Alternative Fuel Transportation Program; Biodiesel Fuel Use Credit

[Federal Register Volume 64, Number 96 (Wednesday, May 19, 1999)]
[Rules and Regulations]
[Pages 27169-27175]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-12571]


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DEPARTMENT OF ENERGY

Office of Energy Efficiency and Renewable Energy

10 CFR Part 490

RIN 1904-AB-00
[Docket No. EE-RM-99-BIOD]


Alternative Fuel Transportation Program; Biodiesel Fuel Use 
Credit

AGENCY: Department of Energy.

ACTION: Interim final rule and opportunity for public comment.

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SUMMARY: The Department of Energy (DOE) is today publishing an interim 
final rule required by the Energy Conservation Reauthorization Act of 
1998 (ECRA), which amended Title III of the Energy Policy Act of 1992 
(EPACT) to allow fleets that are required to purchase alternative 
fueled vehicles under Titles III, IV and V of EPACT to meet these 
requirements, in part, through the use of biodiesel fuel use credits. 
The rule establishes procedures for fleets and covered persons to 
request credits for specified biodiesel fuel use and implements ECRA's 
credit eligibility and allocation provisions. By publishing this rule, 
DOE is giving fleets and covered persons, who are otherwise required 
under EPACT to purchase an alternative fueled vehicle, the option of 
purchasing and using 450 gallons of biodiesel in vehicles in excess of 
8,500 lbs. gross vehicle weight instead of acquiring an alternative 
fueled vehicle.

DATES: This interim final rule is effective June 18, 1999. DOE will

[[Page 27170]]

consider any public comments that are received on or before July 19, 
1999.

ADDRESSES: Written comments (5 copies) should be sent to: Paul McArdle, 
U.S. Department of Energy, EE-34, Docket No. EE-RM-99-BIOD, 1000 
Independence Ave., SW, Washington, DC 20585. Comments will be available 
for public inspection at DOE's Freedom of Information Reading Room, 
Room 1E-190, 1000 Independence Avenue, SW, Washington, DC between the 
hours of 9:00 a.m. and 4:00 p.m. Monday through Friday.

FOR FURTHER INFORMATION CONTACT: Paul McArdle, Office of Energy 
Efficiency and Renewable Energy, EE-34, U.S. Department of Energy, 1000 
Independence Avenue, SW, Washington, DC 20585, (202) 586-9171.

SUPPLEMENTARY INFORMATION:

I. Introduction
    A. Overview of DOE's Alternative Fuel Transportation Program
    B. Prior Administrative Action on Biodiesel
II. Section-by-Section Discussion of Interim Final Rule
III. Public Comment
IV. Regulatory and Procedural Requirements
    A. Review Under Executive Order 12866
    B. Review Under Executive Order 12612
    C. Review Under the Regulatory Flexibility Act
    D. Review Under the National Environmental Policy Act
    E. Review Under the Paperwork Reduction Act
    F. Review Under Executive Order 12988
    G. Review Under the Unfunded Mandates Reform Act of 1995
    H. Congressional Notification

I. Introduction

    Section 7 of the Energy Conservation Reauthorization Act of 1998 
(ECRA), Pub. L. 105-388, adds section 312 to Title III of the Energy 
Policy Act of 1992 (EPACT), 42 U.S.C. 13211-13219. Section 312 allows 
Titles III and V fleets and covered persons, which are required to 
acquire certain annual percentages of alternative fueled vehicles, to 
use biodiesel fuel use credits to meet, in part, these acquisition 
requirements (although Title IV is included as one of the Titles that 
is covered in ECRA, this inclusion appears to be a drafting error since 
Title IV has no mandated acquisition requirements for fleets and 
covered persons). DOE is required to allocate one credit to fleets and 
covered persons for using in certain vehicles 450 gallons (or 
``qualifying volume'') of the biodiesel component of a motor fuel 
containing at least 20 percent biodiesel by volume.
    Although the ``qualifying volume'' is denominated in gallons of 
neat biodiesel (B-100), which is a fuel composed of 100 percent 
biodiesel by volume, a fleet or covered person can also be allocated a 
biodiesel fuel use credit through the use of motor fuels containing at 
least 20 percent biodiesel by volume. So for example, if a fleet wished 
to qualify for the credit using B-100, it would need to purchase and 
use 450 gallons of B-100 to receive one biodiesel fuel use credit. 
Alternatively, if a fleet wanted to qualify for the credit using B-20 
(a motor fuel containing 20 percent biodiesel and 80 percent petroleum 
diesel by volume) it would need to purchase and use 2,250 gallons of B-
20, since each gallon of B-20 contains one-fifth of a gallon of 
biodiesel ((2,250 gallons of B-20) * (\1/5\) = 450 gallons of B-100).
    The allocation of each biodiesel fuel use credit requires the full 
purchase and use of 450 gallons of biodiesel. No rounding of the 
biodiesel fuel use credit upward is allowed. For example, if a fleet or 
covered person purchased and used 1,200 gallons of biodiesel, an 
initial credit calculation would indicate 2.67 credits. However, since 
ECRA requires that 450 gallons are needed to achieve each biodiesel 
fuel use credit, the fleet or covered person could only be allocated 
two biodiesel fuel use credits, using this example. The use of the 
biodiesel fuel use credit as the equivalent of acquiring one 
alternative fueled vehicle is also restricted to the model year in 
which it is generated and cannot be carried forward like alternative 
fueled vehicle acquisition credits generated under Subpart F.
    The legislation, however, authorizes the Secretary to collect data 
which could support a determination to increase the qualifying volume 
of biodiesel required to allocate a biodiesel fuel use credit. Any 
increase in the qualifying volume would be set equal to the average 
annual alternative fuel use in light duty vehicles by fleets and 
covered persons. If the data support an increase, the Secretary is to 
issue a rulemaking to determine if the qualifying volume should be 
increased.
    Additionally, the vehicles in which the fuel is used must weigh 
more than 8,500 pounds gross vehicle weight rating. Fleets and covered 
persons must own or operate these vehicles. Credits will be allocated 
only for the biodiesel fuel purchased after the enactment of ECRA, 
i.e., November 13, 1998.
    The legislation prohibits the allocation of biodiesel fuel use 
credits for the purchase of biodiesel when the biodiesel is used in 
alternative fueled vehicles that are utilized to satisfy the EPACT 
alternative fueled vehicle purchase requirements, or when biodiesel 
fuel use is required by Federal or State law. With the exception of 
biodiesel fuel providers, allocated credits can be used to satisfy up 
to 50 percent of a fleet's or covered person's alternative fueled 
vehicles requirements. For example, if a fleet's, or covered person's, 
alternative fueled vehicle acquisition requirements for a given model 
year were 20 alternative fueled vehicles, that fleet would only be able 
to use up to 10 biodiesel fuel use credits as a contribution to its 
acquisition requirements. To achieve the 10 biodiesel fuel use credits 
the fleet or covered person could purchase and use 4,500 gallons of B-
100 (10 credits). In this example, any biodiesel purchases beyond 4,500 
gallons would not generate any additional credits. Alternatively, the 
fleet could also be granted the 10 credits through the purchase and use 
of 22,500 gallons of B-20, since each gallon of B-20 has one-fifth of a 
gallon of biodiesel ((22,500 gallons of B-20) * (\1/5\) = 4,500 gallons 
of B-100).
    Today's rule adds a new Subpart H to DOE's Alternative Fuel 
Transportation Program rules at 10 CFR part 490. Some of the provisions 
in current Part 490, such as definitions of fleet and covered persons, 
are also applicable to Subpart H. However, the biodiesel credits 
provisions under Subpart H cannot be considered a credit under Subpart 
F. Because of the relationship of Subpart H to the overall Alternative 
Fuel Transportation Program, a brief overall summary of 10 CFR part 490 
is discussed.

A. Overview of DOE's Alternative Fuel Transportation Program

    10 CFR part 490 sets forth regulations that implement title V of 
EPACT, 42 U.S.C. 13251-13264. The regulations mandate alternative 
fueled vehicle acquisition requirements for certain alternative fuel 
providers and State government fleets. Part 490 is one of a variety of 
EPACT programs designed to promote alternative and replacement fuels 
that reduce reliance on imported oil, decrease greenhouse gas 
emissions, lessen pollutant emissions and help realize EPACT's 10 
percent and 30 percent petroleum replacement fuels goals in the years 
2000 and 2010, respectively.
    Title III of EPACT requires Federal fleet acquisitions of 
alternative fueled vehicles. Title IV includes specific authority for a 
financial incentive program for States, a public information program, 
and a program for certifying alternative fuel technician training 
programs. In addition to the mandates for the purchase of alternative 
fueled vehicles that apply to certain alternative

[[Page 27171]]

fuel providers and State government fleets, Title V provides for a 
possible similar mandate for certain private and municipal fleets. DOE 
issued an Advanced Notice of Proposed Rulemaking in the Federal 
Register on April 17, 1998, to solicit comments on whether alternative 
fueled vehicle acquisition requirements for certain private and local 
government fleets should be promulgated under the terms of section 
507(g) of EPACT (63 FR 19732). Title VI provides for a program to 
promote electric motor vehicles.
    The types of vehicles that satisfy the alternative fuel provider 
and State government fleet mandates in Title V are determined in part 
by the definition of ``alternative fuel'' in Title III, section 301(2). 
That definition provides: `` `Alternative fuel' means methanol, 
denatured ethanol, and other alcohols; mixtures containing 85 percent 
or more (or such other percentage, but not less than 70 percent, as 
determined by the Secretary, by rule, to provide for requirements 
relating to cold start, safety, or vehicle functions) by volume of 
methanol, denatured ethanol, and other alcohols with gasoline or other 
fuels; natural gas; fuels (other than alcohol) derived from biological 
materials; electricity (including electricity from solar energy); and 
any other fuel the Secretary determines, by rule, is substantially not 
petroleum, and would yield substantial energy security benefits and 
substantial environmental benefits.'' 42 U.S.C. 13211(2).
    EPACT also defines the term ``replacement fuel.'' Section 301(14) 
provides: ``the term `replacement fuel' means the portion of any motor 
fuel that is methanol, ethanol, or other alcohols, natural gas, 
liquefied petroleum gas, hydrogen, coal derived liquid fuels, fuels 
(other than alcohol) derived from biological materials, electricity 
(including electricity from solar energy), ethers, or any other fuel 
the Secretary determines, by rule, is substantially not petroleum and 
would yield substantial energy security benefits and substantial 
environmental benefits.'' 42 U.S.C. 13211(14).

B. Prior Administrative Action on Biodiesel

    DOE considered the allocation of credits for use of biodiesel fuel 
in the rulemaking that implemented the alternative fuel provider and 
State government fleet mandates. After considering public comments on 
the issue of whether biodiesel was an alternative fuel, DOE concluded 
that neat biodiesel (B-100), a fuel that is 100 percent biodiesel by 
volume, is included in the definition of ``alternative fuel.'' Section 
301(2) of EPACT expressly refers to fuels derived from biological 
materials. With respect to the credit program under section 508 of 
EPACT (Subpart F of 10 CFR part 490), DOE concluded that credits could 
be given in certain circumstances for the purchase of medium- and 
heavy-duty alternative fueled vehicles, as provided in Subpart F, but 
multiple credits based on the amount of fuel consumed were not 
allowable.
    During the rulemaking to implement the alternative fuel provider 
and State government fleet mandates, proponents of biodiesel fuel also 
requested DOE to include B-20, a fuel that is 20 percent biodiesel and 
80 percent petroleum diesel by volume, in the list of alternative 
fuels. DOE declined on the grounds that the comments did not provide 
sufficient supporting information to warrant including this issue 
within the scope of the rulemaking. The final rule was published on 
March 14, 1996 (61 FR 10653).
    On September 10, 1996, the National Biodiesel Board (NBB) and a 
number of co-petitioners submitted to DOE a petition requesting DOE to 
initiate a rulemaking to amend the definition of ``alternative fuel'' 
in the regulations by adding, without limitation, B-20. In response to 
the NBB petition, DOE, on July 15, 1997, issued a notice in the Federal 
Register (62 FR 37897) inviting interested members of the public to 
comment on the petition and to attend a public workshop on July 31 and 
August 1, 1997 at which the petition and related policy issues were 
discussed. On November 16, 1999, NBB and the co-petitioners withdrew 
their petition.

II. Section-by-Section Discussion of Interim Final Rule

    This section of the Supplementary Information contains explanatory 
material for some of the ECRA and interim final rule provisions, in 
order to provide interpretive guidance to States and persons that must 
comply with this part.
    The biodiesel fuel use credit is also available to Federal fleets 
that are required under Title III, Section 303 of the Energy Policy Act 
of 1992, to purchase certain percentages of alternative fueled 
vehicles. Federal fleet purchase requirements are also stipulated in 
Executive Order 13031 (61 FR 66529). Under Executive Order 13031, 
Federal agencies, as part of their annual budget submission to the 
Office of Management and Budget, are required to submit a report on 
their compliance with section 303 of EPACT. A copy of the report is 
also submitted to DOE and the General Services Administration (GSA). 
DOE and GSA cooperatively analyze the agency alternative fueled vehicle 
reports and acquisition plans, and jointly submit a summary report to 
the OMB. Section 8 of ECRA also amended section 310 of EPACT to require 
each Federal agency to report annually to the Congress on compliance 
with the alternative fuel purchasing requirements for Federal fleets, 
including a plan with specific dates for achieving compliance. Federal 
agencies will also be required to publicly disseminate such reports in 
the Federal Register and on the Internet.
    Federal agency alternative fueled vehicle acquisition compliance 
data are currently submitted to DOE under the Federal Energy Management 
Program (FEMP). DOE plans on amending the FEMP reporting form to allow 
for the allocation of biodiesel fuel use credits for Federal fleets. 
Like State and alternative fuel provider fleets, Federal fleets will be 
required to report the quantity of biodiesel purchased for use in 
vehicles weighing in excess of 8,500 lbs. gross vehicle weight. Federal 
fleets seeking to utilize the biodiesel fuel use credit should follow 
the requirements laid out below in 10 CFR Part 490 Subpart H, as well 
as any other guidance issued by DOE. The only difference for the 
Federal fleets will be that their reporting year is for the fiscal 
year, October 1 through September 30, as opposed to a model year, 
September 1 through August 31, which applies to State and alternative 
fuel provider fleets, as well as private and municipal government 
fleets if DOE determines that such fleets should be covered under the 
Alternative Fuel Transportation Program.
    Section 490.702 Definitions. This section contains definitions of 
biodiesel and qualifying volume that are in section 312(f) of ECRA. The 
term `biodiesel' is defined as a diesel fuel substitute produced from 
nonpetroleum renewable resources that meets the registration 
requirements for fuels and fuel additives established by the 
Environmental Protection Agency under section 211 of the Clean Air Act.
    The term ``qualifying volume'' is set equal to 450 gallons. If DOE 
determines, after the rulemaking, that the average annual alternative 
fuel use in light duty vehicles by fleets and covered persons exceeds 
450 gallons or gallon equivalents, DOE may set a qualifying volume that 
is equal to the average annual alternative fuel use determined by its 
collection of data under section 490.703.

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    Section 490.703 Biodiesel Fuel Use Credit Allocation. This section 
prescribes the conditions and exceptions under which DOE may allocate 
an alternative fueled vehicle acquisition credit to a fleet or covered 
person for each ``qualifying volume'' of the biodiesel component of a 
fuel containing at least 20 percent biodiesel by volume. The allocation 
of such a credit is restricted to vehicles owned or operated by the 
fleet or covered person that have a gross vehicle weight rating of more 
than 8,500 lbs.
    Paragraph (b) of this section states the statutory exceptions to 
allocation of biodiesel fuel credits. No credits may be allocated when 
the biodiesel purchased is for use in an alternative fueled vehicle, as 
defined in Section 490.2. This exception is designed to prevent fleets 
and covered persons from utilizing the biodiesel fuel use credit to 
claim an additional alternative fueled vehicle acquisition credit on an 
alternative fueled vehicle which has already received credit by virtue 
of its acquisition for use in a covered fleet. Additionally, no 
alternative fueled vehicle acquisition credit shall be awarded if the 
biodiesel purchased is required by Federal or State law.
    Section 490.704 Procedures and Documentation. Paragraph (a) of this 
section specifies the office within DOE that will receive requests for 
biodiesel fuel credits, and paragraph (b) covers the documentation that 
must accompany a request. To ensure proper credit allocation, a fleet 
or covered person under this section must provide written documentation 
to DOE supporting the allocation of a biodiesel fuel use credit. The 
written documentation must be submitted by the December 31 after the 
applicable model year. The initial model year for use of the biodiesel 
fuel use credit began on November 14, 1998, the enactment of ECRA, and 
will close on August 31, 1999 for State and alternative fuel provider 
fleets and September 30, 1999 for Federal fleets. Future model years, 
beginning with the 2000 model year, for use of the biodiesel fuel use 
credit, however, will be complete 12-month years.
    Such documentation must include meeting the annual reporting 
requirements of section 490.704, as well as section 490.205 for State 
fleets and section 490.309 for alternative fuel provider fleets. The 
form referenced in paragraph (a) is the annual reporting form DOE/OTT/
101, Annual Alternative Fueled Vehicle Acquisition Report for State 
Government and Alternative Fuel Provider Fleets. It will be amended to 
include the documentation requirements of section 490.704. 
Documentation requirements include listing the quantity of biodiesel 
purchased for use in vehicles weighing in excess of 8,500 lbs. gross 
vehicle weight for the model year covered in the report.
    Section 490.705 Use of Credits. Section 490.705 delineates the use 
and limits of the biodiesel fuel use credit. At the request of a fleet 
or covered person, DOE shall, for the model year in which the purchase 
of a qualifying volume is made, treat that purchase as the acquisition 
of one alternative fueled vehicle the fleet or covered person is 
required to acquire under Subpart C (State fleets), Subpart D 
(alternative fuel provider fleets), and Title III of EPACT (Federal 
fleets). The use of the biodiesel fuel use credit to serve as the 
acquisition of one alternative fueled vehicle is restricted to the 
model year, or the fiscal year in the case of Federal fleets, in which 
the biodiesel is purchased and cannot be carried forward like 
alternative fueled vehicle acquisition credits generated under Subpart 
F. The House of Representatives Commerce Committee Report addressed 
these restrictions, stating that biodiesel fuel use credits ``may only 
be used by the fleet or covered person that earned the credits and only 
in the year the credit is issued, so they cannot be traded or banked.'' 
1
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    \1\ H.R. Rep. No. 105-727, Pt. 3, at 33 (1998).
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    Credits allocated under subsection 490.703 may not be used to 
satisfy more than 50 percent of the alternative fueled vehicle 
requirements of a fleet or covered person under Subpart C (State 
fleets), Subpart D (alternative fuel provider fleets), and Title III of 
EPACT (Federal fleets). This limitation would also apply to private and 
municipal government fleets if DOE determines that such fleets should 
be included in the Alternative Fuel Transportation Program. The 50 
percent limitation in section 490.705 does not apply to a fleet or 
covered person that is a biodiesel alternative fuel provider described 
in sections 490.301 and 490.303. Biodiesel alternative fuel providers 
may satisfy up to 100 percent of their alternative fueled vehicle 
acquisition requirements through the use of biodiesel fuel use credits.
    Section 490.706 Procedure for Modifying the Biodiesel Component 
Percentage. This section includes a cross-reference to the procedures a 
person may use to request DOE to exercise the authority provided in 
section 312(a)(3) of ECRA to lower the minimum 20 percent biodiesel 
volume requirement for reasons related to cold start, safety, or 
vehicle function considerations. DOE expects petitions to change the 
percentage requirement to be supported by data demonstrating the need 
for lowering the percentage.
    Section 490.707 Increasing the Qualifying Volume of the Biodiesel 
Component. This section allows DOE to collect the data required to make 
a determination that the average annual alternative fuel use in light 
duty vehicles by fleets and covered persons exceeds 450 gallons or 
gallon equivalents. Such a data collection effort would be used by DOE 
to propose an increase in the 450 gallon qualifying volume necessary to 
generate credits under the Section 490.701 biodiesel fuel use credit. A 
DOE proposal to increase the qualifying volume would have to be done 
through a rulemaking that provides public notice and opportunity for 
comment. DOE does not, at this time, plan on proposing an increase in 
the qualifying volume. If the data that become available on alternative 
fuel use by EPACT alternative fueled vehicles indicate that average 
alternative fuel use is higher than 450 gallons, DOE will consider 
proposing an increase in the qualifying volume level.

III. Public Comment

    This rule prescribes procedures and contains interpretive guidance 
for implementing the biodiesel fuel use credit provisions of ECRA, 
section 7. An opportunity for prior public comment is not required by 
the Administrative Procedure Act, 5 U.S.C. 553, or any other law for 
this type of rule, nor does DOE see any need for prior public comment 
as a matter of policy. The rule contains straightforward procedures for 
requesting credits, necessary cross-references to other provisions in 
the Part 490 Alternative Fuel Transportation Program, and implementing 
provisions that closely track the statute.
    Although DOE is making this rule effective 30 days after 
publication, it is nevertheless interested in any written data, views, 
or comments that interested persons may have with respect to the rule. 
DOE will take appropriate action after considering the comments. DOE 
invites public comments by the deadline in the DATES section at the 
beginning of this notice. Written comments (5 copies) should be 
identified on the outside of the envelope, and on the comments 
themselves, with the designation: ``Biodiesel Fuel Use Credit Interim 
Final Rule, Docket Number EE-RM-99-BIOD''. In the event any person 
wishing to submit a written comment cannot provide five copies, 
alternative arrangements may be made in advance

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by calling Ms. Andi Kasarsky at (202) 586-3012. All comments submitted 
will be available for examination in the Rule Docket File (EE-RM-99-
BIOD) in DOE's Freedom of Information Reading Room at the address 
indicated at the beginning of this notice.
    Pursuant to the provisions of 10 CFR 1004.11, any person submitting 
information or data that are believed to be confidential, and which may 
be exempt by law from public disclosure, should submit one complete 
copy, as well as two copies from which the information claimed to be 
confidential has been deleted. The DOE will make its own determination 
of any such claim.

IV. Regulatory and Procedural Requirements

A. Review Under Executive Order 12866

    Today's regulatory action has been determined not to be a 
``significant regulatory action'' under Executive Order 12866, 
``Regulatory Planning and Review,'' 58 FR 51735 (October 4, 1993). 
Accordingly, this rulemaking has not been reviewed by the Office of 
Information and Regulatory Affairs of the Office of Management and 
Budget (OMB).

B. Review Under Executive Order 12612

    Executive Order 12612, ``Federalism,'' 52 FR 41685 (October 30, 
1987) requires that regulations, rules, legislation, and other policy 
actions be reviewed for any substantial direct effect on States, on the 
relationship between the National Government and the States, or in the 
distribution of power and responsibilities among various levels of 
government. If there are substantial effects, then the Executive Order 
requires the preparation of a federalism assessment to be used in all 
decisions involved in promulgating and implementing policy action. The 
Department has analyzed this rulemaking in accordance with the 
principles and criteria contained in Executive Order 12612, and has 
determined there are no federalism implications that would warrant the 
preparation of a federalism assessment. The interim final rule will not 
have a substantial direct effect on States, the relationship between 
the States and Federal Government, or the distribution of power and 
responsibilities among various levels of government.

C. Review Under the Regulatory Flexibility Act

    The Regulatory Flexibility Act, 5 U.S.C. 601 et seq., requires 
preparation of an initial regulatory flexibility analysis for every 
rule for which the law requires publication of a general notice of 
proposed rulemaking unless the agency certifies that the rule, if 
promulgated, will not have a significant economic impact on a 
substantial number of small entities. Today's interim final rule is not 
subject to a legal requirement for a general notice of proposed 
rulemaking. Accordingly, DOE did not prepare a regulatory flexibility 
analysis for this rule.

D. Review Under the National Environmental Policy Act

    The Department has determined that this rule is covered by 
Categorical Exclusion in paragraph A5 to Subpart D, 10 CFR part 1021. 
Accordingly, neither an environmental assessment nor an environmental 
impact statement is required.

E. Review Under the Paperwork Reduction Act

    This interim final rule contains a collection of information that 
is subject to review by the Office of Management and Budget (OMB) under 
the Paperwork Reduction Act of 1995. More specifically, DOE plans to 
obtain documentation to support allocation of credits by use of the 
annual reporting form DOE/OTT/101, Annual Alternative Fueled Vehicle 
Acquisition Report for State Government and Alternative Fuel Provider 
Fleets. DOE proposes to amend that form to include the documentation 
requirements of Sec. 490.704. Fleets claiming credits must, for the 
model year in which the biodiesel fuel is purchased, report the 
quantity of biodiesel purchased for use in vehicles weighing in excess 
of 8,500 lbs. gross vehicle weight.
    The title, description, and respondent description of the 
collection of information for the existing Alternative Fuel 
Transportation Program are shown as follows with an estimate of the 
annual reporting and record keeping burden. Included in the estimate 
are the time for reviewing instructions, searching existing data 
sources, gathering and maintaining the data needed, and providing the 
information. DOE does not expect any change in the existing burden with 
the addition of the availability of the biodiesel fuel use credit to 
affected fleets. Should fleets utilize the biodiesel fuel use credit, 
DOE believes that the increased burden of reporting biodiesel fuel use 
credits would be counterbalanced by a reduced burden of reporting the 
number of alternative fueled vehicles acquired.
    Collection Title: Annual Alternative Fueled Vehicle Acquisition 
Report for State Government and Alternative Fuel Provider Fleets.
    Type of Review: Revised collection.
    OMB Number: 1910-5101.
    Type of Respondents: States and alternative fuel provider firms.
    Estimated Number of Respondents: 1,000.
    Estimated Total Burden Hours: 12,000.
    Frequency of Responses: Annually.
    DOE invites comments on: (1) The need for the proposed collection 
of information; (2) the accuracy of DOE's burden estimates, including 
the validity of the methodology and assumptions used; (3) ways to 
enhance the quality, utility, and clarity of the information to be 
collected; and (4) ways to minimize the burden of the collection of 
information on respondents.
    As provided in 5 CFR 1320.5(c)(1), collections of information 
addressed in an interim final rule are subject to the procedures in 5 
CFR 1320.10. Interested persons and organizations may submit comments 
on the information collection in this rule by July 19, 1999 to Paul 
McArdle, Office of Energy Efficiency and Renewable Energy, (EE-34), U. 
S. Department of Energy, 1000 Independence Avenue, SW, Washington, DC 
20585 and to the DOE Desk Officer, OMB, NRD, Room 10202, 725 17th 
Street, NW, Washington, DC 20503.
    At the close of the 60-day comment period, DOE will review the 
comments received, revise the information collection as necessary, and 
submit these provisions to OMB for review. DOE will publish a notice in 
the Federal Register when the information collection provisions are 
submitted to OMB, and an opportunity for public comment to OMB will be 
provided at that time. DOE will publish a notice in the Federal 
Register of OMB's decision to approve, modify, or disapprove the 
collection of information. An agency may not conduct or sponsor, and a 
person is not required to respond to, a collection of information 
unless it displays a current, valid OMB control number.

F. Review Under Executive Order 12988

    With respect to the review of existing regulations and the 
promulgation of new regulations, section 3(a) of Executive Order 12988, 
``Civil Justice Reform,'' 61 FR 4729 (February 7, 1996), imposes on 
Executive agencies the general duty to adhere to the following 
requirements: (1) Eliminate drafting errors and ambiguity; (2) write 
regulations to minimize litigation; and (3) provide a clear legal 
standard for affected conduct rather than a general standard and 
promote simplification and burden reduction. Section 3(b) of

[[Page 27174]]

Executive Order 12988 specifically requires that Executive agencies 
make every reasonable effort to ensure that the regulation: (1) Clearly 
specifies the preemptive effect, if any; (2) clearly specifies any 
effect on existing Federal law or regulation; (3) provides a clear 
legal standard for affected conduct while promoting simplification and 
burden reduction; (4) specifies the retroactive effect, if any; (5) 
adequately defines key terms; and (6) addresses other important issues 
affecting clarity and general draftsmanship under any guidelines issued 
by the Attorney General. Section 3(c) of Executive Order 12988 requires 
Executive agencies to review regulations in light of applicable 
standards in section 3(a) and section 3(b) to determine whether they 
are met or it is unreasonable to meet one or more of them. DOE has 
completed the required review and determined that, to the extent 
permitted by law, this interim final rule meets the relevant standards 
of Executive Order 12988.

G. Review Under the Unfunded Mandates Reform Act of 1995

    Title II of the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-
4) requires each Federal agency to prepare a written assessment of the 
effects of any Federal mandate in a proposed or final agency rule that 
may result in the expenditure by State, local, and tribal governments, 
in the aggregate, or by the private sector, of $100 million in any one 
year. The Act also requires a Federal agency to develop an effective 
process to permit timely input by elected officers of State, local, and 
tribal governments on a proposed ``significant intergovernmental 
mandate,'' and requires an agency plan for giving notice and 
opportunity for timely input to potentially affected small governments 
before establishing any requirements that might significantly or 
uniquely affect small governments. The interim final rule published 
today does not contain any Federal mandate, so these requirements do 
not apply.

H. Congressional Notification

    As required by 5 U.S.C. 801, DOE will report to Congress the 
promulgation of this rule prior to its effective date. The report will 
state that it has been determined that the rule is not a ``major rule'' 
as defined by 5 U.S.C. 801(2).

List of Subjects in 10 CFR Part 490

    Administrative practice and procedure, Energy conservation, Fuel, 
Motor vehicles.

    Issued in Washington, DC on April 28, 1999.
Dan W. Reicher,
Assistant Secretary, Energy Efficiency and Renewable Energy.
    For the reasons set forth in the Preamble, Part 490 of Title 10, 
Chapter II, Subchapter D of the Code of Federal Regulations, is amended 
as follows:

PART 490--ALTERNATIVE FUEL TRANSPORTATION PROGRAM

    1. The authority citation is revised to read as follows:

    Authority: 42 U.S.C. 7191, 13211-13212, 13235, 13251, 13257, 
12260-12263.

    2. Subpart H--Biodiesel Fuel Use Credit is added to read as 
follows:

Subpart H--Biodiesel Fuel Use Credit

Sec.
490.701  Purpose and scope.
490.702  Definitions.
490.703  Biodiesel fuel use credit allocation.
490.704  Procedures and documentation.
490.705  Use of credits.
490.706  Procedure for modifying the biodiesel component percentage.
490.707  Increasing the qualifying volume of the biodiesel 
component.
490.708  Violations.


Sec. 490.701  Purpose and scope.

    (a) This subpart implements provisions of the Energy Conservation 
Reauthorization Act of 1998 (Pub. L. 105-388) that require, subject to 
some limitations, the allocation of credit to a fleet or covered person 
under Titles III and V of the Energy Policy Act of 1992 for the 
purchase of a qualifying volume of the biodiesel component of a fuel 
containing at least 20 percent biodiesel by volume.
    (b) Fleets and covered persons may use these credits to meet, in 
part, their mandated alternative fueled vehicle acquisition 
requirements.


Sec. 490.702  Definitions.

    In addition to the definitions found in Sec. 490.2, the following 
definitions apply to this subpart--
    Biodiesel means a diesel fuel substitute produced from nonpetroleum 
renewable resources that meets the registration requirements for fuels 
and fuel additives established by the Environmental Protection Agency 
under section 211 of the Clean Air Act; and
    Qualifying volume means--
    (1) 450 gallons; or
    (2) If DOE determines by rule that the average annual alternative 
fuel use in light duty vehicles by fleets and covered persons exceeds 
450 gallons or gallon equivalents, the amount of such average annual 
alternative fuel use.


Sec. 490.703  Biodiesel fuel use credit allocation.

    (a) DOE shall allocate to a fleet or covered person one credit for 
each qualifying volume of the biodiesel component of a fuel that 
contains at least 20 percent biodiesel by volume if:
    (1) Each qualifying volume of the biodiesel component of a fuel was 
purchased after November 13, 1998;
    (2) The biodiesel component of fuel is used in vehicles owned or 
operated by the fleet or covered person; and
    (3) The biodiesel component of the fuel is used in vehicles 
weighing more than 8,500 pounds gross vehicle weight rating.
    (b) No credit shall be allocated under this subpart for a purchase 
of the biodiesel component of a fuel if the fuel is:
    (1) For use in alternative fueled vehicles; or
    (2) Required by Federal or State law.


Sec. 490.704  Procedures and documentation.

    (a) To receive a credit under this subpart, the fleet or covered 
person shall submit its request, on a form obtained from DOE, to the 
Office of Energy Efficiency and Renewable Energy, U. S. Department of 
Energy, EE-34, 1000 Independence Ave. SW., Washington, DC 20585, or 
such other address as DOE may publish in the Federal Register, along 
with the documentation required by paragraph (b) of this section.
    (b) Each request for a credit under this subpart must be submitted 
on or before the December 31 after the close of the applicable model 
year and must include written documentation stating the quantity of 
biodiesel purchased, for the given model year, for use in vehicles 
weighing in excess of 8,500 lbs. gross vehicle weight;
    (c) A fleet or covered person submitting a request for a credit 
under this subpart must maintain and retain purchase records verifying 
information in the request for a period of three years from December 31 
immediately after the close of the model year for which the request is 
submitted.


Sec. 490.705  Use of credits.

    (a) At the request of a fleet or covered person allocated a credit 
under this subpart, DOE shall, for the model year in which the purchase 
of a qualifying volume is made, treat that purchase as the acquisition 
of one alternative fueled vehicle the fleet or covered person is 
required to acquire under sections 490.201, 490.302 and 490.307, and 
Title III of the Energy Policy Act of 1992.
    (b) Except as provided in paragraph (c) of this section, credits 
allocated

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under this subpart may not be used to satisfy more than 50 percent of 
the alternative fueled vehicle requirements of a fleet or covered 
person under sections 490.201, 490.302 and 490.307, and Title III of 
the Energy Policy Act of 1992.
    (c) A fleet or covered person that is a biodiesel alternative fuel 
provider described in section 490.303 of this part may use its credits 
allocated under this subpart to satisfy all of its alternative fueled 
vehicle requirements under section 490.302.


Sec. 490.706  Procedure for modifying the biodiesel component 
percentage.

    (a) DOE may, by rule, lower the 20 percent biodiesel volume 
requirement of this subpart for reasons related to cold start, safety, 
or vehicle function considerations.
    (b) Any person may use the procedures in section 490.6 of this part 
to petition DOE for a rulemaking to lower the biodiesel volume 
percentage. A petitioner should include any data or information that it 
wants DOE to consider in deciding whether or not to begin a rulemaking.


Sec. 490.707  Increasing the qualifying volume of the biodiesel 
component.

    DOE may increase the qualifying volume of the biodiesel component 
of fuel for purposes of allocation of credits under this subpart only 
after it:
    (a) Collects data establishing that the average annual alternative 
fuel use in light duty vehicles by fleets and covered persons exceeds 
450 gallons or gallon equivalents; and
    (b) Conducts a rulemaking to amend the provisions of this subpart 
to change the qualifying volume to the average annual alternative fuel 
use.


Sec. 490.708  Violations.

    Violations of this subpart are subject to investigation and 
enforcement under subpart G of this part.

[FR Doc. 99-12571 Filed 5-18-99; 8:45 am]
BILLING CODE 6560-50-P