.S.'s HD 
Phase 2 standards.
    In the interim, ECCC has since adopted final standards for these 
120,000 to 140,000 pound GCWR tractors, which differ from the optional 
standards finalized in Phase 2.\7\ Since the purpose of these standards 
was to facilitate certification of vehicles intended for Canada, EPA 
proposed optional standards in 40 CFR 1037.670 that would be the same 
as the final ECCC standards, and did not receive any adverse comments 
regarding that proposal. NHTSA is proposing to adopt these alternative 
standards, in gallons per 1,000 ton-miles units, for 120,000 to 
140,000-pound GCWR tractors that are equivalent to the EPA and ECCC 
standards. This would maintain harmonization across the programs for 
all three agencies.
---------------------------------------------------------------------------

    \7\ Regulations Amending the Heavy-duty Vehicle and Engine 
Greenhouse Gas Emission Regulations and Other Regulations Made Under 
the Canadian Environmental Protection Act, 1999: SOR/2018-98, Canada 
Gazette, Part II, Volume 152, Number 11, May 16, 2018.
---------------------------------------------------------------------------

7. 49 CFR Part 535.5(d)
    NHTSA is proposing to add clarifications in 49 CFR part 535.5(d) 
and 535.6(d) to expand its regulatory provision to optionally 
accommodate powertrain families and subfamilies added by EPA in 40 CFR 
1036.108(a) and 1036.230(d) and (f). The EPA provisions allow 
manufacturers to apply CO2 standards to powertrain families 
and subfamilies. They also allow manufacturers to optionally certify 
powertrains using the engine testing provisions in 40 CFR 1036 instead 
of 40 CFR 1037. Manufacturers may choose to include electric powertrain 
and hybrid electric powertrain emissions in their engine families or 
subfamilies under part 1036 instead of (or in addition to) the 
otherwise applicable engine fuel maps. Doing so would provide the same 
compliance options for manufacturers under the EPA and NHTSA programs.

[[Page 56161]]

8. 49 CFR Part 535.5(d)(3)
    NHTSA is proposing to correct the Heavy-Duty Engine Fuel 
Consumption Standards for Phase 1 MHD and HHD compression ignition (CI) 
tractor engines. The current published standards for these engine 
classes are incorrect, and do not align with EPA GHG standards for 
these engine types. The incorrect values resulted from an incorrect 
calculation during the Phase 2 rulemaking which intended to maintain 
alignment of the NHTSA and EPA standards. The proposed correct values 
for these regulatory classes are 4.7839 gallons per 100 hp-hr for MHD 
CI tractor engines and 4.5187 gallons per 100 hp-hr for HHD CI tractor 
engines.
9. 49 CFR Part 535.5(d)(11)
    NHTSA is proposing to correct the Alternate transition option for 
Phase 2 engine standards (A) and (C). The current published standards 
for these engine standards are incorrect, and do not align with current 
EPA GHG standards for these engine types. The incorrect values resulted 
from an incorrect calculation during the Phase 2 rulemaking which 
intended to maintain alignment for the NHTSA and EPA standards. The 
proposed corrected values for these regulatory classes are 5.3241 
gallons per 100 hp-hr for MHD vocational vehicle engines and 5.0098 
gallons per 100 hp-hr for HHD vocational engines.
10. 49 CFR Part 535.5(e)
    NHTSA is proposing to delete 535.3(e), Heavy Duty Trailer, 
consistent with the 2021 D.C. Circuit decision, discussed above.

G. 49 CFR Part 535.6 Measurement and Calculation Procedures

1. 49 CFR Part 535.6(b)(1)
    NHTSA is proposing to add a reference to EPA's finalized regulation 
40 CFR 1037.150 to 49 CFR part 535.6(b)(1). This added reference would 
provide clear guidance that would be used to determine the proper 
vehicle and vehicle family to select when determining a manufacturer's 
regulatory subcategories for vocational vehicles and tractors. The 
addition would also maintain program alignment across the agencies.
2. 49 CFR Part 535.6(b)(4)(ii)
    NHTSA is proposing to add a reference to EPA's finalized regulation 
40 CFR 1037.525 to 49 CFR part 535.6(b)(4)(ii). This added reference 
would clarify how to determine a high-roof tractor's aerodynamic 
performance. EPA finalized this revision to more clearly relate the 
drag areas to the defined effective yaw variable, as recommended by EMA 
as a comment to the EPA proposal.\8\ NHTSA is proposing to adopt this 
same measurement schema to keep programs aligned across the agencies.
---------------------------------------------------------------------------

    \8\ The variables 
CdAeffective-yaw-coastdown and 
CdAeffective-yaw-alt are now 
CdAcoastdown([psi]eff) and 
CdAalt([psi]eff), respectively.
---------------------------------------------------------------------------

3. 49 CFR Part 535.6(b)(5)(i)
    NHTSA is proposing to revise 49 CFR part 535.6(b)(5)(i) to change 
the reference to an EPA regulation from 40 CFR 1036.510 to 1036.503. 
This revision would align the NHTSA regulations with the revised and 
finalized EPA regulations. This change would keep the programs of both 
agencies aligned.
4. 49 CFR Part 535.6(b)(5)(v)(E)(3)
    NHTSA is proposing to add a new requirement in 49 CFR part 
535.6(b)(5)(v)(E)(3) that allows manufacturers to characterize torque 
converters to allow a manufacturer to determine their own torque 
converter capacity factor instead of using the default value provided 
in GEM. This change aligns with EPA provisions in 40 CFR 1037.570 and 
maintains program alignment across both agencies.
5. 49 CFR Part 535.6(b)(5)(v)(E)(4)
    NHTSA is proposing to add a new requirement in 49 CFR part 
535.6(b)(5)(v)(E)(4) to allow vocational vehicles to input a value for 
neutral coasting in GEM as a compliance option for its fuel consumption 
program. This revision would align the NHTSA regulations with the EPA 
regulations in 40 CFR 1037.52 and keep both agencies aligned for 
program compliance.
6. 49 CFR Part 535.6(d)
    Like 49 CFR part 535.5(d), NHTSA is proposing to add clarifications 
in NHTSA 535.6(d) to expand its regulatory provision to optionally 
accommodate powertrain families and subfamilies added by EPA in 40 CFR 
1036.108(a) and 1036.230(d) and (f). The EPA provisions allow 
manufacturers to apply CO2 standards to powertrain families 
and subfamilies. They also allow manufacturers to optionally certify 
powertrains using the engine testing provisions in 40 CFR 1036 instead 
of 40 CFR 1037. Manufacturers may choose to include electric powertrain 
and hybrid electric powertrain emissions in their engine families or 
subfamilies under part 1036 instead of (or in addition to) the 
otherwise applicable engine fuel maps. Doing so would provide the same 
compliance options for manufacturers under the EPA and NHTSA programs.
7. 49 CFR Part 535.6(d)(1)
    NHTSA is proposing a consolidation of references to EPA regulation 
40 CFR 1036.501 for engines in heavy-duty truck tractors and vocational 
vehicles that make up each of the manufacturer's regulatory 
subcategories.
8. 49 CFR Part 535.6(d)(2)
    Like 49 CFR part 535.6(d), NHTSA is proposing to add clarifications 
to 535.6(d)(2) that align with the EPA regulation 40 CFR 1036.230(f) 
and to expand this regulatory provision to accommodate powertrains 
other than engines and to also include sub-families.
9. 49 CFR Part 535.6(d)(3)
    NHTSA is proposing to add a new section to 49 CFR part 535.6(d) to 
address medium and heavy heavy-duty engines. This new subsection (3) 
mirrors and references the recently finalized EPA technical amendment 
for 40 CFR 1036.501 addressing the same regulatory items. Subsequently, 
existing sections 49 CFR part 535.6(d)(3) and 49 CFR part 535.6(d)(4) 
would be incremented by one as a result of inserting this new section, 
resulting in the existing 49 CFR part 535.6(d)(3) becoming 49 CFR part 
535.6(d)(4), and the existing 49 CFR part 535.6(d)(4) becoming 49 CFR 
part 535.6(d)(5).
10. 49 CFR Part 535.6(d)(3)(ii)
    NHTSA is proposing to add clarifications to 49 CFR part 
535.6(d)(3)(ii) that expand this regulatory provision to accommodate 
powertrains other than engines and to also include sub-families.
11. 49 CFR Part 535.6(e)
    NHTSA is proposing to delete 49 CFR part 535.6(e) reference to 
heavy duty trailer, consistent with the 2021 D.C. Circuit decision.

H. 49 CFR 535.7 Averaging, Banking, and Trading (ABT) Credit Program

1. 49 CFR Part 535.7(a)
    NHTSA is proposing to delete reference to trailer manufacturers, 
consistent with the 2021 D.C. Circuit decision.
2. 49 CFR Part 535.7(a)(2)(v)
    NHTSA is proposing to delete reference to application of using bank 
or trade credit to trailer, consistent with the 2021 D.C. Circuit 
decision.

[[Page 56162]]

3. 49 CFR Part 535.7(a)(3)(v)
    NHTSA is proposing to delete reference to trailer manufacturers 
generating credits, consistent with the 2021 D.C. Circuit decision.
4. 49 CFR part 535.7(a)(4)
    NHTSA is clarifying its requirements for trading fuel consumption 
credits. Tractor, vocational vehicle and engine manufacturers may trade 
credits generated for vehicle or engine families or subfamilies while 
manufacturers of heavy-duty pickup trucks and vans certified as 
complete vehicles may trade credits generated for averaging sets. NHTSA 
is also proposing to delete reference to trading credits earned for 
compliance with trailer regulations, consistent with the 2021 D.C. 
Circuit decision.
5. 49 CFR Part 535.7(a)(4)(v)
    NHTSA is proposing to delete reference to trailer manufacturers 
generating credits starting in model year 2027 may not bank or trade 
credits, consistent with the 2021 D.C. Circuit decision.
6. 49 CFR Part 535.7(a)(8)
    The agency is proposing additions to the credit calculation 
provisions and to the calculations used for vocational vehicles 
transitioning to Phase 2 standards. More specifically, NHTSA is 
proposing to mirror the crediting provisions finalized by EPA as part 
of their technical amendments rulemaking. These added provisions 
include extending credit life, allowing off-cycle credits, allowing 
credit values for automatic tire inflation systems, and allowing 
automatic engine shutdown systems.
7. 49 CFR Part 535.7(a)(9)(iv)(B)
    NHTSA is proposing to provide clarifications regarding production 
limits for drayage tractors under the custom chassis allowance, and how 
it relates to corporate relationships regarding averaging, banking and 
trading of credits.
8. 49 CFR Part 535.7(a)(11)
    NHTSA is proposing regulatory provisions that prevent the 
calculation of any Phase 1 fuel consumption credits more than once for 
compliance unless the regulations explicitly allow it.
9. 49 CFR Part 535.7(b)(1)
    NHTSA is proposing to amend the Total MY Fleet FCC equation because 
the current CFR shows an incorrect equation.
10. 49 CFR Part 535.7(c)(1)
    NHTSA is proposing to amend the Vehicle Family FCC equation because 
the current CFR shows an incorrect equation.
11. 49 CFR Part 535.7(d)(1)
    NHTSA is proposing to amend the Engine Family FCC equation because 
the current CFR shows an incorrect equation.
12. 49 CFR Part 535.7(d)(7)(ii)
    NHTSA is proposing to the remove the usage restrictions associated 
with model year 2021 and earlier vocational engine credits. 
Manufacturers may use Phase 1 credits in the Phase 2 program using an 
adjustment factor to prorate credits to compensate for changes in the 
technologies and drive cycles used in developing the Phase 2 standards. 
NHTSA is also correcting the adjustment factor values used for the 
conversion to fuel consumption values in terms of gallons/100 hp-hr 
versus the currently published grams of CO2 reference 
values.
13. 49 CFR 535.7(e)
    NHTSA is proposing to delete 535.7(e), ABT Provision for Trailers, 
consistent with the 2021 D.C. Circuit decision, discussed above.
14. 49 CFR 535.7(f)(2)(v)
    NHTSA is proposing to delete the provision formerly labeled as 
535.7(f)(2)(v) reference to application of off-cycle provision to 
trailers, consistent with the 2021 D.C. Circuit decision, discussed 
above.

I. 49 CFR 535.8 Reporting and Recordkeeping Requirements

1. 49 CFR Part 535.8(a)(6)
    NHTSA is proposing to amend the address to 1200 New Jersey Avenue, 
NVS-200, Office W45-306, SE, Washington, DC 20590, because the current 
CFR shows an incorrect address.
2. 49 CFR Part 535.8(b)(11)(i)(C)
    Like 49 CFR part 535.6(d), NHTSA is proposing to add clarifications 
to 49 CFR part 535.8(b)(11)(i)(C) that expand this regulatory provision 
to accommodate powertrains other than engines and to also include sub-
families.
3. 49 CFR Part 535.8(c)(13)(h)(i)
    NHTSA is proposing additions to this reporting requirement that 
clarify potential enforcement actions associated with the submission of 
information that is fraudulent or grossly negligent or otherwise 
provided in bad faith.
4. 49 CFR Part 535.8(g)(12)
    NHTSA is proposing to delete reference to requirements for trailer 
manufacturers, consistent with the 2021 D.C. Circuit decision, 
discussed above.

J. 49 CFR 535.9 Enforcement Approach

1. 49 CFR Part 535.9(a)(1)(i)
    NHTSA is proposing additional language and clarifications that 
NHTSA will perform confirmatory testing and collaborate with EPA 
regarding any potential issues with testing results.
2. 49 CFR Part 535.9(a)(1)(v)
    NHTSA is proposing additional language and clarifications with 
respect to any GEM inputs in a manufacturer's application for 
certification or in the end of the year ABT final reports. The proposed 
revisions include streamlining references to EPA regulations.

K. 49 CFR 535.10 How do manufacturers comply with fuel consumption 
standards?

1. 49 CFR Part 535.10(a)(3)
    NHTSA is clarifying that EPA's compliance requirements 40 CFR 
1037.601 and 40 CFR part 1068 apply similarly to NHTSA's fuel 
consumption program, except for the warranty provisions in 40 CFR 
1037.601(a)(5).
2. 49 CFR Part 535.10(a)(6)
    NHTSA is proposing the addition of language clarifying that 
vehicles required to meet the fuel consumption standards of this part 
must also comply with the same requirements as specified in the EPA 
regulation 40 CFR 1037.115.
3. 49 CFR Part 535.10(c)
    NHTSA is proposing to delete the 535.10(c)(2) reference to box 
trailers, as well as the 535.10(c)(3) reference to manufacturer's 
compliance if their trailer meet specified standards, consistent with 
the 2021 D.C. Circuit decision, discussed above.

III. Statutory Authority and Executive Order Reviews

A. Executive Order 12866: Regulatory Planning and Review and Executive 
Order 13563: Improving Regulation and Regulatory Review

    This action is not a significant regulatory action and was 
therefore not submitted to the Office of Management and Budget (OMB) 
for review.

B. Paperwork Reduction Act (PRA)

    This action does not impose any new information collection burden 
under the PRA. OMB has previously approved the information collection 
activities

[[Page 56163]]

contained in the existing regulations and has assigned OMB control 
numbers 2060-0104, 2060-0287, 2060-0338, 2060-0545, 2060-0641. This 
rule clarifies and simplifies procedures without affecting information 
collection requirements.

C. Regulatory Flexibility Act (RFA)

    I certify that this action would not have a significant economic 
impact on a substantial number of small entities under the RFA. In 
making this determination, the impact of concern is any significant 
adverse economic impact on small entities. An agency may certify that a 
rule will not have a significant economic impact on a substantial 
number of small entities if the rule relieves regulatory burden, has no 
net burden or otherwise has a positive economic effect on the small 
entities subject to the rule. This proposed action is designed to 
reduce testing burdens, increase compliance flexibility, and make 
various corrections and adjustments to compliance provisions. We 
therefore anticipate no costs and no regulatory burden associated with 
this proposed rule. We have concluded that this proposed action will 
have no significant increase in regulatory burden for directly 
regulated small entities.

D. Unfunded Mandates Reform Act (UMRA)

    This action does not contain any unfunded mandate as described in 
UMRA, 2 U.S.C. 1531-1538, and does not significantly or uniquely affect 
small governments. The proposed action imposes no enforceable duty on 
any state, local or tribal governments. Requirements for the private 
sector do not exceed $100 million in any one year.

E. National Environmental Policy Act (NEPA)

    NHTSA has analyzed this proposed rule for the purposes of the 
National Environmental Policy Act. The agency has determined that 
implementation of this action will not have any significant impact on 
the quality of the human environment.

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.

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

    This action does not have tribal implications as specified in 
Executive Order 13175. This proposed rule will be implemented at the 
Federal level and affects engine and vehicle manufacturers. Thus, 
Executive Order 13175 does not apply to this action.

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

    This action is not subject to Executive Order 13045 because it is 
not economically significant as defined in Executive Order 12866, and 
because there are no environmental health or safety risks created by 
this action that could present a disproportionate risk to children.

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

    This action is not a ``significant energy action'' because it is 
not likely to have a significant adverse effect on the supply, 
distribution, or use of energy. We have concluded that this action is 
not likely to have any adverse energy effects because it is designed 
merely to reduce testing burdens, increase compliance flexibility, and 
make various corrections and adjustments to compliance provisions.

J. National Technology Transfer and Advancement Act (NTTAA)

    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 
involves technical standards.

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

    NHTSA believes this action does not have disproportionately high 
and adverse human health or environmental effects on minority 
populations, low-income populations or indigenous peoples, as specified 
in Executive Order 12898 (59 FR 7629, February 16, 1994). Due to the 
lack of environmental impact, these proposed regulatory changes will 
not have a disproportionate adverse effect on minority populations, 
low-income populations, or indigenous peoples.

IV. Regulatory Text

List of Subjects in 49 CFR Part 535

    Energy conservation, Fuel, Fuel economy, Motor vehicles.

    For the reasons discussed in the preamble, the National Highway 
Traffic Safety Administraton proposes to amend 49 CFR part 535 as 
follows:

0
1. Revise Part 535 to read as follows:

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

Sec.
535.1 Scope.
535.2 Purpose.
535.3 Applicability.
535.4 Definitions.
535.5 Standards.
535.6 Measurement and calculation procedures.
535.7 Averaging, banking, and trading (ABT) credit program.
535.8 Reporting and recordkeeping requirements.
535.9 Enforcement approach.
535.10 How do manufacturers comply with fuel consumption standards?

    Authority:  49 U.S.C. 32902.


Sec.  535.1  Scope.

    This part establishes fuel consumption standards pursuant to 49 
U.S.C. 32902(k) for work trucks and commercial medium- and heavy-duty 
on-highway vehicles (hereafter referenced as heavy-duty vehicles), and 
engines manufactured for sale in the United States. This part 
establishes a credit program manufacturers may use to comply with 
standards and requirements for manufacturers to provide reports to the 
National Highway Traffic Safety Administration regarding their efforts 
to reduce the fuel consumption of heavy-duty vehicles and engines.


Sec.  535.2  Purpose.

    The purpose of this part is to reduce the fuel consumption of new 
heavy-duty vehicles and engines by establishing maximum levels for fuel 
consumption standards while providing a flexible credit program to 
assist manufacturers in complying with standards.

[[Page 56164]]

Sec.  535.3  Applicability.

    (a) This part applies to manufacturers that produce complete and 
incomplete heavy-duty vehicles as defined in 49 CFR part 523, and to 
the manufacturers of all heavy-duty engines manufactured for use in the 
applicable vehicles for each given model year. Incomplete vehicle 
manufacturers must comply with NHTSA's safety requirements in 49 CFR 
parts 565, 567 and 568 to comply with part 535. Manufacturers found 
under this program not to comply with NHTSA's safety standards or 
regulations which apply to the construction of new and incomplete 
vehicles in 49 CFR parts 566 through 568 due to incorrect or fraudulent 
information will be subject to enforcement in accordance with Chapter 
301 of Title 49 and deemed as not complying with Part 535. If the 
manufacturer is unable to correct its noncompliance with NHTSA, the 
manufacturer fails to comply with the fuel efficiency program and is 
unable to earn fuel efficiency credits.
    (b) This part also applies to alterers, final stage manufacturers, 
and intermediate manufacturers producing vehicles and engines or 
assembling motor vehicles or motor vehicle equipment under special 
conditions. Manufacturers comply with this part by following the 
special conditions in 40 CFR 1037.620, 1037.621, and 1037.622 in which 
EPA allows manufacturer to:
    (1) Share responsibility for the vehicles they produce. 
Manufacturers sharing responsibility for complying with emissions and 
fuel consumption standards must submit to the agencies a joint 
agreement as specified in 49 CFR 534.8(a);
    (2) Have certificate holders sell or ship vehicles that are missing 
certain emission-related components to be installed by secondary 
vehicle manufacturers;
    (3) Ship partially complete vehicles to secondary manufacturers;
    (4) Build electric vehicles; and
    (5) Build alternative fueled vehicles from all types of heavy-duty 
engine conversions. The conversion manufacturer must:
    (i) Install alternative fuel conversion systems into vehicles 
acquired from vehicle manufacturers prior to first retail sale or prior 
to the vehicle's introduction into interstate commerce.
    (ii) Be designated by the vehicle manufacturer and EPA to be the 
certificate holder.
    (iii) Omit alternative fueled vehicles from compliance with vehicle 
fuel consumption standards, if-
    (A) Excluded from EPA emissions standards; and
    (B) A reasonable technical basis exist that the modified vehicle 
continues to meet emissions and fuel consumption vehicle standards.
    (c) Vehicle and engine manufacturers that must comply with this 
part include manufacturers required to have approved certificates of 
conformity from EPA as specified in 40 CFR parts 86, 1036, and 1037.
    (d) The following heavy-duty vehicles and engines are excluded from 
the requirements of this part:
    (1) Vehicles and engines manufactured prior to January 1, 2014, 
unless certified early under NHTSA's voluntary provisions in Sec.  
535.5.
    (2) Medium-duty passenger vehicles and other vehicles subject to 
the light-duty corporate average fuel economy standards in 49 CFR parts 
531 and 533.
    (3) Recreational vehicles, including motor homes manufactured 
before January 1, 2021, except those produced by manufacturers 
voluntarily complying with NHTSA's early vocational standards for model 
years 2013 through 2020.
    (4) Aircraft vehicles meeting the definition of ``motor vehicle''. 
For example, this would include certain convertible aircraft that can 
be adjusted to operate on public roads.
    (5) Engines installed in heavy-duty vehicles that are not used to 
propel vehicles. Note, this includes engines used to indirectly propel 
vehicles (such as electrical generator engines that power to batteries 
for propulsion).
    (6) The provisions of this part do not apply to engines that are 
not internal combustion engines. For example, the provisions of this 
part do not apply to fuel cells. Note that gas turbine engines are 
internal combustion engines.
    (e) The following heavy-duty vehicles and engines are exempted from 
the requirements of this part:
    (1) Off-road vehicles. Vehicle manufacturers producing vehicles 
intended for off-road may exempt vehicles without requesting approval 
from the agencies subject to the criteria in Sec.  535.5(b)(9)(i) and 
40 CFR 1037.631(a). If unusual circumstances exist and a manufacturer 
is uncertain as to whether its vehicles qualify, the manufacturer 
should ask for a preliminary determination from the agencies before 
submitting its application for certification in accordance with 40 CFR 
1037.205 for the applicable vehicles. Send the request with supporting 
information to EPA and the agencies will coordinate in making a 
preliminary determination as specified in 40 CFR 1037.210. These 
decisions are considered to be preliminary approvals and subject to 
final review and approval.
    (i) Vocational vehicles with a date of manufacture before January 
1, 2021 automatically qualify for an exemption under Sec.  1037.631 if 
the tires installed on the vehicle have a maximum speed rating at or 
below 55 miles per hour.
    (ii) In unusual circumstances, vehicle manufacturers may ask EPA 
and NHTSA to exempt vehicles under Sec.  1037.631 based on other 
criteria that are equivalent to those specified in Sec.  1037.631(a); 
however, the agencies will normally not grant relief in cases where the 
vehicle manufacturer has credits or can otherwise comply with 
applicable standards. Manufacturers should request approval for an 
exemption before producing the subject vehicles. Send your request with 
supporting information to the Designated Compliance Officer; EPA will 
coordinate in making a determination under Sec.  1037.210. If the 
manufacturer introduces into U.S. commerce vehicles that depend on our 
approval under this paragraph (h) of this section before we inform you 
of our approval, those vehicles violate 40 CFR 1068.101(a)(1) and 40 
CFR 535.9.
    (2) Small business manufacturers. (i) For Phase 1, small business 
manufacturers are exempted from the vehicle and engine standards of 
Sec.  535.5, but must comply with the reporting requirements of Sec.  
535.8(g).
    (ii) For Phase 2, fuel consumption standards apply on a delayed 
schedule for manufacturers meeting the small business criteria 
specified in 13 CFR 121.201 and in 40 CFR 86.1819- 14(k)(5), 40 CFR 
1036.150, and 40 CFR 1037.150. Qualifying manufacturers of truck 
tractors, vocational vehicles, heavy duty pickups and vans, and engines 
are not subject to the fuel consumption standards for vehicles built 
before January 1, 2022 and engines (such as those engines built by 
small alternative fuel engine converters) with a date of manufacturer 
on or after November 14, 2011 and before January 1, 2022. Qualifying 
manufacturers may choose to voluntarily comply early.
    (A) Small manufacturers that certify their entire U.S.-directed 
production volume to the Phase 1 standards for calendar year 2021 may 
certify to the Phase 1 standards for model year 2022 (instead of the 
otherwise applicable Phase 2 standards).
    (B) Phase 1 vehicle credits small manufacturers generate under 
provision (A) of this section for model year 2018 through 2022 
vocational vehicles may be used through model year 2027 (instead of 
being subject to a five-year credit life).

[[Page 56165]]

    (iii) Small business manufacturers producing vehicles and engines 
that run on any fuel other than gasoline, E85, or diesel fuel meeting 
the criteria specified in 13 CFR 121.201 and in 40 CFR 86.1819-
14(k)(5), 40 CFR 1036.150, and 40 CFR 1037.150 may delay complying with 
every new mandatory standard under this part by one model year.
    (3) Engines for specialty vehicles. Engines certified to the 
alternative standards specified in 40 CFR 86.007-11 and 86.008-10 for 
use in specialty vehicles as described in 40 CFR 1037.605. Compliance 
with the vehicle provisions in 40 CFR 1037.605 satisfies compliance for 
NHTSA under this part.
    (f) For model year 2021 and later, vocational vehicle manufacturers 
building custom chassis vehicles (e.g., emergency vehicles) may be 
exempted from standards in Sec.  535.5(b)(4) and may comply with 
alternative fuel consumption standards as specified in Sec.  
535.5(b)(6). Manufacturers complying with alternative fuel consumption 
standards in Sec.  535.5(b)(6) are restricted in using fuel consumption 
credits as specified in Sec.  535.7(c).
    (g) The fuel consumption standards in some cases apply differently 
for spark-ignition and compression-ignition engines or vehicles as 
specified in 40 CFR parts 1036 and 1037. Engine requirements are 
similarly differentiated by engine type and by primary intended service 
class, as described in 40 CFR 1036.140.
    (h) NHTSA may exclude or exempt vehicles and engines under special 
conditions allowed by EPA in accordance with 40 CFR parts 85, 86, 1036, 
1037, 1039, and 1068. Manufacturers should consult the agencies if 
uncertain how to apply any EPA provision under the NHTSA fuel 
consumption program. It is recommended that manufacturers seek 
clarification before producing a vehicle. Upon notification by EPA of a 
fraudulent use of an exemption, NHTSA reserves that right to suspend or 
revoke any exemption or exclusion.
    (i) In cases where there are differences between the application of 
this part and the corresponding EPA program regarding whether a vehicle 
is regulated or not (such as due to differences in applicability 
resulting from differing agency definitions, etc.), manufacturers 
should contact the agencies to identify these vehicles and assess the 
applicability of the agencies' standards. The agencies will provide 
guidance on how the vehicles can comply. Manufacturers are required to 
identify these vehicles in their final reports submitted in accordance 
with Sec.  535.8.
    (j) If EPA denies, suspends or revokes, a manufacturer's 
certificate of conformity in accordance with 40 CFR 1036.255 or 
1037.225, due to incomplete, incorrect or fraudulent information, the 
vehicles or engines covered by the applicable certificate will be:
    (1) ineligible to participate in the NHTSA fuel consumption program 
if the certificate is denied.
    (2) eligible only for partial crediting under Sec.  535.7, for the 
population of vehicles or engines which the certificate remains in 
effect before the date of the suspension. The population of vehicle or 
engines after the suspension may also be subject to possible fines in 
accordance with Sec.  535.9.
    (3) ineligible for crediting under Sec.  535.7, and subject to 
possible fines in accordance with Sec.  535.9 if fraud exists.
    (4) If NHTSA finds a manufacturer has submitted incomplete, 
incorrect or fraudulent information, it will contact EPA to deliberate 
and determine the appropriate enforcement action.


Sec.  535.4  Definitions.

    The terms manufacture and manufacturer are used as defined in 
section 501 of the Act and the terms commercial medium-duty and heavy-
duty on highway vehicle, fuel and work truck are used as defined in 49 
U.S.C. 32901. See 49 CFR 523.2 for general definitions related to 
NHTSA's fuel efficiency programs.
    Act means the Motor Vehicle Information and Cost Savings Act, as 
amended by Public Law 94-163 and 96-425.
    Adjustable parameter has the meaning given in 40 CFR 1037.801.
    Administrator means the Administrator of the National Highway 
Traffic Safety Administration (NHTSA) or the Administrator's delegate.
    Advanced technology means vehicle technology under this fuel 
consumption program in Sec.  535.6 and 535.7 and by EPA under 40 CFR 
86.1819-14(d)(7), 1036.615, or 1037.615.
    Alterers means a manufacturer that modifies an altered vehicle as 
defined in 49 CFR 567.3.
    Alternative fuel conversion has the meaning given for clean 
alternative fuel conversion in 40 CFR 85.502.
    Alternative fuel conversion has the meaning given in 40 CFR 85.502.
    A to B testing has the meaning given in 40 CFR 1037.801.
    Automated manual transmission has the meaning given in 40 CFR 
1037.801.
    Automatic tire inflation system has the meaning given in 40 CFR 
1037.801.
    Automatic transmission (AT) has the meaning given in 40 CFR 
1037.801.
    Auxiliary power unit has the meaning given in 40 CFR 1037.801.
    Averaging set means, a set of engines or vehicles in which fuel 
consumption credits may be exchanged. Credits generated by one engine 
or vehicle family may only be used by other respective engine or 
vehicle families in the same averaging set as specified in Sec.  535.7. 
Note that an averaging set may comprise more than one regulatory 
subcategory. The averaging sets for this HD program are defined as 
follows:
    (1) Heavy-duty pickup trucks and vans.
    (2) Light heavy-duty (LHD) vehicles.
    (3) Medium heavy-duty (MHD) vehicles.
    (4) Heavy heavy-duty (HHD) vehicles.
    (5) Light heavy-duty engines subject to compression-ignition 
standards.
    (6) Medium heavy-duty engines subject to compression-ignition 
standards.
    (7) Heavy heavy-duty engines subject to compression-ignition 
standards.
    (8) Engines subject to spark-ignition standards.
    (9) Vehicle types certifying to optional custom chassis standards 
as specified in Sec.  535.5(b)(6) form separate averaging sets for each 
vehicle type as specified in Sec.  535.7(c).
    Axle ratio or Drive axle ratio, ka has the meaning given in 40 CFR 
1037.801.
    Basic vehicle frontal area has the meaning given in 40 CFR 
1037.801.
    Cab-complete vehicle has the meaning given in 49 CFR 523.2.
    Carryover has the meaning given in 40 CFR 1037.801.
    Certificate holder means the manufacturer who holds the certificate 
of conformity for the vehicle or engine and that assigns the model year 
based on the date when its manufacturing operations are completed 
relative to its annual model year period.
    Certificate of Conformity means an approval document granted by EPA 
to a manufacturer that submits an application for a vehicle or engine 
emissions family in 40 CFR 1036.205 and 1037.205. A certificate of 
conformity is valid from the indicated effective date until December 31 
of the model year for which it is issued. The certificate must be 
renewed annually for any vehicle a manufacturer continues to produce. 
Information included in an amended application made in accordance with 
40 CFR part 1036.225 and 1037.225, before the end of the model year 
applies similarly to the NHTSA fuel consumption program as to the EPA. 
If a manufacturer amends its application to make the amended 
application correct and complete, these changes do not apply 
retroactively to

[[Page 56166]]

the NHTSA fuel efficiency program. Also, if EPA or NHTSA determines 
that the manufacturer's amended application is not correct and 
complete, or otherwise does not conform to its regulations, any changes 
finalized by EPA or if EPA suspends, revokes, or voids a certification, 
also applies to the NHTSA fuel efficiency program. See Sec.  535.3(j).
    Certification has the meaning given in 40 CFR 1037.801.
    Certified emission level has the meaning given in 40 CFR 1036.801.
    Chassis-cab means the incomplete part of a vehicle that includes a 
frame, a completed occupant compartment and that requires only the 
addition of cargo-carrying, work-performing, or load- bearing 
components to perform its intended functions.
    Chief Counsel means the NHTSA Chief Counsel, or his or her 
designee.
    Class means relating to GVWR classes for vehicles other than 
trailers, as follows:
    (1) Class 2b vehicles are vehicles with a gross vehicle weight 
rating (GVWR) ranging from 8,501 to 10,000 pounds.
    (2) Class 3 through Class 8 vehicles are vehicles with a gross 
vehicle weight rating (GVWR) of 10,001 pounds or more as defined in 49 
CFR 565.15.
    Complete sister vehicle is a complete vehicle of the same 
configuration as a cab-complete vehicle.
    Complete vehicle has the meaning given in 49 CFR part 523.
    Compression-ignition (CI) means relating to a type of 
reciprocating, internal-combustion engine, such as a diesel engine, 
that is not a spark-ignition engine. Note, in accordance with 40 CFR 
1036.1, gas turbine engines and other engines not meeting the 
definition of compression-ignition are deemed to be compression-
ignition engines for complying with fuel consumption standards.
    Configuration means a subclassification within a test group for 
passenger cars, light trucks and medium-duty passenger vehicles and 
heavy-duty pickup trucks and vans which is based on basic engine, 
engine code, transmission type and gear ratios, and final drive ratio.
    Container chassis trailer has the same meaning as container chassis 
in 40 CFR 1037.801.
    Curb weight has the meaning given in 40 CFR 86.1803.
    Custom chassis vehicle means a vocational vehicle that is a motor 
home, school bus, refuse hauler, concrete mixer, emergency vehicle, 
mixed-use vehicle or other buses that are not school buses or motor 
coaches. These vehicle types are defined in 49 CFR 523.3. A ``mixed-use 
vehicle'' is one that meets at least one of the criteria specified in 
40 CFR 1037.631(a)(1) or at least one of the criteria in 40 CFR 
1037.631(a)(2), but not both.
    Date of manufacture means the date on which the certifying vehicle 
manufacturer completes its manufacturing operations, except as follows:
    (1) Where the certificate holder is an engine manufacturer that 
does not manufacture the complete or incomplete vehicle, the date of 
manufacture of the vehicle is based on the date assembly of the vehicle 
is completed.
    (2) EPA and NHTSA may approve an alternate date of manufacture 
based on the date on which the certifying (or primary) vehicle 
manufacturer completes assembly at the place of main assembly, 
consistent with the provisions of 40 CFR 1037.601 and 49 CFR 567.4.
    (3) A vehicle manufacturer that completes assembly of a vehicle at 
two or more facilities may ask to use as the month and year of 
manufacture, for that vehicle, the month and year in which 
manufacturing is completed at the place of main assembly, consistent 
with provisions of 49 CFR 567.4, as the model year. Note that such 
staged assembly is subject to the provisions of 40 CFR 1068.260(c). 
NHTSA's allowance of this provision is effective when EPA approves the 
manufacturer's certificates of conformity for these vehicles.
    Day cab has the meaning given in 40 CFR 1037.801.
    Drayage tractor has the meaning given in 40 CFR 1037.801.
    Dual-clutch transmission (DCT) means a transmission has the meaning 
given in 40 CFR 1037.801.
    Dual-fuel has the meaning given in 40 CFR 1037.801.
    Electric vehicle has the meaning given in 40 CFR 1037.801.
    Emergency vehicle means a vehicle that meets one of the criteria in 
40 CFR 1037.801.
    Emission data engine has the meaning given in 40 CFR 1036.801.
    Engine configuration has the meaning given in 40 CFR 1036.801.
    Engine family has the meaning given in 40 CFR 1036.230. 
Manufacturers designate families in accordance with EPA provisions and 
may not choose different families between the NHTSA and EPA programs.
    Excluded means a vehicle or engine manufacturer or component is not 
required to comply with any aspects with the NHTSA fuel consumption 
program.
    Exempted means a vehicle or engine manufacturer or component is not 
required to comply with certain provisions of the NHTSA fuel 
consumption program.
    Family certification level (FCL) has the meaning given in 40 CFR 
1036.801.
    Family emission limit (FEL) has the meaning given in 40 CFR 
1037.801.
    Final drive ratio has the meaning given in 40 CFR 1037.801.
    Final-stage manufacturer has the meaning given in 49 CFR 567.3 and 
includes secondary vehicle manufacturers as defined in 40 CFR 1037.801.
    Fleet in this part means all the heavy-duty vehicles or engines 
within each of the regulatory sub- categories that are manufactured by 
a manufacturer in a particular model year and that are subject to fuel 
consumption standards under Sec.  535.5.
    Fleet average fuel consumption is the calculated average fuel 
consumption performance value for a manufacturer's fleet derived from 
the production weighted fuel consumption values of the unique vehicle 
configurations within each vehicle model type that makes up that 
manufacturer's vehicle fleet in a given model year. In this part, the 
fleet average fuel consumption value is determined for each 
manufacturer's fleet of heavy-duty pickup trucks and vans.
    Fleet average fuel consumption standard is the actual average fuel 
consumption standard for a manufacturer's fleet derived from the 
production weighted fuel consumption standards of each unique vehicle 
configuration, based on payload, tow capacity and drive configuration 
(2, 4 or all- wheel drive), of the model types that makes up that 
manufacturer's vehicle fleet in a given model year. In this part, the 
fleet average fuel consumption standard is determined for each 
manufacturer's fleet of heavy-duty pickup trucks and vans.
    Flexible-fuel has the meaning given in 40 CFR 1036.801.
    Fuel cell means an electrochemical cell that produces electricity 
via the non-combustion reaction of a consumable fuel, typically 
hydrogen.
    Fuel cell electric vehicle means a motor vehicle propelled solely 
by an electric motor where energy for the motor is supplied by a fuel 
cell.
    Fuel efficiency means the amount of work performed for each gallon 
of fuel consumed.
    Fuel type has the meaning given in 40 CFR 1037.801.
    Gaseous fuel has the meaning given in 40 CFR 1037.801.
    Gear ratio or Transmission gear ratio, kg, has the meaning given in 
40 CFR 1037.801.

[[Page 56167]]

    Good engineering judgment has the meaning given in 40 CFR 1068.30. 
See 40 CFR 1068.5 for the administrative process used to evaluate good 
engineering judgement.
    Greenhouse gas has the meaning given in 40 CFR 1036.801.
    Greenhouse gas Emissions Model (GEM) has the meaning given in 40 
CFR 1037.801.
    Gross axle weight rating (GAWR) has the meaning given in 49 CFR 
571.3.
    Gross combination weight rating (GCWR) has the meaning given in 49 
CFR 571.3.
    Gross vehicle weight rating (GVWR) has the meaning given in 49 CFR 
571.3.
    Heavy-duty off-road vehicle means a heavy-duty vocational vehicle 
or vocational tractor that is intended for off-road use.
    Heavy-duty engine has the meaning given in 40 CFR 1036.801 and 49 
CFR part 523.
    Heavy-duty vehicle has the meaning given in 40 CFR 1036.801 and 49 
CFR part 523.
    Heavy-haul tractor has the meaning given in 40 CFR 1037.801 and 49 
CFR part 523.
    Heavy heavy-duty (HHD) vehicle has the meaning given in vehicle 
service class.
    Hybrid has the meaning given in 40 CFR 1036.801.
    Hybrid engine or hybrid powertrain has the meaning given in 40 CFR 
1037.801.
    Hybrid vehicle has the meaning given in 40 CFR 1037.801.
    Identification number has the meaning given in 40 CFR 1037.801.
    Idle operation has the meaning given in 40 CFR 1037.801.
    Incomplete vehicle has the meaning given in 49 CFR part 523. For 
the purpose of this regulation, a manufacturer may request EPA and 
NHTSA to allow the certification of a vehicle as an incomplete vehicle 
if it manufactures the engine and sells the unassembled chassis 
components, provided it does not produce and sell the body components 
necessary to complete the vehicle.
    Innovative technology means technology certified under Sec.  535.7 
and by EPA under 40 CFR 86.1819-14(d)(13), 1036.610, and 1037.610 in 
the Phase 1 program.
    Intermediate manufacturer has the meaning given in 49 CFR 567.3.
    Light heavy-duty (LHD) vehicle has the meaning given in vehicle 
service class.
    Liquefied petroleum gas (LPG) has the meaning given in 40 CFR 
1036.801.
    Low rolling resistance tire means a tire on a vocational vehicle 
with a tire rolling resistance level (TRRL) of 7.7 kg/metric ton or 
lower, a steer tire on a tractor with a TRRL of 7.7 kg/metric ton or 
lower, or a drive tire on a tractor with a TRRL of 8.1 kg/metric ton or 
lower.
    Manual transmission (MT) has the meaning given in 40 CFR 1037.801.
    Manufacturer has the meaning given in 40 CFR 1036.801.
    Medium heavy-duty (MHD) vehicle has the meaning given in vehicle 
service class.
    Model type has the meaning given in 40 CFR 600.002.
    Model year as it applies to vehicles means:
    (1) For tractors and vocational vehicles with a date of manufacture 
on or after January 1, 2021, the vehicle's model year is the calendar 
year corresponding to the date of manufacture; however, the vehicle's 
model year may be designated to be the year before the calendar year 
corresponding to the date of manufacture if the engine's model year is 
also from an earlier year. Note that paragraph (2) of this definition 
limits the extent to which vehicle manufacturers may install engines 
built in earlier calendar years. Note that 40 CFR 1037.601(a)(2) limits 
the extent to which vehicle manufacturers may install engines built in 
earlier calendar years.
    (2) For Phase 1 tractors and vocational vehicles with a date of 
manufacture before January 1, 2021, model year means the manufacturer's 
annual new model production period, except as restricted under this 
definition. It must include January 1 of the calendar year for which 
the model year is named, may not begin before January 2 of the previous 
calendar year, and it must end by December 31 of the named calendar 
year. The model year may be set to match the calendar year 
corresponding to the date of manufacture.
    (i) The manufacturer who holds the certificate of conformity for 
the vehicle must assign the model year based on the date when its 
manufacturing operations are completed relative to its annual model 
year period. In unusual circumstances where completion of your assembly 
is delayed, we may allow you to assign a model year one year earlier, 
provided it does not affect which regulatory requirements will apply.
    (ii) Unless a vehicle is being shipped to a secondary manufacturer 
that will hold the certificate of conformity, the model year must be 
assigned prior to introduction of the vehicle into U.S. commerce. The 
certifying manufacturer must re-designate the model year if it does not 
complete its manufacturing operations within the originally identified 
model year. A vehicle introduced into U.S. commerce without a model 
year is deemed to have a model year equal to the calendar year of its 
introduction into U.S. commerce unless the certifying manufacturer 
assigns a later date.
    Model year as it applies to engines means the manufacturer's annual 
new model production period, except as restricted under this 
definition. It must include January 1 of the calendar year for which 
the model year is named, may not begin before January 2 of the previous 
calendar year, and it must end by December 31 of the named calendar 
year. Manufacturers may not adjust model years to circumvent or delay 
compliance with emission standards or to avoid the obligation to 
certify annually.
    (1) The following provisions apply for production and ABT reports 
during the transition to engine-based model year determinations for 
tractors and vocational vehicles in 2020 and 2021:
    (i) If a manufacturer installs model year 2020 or earlier engines 
in its vehicles in calendar year 2020, the manufacturers should include 
all those Phase 1 vehicles in its production and ABT reports related to 
model year 2020 compliance, although EPA may require the manufacturer 
to identify these separately from vehicles produced in calendar year 
2019.
    (ii) If a manufacturer installs model year 2020 engines in its 
vehicles in calendar year 2021, the manufacturer should submit 
production and ABT reports for those Phase 1 vehicles separate from the 
reports it submits for Phase 2 vehicles with model year 2021 engines.
    Motor Vehicle has the meaning given in 49 U.S.C. 32901.
    Multi-purpose has the meaning given in 40 CFR 1037.801.
    Natural gas has the meaning given in 40 CFR 1036.801. Vehicles that 
use a pilot-ignited natural gas engine (which uses a small diesel fuel 
ignition system), are still considered natural gas vehicles.
    NHTSA Enforcement means the NHTSA Associate Administrator for 
Enforcement, or his or her designee.
    Neutral coasting has the meaning given in 40 CFR 1037.801.
    Neutral idle has the meaning given in 40 CFR 1037.801.
    New vehicles has the meaning given to ``new motor vehicle'' 
provided in 40 CFR 1037.801.
    Off-cycle technology means technology certified under Sec.  535.7 
and by EPA under 40 CFR 86.1819-14(d)(13), 1036.610, and 1037.610 in 
the Phase 2 program.

[[Page 56168]]

    Party means the person alleged to have committed a violation of 
Sec.  535.9, and includes manufacturers of vehicles and manufacturers 
of engines.
    Payload means in this part the resultant of subtracting the curb 
weight from the gross vehicle weight rating.
    Percent has the meaning given in 40 CFR 1036.801.
    Petroleum has the meaning given in 40 CFR 1037.801.
    Phase 1 means the joint NHTSA and EPA program established in 2011 
for fuel efficiency standards and greenhouse gas emissions standards 
regulating medium- and heavy-duty engines and vehicles. See Sec.  535.5 
for the specific model years that standards apply to vehicles and 
engines.
    Phase 2 means the joint NHTSA and EPA program established in 2016 
for fuel efficiency standards and greenhouse gas emissions standards 
regulating medium- and heavy-duty vehicles and engines. See Sec.  535.5 
for the specific model years that standards apply to vehicles and 
engines.
    Pickup truck has the meaning given in 49 CFR part 523.
    Placed into service has the meaning given in 40 CFR 1037.801.
    Plug-in hybrid electric vehicle (PHEV) means a hybrid electric 
vehicle that has the capability to charge the battery or batteries used 
for vehicle propulsion from an off-vehicle electric source, such that 
the off-vehicle source cannot be connected to the vehicle while the 
vehicle is in motion.
    Power take-off (PTO) means a secondary engine shaft or other system 
on a vehicle that provides substantial auxiliary power for purposes 
unrelated to vehicle propulsion or normal vehicle accessories such as 
air conditioning, power steering, and basic electrical accessories. A 
typical PTO uses a secondary shaft on the engine to transmit power to a 
hydraulic pump that powers auxiliary equipment such as a boom on a 
bucket truck.
    Powertrain family has the meaning given in 40 CFR 1037.231. 
Manufacturers choosing to perform powertrain testing as specified in 40 
CFR 1037.550, divide product lines into powertrain families that are 
expected to have similar fuel consumptions and CO2 emission 
characteristics throughout the useful life.
    Preliminary approval means approval granted by an authorized EPA 
representative prior to submission of an application for certification, 
consistent with the provisions of 40 CFR 1037.210. For requirements 
involving NHTSA, EPA will ensure decisions are jointly made and will 
convey the decision to the manufacturer.
    Primary intended service class has the same meaning for engines as 
specified in 40 CFR 1036.140. Manufacturers must identify a single 
primary intended service class for each engine family that best 
describes vehicles for which it designs and markets the engine, as 
follows:
    (1) Divide compression-ignition engines into primary intended 
service classes based on the following engine and vehicle 
characteristics:
    (i) Light heavy-duty ``LHD'' engines usually are not designed for 
rebuild and do not have cylinder liners. Vehicle body types in this 
group might include any heavy-duty vehicle built from a light-duty 
truck chassis, van trucks, multi-stop vans, and some straight trucks 
with a single rear axle. Typical applications would include personal 
transportation, light-load commercial delivery, passenger service, 
agriculture, and construction. The GVWR of these vehicles is normally 
below 19,500 pounds.
    (ii) Medium heavy-duty ``MHD'' engines may be designed for rebuild 
and may have cylinder liners. Vehicle body types in this group would 
typically include school buses, straight trucks with single rear axles, 
city tractors, and a variety of special purpose vehicles such as small 
dump trucks, and refuse trucks. Typical applications would include 
commercial short haul and intra- city delivery and pickup. Engines in 
this group are normally used in vehicles whose GVWR ranges from 19,500 
to 33,000 pounds.
    (iii) Heavy heavy-duty ``HHD'' engines are designed for multiple 
rebuilds and have cylinder liners. Vehicles in this group are normally 
tractors, trucks, straight trucks with dual rear axles, and buses used 
in inter-city, long-haul applications. These vehicles normally exceed 
33,000 pounds GVWR.
    (2) Divide spark-ignition engines into primary intended service 
classes as follows:
    (i) Spark-ignition engines that are best characterized by paragraph 
(1)(i) or (ii) of this section are in a separate ``spark-ignition'' 
primary intended service class.
    (ii) Spark-ignition engines that are best characterized by 
paragraph (1)(iii) of this section share a primary intended service 
class with compression-ignition heavy heavy-duty engines. Gasoline-
fueled engines are presumed not to be characterized by paragraph 
(1)(iii) of this section; for example, vehicle manufacturers may 
install some number of gasoline-fueled engines in Class 8 trucks 
without causing the engine manufacturer to consider those to be heavy 
heavy-duty engines.
    (iii) References to ``spark-ignition standards'' in this part 
relate only to the spark-ignition engines identified in paragraph 
(b)(1) of this section. References to ``compression-ignition 
standards'' in this part relate to compression-ignition engines, to 
spark-ignition engines optionally certified to standards that apply to 
compression-ignition engines, and to all engines identified under 
paragraph (b)(2) of this section as heavy heavy-duty engines.
    Rechargeable Energy Storage System (RESS) means the component(s) of 
a hybrid engine or vehicle that store recovered energy for later use, 
such as the battery system in a electric hybrid vehicle.
    Refuse hauler has the meaning given in 40 CFR 1037.801.
    Regional has the meaning relating to the Regional duty cycle as 
specified in 40 CFR 1037.510.
    Regulatory category means each of the four types of heavy-duty 
vehicles defined in 49 CFR 523.6 and the heavy-duty engines used in 
these heavy-duty vehicles.
    Regulatory subcategory means the sub-groups in each regulatory 
category to which mandatory fuel consumption standards and requirements 
apply as specified in 40 CFR 1036.230 and 1037.230 and are defined as 
follows:
    (1) Heavy-duty pick-up trucks and vans.
    (2) Vocational vehicle subcategories have 18 separate vehicle 
service classes as shown in Tables 1 and 2 below and include vocational 
tractors. Table 1 includes vehicles complying with Phase 1 standards. 
Phase 2 vehicles are included in Table 2 which have separate 
subcategories to account for engine characteristics, GVWR, and the 
selection of duty cycle for vocational vehicles as specified in 40 CFR 
1037.510; vehicles may additionally fall into one of the subcategories 
defined by the custom-chassis standards in Sec.  535.5(b)(6) and 40 
1037.105(h). Manufacturers using the alternate standards in Sec.  
535.5(b)(6) and 40 CFR 1037.105(h) should treat each vehicle type as a 
separate vehicle subcategory.

            Table 1--Phase 1 Vocational Vehicle Subcategories
------------------------------------------------------------------------
 
-------------------------------------------------------------------------
Vocational LHD vehicles.
Vocational MHD vehicles.
Vocational HHD vehicles.
------------------------------------------------------------------------


[[Page 56169]]


            Table 2--Phase 2 Vocational Vehicle Subcategories
------------------------------------------------------------------------
                        Vocational LHD   Vocational MHD   Vocational HHD
     Engine type           vehicles         vehicles         vehicles
------------------------------------------------------------------------
CI...................  Urban..........  Urban..........  Urban.
CI...................  Multi-Purpose..  Multi-Purpose..  Multi-Purpose.
CI...................  Regional.......  Regional.......  Regional.
SI...................  Urban..........  Urban..........
SI...................  Multi-Purpose..  Multi-Purpose..
SI...................  Regional.......  Regional.......
------------------------------------------------------------------------

    (3) Tractor subcategories are shown in Table 3 below for Phase 1 
and 2. Table 3 includes 10 separate subcategories for tractors 
complying with Phase 1 and 2 standards. The heavy-haul tractor 
subcategory only applies for Phase 2.

           Table 3--Phase 1 and 2 Truck Tractor Subcategories
------------------------------------------------------------------------
                                                        Class 8 sleeper
             Class 7               Class 8 day cabs          cabs
------------------------------------------------------------------------
Low-roof tractors...............  Low-roof day cab    Low-roof sleeper
                                   tractors.           cab tractors.
Mid-roof tractors...............  Mid-roof day cab    Mid-roof sleeper
                                   tractors.           cab tractors.
High-roof tractors..............  High-roof day cab   High-roof sleeper
                                   tractors.           cab tractors.
                                 ---------------------------------------
                                   Heavy-haul tractors (applies only to
                                             Phase 2 program).
------------------------------------------------------------------------

    (5) Engine subcategories are shown for each primary intended 
service class in Table 5 below. Table 5 includes 6 separate 
subcategories for engines which are the same for Phase 1 and 2 
standards.

                      Table 5--Engine Subcategories
------------------------------------------------------------------------
           LHD engines                MHD engines         HHD engines
------------------------------------------------------------------------
CI engines for vocational         CI engines for      CI engines for
 vehicles.                         vocational          vocational
                                   vehicles.           vehicles.
                                  CI engines for      CI engines for
                                   truck tractors.     truck tractors.
-----------------------------------------------------
             All spark-ignition engines.
------------------------------------------------------------------------

    Relating to has the meaning given in 40 CFR 1037.801.
    Revoke has the same meaning given in 40 CFR 1068.30.
    Roof height means the maximum height of a vehicle (rounded to the 
nearest inch), excluding narrow accessories such as exhaust pipes and 
antennas, but including any wide accessories such as roof fairings. 
Measure roof height of the vehicle configured to have its maximum 
height that will occur during actual use, with properly inflated tires 
and no driver, passengers, or cargo onboard. Determine the base roof 
height on fully inflated tires having a static loaded radius equal to 
the arithmetic mean of the largest and smallest static loaded radius of 
tires a manufacturer offers or a standard tire EPA approves. If a 
vehicle is equipped with an adjustable roof fairing, measure the roof 
height with the fairing in its lowest setting. Once the maximum height 
is determined, roof heights are divided into the following categories:
    (1) Low-roof means a vehicle with a roof height of 120 inches or 
less.
    (2) Mid-roof means a vehicle with a roof height between 121 and 147 
inches.
    (3) High-roof means a vehicle with a roof height of 148 inches or 
more.
    Round has the meaning given in 40 CFR 1065.1001.
    Secondary vehicle manufacturer has the same meaning as final-stage 
manufacturer in 49 CFR part 567.
    Service class group means a group of engine and vehicle averaging 
sets defined as follows:
    (1) Spark-ignition engines, light heavy-duty compression-ignition 
engines, light heavy-duty vocational vehicles and heavy-duty pickup 
trucks and vans.
    (2) Medium heavy-duty compression-ignition engines and medium 
heavy-duty vocational vehicles and tractors.
    (3) Heavy heavy-duty compression-ignition engines and heavy heavy-
duty vocational vehicles and tractors.
    Sleeper cab means a type of truck cab that has a compartment behind 
the driver's seat intended to be used by the driver for sleeping. This 
includes both cabs accessible from the driver's compartment and those 
accessible from outside the vehicle.
    Small business manufacturer means a manufacturer meeting the 
criteria specified in 13 CFR 121.201. For manufacturers owned by a 
parent company, the employee and revenue limits apply to the total 
number employees and total revenue of the parent company and all its 
subsidiaries.
    Spark-ignition (SI) means relating to a gasoline-fueled engine or 
any other type of engine with a spark plug (or other sparking device) 
and with operating characteristics significantly similar to the 
theoretical Otto combustion cycle. Spark-ignition engines usually use a 
throttle to regulate intake air flow to control power during normal 
operation. Note that some spark-ignition engines are subject to 
requirements that apply for compression-ignition engines as described 
in 40 CFR 1036.140.
    Standard payload means the payload assumed for each vehicle, in 
tons, for modeling and calculating emission credits, as follows:
    (1) For vocational vehicles:
    (i) 2.85 tons for light heavy-duty vehicles.
    (ii) 5.6 tons for medium heavy-duty vehicles.
    (iii) 7.5 tons for heavy heavy-duty vocational vehicles.
    (2) For tractors:
    (i) 12.5 tons for Class 7.

[[Page 56170]]

    (ii) 19 tons for Class 8.
    (iii) 43 tons for heavy-haul tractors.
    Standard tractor has the meaning given in 40 CFR 1037.801.
    Standard trailer has the meaning given in 40 CFR 1037.801.
    Stop start has the meaning given in 40 CFR 1037.801
    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 as 
defined in 40 CFR 600.002.
    Suspend has the meaning given in 40 CFR 1037.801.
    Tank trailer has the meaning given in 40 CFR 1037.801.
    Test group means the multiple vehicle lines and model types that 
share critical emissions and fuel consumption related features and that 
are certified as a group by a common certificate of conformity issued 
by EPA and is used collectively with other test groups within an 
averaging set or regulatory subcategory and is used by NHTSA for 
determining the fleet average fuel consumption.
    The agencies means the National Highway Traffic Safety 
Administration (NHTSA) and the Environmental Protection Agency (EPA) in 
this part.
    Tire pressure monitoring system (TPMS) has the meaning given in 
section S3 of 49 CFR 571.138.
    Tire rolling resistance level (TRRL) means a value with units of 
kg/metric ton that represents that rolling resistance of a tire 
configuration. TRRLs are used as inputs to the GEM model under 40 CFR 
1037.520. Note that a manufacturer may assign a value higher than a 
measured rolling resistance of a tire configuration.
    Towing capacity in this part is equal to the resultant of 
subtracting the gross vehicle weight rating from the gross combined 
weight rating.
    Trade means to exchange fuel consumption credits, either as a buyer 
or a seller.
    U.S.-directed production volume means the number of vehicle units, 
subject to the requirements of this part, produced by a manufacturer 
for which the manufacturer has a reasonable assurance that sale was or 
will be made to ultimate purchasers in the United States.
    Useful life has the meaning given in 40 CFR 1036.801 and 1037.801.
    Vehicle configuration means a unique combination of vehicle 
hardware and calibration (related to measured or modeled emissions) 
within a vehicle family as specified in 40 CFR 1037.801.
    Vehicles with hardware or software differences, but that have no 
hardware or software differences related to measured or modeled 
emissions or fuel consumption can be included in the same vehicle 
configuration. Note that vehicles with hardware or software differences 
related to measured or modeled emissions or fuel consumption are 
considered to be different configurations even if they have the same 
GEM inputs and FEL. Vehicles within a vehicle configuration differ only 
with respect to normal production variability or factors unrelated to 
measured or modeled emissions and fuel consumption for EPA and NHTSA.
    Vehicle family has the meaning given in 40 CFR 1037.230. 
Manufacturers designate families in accordance with EPA provisions and 
may not choose different families between the NHTSA and EPA programs. 
If a manufacturer is certifying vehicles within a vehicle family to 
more than one FEL, it must subdivide its greenhouse gas and fuel 
consumption vehicle families into subfamilies that include vehicles 
with identical FELs. Note that a manufacturer may add subfamilies at 
any time during the model year.
    Vehicle service class has the same meaning for vehicles as 
specified in 40 CFR 1037.140.
    Vehicle subfamily or subfamily means a subset of a vehicle family 
including vehicles subject to the same FEL(s).
    Vocational tractor has the meaning given in 40 CFR 1037.801.
    Void has the meaning given in 40 CFR 1036.30.
    Zero emissions vehicle means an electric vehicle or a fuel cell 
vehicle.


Sec.  535.5  Standards.

    (a) Heavy-duty pickup trucks and vans. Each manufacturer's fleet of 
heavy-duty pickup trucks and vans shall comply with the fuel 
consumption standards in this paragraph (a) expressed in gallons per 
100 miles. Each vehicle must be manufactured to comply for its full 
useful life. For the Phase 1 program, if the manufacturer's fleet 
includes conventional vehicles (gasoline, diesel and alternative fueled 
vehicles) and advanced technology vehicles (hybrids with powertrain 
designs that include energy storage systems, vehicles with waste heat 
recovery, electric vehicles and fuel cell vehicles), it may divide its 
fleet into two separate fleets each with its own separate fleet average 
fuel consumption standard which the manufacturer must comply with the 
requirements of this paragraph (a). For Phase 2, manufacturers may 
calculate their fleet average fuel consumption standard for a 
conventional fleet and multiple advanced technology vehicle fleets. 
Advanced technology vehicle fleets should be separated into plug-in 
hybrid electric vehicles, electric vehicles and fuel cell vehicles. The 
standards in this paragraph (a) correspond to the same requirements for 
EPA as specified in 40 CFR 86.1819-14. Manufacturers must apply the 
fuel consumption standards in this paragraph (a) to the same vehicles 
and engines using the same options used to comply with EPA in 40 CFR 
part 86, subpart S. Engines that comply to the standards in this 
paragraph are not allowed to comply with the standards in paragraph (d) 
of this section.
    (1) Mandatory standards. For model years 2016 and later, each 
manufacturer must comply with the fleet average standard derived from 
the unique subconfiguration target standards (or groups of 
subconfigurations approved by EPA in accordance with 40 CFR 86.1819) of 
the model types that make up the manufacturer's fleet in a given model 
year. Each subconfiguration has a unique attribute-based target 
standard, defined by each group of vehicles having the same payload, 
towing capacity and whether the vehicles are equipped with a 2-wheel or 
4-wheel drive configuration. Phase 1 target standards apply for model 
years 2016 through 2020. Phase 2 target standards apply for model year 
2021 and afterwards.
    (2) Subconfiguration target standards.
    (i) Two alternatives exist for determining the subconfiguration 
target standards for Phase 1. For each alternative, separate standards 
exist for compression-ignition and spark-ignition vehicles:
    (A) The first alternative allows manufacturers to determine a fixed 
fuel consumption standard that is constant over the model years; and
    (B) The second alternative allows manufacturers to determine 
standards that are phased-in gradually each year.
    (ii) Calculate the subconfiguration target standards as specified 
in this paragraph (a)(2)(ii) of this section, using the appropriate 
coefficients from Table 6 choosing between the alternatives in 
paragraph (a)(2)(i) of this section. For electric or fuel cell heavy-
duty vehicles, use compression-ignition vehicle coefficients ``c'' and 
``d'' and for hybrid (including plug-in hybrid), dedicated and dual-
fueled vehicles, use coefficients ``c'' and ``d'' appropriate for the 
engine type used. Round each standard to the nearest 0.001 gallons per 
100 miles and specify all weights in pounds rounded to the nearest 
pound. Calculate the subconfiguration target standards using the 
following equation:


[[Page 56171]]


Subconfiguration Target Standard (gallons per 100 miles) = [c x (WF)] + 
d

Where:

WF = Work Factor = [0.75 x (Payload Capacity + Xwd)] + [0.25 x 
Towing Capacity]
Xwd = 4wd Adjustment = 500 lbs if the vehicle group is equipped with 
4wd and all-wheel drive, otherwise equals 0 lbs for 2wd.
Payload Capacity = GVWR (lbs)-Curb Weight (lbs) (for each vehicle 
group) Towing
Capacity = GCWR (lbs)-GVWR (lbs) (for each vehicle group)

                      Table 6--Coefficients for Mandatory Subconfiguration Target Standards
----------------------------------------------------------------------------------------------------------------
                         Model year(s)                                     c                        d
----------------------------------------------------------------------------------------------------------------
                                  Phase 1 Alternative 1--Fixed Target Standards
----------------------------------------------------------------------------------------------------------------
                                             CI Vehicle Coefficients
----------------------------------------------------------------------------------------------------------------
2016 to 2018..................................................                0.0004322                    3.330
2019 to 2020..................................................                0.0004086                    3.143
----------------------------------------------------------------------------------------------------------------
                                             SI Vehicle Coefficients
----------------------------------------------------------------------------------------------------------------
2016 to 2017..................................................                0.0005131                    3.961
2018 to 2020..................................................                0.0004086                    3.143
----------------------------------------------------------------------------------------------------------------
                                Phase 1 Alternative 2--Phased-in Target Standards
----------------------------------------------------------------------------------------------------------------
                                             CI Vehicle Coefficients
----------------------------------------------------------------------------------------------------------------
2016..........................................................                0.0004519                    3.477
2017..........................................................                0.0004371                    3.369
2018 to 2020..................................................                0.0004086                    3.143
----------------------------------------------------------------------------------------------------------------
                                             SI Vehicle Coefficients
----------------------------------------------------------------------------------------------------------------
2016..........................................................                0.0005277                    4.073
2017..........................................................                0.0005176                    3.983
2018 to 2020..................................................                0.0004951                    3.815
----------------------------------------------------------------------------------------------------------------
                                         Phase 2--Fixed Target Standards
----------------------------------------------------------------------------------------------------------------
                                             CI Vehicle Coefficients
----------------------------------------------------------------------------------------------------------------
2021..........................................................                0.0003988                    3.065
2022..........................................................                0.0003880                    2.986
2023..........................................................                0.0003792                    2.917
2024..........................................................                0.0003694                    2.839
2025..........................................................                0.0003605                    2.770
2026..........................................................                0.0003507                    2.701
2027 and later................................................                0.0003418                    2.633
----------------------------------------------------------------------------------------------------------------
                                             SI Vehicle Coefficients
----------------------------------------------------------------------------------------------------------------
2021..........................................................                0.0004827                    3.725
2022..........................................................                0.0004703                    3.623
2023..........................................................                0.0004591                    3.533
2024..........................................................                0.0004478                    3.443
2025..........................................................                0.0004366                    3.364
2026..........................................................                0.0004253                    3.274
2027 and later................................................                0.0004152                    3.196
----------------------------------------------------------------------------------------------------------------

    (3) Fleet average fuel consumption standard. (i) For the Phase 1 
program, calculate each manufacturer's fleet average fuel consumption 
standard for a conventional fleet and a combined advanced technology 
fleet separately based on the subconfiguration target standards 
specified in paragraph (a)(2) of this section, weighted to production 
volumes and averaged using the following equation combining all the 
applicable vehicles in a manufacturer's U.S.-directed fleet 
(compression-ignition, spark-ignition and advanced technology vehicles) 
for a given model year, rounded to the nearest 0.001 gallons per 100 
miles:
[GRAPHIC] [TIFF OMITTED] TP13SE22.000


[[Page 56172]]


Where:

Subconfiguration Target Standardi = fuel consumption standard for 
each group of vehicles with same payload, towing capacity and drive 
configuration (gallons per 100 miles).
Volumei = production volume of each unique subconfiguration of a 
model type based upon payload, towing capacity and drive 
configuration.

    (A) A manufacturer may group together subconfigurations that have 
the same test weight (ETW), GVWR, and GCWR. Calculate work factor and 
target value assuming a curb weight equal to two times ETW minus GVWR.
    (B) A manufacturer may group together other subconfigurations if it 
uses the lowest target value calculated for any of the 
subconfigurations.
    (ii) For Phase 1, manufacturers must select an alternative for 
subconfiguration target standards at the same time they submit the 
model year 2016 pre-model year Report, specified in Sec.  535.8. Once 
selected, the decision cannot be reversed and the manufacturer must 
continue to comply with the same alternative for subsequent model 
years.
    (4) Voluntary standards. (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.
    (ii) A manufacturer must declare its intent to voluntarily comply 
with fuel consumption standards at the same time it submits a Pre-Model 
Report, prior to the compliance model year beginning as specified in 
Sec.  535.8; and, once selected, the decision cannot be reversed and 
the manufacturer must continue to comply for each subsequent model year 
for all the vehicles and engines it manufactures in each regulatory 
category for a given model year.
    (iii) Calculate separate subconfiguration target standards for 
compression-ignition and spark- ignition vehicles for model years 2013 
through 2015 using the equation in paragraph (a)(2)(ii) of this 
section, substituting the appropriate values for the coefficients in 
the following table as appropriate:

                      Table 7--Coefficients for Voluntary Subconfiguration Target Standards
----------------------------------------------------------------------------------------------------------------
                         Model year(s)                                     c                        d
----------------------------------------------------------------------------------------------------------------
                                             CI Vehicle Coefficients
----------------------------------------------------------------------------------------------------------------
2013 and 14...................................................                0.0004695                    3.615
2015..........................................................                0.0004656                    3.595
----------------------------------------------------------------------------------------------------------------
                                             SI Vehicle Coefficients
----------------------------------------------------------------------------------------------------------------
2013 and 14...................................................                0.0005424                    4.175
2015..........................................................                0.0005390                    4.152
----------------------------------------------------------------------------------------------------------------

    (iv) Calculate the fleet average fuel consumption standards for 
model years 2013 through 2015 using the equation in paragraph (a)(3) of 
this section.
    (5) Exclusion of vehicles not certified as complete vehicles. The 
vehicle standards in paragraph (a) of this section do not apply for 
vehicles that are chassis-certified with respect to EPA's criteria 
pollutant test procedure in 40 CFR part 86, subpart S. Any chassis-
certified vehicles must comply with the vehicle standards and 
requirements of paragraph (b) of this section and the engine standards 
of paragraph (d) of this section for engines used in these vehicles. A 
vehicle manufacturer choosing to comply with this paragraph and that is 
not the engine manufacturer is required to notify the engine 
manufacturers that their engines are subject to paragraph (d) of this 
section and that it intends to use their engines in excluded vehicles.
    (6) Optional certification under this section. Manufacturers may 
certify certain complete or cab- complete vehicles to the fuel 
consumption standards of this section. All vehicles optionally 
certified under this paragraph (a)(6) are deemed to be subject to the 
fuel consumption standards of this section given the following 
conditions:
    (i) For fuel consumption compliance, manufacturers 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 fuel consumption 
standards of this section.
    (ii) Manufacturers may apply the provisions of this section to cab-
complete vehicles based on a complete sister vehicle. In unusual 
circumstances, manufacturers may ask the agencies to apply these 
provisions to Class 2b or Class 3 incomplete vehicles that do not meet 
the definition of cab-complete.
    (A) Except as specified in paragraph (a)(6)(iii) of this section, 
for purposes of this section, a complete sister vehicle is a complete 
vehicle of the same vehicle configuration as the cab- complete vehicle. 
A manufacturer may not apply the provisions of this paragraph (a)(6) to 
any vehicle configuration that has a four-wheel rear axle if the 
complete sister vehicle has a two- wheel rear axle.
    (B) Calculate the target value for the fleet-average fuel 
consumption standard under paragraph (a)(3) of this section based on 
the work factor value that applies for the complete sister vehicle.
    (C) Test these cab-complete vehicles using the same equivalent test 
weight and other dynamometer settings that apply for the complete 
vehicle from which you used the work factor value (the complete sister 
vehicle). For fuel consumption certification, manufacturers may submit 
the test data from that complete sister vehicle instead of performing 
the test on the cab- complete vehicle.
    (D) Manufacturers are not required to produce the complete sister 
vehicle for sale to use the provisions of this paragraph (a)(6)(ii). 
This means the complete sister vehicle may be a carryover vehicle from 
a prior model year or a vehicle created solely for the purpose of 
testing.
    (iii) For fuel consumption purposes, if a cab-complete vehicle is 
not of the same vehicle configuration as a complete sister vehicle due 
only to certain factors unrelated to coastdown performance, 
manufacturers may use the road-load coefficients from the complete 
sister vehicle for certification testing of the cab-complete vehicle, 
but it may not use fuel consumption data from the complete sister 
vehicle for certifying the cab-complete vehicle.

[[Page 56173]]

    (7) Loose engines. For model year 2023 and earlier spark-ignition 
engines with identical hardware compared with engines used in vehicles 
certified to the standards of this section, where such engines are sold 
as loose engines or as engines installed in incomplete vehicles that 
are not cab-complete vehicles. Manufacturers may certify such engines 
to the standards of this section, subject to the following provisions:
    (i) For 2020 and earlier model years, the maximum allowable U.S.-
directed production volume of engines manufacturers may sell under this 
paragraph (a)(7) in any given model year is ten percent of the total 
U.S-directed production volume of engines of that design that the 
manufacturer produces for heavy-duty applications for that model year, 
including engines it produces for complete vehicles, cab-complete 
vehicles, and other incomplete vehicles. The total number of engines a 
manufacturer may certify under this paragraph (a)(7), of all engine 
designs, may not exceed 15,000 in any model year. Engines produced in 
excess of either of these limits are not covered by your certificate. 
For example, a manufacturer produces 80,000 complete model year 2017 
Class 2b pickup trucks with a certain engine and 10,000 incomplete 
model year 2017 Class 3 vehicles with that same engine, and the 
manufacturer did not apply the provisions of this paragraph (a)(7) to 
any other engine designs, it may produce up to 10,000 engines of that 
design for sale as loose engines under this paragraph (a)(7). If a 
manufacturer produced 11,000 engines of that design for sale as loose 
engines, the last 1,000 of them that it produced in that model year 
2017 would be considered uncertified.
    (ii) For model years 2021 through 2023, the U.S.-directed 
production volume of engines manufacturers sell under this paragraph 
(a)(7) in any given model year may not exceed 10,000 units. This 
paragraph (a)(7) does not apply for engines certified to the standards 
of paragraph (d) of this section and 40 CFR 1036.108.
    (iii) Vehicles using engines certified under this paragraph (a)(7) 
are subject to the fuel consumption and emission standards of paragraph 
(b) of this section and 40 CFR 1037.105 and engine standards in 40 CFR 
1036.150(j).
    (iv) For certification purposes, engines are deemed to have a fuel 
consumption target values and test result equal to the fuel consumption 
target value and test result for the complete vehicle in the applicable 
test group with the highest equivalent test weight, except as specified 
in paragraph (a)(7)(iv)(B) of this part. Manufacturers use these values 
to calculate target values and the fleet- average fuel consumption 
rate. Where there are multiple complete vehicles with the same highest 
equivalent test weight, select the fuel consumption target value and 
test result as follows:
    (A) If one or more of the fuel consumption test results exceed the 
applicable target value, use the fuel consumption target value and test 
result of the vehicle that exceeds its target value by the greatest 
amount.
    (B) If none of the fuel consumption test results exceed the 
applicable target value, select the highest target value and set the 
test result equal to it. This means that the manufacturer may not 
generate fuel consumption credits from vehicles certified under this 
paragraph (a)(7).
    (8) Alternative fuel vehicle conversions. Alternative fuel vehicle 
conversions may demonstrate compliance with the standards of this part 
or other alternative compliance approaches allowed by EPA in 40 CFR 
85.525.
    (9) Advanced, innovative and off-cycle technologies. For vehicles 
subject to Phase 1 standards, manufacturers may generate separate 
credit allowances for advanced and innovative technologies as specified 
in Sec.  535.7(f)(1) and (2). For vehicles subject to Phase 2 
standards, manufacturers may generate separate credits allowance for 
off-cycle technologies in accordance with Sec.  535.7(f)(2). Separate 
credit allowances for advanced technology vehicles cannot be generated; 
instead manufacturers may use the credit multipliers specified in Sec.  
535.7(f)(1)(iv) through model year 2026.
    (10) Useful life. The following useful life values apply for the 
standards of this section:
    (i) 120,000 miles or 10 years, whichever comes first, for Class 2b 
through Class 3 heavy-duty pickup trucks and vans certified to Phase 1 
standards.
    (ii) 150,000 miles or 15 years, whichever comes first, for Class 2b 
through Class 3 heavy-duty pickup trucks and vans certified to Phase 2 
standards.
    (iii) For Phase 1 credits that you calculate based on a useful life 
of 120,000 miles, multiply any banked credits that you carry forward 
for use into the Phase 2 program by 1.25. For Phase 1 credit deficits 
that you generate based on a useful life of 120,000 miles multiply the 
credit deficit by 1.25 if offsetting the shortfall with Phase 2 
credits.
    (11) Compliance with standards. A manufacturer complies with the 
standards of this part as described in Sec.  535.10.
    (b) Heavy-duty vocational vehicles. Each manufacturer building 
complete or incomplete heavy- duty vocational vehicles shall comply 
with the fuel consumption standards in this paragraph (b) expressed in 
gallons per 1000 ton-miles. Manufacturers must apply the fuel 
consumption standards in this paragraph (b) to the same vehicles using 
the same options used to comply with EPA in 40 CFR 1037.105. Engines 
used in heavy-duty vocational vehicles shall comply with the standards 
in paragraph (d) of this section. Each vehicle must be manufactured to 
comply for its full useful life. Standards apply to the vehicle 
subfamilies based upon the vehicle service classes within each of the 
vocational vehicle regulatory subcategories in accordance with Sec.  
535.4 and based upon the applicable modeling and testing specified in 
Sec.  535.6. Determine the duty cycles that apply to vocational 
vehicles according to 40 CFR 1037.140 and 1037.150(z).
    (1) Mandatory standards. Heavy-duty vocational vehicle subfamilies 
produced for Phase 1 must comply with the fuel consumption standards in 
paragraph (b)(3) of this section. For Phase 2, each vehicle 
manufacturer of heavy-duty vocational vehicle subfamilies must comply 
with the fuel consumption standards in paragraph (b)(4) of this 
section.
    (i) For model years 2016 to 2020, the heavy-duty vocational vehicle 
category is subdivided by GVWR into three regulatory subcategories as 
defined in Sec.  535.4, each with its own assigned standard.
    (ii) For model years 2021 and later, the heavy-duty vocational 
vehicle category is subdivided into 15 regulatory subcategories 
depending upon whether vehicles are equipped with a compression or 
spark-ignition engine, as defined in Sec.  535.4. Standards also differ 
based upon vehicle service class and intended vehicle duty cycles. See 
40 CFR 1037.140 and 1037.150(z).
    (iii) For purposes of certifying vehicles to fuel consumption 
standards, manufacturers must divide their product lines in each 
regulatory subcategory into vehicle families that have similar 
emissions and fuel consumption features, as specified by EPA in 40 CFR 
1037.230. These families will be subject to the applicable standards. 
Each vehicle family is limited to a single model year.
    (2) Voluntary compliance. (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)

[[Page 56174]]

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 manufactures in each 
regulatory category for a given model year.
    (ii) A manufacturer must declare its intent to voluntarily comply 
with fuel consumption standards and identify its plans to comply before 
it submits its first application for a certificate of conformity for 
the respective model year as specified in Sec.  535.8; and, once 
selected, the decision cannot be reversed and the manufacturer must 
continue to comply for each subsequent model year for all the vehicles 
and engines it manufactures in each regulatory category for a given 
model year.
    (3) Regulatory subcategory standards for model years 2013 to 2020. 
The mandatory and voluntary fuel consumption standards for heavy-duty 
vocational vehicles are given in the following table:

                         Table 8--Phase 1 Vocational Vehicle Fuel Consumption Standards
                                          [Gallons per 1000 ton-miles]
----------------------------------------------------------------------------------------------------------------
       Regulatory subcategories        Vocational LHD Vehicles  Vocational MHD Vehicles  Vocational HHD Vehicles
----------------------------------------------------------------------------------------------------------------
                                  Model Years 2013 to 2016 Voluntary Standards
----------------------------------------------------------------------------------------------------------------
Standard.............................                  38.1139                  22.9862                  22.2004
----------------------------------------------------------------------------------------------------------------
                                  Model Years 2017 to 2020 Mandatory Standards
----------------------------------------------------------------------------------------------------------------
Standard.............................                  36.6405                  22.1022                  21.8075
----------------------------------------------------------------------------------------------------------------

    (4) Regulatory subcategory standards for model years 2021 and 
later. The mandatory fuel consumption standards for heavy-duty 
vocational vehicles are given in the following table:
BILLING CODE 4910-59-P

[[Page 56175]]

[GRAPHIC] [TIFF OMITTED] TP13SE22.002


[[Page 56176]]


[GRAPHIC] [TIFF OMITTED] TP13SE22.003

BILLING CODE 4910-59-C
    (5) Subfamily standards. Manufacturers may specify a family 
emission limit (FEL) in terms of fuel consumption for each vehicle 
subfamily. The FEL may not be less than the result of fuel consumption 
modeling from 40 CFR 1037.520. The FELs is the fuel consumption 
standards for the vehicle subfamily instead of the standards specified 
in paragraph (b)(3) and (4) of this section and can be used for 
calculating fuel consumption credits in accordance with Sec.  535.7.
    (6) Alternate standards for custom chassis vehicles for model years 
2021 and later. Manufacturers may elect to certify certain vocational 
vehicles to the alternate standards for custom chassis vehicles 
specified in this paragraph (b)(6) instead of the standards specified 
in paragraph (b)(4) of this section. Note that, although these 
standards were established for custom chassis vehicles, manufacturers 
may apply these provisions to any qualifying vehicle even though these 
standards were established for custom chassis vehicles. For example, 
large diversified vehicle manufacturers may certify vehicles to the 
refuse hauler standards of this section as long as the manufacturer 
ensures that those vehicles qualify as refuse haulers when placed into 
service. GEM simulates vehicle operation for each type of vehicle based 
on an assigned vehicle service class, independent of the vehicle's 
actual characteristics, as shown in Table 10 of this section; however, 
standards apply for the vehicle's useful life based on its actual 
characteristics as specified in paragraph (b)(10) of this section. 
Vehicles certified to these alternative standards must use engines 
certified to requirements under paragraph (d) of this section and 40 
CFR part 1036 for the appropriate model year, except that motor homes 
and emergency vehicles may use engines certified with the loose-engine 
provisions of paragraph

[[Page 56177]]

(a)(7) of this section and 40 CFR 1037.150(m). This also applies for 
vehicles meeting standards under paragraphs (a)(6)(iv) through (vi) of 
this section. The fuel consumption standards for custom chassis 
vehicles are given in the following table:

                           Table 10--Phase 2 Custom Chassis Fuel Consumption Standards
                                           [Gallon per 1,000 ton-mile]
----------------------------------------------------------------------------------------------------------------
               Vehicle type \1\                  Assigned vehicle service class       MY 2021         MY 2027
----------------------------------------------------------------------------------------------------------------
School Bus....................................  MHD Vehicle.....................         28.5855         26.6208
Motor Home....................................  MHD Vehicle.....................         22.3969         22.2004
Coach Bus.....................................  HHD Vehicle.....................         20.6287         20.1375
Other bus.....................................  HHD Vehicle.....................         29.4695         28.0943
Refuse hauler.................................  HHD Vehicle.....................         30.7466         29.2731
Concrete mixer................................  HHD Vehicle.....................         31.3360         31.0413
Mixed-use vehicle.............................  HHD Vehicle.....................         31.3360         31.0413
Emergency Vehicle.............................  HHD Vehicle.....................         31.8271         31.3360
----------------------------------------------------------------------------------------------------------------
\1\ Vehicle types are generally defined in Sec.   535.3. ``Other bus'' includes any bus that is not a school bus
  or a coach bus. A ``mixed-use vehicle'' is one that meets at least one of the criteria specified in 40 CFR
  1037.631(a)(1) or at least one of the criteria in 40 CFR 1037.631(a)(2), but not both.

    (i) Manufacturers may generate or use fuel consumption credits for 
averaging to demonstrate compliance with the alternative standards as 
described in Sec.  535.7(c). This requires that manufacturers specify a 
Family Emission Limit (FEL) for fuel consumption for each vehicle 
subfamily. The FEL may not be less than the result of emission modeling 
as described in this paragraph (b). These FELs serve as the fuel 
consumption standards for the vehicle subfamily instead of the 
standards specified in this paragraph (b)(6). Manufacturers may only 
use fuel consumption credits for vehicles certified to the optional 
standards in this paragraph (b)(6) as specified in Sec.  535.7(c)(6) 
through (8) and you may not bank or trade fuel consumption credits from 
any vehicles certified under this paragraph (b)(6).
    (ii) For purposes of this paragraph (b)(6), each separate vehicle 
type identified in Table 10 of this section is in a separate averaging 
set.
    (iii) For purposes of emission and fuel consumption modeling under 
40 CFR 1037.520, consider motor homes and coach buses to be subject to 
the Regional duty cycle, and consider all other vehicles to be subject 
to the Urban duty cycle.
    (iv) Emergency vehicles are deemed to comply with the standards of 
this paragraph (b)(6) if manufacturers use tires with TRRL at or below 
8.4 kg/ton (8.7 g/ton for model years 2021 through 2026).
    (v) Concrete mixers are deemed to comply with the standards of this 
paragraph (b)(6) if manufacturers use tires with TRRL at or below 7.1 
kg/ton (7.6 g/ton for model years 2021 through 2026).
    (vi) Motor homes are deemed to comply with the standards of this 
paragraph (b)(6) if manufacturers use the following technologies:
    (A) Tires with TRRL at or below 6.0 kg/ton (6.7 g/ton for model 
years 2021 through 2026).
    (B) Automatic tire inflation systems or tire pressure monitoring 
systems with wheels on all axles.
    (C) Tire pressure monitoring systems must use low pressure warning 
and malfunction telltales in clear view of the driver as specified in 
S4.3 and S4.4 of 49 CFR 571.138.
    (vii) Small business manufacturers using the alternative standards 
for custom chassis vehicles under this paragraph (b)(6) may use fuel 
consumption credits subject to the unique provisions in Sec.  
535.7(a)(9).
    (7) Advanced, innovative and off-cycle technologies. For vocational 
vehicles subfamilies subject to Phase 1 standards, manufacturers must 
create separate vehicle subfamilies for vehicles that contain advanced 
or innovative technologies and group those vehicles together in a 
vehicle subfamily if they use the same advanced or innovative 
technologies. Manufacturers may generate separate credit allowances for 
advanced and innovative technologies as specified in Sec.  535.7(f)(1) 
and (2). For vehicle subfamilies subject to Phase 2 standards, 
manufacturers may generate separate credit allowances for off-cycle 
technologies in accordance with Sec.  535.7(f)(2). Separate credit 
allowances for advanced technology vehicles cannot be generated but 
instead manufacturers may use the credit multipliers specified in Sec.  
535.7(f)(1)(iv) through model year 2026.
    (8) Certifying across service classes. A manufacturer may 
optionally certify vocational vehicle subfamilies to the standards and 
useful life applicable to a heavier vehicle service class (such as MHD 
vocational vehicles instead of LHD vocational vehicles). Provisions 
related to generating fuel consumption credits apply as follows:
    (i) If a manufacturer certifies all its vehicles from a given 
vehicle service class in a given model year to the standards and useful 
life that applies for a heavier vehicle service class, it may generate 
credits as appropriate for the heavier service class.
    (ii) Class 8 hybrid vehicles with light or medium heavy-duty 
engines may be certified to compression-ignition standards for the 
Heavy HDV service class. A manufacturer may generate and use credits as 
allowed for the Heavy HDV service class.
    (iii) Except as specified in paragraphs (b)(8)(i) and (ii) of this 
section, a manufacturer may not generate credits with the vehicle. If 
you include lighter vehicles in a subfamily of heavier vehicles with an 
FEL below the standard, exclude the production volume of lighter 
vehicles from the credit calculation. Conversely, if a manufacturer 
includes lighter vehicles in a subfamily with an FEL above the 
standard, it must include the production volume of lighter vehicles in 
the credit calculation.
    (9) Off-road exemptions. This section provides an exemption for 
heavy-duty vocational vehicle subfamilies, including vocational 
tractors that are intended to be used extensively in off-road 
environments such as forests, oil fields, and construction sites from 
the fuel consumption standards in this paragraph (b). Vehicle exempted 
by this part do not comply with vehicle standards in this paragraph 
(b), but the engines in these vehicles must meet the engine 
requirements of paragraph (d) of this section. Note that manufacturers 
may not include these exempted vehicles in any credit calculations 
under this part.

[[Page 56178]]

    (i) Qualifying criteria. Vocational vehicles intended for off-road 
use are exempt without request, subject to the provisions of this 
section, if they are primarily designed to perform work off-road (such 
as in oil fields, mining, forests, or construction sites), and they 
meet at least one of the criteria of paragraph (b)(9)(i)(A) of this 
section and at least one of the criteria of paragraph (b)(9)(i)(B) of 
this section. See paragraph (b)(6) of this section for alternate 
standards that apply for vehicles meeting only one of these sets of 
criteria.
    (A) The vehicle must have affixed components designed to work 
inherently in an off-road environment (such as hazardous material 
equipment or off-road drill equipment) or be designed to operate at low 
speeds such that it is unsuitable for normal highway operation.
    (B) The vehicle must meet one of the following criteria:
    (1) Have an axle that has a gross axle weight rating (GAWR) at or 
above 29,000 pounds.
    (2) Have a speed attainable in 2.0 miles of not more than 33 mi/hr.
    (3) Have a speed attainable in 2.0 miles of not more than 45 mi/hr, 
an unloaded vehicle weight that is not less than 95 percent of its 
gross vehicle weight rating, and no capacity to carry occupants other 
than the driver and operating crew.
    (4) Have a maximum speed at or below 54 mi/hr. A manufacturer may 
consider the vehicle to be appropriately speed-limited if engine speed 
at 54 mi/hr is at or above 95 percent of the engine's maximum test 
speed in the highest available gear. A manufacturer may alternatively 
limit vehicle speed by programming the engine or vehicle's electronic 
control module in a way that is tamper-resistant.
    (ii) Tractors. The provisions of this section may apply for 
tractors only if each tractor qualifies as a vocational tractor under 
paragraph (c)(9) of this section or is granted approval for the 
exemption as specified in paragraph (b)(9)(iii) of this section.
    (iii) Preliminary Approval before Certification. If a manufacturer 
has unusual circumstances where it may be questionable whether its 
vehicles qualify for the off-road exemption of this part, the 
manufacturer may send the agencies information before finishing its 
application for certification (see 40 CFR 1037.205) for the applicable 
vehicles and ask for a preliminary informal approval. The agencies will 
review the request and make an appropriate determination in accordance 
with 40 CFR 1037.210. The agencies will generally not reverse a 
decision where they have given a manufacturer preliminary approval, 
unless the agencies find new information supporting a different 
decision. However, the agencies will normally not grant relief in cases 
where the vehicle manufacturer has credits or can otherwise comply with 
the applicable standards.
    (iv) Recordkeeping and reporting. (A) A manufacturer must keep 
records to document that its exempted vehicle configurations meet all 
applicable requirements of this section. Keep these records for at 
least eight years after you stop producing the exempted vehicle model. 
The agencies may review these records at any time.
    (B) A manufacturer must also keep records of the individual 
exempted vehicles you produce, including the vehicle identification 
number and a description of the vehicle configuration.
    (C) Within 90 days after the end of each model year, manufacturers 
must send to EPA a report as specified in Sec.  535.8(g)(7) and EPA 
will make the report available to NHTSA.
    (v) Compliance. (A) Manufacturers producing vehicles meeting the 
off-road exemption criteria in paragraph (b)(9)(i) of this section or 
that are granted a preliminary approval comply with the standards of 
this part.
    (B) In situations where a manufacturer would normally ask for a 
preliminary approval subject to paragraph (b)(9)(iii) of this section 
but introduces its vehicle into U.S. commerce without seeking approval 
first from the agencies, those vehicles violate compliance with the 
fuel consumption standards of this part and the EPA provisions under 40 
CFR 1068.101(a)(1).
    (C) If at any time, the agencies find new information that 
contradicts a manufacturer's use of the off-road exemption of this 
part, the manufacturers vehicles will be determined to be non-compliant 
with the regulations of this part and the manufacturer may be liable 
for civil penalties.
    (10) Useful life. The following useful life values apply for the 
standards of this section:
    (i) 110,000 miles or 10 years, whichever comes first, for 
vocational LHD vehicles certified to Phase 1 standards.
    (ii) 150,000 miles or 15 years, whichever comes first, for 
vocational LHD vehicles certified to Phase 2 standards.
    (iii) 185,000 miles or 10 years, whichever comes first, for 
vocational MHD vehicles for Phase 1 and 2.
    (iv) 435,000 miles or 10 years, whichever comes first, for 
vocational HHD vehicles for Phase 1 and 2.
    (v) For Phase 1 credits calculated based on a useful life of 
110,000 miles, multiply any banked credits carried forward for use into 
the Phase 2 program by 1.36. For Phase 1 credit deficits generated 
based on a useful life of 110,000 miles multiply the credit deficit by 
1.36, if offsetting the shortfall with Phase 2 credits.
    (11) Recreational vehicles. Recreational vehicles manufactured 
after model year 2020 must comply with the fuel consumption standards 
of this section. Manufacturers producing these vehicles may also 
certify to fuel consumption standards from 2014 through model year 
2020. Manufacturers may earn credits retroactively for early compliance 
with fuel consumption standards. Once selected, a manufacturer cannot 
reverse the decision and the manufacturer must continue to comply for 
each subsequent model year for all the vehicles it manufacturers in 
each regulatory subcategory for a given model year.
    (12) Loose engines. Manufacturers may certify certain spark-
ignition engines along with chassis-certified heavy-duty vehicles where 
there are identical engines used in those vehicles as described in 40 
CFR 86.1819(k)(8) and 40 CFR 1037.150(m). Vehicles in which those 
engines are installed are subject to standards under this part.
    (13) Compliance with standards. A manufacturer complies with the 
standards of this part as described in Sec.  535.10.
    (c) Truck tractors. Each manufacturer building truck tractors, 
except vocational tractors or vehicle constructed in accordance with 
Sec.  571.7(e), with a GVWR above 26,000 pounds shall comply with the 
fuel consumption standards in this paragraph (c) expressed in gallons 
per 1000 ton-miles. Manufacturers must apply the fuel consumption 
standards in this paragraph (c) to the same vehicles using the same 
options used to comply with EPA in 40 CFR 1037.106. Engines used in 
heavy-duty truck tractors vehicles shall comply with the standards in 
paragraph (d) of this section. Each vehicle must be manufactured to 
comply for its full useful life. Standards apply to the vehicle 
subfamilies within each of the tractor vehicle regulatory subcategories 
in accordance with Sec.  535.4 and 40 CFR 1037.230 and based upon the 
applicable modeling and testing specified in Sec.  535.6. Determine the 
vehicles in each regulatory subcategory in accordance with 40 CFR 
1037.140.

[[Page 56179]]

    (1) Mandatory standards. For model years 2016 and later, each 
manufacturer's truck tractor subfamilies must comply with the fuel 
consumption standards in paragraph (c)(3) of this section.
    (i) Based on the roof height and the design of the cab, the truck 
tractor category is divided into subcategories as described in Sec.  
535.4. The standards that apply to each regulatory subcategory are 
shown in paragraphs (c)(2) and (3) of this section, each with its own 
assigned standard.
    (A) When calculating a vehicle's roof height and trailer's length 
should be determined from nominal design specifications, as provided in 
40 CFR 1037.140.
    (B) Specify design values for roof height and trailer length to the 
nearest inch.
    (ii) For purposes of certifying vehicles to fuel consumption 
standards, manufacturers must divide their product lines in each 
regulatory subcategory into vehicles subfamilies that have similar 
emissions and fuel consumption features, as specified by EPA in 40 CFR 
1037.230, and these subfamilies will be subject to the applicable 
standards. Each vehicle subfamily is limited to a single model year.
    (iii) Standards for truck tractor engines are given in paragraph 
(d) of this section.
    (2) Voluntary compliance. (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.
    (ii) A manufacturer must declare its intent to voluntarily comply 
with fuel consumption standards and identify its plans to comply before 
it submits its first application for a certificate of conformity for 
the respective model year as specified in Sec.  535.8; and, once 
selected, the decision cannot be reversed and the manufacturer must 
continue to comply for each subsequent model year for all the vehicles 
and engines it manufacturers in each regulatory category for a given 
model year.
    (3) Regulatory subcategory standards. The fuel consumption 
standards for truck tractors, except for vocational tractors, are given 
in the following table:
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[[Page 56181]]

    (4) Subfamily standards. Manufacturers may generate or use fuel 
consumption credits for averaging, banking, and trading as described in 
Sec.  535.7(c). This requires that manufacturers calculate a credit 
quantity if they specify a family emission limit (FEL) that is 
different than the standard specified in this section. The FEL may not 
be less than the result of emission and fuel consumption modeling from 
40 CFR 1037.520. These FELs serve as the emission standards for the 
specific vehicle subfamily instead of the standards specified in 
paragraph (c)(2) of this section.
    (5) Alternate standards for tractors at or above 120,000 pounds 
GCWR. Manufacturers may certify tractors at or above 120,000 pounds 
GCWR to the following fuel consumption standards in the following 
table:

   Table 12--Alternate Fuel Consumption Standards for Tractors Above 120,000 Pounds GCWR for 2021 MY and Later
                                          [Gallons per 1,000 ton-miles]
----------------------------------------------------------------------------------------------------------------
                                                                    Model years     Model years     Model years
                     Regulatory subcategory                          2021-2023       2024-2026    2026 and later
----------------------------------------------------------------------------------------------------------------
Heavy Class 8 Low-Roof Day Cab..................................         5.25540         4.99018         4.80354
Heavy Class 8 Low-Roof Sleeper Cab..............................         4.62672         4.37132         4.16503
Heavy Class 8 Mid-Roof Day Cab..................................         5.46169         5.18664         4.99018
Heavy Class 8 Mid-Roof Sleeper Cab..............................         4.87230         4.60707         4.39096
Heavy Class 8 High-Roof Day Cab.................................         5.35363         5.04912         4.77407
Heavy Class 8 High-Roof Sleeper Cab.............................         4.62672         4.34185         4.02750
----------------------------------------------------------------------------------------------------------------

    (6) Advanced, innovative and off-cycle technologies. For tractors 
subject to Phase 1 standards, manufacturers must create separate 
vehicle subfamilies for vehicles that contain advanced or innovative 
technologies and group those vehicles together in a vehicle subfamily 
if they use the same advanced or innovative technologies. Manufacturers 
may generate separate credit allowances for advanced and innovative 
technologies as specified in Sec.  535.7(f)(1) and (2). For vehicles 
subject to Phase 2 standards, manufacturers may generate separate 
credits allowance for off-cycle technologies in accordance with Sec.  
535.7(f)(2). Separate credit allowances for advanced technology 
vehicles cannot be generated but instead manufacturers may use the 
credit multipliers specified in Sec.  535.7(f)(1)(iv) through model 
year 2026.
    (7) Certifying across service classes. Manufacturers may certify 
Class 7 tractors to Class 8 tractors standards as follows:
    (i) A manufacturer may optionally certify 4x2 tractors with heavy 
heavy-duty engines to the standards and useful life for Class 8 
tractors, with no restriction on generating or using fuel consumption 
credits within the Class 8 averaging set.
    (ii) A manufacturer may optionally certify a Class 7 tractor to the 
standards and useful life applicable to Class 8 tractors. Credit 
provisions apply as follows:
    (A) If a manufacturer certifies all of its Class 7 tractors to 
Class 8 standards, it may use these Heavy HDV credits without 
restriction.
    (B) This paragraph (c)(7)(ii)(B) applies if a manufacturer 
certifies some Class 7 tractors to Class 8 standards under this 
paragraph (c)(7)(ii) but not all of them. If a manufacturer includes 
Class 7 tractors in a subfamily of Class 8 tractors with an FEL below 
the standard, exclude the production volume of Class 7 tractors from 
the credit calculation. Conversely, if a manufacturer includes Class 7 
tractors in a subfamily of Class 8 tractors with an FEL above the 
standard, it must include the production volume of Class 7 tractors in 
the credit calculation.
    (8) Expanded families. Manufacturers may combine dissimilar 
vehicles into single vehicle subfamilies for applying standards and for 
testing in special circumstances as follows:
    (i) For a Phase 1 vehicle model that straddles a roof-height, cab 
type, or GVWR division, manufacturers can include all the vehicles in 
the same vehicle family if it certifies the vehicle family to the more 
stringent standard. For roof height, the manufacturer must certify to 
the taller roof standard. For cab-type and GVWR, the manufacturers must 
certify to the numerically lower standard.
    (ii) For a Phase 2 vehicle model that includes a range of GVWR 
values that straddle weight classes, manufacturers may include all the 
vehicles in the same vehicle family if it certifies the vehicle family 
to the numerically lower fuel consumption standard from the affected 
service classes. Vehicles that are optionally certified to a more 
stringent standard under this paragraph are subject to useful-life and 
all other provisions corresponding to the weight class with the 
numerically lower fuel consumption standard. For a Phase 2 tractor 
model that includes a range of roof heights that straddle 
subcategories, a manufacturer may include all the vehicles in the same 
vehicle family if it certifies the vehicle family to the appropriate 
subcategory as follows:
    (A) A manufacturer may certify mid-roof tractors as high-roof 
tractors, but it may not certify high-roof tractors as mid-roof 
tractors.
    (B) For tractor families straddling the low-roof/mid-roof division, 
a manufacturer may certify the family based on the primary roof-height 
as long as no more than 10 percent of the tractors are certified to the 
otherwise inapplicable subcategory. For example, if 95-percent of the 
tractors in the family are less than 120 inches tall, and the other 5 
percent are 122 inches tall, a manufacturer may certify the tractors as 
a single family in the low-roof subcategory.
    (C) Determine the appropriate aerodynamic bin number based on the 
actual roof height if the CdA value is measured. However, 
use the GEM input for the bin based on the standards to which the 
manufacturer certifies. For example, of a manufacturer certifies as mid 
roof tractors some low-roof tractors with a measured CdA 
value of 4.2 m\2\, it qualifies as Bin IV; and must input into GEM the 
mid-roof Bin IV value of 5.85 m\2\.
    (9) Vocational tractors. Tractors meeting the definition of 
vocational tractors in 49 CFR 523.2 must comply with requirements for 
heavy-duty vocational vehicles specified in paragraphs (b) and (d) of 
this section. For Phase 1, 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

[[Page 56182]]

EPA in its applications for certification in accordance with 40 CFR 
1037.205 and 1037.610, a manufacturer must comply with the tractor fuel 
consumption standards in paragraph (c)(3) of this section. No 
production limit applies for vocational tractors subject to Phase 2 
standards.
    (10) Small business manufacturers converting to mid roof or high 
roof configurations. Small manufacturers are to allowed convert low and 
mid roof tractors to high roof configurations without recertification, 
provided it is for the purpose of building a custom sleeper tractor or 
conversion to a natural gas tractor as specified in 40 CFR 1037.150(r).
    (11) Useful life. The following useful life values apply for the 
standards of this section:
    (i) 185,000 miles or 10 years, whichever comes first, for vehicles 
at or below 33,000 pounds GVWR.
    (ii) 435,000 miles or 10 years, whichever comes first, for vehicles 
above 33,000 pounds GVWR.
    (12) Conversion to high-roof configurations. Secondary vehicle 
manufacturers that qualify as small manufacturers may convert low- and 
mid-roof tractors to high-roof configurations without recertification 
for the purpose of building a custom sleeper tractor or converting it 
to run on natural gas, as follows:
    (i) The original low- or mid-roof tractor must be covered by a 
valid certificate of conformity by EPA.
    (ii) The modifications may not increase the frontal area of the 
tractor beyond the frontal area of the equivalent high-roof tractor 
with the corresponding standard trailer. If a manufacturer cannot use 
the original manufacturer's roof fairing for the high-roof tractor, use 
good engineering judgment to achieve similar or better aerodynamic 
performance.
    (iii) The agencies may require that these manufacturers submit 
annual production reports as described in Sec.  535.8 and 40 CFR 
1037.250 indicating the original roof height for requalified vehicles.
    (13) Compliance with standards. A manufacturer complies with the 
standards of this part as described in Sec.  535.10.
    (d) Heavy-duty engines. Each manufacturer of heavy-duty engines 
shall comply with the fuel consumption standards in this paragraph (d) 
expressed in gallons per 100 horsepower-hour. Manufacturers must apply 
the fuel consumption standards in this paragraph (d) to the same 
engines using the same options used to comply with EPA in 40 CFR 
1036.108. Each engine must be manufactured to comply for its full 
useful life, expressed in service miles, operating hours, or calendar 
years, whatever comes first. The provisions of this part apply to all 
new 2014 model year and later heavy-duty engines fueled by conventional 
and alternative fuels and manufactured for use in heavy-duty tractors 
or vocational vehicles. Standards apply to the engine and powertrain 
families and sub-families based upon the primary intended service 
classes within each of the engine regulatory subcategories as described 
inSec.  535.4 and based upon the applicable modeling and testing 
specified in Sec.  535.6.
    (1) Mandatory standards. Manufacturers of heavy-duty engine 
families shall comply with the mandatory fuel consumption standards in 
paragraphs (d)(3) through (6) of this section for model years 2017 and 
later for compression-ignition engines and for model years 2016 and 
later for spark-ignition engines.
    (i) The heavy-duty engine regulatory category is divided into six 
regulatory subcategories, five compression-ignition subcategories and 
one spark-ignition subcategory, as shown in Table 14 of this section.
    (ii) Separate standards exist for engine families manufactured for 
use in heavy-duty vocational vehicles and in truck tractors.
    (iii) For purposes of certifying engines to fuel consumption 
standards, manufacturers must divide their product lines in each 
regulatory subcategory into engine families. Fuel consumption standards 
apply each model year to the same engine families used to comply with 
EPA standards in 40 CFR 1036.108 and 40 CFR 1037.230. An engine family 
is designated under the EPA program based upon testing specified in 40 
CFR part 1036, subpart F, and the engine family's primary intended 
service class. Each engine family manufactured for use in a heavy-duty 
tractor or vocational vehicle must be certified to the primary intended 
service class that it is designed for in accordance with 40 CFR 
1036.108 and 1036.140.
    (2) Voluntary compliance. (i) For model years 2013 through 2016 for 
compression-ignition engine families, and for model year 2015 for 
spark-ignition engine families, a manufacturer may choose voluntarily 
to comply with the fuel consumption standards provided in paragraphs 
(d)(3) through (5) 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 
in model year 2013 the manufacturer may comply with individual engine 
families as specified in 40 CFR 1036.150(a)(2).
    (ii) A manufacturer must declare its intent to voluntarily comply 
with fuel consumption standards and identify its plans to comply before 
it submits its first application for a certificate of conformity for 
the respective model year as specified in Sec.  535.8; and, once 
selected, the decision cannot be reversed and the manufacturer must 
continue to comply for each subsequent model year for all the vehicles 
and engines it manufacturers in each regulatory category for a given 
model year.
    (3) Regulatory subcategory standards. The primary fuel consumption 
standards for heavy-duty engine families are given in the following 
table:
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[[Page 56184]]

    (4) Alternate subcategory standards. The alternative fuel 
consumption standards for heavy-duty compression-ignition engine 
families are as follows:
    (i) Manufacturers entering the voluntary program in model years 
2014 through 2016, may choose to certify compression-ignition engine 
families unable to meet standards provided in paragraph (d)(3) of this 
section to the alternative fuel consumption standards of this paragraph 
(d)(4).
    (ii) Manufacturers may not certify engines to these alternate 
standards if they are part of an averaging set in which they carry a 
balance of banked credits. For purposes of this section, manufacturers 
are deemed to carry credits in an averaging set if they carry credits 
from advance technology that are allowed to be used in that averaging 
set in accordance with Sec.  535.7(d)(12).
    (iii) The emission standards of this section are determined as 
specified by EPA in 40 CFR 1036.620(a) through (c) and should be 
converted to equivalent fuel consumption values.
    (5) Alternate phase-in standards. Manufacturers have the option to 
comply with EPA emissions standards for compression-ignition engine 
families using an alternative phase-in schedule that correlates with 
EPA's OBD standards. If a manufacturer chooses to use the alternative 
phase-in schedule for meeting EPA standards and optionally chooses to 
comply early with the NHTSA fuel consumption program, it must use the 
same phase-in schedule beginning in model year 2013 for fuel 
consumption standards and must remain in the program for each model 
year thereafter until model year 2020. The fuel consumption standard 
for each model year of the alternative phase-in schedule is provided in 
Table 15 of this section. Note that engine families certified to these 
standards are not eligible for early credits under Sec.  535.7.
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BILLING CODE 4910-59-C
    (6) Alternative fuel conversions. Engines that have been converted 
to operate on alternative fuels may demonstrate compliance with the 
standards of this part or other alternative compliance approaches 
allowed by EPA in 40 CFR 85.525.
    (7) Optional certification under this section. Manufacturers 
certifying spark-ignition engines to the compression-ignition standards 
for EPA must treat those engines as compression-ignition engines for 
all the provisions of this part.
    (8) Advanced, innovative and off-cycle technologies. For engines 
subject to Phase 1 standards, manufacturers must create separate engine 
families for engines that contain advanced or innovative technologies 
and group those engines together in an engine family if they use the 
same advanced or innovative technologies. Manufacturers may generate 
separate credit allowances for advanced and innovative technologies as 
specified in Sec.  535.7(f)(1) and (2). For engines subject to Phase 2 
standards, manufacturers may generate separate credits allowance for 
off-cycle technologies in accordance with Sec.  535.7(f)(2). Credit 
incentives for advanced technology engines do not apply during the 
Phase 2 period.
    (9) Useful life. The exhaust emission standards of this section 
apply for the full useful life, expressed in service miles, operating 
hours, or calendar years, whichever comes first. The following useful 
life values apply for the standards of this section:
    (i) 120,000 miles or 11 years, whichever comes first, for CI and SI 
LHD engines certified to Phase 1 standards.

[[Page 56185]]

    (ii) 150,000 miles or 15 years, whichever comes first, for CI and 
SI LHD and spark-ignition engines certified to Phase 2 standards.
    (iii) 185,000 miles or 10 years, whichever comes first, for CI MHD 
engines certified to Phase 1 and for Phase 2.
    (iv) 435,000 miles or 10 years, whichever comes first, for CI HHD 
engines certified to Phase 1 and for Phase 2.
    (v) For Phase 1 credits that manufacturers calculate based on a 
useful life of 110,000 miles, multiply any banked credits that it 
carries forward for use into the Phase 2 program by 1.36. For Phase 1 
credit deficits that manufacturers generate based on a useful life of 
110,000 miles multiply the credit deficit by 1.36, if offsetting the 
shortfall with Phase 2 credits.
    (10) Loose engines. This paragraph (d)(10) describes alternate 
emission and fuel consumption standards for loose engines certified 
under. The standards of this paragraph (d) and 1036.108 do not apply 
for loose engines certified under paragraph (a) of this section and 40 
CFR 86.1819- 14(k)(8). The standards in 40 CFR 1036.150(j) apply for 
the emissions and equivalent fuel consumption measured with the engine 
installed in a complete vehicle consistent with the provisions of 40 
CFR 86.1819-14(k)(8)(vi).
    (11) Alternate transition option for Phase 2 engine standards. (i) 
Manufacturers may optionally elect to comply with the model year 2021 
primary (Phase 2) vocational vehicle and tractor engine standards in 
paragraph (d)(3) of this section beginning in model year 2020 (e.g., 
comply with the more stringent standards one year early). The model 
year 2021 standard would apply to these manufacturers for model years 
2020 through 2023. Manufacturers that voluntarily certify their engines 
to model year 2021 standards early would then be eligible for less 
stringent engine tractor standards in model years 2024 through 2026, as 
follows:
    (A) 5.3242 gallons per 100 hp-hr for MHD vocational vehicle 
engines.
    (B) 4.5874 gallons per 100 hp-hr for MHD tractor engines.
    (C) 5.0098 gallons per 100 hp-hr for HHD vocational vehicle 
engines.
    (D) 4.3418 gallons per 100 hp-hr for HHD tractor engines.
    (ii) The primary standard in paragraph (d)(3) of this section 
applies for all manufacturers in model year 2027 and later years.
    (iii) Manufacturers may apply these provisions separately for 
medium heavy-duty engines and heavy heavy-duty engines. This election 
applies to all engines in each segment. For example, if a manufacturer 
elects this alternate option for its medium heavy-duty engines, all of 
the manufacturer's medium heavy-duty vocational and tractor engines 
must comply. Engine fuel consumption credits generated under Sec.  
535.7(d) for manufacturers complying early with the model year 2021 
standards follow the temporary extended credit life allowance in Sec.  
535.7(d)(9).
    (12) Compliance with standards. A manufacturer complies with the 
standards of this part as described in Sec.  535.10.


Sec.  535.6  Measurement and calculation procedures.

    This part describes the measurement and calculation procedures 
manufacturers use to determine annual fuel consumption performance 
results. Manufacturers use the fuel consumption results determined in 
this part for calculating credit balances specified in Sec.  535.7 and 
then determine whether they comply with standards as specified in Sec.  
535.10. Manufacturers must use EPA emissions test results for deriving 
NHTSA's fuel consumption performance rates. Consequently, manufacturers 
conducting testing for certification or annual demonstration testing 
and providing CO2 emissions data to EPA must also provide 
equivalent fuel consumption results to NHTSA for all values. NHTSA and 
EPA reserve the right to verify separately or in coordination the 
results of any testing and measurement established by manufacturers in 
complying with the provisions of this program and as specified in 40 
CFR 1037.301 and Sec.  535.9. Any carry over data from the Phase 1 
program may be carried into the Phase 2 only with approval from EPA and 
by using good engineering judgment considering differences in testing 
protocols between test procedures.
    (a) Heavy-duty pickup trucks and vans. This section describes the 
method for determining the fuel consumption performance rates for test 
groups and for fleets of complete heavy-duty pickup trucks and vans 
each model year. The NHTSA heavy-duty pickup truck and van fuel 
consumption performance rates correspond to the same requirements for 
EPA as specified in 40 CFR 86.1819-14.
    (1) For the Phase 1 program, if the manufacturer's fleet includes 
conventional vehicles (gasoline, diesel and alternative fueled 
vehicles) and advanced technology vehicles (hybrids with powertrain 
designs that include energy storage systems, vehicles with waste heat 
recovery, electric vehicles and fuel cell vehicles), it may divide its 
fleet into two separate fleets each with its own separate fleet average 
fuel consumption performance rate. For Phase 2, manufacturers may 
calculate their fleet average fuel consumption rates for a conventional 
fleet and separate advanced technology vehicle fleets. Advanced 
technology vehicle fleets should be separated into plug-in hybrid 
electric vehicles, electric vehicles and fuel cell vehicles.
    (2) Vehicles in each fleet should be selected and divided into test 
groups or subconfigurations according to EPA in 40 CFR 86.1819-14(d).
    (3) Use the EPA CO2 emissions test results for each test group, in 
grams per mile, for the selected vehicles.
    (i) Use CO2 emissions test results for vehicles fueled 
by conventional and alternative fuels, including dedicated and dual-
fueled (multi-fuel and flexible-fuel) vehicles using each fuel type as 
specified in 40 CFR 86.1819-14(d)(10).
    (ii) Use CO2 emissions test results for dual-fueled 
vehicles using a weighted average of the manufacturer's emission 
results as specified in 40 CFR 600.510-12(k) for light-duty trucks.
    (iii) All electric vehicles are deemed to have zero emissions of 
CO2, CH4, and N2O. No emission testing 
is required for such electric vehicles. Assign the fuel consumption 
test group result to a value of zero gallons per 100 miles in paragraph 
(a)(4) of this section.
    (iv) Use CO2 emissions test results for cab-complete and 
incomplete vehicles based upon the applicable complete sister vehicles 
as determined in 40 CFR 1819-14(j)(2).
    (v) Use CO2 emissions test results for loose engines 
using applicable complete vehicles as determined in 40 CFR 86.1819-
14(k)(8).
    (vi) Manufacturers can choose to analytically derive CO2 
emission rates (ADCs) for test groups or subconfigurations. Use ADCs 
for test groups or subconfigurations in accordance with 40 CFR 86.1819-
14 (d) and (g).
    (4) Calculate equivalent fuel consumption results for all test 
groups, in gallons per 100 miles, from CO2emissions test 
group results, in grams per miles, and round to the nearest 0.001 
gallon per 100 miles.
    (i) Calculate the equivalent fuel consumption test group results as 
follows for compression-ignition vehicles and alternative fuel 
compression-ignition vehicles. CO2 emissions test group 
result (grams per mile)/10,180 grams per gallon of diesel fuel) x 
(10\2\) = Fuel consumption test group result (gallons per 100 mile).

[[Page 56186]]

    (ii) Calculate the equivalent fuel consumption test group results 
as follows for spark-ignition vehicles and alternative fuel spark-
ignition vehicles. CO2emissions test group result (grams per 
mile)/8,877 grams per gallon of gasoline fuel) x (10\2\) = Fuel 
consumption test group result (gallons per 100 mile).
    (5) Calculate the fleet average fuel consumption result, in gallons 
per 100 miles, from the equivalent fuel consumption test group results 
and round the fuel consumption result to the nearest 0.001 gallon per 
100 miles. Calculate the fleet average fuel consumption result using 
the following equation.
[GRAPHIC] [TIFF OMITTED] TP13SE22.001

Where:
Fuel Consumption Test Group Resulti = fuel consumption performance 
for each test group as defined in 49 CFR 523.4.
Volumei = production volume of each test group.

    (6) Compare the fleet average fuel consumption standard to the 
fleet average fuel consumption performance. The fleet average fuel 
consumption performance must be less than or equal to the fleet fuel 
consumption standard to comply with standards in Sec.  535.5(a).
    (b) Heavy-duty vocational vehicles and tractors. This section 
describes the method for determining the fuel consumption performance 
rates for vehicle families of heavy-duty vocational vehicles and 
tractors. The NHTSA heavy-duty vocational vehicle and tractor fuel 
consumption performance rates correspond to the same requirements for 
EPA as specified in 40 CFR 1037, subpart F.
    (1) Select vehicles and vehicle family configurations as specified 
in 40 CFR 1037.150 and 1037.230 for vehicles that make up each of the 
manufacturer's regulatory subcategories of vocational vehicles and 
tractors. For the Phase 2 program, select powertrain, axle and 
transmission families in accordance with 40 CFR 1037.231 and 1037.232.
    (2) Follow the EPA testing requirements in 40 CFR 1037.230 and 
1037.501 to derive inputs for the Greenhouse gas Emissions Model (GEM).
    (3) Enter inputs into GEM, in accordance with 40 CFR 1037.520, to 
derive the emissions and fuel consumption performance results for all 
vehicles (conventional, alternative fueled and advanced technology 
vehicles).
    (4) For Phase 1 and 2, all of the following GEM inputs apply for 
vocational vehicles and other tractor regulatory subcategories, as 
follows:
    (i) Model year and regulatory subcategory (see Sec.  535.3 and 40 
CFR 1037.230).
    (ii) Coefficient of aerodynamic drag (CdA) or drag area, 
as described in 40 CFR 1037.520(b), 40 CFR 1037.525, 1037.527 and 
1037.528. Alternatively, manufacturers may use CdA values as 
specified in 40 CFR 1037.530, 1037.532 or 1037.534 if used for 
determining CO2 compliance for EPA. Manufacturers must use 
the same compliance approach for determining CdA values in 
GEM for the NHTSA and EPA programs.
    (iii) Steer and drive tire rolling resistance, as described in 40 
CFR 1037.520(c).
    (iv) Vehicle speed limiters, as described in 40 CFR 1037.520(d) 
(tractors only).
    (v) Vehicle weight reduction, as described in 40 CFR 1037.520(e) 
(tractors only for Phase 1).
    (vi) Automatic engine shutdown systems, as described in 40 CFR 
1037.660 (only for Phase 1 Class 8 sleeper cabs). For Phase 1, enter a 
GEM input value of 5.0 g/ton-mile, or an adjusted value as specified in 
40 CFR 1037.660.
    (5) For Phase 2 vehicles, the GEM inputs described in paragraphs 
(b)(4)(i) through (v) of this section continue to apply. Note that the 
provisions related to vehicle speed limiters and automatic engine 
shutdown systems are available for vocational vehicles in Phase 2. The 
additional GEM inputs that apply for vocational vehicles and other 
tractor regulatory subcategories for demonstrating compliance with 
Phase 2 standards are as follows:
    (i) Engine characteristics. Enter information from the engine 
manufacturer to describe the installed engine and its operating 
parameters as described in 40 CFR 1036.503 and 1037.520(f).
    (ii) Vehicle information. Enter information in accordance with 40 
CFR 1037.520(g) for the vehicle and its operating parameters including:
    (A) Transmission make, model and type;
    (B) Drive axle configuration;
    (C) Drive axle ratio, ka;
    (D) For Phase 2, GEM inputs associated with powertrain testing 
include powertrain family, transmission calibration identifier, test 
data from 40 CFR 1037.550 and 1037.551, and the powertrain test 
configuration (dynamometer connected to transmission output or wheel 
hub). Test Phase 1 hybrid systems according to 40 CFR 1037.555 to 
determine GEM inputs.
    (iii) Idle-reduction technologies. Identify whether the 
manufacturer's vehicle has qualifying idle- reduction technologies, 
subject to the qualifying criteria in 40 and 1037.660 and enter values 
for stop start and neutral idle technologies as specified in 40 CFR 
1037.520(h).
    (iv) Axle and transmission efficiency. Manufacturers may use axle 
efficiency maps as described in 40 CFR 1037.560 and transmission 
efficiency maps as described in 40 CFR 1037.565 to replace the default 
values in GEM.
    (v) Additional reduction technologies. Enter input values in GEM as 
follows to characterize the percentage CO2 emission 
reduction corresponding to certain technologies and vehicle 
configurations, or enter 0 as specified in 40 CFR 1037.520(j):
    (A) Intelligent controls
    (B) Accessory load
    (C) Tire-pressure systems
    (D) Extended-idle reduction
    (E) Additional GEM inputs may apply as follows:
    (1) Enter 1.7 and 0.9, respectively, for school buses and coach 
buses that have at least seven available forward gears.
    (2) If the agencies approve an off-cycle technology under Sec.  
535.7(f) and 40 CFR 1037.610 in the form of an improvement factor, 
enter the improvement factor expressed as a percentage reduction in 
CO2 emissions. (Note: In the case of approved off-cycle 
technologies whose benefit is quantified as a g/ton-mile credit, apply 
the credit to the GEM result, not as a GEM input value.)
    (3) Manufacturers may use values to characterize torque converters 
as inputs to GEM as specified in the procedure defined in 40 CFR 
1037.570.
    (4) Vocational vehicle manufacturers may optionally use values for 
neutral coasting in GEM as in 40 CFR 1037.520

[[Page 56187]]

    (vi) Vehicles with hybrid power take-off (PTO). For vocational 
vehicles, determine the delta PTO emission result of the manufacturer's 
engine and hybrid power take-off system as described in 40 CFR 
1037.540.
    (vii) Aerodynamic improvements for vocational vehicles. For 
vocational vehicles certified using the Regional duty cycle, 
enter[Delta]CdAvalues to account for using rear fairings and 
a reduced minimum frontal area as specified in 40 CFR 1037.520(m) and 
1037.527.
    (viii) Alternate fuels. For fuels other than those identified in 
GEM, perform the simulation by identifying the vehicle as being diesel-
fueled if the engine is subject to the compression-ignition standard, 
or as being gasoline-fueled if the engine is subject to the spark-
ignition standards. Correct the engine or powertrain fuel map for mass-
specific net energy content as described in 40 CFR 1036.535(b).
    (ix) Custom Chassis Vehicles. A simplified version of GEM applies 
for custom chassis vehicle subject Sec.  535.5(b)(6) in accordance with 
40 CFR 1037.520(a)(2)(ii).
    (6) In unusual circumstances, manufacturers may ask EPA to use 
weighted average results of multiple GEM runs to represent special 
technologies for which no single GEM run can accurately reflect.
    (7) 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 subcategory 
for each model year. Equivalent fuel consumption FELs are derived in 
GEM and expressed to the nearest 0.0001 gallons per 1000 ton-mile. For 
families containing multiple subfamilies, identify the FELs for each 
subfamily.
    (8) The fuel consumption of electric vehicles (as defined in Sec.  
1037.801) are deemed to be zero. No emission testing is required for 
electric vehicles. Use good engineering judgment to apply other 
requirements of this part to electric vehicles.
    (c) [Reserved]
    (d) Heavy-duty engines. This section describes the method for 
determining equivalent fuel consumption family certification level 
(FCL) values for engine and powertrain families and subfamilies of 
heavy-duty truck tractors and vocational vehicles. The NHTSA heavy-duty 
engine fuel consumption FCLs are determined from the EPA FCLs tested in 
accordance with 40 CFR 1036, subpart F. Each engine and powertrain 
family must use the same primary intended service class as designated 
for EPA in accordance with 40 CFR 1036.140.
    (1) Manufacturers must select emission-data engines representing 
the tested configuration of each engine family specified in 40 CFR 
1036.501 for engines in heavy-duty truck tractors and vocational 
vehicles that make up each of the manufacturer's regulatory 
subcategories.
    (2) Standards in Sec.  535.5(d) apply to the CO2 
emissions rates for each emissions-data engine in an engine or 
powertrain family subject to the procedures and equipment specified in 
40 CFR part 1036, subpart F. Determine equivalent fuel consumptions 
rates using CO2 emissions rates in grams per hp-hr measured 
to at least one more decimal place than that of the applicable EPA 
standard in 40 CFR 1036.108.
    (i) Use the CO2 emissions test results for engines 
running on each fuel type for conventional, dedicated, multi -fueled 
(dual-fuel, and flexible-fuel) engines as specified in 40 CFR part 
1036, subpart F.
    (ii) Use the CO2 emissions result for multi-fueled 
engines using the same weighted fuel mixture emission results as 
specified in 40 CFR 1036.235 and 40 CFR part 1036, subpart F.
    (iii) Use the CO2 emissions test results for hybrid 
engines as described in 40 CFR 1036.525.
    (iv) All electric vehicles are deemed to have zero emissions of 
CO2 and zero fuel consumption. No emission or fuel 
consumption testing is required for such electric vehicles.
    (3) Use the CO2 emissions test results for medium and 
heavy heavy-duty engines certified as tractor and other line haul 
engine families using the steady-state duty cycle specified in Sec.  
1036.501 (referred to as the Supplementary Emissions Test, or SET) and 
as both tractor and vocational engines using the steady-state duty 
cycle and the transient duty cycle (sometimes referred to as the FTP 
engine cycle)-for each model year. Use the CO2 emissions 
test results for all other engines (including engines meeting spark-
ignition standards) using the appropriate transient duty cycle 
specified in 40 CFR 1036.501.
    (i) If a manufacturer certifies an engine family for use both as a 
vocational engine and as a tractor engine, the manufacturer must split 
the family into two separate subfamilies in accordance with 40 CFR 
1036.230. The manufacturer may assign the numbers and configurations of 
engines within the respective subfamilies at any time prior to the 
submission of the end-of-year report required by 40 CFR 1036.730 and 
Sec.  535.8. The manufacturer must track into which type of vehicle 
each engine is installed, although EPA may allow the manufacturer to 
use statistical methods to determine this for a fraction of its 
engines.
    (ii) The following engines are excluded from the engine and 
powertrain families and subfamilies used to determine fuel consumption 
FCL values and the benefit for these engines is determined as an 
advanced technology credit under the ABT provisions provided in Sec.  
535.7(e); these provisions apply only for the Phase 1 program:
    (A) Engines certified as hybrid engines or power packs.
    (B) Engines certified as hybrid engines designed with PTO 
capability and that are sold with the engine coupled to a transmission.
    (C) Engines with Rankine cycle waste heat recovery.
    (4) Manufacturers generating CO2 emissions rates to 
demonstrate compliance to EPA vehicle standards for model years 2021 
and later, using engine fuel maps determined in accordance with 40 CFR 
1036.535 and 1036.540 or engine powertrain results in accordance with 
40 CFR 1036.630 and 40 CFR 1037.550 for each engine configuration, must 
use the same compliance pathway and model years for certifying under 
the NHTSA program. Manufacturers may omit providing equivalent fuel 
consumption FCLs under this section if all of its engines will be 
installed in vehicles that are certified based on powertrain testing as 
described in 40 CFR 1037.550.
    (5) Calculate equivalent fuel consumption values from the emissions 
CO2 FCLs levels for certified engines, in gallons per 100 
hp-hr and round each fuel consumption value to the nearest 0.0001 
gallon per 100 hp-hr.
    (i) Calculate equivalent fuel consumption FCL values for 
compression-ignition engines and alternative fuel compression-ignition 
engines. CO2 FCL value (grams per hp-hr)/10,180 grams per 
gallon of diesel fuel) x (10\2\) = Fuel consumption FCL value (gallons 
per 100 hp-hr).
    (ii) Calculate equivalent fuel consumption FCL values for spark-
ignition engines and alternative fuel spark-ignition engines. 
CO2 FCL value (grams per hp-hr)/8,877 grams per gallon of 
gasoline fuel) x (10\2\) = Fuel consumption FCL value (gallons per 100 
hp-hr).
    (iii) Manufacturers may carryover fuel consumption data from a 
previous model year if allowed to carry over emissions data for EPA in 
accordance with 40 CFR 1036.235.
    (iv) If a manufacturer uses an alternate test procedure under 40 
CFR 1065.10

[[Page 56188]]

and subsequently the data is rejected by EPA, NHTSA will also reject 
the data.


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

    (a) General provisions. After the end of each model year, 
manufacturers must comply with the fuel consumption standards in Sec.  
535.5 for averaging, banking and trading credits. Manufacturers comply 
with standards if the sum of averaged, banked and traded credits 
generate a ``zero'' credit balance or a credit surplus within an 
averaging set of vehicles or engines. Manufacturers fail to comply with 
standards if the sum of the credit flexibilities generate a credit 
deficit (or shortfall) in an averaging set. Credit shortfalls must be 
offset by banked or traded credits within three model years after the 
shortfall is incurred. These processes are hereafter referenced as the 
NHTSA ABT credit program. The following provisions apply to all fuel 
consumption credits.
    (1) Credits (or fuel consumption credits (FCCs)). Credits in this 
part mean a calculated weighted value representing the difference 
between the fuel consumption performance and the standard of a vehicle 
or engine family or fleet within a particular averaging set. Positive 
credits represent cases where a vehicle or engine family or fleets 
perform better than the applicable standard (the fuel consumption 
performance is less than the standard) whereas negative credits 
represent underperforming cases. The value of a credit is calculated 
according to paragraphs (b) through (e) of this section. FCCs are only 
considered earned or useable for averaging, banking or trading after 
EPA and NHTSA have verified the information in a manufacturer's final 
reports required in Sec.  535.8. Types of FCCs include the following:
    (i) Conventional credits. Credits generated by vehicle or engine 
families or fleets containing conventional vehicles (i.e., gasoline, 
diesel and alternative fueled vehicles).
    (ii) Early credits. Credits generated by vehicle or engine families 
or fleets produced for model year 2013. Early credits are multiplied by 
an incentive factor of 1.5 times.
    (iii) Advanced technology credits. Credits generated by vehicle or 
engine families or subconfigurations containing vehicles with advanced 
technologies (i.e., hybrids with regenerative braking, vehicles 
equipped with Rankine-cycle engines, electric and fuel cell vehicles) 
and incentivized under this ABT credit program in paragraph (f)(1) of 
this section and by EPA under 40 CFR 86.1819-14(d)(7), 1036.615, and 
1037.615.
    (iv) Innovative and off-cycle technology credits. Credits can be 
generated by vehicle or engine families or subconfigurations having 
fuel consumption reductions resulting from technologies not reflected 
in the GEM simulation tool or in the FTP chassis dynamometer and that 
were not in common use with heavy-duty vehicles or engines before model 
year 2010 that are not reflected in the specified test procedure. 
Manufacturers should prove that these technologies were not in common 
use in heavy-duty vehicles or engines before model year 2010 by 
demonstrating factors such as the penetration rates of the technology 
in the market. NHTSA will not approve any request if it determines that 
these technologies do not qualify. The approach for determining 
innovative and off-cycle technology credits under this fuel consumption 
program is described in paragraph (f)(2) of this section and by EPA 
under 40 CFR 86.1819-14(d)(13), 1036.610, and 1037.610.
    (2) Averaging. Averaging is the summing of a manufacturer's 
positive and negative FCCs for engines or vehicle families or fleets 
within an averaging set. The principle averaging sets are defined in 
Sec.  535.4.
    (i) A credit surplus occurs when the net sum of the manufacturer's 
generated credits for engines or vehicle families or fleets within an 
averaging set is positive (a zero-credit balance is when the sum equals 
zero).
    (ii) A credit deficit occurs when the net sum of the manufacturer's 
generated credits for engines or vehicle families or fleets within an 
averaging set is negative.
    (iii) Positive credits, other than advanced technology credits, 
generated and calculated within an averaging set may only be used to 
offset negative credits within the same averaging set.
    (iv) Manufacturers may certify one or more vehicle families (or 
subfamilies) to an FEL above the applicable fuel consumption standard, 
subject to any applicable FEL caps and other provisions allowed by EPA 
in 40 CFR parts 1036 and 1037, if the manufacturer shows in its 
application for certification to EPA that its projected balance of all 
FCC transactions in that model year is greater than or equal to zero or 
that a negative balance is allowed by EPA under 40 CFR 1036.745 and 
1037.745.
    (v) If a manufacturer certifies a vehicle family to an FEL that 
exceeds the otherwise applicable standard, it must obtain enough FCC to 
offset the vehicle family's deficit by the due date of its final report 
required in Sec.  535.8. The emission credits used to address the 
deficit may come from other vehicle families that generate FCCs in the 
same model year (or from the next three subsequent model years), from 
banked FCCs from previous model years, or from FCCs generated in the 
same or previous model years that it obtained through trading.
    (vi) Manufacturers may certify a vehicle or engine family using an 
FEL (as described in Sec.  535.6) below the fuel consumption standard 
(as described in Sec.  535.5) and choose not to generate conventional 
fuel consumption credits for that family. Manufacturers do not need to 
calculate fuel consumption credits for those families and do not need 
to submit or keep the associated records described in Sec.  535.8 for 
these families. Manufacturers participating in NHTSA's FCC program must 
provide reports as specified in Sec.  535.8.
    (3) Banking. Banking is the retention of surplus FCC in an 
averaging set by the manufacturer for use in future model years for the 
purpose of averaging or trading.
    (i) Surplus credits may be banked by the manufacturer for use in 
future model years, or traded, given the restriction that the credits 
have an expiration date of five model years after the year in which the 
credits are generated. For example, banked credits earned in model year 
2014 may be utilized through model year 2019. Surplus credits will 
become banked credits unless a manufacturer contacts NHTSA to expire 
its credits.
    (ii) Surplus credits become earned or usable banked FCCs when the 
manufacturer's final report is approved by both agencies. However, the 
agencies may revoke these FCCs at any time if they are unable to verify 
them after reviewing the manufacturer's reports or auditing its 
records.
    (iii) Banked FCC retain the designation from the averaging set and 
model year in which they were generated.
    (iv) Banked credits retain the designation of the averaging set in 
which they were generated.
    (4) Trading. Trading is a transaction that transfers banked family 
regulatory subcategory or averaging set fuel consumption credits. 
Tractor, vocational vehicle and engine manufacturers may trade credits 
generated for vehicle or engine families or subfamilies while 
manufacturers of heavy-duty pickup trucks and vans certified as 
complete vehicles may trade credit credits generated for averaging 
sets. A manufacturer may use traded FCCs for

[[Page 56189]]

averaging, banking, or further trading transactions.
    (i) Manufacturers may only trade banked credits to other 
manufacturers to use for compliance with fuel consumption standards. 
Traded FCCs, other than advanced technology credits, may be used only 
within the averaging set in which they were generated. Manufacturers 
may only trade credits to other entities for the purpose of expiring 
credits.
    (ii) Advanced technology credits can be traded across different 
averaging sets.
    (iii) The agencies may revoke traded FCCs at any time if they are 
unable to verify them after reviewing the manufacturer's reports or 
auditing its records.
    (iv) If a negative FCC balance results from a transaction, both the 
buyer and seller are liable, except in cases the agencies deem to 
involve fraud. See Sec.  535.9 for cases involving fraud. EPA also may 
suspend, revoke or void the certificates of all vehicle families 
participating in a trade that results in a manufacturer having a 
negative balance of emission credits. See 40 CFR 1037.745 and Sec.  
535.3(j).
    (v) Manufacturers with deficits or projecting deficits before or 
during a production model year may not trade credits until its 
available credits exceed the deficit. Manufacturers with a deficit may 
not trade credits if the deadline to offset that credit deficit has 
passed.
    (5) Credit deficit (or credit shortfall). A credit shortfall or 
deficit occurs when the sum of the manufacturer's generated credits for 
engines or vehicle families or fleets within an averaging set is 
negative. Credit shortfalls must be offset by an available credit 
surplus within three model years after the shortfall was incurred. If 
the shortfall cannot be offset, the manufacturer is liable for civil 
penalties as discussed in Sec.  535.9.
    (6) FCC credit plan. (i) Each model year manufacturers submit 
credit plan in their certificates of conformity as required in 40 CFR 
1036.725(b)(2) and 40 CFR 1037.725(b)(2). The plan is required to 
contain equivalent fuel consumption information in accordance Sec.  
535.8(c). The plan must include:
    (A) Detailed calculations of projected emission and fuel 
consumption credits (positive or negative) based on projected U.S.-
directed production volumes. The agencies may require a manufacturer to 
include similar calculations from its other engine or vehicle families 
to project its net credit balances for the model year. If a 
manufacturer projects negative emission and/or fuel consumption credits 
for a family, it must state the source of positive emission and/or fuel 
consumption credits it expects to use to offset the negative credits 
demonstrating how it plans to resolve any credit deficits that might 
occur for a model year within a period of up to three model years after 
that deficit has occurred.
    (B) Actual emissions and fuel consumption credit balances, credit 
transactions, and credit trades.
    (i) Manufacturers are required to provide updated credit plans 
after receiving their final verified reports from EPA and NHTSA after 
the end of each model year.
    (ii) The agencies may determine that a manufacturer's plan is 
unreasonable or unrealistic based on a consideration of past and 
projected use of specific technologies, the historical sales mix of its 
vehicle models, subsequent failure to follow any submitted plans, and 
limited expected access to traded credits.
    (iii) The agencies may also consider the plan unreasonable if the 
manufacturer's credit deficit increases from one model year to the 
next. The agencies may require that the manufacturers must send interim 
reports describing its progress toward resolving its credit deficit 
over the course of a model year.
    (iv) If NHTSA determines that a manufacturers plan is unreasonable 
or unrealistic, the manufacturer is deemed as not comply with fuel 
consumption standards as specified in Sec.  535.10(c) and the 
manufacturer may be liable for civil penalties.
    (7) Revoked credits. NHTSA may revoke fuel consumption credits if 
unable to verify any information after auditing reports or records or 
conducting confirmatory testing. In the cases where EPA revokes 
emissions CO2 credits, NHTSA will revoke the equivalent 
amount of fuel consumption credits.
    (8) Transition to Phase 2 standards. The following provisions allow 
for enhanced use of fuel consumption credits from Phase 1 tractors and 
vocational vehicles for meeting the Phase 2 standards:
    (i) Fuel consumption credits a manufacturer generates for light and 
medium heavy-duty vocational vehicles in model years 2018 through 2021 
may be used through model year 2027, instead of being limited to a 
five-year credit life as specified in this part.
    (ii) The manufacturer may use the off-cycle provisions of paragraph 
(f) of this section to apply technologies to Phase 1 vehicles as 
follows:
    (A) A manufacturer may apply an improvement factor of 0.988 for 
tractors and vocational vehicles with automatic tire inflation systems 
on all axles.
    (B) For vocational vehicles with automatic engine shutdown systems 
that conform with 40 CFR 1037.660, a manufacturer may apply an 
improvement factor of 0.95.
    (C) For vocational vehicles with stop-start systems that conform 
with 40 CFR 1037.660, a manufacturer may apply an improvement factor of 
0.92.
    (D) For vocational vehicles with neutral-idle systems conforming 
with 40 CFR 1037.660, manufacturers may apply an improvement factor of 
0.98. Manufacturers may adjust this improvement factor if we approve a 
partial reduction under 40 CFR 1037.660(a)(2); for example, if the 
manufacturer's design reduces fuel consumption by half as much as 
shifting to neutral, it may apply an improvement factor of 0.99.
    (9) Credits for small business manufacturers. Small manufacturers 
may generate fuel consumption credits for natural gas-fueled vocational 
vehicles as follows:
    (i) Small manufacturers may certify their vehicles instead of 
relying on the exemption of Sec.  535.3.
    (ii) Use Phase 1 GEM to determine a fuel consumption level for 
vehicle, then multiply this value by the engine's FCL for fuel 
consumption and divide by the engine's applicable fuel consumption 
standard.
    (iii) Use the value determined in paragraph (a)(ii) of this section 
in the credit equation specified in paragraph (c) of this section in 
place of the term (Std -FEL)
    (iv) The following provisions apply uniquely to small businesses 
under the custom-chassis standards of Sec.  535.5(b)(6):
    (A) Manufacturers may use fuel consumption credits generated under 
paragraph (c) of this section, including banked or traded credits from 
any averaging set. Such credits remain subject to other limitations 
that apply under this part.
    (B) Manufacturers may produce up to 200 drayage tractors in a given 
model year to the standards described in Sec.  535.5(b)(6) for ``other 
buses''. Treat these drayage tractors as being in their own averaging 
set. This limit applies with respect to vehicles produced by the parent 
manufacturer and its owned subordinate companies.
    (10) Certifying non-gasoline engines. A manufacturer producing non-
gasoline engines complying with model year 2021 or later medium heavy-
duty spark-ignition standards may not generate fuel consumption 
credits. Only manufacturers producing gasoline engines certifying to 
spark-ignition standards can generate fuel

[[Page 56190]]

consumption credits under paragraph (d) of this section.
    (11) Unless the regulations explicitly allow it, manufacturers may 
not calculate Phase 1 fuel consumption credits more than once for 
compliance. For example, if a manufacturer generates Phase 1 fuel 
consumption credits for a given hybrid vehicle under this part, no one 
may generate fuel consumption credits for the associated hybrid engine 
under 40 CFR part 1036. However, Phase 1 credits could be generated for 
identical engines used in vehicles that did not generate engine 
credits.
    (b) ABT provisions for heavy-duty pickup trucks and vans. (1) 
Calculate fuel consumption credits in a model year for one fleet of 
conventional heavy-duty pickup trucks and vans and if designated by the 
manufacturer another consisting of advance technology vehicles for the 
averaging set as defined in Sec.  535.4. Calculate credits for each 
fleet separately 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.

    The useful life value for heavy- pickup trucks and vans 
manufactured for model years 2013 through 2020 is equal to the 120,000 
miles. The useful life for model years 2021 and later is equal to 
150,000 miles.
    (2) Adjust the fuel consumption performance of subconfigurations 
with advanced technology for determining the fleet average actual fuel 
consumption value as specified in paragraph (f)(1) of this section and 
40 CFR 86.1819-14(d)(7). Advanced technology vehicles can be separated 
in a different fleet for the purpose of applying credit incentives as 
described in paragraph (f)(1) of this section.
    (3) Adjust the fuel consumption performance for subconfigurations 
with innovative technology. A manufacturer is eligible to increase the 
fuel consumption performance of heavy-duty pickup trucks and vans in 
accordance with procedures established by EPA set forth in 40 CFR part 
600. The eligibility of a manufacturer to increase its fuel consumption 
performance through use of an off-cycle technology requires an 
application request made to EPA and NHTSA in accordance with 40 CFR 
86.1869-12 and an approval granted by the agencies. For off-cycle 
technologies that are covered under 40 CFR 86.1869-12, NHTSA will 
collaborate with EPA regarding NHTSA's evaluation of the specific off-
cycle technology to ensure its impact on fuel consumption and the 
suitability of using the off-cycle technology to adjust fuel 
consumption performance. NHTSA will provide its views on the 
suitability of the technology for that purpose to EPA. NHTSA will apply 
the criteria in paragraph (f)(2) of this section in granting or denying 
off- cycle requests.
    (4) Fuel consumption credits may be generated for vehicles 
certified in model year 2013 to the model year 2014 standards in Sec.  
535.5(a). If a manufacturer chooses to generate CO2 emission 
credits under EPA's provisions in 40 CFR part 86, it may also 
voluntarily generate early credits under the NHTSA fuel consumption 
program. To do so, a manufacturer must certify its entire U.S.-directed 
production volume of vehicles in its fleet. The same production volume 
restrictions specified in 40 CFR 1037.150(a)(2) relating to when test 
groups are certified apply to the NHTSA early credit provisions. 
Credits are calculated as specified in paragraph (b)(3) of this section 
relative to the fleet standard that would apply for model year 2014 
using the model year 2013 production volumes. Surplus credits generated 
under this paragraph (b)(4) are available for banking or trading. 
Credit deficits for an averaging set prior to model year 2014 do not 
carry over to model year 2014. These credits may be used to show 
compliance with the standards of this part for 2014 and later model 
years. Once a manufacturer opts into the NHTSA program, they must stay 
in the program for all of the optional model years and remain 
standardized with the same implementation approach being followed to 
meet the EPA CO2 emission program.
    (5) Calculate the averaging set credit value by summing together 
the fleet credits for conventional and advanced technology vehicles 
including any adjustments for innovative technologies. Manufacturers 
may sum conventional and innovative technology credits before adding 
any advanced technology credits in each averaging set.
    (6) For credits that manufacturers calculate based on a useful life 
of 120,000 miles, multiply any banked credits carried forward for use 
in model year 2021 and later by 1.25. For credit deficits that a 
manufacturer calculates based on a useful life of 120,000 miles and 
that it offsets with credits originally earned in model year 2021 and 
later, it multiplies the credit deficit by 1.25.
    (c) ABT provisions for vocational vehicles and tractors. (1) 
Calculate the fuel consumption credits in a model year for each 
participating family or subfamily consisting of conventional vehicles 
in each averaging set (as defined in Sec.  535.4) using the equation in 
this section. Each designated vehicle family or subfamily has a 
``family emissions limit'' (FEL) that is compared to the associated 
regulatory subcategory standard. An FEL that falls below the regulatory 
subcategory standard creates ``positive credits,'' while fuel 
consumption level of a family group above the standard creates a 
``negative credits.'' The value of credits generated for each family or 
subfamily in a model year is calculated as follows and must be rounded 
to nearest whole number:

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 (gal/1000 ton-
mile).
Payload = the prescribed payload in tons for each regulatory 
subcategory as shown in the following table:

------------------------------------------------------------------------
               Regulatory subcategory                   Payload (tons)
------------------------------------------------------------------------
Vocational LHD Vehicles.............................                2.85
Vocational MHD Vehicles.............................                5.60
Vocational HHD Vehicles.............................                 7.5
MDH MHD Tractors....................................               12.50
HHD Tractors, other than heavy-haul Tractors........               19.00
Heavy-haul Tractors.................................               43.00
------------------------------------------------------------------------


[[Page 56191]]

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 Vehicles..........................  110,000 (Phase 1).
                                        150,000 (Phase 2).
Vocational MHD Vehicles and tractors    185,000.
 at or below 33,000 pounds GVWR.
Vocation HHD Vehicles and tractors at   435,000.
 or above 33,000 pounds GVWR.
------------------------------------------------------------------------

    (i) Calculate the value of credits generated in a model year for 
each family or subfamily consisting of vehicles with advanced 
technology vehicles in each averaging set using the equation above and 
the guidelines provided in paragraph (f)(1) of this section. 
Manufacturers may generate credits for advanced technology vehicles 
using incentives specified in paragraph (f)(1) of this section.
    (ii) Calculate the value of credits generated in a model year for 
each family or subfamily consisting of vehicles with off-cycle 
technology vehicles in each averaging set using the equation above and 
the guidelines provided in paragraph (f)(2) of this section.
    (2) Manufacturers must sum all negative and positive credits for 
each vehicle family within each applicable averaging set to obtain the 
total credit balance for the model year before rounding. The sum of 
fuel consumptions credits must be rounded to the nearest gallon. 
Calculate the total credits generated in a model year for each 
averaging set using the following equation:

Total averaging set MY credits = [Sigma] Vehicle family credits within 
each averaging set

    (3) Manufacturers can sum conventional and innovative technology 
credits before adding any advanced technology credits in each averaging 
set.
    (4) If a manufacturer chooses to generate CO2 emission 
credits under EPA provisions of 40 CFR 1037.150(a), it may also 
voluntarily generate early credits under the NHTSA fuel consumption 
program as follows:
    (i) Fuel consumption credits may be generated for vehicles 
certified in model year 2013 to the model year 2014 standards in Sec.  
535.5(b) and (c). To do so, a manufacturer must certify its entire 
U.S.-directed production volume of vehicles. The same production volume 
restrictions specified in 40 CFR 1037.150(a)(1) relating to when test 
groups are certified apply to the NHTSA early credit provisions. 
Credits are calculated as specified in paragraph (c)(11) of this 
section relative to the standards that would apply for model year 2014. 
Surplus credits generated under this paragraph (c)(4) may be increased 
by a factor of 1.5 for determining total available credits for banking 
or trading. For example, if a manufacturer has 10 gallons of surplus 
credits for model year 2013, it may bank 15 gallons of credits. Credit 
deficits for an averaging set prior to model year 2014 do not carry 
over to model year 2014. These credits may be used to show compliance 
with the standards of this part for 2014 and later model years. Once a 
manufacturer opts into the NHTSA program they must stay in the program 
for all of the optional model years and remain standardized with the 
same implementation approach being followed to meet the EPA 
CO2 emission program.
    (ii) A tractor manufacturer may generate fuel consumption credits 
for the number of additional SmartWay designated tractors (relative to 
its MY 2012 production), provided that credits are not generated for 
those vehicles under paragraph (c)(4)(i) of this section. Calculate 
credits for each regulatory sub-category relative to the standard that 
would apply in model year 2014 using the equations in paragraph (c)(2) 
of this section. Use a production volume equal to the number of 
verified model year 2013 SmartWay tractors minus the number of verified 
model year 2012 SmartWay tractors. A manufacturer may bank credits 
equal to the surplus credits generated under this paragraph multiplied 
by 1.50. A manufacturer's 2012 and 2013 model years must be equivalent 
in length. Once a manufacturer opts into the NHTSA program they must 
stay in the program for all of the optional model years and remain 
standardized with the same implementation approach being followed to 
meet the EPA CO2 emission program.
    (5) If a manufacturer generates credits from vehicles certified for 
advanced technology in accordance with paragraph (e)(1) of this 
section, a multiplier of 1.5 can be used, but this multiplier cannot be 
used on the same credits for which the early credit multiplier is used.
    (6) For model years 2012 and later, manufacturers may generate or 
use fuel consumption credits for averaging to demonstrate compliance 
with the alternative standards as described in Sec.  535.5(b)(6) of 
this part. Manufacturers can specify a Family Emission Limit (FEL) for 
fuel consumption for each vehicle subfamily. The FEL may not be less 
than the result of emissions and fuel consumption modeling as described 
in 40 CFR 1037.520 and Sec.  535.6. These FELs serve as the fuel 
consumption standards for the vehicle subfamily instead of the 
standards specified in this Sec.  535.5(b)(6). Manufacturers may not 
use averaging for motor homes, coach buses, emergency vehicles or 
concrete mixers meeting standards under Sec.  535.5(b)(5).
    (7) Manufacturers may not use averaging for vehicles meeting 
standards Sec.  535.5(b)(6)(iv) through (vi), and manufacturers may not 
use fuel consumption credits for banking or trading for any vehicles 
certified under Sec.  535.5(b)(6).
    (8) Manufacturers certifying any vehicles under Sec.  535.5(b)(6) 
must consider each separate vehicle type (or group of vehicle types) as 
a separate averaging set.
    (d) ABT provisions for heavy-duty engines. (1) Calculate the fuel 
consumption credits in a model year for each participating family or 
subfamily consisting of engines in each averaging set (as defined in 
Sec.  535.4) using the equation in this section. Each designated engine 
family has a ``family certification level'' (FCL) which is compared to 
the associated regulatory subcategory standard. A FCL that falls below 
the regulatory subcategory standard creates ``positive credits,'' while 
fuel consumption level of a family group above the standard creates a 
``credit shortfall.'' The value of credits generated in a model year 
for each engine family or subfamily is calculated as follows and must 
be rounded to nearest whole number:

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

Where:


[[Page 56192]]


Std = the standard for the respective engine regulatory subcategory 
(gal/100 hp-hr).
FCL = family certification level for the engine family (gal/100 hp-
hr).
CF= a transient cycle conversion factor in hp-hr/mile which is the 
integrated total cycle horsepower-hour divided by the equivalent 
mileage of the applicable test cycle. For engines subject to spark-
ignition heavy-duty standards, the equivalent mileage is 6.3 miles. 
For engines subject to compression-ignition heavy-duty standards, 
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)
------------------------------------------------------------------------
SI and CI LHD Engines.................  120,000 (Phase 1).
                                        150,000 (Phase 2).
CI MHD Engines........................  185,000.
CI HHD Engines........................  435,000.
------------------------------------------------------------------------


    (i) Calculate the value of credits generated in a model year for 
each family or subfamily consisting of engines with advanced technology 
vehicles in each averaging set using the equation above and the 
guidelines provided in paragraph (f)(1) of this section. Manufacturers 
may generate credits for advanced technology vehicles using incentives 
specified in paragraph (f)(1) of this section.
    (ii) Calculate the value of credits generated in a model year for 
each family or subfamily consisting of engines with off-cycle 
technology vehicles in each averaging set using the equation above and 
the guidelines provided in paragraph (f)(2) of this section.
    (2) Manufacturers shall sum all negative and positive credits for 
each engine family within the applicable averaging set to obtain the 
total credit balance for the model year before rounding. The sum of 
fuel consumptions credits should be rounded to the nearest gallon.
    Calculate the total credits generated in a model year for each 
averaging set using the following equation:

Total averaging set MY credits = [Sigma] Engine family credits within 
each averaging set

    (3) The provisions of this section apply to manufacturers utilizing 
the compression-ignition engine voluntary alternate standard provisions 
specified in Sec.  535.5(d)(4) as follows:
    (i) Manufacturers may not certify engines to the alternate 
standards if they are part of an averaging set in which they carry a 
balance of banked credits. For purposes of this section, manufacturers 
are deemed to carry credits in an averaging set if they carry credits 
from advance technology that are allowed to be used in that averaging 
set.
    (ii) Manufacturers may not bank fuel consumption credits for any 
engine family in the same averaging set and model year in which it 
certifies engines to the alternate standards. This means a manufacturer 
may not bank advanced technology credits in a model year it certifies 
any engines to the alternate standards.
    (iii) Note that the provisions of paragraph (d)(10) of this section 
apply with respect to credit deficits generated while utilizing 
alternate standards.
    (4) Where a manufacturer has chosen to comply with the EPA 
alternative compression-ignition engine phase-in standard provisions in 
40 CFR 1036.150(e), and has optionally decided to follow the same path 
under the NHTSA fuel consumption program, it must certify all of its 
model year 2013 compression-ignition engines within a given averaging 
set to the applicable alternative standards in Sec.  535.5(d)(5). 
Engines certified to these standards are not eligible for early credits 
under paragraph (d)(14) of this section. Credits are calculated using 
the same equation provided in paragraph (d)(11) of this section.
    (5) If a manufacturer chooses to generate early CO2 
emission credits under EPA provisions of 40 CFR 1036.150, it may also 
voluntarily generate early credits under the NHTSA fuel consumption 
program. Fuel consumption credits may be generated for engines 
certified in model year 2013 (2015 for spark-ignition engines) to the 
standards in Sec.  535.5(d). To do so, a manufacturer must certify its 
entire U.S.-directed production volume of engines except as specified 
in 40 CFR 1036.150(a)(2). Credits are calculated as specified in 
paragraph (d)(11) of this section relative to the standards that would 
apply for model year 2014 (2016 for spark-ignition engines). Surplus 
credits generated under this paragraph (d)(3) may be increased by a 
factor of 1.5 for determining total available credits for banking or 
trading. For example, if a manufacturer has 10 gallons of surplus 
credits for model year 2013, it may bank 15 gallons of credits. Credit 
deficits for an averaging set prior to model year 2014 (2016 for spark-
ignition engines) do not carry over to model year 2014 (2016 for spark-
ignition engines). These credits may be used to show compliance with 
the standards of this part for 2014 and later model years. Once a 
manufacturer opts into the NHTSA program they must stay in the program 
for all of the optional model years and remain standardized with the 
same implementation approach being followed to meet the EPA 
CO2 emission program.
    (6) Manufacturers may generate fuel consumption credits from an 
engine family subject to spark-ignition standards for exchanging with 
other engine families only if the engines in the family are gasoline-
fueled.
    (7) Engine credits generated for compression-ignition engines in 
the 2020 and earlier model years may be used in model year 2021 and 
later as follows:
    (i) For credit-generating engines certified to the tractor engine 
standards in Sec.  535.5(d), you may use credits calculated relative to 
the tractor engine standards.
    (ii) For credit-generating engines certified to the vocational 
engine standards in Sec.  535.5(d), you may use credits calculated 
relative to the following fuel consumption levels:
    (A) Medium Heavy-Duty Engines = 5.4813 gallons/100 hp-hr.
    (B) Heavy Heavy-Duty Engines = 5.1572 gallons/100 hp-hr.
    (C) To transfer Phase 1 credits for use in the Phase 2 fuel 
consumption program, manufacturers must recalculate credit values for 
the Phase 1 model years by substituting the standards in paragraphs 
(d)(7)(ii)(A) and (B) of this section in the credit equation specified 
in Sec.  535.5(d)(1).
    (8) Engine families manufacturers certify with a nonconformance 
penalty under 40 CFR part 86, subpart L, and may not generate fuel 
consumption credits.
    (9) Alternate transition option for Phase 2 engine standards. The 
following provisions allow for enhanced generation and use of fuel 
consumption credits for manufacturers complying

[[Page 56193]]

with engines standards in accordance with Sec.  535.7(d)(11):
    (i) If a manufacturer is eligible to certify all of its model year 
2020 engines within the averaging set to the tractor and vocational 
vehicle engine standards in Sec.  535.5(d)(11) and the requirements 
applicable to model year 2021 engines, the banked and traded fuel 
consumption credits generated for model year 2018 through 2024 engines 
may be used through model year 2030 as specified in paragraph 
(d)(9)(ii) of this section or through a five-year credit life, 
whichever is later.
    (ii) Banked and traded fuel consumption credits generated under 
this paragraph (d)(9) for model year 2018 through 2024 engines may be 
used through model year 2030 with the extended credit life values shown 
in the table:

------------------------------------------------------------------------
                                                     Credit life for
                                                  transition option for
                   Model year                        Phase 2  engine
                                                    standards  (years)
------------------------------------------------------------------------
2018...........................................                       12
2019...........................................                       11
2020...........................................                       10
2021...........................................                        9
2022...........................................                        8
2023...........................................                        7
2024...........................................                        6
2025 and later.................................                        5
------------------------------------------------------------------------

    (e) Additional credit provisions.
    (1) Advanced technology credits.
    (i) For the Phase 1 program, manufacturers of heavy-duty pickup 
trucks and vans, vocational vehicles, tractors and the associated 
engines showing improvements in CO2 emissions and fuel 
consumption using hybrid vehicles with regenerative braking, vehicles 
equipped with Rankine-cycle engines, electric vehicles and fuel cell 
vehicles are eligible for advanced technology credits. Manufacturers 
shall use sound engineering judgment to determine the performance of 
the vehicle or engine with advanced technology. Advanced technology 
credits for vehicles or engines complying with Phase 1 standards may be 
increased by a 1.5 multiplier. Manufacturers may not apply this 
multiplier in addition to any early-credit multipliers. The maximum 
amount of credits a manufacturer may bring into the service class group 
that contains the heavy-duty pickup and van averaging set is 
5.89[middot]10\6\ gallons (for advanced technology credits based upon 
compression-ignition engines) or 6.76[middot]10\6\ gallons (for 
advanced technology credits based upon spark-ignition engines) per 
model year as specified in 40 CFR part 86 for heavy-duty pickup trucks 
and vans, 40 CFR 1036.740 for engines and 40 CFR 1037.740 for tractors 
and vocational vehicles. The specified limit does not cap the amount of 
advanced technology credits that can be used across averaging sets 
within the same service class group. Advanced technology credits can be 
used to offset negative credits in the same averaging set or other 
averaging sets. A manufacturer must first apply advanced technology 
credits to any deficits in the same averaging set before applying them 
to other averaging.
    (A) Heavy-duty pickup trucks and vans. For advanced technology 
systems (hybrid vehicles with regenerative braking, vehicles equipped 
with Rankine-cycle engines and fuel cell vehicles), calculate fleet-
average performance rates consistent with good engineering judgment and 
the provisions of 40 CFR 86.1819-14 and 86.1865.
    (B) Tractors and vocational vehicles. For advanced technology 
system (hybrid vehicles with regenerative braking, vehicles equipped 
with Rankine-cycle engines and fuel cell vehicles), calculate the 
advanced technology credits as follows:
    (1) Measure the effectiveness of the advanced system by conducting 
A to B testing a vehicle equipped with the advanced system and an 
equivalent conventional system in accordance with 40 CFR 1037.615.
    (2) For purposes of this paragraph (e), 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) Calculate the benefit in credits using the equation in 
paragraph (c) of this section and replacing the term (Std-FEL) with the 
benefit.
    (5) For electric vehicles calculate the fuel consumption credits 
using an FEL of 0 g/1000ton-mile.
    (C) Heavy-duty engines. This section specifies how to generate 
advanced technology-specific fuel consumption credits for hybrid 
powertrains that include energy storage systems and regenerative 
braking (including regenerative engine braking) and for engines that 
include Rankine-cycle (or other bottoming cycle) exhaust energy 
recovery systems.
    (1) Pre-transmission hybrid powertrains are those engine systems 
that include features that recover and store energy during engine 
motoring operation but not from the vehicle wheels. These powertrains 
are tested using the hybrid engine test procedures of 40 CFR part 1065 
or using the post-transmission test procedures.
    (2) Post-transmission hybrid powertrains are those powertrains that 
include features that recover and store energy from braking at the 
vehicle wheels. These powertrains are tested by simulating the chassis 
test procedure applicable for hybrid vehicles under 40 CFR 1037.550.
    (3) Test engines that include Rankine-cycle exhaust energy recovery 
systems according to the test procedures specified in 40 CFR part 1036, 
subpart F, unless EPA approves the manufacturer's alternate procedures.
    (D) Credit calculation. Calculate credits as specified in paragraph 
(c) of this section. Credits generated from engines and powertrains 
certified under this section may be used in other averaging sets as 
described in 40 CFR 1036.740(d).
    (ii) There are no separate credit allowances for advanced 
technology vehicles in the Phase 2 program. Instead, vehicle families 
containing plug-in battery electric hybrids, all-electric, and fuel 
cell vehicles certifying to Phase 2 vocational and tractor standards 
may multiply credits by a multiplier of:
    (A) 3.5 times for plug-in hybrid electric vehicles;
    (B) 4.5 times for all-electric vehicles; and
    (C) 5.5 times for fuel cell vehicles.
    (D) Incentivized credits for vehicles equipped with advanced 
technologies maintain the same credit flexibilities and restrictions as 
conventional credits

[[Page 56194]]

specified in paragraph (a) of this section during the Phase 2 program.
    (E) For vocational vehicles and tractors subject to Phase 2 
standards, create separate vehicle families if there is a credit 
multiplier for advanced technology; group those vehicles together in a 
vehicle family if they use the same multiplier.
    (F) For Phase 2 plug-in hybrid electric vehicles and for fuel cells 
powered by any fuel other than hydrogen, calculate fuel consumption 
credits using an FEL based on equivalent emission measurements from 
powertrain testing. Phase 2 advanced-technology credits do not apply 
for hybrid vehicles that have no plug-in capability.
    (2) Innovative and off-cycle technology credits. This provision 
allows fuel saving innovative and off-cycle engine and vehicle 
technologies to generate fuel consumption credits comparable to 
CO2 emission credits consistent with the provisions of 40 
CFR 86.1819-14(d)(13) (for heavy-duty pickup trucks and vans), 40 CFR 
1036.610 (for engines), and 40 CFR 1037.610 (for vocational vehicles 
and tractors).
    (i) For model years 2013 through 2020, manufacturers may generate 
innovative technology credits for introducing technologies that were 
not in-common use for heavy-duty tractor, vocational vehicles or 
engines before model year 2010 and that are not reflected in the EPA 
specified test procedures. Upon identification and joint approval with 
EPA, NHTSA will allow equivalent fuel consumption credits into its 
program to those allowed by EPA for manufacturers seeking to obtain 
innovative technology credits in a given model year. Such credits must 
remain within the same regulatory subcategory in which the credits were 
generated. NHTSA will adopt fuel consumption credits depending upon 
whether--
    (A) The technology has a direct impact upon reducing fuel 
consumption performance; and
    (B) The manufacturer has provided sufficient information to make 
sound engineering judgments on the impact of the technology in reducing 
fuel consumption performance.
    (ii) For model years 2021 and later, manufacturers may generate 
off-cycle technology credits for introducing technologies that are not 
reflected in the EPA specified test procedures. Upon identification and 
joint approval with EPA, NHTSA will allow equivalent fuel consumption 
credits into its program to those allowed by EPA for manufacturers 
seeking to obtain innovative technology credits in a given model year. 
Such credits must remain within the same regulatory subcategory in 
which the credits were generated. NHTSA will adopt fuel consumption 
credits depending upon whether--
    (A) The technology meets paragraph (f)(2)(i)(A) and (B) of this 
section.
    (B) For heavy-duty pickup trucks and vans, manufacturers using the 
5-cycle test to quantify the benefit of a technology are not required 
to obtain approval from the agencies to generate results.
    (iii) The following provisions apply to all innovative and off-
cycle technologies:
    (A) Technologies found to be defective, or identified as a part of 
NHTSA's safety defects program, and technologies that are not 
performing as intended will have the values of approved off-cycle 
credits removed from the manufacturer's credit balance.
    (B) Approval granted for innovative and off-cycle technology 
credits under NHTSA's fuel efficiency program does not affect or 
relieve the obligation to comply with the Vehicle Safety Act (49 U.S.C. 
Chapter 301), including the ``make inoperative'' prohibition (49 U.S.C. 
30122), and all applicable Federal motor vehicle safety standards 
issued thereunder (FMVSSs) (49 CFR part 571). In order to generate off-
cycle or innovative technology credits manufacturers must state--
    (1) That each vehicle equipped with the technology for which they 
are seeking credits will comply with all applicable FMVSS(s); and
    (2) Whether or not the technology has a fail-safe provision. If no 
fail-safe provision exists, the manufacturer must explain why not and 
whether a failure of the innovative technology would affect the safety 
of the vehicle.
    (C) Manufacturers requesting approval for innovative technology 
credits are required to provide documentation in accordance with 40 CFR 
86.1869-12, 1036.610, and 1037.610.
    (D) Credits will be accepted on a one-for-one basis expressed in 
terms of gallons in comparison to those approved by EPA.
    (E) For the heavy-duty pickup trucks and vans, the average fuel 
consumption will be calculated as a separate credit amount (rounded to 
the nearest whole number) using the following equation:

Off-cycle FC credits = (CO2 Credit/CF) x 100 x Production x 
VLM

Where:

CO2 Credits = the credit value in grams per mile 
determined in 40 CFR 86.1869-12(c)(3), (d)(1), (d)(2) or (d)(3).
CF = conversion factor, which for spark-ignition engines is 8,887 
and for compression-ignition engines is 10,180.
Production = the total production volume for the applicable category 
of vehicles.
VLM = vehicle lifetime miles, which for 2b-3 vehicles shall be 
150,000 for the Phase 2 program.

    The term (CO2 Credit/CF) should be rounded to the 
nearest 0.0001

    (F) NHTSA will not approve innovative technology credits for 
technology that is related to crash-avoidance technologies, safety 
critical systems or systems affecting safety-critical functions, or 
technologies designed for the purpose of reducing the frequency of 
vehicle crashes.
    (iv) Manufacturers normally may not calculate off-cycle credits or 
improvement factors under this section for technologies represented by 
GEM, but the agencies may allow a manufacturer to do so by averaging 
multiple GEM runs for special technologies for which a single GEM run 
cannot accurately reflect in-use performance. For example, if a 
manufacturer use an idle-reduction technology that is effective 80 
percent of the time, the agencies may allow a manufacturer to run GEM 
with the technology active and with it inactive, and then apply an 80% 
weighting factor to calculate the off-cycle credit or improvement 
factor. A may need to perform testing to establish proper weighting 
factors or otherwise quantify the benefits of the special technologies.
    (vi) Carry-over Approval. Manufacturers may carry-over these 
credits into future model years as described below:
    (A) For model years before 2021, manufacturers may continue to use 
an approved improvement factor or credit for any appropriate engine or 
vehicle family in future model years through 2020.
    (B) For model years 2021 and later, manufacturers may not rely on 
an approval for model years before 2021. Manufacturers must separately 
request the agencies approval before applying an improvement factor or 
credit under this section for 2021 and later engines and vehicle, even 
if the agencies approve the improvement factor or credit for similar 
engine and vehicle models before model year 2021.
    (C) The following restrictions also apply to manufacturers seeking 
to continue to carryover the improvement factor (not the credit value) 
if--
    (1) The FEL is generated by GEM or 5-cycle testing;
    (2) The technology is not changed or paired with any other off-
cycle technology;
    (3) The improvement factor only applies to approved vehicle or 
engine families;

[[Page 56195]]

    (4) The agencies do not expect the technology to be incorporated 
into GEM at any point during the Phase 2 program; and
    (D) The documentation to carryover credits that would primarily 
justify the difference in fuel efficiency between real world and 
compliance protocols is the same for both Phase 1 and Phase 2 
compliance protocols. The agencies must approve the justification. If 
the agencies do not approve the justification, the manufacturer must 
recertify.


Sec.  535.8  Reporting and recordkeeping requirements.

    (a) General requirements. Manufacturers producing heavy-duty 
vehicles and engines applicable to fuel consumption standards in Sec.  
535.5, for each given model year, must submit the required information 
as specified in paragraphs (b) through (h) of this section.
    (1) The information required by this part must be submitted by the 
deadlines specified in this section and must be based upon all the 
information and data available to the manufacturer 30 days before 
submitting information.
    (2) Manufacturers must submit information electronically through 
the EPA database system as the single point of entry for all 
information required for this national program and both agencies will 
have access to the information. In special circumstances, data may not 
be able to be received electronically (i.e., during database system 
development work). The agencies will inform manufacturer of the 
alternatives can be used for submitting information. The format for the 
required information will be specified by EPA in coordination with 
NHTSA.
    (3) Manufacturers providing incomplete reports missing any of the 
required information or providing untimely reports are considered as 
not complying with standards (i.e., if good-faith estimates of U.S.-
directed production volumes for EPA certificates of conformity are not 
provided) and are liable to pay civil penalties in accordance with 49 
U.S.C. 32912.
    (4) Manufacturers certifying a vehicle or engine family using an 
FEL or FCL below the applicable fuel consumption standard as described 
in Sec.  535.5 may choose not to generate fuel consumption credits for 
that family. In which case, the manufacturer is not required to submit 
reporting or keep the associated records described in this part for 
that family.
    (5) Manufacturers must use good engineering judgment and provide 
comparable fuel consumption information to that of the information or 
data provided to EPA under 40 CFR 86.1865, 1036.250, 1036.730, 1036.825 
1037.250, 1037.730, and 1037.825.
    (6) Any information that must be sent directly to NHTSA. In 
instances in which EPA has not created an electronic pathway to receive 
the information, the information should be sent through an electronic 
portal identified by NHTSA or through the NHTSA CAFE database (i.e., 
information on fuel consumption credit transactions). If hardcopy 
documents must be sent, the information should be sent to the Associate 
Administrator of Enforcement at 1200 New Jersey Avenue SE, NVS-200, 
Office W45-306EOY, Washington, DC 20590.
    (b) Pre-model year reports. Manufacturers producing heavy-duty 
pickup trucks and vans must submit reports in advance of the model year 
providing early estimates demonstrating how their fleet(s) would comply 
with GHG emissions and fuel consumption standards. Note, the agencies 
understand that early model year reports contain estimates that may 
change over the course of a model year and that compliance information 
manufacturers submit prior to the beginning of a new model year may not 
represent the final compliance outcome. The agencies view the necessity 
for requiring early model reports as a manufacturer's good faith 
projection for demonstrating compliance with emission and fuel 
consumption standards.
    (1) Report deadlines. For model years 2013 and later, manufacturer 
of heavy-duty pickup trucks and vans complying with voluntary and 
mandatory standards must submit a pre-model year report for the given 
model year as early as the date of the manufacturer's annual 
certification preview meeting with EPA and NHTSA, or prior to 
submitting its first application for a certificate of conformity to EPA 
in accordance with 40 CFR 86.1819-14(d). For example, a manufacturer 
choosing to comply in model year 2014 could submit its pre-model year 
report during its precertification meeting which could occur before 
January 2, 2013, or could provide its pre-model year report any time 
prior to submitting its first application for certification for the 
given model year.
    (2) Contents. Each pre-model year report must be submitted 
including the following information for each model year.
    (i) A list of each unique subconfiguration in the manufacturer's 
fleet describing the make and model designations, attribute based-
values (i.e., GVWR, GCWR, Curb Weight and drive configurations) and 
standards;
    (ii) The emission and fuel consumption fleet average standard 
derived from the unique vehicle configurations;
    (iii) The estimated vehicle configuration, test group and fleet 
production volumes;
    (iv) The expected emissions and fuel consumption test group results 
and fleet average performance;
    (v) If complying with MY 2013 fuel consumption standards, a 
statement must be provided declaring that the manufacturer is 
voluntarily choosing to comply early with the EPA and NHTSA programs. 
The manufacturers must also acknowledge that once selected, the 
decision cannot be reversed and the manufacturer will continue to 
comply with the fuel consumption standards for subsequent model years 
for all the vehicles it manufacturers in each regulatory category for a 
given model year;
    (vi) If complying with MYs 2014, 2015 or 2016 fuel consumption 
standards, a statement must be provided declaring whether the 
manufacturer will use fixed or increasing standards in accordance with 
Sec.  535.5(a). The manufacturer must also acknowledge that once 
selected, the decision cannot be reversed and the manufacturer must 
continue to comply with the same alternative for subsequent model years 
for all the vehicles it manufacturers in each regulatory category for a 
given model year;
    (vii) If complying with MYs 2014 or 2015 fuel consumption 
standards, a statement must be provided declaring that the manufacturer 
is voluntarily choosing to comply with NHTSA's voluntary fuel 
consumption standards in accordance with Sec.  535.5(a)(4). The 
manufacturers must also acknowledge that once selected, the decision 
cannot be reversed and the manufacturer will continue to comply with 
the fuel consumption standards for subsequent model years for all the 
vehicles it manufacturers in each regulatory category for a given model 
year;
    (viii) The list of Class 2b and 3 incomplete vehicles (cab-complete 
or chassis complete vehicles) and the method used to certify these 
vehicles as complete pickups and vans identifying the most similar 
complete sister- or other complete vehicles used to derive the target 
standards and performance test results;
    (ix) The list of Class 4 and 5 incomplete and complete vehicles and 
the method use to certify these vehicles as complete pickups and vans 
identifying the most similar complete or

[[Page 56196]]

sister vehicles used to derive the target standards and performance 
test results;
    (x) List of loose engines included in the heavy-duty pickup and van 
category and the list of vehicles used to derive target standards and 
performance test results;
    (xi) Copy of any notices a vehicle manufacturer sends to the engine 
manufacturer to notify the engine manufacturers that their engines are 
subject to emissions and fuel consumption standards and that it intends 
to use their engines in excluded vehicles;
    (xii) A fuel consumption credit plan as specified Sec.  535.7(a) 
identifying the manufacturers estimated credit balances, planned credit 
flexibilities (i.e., credit balances, planned credit trading, 
innovative, advanced and early credits and etc.) and if needed a credit 
deficit plan demonstrating how it plans to resolve any credit deficits 
that might occur for a model year within a period of up to three model 
years after that deficit has occurred; and
    (xiii) The supplemental information specified in paragraph (h) of 
this section. [Note: NHTSA may also ask a manufacturer to provide 
additional information, if necessary, to verify compliance with the 
fuel consumption requirements of this regulation.]
    (c) Applications for certificate of conformity. Manufacturers 
producing vocational vehicles, tractors and heavy-duty engines are 
required to submit applications for certificates of conformity to EPA 
in accordance with 40 CFR 1036.205 and 1037.205 in advance of 
introducing vehicles for commercial sale. Applications contain early 
model year information demonstrating how manufacturers plan to comply 
with GHG emissions. For model years 2013 and later, manufacturers of 
vocational vehicles, tractors and engine complying with NHTSA's 
voluntary and mandatory standards must submit applications for 
certificates of conformity in accordance through the EPA database 
including both GHG emissions and fuel consumption information for each 
given model year.
    (1) Submission deadlines. Applications are primarily submitted in 
advance of the given model year to EPA but cannot be submitted any 
later than December 31 of the given model year.
    (2) Contents. Each application for certificates of conformity 
submitted to EPA must include the following equivalent fuel 
consumption.
    (i) Equivalent fuel consumption values for emissions CO2 
FCLs values used to certify each engine family in accordance with 40 
CFR 1036.205(e). This provision applies only to manufacturers producing 
heavy-duty engines.
    (ii) Equivalent fuel consumption values for emission CO2 
data engines used to comply with emission standards in 40 CFR 1036.108. 
This provision applies only to manufacturers producing heavy-duty 
engines.
    (iii) Equivalent fuel consumption values for emissions 
CO2 FELs values used to certify each vehicle families or 
subfamilies in accordance with 40 CFR 1037.205(k). This provision 
applies only to manufacturers producing vocational vehicles and 
tractors.
    (iv) Report modeling results for ten configurations in terms of 
CO2 emissions and equivalent fuel consumption results in 
accordance with 40 CFR 1037.205(o). Include modeling inputs and 
detailed descriptions of how they were derived. This provision applies 
only to manufacturers producing vocational vehicles and tractors.
    (v) Credit plans including the fuel consumption credit plan 
described in Sec.  535.7(a).
    (3) Additional supplemental information. Manufacturers are required 
to submit additional information as specified in paragraph (h) of this 
section for the NHTSA program before or at the same time it submits its 
first application for a certificate of conformity to EPA. Under limited 
conditions, NHTSA may also ask a manufacturer to provide additional 
information directly to the Administrator, if necessary, to verify the 
fuel consumption requirements of this regulation.
    (d) End of the Year (EOY) and Final reports. Heavy-duty vehicle and 
engine manufacturers participating in the ABT program are required to 
submit EOY and final reports containing information for NHTSA as 
specified in paragraph (d)(2) of this section and in accordance with 40 
CFR 86.1865, 1036.730, and 1037.730. Only manufacturers without credit 
deficits may decide not to participate in the ABT or may waive the 
requirement to send an EOY report. The EOY and final 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 year. For model years 2013 and later, heavy-duty vehicle 
and engine manufacturers complying with NHTSA's voluntary and mandatory 
standards must submit EOY and final reports through the EPA database 
including both GHG emissions and fuel consumption information for each 
given model year.
    (1) Report deadlines. (i) For model year 2013 and later, heavy-duty 
vehicle and engine manufacturers complying with NHTSA voluntary and 
mandatory standards must submit EOY reports through the EPA database 
including both GHG emissions and fuel consumption information within 90 
days after the end of the given model year and no later than March 31 
of the next calendar year.
    (ii) For model year 2013 and later, heavy-duty vehicle and engine 
manufacturers complying with NHTSA voluntary and mandatory standards 
must submit final reports through the EPA database including both GHG 
emissions and fuel consumption information within 270 days after the 
end of the given model year and no later than September 30 of the next 
calendar year.
    (iii) A manufacturer may ask NHTSA and EPA to extend the deadline 
of a final report by up to 30 days. A manufacturer unable to provide 
and requesting to omit an emissions rate or fuel consumption value from 
a final report must obtain approval from the agencies prior to the 
submission deadline of its final report.
    (iv) If a manufacturer expects differences in the information 
reported between the EOY and the final year report specified in 40 CFR 
1036.730 and 1037.730, it must provide the most up-to-date fuel 
consumption projections in its final report and identify the 
information as preliminary.
    (v) If the manufacturer cannot provide any of the required fuel 
consumption information, it must state the specific reason for the 
insufficiency and identify the additional testing needed or explain 
what analytical methods are believed by the manufacturer will be 
necessary to eliminate the insufficiency and certify that the results 
will be available for the final report.
    (2) Contents. Each EOY and final report must be submitted including 
the following fuel consumption information for each model year. EOY 
reports contain preliminary final estimates and final reports must 
include the manufacturer's final compliance information.
    (i) Engine and vehicle family designations and averaging sets.
    (ii) Engine and vehicle regulatory subcategory and fuel consumption 
standards including any alternative standards used.
    (iii) Engine and vehicle family FCLs and FELs in terms of fuel 
consumption.
    (iv) Production volumes for engines and vehicles.
    (v) A summary as specified in paragraph (g)(7) of this section 
describing the vocational vehicles and vocational tractors that were 
exempted

[[Page 56197]]

as heavy-duty off-road vehicles. This applies to manufacturers 
participating and not participating in the ABT program.
    (vi) A summary describing any advanced or innovative technology 
engines or vehicles including alternative fueled vehicles that were 
produced for the model year identifying the approaches used to 
determinate compliance and the production volumes.
    (vii) A list of each unique subconfiguration included in a 
manufacturer's fleet of heavy-duty pickup trucks and vans identifying 
the attribute based-values (GVWR, GCWR, Curb Weight, and drive 
configurations) and standards. This provision applies only to 
manufacturers producing heavy-duty pickup trucks and vans.
    (viii) The fuel consumption fleet average standard derived from the 
unique vehicle configurations. This provision applies only to 
manufacturers producing heavy-duty pickup trucks and vans.
    (ix) The subconfiguration and test group production volumes. This 
provision applies only to manufacturers producing heavy-duty pickup 
trucks and vans.
    (x) The fuel consumption test group results and fleet average 
performance. This provision applies only to manufacturers producing 
heavy-duty pickup trucks and vans.
    (xi) Manufacturers may correct errors in EOY and final reports as 
follows:
    (A) Manufacturers may correct any errors in their end-of-year 
report when preparing the final report, as long as manufacturers send 
us the final report by the time it is due.
    (B) If manufacturers or the agencies determine within 270 days 
after the end of the model year that errors mistakenly decreased he 
manufacturer's balance of fuel consumption credits, manufacturers may 
correct the errors and recalculate the balance of its fuel consumption 
credits. Manufacturers may not make any corrections for errors that are 
determined more than 270 days after the end of the model year. If 
manufacturers report a negative balance of fuel consumption credits, 
NHTSA may disallow corrections under this paragraph (d)(2)(xi)(B).
    (C) If manufacturers or the agencies determine any time that errors 
mistakenly increased its balance of fuel consumption credits, 
manufacturers must correct the errors and recalculate the balance of 
fuel consumption credits.
    (xii) Under limited conditions, NHTSA may also ask a manufacturer 
to provide additional information directly to the Administrator, if 
necessary, to verify the fuel consumption requirements of this 
regulation.
    (e) Amendments to applications for certification. At any time, a 
manufacturer modifies an application for certification in accordance 
with 40 CFR 1036.225 and 1037.225, it must submit GHG emissions changes 
with equivalent fuel consumption values for the information required in 
paragraphs (b) through (e) and (h) of this section.
    (f) Confidential information. Manufacturers must submit a request 
for confidentiality with each electronic submission specifying any part 
of the for information or data in a report that it believes should be 
withheld from public disclosure as trade secret or other confidential 
business information. Information submitted to EPA should follow EPA 
guidelines for treatment of confidentiality. Requests for confidential 
treatment for information submitted to NHTSA must be filed in 
accordance with the requirements of 49 CFR part 512, including 
submission of a request for confidential treatment and the information 
for which confidential treatment is requested as specified by part 512. 
For any information or data requested by the manufacturer to be 
withheld under 5 U.S.C. 552(b)(4) and 49 U.S.C. 32910(c), the 
manufacturer shall present arguments and provide evidence in its 
request for confidentiality demonstrating that--
    (1) The item is within the scope of 5 U.S.C. 552(b)(4) and 49 
U.S.C. 32910(c);
    (2) The disclosure of the information at issue would cause 
significant competitive damage;
    (3) The period during which the item must be withheld to avoid that 
damage; and
    (4) How earlier disclosure would result in that damage.
    (g) Additional required information. The following additional 
information is required to be submitted through the EPA database. NHTSA 
reserves the right to ask a manufacturer to provide additional 
information, if necessary, to verify the fuel consumption requirements 
of this regulation.
    (1) Small businesses. For model years 2013 through 2020, vehicles 
and engines produced by small business manufacturers meeting the 
criteria in 13 CFR 121.201 are exempted from the requirements of this 
part. Qualifying small business manufacturers must notify EPA and NHTSA 
Administrators before importing or introducing into U.S. commerce 
exempted vehicles or engines. This notification must include a 
description of the manufacturer's qualification as a small business 
under 13 CFR 121.201. Manufacturers must submit this notification to 
EPA, and EPA will provide the notification to NHTSA. The agencies may 
review a manufacturer's qualification as a small business manufacturer 
under 13 CFR 121.201.
    (2) Emergency vehicles. For model years 2021 and later, emergency 
vehicles produced by heavy-duty pickup truck and van manufacturers are 
exempted except those produced by manufacturers voluntarily complying 
with standards in Sec.  535.5(a). Manufacturers must notify the 
agencies in writing if using the provisions in Sec.  535.5(a) to 
produce exempted emergency vehicles in a given model year, either in 
the report specified in 40 CFR 86.1865 or in a separate submission.
    (3) Early introduction. The provision applies to manufacturers 
seeking to comply early with the NHTSA's fuel consumption program prior 
to model year 2014. The manufacturer must send the request to EPA 
before submitting its first application for a certificate of 
conformity.
    (4) NHTSA voluntary compliance model years. Manufacturers must 
submit a statement declaring whether the manufacturer chooses to comply 
voluntarily with NHTSA's fuel consumption standards for model years 
2014 through 2015. The manufacturers must acknowledge that once 
selected, the decision cannot be reversed and the manufacturer will 
continue to comply with the fuel consumption standards for subsequent 
model years. The manufacturer must send the statement to EPA before 
submitting its first application for a certificate of conformity.
    (5) Alternative engine standards. Manufacturers choosing to comply 
with the alternative engine standards must notify EPA and NHTSA of 
their choice and include in that notification a demonstration that it 
has exhausted all available credits and credit opportunities. The 
manufacturer must send the statement to EPA before submitting its EOY 
report.
    (6) Alternate phase-in. Manufacturers choosing to comply with the 
alternative engine phase-in must notify EPA and NHTSA of their choice. 
The manufacturer must send the statement to EPA before submitting its 
first application for a certificate of conformity.
    (7) Off-road exclusion (tractors and vocational vehicles only). (i) 
Tractors and vocational vehicles primarily designed to perform work in 
off-road environments such as forests, oil fields, and construction 
sites may be exempted without request from the requirements of this 
regulation as specified in 49 CFR

[[Page 56198]]

523.2 and Sec.  535.5(b). Within 90 days after the end of each model 
year, manufacturers must send EPA and NHTSA through the EPA database a 
report with the following information:
    (A) A description of each excluded vehicle configuration, including 
an explanation of why it qualifies for this exclusion.
    (B) The number of vehicles excluded for each vehicle configuration.
    (ii) A manufacturer having an off-road vehicle failing to meet the 
criteria under the agencies' off-road exclusions will be allowed to 
request an exclusion of such a vehicle from EPA and NHTSA. The approval 
will be granted through the certification process for the vehicle 
family and will be done in collaboration between EPA and NHTSA in 
accordance with the provisions in 40 CFR 1037.150, 1037.210, and 
1037.631.
    (8) Vocational tractors. Tractors intended to be used as vocational 
tractors may comply with vocational vehicle standards in Sec.  535.5(b) 
of this regulation. Manufacturers classifying tractors as vocational 
tractors must provide a description of how they meet the qualifications 
in their applications for certificates of conformity as specified in 40 
CFR 1037.205.
    (9) Approval of alternate methods to determine drag coefficients 
(tractors only). Manufacturers seeking to use alternative methods to 
determine aerodynamic drag coefficients must provide a request and gain 
approval by EPA in accordance with 40 CFR 1037.525. The manufacturer 
must send the request to EPA before submitting its first application 
for a certificate of conformity.
    (10) Innovative and off-cycle technology credits. Manufacturers 
pursuing innovative and off-cycle technology credits must submit 
information to the agencies and may be subject to a public evaluation 
process in which the public would have opportunity for comment if the 
manufacturer is not using a test procedure in accordance with 40 CFR 
1037.610(c). Whether the approach involves on-road testing, modeling, 
or some other analytical approach, the manufacturer would be required 
to present a final methodology to EPA and NHTSA. EPA and NHTSA would 
approve the methodology and credits only if certain criteria were met. 
Baseline emissions and fuel consumption and control emissions and fuel 
consumption would need to be clearly demonstrated over a wide range of 
real-world driving conditions and over a sufficient number of vehicles 
to address issues of uncertainty with the data. Data would need to be 
on a vehicle model-specific basis unless a manufacturer demonstrated 
model-specific data was not necessary. The agencies may publish a 
notice of availability in the Federal Register notifying the public of 
a manufacturer's proposed alternative off-cycle credit calculation 
methodology and provide opportunity for comment. Any notice will 
include details regarding the methodology, but not include any 
Confidential Business Information.
    (11) Credit trades. If a manufacturer trades fuel consumption 
credits, it must send EPA and NHTSA a fuel consumption credit plan as 
specified in Sec.  535.7(a) and provide the following additional 
information:
    (i) As the seller, the manufacturer must include the following 
information:
    (A) The corporate names of the buyer and any brokers.
    (B) A copy of any contracts related to the trade.
    (C) The averaging set corresponding to the engine and powertrain 
families and sub-families that generated fuel consumption credits for 
the trade, including the number of fuel consumption credits from each 
averaging set.
    (ii) As the buyer, the manufacturer or entity must include the 
following information in its report:
    (A) The corporate names of the seller and any brokers.
    (B) A copy of any contracts related to the trade.
    (C) How the manufacturer or entity intends to use the fuel 
consumption credits, including the number of fuel consumption credits 
it intends to apply for each averaging set.
    (D) A copy of the contract with signatures from both the buyer and 
the seller.
    (12) Production reports. Within 90 days after the end of the model 
year and no later than March 31st, manufacturers participating and not-
participating in the ABT program must send to EPA and NHTSA a report 
including the total U.S.-directed production volume of vehicles it 
produced in each vehicle and engine family during the model year (based 
on information available at the time of the report) as required by 40 
CFR 1036.250 and 1037.250. Each manufacturer shall report by vehicle or 
engine identification number and by configuration and identify the 
subfamily identifier. Report uncertified vehicles sold to secondary 
vehicle manufacturers. Small business manufacturers may omit reporting. 
Identify any differences between volumes included for EPA but excluded 
for NHTSA.
    (13) Transition to engine-based model years. The following 
provisions apply for production and ABT reports during the transition 
to engine-based model year determinations for tractors and vocational 
vehicles in 2020 and 2021:
    (i) If a manufacturer installs model year 2020 or earlier engines 
in the manufacturer's vehicles in calendar year 2020, include all those 
Phase 1 vehicles in its production and ABT reports related to model 
year 2020 compliance, although the agencies may require the 
manufacturer to identify these separately from vehicles produced in 
calendar year 2019.
    (ii) If a manufacturer installs model year 2020 engines in its 
vehicles in calendar year 2021, submit production and ABT reports for 
those Phase 1 vehicles separate from the reports it submits for Phase 2 
vehicles with model year 2021 engines.
    (h) Public information. Based upon information submitted by 
manufacturers and EPA, NHTSA will publish fuel consumption standards 
and performance results.
    (i) Information received from EPA. NHTSA will receive information 
from EPA as specified in 40 CFR 1036.755 and 1037.755. If NHTSA or EPA 
finds that information is provided fraudulent or grossly negligent or 
otherwise provided in bad faith, the manufacturer may be liable to 
civil penalties in accordance with each agency's authority.
    (j) Recordkeeping. NHTSA has the same recordkeeping requirements as 
the EPA, specified in 40 CFR 86.1865-12(k), 1036.250, 1036.735, 
1036.825, 1037.250, 1037.735, and 1037.825. The agencies each reserve 
the right to request information contained in reports separately.
    (1) Manufacturers must organize and maintain records for NHTSA as 
described in this section. NHTSA in conjunction or separately from EPA 
may review a manufacturers records at any time.
    (2) Keep the records required by this section for at least eight 
years after the due date for the end-of-year report. Manufacturers may 
not use fuel consumption credits for any engines if it does not keep 
all the records required under this section. Manufacturers must 
therefore keep these records to continue to bank valid credits. Store 
these records in any electronic format and on any media, as long as the 
manufacturer can promptly send the agencies organized records in 
English if the agencies ask for them. Manufacturers must keep these 
records readily available. NHTSA may review them at any time.

[[Page 56199]]

    (3) Keep a copy of the reports required in Sec.  535.8 and 40 CFR 
1036.725,1036.730, 1037.725 and 1037.730.
    (4) Keep records of the vehicles and engine identification number 
(usually the serial number) for each vehicle and engine produced that 
generates or uses fuel consumption credits under the ABT program. 
Manufacturers may identify these numbers as a range. If manufacturers 
change the FEL after the start of production, identify the date started 
using each FEL/FCL and the range of vehicles or engine identification 
numbers associated with each FEL/FCL. Manufacturers must also identify 
the purchaser and destination for each vehicle and engine produced to 
the extent this information is available.
    (5) The agencies may require manufacturers to keep additional 
records or to send relevant information not required by this section in 
accordance with each agency's authority.
    (6) If collected separately and NHTSA finds that information is 
provided fraudulent or grossly negligent or otherwise provided in bad 
faith, the manufacturer may be liable to civil penalties in accordance 
with each agency's authority.


Sec.  535.9  Enforcement approach.

    (a) Compliance. (1) Each year NHTSA will assess compliance with 
fuel consumption standards as specified in Sec.  535.10.
    (i) NHTSA may conduct audits or confirmatory testing prior to first 
sale throughout a given model year or after the model year in order to 
validate data received from manufacturers and will discuss any 
potential issues with EPA and the manufacturer. NHTSA will perform 
confirmatory testing as specified in the EPA requirements defined in 40 
CFR 1037.150, 1037.201 and 1037.235. Audits may periodically be 
performed to confirm manufacturers' credit balances, or other credit 
transactions or other information submitted to EPA and NHTSA.
    (ii) NHTSA may also conduct field inspections either at 
manufacturing plants or at new vehicle dealerships to validate data 
received from manufacturers. Field inspections will be carried out in 
order to validate the condition of vehicles, engines or technology 
prior to first commercial sale to verify each component's certified 
configuration as initially built. NHTSA reserves the right to conduct 
inspections at other locations but will target only those components 
for which a violation would apply to OEMs and not the fleets or vehicle 
owners. Compliance inspections could be carried out through a number of 
approaches including during safety inspections or during compliance 
safety testing.
    (iii) NHTSA will conduct audits and inspections in the same manner 
and, when possible, in conjunction with EPA. NHTSA will also attempt to 
coordinate inspections with EPA and share results.
    (iv) Documents collected under NHTSA safety authority may be used 
to support fuel efficiency audits and inspections.
    (v) NHTSA may require a manufacturer to perform selective 
enforcement audits with respect to any GEM inputs in its application 
for certification or in the end of the year ABT final reports. 
Selective enforcement audits will be conducted similar to EPA's as 
defined in 40 CFR 1037.301, 40 CFR 1037.305 and 1037.320.
    (2) At the end of each model year NHTSA will confirm a 
manufacturer's fleet or family performance values against the 
applicable standards and, if a manufacturer uses a credit flexibility, 
the amount of credits in each averaging set. The averaging set balance 
is based upon the engines or vehicles performance above or below the 
applicable regulatory subcategory standards in each respective 
averaging set and any credits that are traded into or out of an 
averaging set during the model year.
    (i) If the balance is positive, the manufacturer is designated as 
having a credit surplus.
    (ii) If the balance is negative, the manufacturer is designated as 
having a credit deficit.
    (iii) NHTSA will provide notification to each manufacturer 
confirming its credit balance(s) after the end of each model year 
directly or through EPA.
    (3) Manufacturer are required to confirm the negative balance and 
submit a fuel consumption credit plan as specified in Sec.  535.7(a) 
along with supporting documentation indicating how it will allocate 
existing credits or earn (providing information on future vehicles, 
engines or technologies), and/or acquire credits, or else be liable for 
a civil penalty as determined in paragraph (b) of this section. The 
manufacturer must submit the information within 60 days of receiving 
agency notification.
    (4) Credit shortfall within an averaging set may be carried forward 
only three years, and if not offset by earned or traded credits, the 
manufacturer may be liable for a civil penalty as described in 
paragraph (b) of this section.
    (5) Credit allocation plans received from a manufacturer will be 
reviewed and approved by NHTSA. NHTSA will approve a credit allocation 
plan unless it determines that the proposed credits are unavailable or 
that it is unlikely that the plan will result in the manufacturer 
earning or acquiring sufficient credits to offset the subject credit 
shortfall. In the case where a manufacturer submits a plan to acquire 
future model year credits earned by another manufacturer, NHTSA will 
require a signed agreement by both manufacturers to initiate a review 
of the plan. If a plan is approved, NHTSA will revise the respective 
manufacturer's credit account accordingly by identifying which existing 
or traded credits are being used to address the credit shortfall, or by 
identifying the manufacturer's plan to earn future credits for 
addressing the respective credit shortfall. If a plan is rejected, 
NHTSA will notify the respective manufacturer and request a revised 
plan. The manufacturer must submit a revised plan within 14 days of 
receiving agency notification. The agency will provide a manufacturer 
one opportunity to submit a revised credit allocation plan before it 
initiates civil penalty proceedings.
    (6) For purposes of this regulation, NHTSA will treat the use of 
future credits for compliance, as through a credit allocation plan, as 
a deferral of civil penalties for non-compliance with an applicable 
fuel consumption standard.
    (7) If NHTSA receives and approves a manufacturer's credit 
allocation plan to earn future credits within the following three model 
years in order to comply with regulatory obligations, NHTSA will defer 
levying civil penalties for non-compliance until the date(s) when the 
manufacturer's approved plan indicates that credits will be earned or 
acquired to achieve compliance, and upon receiving confirmed 
CO2 emissions and fuel consumption data from EPA. If the 
manufacturer fails to acquire or earn sufficient credits by the plan 
dates, NHTSA will initiate civil penalty proceedings.
    (8) In the event that NHTSA fails to receive or is unable to 
approve a plan for a non-compliant manufacturer due to insufficiency or 
untimeliness, NHTSA may initiate civil penalty proceedings.
    (9) In the event that a manufacturer fails to report accurate fuel 
consumption data for vehicles or engines covered under this rule, 
noncompliance will be assumed until corrected by submission of the 
required data, and NHTSA may initiate civil penalty proceedings.

[[Page 56200]]

    (10) If EPA suspends or revoke a certificate of conformity as 
specified in 40 CFR 1036.255 or 1037.255, and a manufacturer is unable 
to take a corrective action allowed by EPA, noncompliance will be 
assumed, and NHTSA may initiate civil penalty proceedings or revoke 
fuel consumption credits.
    (b) Civil penalties. (1) Generally. NHTSA may assess a civil 
penalty for any violation of this part under 49 U.S.C. 32902(k). This 
section states the procedures for assessing civil penalties for 
violations of Sec.  535.3(h). The provisions of 5 U.S.C. 554, 556, and 
557 do not apply to any proceedings conducted pursuant to this section.
    (2) Initial determination of noncompliance. An action for civil 
penalties is commenced by the execution of a Notice of Violation. A 
determination by NHTSA's Office of Enforcement of noncompliance with 
applicable fuel consumption standards utilizing the certified and 
reported CO2 emissions and fuel consumption data provided by 
the Environmental Protection Agency as described in this part, and 
after considering all the flexibilities available under Sec.  535.7, 
underlies a Notice of Violation. If NHTSA Enforcement determines that a 
manufacturer's averaging set of vehicles or engines fails to comply 
with the applicable fuel consumption standard(s) by generating a credit 
shortfall, the incomplete vehicle, complete vehicle or engine 
manufacturer, as relevant, shall be subject to a civil penalty.
    (3) Numbers of violations and maximum civil penalties. Any 
violation shall constitute a separate violation with respect to each 
vehicle or engine within the applicable regulatory averaging set. The 
maximum civil penalty is not more than $37,500.00 per vehicle or 
engine. The maximum civil penalty under this section for a related 
series of violations shall be determined by multiplying $37,500.00 
times the vehicle or engine production volume for the model year in 
question within the regulatory averaging set. NHTSA may adjust this 
civil penalty amount to account for inflation.
    (4) Factors for determining penalty amount. In determining the 
amount of any civil penalty proposed to be assessed or assessed under 
this section, NHTSA shall take into account the gravity of the 
violation, the size of the violator's business, the violator's history 
of compliance with applicable fuel consumption standards, the actual 
fuel consumption performance related to the applicable standards, the 
estimated cost to comply with the regulation and applicable standards, 
the quantity of vehicles or engines not complying, and the effect of 
the penalty on the violator's ability to continue in business. The 
``estimated cost to comply with the regulation and applicable 
standards,'' will be used to ensure that penalties for non-compliance 
will not be less than the cost of compliance.
    (5) NHTSA enforcement report of determination of non-compliance. 
(i) If NHTSA Enforcement determines that a violation has occurred, 
NHTSA Enforcement may prepare a report and send the report to the NHTSA 
Chief Counsel.
    (ii) The NHTSA Chief Counsel will review the report prepared by 
NHTSA Enforcement to determine if there is sufficient information to 
establish a likely violation.
    (iii) If the Chief Counsel determines that a violation has likely 
occurred, the Chief Counsel may issue a Notice of Violation to the 
party.
    (iv) If the Chief Counsel issues a Notice of Violation, he or she 
will prepare a case file with recommended actions. A record of any 
prior violations by the same party shall be forwarded with the case 
file.
    (6) Notice of violation. (i) The Notice of Violation will contain 
the following information:
    (A) The name and address of the party;
    (B) The alleged violation(s) and the applicable fuel consumption 
standard(s) violated;
    (C) The amount of the proposed penalty and basis for that amount;
    (D) The place to which, and the manner in which, payment is to be 
made;
    (E) A statement that the party may decline the Notice of Violation 
and that if the Notice of Violation is declined within 30 days of the 
date shown on the Notice of Violation, the party has the right to a 
hearing, if requested within 30 days of the date shown on the Notice of 
Violation, prior to a final assessment of a penalty by a Hearing 
Officer; and
    (F) A statement that failure to either pay the proposed penalty or 
to decline the Notice of Violation and request a hearing within 30 days 
of the date shown on the Notice of Violation will result in a finding 
of violation by default and that NHTSA will proceed with the civil 
penalty in the amount proposed on the Notice of Violation without 
processing the violation under the hearing procedures set forth in this 
subpart.
    (ii) The Notice of Violation may be delivered to the party by--
    (A) Mailing to the party (certified mail is not required);
    (B) Use of an overnight or express courier service; or
    (C) Facsimile transmission or electronic mail (with or without 
attachments) to the party or an employee of the party.
    (iii) At any time after the Notice of Violation is issued, NHTSA 
and the party may agree to reach a compromise on the payment amount.
    (iv) Once a penalty amount is paid in full, a finding of ``resolved 
with payment'' will be entered into the case file.
    (v) If the party agrees to pay the proposed penalty, but has not 
made payment within 30 days of the date shown on the Notice of 
Violation, NHTSA will enter a finding of violation by default in the 
matter and NHTSA will proceed with the civil penalty in the amount 
proposed on the Notice of Violation without processing the violation 
under the hearing procedures set forth in this subpart.
    (vi) If within 30 days of the date shown on the Notice of Violation 
a party fails to pay the proposed penalty on the Notice of Violation, 
and fails to request a hearing, then NHTSA will enter a finding of 
violation by default in the case file, and will assess the civil 
penalty in the amount set forth on the Notice of Violation without 
processing the violation under the hearing procedures set forth in this 
subpart.
    (vii) NHTSA's order assessing the civil penalty following a party's 
default is a final agency action.
    (7) Hearing Officer. (i) If a party timely requests a hearing after 
receiving a Notice of Violation, a Hearing Officer shall hear the case.
    (ii) The Hearing Officer will be appointed by the NHTSA 
Administrator, and is solely responsible for the case referred to him 
or her. The Hearing Officer shall have no other responsibility, direct 
or supervisory, for the investigation of cases referred for the 
assessment of civil penalties. The Hearing Officer shall have no duties 
related to the light-duty fuel economy or medium- and heavy-duty fuel 
efficiency programs.
    (iii) The Hearing Officer decides each case on the basis of the 
information before him or her.
    (8) Initiation of action before the Hearing Officer. (i) After the 
Hearing Officer receives the case file from the Chief Counsel, the 
Hearing Officer notifies the party in writing of--
    (A) The date, time, and location of the hearing and whether the 
hearing will be conducted telephonically or at the DOT Headquarters 
building in Washington, DC;

[[Page 56201]]

    (B) The right to be represented at all stages of the proceeding by 
counsel as set forth in paragraph (b)(9) of this section; and
    (C) The right to a free copy of all written evidence in the case 
file.
    (ii) On the request of a party, or at the Hearing Officer's 
direction, multiple proceedings may be consolidated if at any time it 
appears that such consolidation is necessary or desirable.
    (9) Counsel. A party has the right to be represented at all stages 
of the proceeding by counsel. A party electing to be represented by 
counsel must notify the Hearing Officer of this election in writing, 
after which point the Hearing Officer will direct all further 
communications to that counsel. A party represented by counsel bears 
all of its own attorneys' fees and costs.
    (10) Hearing location and costs. (i) Unless the party requests a 
hearing at which the party appears before the Hearing Officer in 
Washington, DC, the hearing may be held telephonically. In Washington, 
DC, the hearing is held at the headquarters of the U.S. Department of 
Transportation.
    (ii) The Hearing Officer may transfer a case to another Hearing 
Officer at a party's request or at the Hearing Officer's direction.
    (iii) A party is responsible for all fees and costs (including 
attorneys' fees and costs, and costs that may be associated with travel 
or accommodations) associated with attending a hearing.
    (11) Hearing procedures. (i) There is no right to discovery in any 
proceedings conducted pursuant to this subpart.
    (ii) The material in the case file pertinent to the issues to be 
determined by the Hearing Officer is presented by the Chief Counsel or 
his or her designee.
    (iii) The Chief Counsel may supplement the case file with 
information prior to the hearing. A copy of such information will be 
provided to the party no later than three business days before the 
hearing.
    (iv) At the close of the Chief Counsel's presentation of evidence, 
the party has the right to examine respond to and rebut material in the 
case file and other information presented by the Chief Counsel. In the 
case of witness testimony, both parties have the right of cross- 
examination.
    (v) In receiving evidence, the Hearing Officer is not bound by 
strict rules of evidence. In evaluating the evidence presented, the 
Hearing Officer must give due consideration to the reliability and 
relevance of each item of evidence.
    (vi) At the close of the party's presentation of evidence, the 
Hearing Officer may allow the introduction of rebuttal evidence that 
may be presented by the Chief Counsel.
    (vii) The Hearing Officer may allow the party to respond to any 
rebuttal evidence submitted.
    (viii) After the evidence in the case has been presented, the Chief 
Counsel and the party may present arguments on the issues in the case. 
The party may also request an opportunity to submit a written statement 
for consideration by the Hearing Officer and for further review. If 
granted, the Hearing Officer shall allow a reasonable time for 
submission of the statement and shall specify the date by which it must 
be received. If the statement is not received within the time 
prescribed, or within the limits of any extension of time granted by 
the Hearing Officer, it need not be considered by the Hearing Officer.
    (ix) A verbatim transcript of the hearing will not normally be 
prepared. A party may, solely at its own expense, cause a verbatim 
transcript to be made. If a verbatim transcript is made, the party 
shall submit two copies to the Hearing Officer not later than 15 days 
after the hearing. The Hearing Officer shall include such transcript in 
the record.
    (12) Determination of violations and assessment of civil penalties. 
(i) Not later than 30 days following the close of the hearing, the 
Hearing Officer shall issue a written decision on the Notice of 
Violation, based on the hearing record. This may be extended by the 
Hearing officer if the submissions by the Chief Counsel or the party 
are voluminous. The decision shall address each alleged violation, and 
may do so collectively. For each alleged violation, the decision shall 
find a violation or no violation and provide a basis for the finding. 
The decision shall set forth the basis for the Hearing Officer's 
assessment of a civil penalty, or decision not to assess a civil 
penalty. In determining the amount of the civil penalty, the gravity of 
the violation, the size of the violator's business, the violator's 
history of compliance with applicable fuel consumption standards, the 
actual fuel consumption performance related to the applicable standard, 
the estimated cost to comply with the regulation and applicable 
standard, the quantity of vehicles or engines not complying, and the 
effect of the penalty on the violator's ability to continue in 
business. The assessment of a civil penalty by the Hearing Officer 
shall be set forth in an accompanying final order. The Hearing 
Officer's written final order is a final agency action.
    (ii) If the Hearing Officer assesses civil penalties in excess of 
$1,000,000, the Hearing Officer's decision shall contain a statement 
advising the party of the right to an administrative appeal to the 
Administrator within a specified period of time. The party is advised 
that failure to submit an appeal within the prescribed time will bar 
its consideration and that failure to appeal on the basis of a 
particular issue will constitute a waiver of that issue in its appeal 
before the Administrator.
    (iii) The filing of a timely and complete appeal to the 
Administrator of a Hearing Officer's order assessing a civil penalty 
shall suspend the operation of the Hearing Officer's penalty, which 
shall no longer be a final agency action.
    (iv) There shall be no administrative appeals of civil penalties 
assessed by a Hearing Officer of less than $1,000,000.
    (13) Appeals of civil penalties in excess of $1,000,000. (i) A 
party may appeal the Hearing Officer's order assessing civil penalties 
over $1,000,000 to the Administrator within 21 days of the date of the 
issuance of the Hearing Officer's order.
    (ii) The Administrator will review the decision of the Hearing 
Officer de novo, and may affirm the decision of the hearing officer and 
assess a civil penalty, or
    (iii) The Administrator may--
    (A) Modify a civil penalty;
    (B) Rescind the Notice of Violation; or
    (C) Remand the case back to the Hearing Officer for new or 
additional proceedings.
    (iv) In the absence of a remand, the decision of the Administrator 
in an appeal is a final agency action.
    (14) Collection of assessed or compromised civil penalties. (i) 
Payment of a civil penalty, whether assessed or compromised, shall be 
made by check, postal money order, or electronic transfer of funds, as 
provided in instructions by the agency. A payment of civil penalties 
shall not be considered a request for a hearing.
    (ii) The party must remit payment of any assessed civil penalty to 
NHTSA within 30 days after receipt of the Hearing Officer's order 
assessing civil penalties, or, in the case of an appeal to the 
Administrator, within 30 days after receipt of the Administrator's 
decision on the appeal.
    (iii) The party must remit payment of any compromised civil penalty 
to NHTSA on the date and under such terms and conditions as agreed to 
by the party and NHTSA. Failure to pay may result in NHTSA entering a 
finding of violation by default and assessing a civil penalty in the 
amount proposed in the Notice of Violation without processing

[[Page 56202]]

the violation under the hearing procedures set forth in this part.
    (c) Changes in corporate ownership and control. Manufacturers must 
inform NHTSA of corporate relationship changes to ensure that credit 
accounts are identified correctly and credits are assigned and 
allocated properly.
    (1) In general, if two manufacturers merge in any way, they must 
inform NHTSA how they plan to merge their credit accounts. NHTSA will 
subsequently assess corporate fuel consumption and compliance status of 
the merged fleet instead of the original separate fleets.
    (2) If a manufacturer divides or divests itself of a portion of its 
automobile manufacturing business, it must inform NHTSA how it plans to 
divide the manufacturer's credit holdings into two or more accounts. 
NHTSA will subsequently distribute holdings as directed by the 
manufacturer, subject to provision for reasonably anticipated 
compliance obligations.
    (3) If a manufacturer is a successor to another manufacturer's 
business, it must inform NHTSA how it plans to allocate credits and 
resolve liabilities per 49 CFR part 534.


Sec.  535.10  How do manufacturers comply with fuel consumption 
standards?

    (a) Pre-certification process. (1) Regulated manufacturers 
determine eligibility to use exemptions or exclusions in accordance 
with Sec.  535.3.
    (2) Manufacturers may seek preliminary approvals as specified in 40 
CFR 1036.210 and 40 CFR 1037.210 from EPA and NHTSA, if needed. 
Manufacturers may request to schedule pre- certification meetings with 
EPA and NHTSA prior to submitting approval requests for certificates of 
conformity to address any joint compliance issues and gain informal 
feedback from the agencies.
    (3) The requirements and prohibitions required by EPA in special 
circumstances in accordance with 40 CFR 1037.601 and 40 CFR part 1068 
apply, except for the warranty provisions in 40 CFR 1037.601(a)(5), to 
manufacturers for the purpose of complying with fuel consumption 
standards. Manufacturers should use good judgment when determining how 
EPA requirements apply in complying with the NHTSA program. 
Manufacturers may contact NHTSA and EPA for clarification about how 
these requirements apply to them.
    (4) In circumstances in which EPA provides multiple compliance 
approaches manufacturers must choose the same compliance path to comply 
with NHTSA's fuel consumption standards that they choose to comply with 
EPA's greenhouse gas emission standards.
    (5) Manufacturers may not introduce new vehicles into commerce 
without a certificate of conformity from EPA. Manufacturers must attest 
to several compliance standards in order to obtain a certificate of 
conformity. This includes stating comparable fuel consumption results 
for all required CO2 emissions rates. Manufacturers not 
completing these steps do not comply with the NHTSA fuel consumption 
standards.
    (6) Manufacturers apply the fuel consumption standards specified in 
Sec.  535.5 to vehicles, engines and components that represent 
production units and components for vehicle and engine families, sub-
families and configurations consistent with the EPA specifications in 
40 CFR 86.1819, 1036.230, and 1037.230. Vehicles required to meet the 
fuel consumption standards of this part must also comply with the same 
requirements as specified in 40 CFR 1037.115.
    (7) Only certain vehicles and engines are allowed to comply 
differently between the NHTSA and EPA programs as detailed in this 
section. These vehicles and engines must be identified by manufacturers 
in the ABT and production reports required in Sec.  535.8.
    (b) Model year compliance. Manufacturers are required to conduct 
testing to demonstrate compliance with CO2 exhaust emissions 
standards in accordance with EPA's provisions in 40 CFR part 600, 
subpart B, 40 CFR 1036, subpart F, 40 CFR part 1037, subpart R, and 40 
CFR part 1066. Manufacturers determine equivalent fuel consumption 
performance values for CO2 results as specified in Sec.  
535.6 and demonstrate compliance by comparing equivalent results to the 
applicable fuel consumption standards in Sec.  535.5.
    (c) End-of-the-year process. Manufacturers comply with fuel 
consumption standards after the end of each model year, if--
    (1) For heavy-duty pickup trucks and vans, the manufacturer's fleet 
average performance, as determined in Sec.  535.6, is less than the 
fleet average standard; or
    (2) For truck tractors, vocational vehicles and engines the 
manufacturer's fuel consumption performance for each vehicle or engine 
family (or sub-family), as determined in Sec.  535.6, is lower than the 
applicable regulatory subcategory standards in Sec.  535.5.
    (4) NHTSA will use the EPA final verified values as specified in 40 
CFR 86.1819, 40 CFR 1036.755, and 1037.755 for making final 
determinations on whether vehicles and engines comply with fuel 
consumption standards.
    (5) A manufacturer fails to comply with fuel consumption standards 
if its final reports are not provided in accordance with Sec.  535.8 
and 40 CFR 86.1865, 1036.730, and 1037.730. Manufacturers not providing 
complete or accurate final reports or any plans by the required 
deadlines do not comply with fuel consumption standards. A manufacturer 
that is unable to provide any emissions results along with comparable 
fuel consumption values must obtain permission for EPA to exclude the 
results prior to the deadline for submitting final reports.
    (6) A manufacturer that would otherwise fail to directly comply 
with fuel consumption standards as described in paragraphs (c)(1) 
through (3) of this section may use one or more of the credit 
flexibilities provided under the NHTSA averaging, banking and trading 
program, as specified in Sec.  535.7, but must offset all credit 
deficits in its averaging sets to achieve compliance.
    (7) A manufacturer failing to comply with the provisions specified 
in this part may be liable to pay civil penalties in accordance with 
Sec.  535.9.
    (8) A manufacturer may also be liable to pay civil penalties if 
found by EPA or NHTSA to have provided false information as identified 
through NHTSA or EPA enforcement audits or new vehicle verification 
testing as specified in Sec.  535.9 and 40 CFR parts 86, 1036, and 
1037.

    Issued in Washington, DC, under authority delegated in 49 CFR 
1.95 and 49 CFR 501.5.
Steven S. Cliff,
Administrator.
[FR Doc. 2022-17134 Filed 9-12-22; 8:45 am]
BILLING CODE 4910-59-P


