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Air Pollution Control: Amendments To Regulations Governing the Importation of Nonconforming Vehicles

American Government Special Collections Reference Desk

American Government

Air Pollution Control: Amendments To Regulations Governing the Importation of Nonconforming Vehicles

Carol M. Browner
Environmental Protection Agency
March 24, 1994


[Federal Register Volume 59, Number 57 (Thursday, March 24, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 94-6949]


[[Page Unknown]]

[Federal Register: March 24, 1994]


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ENVIRONMENTAL PROTECTION AGENCY
40 CFR Parts 85 and 600

[FRL-4854-7]

 

Air Pollution Control: Amendments To Regulations Governing the 
Importation of Nonconforming Vehicles

AGENCY: Environmental Protection Agency (EPA).

ACTION: Notice of proposed rulemaking.

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SUMMARY: EPA is proposing to amend 40 CFR part 85, subpart P to permit 
the importation of certain motor vehicles and motor vehicle engines 
from Canada without obtaining a certificate of conformity from EPA. 
Such vehicles will be allowed entry into the United States provided a 
commercial importer proves they are identical, in all material 
respects, to a vehicle certified for sale in the United States. EPA is 
proposing this change because it believes that many vehicles produced 
by manufacturers for sale in Canada are identical to their United 
States certified counterparts.
    In addition to the changes in subpart P which affect commercial 
importers of vehicles produced for the Canadian market, this proposal 
also addresses other issues relating to the importation of 
nonconforming vehicles. EPA is proposing to: Formalize a longstanding 
EPA policy regarding the importation of individually owned vehicles 
that are proven to be identical, in all material respects, to a vehicle 
certified for sale in the United States, establish new emission 
standards applicable to imported nonconforming vehicles, clarify the 
regulatory language at 40 CFR part 85, subparts P and R, which concern 
the exclusion or exemption of motor vehicles and motor vehicle engines 
from meeting Federal emission requirements, and provide several minor 
clarifications to the existing regulations.
    EPA is proposing that implementation of these regulations take 
place 30 days after publication of the final rule.
    This preamble is abbreviated from a larger supplementary document 
which expands upon the issues discussed here and which may be found in 
the Docket No. A-89-20 described below.

DATES: If requested, EPA will conduct a public hearing on this Notice 
of Proposed Rulemaking on April 25, 1994. The hearing will convene at 
10:00 a.m. and will adjourn at such time as necessary to complete the 
testimony. Written comments on this notice will be accepted for 30 days 
following the hearing, until May 23, 1994. Any party desiring to 
present oral testimony for the record at the public hearing, instead 
of, or in addition to, written comments, must notify EPA by 5:00 p.m. 
EST on April 8, 1994. If no party informs EPA that it wishes to 
testify, no hearing will be held and EPA will address only written 
submissions.

ADDRESSES: The hearing, if requested, will take place at the EPA 
Education Center, Waterside Mall, 401 M Street, SW., Washington, DC 
20460. Any person wishing to attend should call the EPA contact person 
listed below to determine if the hearing will be held.
    Materials relevant to this rulemaking are contained in the EPA Air 
Docket LE-131, Attention: Docket No. A-89-20, located at the Air Docket 
Section, U.S. Environmental Protection Agency, Room M-1500, 401 M 
Street, SW., Washington, DC 20460 telephone (202) 260-7548. The docket 
may be reviewed on weekdays between the hours of 8:30 a.m. to 12 noon 
and from 1:30 to 3:30 p.m. As provided in 40 CFR part 2, a reasonable 
fee may be charged for copying services.

FOR FURTHER INFORMATION CONTACT: This notice of proposed rulemaking 
provides a brief description of the changes that EPA is proposing. For 
a more complete explanation, including proposed regulatory language, 
refer to the EPA Air Docket at A-89-20. Any questions or comments 
should be directed to: Leonard D. Lazarus, Investigation/Imports 
Section, Manufacturers Operations Division (6405J), U.S. Environmental 
Protection Agency, 401 M Street, SW., Washington, DC 20460. Telephone 
(202) 233-9250.

SUPPLEMENTARY INFORMATION:

I. Statutory Authority

    Today's proposal discusses several regulatory programs administered 
by EPA which provide for the importation of vehicles into the United 
States. Section 203 of the Clean Air Act (Act), 42 U.S.C. 7522, 
provides the statutory authority for regulations relating to the 
importation of new motor vehicles\1\ and motor vehicle engines which 
are not covered by a certificate of conformity. Sections 203(a)(1) and 
203(b)(2) provide the statutory authority for the regulations in 
today's proposal. Generally, section 203(a)(1) prohibits the 
importation of vehicles not covered by a certificate of conformity by 
any person except as provided by regulation of the Administrator. The 
exception for regulations of the Administrator in section 203(a)(1) 
refers to the grant of authority in section 203(b)(2), which states 
that a vehicle not covered by a certificate of conformity and offered 
for importation shall be refused admission into the United States 
unless the Administrator, by regulation, provides for deferring final 
determination regarding admission of the vehicle offered for 
importation upon such terms and conditions as may appear appropriate to 
insure that any imported vehicle will be brought into conformity with 
applicable standards, requirements and limitations.
---------------------------------------------------------------------------

    \1\The word ``vehicle'' hereinafter refers to a motor vehicle 
and motor vehicle engine.
---------------------------------------------------------------------------

    To implement section 203(b)(2), EPA has established procedures 
regarding the importation of vehicles not covered by a certificate of 
conformity. EPA first promulgated regulations on November 15, 1972 (37 
FR 24314) which allowed individuals to import vehicles and perform 
modifications subsequent to importation. This regulatory structure was 
replaced on July 1, 1988 with a new regulatory program promulgated on 
September 25, 1987. This program established the independent commercial 
importer (ICI) as the entity responsible for the importation of 
nonconforming vehicles. The primary purpose of this NPRM is to propose 
additional provisions regarding the importation of vehicles intended 
for sale in Canada but identical to U.S. certified configurations. See 
section II for a discussion of the importation of Canadian vehicles. 
This proposal also includes amendments to the procedures governing the 
importation of nonconforming vehicles generally.
    In addition to the regulations administering the importation of 
vehicles pursuant to section 203(b)(2), EPA is proposing amendments to 
regulations which implement section 203(b)(1) of the Act. Section 
203(b)(1) states, ``[t]he Administrator may exempt any new motor 
vehicle or new motor vehicle engine * * * upon such terms and 
conditions as he may find necessary for the purpose of research, 
investigations, studies, demonstrations, or training or for reasons of 
national security.'' To implement this section of the Act, regulations 
were initially promulgated on September 10, 1974 (39 FR 32609), 
codified at 40 CFR part 85, subpart R, to provide for a program 
allowing manufacturers to apply for and receive exemptions for vehicles 
that were used for the purposes specified in section 203(b)(1) of the 
Act. These regulations were amended on March 3, 1980 (45 FR 13733) to 
extend the availability of exemptions under section 203(b)(1) to 
individuals and other non-manufacturers. On July 14, 1982 (47 FR 30482) 
these regulations were amended to reduce the information required in a 
manufacturer's exemption application. The regulations were also amended 
on August 27, 1985 (50 FR 34797) to require that a claim of 
confidentiality accompany information submitted to EPA that is covered 
by such a claim.
    The proposed amendments to the regulations, codified at 40 CFR 
85.1703, implement section 203(b)(1) of the Act to address the 
definition of a motor vehicle; to clarify the definition of a 
precertification vehicle in contrast to a vehicle subject to a testing 
exemption; and, to revise the regulations regarding obtaining a display 
exemption pursuant to 40 CFR 85.1511(b)(4) and 85.1707. These proposed 
changes are discussed in section V, Proposed Amendments to subpart R.

II. Background for Canadian Importations

    The framework of EPA's current Imports regulations establishes, 
with some limited exceptions, that only independent commercial 
importers (ICIs) holding a valid certificate of conformity may import 
nonconforming vehicles into the United States. An ICI bears the 
responsibility not only for performing all necessary modifications and 
testing, but also for ensuring that the vehicle it imports complies 
with United States emission requirements for the vehicle's useful life. 
In effect, this imposes on the ICI the same emission requirements the 
Act imposed on original equipment manufacturers (OEMs).
    On November 24, 1987, potential importers of Canadian vehicles for 
resale in the U.S. petitioned EPA\2\ to reconsider the regulations as 
they apply to the commercial importation of vehicle models originally 
designed and built for sale in Canada which are identical to vehicles 
certified by EPA for sale in the United States. The petitioners 
maintained that, although these vehicles may not be labeled by the OEM 
as meeting United States emission requirements, the vehicles do not 
have to be mechanically modified to comply with such requirements and 
do not present air quality concerns similar to those presented by other 
imported nonconforming vehicles.
---------------------------------------------------------------------------

    \2\A copy of the petition may be found in the docket at A-89-20.
---------------------------------------------------------------------------

    The evidence available to EPA suggests that an overwhelming 
majority of the vehicle models manufactured for sale in Canada are not 
configurations unique to the Canadian market, but are mechanically 
identical to their corresponding United States version regarding 
emissions compliance, except for EPA's labeling and warranty 
requirements. Given this situation, EPA believes that it is not 
necessary to require individuals and commercial importers to obtain 
separate certificates of conformity from EPA for those vehicles that 
are mechanically identical to their corresponding United States version 
regarding emissions compliance.
    On June 29, 1988, EPA granted the petition for reconsideration (the 
document granting the petition may be found in the docket at A-89-20), 
and agreed to commence this rulemaking to address the unique issues 
surrounding Canadian vehicles.
    Today's action proposes formal revisions to EPA's regulations for 
importing vehicles from Canada. It also clarifies or changes certain 
other provisions contained in the existing regulations.

A. EPA's Proposal

    EPA's proposal would allow only commercial importers with 
designated Canadian importer status approved by EPA to import vehicles 
from Canada both for which the title has previously been transferred to 
an ultimate purchaser and for which the title has not yet been 
transferred to an ultimate purchaser, for the purpose of resale. The 
designated Canadian importers would be permitted to import only those 
vehicles which were previously proven to be identical, in all material 
respects, to their United States certified counterparts. In addition to 
making the showing of identical in all material respects, a designated 
Canadian importer must agree to: (1) Label each vehicle for fuel 
economy and emissions compliance purposes; (2) fulfill emission 
warranty and recall obligations, and notify owners of recalls and 
available warranty coverage; (3) maintain adequate records; (4) pay any 
applicable Gas Guzzler Taxes, and Corporate Average Fuel Economy 
penalties (49 CFR 531, 533); (5) submit applications for final 
admission to EPA; (6) hold vehicles for a period of five working days 
(or less if approved by EPA on a case-by-case basis) for EPA inspection 
before transfer to an ultimate purchaser or dealer; and (7) submit to 
inspections conducted by EPA enforcement officers.

B. Importations by Individuals

    Today's proposal also addresses the importation of vehicles by 
individual owners. Often an individual moving to the United States from 
Canada wishes to import his/her vehicle for personal use. In many of 
these cases, the vehicle is identical, except for labeling, to its 
United States certified counterpart. The few vehicles which are not 
identical to their United States certified counterparts, typically 
require only minor modifications to make them identical. For these 
reasons, EPA believes that the special circumstances associated with an 
individual moving to the United States from Canada also warrant 
consideration in this rulemaking. EPA believes that similar 
circumstances may also apply to some individuals importing vehicles 
from other countries. Consequently, this proposal addresses vehicle 
importations by individuals moving to the United States from other 
countries, as well.
    EPA's current policy permits entry to certain vehicles on a case-
by-case basis. EPA proposes to formalize this policy to grant 
exemptions to individual owners (individuals and businesses) to import 
their personal vehicles (i.e., vehicles not imported for the purpose of 
resale), provided they have proven that their vehicles were: (1) 
Originally manufactured to be identical, in all material respects, to a 
vehicle described in an OEM's application for certification, or (2) 
modified to be identical in all material respects to a vehicle 
described in an OEMs application for certification. EPA is not 
proposing to change individual vehicle owners' responsibility for 
payment of any Gas Guzzler taxes applicable to vehicles they import.
    EPA's proposal also offers individual importers the option of 
having an ICI import their vehicle or engine for the purpose of 
modifying it to be identical in all material respects to a vehicle or 
motor vehicle engine certified by the OEM for sale in the United 
States. Vehicles imported under this option must be modified by the ICI 
according to OEM instructions, but do not have to be tested. EPA is 
confident that detailed instructions provided by an OEM specifying 
parts to be installed and adjustments to be performed will be 
sufficient to make a vehicle or engine identical in all material 
respects to a certified vehicle or engine, because these modifications 
will result in the vehicle or engine having the same parts and 
parameters as are described in the OEM's application for certification, 
which describes the vehicles or engines produced by the OEM within a 
given certified engine family. Individual vehicle owners who might 
otherwise have to incur the greater expense of ICI testing for a 
vehicle they wish to import may benefit from this option, if 
modification instructions can be obtained from the OEM.

C. Emission Standards

    Today, EPA is proposing to delete the requirement that 
nonconforming light-duty vehicles and light-duty trucks imported 
pursuant to 40 CFR 85.1505 or 85.1509 meet current year emission 
standards.\3\ Instead of meeting current year emission standards, these 
vehicles will be allowed to meet emission standards (with applicable 
deterioration factors applied) that were in effect at the time of 
original vehicle production, with a few exceptions. These vehicles 
must, however, meet such emission standards using the currently 
applicable testing procedures, and must meet all applicable current 
model year fuel economy requirements. EPA is not proposing to change 
ICIs' status as small volume manufacturers and they must comply with 
corporate average fuel economy (CAFE) requirements as imposed by the 
Department of Transportation (DOT). This revision would give owners of 
older motor vehicles a way to import their vehicles. Many of these 
vehicles are now effectively excluded from importation due to the high 
cost of modification to meet current model year standards, which may be 
greater than the value of the vehicle involved.
---------------------------------------------------------------------------

    \3\This proposal does not change the emission standards for new 
motor vehicles imported by the original equipment manufacturers. 
This proposal changes only the emission standards for motor vehicles 
that were originally produced in earlier years than the model year 
of importation.
---------------------------------------------------------------------------

    EPA would continue, as under current regulations, to define the 
useful life of imported nonconforming vehicles as a period of time or 
mileage of use in the United States, beginning with the date and 
mileage at the time of a vehicle's release to the owner or purchaser. 
Consequently, this proposal would not affect the warranty and recall 
requirements pursuant to 40 CFR 85.1508 and 85.1510 or any other 
requirement under that subpart.

D. Other Issues

(1) Precertification Exemption
    Today's proposal revises the precertification exemption available 
to ICIs pursuant to 40 CFR 85.1511(b)(3) for the importation of 
nonconforming prototype vehicles for use in certification. Presently, 
the ICI must obtain written approval from the Administrator prior to 
importing such nonconforming motor vehicles, must use the vehicle to 
obtain a certificate of conformity, and must obtain a certificate of 
conformity within 180 days of importation. In this rulemaking, EPA 
retains these provisions, and proposes additional requirements 
regarding the number of precertification exemptions given to an ICI at 
any given time and EPA's criteria for granting precertification 
exemptions pursuant to 40 CFR 85.1511(b)(3) while other 
precertification exemptions are pending. In addition, a provision is 
made for extension of the 180 day time limit under certain 
circumstances. A precertification exemption allows an ICI to bring a 
vehicle or engine into the U.S. for the purpose of obtaining a 
certificate of conformity.
    EPA is concerned with granting, or with the need for granting, 
precertification exemptions when the ICI has failed to complete the 
certification process and obtain certificates of conformity for other 
prototype vehicles previously entered under this exemption. EPA is also 
concerned about the technical capability of some ICIs, that the ICIs 
successfully modify the pending precertification vehicles, and that the 
ICIs continue to comply with all requirements of the Imports 
regulations. Therefore, EPA is proposing limits to precertification 
exemptions.
    EPA is proposing an automatic limit of no more than three 
precertification exemptions to an ICI at any one time except upon a 
case-by-case determination that the ICI has demonstrated an ability to 
meet the EPA technical and time requirements for the additional 
prototype vehicle as well as for all other vehicles it has already 
imported. Absent such approval, the ICI will not be granted another 
precertification exemption until a certificate for the existing 
prototype vehicle(s) is obtained or the vehicle(s) unable to be brought 
into conformity with Federal emission requirements has been exported. 
Secondly, regardless of the number of outstanding precertification 
exemptions, EPA also would not grant another precertification exemption 
if the ICI is in noncompliance with the Imports regulations for any 
other vehicle already imported until the noncompliance situation is 
resolved. When determining whether to grant approval of additional 
exemptions, EPA will consider such factors as an ICI's previously 
demonstrated success in obtaining certificates of conformity in a 
timely manner, accurate and efficient compliance with all certification 
procedures, extent of progress on other outstanding precertification 
exemptions, and whether the ICI is and will likely be in compliance 
with all requirements of the Imports regulations for other vehicles it 
has already imported. EPA is also proposing the following 
clarifications to the precertification process to eliminate confusion 
associated with the final admission of prototype vehicles. The 
prototype vehicle is the first vehicle imported and tested under the 
certificate of conformity for the purposes of testing every third (or 
fifth) vehicle under 40 CFR 85.1505.
    Under current regulations, an ICI must obtain a certificate of 
conformity within 180 days of the date of entry of the prototype 
vehicle. If not, then either the total amount of the bond is forfeited 
or the vehicle is exported. EPA recognizes there are limited instances 
when it is not possible to obtain a certificate of conformity within 
180 days. Therefore, EPA is proposing that an extension of the 180 day 
requirement may be granted by the Administrator. The length of the 
extension will be determined by EPA on a case-by-case basis considering 
the needs of each ICI. The ICI must request such an extension prior to 
the expiration of the 180 days. EPA expects to grant such requests only 
under unique circumstances. For example, EPA would expect to grant an 
extension to an ICI who has completed all modifications for the vehicle 
and certification testing is pending, but circumstances beyond the 
ICI's control have led to failure to obtain the certificate of 
conformity within the required 180 days. EPA specifically will not 
grant an extension for situations such as (but not limited to) when an 
ICI allows a significant amount of time to elapse in which significant 
progress was not made on the vehicle, or when an ICI fails to submit in 
a timely manner the application for certification (or applicable parts, 
thereof) to EPA.
    The ICI must comply with all requirements of Subpart P once the 
certification process is complete, including the submittal of final 
admission forms as stated in 40 CFR 85.1505, the recordkeeping 
requirements and labeling requirements of 40 CFR 85.1706 and any other 
requirements of 40 CFR 85.1501 et seq.
(2) Racing Exclusion
    According to 40 CFR 85.1511(e), a racing vehicle may be imported by 
any person provided the vehicle meets one or more of the exclusion 
criteria set forth in 40 CFR 85.1703. Presently, EPA policy will allow 
such a vehicle to be imported only with a prior written EPA 
determination that the vehicle meets these exclusion criteria. The 
purpose of this policy is to ensure that vehicles which may be legally 
operated or are capable of being legally operated on the streets and 
highways will not be imported as racing vehicles. EPA proposes to 
incorporate this practice into the regulations.
(3) Warranty/Insurance
    When the current Imports program was initially implemented in 1988, 
EPA discovered that ICIs were not capable of obtaining the independent 
insurance coverage as required in 40 CFR 85.1510(b)(2). As a result, 
EPA proposes to amend the existing regulations to allow an ICI to 
obtain prepaid independent insurance coverage less than that required 
by the regulations, with the ICI retaining full responsibility for the 
remaining warranty coverage. The prepaid insurance policy, underwritten 
by an independent insurance company, shall at a minimum provide 
coverage for emission related components installed or modified by the 
ICI and to the maximum extent possible, the emission related components 
installed by the OEM.
    This change does not alter the requirement that the ICI provide an 
emissions warranty as required by section 207 (a) and (b) of the Act.
(4) Minor Clarifications
    EPA is also proposing the following minor clarifications and 
changes: (1) Adding a definition of fifteen working day hold period 
(and five working day hold period) (40 CFR 85.1502), (2) clarifying 
that the fifteen (or five) working day hold period begins the first 
working day after the application for final admission is received by 
the Manufacturers Operations Division (40 CFR 85.1505 and 85.1509), (3) 
providing for the transfer of control of a nonconforming motor vehicle 
between ICIs after conditional admission (40 CFR 85.1504), (4) adding a 
requirement that vehicles be stored within 50 miles of the test 
facility during the fifteen working day hold period (importers wishing 
to use storage facilities not meeting this criterion must obtain EPA's 
prior written approval) (40 CFR 85.1505 and 85.1509), (5) providing for 
the acceptance of alternative dates in lieu of the date of original 
manufacture, if it is unobtainable (40 CFR 85.1507), (6) clarifying the 
repair and alteration exemption (40 CFR 85.1511), (7) clarifying the 
exclusion for methanol-fueled vehicles produced prior to the 1990 model 
year (40 CFR 85.1511), (8) clarifying the catalyst control programs and 
other requirements for United States version vehicles driven overseas 
(40 CFR 85.1512), (9) clarifying that the ICI must retain control of 
each vehicle until final admission is granted by EPA (40 CFR 85.1513), 
(10) adding a requirement that to be eligible to modify and test six-
year old or older vehicles under 40 CFR 85.1509, an ICI must have a 
currently valid certificate of conformity for the same vehicle type 
(i.e., light-duty gasoline-fueled vehicle/truck, heavy-duty diesel 
engine, or motorcycle) (40 CFR 85.1509), (11) clarify that unless all 
requirements of 40 CFR 85.1505 or 85.1509 have been met, final 
admission status will not be granted (40 CFR 85.1505 and 85.1509), (12) 
delete the requirement that a vehicle greater than 20 original 
production (OP) years old which is ineligible for exclusion, must be 
imported by an ICI (40 CFR 85.1511), (13) clarify that vehicles 
returning to the United States may be imported under bond for 
restoration of any missing, damaged, or disabled emission-related parts 
(40 CFR 85.1512), (14) modify existing regulatory language to 
accurately reflect recent changes in the Act regarding useful life and 
civil penalties (40 CFR 85.1507, 85.1508, 85.1510, and 85.1513), (15) 
clarify that a conditionally admitted vehicle or engine must comply 
with EPA requirements at the time that the application for final 
admission is submitted to EPA (40 CFR Sec. 85.1513), (16) clarify that 
the recordkeeping requirements for maintaining a list of vehicle 
modifications includes all part numbers and calibration changes (40 CFR 
85.1507), and (17) clarify that a vehicle that is emission tested in 
order to obtain final admission must satisfy all of the applicable 
testing requirements of part 86 (40 CFR 85.1502, 85.1505, 85.1507, 
85.1509, 85.1513, 85.1516).

III. Proposed Amendments To Subpart R

A. Application of Section 216(2)

    Section 216(2) of the Act defines the term ``motor vehicle'' as ``* 
* * any self-propelled vehicle designed for transporting persons or 
property on a street or highway.'' Generally, EPA proposes to amend 
section 40 CFR 85.1703 to provide additional guidance on when a vehicle 
is not a ``motor vehicle'' under section 216 of the Act.
    To provide further guidance to the regulated industry, EPA proposes 
to: (1) Amend this exclusion provision to reflect EPA's policy that the 
use of a governor to limit a vehicle's speed to 25 mph is unacceptable 
unless the speed control device cannot easily be removed, disabled, or 
circumvented; (2) amend 40 CFR 85.1703(a)(2) by deleting the reference 
to safety features required by Federal law; (3) revise 40 CFR 
85.1703(a)(3) to state that the Federal Interstate Highway limitations 
will be used to determine if a vehicle is of ``inordinate size''; (4) 
include a new provision reflecting the Agency's policy that racing and 
other vehicles which are not capable of safe and practical street or 
highway use will not be considered motor vehicles under section 216 of 
the Act; and (5) include a new provision to specify when a motorcycle 
(as defined at 40 CFR 86.402-78) will be deemed to not be a motor 
vehicle.
    It is important to note that converting a non-motor vehicle into a 
motor vehicle, and operating it on a public street or highway may be 
considered to be manufacturing and introduction into commerce of an 
uncertified motor vehicle. This is a violation of section 203(a)(1) of 
the Act and may subject the manufacturer to civil penalties under 
section 205 of the Act.

B. Precertification Exemption

    EPA proposes to amend 40 CFR 85.1702(a) (3) and (4), to clarify the 
distinction between a ``Precertification motor vehicle or motor vehicle 
engine'' and a motor vehicle or motor vehicle engine subject to a 
testing exemption (40 CFR 85.1705).
    EPA further proposes to revise 40 CFR 85.1702(a) (3) and (4) by 
substituting the terms ``Manufacturer-owned vehicle'' and 
``Manufacturer-owned vehicle engine'' for the terms ``Precertification 
vehicle'' and ``Precertification vehicle engine'' respectively. 
Finally, EPA proposes to rename 40 CFR 85.1706 ``Manufacturer-owned 
exemption''. For purposes of this provision, this substitution does not 
expand the meaning of the subject terms, but only distinguishes them 
from the exemptions provided to ICIs under Subpart P in order to 
eliminate possible confusion created by the current use of the terms.

C. Display Exemption

    EPA is also proposing a revision to the display exemption found at 
40 CFR 85.1511(b)(4) and 85.1707. Presently, EPA will grant a temporary 
display exemption for uncertified motor vehicles under certain 
conditions. Although the exemption will be retained, EPA is proposing 
several clarifications. These clarifications include incorporating 
EPA's policy of granting the display exemption for business or public 
display purposes only; and establishing a time limit for the display 
exemption. In addition, the language in the display exemption in 40 CFR 
85.1511(b)(4) and 40 CFR 85.1707 will be reconciled so that both 
provisions will prohibit use on public streets and highways except for 
purposes incident and necessary to the display purpose.

IV. Administrative Requirements

A. Administrative Designation and Regulatory Analysis Executive Order 
12866

    Under Executive Order 12866, [58 FR 51,735 (October 4, 1993)] the 
Agency must determine whether the regulatory action is ``significant'' 
and therefore subject to OMB review and the requirements of the 
Executive Order. The Order defines ``significant regulatory action'' as 
one that is likely to result in a rule that may:

    (1) Have an annual effect on the economy of $100 million or more 
or adversely affect in a material way the economy, a sector of the 
economy, productivity, competition, jobs, the environment, public 
health or safety, or State, local, or tribal governments or 
communities;
    (2) Create a serious inconsistency or otherwise interfere with 
an action taken or planned by another agency;
    (3) Materially alter the budgetary impact of entitlements, 
grants, user fees, or loan programs or the rights and obligations of 
recipients thereof; or
    (4) Raise novel legal or policy issues arising out of legal 
mandates, the President's priorities, or the principles set forth in 
the Executive Order.

    It has been determined that this rule is not a ``significant 
regulatory action'' under the terms of Executive Order 12866 and is 
therefore not subject to OMB review.

B. Paperwork Reduction Act

    The information collection requirements in this proposed rule have 
been submitted for approval to the Office of Management and Budget 
(OMB) under the Paperwork Reduction Act, 44 U.S.C. 3501 et seq. An 
Information Collection Request document has been prepared by EPA (OMB 
control number 2060-0095, ICR No. 10.06) and a copy may be obtained 
from Sandy Farmer, Information Policy Branch,; EPA; 401 M St., SW. 
(Mail Code 2136); Washington, DC 20460 or by calling (202) 260-2740.
    This collection of information has an estimated reporting burden 
averaging 0.5 hours per response and an estimated annual recordkeeping 
burden averaging 0.3 hours per respondent. These estimates include time 
for reviewing instructions, searching existing data sources, gathering 
and maintaining the data needed, and completing and reviewing the 
collection of information.
    Send comments regarding the burden estimate or any other aspect of 
this collection of information, including suggestions for reducing this 
burden to Chief, Information Policy Branch; EPA; 401 M St., SW. (Mail 
Code 2136); Washington, DC 20460; and to the Office of Information and 
Regulatory Affairs, Office of Management and Budget, Washington, DC 
20503, marked ``Attention: Desk Officer for EPA.'' The final Rule will 
respond to any OMB or public comments on the information collection 
requirements contained in this proposal.

C. Impact on Small Entities

    The Regulatory Flexibility Act of 1980 requires federal agencies to 
identify potentially adverse impacts of federal regulations upon small 
entities. In instances where significant impacts are possible on a 
substantial number of these entities, agencies are required to perform 
a Regulatory Flexibility Analysis.
    There will not be a significant impact on a substantial number of 
small business entities because the proposed rule benefits the small 
businesses that import nonconforming vehicles into the United States, 
allowing them additional options for importing these vehicles and 
minimizing their costs.
    Therefore, as required under section 605 of the Regulatory 
Flexibility Act, 5 U.S.C. 601 et. seq., the Administrator certifies 
that this regulation does not have a significant impact on a 
substantial number of small entities.

D. Statutory Authority

    Subpart P--Secs. 203, 206, 207, 208, 301 and 307, Clean Air Act, as 
amended (42 U.S.C. 7522, 7525, 7541, 7542, 7601 and 7607).
    Subpart R--Secs. 203(b)(1), 216(2), 301 and 307, Clean Air Act, as 
amended (42 U.S.C. 7522(b)(1), 7550(2), 7601 and 7607).

List of Subjects

40 CFR Part 85

    Imports labeling, Motor vehicle pollution, Reporting and 
recordkeeping requirements, Research, Warranties.

40 CFR Part 600

    Electric power, Energy conservation, Gasoline, Labeling, 
Administrative practice and procedure, Fuel economy.

    Dated: March 17, 1994.
Carol M. Browner,
Administrator.
[FR Doc. 94-6949 Filed 3-23-94; 8:45 am]
BILLING CODE 6560-50-P

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