ENV-31-12-00009-P LEV, ZEV, GHG, Environmental Performance Label, New Aftermarket Catalytic Converter, and Emissions Warranty/Recall Standards

8/1/12 N.Y. St. Reg. ENV-31-12-00009-P

NEW YORK STATE REGISTER

VOLUME XXXIV, ISSUE 31

August 01, 2012

RULE MAKING ACTIVITIES

DEPARTMENT OF ENVIRONMENTAL CONSERVATION

PROPOSED RULE MAKING

HEARING(S) SCHEDULED

 

I.D No. ENV-31-12-00009-P

LEV, ZEV, GHG, Environmental Performance Label, New Aftermarket Catalytic Converter, and Emissions Warranty/Recall Standards

PURSUANT TO THE PROVISIONS OF THE State Administrative Procedure Act, NOTICE is hereby given of the following proposed rule:

Proposed Action:

Amendment of Parts 200 and 218; and repeal of Part 252 of Title 6 NYCRR.

Statutory authority:

Environmental Conservation Law, sections 1-0101, 1-0303, 3-0301, 19-0103, 19-0105, 19-0107, 19-0301, 19-0303, 19-0305, 19-1101, 19-1103, 19-1105, 71-2103 and 71-2105; and Federal Clean Air Act (42 USC 7507), section 177

Subject:

LEV, ZEV, GHG, environmental performance label, new aftermarket catalytic converter, and emissions warranty/recall standards.

Purpose:

To incorporate California's LEV, ZEV, GHG, environmental performance label, catalytic converter, and warranty standards.

Public hearing(s) will be held at:

2:00 p.m., Sept. 17, 2012 at New York State Department of Environmental Conservation Region 8 Office, Conference Rm. 6274, E. Avon-Lima Rd., (Rtes. 5 and 20), Avon, NY; 2:00 p.m., Sept. 19, 2012 at New York State Department of Environmental Conservation, 625 Broadway, Public Assembly Rm. 129B, Albany, NY; and 2:00 p.m., Sept. 20, 2012 at New York State Department of Environmental Conservation, Region 2 Office, One Hunters Point Plaza, 47-40 21st St., Rm. 834, Long Island City, NY.

Interpreter Service:

Interpreter services will be made available to hearing impaired persons, at no charge, upon written request submitted within reasonable time prior to the scheduled public hearing. The written request must be addressed to the agency representative designated in the paragraph below.

Accessibility:

All public hearings have been scheduled at places reasonably accessible to persons with a mobility impairment.

Substance of proposed rule (Full text is posted at the following State website:www.dec.ny.gov):

The New York State Department of Environmental Conservation (Department) is proposing to amend 6 NYCRR Part 218, 6 NYCRR Part 252 and Section 200.9. Section 200.9 is a list that cites Federal and California codes and regulations that have been referenced by the Department in the course of amending Parts 218 and 252. The purpose of the amendment is to revise the existing low emission vehicle (LEV) program to incorporate modifications California has made to its vehicle emission control program to reduce criteria pollutant and greenhouse gas (GHG) emissions. The Department is amending Sections 218-1.2, Definitions; 218-2.2, Reporting; 218-3.1, Fleet Average; 218-3.2, Fleet average reporting and projection; 218-4.1, ZEV percentages; 218-4.2, Voluntary alternative compliance plan (ACP); 218-5.1, Assembly-line quality audit testing and reporting for 1993, 1994, 1996 and subsequent model-years; 218-7.2, Prohibitions; 218-8.2, Prohibitions; 218-8.3, Fleet average greenhouse gas requirements; and 218-8.5, Greenhouse gas exhaust emissions reporting. New Sections 218-9, Emissions control system warranty requirements; 218-10, Recall requirements; and 218-11, Environmental performance labels are being created. Existing Section 218-9, Severability is being renumbered as Section 218-12. The remaining Sections in Part 218 are unchanged. The existing Part 252 Environmental Performance Labels will be repealed.

Section 218-1.2 is amended to include revisions to definitions that govern the provisions of this Part.

Section 218-2.2 is amended to revise the certification reporting requirements.

Section 218-3.1 is amended to incorporate California's latest LEV standards. These changes will apply to all 2014 and subsequent model year passenger cars (PC), light-duty trucks (LDT), and medium-duty vehicles (MDV) up to 14,000 pounds Gross Vehicle Weight Rating (GVWR).

The LEV proposal will: require fleet average Super Ultra-low Emission Vehicle (SULEV) performance by model year 2022; increase the stringency and restructure the Non-Methane Organic Gas (NMOG) and oxides of nitrogen (NO) standards; increase the stringency of the Particulate Matter (PM) standards; increase emission control component durability requirements; increase the stringency and coverage of evaporative emission control requirements; permit manufacturers to pool emissions of criteria pollutants including hydrocarbon (HC), carbon monoxide (CO), and NO in California and Section 177 states to demonstrate compliance.

Section 218-3.2 is amended to revise the fleet average reporting requirements. The words "and projection" are being deleted from the title. Section 218-3.2(b) is also being deleted. Manufacturers will no longer be required to submit annual fleet average projection reports to the Department. This change will align the Department's requirements with California and other Section 177 State requirements.

Section 218-4.1 is amended to incorporate California's latest zero emission vehicle (ZEV) standards. The California regulations take effect for all vehicles up to 10,000 pounds GVWR beginning with the 2012 model year. The ZEV proposal will essentially be split into two periods covering the 2012-2017 model years and the 2018-2025 model years.

The amendments for the 2012-2017 timeframe will: create new ZEV types; extend the travel provision; reduce the ZEV requirement for intermediate low volume manufacturers (IVM); remove credit carry forward restrictions; clarify vehicle credit eligibility. An optional Section 177 ZEV compliance path will also be created as an alternative to the base ZEV requirements. The alternative compliance option meets the states' interests in placing BEV and PHEV in Section 177 states earlier than would be required under the base program, while also providing vehicle manufacturers with a smoother ramp-up in the number of vehicles required and a reduced ZEV obligation over the life of the program.

The amendments for the 2018-2025 timeframe will: amend manufacturer size definitions, aggregated ownership criteria, and lead time provisions; eliminate partial zero emission vehicles (PZEV) and advanced technology PZEV (ATPZEV) as compliance options; increase ZEV compliance requirements; allow IVM to meet entire ZEV requirement with transitional ZEV (TZEV); limit the use of banked PZEV, ATPZEV, and neighborhood electric vehicle (NEV) credits to meet ZEV requirements; eliminate the travel provision for Type I, I.5, II, and III ZEV; allow GHG over-compliance credits to be used to offset a portion of a manufacturer's ZEV requirement.

Section 218-4.2 is being repealed. The voluntary ACP program concluded at the end of the 2009 model year and was not extended.

Section 218-5.1 is being amended to remove existing Section 218-5.1(a).

Section 218-7.2 is being amended to include a new Section 218-7.2(c). Section 218-7.2(c) incorporates California's new aftermarket catalytic converter requirements and prohibition of used catalytic converters.

Sections 218-8.2 and 218-8.3 are being amended to incorporate California's latest GHG standards. These changes will apply to all 2017 and subsequent model year PC, LDT, and MDV up to 10,000 pounds GVWR. The amendments will: establish separate footprint indexed CO grams per mile emission standards for PC and LDT harmonized with proposed federal GHG standards; establish separate emission standards for CH and NO to harmonize with federal standards; include mandatory requirements for motor vehicle air conditioning (MVAC) refrigerants; include MVAC fleet average leak rate limits and indirect emission limits; create off-cycle credit provisions similar to federal provisions; create incentives for full-size pickup truck emission reductions; create optional credit provisions for upstream emissions.

Section 218-8.5(a) is being amended to change the reporting date from March 1st to May 1st. This change will align New York's reporting date with California's.

Existing Section 218-9 is renumbered to create Section 218-12. This Section contains severability provisions.

A new Section 218-9 is being created to incorporate California's emissions control system warranty requirements. These requirements will apply to 2016 and subsequent model year PC, LDT, and MDV up to 14,000 pounds GVWR.

A new Section 218-10 is being created to incorporate California's recall requirements. These requirements will apply to 2016 and subsequent model year PC, LDT, and MDV up to 14,000 pounds GVWR. The California emissions warranty and recall regulations are designed to reduce vehicle emissions by identifying, recalling, and repairing noncompliant vehicles to meet applicable emission standards and test procedures.

A new Section 218-11 is being created to incorporate California's environmental performance label standards. These standards were previously incorporated in Part 252. The standards will be updated and moved to Part 218 to consolidate all of the new motor vehicle emission standards in one Part.

Existing Part 252 will be repealed.

Text of proposed rule and any required statements and analyses may be obtained from:

Jeff Marshall, P.E., NYSDEC, Division of Air Resources, 625 Broadway, Albany, NY 12233-3255, [phone], email: [e-mail]

Data, views or arguments may be submitted to:

Same as above.

Public comment will be received until:

September 27, 2012.

Additional matter required by statute:

Pursuant to Article 8 of the State Environmental Quality Review Act, a Short Environmental Assessment Form, a Negative Declaration, and a Coastal Assessment Form have been prepared and are on file.

Summary of Regulatory Impact Statement

The New York State Department of Environmental Conservation (Department) is proposing to amend 6 NYCRR Section 200.9 and 6 NYCRR Part 218. Part 218 is being amended to incorporate revisions to the low emission vehicle (LEV), greenhouse gas (GHG), zero emission vehicle (ZEV), environmental performance label, and new aftermarket and used catalytic converter standards that have been adopted by the California Air Resources Board (CARB) as part of the LEV program. The Department is also incorporating California's emissions warranty and recall provisions. Part 252 is being repealed and its contents are being updated and incorporated into Part 218.

By statutory authority of, and pursuant to, Environmental Conservation Law (ECL), the Commissioner of Environmental Conservation is responsible for protecting the air resources of New York State. The Commissioner is authorized to adopt rules and regulations to enforce the ECL. The legislature bestowed on the Department the power to formulate, adopt, promulgate, amend, and repeal regulations for preventing, controlling, or prohibiting air pollution.

The main purpose of enacting this regulation is to address the adverse health, environmental, and climate change impacts that criteria and GHG pollutants will cause in New York State if left uncontrolled. New York has made significant progress over the years in improving its air quality; however, it is essential that the Department continue to adopt stringent mobile source emissions standards to protect human health and the environment.

Low emission motor vehicle technology is important to achieving and maintaining the long term air quality of New York. While motor vehicle technology has continued to improve, the number of vehicles and the number of vehicle miles traveled (VMT) has continued to increase. While vehicles emit pollutants at a lower level when new, the increases in VMT, as well as deterioration of vehicle emission control systems over vehicle life, have resulted in the mobile sector being a major contributor to air quality degradation.

Part 218 is being revised to incorporate California's latest amendments to the LEV program. The California LEV III regulations take effect for all vehicles up to 14,000 pounds gross vehicle weight rating (GVWR) beginning with the 2015 model year. The Department is adopting LEV standards and credit mechanisms that are identical to those adopted by CARB. The amendments will: require fleet average super ultra low emission vehicle (SULEV) emissions performance from new vehicles by model year 2022; increase the stringency of the passenger car (PC) and light-duty truck (LDT) standards and restructure them into a combined NMOG+NO standard (non-methane organic gas + oxides of nitrogen); increase the stringency and restructure the standards for chassis certified medium-duty vehicles (MDV); increase the stringency of the particulate matter (PM) standards; increase the durability requirements; increase the stringency and coverage of the evaporative emission standards; allow manufacturers to demonstrate compliance with the fleet average NMOG+NO standard based on new vehicles produced and delivered for sale in California and Section 177 states, including the District of Columbia; revise the fuel standards to include ethanol fuels.

New York State's criteria pollutant emission reductions for reactive organic gas (ROG), NO, and PM will be fully realized in the 2035-2040 timeframe. The Department estimates that by 2035 the standards will reduce ROG emissions by approximately 21 tons per day (TPD), NO emissions by approximately 23 TPD, and PM emissions by approximately 1 TPD.

Part 218 is also being revised to incorporate California's amendments to the ZEV program. The California regulations take effect for all vehicles up to 10,000 pounds GVWR beginning with the 2012 model year. The Department is adopting ZEV standards and credit mechanisms that are identical to those adopted by CARB. The amendments for the 2012-2017 timeframe will: create new ZEV types; extend the travel provision for Type I, I.5, II, and III ZEV; increase the credit amount for Type V fuel cell vehicles; reduce the ZEV requirement for intermediate low volume manufacturers (IVM); remove credit carry forward restrictions; decrease the value of transportation system credits; no longer use NMOG fleet average in the calculation of ZEV credits; revise lead time provisions; clarify vehicle credit eligibility.

The amendments for the 2018-2025 timeframe will: amend manufacturer size definitions, aggregated ownership criteria, and lead time provisions; eliminate partial zero emission vehicles (PZEV) and advanced technology PZEV (ATPZEV) as compliance options; increase ZEV compliance requirements; allow IVM to meet entire ZEV requirement with transitional ZEV (TZEV, previously Enhanced ATPZEV); limit the use of banked PZEV, ATPZEV, and NEV credits to meet ZEV requirements; adjust the credit range; simplify the TZEV credit system; eliminate the travel provision for Type I, I.5, II, and III ZEV; allow GHG over-compliance credits to be used to offset a portion of a manufacturer's ZEV requirement; amend the sales volume determination method; amend the credit carry back provision; remove the placed in service requirement.

There are no additional emission benefits associated with ZEV regulations beyond those achieved under the LEV III and GHG standards.

Part 218 is also being revised to incorporate California's amendments to the GHG standards. The California regulations take effect for all vehicles up to 10,000 pounds GVWR beginning with the 2017 model year. The Department is adopting GHG standards and credit mechanisms that are identical to those adopted by CARB. The amendments will: establish separate footprint indexed carbon dioxide () grams per mile emission standards for PC and LDT harmonized with proposed federal GHG standards; establish separate emission standards for methane (CH) and nitrous oxide (NO) to harmonize with federal standards; include mandatory requirements for motor vehicle air conditioning (MVAC) refrigerants; include MVAC fleet average leak rate limits; include MVAC indirect emission limits; create off-cycle credit provisions similar to federal provisions; create incentives for full-size pickup truck emission reductions; create optional credit provisions for upstream emissions.

New York State's GHG emission reductions will be fully realized in the 2035-2040 timeframe. The Department estimates that by 2035 the standards will reduce carbon dioxide equivalent (e) emissions in New York by approximately 19 million metric tons (MMT) per year.

Part 218 is being revised to incorporate regulations for new aftermarket and used catalytic converters that are identical to those adopted by CARB. This regulation prohibits the sale of used catalytic converters and requires more stringent emissions reduction performance and durability requirements for new aftermarket catalytic converters. The new aftermarket catalytic converters are required to achieve exhaust emissions that comply with the emissions standards to which the vehicles were certified. The durability requirement was extended from 25,000 miles to 50,000 miles and the catalytic converters must be warranted to be free from defect for five years. The new aftermarket catalytic converters also must be compliant with onboard diagnostic (OBDII) systems on 1996 and newer vehicles. New aftermarket catalytic converters are required to display a permanent label or stamp indicating the CARB Executive Order approval number, the part number, date of manufacture, and an arrow indicating the proper installation direction.

The Department estimates that the proposed regulation will reduce emissions of HC + NO in New York State by 3.66 tons per day in 2012.

Part 218 is also being revised to incorporate revisions to California's environmental performance label standards. Theses revisions will apply to all 2013 and subsequent model year PC, LDT, and MDV up to 14,000 GVWR. The standards will harmonize California's label with the recently adopted federal fuel economy and environmental performance label.

The Department is adopting environmental performance label standards that are identical to those adopted by CARB. The Department originally adopted California's environmental performance label standards in 2009 and incorporated them in Part 252. The standards are being updated and moved to Part 218 to consolidate the new motor vehicle regulations in a single Part. Part 252 will be repealed. New York State passed legislation (S4833/A8839) in 2007 requiring that global warming index labels be affixed to new 2010 and subsequent model year vehicles delivered for sale in New York. The labels were required to be consistent with labels adopted by other states, and permitted the adoption of California labeling requirements.

The Department is also revising Part 218 to incorporate California's warranty and recall regulations for California certified vehicles delivered for sale and registered in New York State. These regulations will apply to 2016 and subsequent model year vehicles and will not be retroactive. Adoption of the warranty and recall regulations is important to achieving the State's goal of reduced motor vehicle emissions. The California warranty and recall program has the potential to achieve additional emission reductions by addressing parts failures before they can lead to excessive emissions. The reporting requirements will enable the Department to track failures and corrective action undertaken by manufacturers. Adopting the warranty and recall regulations will also remove existing confusion over what requirements apply to varying states, particularly for new vehicle dealers and consumers.

The cost effectiveness of the LEV III standards for light-duty vehicles is estimated to be $4 per pound of ROG + NO emissions reduced in 2025 and $3 per pound in 2035. The average incremental price increases in 2025 were estimated to be $75 for gasoline fueled vehicles and $54 for diesel. There are no operating cost savings associated with the LEV III standards.

There are no compliance costs attributed to the ZEV program in this rulemaking package. All compliance costs are accounted for in the LEV III and GHG standards.

The operating cost savings resulting from the regulation are attributed solely to the GHG standards. Consumers should experience significant savings resulting from decreased operating costs which would more than offset the increased initial purchase price of new vehicles. The GHG standards are estimated to increase new vehicle prices by approximately $1,800 dollars in 2025. The Department estimates that the break-even year for model year 2017-2025 passenger cars occurs between one to five years after initial purchase. The average 2025 model year new passenger car is projected to save more than $3,400 over a 10 year period. For model year 2017-2025 light-duty trucks the break-even year occurs one year after initial purchase. The average 2025 model year new light-duty truck is projected to save more than $14,000 over a 10 year period.

The cost effectiveness of the proposed warranty and recall regulations is difficult to quantify since it relies upon the quality and durability of future emission control components. However, it is anticipated that some emissions reductions will occur as a result of repairing defective, or noncompliant, in-use emissions control components to meet original certification standards. Staff believes that the emissions benefit of the warranty and recall regulations would be achieved by completing emissions related repairs at no, or reduced, cost to the consumer. DEC anticipates a reduction in the number of repair expenditure based emission inspection waivers. Repair costs for vehicles receiving waivers ranged from $450 to $6,200 with an average repair cost of $838.

The cost of a new aftermarket catalytic converter is expected to increase up to $200 per unit. The average cost increase is attributable to the increased amounts of precious metals required to comply with the new regulation. However, this cost increase is partially offset by increased durability and warranty requirements. The Department estimates the cost effectiveness of the proposed regulation in New York to be $3.60 per pound of HC + NO reduced.

New York State consumers will likely experience increased new vehicle prices as a result of the LEV III, GHG and ZEV standards. However, it is expected that they will also experience reduced operating costs which should more than offset the increased purchase prices. The warranty and recall regulations could provide an economic benefit for consumers since they provide enhanced protection for a vast array of emissions parts and systems that may not have been covered under warranty in the past.

The aftermarket catalytic converter regulations are expected to result in additional costs for New York State consumers. The greatest adverse impact is likely to be experienced by consumers accustomed to purchasing used converters, and those vehicle owners faced with the need to replace a converter for vehicles sold in low volume.

The revised environmental performance labels are not expected to result in any additional costs for consumers. Consumers will benefit by having access to information that will enable them to make knowledgeable decisions when purchasing new vehicles, ideally resulting in a cleaner fleet in New York.

Adoption of the warranty and recall regulations in New York will likely result in cost increases for manufacturers. Manufacturers would be required to extend California's more comprehensive warranty coverage to a market where it has not been required to date, thereby incurring costs to repair affected vehicles. Further, the more stringent recall reporting requirements will likely result in minimal cost and workload increases to manufacturers to prepare reports specifically for New York vehicles. The reporting requirements will be identical to those in California and other Section 177 states that have previously adopted the regulation. The regulations could enable the manufacturers to reduce some costs by reducing the number of markets with different warranty and recall provisions. Adopting the warranty and recall regulations would also remove existing confusion over what requirements apply to varying states, particularly for new vehicle dealers and consumers.

The proposed amendments are not expected to cause a noticeable change in New York employment since the State accounts for only a small share of motor vehicle and parts manufacturing employment. The proposed LEV, ZEV, GHG, environmental performance label, and warranty and recall regulations are not expected to have a significant adverse impact on business creation, elimination, or expansion. This determination is based upon previous experience implementing similar revisions to the program over the past 22 years.

The proposed regulations are not expected to result in any additional costs for local and state agencies beyond those that will be experienced by the general public. No additional paperwork or staffing requirements are expected. This is not a mandate on local governments pursuant to Executive Order 17.

The LEV, ZEV, GHG, and environmental performance label regulations should not result in any significant paperwork requirements for New York vehicle suppliers, dealers or government. In fact, the Department is reducing the paperwork burden in some areas by eliminating reporting requirements that are no longer necessary. New York relies on materials submitted to California for certification, while manufacturers must submit to New York annual sales and corporate fleet average reports to show compliance with the fleet average requirements. This has been the case since New York first adopted the California LEV program in 1992. The implementation of the proposed regulations is not expected to be burdensome in terms of paperwork to vehicle owners.

The aftermarket catalytic converter regulation should not result in any significant paperwork requirements for New York vehicle suppliers, dealers or local government. The proposed warranty provisions would require the installer to complete a warranty card in triplicate with the original going to the customer, one copy to the installer, and one copy to the manufacturer of the converter. The implementation of the proposed catalytic converter regulation is not expected to be burdensome in terms of paperwork to owners/operators of vehicles.

The Department will experience an increase in paperwork associated with aftermarket catalytic converter warranty reporting requirements. This increased workload will be covered by existing staff working on the LEV program. Manufacturers of aftermarket catalytic converters will be required to submit semi-annual reports to the Department identical in format and content to those submitted to California. Warranty claims exceeding four percent or 100 claims, whichever is greater, in New York will require the manufacturer to include in the report the type of failure, the probable cause of the failure, and an evaluation of the impact on vehicle emissions.

The warranty and recall regulations are likely to result in increased paperwork requirements for New York vehicle suppliers, dealers, and government. Manufacturers currently provide warranty and recall information to California and other Section 177 states, and it is anticipated that manufacturers will provide similar information adjusted for New York vehicles. Implementation of the warranty and recall regulations is expected to be transparent in terms of paperwork to owners and operators of vehicles.

The LEV III regulatory amendments will take effect for 2015 through 2025 model year PC, LDT, and MDV up to 14,000 pounds GVWR. The ZEV amendments will take effect for 2012 through 2025 model year PC and LDT up to 10,000 pounds GVWR. The GHG amendments will take effect for 2017 and subsequent model year PC, LDT, and MDV up to 10,000 pounds GVWR. The environmental performance label amendments will take effect for 2013 and subsequent model year PC, LDT, and MDPV up to 10,000 pounds GVWR. The new aftermarket and used catalytic converter regulations will take effect for all 1993 and subsequent model year California certified on-road motor vehicles, with the exception of 1995 model year vehicles. The warranty and recall regulations will take effect for 2016 and subsequent model year California certified vehicles.

Regulatory Flexibility Analysis

1. Effect of rule:

The New York State Department of Environmental Conservation (Department) is proposing to amend 6 NYCRR Part 200, and 6 NYCRR Part 218. Part 218 is being amended to incorporate revisions to the low emission vehicle (LEV), greenhouse gas (GHG), zero emission vehicle (ZEV), environmental performance label, and new aftermarket catalytic converter requirements that have been adopted by the California Air Resources Board (CARB) as part of the LEV program. The Department is also incorporating California's emissions warranty and recall provisions. Part 252 is being repealed and its contents are being updated and incorporated into Part 218. These changes apply to vehicles purchased by consumers, businesses, and government agencies in New York and may impact businesses involved in manufacturing, selling, leasing, or purchasing passenger cars or trucks.

State and local governments are also consumers of vehicles that will be regulated under the proposed GHG amendments. Therefore, local governments who own or operate vehicles in New York State are subject to the same requirements as owners of private vehicles in New York State; i.e., they must purchase California certified vehicles. This rulemaking is not a local government mandate pursuant to Executive Order 17.

The changes are an addition to the current LEV standards. The new motor vehicle emissions program has been in effect in New York State since model year 1993 for passenger cars and light-duty trucks, with the exception of the 1995 model year, and the Department is unaware of any significant adverse impact to small businesses or local governments as a result of previous revisions.

2. Compliance requirements:

There are no specific requirements in the regulation which apply exclusively to small businesses or local governments. Reporting, recordkeeping and compliance requirements are effective statewide. Automobile dealers (some of which may be small businesses) selling new cars are required to sell or offer for sale only California certified vehicles. These proposed amendments will not result in any additional reporting requirements to dealerships other than the current requirements to maintain records demonstrating that vehicles are California certified. This documentation is the same documentation already required by the New York State Department of Motor Vehicles for vehicle registration. If local governments are buying new fleet vehicles they should make sure that the vehicles are California certified.

The proposed aftermarket catalytic converter requirements are not expected to have an adverse impact on the majority of New York State businesses. The greatest impact will be on businesses which sell, advertise, or install used catalytic converters, as these activities will be prohibited by the proposed regulation. The result will be a transfer of business and associated income from companies selling used catalytic converters to companies selling new aftermarket or OEM catalytic converters. The total sales of catalytic converters will remain unchanged. The Department expects that any increase in development and production costs will be passed along to consumers in the form of higher purchase prices.

3. Professional services:

There are no professional services needed by small business or local government to comply with the proposed rule.

4. Compliance costs:

New York State currently maintains personnel and equipment to administer the LEV program. It is expected that these personnel will be retained to administer the revisions to this program. Therefore, no additional costs will be incurred by the State of New York for the administration of this program.

5. Minimizing adverse impact:

The regulations are not expected to have significant adverse impacts on automobile dealers. Dealerships may experience a reduction in sales revenue if consumers decide to delay, or forego, purchasing new advanced technology vehicles in response to increased prices. However, these delayed or lost sales could potentially be offset by early adopters and consumers desiring vehicles with reduced operating costs. Dealerships may also incur expenses to train staff to sell and service advanced technology vehicles. Dealerships may experience a reduction in service revenue due to the emissions warranty regulations. This is due to the fact that original equipment manufacturers (OEM) generally reimburse dealerships for warranty repairs at a rate lower than the rate charged to retail customers. Dealerships may experience increased revenue from sales of catalytic converters for vehicle models for which there are no certified aftermarket catalytic converters.

It will be difficult, if not impossible, to minimize the adverse impact of the aftermarket and used catalytic converter standards on businesses which sell, advertise, or install used catalytic converters. The use, sale, or installation of used catalytic converters is expressly prohibited due to the lack of economically feasible screening methods to evaluate the emissions reduction performance of used catalytic converters. Each converter will have to be tested individually to determine if it was acceptable for reuse, which is a costly and time consuming process. Further, the existing methods are unable to determine if the used catalytic converters will meet the performance and durability requirements required by the new aftermarket catalytic converter standards. It is possible that companies supplying used catalytic converters will be able to generate some revenue by recycling the precious metal content of used converters.

There will be no adverse impact on local governments who own or operate vehicles in the state because they are subject to the same requirements as those imposed on owners of private vehicles. In other words, state and local governments will be required to purchase California certified vehicles. This rulemaking is not a local government mandate pursuant to Executive Order 17.

This regulation contains exemptions for emergency vehicles, and military tactical vehicles and equipment.

6. Small business and local government participation:

The Department plans on holding public hearings at various locations throughout New York State after the amendments are proposed. Small businesses and local governments will have the opportunity to attend these public hearings. Additionally, there will be a public comment period in which interested parties can submit written comments.

7. Economic and technological feasibility:

The standards are not expected to have significant adverse impacts on automobile dealers. Dealerships will be required to ensure that the vehicles they sell are California certified. Starting with the 1993 model year, most manufacturers have included provisions in their ordering mechanisms to ensure that only California certified vehicles are shipped to New York dealers. The implementation of the standards is not expected to be burdensome in terms of additional reporting requirements for dealers. As stated previously, there would be no change in the competitive relationship with out-of-state businesses.

The regulations attempt to minimize adverse impacts on automobile manufacturers by phasing-in emissions standards over several model years, offering credit incentives, allowing pooling of vehicle sales to demonstrate compliance, and offering alternative compliance pathways to increase compliance flexibility among other options. The warranty and recall provisions will have the required 2 years of lead time and will not be applied to vehicles retroactively.

As discussed previously, the use, sale, or installation of used catalytic converters is expressly prohibited due to the lack of economically feasible screening methods to evaluate the emissions reduction performance of used catalytic converters. The result will be a transfer of business and associated income from companies supplying used catalytic converters to companies supplying new aftermarket or OEM catalytic converters. The total sales of catalytic converters will remain unchanged. Any increase in new aftermarket catalytic converter development and production costs will most likely be passed along to consumers in the form of higher purchase prices.

8. Cure period:

In accordance with NYS State Administrative Procedures Act (SAPA) Section 202-b, this rulemaking does not include a cure period because the Department is undertaking this rulemaking to comply with changes California has made to its vehicle emissions program in order to maintain identicality with section 177 of the Clean Air Act.

Rural Area Flexibility Analysis

1. Types and estimated numbers of rural areas:

The New York State Department of Environmental Conservation (Department) is proposing to amend 6 NYCRR Section 200.9, and 6 NYCRR Part 218. Part 218 is being amended to incorporate revisions to the low emission vehicle (LEV), greenhouse gas (GHG), zero emission vehicle (ZEV), environmental performance label, and new aftermarket catalytic converter requirements that have been adopted by the California Air Resources Board (CARB) as part of the LEV program. The Department is also incorporating California's emissions warranty and recall provisions. Part 252 is being repealed and its contents are being updated and incorporated into Part 218.

There are no requirements in the regulation which apply only to rural areas. These changes apply to vehicles purchased by consumers, businesses, and government agencies in New York. The changes to these regulations may impact businesses involved in manufacturing, selling, purchasing, or repairing passenger cars or trucks.

The changes are additions to the current LEV standards. The new motor vehicle emission program has been in effect in New York State since model year 1993 for passenger cars as well as light-duty trucks, with the exception of model year 1995, and the Department is unaware of any adverse impact to rural areas as a result. The beneficial emission reductions from the program accrue to all areas of the state.

2. Reporting, recordkeeping and other compliance requirements; and professional services:

There are no specific requirements in the proposed regulations which apply exclusively to rural areas. Reporting, recordkeeping and compliance requirements apply primarily to vehicle manufacturers, and to a lesser degree to automobile dealerships. Manufacturers reporting requirements mirror the California requirements, and are thus not expected to be burdensome. Dealerships do not have reporting requirements, but must maintain records to demonstrate that vehicles are California certified. This documentation is the same as documentation already required by the New York State Department of Motor Vehicles for vehicle registration. There will be some reporting and recordkeeping requirements associated with the warranty and recall provisions, as well as the aftermarket catalytic converter standards, but these are not expected to be burdensome for manufacturers, dealerships, or independent repair facilities.

Professional services are not anticipated to be necessary to comply with the rules.

3. Costs:

The amendments to Part 218 are expected to have an impact on consumers. Consumers will likely experience increased initial purchase prices as a result of the new standards. It is estimated that the LEV III and GHG standards will increase new vehicle prices by approximately $1,800 in 2025. However, these price increases should be more than offset by reduced operating expenses. It is estimated that the new standards could save consumers approximately $3,500 over a 10 year period. The aftermarket catalytic converter standards are expected to increase prices by approximately $200 per unit.

4. Minimizing adverse impact:

The changes will not adversely impact rural areas. The regulations are expected to result in increased initial purchase prices for vehicles, but this increase should be more than offset by reduced operating expenses. Consumers will also benefit from increased emissions warranty coverage on new vehicles and new aftermarket catalytic converters.

5. Rural area participation:

The Department plans on holding public hearings at various locations throughout New York State once the regulation is proposed. Some of these locations will be convenient for persons from rural areas to participate. Additionally, there will be a public comment period in which interested parties can submit written comments.

Job Impact Statement

1. Nature of impact:

The New York State Department of Environmental Conservation (Department) is proposing to amend 6 NYCRR Section 200.9 and 6 NYCRR Part 218. Part 218 is being amended to incorporate revisions to the low emission vehicle (LEV), greenhouse gas (GHG), zero emission vehicle (ZEV), environmental performance label, and new aftermarket catalytic converter requirements that have been adopted by the California Air Resources Board (CARB) as part of the LEV program. The Department is also incorporating California's emissions warranty and recall provisions. Part 252 is being repealed and its contents are being updated and incorporated into Part 218.

The amendments to the regulations may adversely impact jobs and employment opportunities in New York State. New York State has had a LEV program in effect since model year 1993 for passenger cars and light-duty trucks, with the exception of model year 1995, and the Department is unaware of any significant adverse impact to jobs and employment opportunities as a result of previous revisions.

2. Categories and numbers affected:

The changes to this regulation may adversely impact businesses involved in manufacturing, selling, leasing, purchasing, or repairing passenger cars or trucks. The proposed regulation is not expected to impose a competitive disadvantage on affiliated businesses, and there would be no change from the current relationship with out-of-state businesses.

The regulations are not expected to have a significant impact on employment since New York State accounts for only a small portion of automobile manufacturing employment. Automobile manufacturers are expected to incur costs in order to comply with the regulation. The increased costs are associated with the use of advanced technology emissions control components and the increased cost of providing the more comprehensive California emissions warranty. It is expected that these increased costs will be passed on to the consumer in the form of increased purchase prices.

The regulations are not expected to have a significant adverse impact on dealership employment levels. Dealerships may experience a reduction in sales revenue if consumers decide to delay, or forego, purchasing new advanced technology vehicles in response to increased prices. However, these delayed or lost sales could potentially be offset by early adopters and consumers desiring vehicles with reduced operating costs. Dealerships may also incur expenses to train staff to sell and service advanced technology vehicles. Dealerships may experience a reduction in service revenue due to the emissions warranty regulations. This is due to the fact that original equipment manufacturers (OEM) generally reimburse dealerships for warranty repairs at a rate lower than the rate charged to retail customers. Dealerships may experience increased revenue from sales of catalytic converters for vehicle models for which there are no certified aftermarket catalytic converters.

Independent repair shop employment may be adversely affected by the regulations. Independent repair shops may lose revenue associated with repairs that would be performed at dealerships and covered by the more comprehensive emissions warranty. This loss of revenue may result in reduced employment opportunities at some independent repair shops.

The new aftermarket catalytic converter requirements are not expected to have an adverse impact on the majority of New York State businesses. The greatest impact will be on businesses which sell, advertise, or install used catalytic converters, as these activities will be prohibited by the proposed regulation. The result will be a transfer of business and associated income from companies selling used catalytic converters to companies selling CARB certified new aftermarket catalytic converters or OEM catalytic converters. The total sales of catalytic converters will remain unchanged. The Department expects that any increase in development and production costs will be passed along to consumers in the form of higher purchase prices.

3. Regions of adverse impact:

None.

4. Minimizing adverse impact:

The regulations are not expected to have significant adverse impacts on automobile dealers. Dealerships will be required to ensure that the vehicles they sell are California certified. Starting with the 1993 model year, most manufacturers have included provisions in their ordering mechanisms to ensure that only California certified vehicles are shipped to New York dealers. The implementation of the regulations is not expected to be burdensome in terms of additional reporting requirements for dealers. There would be no change in the competitive relationship with out-of-state businesses.

The regulations attempt to minimize adverse impacts on automobile manufacturers by phasing-in emissions standards over several model years, offering credit incentives, allowing pooling of vehicle sales to demonstrate compliance, and offering alternative compliance pathways to increase compliance flexibility among other options. The warranty and recall provisions will have the required two years of lead time and will not be applied to vehicles retroactively.

It will be difficult, if not impossible, to minimize the adverse impact of the new aftermarket catalytic converter requirements and used catalytic converter prohibition on businesses which sell, advertise, or install used catalytic converters. The use, sale, or installation of used catalytic converters is expressly prohibited due to the lack of economically feasible screening methods to evaluate the emissions reduction performance of used catalytic converters. Each converter will have to be tested individually to determine if it was acceptable for reuse, which is a costly and time consuming process. Further, the existing methods are unable to determine if the used catalytic converters will meet the performance and durability requirements required by the new aftermarket catalytic converter standards. It is possible that companies supplying used catalytic converters will be able to generate some revenue by recycling the precious metal content of used converters.

5. Self-employment opportunities:

None that the Department is aware of at this time.