3 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 1 i if UNITED STATES ENVIRONMENTAL PROTECTION AGENCY WASHINGTON, D.C. 2046 0 oOo PUBLIC HEARING on CALIFORNIA WAIVER REQUEST May 16 - May 20, 1977 Conference Rooms A-B-C EPA Region IX Office San Francisco, California VOLUME I Pages 1 - 212 May 16, 1977 Reported by: THOMAS R. WILSON 19290 THOMAS R. WILSON CERTIFIED SHORTHAND REPORTERS (41M I4M1N/4I13IW ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 2 HEARING PANEL BENJAMIN R. JACKSON - Presiding Officer Director, Mobile Source Enforcement Division U. S. Environmental Protection Agency Washington, D. C. CHARLES GRAY Chief, Standards Development and Support Branch U. S. Environmental Protection Agency Washington, D. C. , EPA STAFF DANIEL M. STEINWAY Attorney-Advi sor U. S. Environmental Protection Agency Washington, D. C. JAMES MC NAB, III Attorney-Advisor U. S. Environmental Protection Agency Washington, D. C. MARILYN J. HERMAN Program Analyst U. S. Environmental Protection Agency Washington, D. C. oOo THOMAS R. WILSON CERTIFIED SHORTHAND REPORTERS (41S) S43-31#4/4ซ1-30#8 ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 3 Page CALIFORNIA AIR RESOURCES BOARD 15 THOMAS AUSTIN Deputy Executive Officer, Technical KINGSLEY MACOMBER Chief Counsel DONALD DRACHAND Chief, Engineering Branch GARY RUBENSTEIN Manager, Special Projects Section GENERAL MOTORS CORPORATION 35 EDWIN E. NELSON Assistant Director of Automotive Emission Control RICHARD I. PETERSEN Attorney HAROLD W. SCHWOCHERT Staff Engineer, Automotive Emission Control FORD MOTOR COMPANY 56 DONALD R. BUIST Executive Engineer for Certification Engineering and Testing Laboratory HELEN PETRAUSKAS Attorney CALIFORNIA AIR RESOURCES BOARD 70 THOMAS AUSTIN Deputy Executive Officer, Technical KINGSLEY MACOMBER Chief Counsel DONALD DRACHAND Chief, Engineering Branch GARY RUBENSTEIN Manager, Special Projects Section > R. WILSON SHORTHAND REPORTERS 1415) S43-31t4/481-3MB ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 INDEX (Cont'd) Page HARLEY-DAVIDSON 8 8 JOSEPH R. AUSTIN Attorney with Tuttle and Taylor Los Angeles, California LAIMONIS T. EMBREKTS Director, Environmental Control and Energy Resources Planning for AMF, Inc. YAMAHA 130 RUSSELL JURA Technical Staff Counsel KAWASAKI 155 DENNIS DAVID Manager of Legislative Section DARRELL R. JOHNSON Attorney with Paul, Hastings & Janofsky Los Angeles, California SUZUKI 198 JOHN WALSH Supervisor, Ground Level Research Safety and Legislation oOo 5 R. WILSON SHORTHAND REPORTERS (415) 543-31M/481-3096 ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 EPA 5 CHAIRMAN JACKSON: Good morning. This is the United States Environmental Protection Agency public hearing to consider a number of requests by the State of California for a waiver of federal preemption under Section 209(b) of the Clean Air Act for a series of past actions taken by the California Air Resources Board. I am Ben Jackson, Director of the Mobile Source Enforcement Division of the Environmental Protection Agency. I have been designated as Presiding Officer for the hearing. My colleagues who will assist me at various times in conducting the hearing are Mr. Charles Gray, Mr. Karl Hellman and Mr. Mick Leiferman of the Office of Mobile Source Air Pollution Control. On Thursday, Dr. Norman Shutler, Deputy Assistant Administrator for Mobile Source and Noise Enforcement, and Mr. Eric Stork, Deputy Assistant Administrator for Mobile Source Pollution Control, will join the Panel. The Panel will also be assisted by Mr. Daniel Steinway and Mr. James McNab III, who are attorney-advisors with the Mobile Source Enforcement Division, and Ms. Marilyn Herman, who is responsible for maintaining the record and scheduling witnesses. The CARB has submitted the requests under considera- tion to the Administrator of the Environmental Protection Agency in order to permit the State of California to enforce the following provisions of its motor vehicle emission control program: (1) Compliance and inspection testing of 1977 and 5 R. WILSON SHORTHAND REPORTERS (41#) 543*3194/461-3098 ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 EPA 6 subsequent model year vehicles except 1977 and 1978 model year gasoline-powered passenger cars and light-duty trucks under Title 13 of the California Administrative Code, (2) The exhaust emission standards and test pro- cedures for 1979 and subsequent model year passenger cars, light duty trucks, and medium duty vehicles, including certi- fication procedures applicable to these classes of vehicles for 198 0 and subsequent models imposing a restriction on allowable maintenance, (3) The November 23, 1976, amendments to the California evaporative emission regulations for 1978 and subsequent model year gasoline-powered motor vehicles except motorcycles/ and also, evaporative emission standard and test procedures (SHED test) applicable to these classes of vehicles for 1980 and subsequent model years, and (4) Assembly-line testing of 1978 model year diesel- powered light duty trucks and medium duty vehicles. During this hearing the EPA will also consider whether California continues to comply with the conditions of the October 1, 1976, motorcycle waiver and whether California should be granted a general waiver of Federal preemption for all standards and test procedures (including accompanying enforcement procedures) adopted by the CARB in the future relating to the control of emissions from new motor vehicles or new motor vehicle engines. Some further clarification of the items under con- sideration at this hearing should also be made at this time. First, with respect to California's compliance and inspection testing procedures, EPA has been advised by the CARB that it 5 R. WILSON SHORTHAND REPORTERS iAMI ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 7 EPA intends to modify these procedures for evaluating motorcycles tested under this program at a later date. As a result, EPA has decided to postpone consideration of this item as it applies to motorcycles until such time as California has adopted these modifications. Secondly, in connection with the reconsideration of the October 1, 1976, waiver, EPA will also consider the question of granting California a waiver for the March 24, 1977, amendments to the California motorcycle regulations effecting changes in the 1982 standards and te^t procedures. EPA will also accept testimony during this hearing on the provision of the March 24 amendments requiring the submission of a completed copy of an application for certifi- cation and a certificate of conformity to the Executive Officer of the CARB. However, EPA will not consider any testimony concerning those March 24 amendments which affect the 1978-1981 standards and test procedures, since the manufacturer's views on these amendments have already been adequately presented in the context of the Federal regula- tions. Finally, by letter dated April 25, 1977, the CARB has requested that EPA consider granting California a waiver for a 0.39 grams per mile non-methane hydrocarbon exhaust emission standard applicable to 1980 and subsequent model year passenger cars, light duty trucks and medium duty vehicles under 4000 pounds inertia weight in place of the standard which had originally been adopted on November 23, 1976, for these classes of vehicles. 5 R. WILSON SHORTHAND REPORTERS (418) S43-31M/4t1-3QM ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 EPA 8 We have decided to grant CARB1s request, and we will accept comments on this matter both during the hearing and for three weeks thereafter during which the record will remain open. For the record, the hearing is convened in the Conference Room on the second floor of the Regional Office of the United States Environmental Protection Agency, 100 California Street, San Francisco, California. To complete the opening of the record and at the same time to expedite the proceedings, I would like to insert into the record as if read, the following documents: The' following is a list of 16 documents, which I will give to the reporter so he can insert them in the record, but I will not read them at this time. A copy of this state- ment is available for anyone who would care to have it for their own record, the documents that I am referring to. oOo (1) The letters of July 19, 1976, January 20, 1977, and February 22, 1977, from Mr. William H. Lewis, Jr., Executive Officer of the CARB, to Mr. Russell Train, the former Administrator of EPA, and Mr. Douglas Costle, the present Administrator of the EPA, notifying Mr. Train and Mr. Costle that California had taken a series of actions to revise its motor vehicle emission control program and requesting a waiver of Federal preemption for those actions which in the Administrator's judgment required such a waiver; (2) The letters of November 1, 1976, and February 14, 1977, from Mr. Lewis to Mr. Train and Mr. Costle, informing ปR. WILSON SHORTHAND REPORTERS Mis> S*s-siM/4ai-aoaa ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 EPA 9 Mr. Train and Mr. Costie of the CARB's intentions to modify the California vehicle emissions control program with respect to motorcycles in light of the promulgation of emission standards and test procedures by EPA for 1978 and subsequent model year motorcycles; (3) A letter of February 16, 1977, from EPA to CARB, soliciting the views of CARB on the question of granting California a general waiver of Federal preemption; (4) The letters of April 8, 1977, and May 4, 1977, from EPA to CARB, stating that a hearing would be convened to address California's waiver requests in addition to the questions of whether California should be granted a general waiver and whether the October 1, 1976, waiver should remain in effect; (5) A letter of April 15, 1977, from Mr. Lewis to Mr. Costle notifying Mr. Costle that the CARB had amended the California vehicle emissions control program with respect to motorcycles; (6) A letter of April 25, 1977, from CARB to EPA, requesting that EPA consider at this hearing a 0.39 grams/mile non-methane hydrocarbon standard applicable to 1980 and subsequent model year passenger cars, light duty trucks, and medium duty vehicles under 4000 pounds inertia weight; (7) A May 2, 1977, mailgram from CARB to EPA, requesting that EPA not consider the item of compliance and inspection testing of motorcycles during this hearing; (8) The April 13, 1977, Federal Register notice of this hearing, and the April 20, 1977, Federal Register notice 5 R. WILSON SHORTHAND REPORTER8 (415) S43-31M/461-3098 ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 EPA 10 correcting the Table of Contents in the issue of the Federal Register which included the announcement of the public hearing; and (9) The October 1, 1976, motorcycle waiver decision. See 41 FR 44209 (October 7, 1976). In addition, the following will be made a part of the record: (1) Sections 2100 et seq., Title 13, California Administrative Code, (2) Sections 1955.1, 1955.5, 1959, Title 13, California Administrative Code, and "California Exhaust Emission Standards and Test Procedures for 197 5 through 1979 Model Passenger Cars, Light-Duty Trucks, and Medium-Duty Vehicles," adopted February 19, 1975, last amended November 23, 1976, (3) Section 1960, Title 13, California Administra- tive Code, and "California Exhaust Emissions Standards and Test Procedures for 198 0 and Subsequent Model Passenger Cars, Light-Duty Trucks, and Medium-Duty Vehicles," adopted November 23, 1976, as amended December 14, 1976, (4) Section 1976(b), Title 13, California Administrative Code, and "California Evaporative Emission Standards and Test Procedures for 1978 and Subsequent Model Gasoline-Powered Motor Vehicles except Motorcyles," adopted April 16, 1975, last amended November 23, 1976, (5) Section 2056, Title 13, California Administra- tive Code, and "California Assembly-Line Test Procedures for 1978 Model-Year Passenger Cars, Light-Duty Trucks and 5 R. WILSON SHORTHAND REPORTERS 441 At wm ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 EPA 11 Medium-Duty Vehicles," adopted January 25, 1977, and (6) Section 1958, Title 13, California Administra- tive Code, and "California Exhaust Emission Standards and Test Procedures for 1978 and Subsequent Production Motorcycles," adopted July 15, 1975, as amended February 20, 1976, March 24, 1977, and (7) 40 C.F.R. 86.4 01-78 et seฃ. (1977). Furthermore, in considering whether to grant California a general waiver from the prohibitions of Section 209 (a), the pertinent California standards and test procedures can be found in Title 13 of the California Administrative Code. oOo CHAIRMAN JACKSON: To assure that all parties are aware of the substance of the correspondence mentioned earlier, I will briefly review the issues that were addressed in those letters. In CARB's letters of July 19, 1976, January 20, 1977, I and February 22, 1977, CARB informed EPA that it had taken j a series of actions to revise its motor vehicle emission control program, and requested a waiver for those actions which EPA determined required a waiver. In EPA's letter of j April 8, 1977, CARB was informed that these actions required a waiver before they could be effectuated by California. This letter also informed CARB that a public hearing would be convened to consider its requests for a waiver in connection with those actions noted in the four CARB letters in addition to the questions of whether to grant California a general 5 R. WILSON SHORTHAND REPORTERS (416) 543-3104/461 <3006 ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 EPA 12 waiver and whether the October 1, 1976, waiver should remain in effect. In the CARB correspondence of November 1, 1976, January 20, 1977, and February 14, 1977, the CARB informed EPA of its intentions to modify the California vehicle emissions control program with respect to motorcycles. Following this correspondence, the CARB notified EPA in an. April 15, 1977, letter that the CARB had adopted certain amendments to the California motorcycle regulations. In this letter the CARB also stated that it intended to enforce its compliance and inspection testing program with respect to motorcycles beginning in 1978, but on May. 2, 1977, the CARB requested that EPA postpone consideration of this item until a later date. This hearing is intended to provide an opportunity for interested persons to state their views or arguments, and provide pertinent information relating to the determination to be made by the Administrator with respect to these waiver requests, the general waiver question, and the reconsideration of the October 1, 1976, waiver. However, the determination of the Administrator regarding the action to be taken with respect to the subjects under consideration is not required to be made solely on the record of the public hearing. Since the notice was inserted into the record and not read, I will now summarize the procedures and ground rules for the hearing. The hearing is being held pursuant to Section 209(b) of the Federal Clean Air Act. It will be conducted in i R. WILSON SHORTHAND REPORTERS (418) 94S-3194/461 30SB ------- I 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 EPA accordance with the rules which have been in effect at prior hearings on California waiver applications. The agenda for the hearing" has been previously outlined in the Federal Register notice announcing this hearing. Generally the procedures will be informal. Formal rules of evidence will not be in effect. The Presiding Officer is authorized, however, to strike from the record statements which he deems irrelevant or needlessly repetitious, and to impose reasonable limits on the duration of the statement of any witness. No cross-examination will be permitted. However, to the extent that time allows, the Presiding Officer may permit brief questions of clarification from any partici- pant to any other participant. Questions of a more explora- tory nature may be submitted in writing to the Presiding Officer through Ms. Herman, and such questions at the discre- tion of the Presiding Officer may be posed to any witness by a member of the panel. A verbatim record of the hearing is being made, and the transcript will constitute the sole official record of this hearing. A copy of the record will be on file for public inspection by any interested persons at the EPA Public Information Reference Unit, Room 2922, in Washington, D.C., and at the regional office in San Francisco and the District office in Los Angeles. Persons desiring copies of the transcript should make arrangements with the reporter. I would like to make one more comment in an attempt to focus on the issues we will be concerned with today and foi the rest of the week. HOMAS R. WILSON iRTIFIED SHORTHAND REPORTERS (418) 343-3194/461-3098 ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 EPA 14 Section 209(b) of the Clean Air Act requires the Administrator to waive Federal preemption of California standards for new motor vehicle emissions unless he makes certain findings. Findings which would cause a denial of the waiver include a finding that California does not require more stringent standards to meet compelling and extraordinary conditions of air pollution in California, or that the standards are not more stringent than Federal standards, or that the California standards and accompanying enforcement procedures are inconsistent with Section 202(a) of the Clean Air Act. With regard to whether California requires more stringent standards to meet compelling and extraordinary con- ditions of air pollution, that issue has not generally been considered to be a close one in the past. On the relative stringency issue, if the California standards and procedures may result in some further reduction in air pollution in California above and beyond that which can be achieved under the Federal control program, then the relative stringency test is met. With regard to inconsistency with Section 202(a), the issue of inconsistency relates to whether the Federal and California test procedures are inconsistent, and whether the California standards and enforcement procedures take effect after such a period as the Administrator finds necessary to permit the development and application of the requisite technology, giving appropriate consideration to the cost of complying within the period. Loosely put, this issue focuses 5 R. WILSON SHORTHANO REPORTERS (416) 843-3194/481-3098 ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 C ARB/EPA 15 on whether the industry is faced with different methods of obtaining certification, and whether adequate technology and lead time are available for meeting the prescribed standards. This issue has been the key one in the past. With that, we can move on to the witnesses. We have an order of appearance for those who have indicated that they wished to appear. Copies of the agenda and witness list are available from Ms. Herman. There may have been additions to or deletions from the agenda since it was printed. If it appears the order is going to cause any one or more of you a hardship, please contac ; Ms. Herman and she will relay this to me. We will attempt to accommodate any time problems anyone has. We would also appreciate it if all witnesses would confirm their positions on the schedule with Ms. Herman. The record will remain open until Friday, June 10, 1977, for the submission of any further information by any interested persons. The first witnesses of the day will be the representatives of the California Air Resources Board. MR. TOM AUSTIN: Good morning. My name is Tom Austin, and I am Deputy Executive Officer for the California Air Resources Board. With me today are Kingsley Macomber, the Board's Chief Counsel, Don Drachand and Gary Rubenstein from the Vehicle Emissions Control Division. We are here seeking a waiver from EPA of Section 209(a) of the Clean Air Act in order to allow California to implement more stringent emission standards and test -iOMAS R. WILSON RTIFI6D SHORTHAND REPORTERS <419) M3-J104M61-3OW8 ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 CARB 16 procedures for 1978 and subsequent model-year motorcycles, passenger cars, light-duty trucks, and medium-duty vehicles. In considering California's requests for waivers of federal preemption, Section 209(b) of the Clean Air Act allows the Administrator to consider all three issues: 1. Whether compelling and extraordinary conditions continue to exist in California; 2. Whether California's standards and test pro- cedures are more stringent than applicable Federal Standards; and 3. Whether California's standards and test and enforcement procedures are consistent with Section 202(a) of the Clean Air Act, in particular with respect to their tech- nological feasibility within the remaining lead time, con- sidering the cost of compliance. Since the first issue has been considered many times at previous waiver hearings, my discussion of it will be brief. I will then present our comments on each of the specific waiver items according to the schedule contained in your hearing notice. On compelling and extraordinary conditions, the compelling and extraordinary need for stringent emissions controls which exists in California has never been disputed by the Administrator in previous waiver decisions. California currently violates Federal Ambient Air Quality Standards for every criteria pollutant except SO2 which is now at the Federal standard and rising. Oxidant violations have recently exceeded the Federal standard by over 400%. No other area 5 R. WILSON SHORTHAND REPORTERS (418) 543-3184/481-30Bg ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 CARB 17 of the country, and possibly the world, has such severe oxidant problems. No set of control programs short of a virtual shut down of vehicle and stationary source activity throughout the greater metropolitan Los Angeles area has ever allowed EPA to project compliance with the National Ambient Air Quality Standard for oxidant. Both hydrocarbon and oxides of nitrogen emissions contribute to California's oxidant problem. Given this situation, ARB believes it is prudent to pursue all hydrocarbon and oxides of nitro*gen control measures which are technologically feasible and conomically practical. Further control over motor vehicles consitutes one element of ARB's program to eventually achieve and maintain the National Ambient Air Quality Standard for oxidant. If California's previously adopted standards were maintained without change, we estimate that by 1990, motor- cycle, passenger car, light-duty truck, and medium-duty vehicle emissions would account for 432 tons/day, or 29%, of the South Coast Air Basin NO inventory, and 358 tons/day, or 21%, of the hydrocarbon inventory, even though by that time, almost all vehicles would meet those standards. We estimate that the South Coast Air Basin would exceed the state's ambient N02 standard by 170% in 1990 unless an additional 930 tons/day of NO control were achieved; the ambient oxidant standard could still be exceeded by over 400% during stable meteorological conditions unless an additional 1390 tons/day of the hydrocarbon control were achieved. While substantial reductions in emissions from passenger cars, light-duty trucks, and medium-duty vehicles J R. WILSON 8HORTHANO REPORTERS (418) 543-31M/461-309S ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 CARB 18 have already been made, we believe that further reductions in the emissions levels of this ever-increasing vehicle population must be made as a significant part of our total effort to improve California's air quality. TO achieve further control over motor vehicle emissions, the Board has recently adopted or modified several standards and test procedures which we have asked to be considered at this hearing. These items are: 1. New vehicle inspection and compliance test procedures for 1978 and subsequent model-year motor vehicles and motor vehicle engines. 2. Assembly-line test procedures for 1978 model- year medium-duty vehicles and diesel-powered light-duty trucks. 3. Exhaust hydrocarbon emission test procedure changes for 1982 and subsequent model-year motorcycles. 4. An evaporative emission standard of 2.0 grams per test for 1980 and subsequent model-year motor vehicles except motorcycles. 5. More stringent hydrocarbon, carbon monoxide, and oxides of nitrogen emissions standards for 1979 and subsequent model-year passenger cars, light-duty trucks and medium-duty vehicles. 6. Idle air/fuel ratio adjustability regulations for 1980 and subsequent model-year vehicles. With all of the above regulations, we estimate furthe South Coast Air Basin emission reductions in 1990 of approxi- mately 160 tons/day of hydrocarbons, and 260 tons/day of oxides of nitrogen. These regulations alone bring us 12% and 28% 3 R. WILSON SHORTHAND REPORTERS (415) 543-3194/461-30S8 ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 CARB 19 closer to our goals for hydrocarbon and NO respectively. The 108 tons/day reduction in CO emissions should be the last step required for new vehicles to allow us to achieve the carbon monoxide Ambient Air Quality Standard if vehicles meet the nine gram per mile standard in use. Following I have some specific comments on the individual items, the six individual items being considered today. I have one question for the Hearing Officer, and that's as to whether he prefers me to only cover the inspection and compliance test procedures portion of my statement at this time, or would you prefer to hear our statement on both inspection and compliance and assembly line tests at the same time? CHAIRMAN JACKSON: Both at the same time. I don't think we will have any trouble keeping the record straight. MR. AUSTIN: Okay. They are separate issues, but we think they are somewhat related and maybe it will be helpful. On inspection and compliance test procedures, the inspection and compliance test procedures for which we are seeking a waiver differ from our previous procedures in two significant ways. First, the new procedures incorporate a modified sampling and data analysis technique which is statistically more valid. Under the new procedures, testing continues until we are approximately 90% confident that the engine family either passes or fails, or until 20-24 vehicles have been 5 R. WILSON SHORTHANO REPORTERS (418) 343-31S4/461-309S ------- 1 2 3 4 5 6 7 8 9 10 u 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 CARB 20 tested. Our former procedures forced a decision after triplicate tests on no more than five vehicles. Under the old procedure it was possible for failing engine families to pass because of inadequate confidence that the failure occurred- The second change in the inspection and compliance tests procedures is that the new procedures are restricted to vehicles and pollutants subject to assembly-line testing. The Federal Register notice of April 13, 1977, indicated that California's inspection and compliance testing requirements applicable to 1977 and 1978 model-year gasoline- powered passenger cars and light-duty trucks are within the scope of the waiver currently in effect for assembly-line testing of such vehicles, based on the similarity of their objectives and procedures. We concur with that finding. As an extension of this finding, we ask that the Administrator grant California a waiver for inspection and compliance testing of any vehicles which in the future become subject to assembly-line testing by California under a valid waiver, provided the procedures are similar. For example, the next item, California's waiver request for assembly-line testing of 1978 model-year diesel-powered light-duty trucks, and medium duty vehicles, would fall into this category. We further ask that California be granted a waiver for inspection testing, apart from its relationship to assembly-line testing, for all vehicles, including motorcycles not covered by the April 13 announcement. Since there is currently no equivalent federal program, we believe inspection testing is more stringent. Nor can we identify any issues of IOMAS R. WILSON tTlflED SHORTHAND r foci at* ** aAt ******* ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 CARB 21 feasibility or lead time, since the program is essentially one to enforce quality control procedures. In our mailgram of May 2, 1977, ARB stated that we believe it is premature to request a waiver at this hearing for motorcycle inspection and compliance test procedures, since the Board has not specifically addressed this matter. After the June Board meeting, when the Board is scheduled to consider and draft its recommendations on motorcycle compliance test procedures, we will request a waiver for specific regulations. On the issue of assembly-line test procedures for 1978 diesel-fueled light-duty trucks and gasoline and diesel medium-duty vehicles, assembly-line test procedures have always been an important enforcement tool for the ARB. The increasing sales of medium-duty vehicles and diesel-powered light-duty trucks have created a need for the extension of assembly-line test procedures to these vehicles. There is no essential difference between the assembly-line procedures we have adopted for these vehicles and the current procedures applied to gasoline-powered passenger cars and light-duty trucks. EPA has recognized that ARB's assembly-line test requirements add a degree of stringency both to the California certification requirements, and to Federal certification requirements com- bined with the Selective Enforcement Audit testing program. It appears therefore that the only issue before EPA at this hearing is whether adequate lead time was provided for ARB's extension of assembly-line test requirements to the additional vehicle categories. For 1978, the new regulations require that the 3 R. WILSON SHORTHANO REPORTERS ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 CARB 22 medium-duty vehicle configurations selected for certification testing be assembly-line tested for enforcement purposes. Other vehicle configurations will be assembly-line tested for information only. The data obtained from this second group will not be used for enforcement of the standards. This provision, which is applicable to medium-duty vehicles for one year only, addresses the lead time problems brought to our attention by the manufacturers. There was consensus among the industry that these procedures were feasible for the 1978 model-year, and conse- quently we expect to hear little opposition on this issue today. As far as we know, only General Motors will be manufacturing diesel vehicles subject to these assembly-line test procedures in 1978. General Motors has verbally informed ARB of potential instrumentation problems associated with conducting the required idle test; however, they have not notified us of this problem in writing. We expect to work closely with GM to resolve any technical difficulties prior to the start of 1978 production. In conclusion, we believe that the assembly-line test procedures for 1978 diesel-fueled light-duty trucks and gasoline and diesel medium-duty vehicles are not materially different from other California assembly-line test procedures, and do not present any problems of either lead time or tech- nological feasibility for the manufacturers. We believe that EPA should grant California a waiver for these procedures, since they are a necessary part of ARB's enforcement package. 3 R. WILSON SHORTHAND REPORTERS ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 CARB 23 I have just one other comment to make. In recent conversations with some of the manu- facturers, we have heard the argument expressed that there is an inconsistency between our assembly-line test procedures and the proposed inspection and compliance test procedures because of the fact that the inspection and compliance test procedures look at the performance of subgroups and not just the family, the entire family in toto. We don't think there is an incon- sistency since the purpose of assembly-line testing is to verify that the vehicles being mass produced are, in fact, meeting the same standards which the certification prototypes met. The certification program requires that each and every configuration meet the standard. Assembly-line testing is a method that we employ to check on the performance of the vehicles being mass produced. While we don't specifically look at subgroups during the assembly-line testing program, I believe we have that flexibility; and when we do find failures of an entire family through our assembly-line testing, we quite often allow corrections to be made to a subgroup only if it can- be shown that a subgroup is causing the problem for the entire family. Given that fact, I think it's appropriate for us to look at subgroups when we are doing our inspection and compliance procedures, and we fail to see any significant inconsistency in that area. I don't have any further comments. I will be happy to answer any questions. 'HOMAS R. WILSON ERTIFIED SHORTHAND REPORTERS (413) 543-3194/461 -3096 ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 CARB 24 Mr. Drachand informs me that there is perhaps one other point that's not entirely clear. We mentioned that for assembly-line testing, it's our intention for 1978 only to test the certified configurations of medium-duty vehicles. We also intend to restrict our compliance testing, our Title 13 compliance testing, to the certified configurations of medium-duty vehicles for the 1978 model year. Perhaps that wasn't clear in the statement. CHAIRMAN JACKSON: I assume all of them are going to be certified. MR. AUSTIN: What I am referring to are those configurations that were actually subject to certification testing. Recognizing that all configurations are supposed to be covered by the certificate, in order to reduce the amount of lead time associated with doing the compliance testing, for doing the assembly-line testing for 1978, we agreed to restrict the scope of the program to those specific configurations which went through the certification process. Generally these are the highest volume configurations but in order to allow the manufacturers to avoid having to run specific testing programs to verify the performance of each combination of engine family, calibration, axle ratio, in order to avoid that delay, we have for the 1978 model year only agreed to conduct our enforcement testing on only those specific configurations which actually went through certification and testing. Thev are all covered by the certificate, but for '78 only, we intend to concentrate on the configurations which 5 R. WILSON SHORTHAND REPORTERS IA1SI Ai4.HAiiii4.1AAi ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 CARS 25 actually went through the prototype testing phase. CHAIRMAN JACKSON: That has a terrible inference, does it, in that if it wasn't tested in certification, it may not meet the standards? MR. AUSTIN: Yes, it does. That's why we have made it very clear that it's going to be a one-year program only, and in 1979, we revert to doing a random sampling of all configurations. CHAIRMAN JACKSON: Is it a volume issue of the amount of testing that would have to be done, or is it just the concern that these configurations might not meet the standards? MR. AUSTIN: No, it wasn't a volume issue. I think it was Ford that made most of the arguments in this area. It was their contention that it was difficult it would be difficult for them to assure themselves that each combination of carburetor calibration, axle ratio and engine family was, in fact, going to comply with the standards for 90% of production, or on the average, with the deterioration factor unless they ran a test program to verify that fact. They laid out for us a schedule showing the remaining lead time and the time estimates for conducting the testing on all their combinations and concluded that if they were forced to test every combination, they would have difficulty in starting production at the normal time for the 1978 model year. But if, however, their risk would be minimized by having our assembly-line testing limited to those configura- tions that went through certification, they saw no particular 5 R. WILSON SHORTHAND REPORTERS ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 CARB 26 problem with the 1978 model year. Other manufacturers seemed to agree with Ford's position in order to limit their liability and not require them to demonstrate in themselves that 90% or the average with deterioration factor of each combination could meet the standards. We agreed to restrict our enforcement testing to only those combinationswhich were certified. CHAIRMAN JACKSON: That troubles me a little bit in that I would assume that the same confiqurations are subject to testina via the federal assemblv-line test program. MR. RUBENSTEIN: I don't believe so. These are medium-duty vehicles which are for 1978 only and would be / considered by EPA to be heavy-duty vehicles. CHAIRMAN JACKSON: Is this medium duty? MR. RUBENSTEIN: Yes. CHAIRMAN JACKSON: So we are just talking about medium duty in the context of its limited MR. AUSTIN: Right. CHAIRMAN JACKSON: applicability of your program? MR. AUSTIN: That's right. MR. DRACHAND: Medium-duty Ford 1978. That's what we are talking about. It falls back from the certification lead time problem. MR. AUSTIN: I think you should look at this as a phase-in of assembly-line testing for this vehicle category as currently these vehicles are covered by the heavy-duty engine certificate. There is no:assembly-line testing requirement for 1978. They become subject to assembly-line 5 R. WILSON SHORTHAND REPORTERS idIfll ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 CARB 27 testing for the first time, and for that one model year, they are going to be subject to a somewhat less stringent require- ment than light-duty vehicles currently are. But for 1979, we are planning to go ahead with the same program as we have in effect for light duty. It would still be our contention that all configura- tions covered by the certificate should be subject to end- use surveillance testing in the future, and they should be able to demonstrate a degree of emission control that is roughly comparable to the configurations which actually went through certification testing. But when we get into these high-volume sampling programs like assembly-line tests or Title 13 surveillance on new vehicles, we thought it was appropriate to give some relaxation in the requirement for a one-year period. CHAIRMAN JACKSON: But you are asking us, if I am not mistaken, on Page 5, the last paragraph of your statement, you are asking us to go ahead and grant the waiver with respect to inspection compliance testing for models that will be subject to assembly-line testing in the future; is that right? MR. AUSTIN: That's right. CHAIRMAN JACKSON: Why don't you ask us for a waiver at such time as they become subject to assembly-line testing? MR. AUSTIN: Well, what we are saying is we think that, when you make the determination that our assembly-line procedures are consistent with 202 of the Act, that should automatically give us the authority to conduct compliance I R. WILSON SHORTHAND REPORTERS ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 CARB testing. We are not saying make that determination now. We are saying when you make the determination that, in fact, we should be able to do assembly-line testing. That should automatically give us the right to do compliance testing. MR. MACOMBER: I might point out that that just carries forward the same logic that I think that was applied in the recent Federal Register announcement. CHAIRMAN JACKSON: I agreevith you. I think it's different if we look at the compliance and inspection test procedure and trying to decide a waiver for that alone, whereas if we are looking at it in the combination with established test procedures on the assembly line, well, then, it's a different issue. MR. AUSTIN: Exactly. That's why we requested that you postpone consideration of the inspection and com- pliance procedures as they relate to motorcylces since we have not firmed up our assembly-line testing procedures for motor- cycles as yet. CHAIRMAN JACKSON: On Page 6 of your statement, the first paragraph, you want a waiver for inspection testing MR. AUSTIN: Yes. * CHAIRMAN JACKSON: apart from its relationship to assembly-line testing. MR. AUSTIN: That's correct. CHAIRMAN JACKSON: And inspection testing is now using CVS? MR. AUSTIN: That's correct. Inspection testing, we do a lot of inspection testing when we visit vehicle 5 R. WILSON SHORTHAND REPORTERS ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 21 28 CARB dealerships. We will look at all the vehicles that are offered for sale. If we find that the vehicles are being sold in uncertified configuration Let's assume, for example, a vehicle was certified for sale with an air-injection system, and there is one sitting there in the lot without an air-injection system. Just by virtue of the fact that that component which was supposed to be on the vehicle is absent from the vehicle beina sold, we consider that a violation. We believe we should have the authority to pursue enforcement actions for those kinds of violations without having any specific set of procedures and a waiver covering those specific procedures, in effect because basically all they are are quality control type of evaluations or determining whether or not vehicles being sold are, in fact, similar to the vehicles which were certified. It's basically just enforcement of the certification. It's looking at the vehicles being sold to see if, in fact, they are the same configuration that appears in the Part 2 certification application. CHAIRMAN JACKSON: But you would look at all vehicles here, not just those that were tested; is that right? MR. AUSTIN: Not just those that were subject to assembly-line testing or our Title 13 compliance testing. Specifically here we are saying that, even if we don't start off the first of the year, 1978, with an assembly-line and compliance testing program for motorcycles, we believe that we should have the authority to visit a Kawasaki dealership, for example, to inspect the vehicles being sold to see if, in 5 R. WILSON SHORTHAND REPORTERS /41C1 ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 CARB fact, they are in conformance with the Part 2 certification application. If we find out that Kawasaki told us they were going to sell a vehicle with a certain type of carburetor and, in fact, they are using last year's carburetor which has a different calibration and is not of the same configuration as they said they were going to sell, we think that should be sufficient for us to pursue enforcement action. We don't think any specific set of procedures or a specific waiver should be required for us to pursue that enforcement action. CHAIRMAN JACKSON: You are suggesting it just flows from the MR. AUSTIN: From certification. CHAIRMAN JACKSON: from certification? MR. AUSTIN: That's right. MR. RUBENSTEIN: It's really based on language in the Federal Register that both California and EPA have adopted about the Administrator's and Executive Officer's authority to request a certain number of vehicles for inspection after a certain model year, CHAIRMAN JACKSON: Do you actually plan on securing these vehicles in any way or do you just go by and look at them? MR. AUSTIN: We just look at them. We don't secure them. CHAIRMAN JACKSON: And you have authority to go to the dealership? MR. AUSTIN: Yes. CHAIRMAN JACKSON: So the issue is the authority to 5 R. WILSON SHORTHAND REPORTERS ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 CARB 31 bring an action against the manufacturer? MR. AUSTIN:- That's right. I guess the way we look at it, it's kind of it's a problem that we detected at a dealership. For example, if someone is selling an uncertified configuration of vehicle, that's essentially a violation of the contract which the manufacturer has made with the state during the certification process and for the certification to have any meaning at all, it seems to me that we need to have the authority to determine whether what's being sold is identical to what the manufacturer guaranteed us would be sold. So it's really part of the certification program when you look at it that way. CHAIRMAN JACKSON: Just a point of clarification. In your documentation, is the inspection procedure separable from the compliance and inspection package? MR. DRACHAND: In the regulations, it is. MR. RUBENSTEIN: Yes. In Section 2101 of Title 13, Paragraph (a) of that section refers to both inspection and compliance testing in terms of the Executive Officer's authority to request vehicles. Paragraphs (b) and (c) refer only to compliance testing. And Paragraph (d) refers only to vehicles selected for inspection. We would also like to clarify that the inspection procedures, we have been concentrating mostly on dealerships, but they also apply to vehicles that are brought to the Air Resources Board either for compliance testing or simply for the purpose of inspection by itself, or vehicles that are brought to the Air Resources Board for compliance testing, 5 R. WILSON SHORTHAND REPORTERS (41S) 543-3194/461-3088 ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 CARB 32 for CVS testing are also tested for conformity, and even if those vehicles do comply with the emissions standard and there is a parts non-conformity for some reason, ARB still believes it has the right to take enforcement action. CHAIRMAN JACKSON: Is this brought to the lab for CVS testing for what purpose? MR. AUSTIN: For example, we have an end-use testing program where we have contracted with an organization for procuring vehicles from the general public for testing by the Air Resources Board. I think that's similar to some programs which EPA conducts. When we bring these vehicles in, we not only test them in the as-received configuration to determine emission factors from end-use vehicles, we tune them to manufacturer's specs to see if they are performing as the certification prototypes performed when they are properly adjusted and tuned. We are also inspecting them to see if, in fact, what we are testing is identical to the configuration in which the manufacturer promised to sell in making his application for certification. If we find through that kind of testing program that manufacturers are selling uncertified configura- tions on motor vehicles, again we believe we should have the authority to pursue enforcement actions. CHAIRMAN JACKSON: Have you ever brought an action, just for my own information, under that provision with regard to licensing these vehicles? MR. DRACHAND: Excuse me. What did you say? I didn't understand what you said. 5 R. WILSON SHORTHAND REPORTERS ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 CARB CHAIRMAN JACKSON: I asked if you had ever brought an action with regard to the vehicles that were brought in for this type of CVS testing that Mr. Austin just described under this authority? MR. RUBENSTEIN: You are talking about end-use vehicles? CHAIRMAN JACKSON: Yes. MR. RUBENSTEIN: No, I don't believe so. MR. AUSTIN: Kingsley, Ben asked whether we had ever taken an action against a manufacturer after finding that a vehicle was not manufactured according to the certification application. MR. MACOMBER: Are you talking about end-use vehicles' CHAIRMAN JACKSON: Yes. MR. MACOMBER: Not to my knowledge. I think we have detected some problems in the past, but we have solved them without formal enforcement action. MR. AUSTIN: A point of clarification. As far as the waiver would be concerned, we would only be talking about the inspection procedures as they affect new vehicles. And under our current Title 13 regulations, we would have the authority to request manufacturers to make vehicles available to us at the Board's laboratory for the purpose of inspecting them. Quite often, usually we do our inspections at dealerships. In the case of certain vehicles or certain models, it may be difficult or impractical for us to do that. And under our Title 13 regulations, we have the authority to > R. WILSON SHORTHAND REPORTERS (415) 343-3194/461-30SS ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 CARB J4 request those vehicles be made available to us. CHAIRMAN JACKSON: Those are new vehicles? MR. AUSTIN: New vehicles. CHAIRMAN JACKSON: And you test it on your own? MR. AUSTIN: That's right. MR. DRACHAND: That's right. CHAIRMAN JACKSON: Are you anywhere else indicating in more detail what the inspection program is, will do, how it's conducted? MR. RUBENSTEIN: Well, the inspection program is in Title 13. It's very broad, and it basically states that vehicles will be inspected for conformity with any applicable California law except for an emissions standard applied to certification and to test procedures. Examples of kinds of laws are sections in the Health and Safety Code which require that new vehicles be identical in all material respects to those that were tested during certification. There is no specific inspection procedure, but it is inspection for compliance with specific laws and regulations. MR. AUSTIN: We like the procedure to be broad so that we can do a rather cursory examination of vehicles routinely but go into much greater detail of examination when we have an emission problem associated with the vehicles. And we are making an attempt to determine why we have such a problem. So, generally, we restrict the inspection to visual observation of the vehicle to see that the obvious pieces of 5 R. WILSON SHORTHAND REPORTERS ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 CARB/GM hardware that are supposed to be part of the package are in place. We check some part numbers to see that the proper carburetor, exhaust gas recirculation valve and other equipment is installed. But when we have an emission problem with the family, quite often we would carry the investigation further. Since we are restricted to determining conformance with the certifi- cation application, that kind of puts a boundary on what the program can consist of, and with that boundary in place, we see little need for more specific procedures. CHAIRMAN JACKSON: Do you say anywhere what "in all material respects" means? MR. AUSTIN: I'm not sure if we have defined that. MR. RUBENSTEIN: I don't believe that we have. I believe that it would essentially be construed that all parts identified in the certification documents are, in fact, what is on the vehicle. I would also like to point out that none of this language with respect to inspection testing has been amended as part of this last set of amendments and that this identical language was covered under previous waivers. CHAIRMAN JACKSON: Okay. Thank you, Mr. Austin. MR. AUSTIN: Thank you. MR. EDWIN E. NELSON: Mr. Jackson, members of EPA, ARB, and ladies and gentlemen in the audience: I am Ed Nelson, Assistant Director of Automotive Emission Control, General Motors Environmental Activity Staff. 3 R. WILSON SHORTHAND REPORTERS ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 GM 36 With me today are Harold W. Schwochert, Staff Engineer, California Activities Automotive Emission Control, General Motors Environmental Activity Staff, and also with us today is Richard I. Petersen, Attorney, General Motors Legal Staff. Now, Mr. Jackson, I believe I would like to ask the order of these hearings you would like to address. Would you like to address the assembly-line testing issue first? CHAIRMAN JACKSON: I will admit that, on the agenda, it's first. But I believe CARB inverted the order in their comments, and it's acceptable to us either way you want to go. MR. NELSON: We have no objection to discussing either one of these items first. CHAIRMAN JACKSON: Okay. Well, let's go with assembly-line test procedures. MR. NELSON: Okay. This morning, we would like to present a statement to be given by Mr. Schwochert, and then we will be happy to answer any questions that you may have. MR. HAROLD W. SCHWOCHERT: General Motors offers the following comments regarding EPA's consideration on granting California a waiver that would modify the assembly- line test procedures to include 1978 model year diesel-powered light-duty trucks and medium-duty vehicles. The current assembly-line test procedures apply only to gasoline-powered vehicles. Since California has established specific certifica- tion requirements for light-duty trucks and medium-duty vehicles effective for the 1978 model year, it is appropriate 5 R. WILSON SHORTHAND REPORTER8 ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 GM 37 that the Air Resources Board consider assembly-line testing of certain diesel-powered vehicles. Several studies of diesel hydrocarbon measurements at both EPA and GM have shown large differences in measured hydrocarbon values over the past months. These differences appear to be primarily associated with heating of the con- tinuous hydrocarbon sampling line and the filter placed in this line to remove particulate matter from the exhaust sample. The elevated sample line temperature also requires assurance that sample lines and analyzer plumbing does not leak. The above discussion suggests that measurement of diesel emissions, primarily hydrocarbons, is still in process of refinement compared to the vast amount of experience that exists regarding gasoline exhaust emission measurements. Considering these present uncertainties, GM recommends that EPA grant California a waiver to extend the assembly-line test requirements to diesel-powered light-duty trucks and medium-duty vehicles, but the quality audit hydrocarbon test data be used for informational purposes only for the 1978 model year. This year will serve as a learninq period to better understand and qain experience using this hydrocarbon measurement requirement, which differs considerably from hydrocarbon measurement of gasoline engine emissions. The California assembly-line test procedures also require idle hydrocarbon and CO measurements of all diesel light-duty trucks and medium-duty vehicles. The present instrumentation used for gasoline engine hydrocarbon 5 R. WILSON SHORTHAun Bl ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 GM 38 measurement, non-dispersive infrared analyzers with unheated sample lines, is not applicable to meaningful measurements of diesel engines. It is our understanding that this instrumentation is also to be used for diesel engine idle emission testing. To our knowledge, no shop equipment similar to the gasoline equipment is commercially available for diesel engines and, therefore, it is General Motors' further recommendation that the waiver granted to California should also exclude the idle emission test requirement because of the present uncertainty of making a meaningful measurement. CHAIRMAN JACKSON: Have you discussed these two points with the CARB? MR. SCHWOCHERT: In the ARB's testimony, they indicated that we had verbally discussed the latter point with them. I don't think we have discussed the first point specifically with them, this measurement uncertainty on quality audit test, or I shouldn't say "quality audit;" I guess I should say certification testing has perhaps come to the forefront in the last couple of months more prominently, and that issue in itself has not been discussed with the ARB. CHAIRMAN JACKSON: Who's addressing this issue of the uncertainty with regard to the hydrocarbon measurement? Are you discussing that with EPA? MR. SCHWOCHERT: Yes. CHAIRMAN JACKSON: Is there a resolution in sight or MR. NELSON: Mr. Jackson, we have discussed it 5 R. WILSON SHORTHAND reporters (415) 543-3194/461 -3098 ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 39 GM extensively with the EPA personnel at Ann Arbor and, in fact, recently Mr. Stork asked us to work with Research Triangle Park to see if we can understand the differences better, especially related to heating of the sample line. And so we think that the right types of activities have been started, but we recognize that we are just in the infancy of learning how to measure accurately diesel emission hydrocarbons, and this is a subject which we do want to pursue with ARB a little further what we think is a major problem, getting repeatable, reproducible answers with today's understanding of the measure- ment process. CHAIRMAN JACKSON: But you are going to be able to solve the problem for certification? MR. NELSON: We will certainly do the best we can. And we have been sharing our experience with EPA and going through a refinement process the best we know how. CHAIRMAN JACKSON: Let's see. Then if you solve it. with regard to certification, it would automatically be solved with regard to assembly-line testing; is that reasonable MR. NELSON: I don't think you can conclude that, Mr. Jackson, because the nature of the production line measurement process doesn't necessarily agree with the official certification process laboratories that are used. I wouldn't want to conclude that it follows that you could do it on assembly line testing instantaneously when you accomplish the same result for certification purposes. CHAIRMAN JACKSON: Are you making a lead time argument about changes you may have to make on the assembly 5 R. WILSON SHORTHAND REPORTERS (415) 543-3194/461-3098 ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 40 GM line? I'm trying to understand the nature of this problem because it doesn't it just doesn't jump out at me. MR. SCHWOCHERT: In our case, it will be a different laboratory than a certification laboratory to do the testing. Right now we hope to have that laboratory on stream by the start of production. We are not ready to test yet in that laboratory, so we can't say for sure that we will have all of the equipment ready to go. And, of course, when you are talking about something that you don't have a lot of experience in compared to gasoline emission measurements, problems can come up that can take longer to solve than you would anticipate. So it is a different laboratory in our specific case, but we hope to have the thing testing diesels when we are ready to start producing. CHAIRMAN JACKSON: Okay. So it's not arguably that much of a lead-time problem, but somewhat of a technical problem with regard to these differences in measurement, but arguably it's as critical with regard to certification as it is with regard to assembly-line testing, I would think. MR. NELSON: Mr. Jackson, we do think it's a major problem in complying with emission requirements. And to address your earlier question just a little further, we stated clearly in our statement that we think it's appropriate for California to consider assembly-line testing of medium-duty and light-duty trucks that have diesel-powered engines. But we are concerned right now with the lack of agreement when we try to get the same values from a given 5 R. WILSON SHORTHAND R6PORTSRS 1Atfil &43>31 B4/4Al>30flA ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 GM 41 vehicle at two or three different laboratories. And EPA has recognized that there are problems in this respect. There are some serious penalties that a manufacturer must face if you test thousands of vehicles on the assembly line and get different results than a different laboratory obtains. It's a little different than the certification process where it's a very select procedure of people, of equipment and experience. CHAIRMAN JACKSON: But that's just I mean what kind of a problem is that? I'm not trying to downplay it. It's just that you have got to train some people to do the testing on the assembly line. You are going to have to qualify your labs, I assume, for testing on the assembly line. Once you get the labs working for certification, then the normal issues of lab correlation arise. I'm trying to understand why this is any different from any of the other kinds of correlations problems that we have experienced all along. I mean there are problems. You have got to solve them. MR. PETERSEN: Well, we only use one lab, one General Motors lab for certification, whereas with assembly- line testing, we use several different labs. It's not a question of whether or not there is a problem with regard to certification or assembly-line testing. The problem exists in both places. It's one of magnitude in that possibly it will be we will be able to come to some kind of agreement for the certification process that won't apply to the assembly line testing. 3 R. WILSON SMORTHANO reporters (415) 543-3104/491-3008 ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 42 GM And you are exposed to a lot more, a lot more testing on the assembly line, different labs and a greater number of labs. In other words, it's a larger problem with assembly- line testing than it is for certification. You are dealing with a handful of cars in certification and a couple of labs. CHAIRMAN JACKSON: I just don't see what difference the number of cars makes. MR. PETERSEN: Well, from our standpoint, the magnitude of the problem is pretty important in that a problem with the assembly-line testing can potentially lead to closing down our assembly line. CHAIRMAN JACKSON: Well, if you never get your cars certified, you never have to worry about the assembly line. MR. PETERSEN: The technological problems ought to be solved, you know, before we jump into that. CHAIRMAN JACKSON: Are you certifying, are you emission testing right now for '78 certification? Do you anticipate that you are going to be certified for 1978? MR. PETERSEN: I don't think the problem's resolved yet. CHAIRMAN JACKSON: Will it be resolved in time to get a certificate for 1978? MR. SCHWOCHERT: We can't say that for sure, but we are to answer your first question, we are presently testing, yes, for 1978 certification. CHAIRMAN JACKSON: But it just argues to me that once you get the problems and arguably you are going to be certified for '78 or you don't have to worry about the problems 5 R. WILSON SHORTHAND REPORTERS MIS) 843.31! ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 _ ฃ3 GM of the assembly line. But once you get certified in '78, what is it that makes it impossible to reproduce whatever you are going to do in certification in the same labs or in the labs that you are going to use for assembly-line testing? And I presume that you don't have to use labs all over the country. You could bring the cars to Milford and test them, couldn't you, because you are going to be limited to those you certified. You are talking about your high-volume units only. MR. SCHWOCHERT: What is true, Mr. Jackson, is as far as the differences that are being observed on those, we are seeing changes in the levels that are being measured at various laboratories. And I guess at some point in time someone will have to say, "Yes, that vehicle does certify." For example, EPA Ann Arbor Lab will have to go with the levels that are being measured at the point in time when they make a decision on certification. The vehicle, the configuration, certifies or does not certify. If changes should continue to be made in instrumenta- tion that would measure yet higher levels later on on that model year production, then you would be subjecting the rest of the production to some measurement changes that had occurred as a result of the improvement in the technology associated with hydrocarbon measurement that didn't exist at the time of certification, or knowledge that did not exist at that time. And that's the point that we are trying to bring up, I guess, that there is a little uncertainty about what the 5 R. WILSON SHORTHAND REPORTERS (418) 343-3194/461-3098 ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 44 GM true emission levels are or will be agreed upon. So while we are trying to agree upon this, let's measure some production vehicles, gain some background and use that information to then do a better job in 197 9 in measuring what you know, agreeing on what the procedure should be to measure the level. CHAIRMAN JACKSON: Now, with regard to the issue of the idle test analyzer, you are of the opinion that there is no equipment available for this, and you are making a technological argument in that area, that it is technologically infeasible to do it because the equipment to do it is not available. Is that it? MR. SCHWOCHERT: That's basically correct. One can make the measurement with today's existing equipment. We question whether this will have any meaning, and that's basically what we are suggesting: that until there are some manufacturers that do develop some equipment to measure idle emissions from diesels, then we should consider excluding this requirement1from diesel-powered vehicles. CHAIRMAN JACKSON: Have you talked with the CARB about this? MR. SCHWOCHERT: Yes. They referenced this in their discussion. We have talked to them about this over the phone, but didn't resolve the issue, obviously. We just discussed it. And I think we both recognized that maybe today's instruments do not respond equally between diesels and gasoline- powered vehicles. The certification test requirements were also 5 R. WILSON SHORTHAND REPORTERS (419) 543-3U4/481-3098 ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 45 GM discussed with the ARB at a workshop, but this specific subject of using one year's data for informational purposes only was not discussed. The instrumentation discussion has gone on between us and ARB, but not the CHAIRMAN JACKSON: This would go beyond your concern about the one-year use of informational data on configurations that were not subject to certification testing? MR. SCHWOCHERT: The idle testing? CHAIRMAN JACKSON: No, I'm jumping back to the other, the other issue now. In other words, they made the statement that for the assembly-line testing that they are talking about in '78, that they wouldn't make it applicable to those configurations that were not certification tested. And does that particular relief give you any kind of help for this situation? MR. SCHWOCHERT: No, it does not, because the high volume, the high-volume configuration, would still require testing. And, of course, that's what we would be concerned about. CHAIRMAN JACKSON: How many vehicles are we talking about? MR. SCHWOCHERT: Total production. CHAIRMAN JACKSON: Well, two percent of total production is all we are really interested in. MR. SCHWOCHERT: We will submit that information for the record if you would like it, Mr. Jackson. CHAIRMAN JACKSON: I'm just trying to understand the magnitude of the problem here, which seems to be your basis for 5 R. WILSON SHORTHANO REPORTERS (4181 343-3194/481-3098 ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 asking us to deny what they want to do in 1978. Seems like some more detail would be appropriate in terms of what kind of specific impacts you are talking about. You are really talking about, as I see it, a technological end feasibility argument with regard to the measurement equipment and your ability to put it on the assembly line. And, quite frankly, the argument has not been made very well. It's not very convincing, as I see it now. It may be there. There just doesn't seem to be a lot of trappings on it. MR. NELSON: Perhaps, Mr. Jackson, we could clear up the problem a little better by explaining some of the exact test results we have obtained when we compared General Motors laboratory results with those of EPA. And some of this is very, very concerning to us because, in a period of a month'3 time, we find different emission results from what appears to be the same vehicle. Mr. Schwochert will discuss some of those details. MR. SCHWOCHERT: If we consider some correlation testing that has gone on between our certification laboratories and the Ann Arbor laboratory, we find that well, if we go back to September of '76 through April of '77, we find that on several sets of vehicles, that the variation between GM laboratory and EPA laboratory varied from 13 EPA being 13% lower to 4 3% lower over the period of September to March. The vehicle which was 13% lower at EPA in March was the same vehicle that was tested in April at both laboratories. EPA laboratory measured this specific vehicle about 10% higher in 3 R. WILSON SHORTHAND ftgPOftTFAA ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 47 GM April, and our laboratory measurements on this vehicle remained constant. And in all cases, we are talking about repeat tests of two or more tests in each laboratory at each point in time. So we have seen a change from considerably lower emission levels at EPA to somewhat higher emission levels over the last few months. And it's this type of change that we are concerned about. CHAIRMAN JACKSON: Are you doing any similar work with the CARB? MR. SCHWOCHERT: No. On diesels, we are not doing any correlation work with them. MR. PETERSEN: This kind of inconsistency can possibly be clarified or corrected for certification purposes, but we can't we can't live with this kind of uncertainty on assembly-line testing where you are dealing with a go/no-go decision on the assembly line. I think EPA has a great deal of flexibility in the certification area. And this kind of inconsistency and lack of correlation between data can be more easily resolved for certification purposes than it can for assembly-line com- pliance purposes. CHAIRMAN JACKSON: Okay. What was the other topic here? MR. NELSON: Mr. Jackson, if you would like, we would be happy to present our statement on California Title 13 testing. Or if you would like, we can come back and submit that one whenever the subject comes up, if you want to i R. WILSON shobthano reporters (415) 343-3194/461-3098 ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 GM 48 handle them separately. CHAIRMAN JACKSON: You are talking about the com- pliance and inspection testing MR. NELSON: Yes. CHAIRMAN JACKSON: of '77? MR. NELSON: Yes. CHAIRMAN JACKSON: We will listen to that right now if you want. MR. NELSON: First of all, Mr. Presiding Officer, I would like to indicate that General Motors will submit a copy for the record. We did not get copies available for this particular hearing. Although this is only one of the many subjects to be covered in the next several days, General Motors is appreciative of the opportunity to comment on Title 13, the California Title 13 test procedure that is being considered by EPA at this hearing. General Motors has one major problem with this Title 13 test procedure. That is, it is not consistent with the other test procedures which govern certification and assembly-line testing. This comment is not new, but one which we made to the California ARB on June 24, 1976. Basically, we are concerned about the different treatment of a vehicle engine family in the certification and assembly-line test procedure and the use of subfamily or sub- group in the present Title 13 test. We believe it is unfair for a manufacturer who, in good faith, has complied with the i R. WILSON SHORTHAND REPORTERS (418) 543*3194/461 *3098 ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 GM 49 first two test requirements to be later evaluated by a different set of rules. Perhaps some discussion of the details will help explain the area of concern that we have. The assembly-line test requires that the vehicle manufacturer test, on the quality audit portion of the test procedure, a sample size of at least two percent of the vehicles built with engine families that have been certified for California sale. This particular portion of the assembly- line test, the quality audit test, also requires that the sample must be representative of a hundred percent of the vehicle configurations certified and built for California sale. The Title 13 test procedures, which are claimed to be an ARB check on data submitted by various manufacturers, would now permit ARB to select a small subgroup of vehicles from an engine family for testing. This subgroup can be any combination of engine, fuel system, drive train and vehicle configuration. Certainly, when the random two percent sample often a number of tests approaching several hundred is compared with test results from a small subgroup of vehicles, the average test results may, in fact, be different because of different sampling techniques. This is an apples-and- oranges comparison. It does not provide the stated objective of a cross-check of the manufacturer's data but, instead, merely proves that a small subgroup may, and probably will, be different than the average of the complete engine family "HOMAS R. WILSON acenQTcaa ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Thus, the procedure being considered here does not accomplish the main objectives stated by ARB, and it may also subject the manufacturer to the loss of the right to build vehicles which have passed California certification and assembly-line tests. We assume that EPA does not want to condone and approve the use of a test procedure that potentially penalizes a manufacturer unfairly. If EPA grants the requested waiver, it should do so with the condition that subfamily or subgroup be deleted from the test procedure. CHAIRMAN JACKSON: I think, just for purposes of clarification, you are right in what you understood just based on the testimony of the CARB earlier today, and that is they do intend to apply their Title 13 compliance testing to subgroups of vehicles. MR. NELSON: That is the understanding we have, and that's the basis for making the statement we made. I am confused, Mr. Jackson, that ARB seems to be asking for a waiver on additional things from what we under- stood from the notice. The dealership inspection, for example, we did not realize that it was going to be considered at this hearing, and we would respectfully request the oppor- tunity to supply written comments. This is a test procedure that was billed as being consistent with the certification process. It definitely is not. It disables a portion of the emission control system and requires emission measurements at idle that do not correspond to anything that's required in 3MAS R. WILSON IPIED SHOBTHANO REPORTERS (4181 543-3H4/4g1-3naซ ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 the certification process. It seems to me to be a separate subject that ought to be, in my opinion, appropriately announced for hearing. We have had a little problem with a particular engine that does not have an idle CO adjustment, and because the value doesn't meet, the idle CO value doesn't meet a pre- scribed level by ARB, the dealer has to make an adjustment. And that's impossible, and we have not been able to get ARB to agree that that idle CO value, which is the certified value, is acceptable because it's above the value that was previously determined as their guideline and test procedure. We have comments such as those that we certainly want to submit for the record because we did not understand that that portion of the inspection was being considered. The assembly-line test has an inspection procedure that we did not object to because we assumed that that was the inspection that was being discussed at today's hearing. CHAIRMAN JACKSON: In other words, you didn't realize that they were talking about the inspection portion of their inspection and compliance testing procedure; is that right? MR. NELSON: That's correct. CHAIRMAN JACKSON: As it was described by Mr. Austin earlier, that was new to you? MR. NELSON: That was new for the purpose of this hearing, yes. CHAIRMAN JACKSON: And you are suggesting that some way the notice was deficient? 5 R. WILSON SHORTHAND REPORTERS (419) 543-3194/461-3098 ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 GM 52 MR. PETERSEN: I think we would be satisfied in submitting comments for the record before the record closes on this. CHAIRMAN JACKSON: Fine. Well, we invite those comments, whatever they are. MR. PETERSEN: The dealership inspection program specifically is what Mr. Nelson refers to where the Board disconnects air pumps on cars and performs idle emission tests. CHAIRMAN JACKSON: No, we know that they do that. MR. NELSON: Yes, sir, that's correct. CHAIRMAN JACKSON: This is with regard to passenger cars? MR. NELSON: And light-duty trucks. CHAIRMAN JACKSON: But you are talking about some- thing they have done in the past, I assume. MR. NELSON: It has been done, yes. CHAIRMAN JACKSON: And you are talking about that with respect to light-duty vehicles? MR. NELSON: Yes. CHAIRMAN JACKSON: Not anything else? MR. PETERSEN: I'm not sure what you mean. CHAIRMAN JACKSON: Well, light-duty passenger cars, or does it include light-duty trucks or anything else? MR. NELSON: I'm not sure of the exact categories. It definitely applies to light-duty vehicles, light-duty cars and trucks. CHAIRMAN JACKSON: With regard to your concerns about 5 R. WILSON SHOHTHANO REPORTERS (415) 843-3194/461 -3098 ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 GM 53 the subgroup argument, what's your position? Are you suggesting that some groups of cars don't have to meet the standards and other groups do? MR. NELSON: No, sir. The certification process allows the regulatory authority to pick those cars they want to evaluate. It's a similar problem as we heard described earlier on the truck issue: that the regulatory agencies have recognized that there is a big burden associated with picking a large number of vehicles, so they select the vehicles that appear to have the highest emission potential from the certifi- cation fleet; and then as long as the rest of the vehicles have the same hardware and calibrations, it has been accepted by EPA and ARB in the past that those vehicles are, therefore, certified. So that gives the manufacturer a license to, so to speak, a license to do business. Now they come along to an assembly-line test, and those requirements are very well spelled out and the evaluation is spelled out. But it's on the total engine family basis. Either 90 percent have to comply or, as Mr. Austin mentioned earlier, the average for that vehicle family times the deterioration factor must comply. And then the third step of the test procedure is a different evaluation where you can look at a small subgroup and make a different determination than you do from the total assembly-line test procedure. CHAIRMAN JACKSON: Have you got some sort of an argument, mathematical argument, that will show that in some i R. WILSON SHORTHANO REPORTERS (415) 543-31(4/461-3098 ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 GM 54 way this prejudices the manufacturer that's making cars and meeting the standards? MR. NELSON: We can certainly come up with a mathematical argument that will illustrate the point very clearly. CHAIRMAN JACKSON: Is it realistic? MR. NELSON: Sure. From samples of data that we have already obtained, or theoretical textbook type of analysis, that will accomplish the objective. And the problem that we see is that the manufacturer who, in good faith, complied with the first two steps, then has a different set of rules for the third step. CHAIRMAN JACKSON: What I get out of this is, what you are telling me is that, unless in certification they test each and every possible subgroup, that you shouldn't anywhere else evaluate that particular subgroup for compliance? MR. PETERSEN: I think what Mr. Nelson is saying is that it seems fundamentally unfair to us that a manufacturer can certify his vehicles under one set of rules, build vehicles which are in all material respects substantially the same design, specs as the certification vehicle, be subjected to an assembly-line test and comply with that assembly-line test, and still have to jump over another hurdle which has inconsistent rules with the first two requirements. CHAIRMAN JACKSON: Well, is it a technological argument? I mean you can show that you are going to have to make some sort of design changes that are going to have implications of lead time and cost because of this alleged i R. WILSON SHORTHAND REPORTERS (414) 943-3194/441-30M ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 inconsistency? MR. PETERSEN: I think it's basically a due-process argument, and possibly a hardware argument, I mean. MR. NELSON: Mr. Jackson, I would like to submit that it would be a new requirement that involves the technical capability and lead time to get there if you had to demonstrate that each and every possible subgroup complies with the certi- fication requirement. That would require additional time and perhaps technology. CHAIRMAN JACKSON: But can you show that? The issue here is you are making a claim with regard to the testing of subgroups and the Title 13 program, and you are alleging that it will cause will be inconsistent and somewhat prejudice you. The issue is how? Is that for sure? Are we talking about one in nine chances or one in a thousand that this will ever happen in such a way that it will in some way prejudice the manufacturer who has gone through certification and assembly-line testing, or are we talking about one in two chances? I don't have any kind of appreciation for the magnitude of the concern we are talking about. MR. NELSON: We would be glad to submit that for the record, Mr. Presiding Officer. We have not looked at the exact percent of time that there could be a problem. We say that it's a different rule than what we took the first two steps on and, therefore, it looks like the possibility of having some very severe penalties and losses because we had a third test requirement which, in fact, was different than the first two. > R. WILSON SHORTHAND REPORTERS (41#) M3-31ป4/4ป1-3098 ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 GM/FORD 30 But we can attempt to approach statistically the problem you are describing. CHAIRMAN JACKSON: I think that would be helpful. Mr. Nelson, thank you very much. MR. NELSON: Thank you. CHAIRMAN JACKSON: Go ahead. MS. HELEN PETRAUSKAS: Mr. Chairman, members of the panel: My name is Helen Petrauskas. I'm an attorney for Ford Motor Company. The issues raised by this portion of California's request for a waiver of federal preemption, simply stated, are as follows: Are unique California compliance and inspection testing requirements, i.e., enforcement procedures relating to emissions from new motor vehicles preempted by the Clean Air Act as amended, and, if so, can preemption be properly waived by the Environmental Protection Agency in the case where the underlying standards and certification test procedures are identical to those adopted by EPA? Further, is a waiver proper if enforcement procedures are inconsistent with CARB certification and assembly test procedures, as well as Section 202(a) of the Clean Air Act? It is Ford's view that a waiver is required, and that no waiver cannot be granted for enforcement procedures where the underlying standards are no more stringent than EPA's or for enforcement procedures which are not consistent with Section 202(a). Section 209(a) of the Clean Air Act, as amended, 5 R. WILSON SHOHTHANO REPORTERS (415) S43-31MMH-3098 ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 FORD 57 clearly expresses a broad Congressional intent to preempt state control of emissions of air pollutants from new motor vehicles. The preemption applies to "any standard" and enjoins all states from adopting "certification" or "inspection" or any other "approval" relating to control of emissions from new motor vehicles. Moreoever, Section 209(a) prohibits in the dis- junctive the adoption or the enforcement of any form of new motor vehicle emission requirements. The language of Section 209 is so clear and unequivocal that no further con- sideration of this issue should be necessary. Even a superficial consideration of the effect of a finding by EPA that enforcement procedures are not preempted is sufficient to illustrate the disruption which could occur. First, such a finding would not simply relate to California but to all other states and political subdivisions thereof. Second, enforcement procedures could arguably encompass a variety of measures penalties, repairs, recalls, limitations on future sales limited only by the imagination of state and local legislatures. An EPA finding that enforcement procedures per se are not preempted could create an impetus to each of the states to promulgate unique enforcement procedures with respect to federal emission standards. Under these circumstances it is conceivable that enforcement measures adopted could be flatly inconsistent with federal enforcement proceedings. For example, in the case of a recall conducted pursuant to Section 207(c) of the Clean Air Act, is it in the i R. WILSON SHORTHAND REPOftTIRS <415> S43-3194/48 f-30M ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 FORD 58 public interest to require manufacturers to secure approval of a remedial plan not only from EPA but also from as many states cr state subdivisions as may elect to adopt unique enforcement proceeding? The answer must be no. Yet Ford can conceive no statutory or rational basis for distinguishing between preemption of an enforcement proceeding adopted by California and one adopted by any other state. Both are preempted with resepct to the one, California, under certain conditions this preemption may be waived. Ford has elsewhere recited in detail its views of the findings which must be made by EPA before preemption may be waived pursuant to Section 209(b). In this instance the most important of these are the following: (1) Are the California standards and certification test procedure in question more stringent than the federal counterparts? (2) If so, are the accompanying enforcement pro- cedure consistent with Section 202(a) of the Clean Air Act? Insofar as the 1978 and subsequent medium-duty truck standards are concerned, EPA has already found that the 1978 California standards applicable to medium-duty vehicles are more stringent than corresponding federal standards. I might add parenthetically that in connection with that grant of waiver, EPA agreed that compliance with the California certification procedure was deemed to constitute compliance with the federal heavy-duty engine requirements that may be applicable to the engines that are in those vehicles. 5 R. WILSON 8HORTHANO REPORTERS M1S4 S43-3194/481.309* ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 FORD 59 The federal standards and procedures applicable to motorcycles, on the other hand, are, in California's words, "equivalent in stringency to our own." Because the first criterion noted above is not met, it would appear that EPA's inquiry into the motorcycle portion of this matter should be at an end. Mr. Buist will now review the consistency problem we have with the enforcement procedure insofar as it relates to medium-duty vehicles. MR. DONALD R. BUIST: In the case of the enforcement procedures applicable to medium-duty trucks, one important issue requires resolution. Understanding this issue requires an understanding of the background of the 1978 model year medium-duty truck standards adopted by California. On March 31, 1976, CARB defined a new class of medium-duty motor vehicles and adopted standards applicable to this new class of vehicles. At the same time CARB directed the staff to hold a workshop at which proposals could be developed to deal with the lead time problems inherent in the action taken by CARB. On June 30, 1976, following the staff workshop, California adopted the test procedures applicable to medium- duty vehicles designed to alleviate, in part, these very stringent lead time and technological problems. As described by. EPA in the January 11th, '77, Federal Register. "The purpose of these changes is to minimize the certification effort and lead time problems by reducing the need for special medium duty durability vehicles, HOMAS R. WILSON ERTIFIED SHORTHAND REPORTERS (415) S43-3194/4S1-3096 ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 FORD 60 provided that the medium duty and light duty truck emission control systems are essentially the same. As stated by representatives of the Ford Motor Company, these changes permit 'carry-over* and 'carry-up' of California light duty truck engine codes into the medium duty class, and use of carry-over light duty truck deterioration factors. The changes also limit certification and quality audit testing to high volume transmission/inertia weight/ axle combinations of unique medium duty engine codes. These amendments will permit Ford to significantly reduce the number of unique, new engine codes or calibrations which will have to undergo certification testing." At the CARB staff workshop conducted one week prior to the adoption of the medium-duty truck standards, and in anticipation of this action, Ford recommended that the amend- ments to Section 2101 of Title 13 of the California Adminis- trative Code, adopted by CARB on June 24, 1976, expressly provide that so-called "Title 13" testing of medium duty vehicles be limited to the vehicles represented in the test fleet on the basis of which certification was granted. CARB declined to adopt this change and stated that this issue would be considered at the time CARB amended the 1978 Assembly Line Test Procedures. On January 25, 1977, CARB amended the Assembly Line Test Procedures applicable to 1978 and subsequent year passenger cars, light-duty truck and medium-duty vehicles. The staff report which accompanied the regulations acted upon at this hearing stated: I R. WILSON SHORTHAND REPORTERS (418) 343-3194/4(1-3098 ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 FORD 61 "This revision adds medium-duty vehicles to the assembly-line test procedures as this class of vehicles has been added to the standards and test procedures for the 1978 model-year. However, the selection of vehicles will be biased toward and compliance will be based upon configurations actually tested for certification." Accordingly, Section 3 of the applicable test procedure now provides: "Of the medium-duty vehicles chosen for quality audit testing, approximately two-thirds shall be from those configurations tested for certification and approximately one-third shall be from those configurations not tested for certification. The data from the two-third group will be used for evaluation according to Section C.5. of these procedures and the data from theฆ 6ne-r third group will be for information only." Unfortunately CARB has not taken any action to conform the so-called Title 13 compliance/inspection test procedures to its assembly-line procedures. This entire matter is further confused by the fact that the Notice of this proceeding (42 Fed. Reg. 19372) and Attachment "L" to CARB's letter of January 20, 1976 on its face would appear to apply to medium-duty trucks even though CARB's waiver request of January 20, 1977 nowhere mentions medium-duty vehicles. It is Ford's view that unless the test procedures referenced in subsection 2101(c) of Attachment "Lw are amended to restrict compliance testing rot 1978 and subsequent model i R. WILSON SHORTHAND REPORTERS (418) S49-9194/461-30M ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 62 FORD year medium-duty vehicles in a manner consistent with the 1978 Assembly Line Testing and Certification Procedures no waiver may be granted. The record before CARB and EPA clearly demonstrates that in the absence of such amendment, the lead time remaining prior to the 1978 model year is inadequate to enable compliance with this requirement. In this regard CARB's testimony before the EPA on August 25, 1976 is sufficient to illustrate this point. "... the ARB held a workshop with the manu- facturers which resulted in changes to the certification vehicle selection procedures on June 30, 1976. These changes minimized the certification burden and increased the available lead time by virtually eliminating the necessity for special medium-duty vehicle durability vehicles provided that the medium-duty vehicle emission control systems are essentially the same as the light- duty truck systems." The sole conclusion that can be drawn from the above cited testimony by the CARB is that lead time is inadequate to meet inspection tests which are different from and substantially more burdensome than the applicable certification requirements. I would like to add, Mr. Jackson, that we were very pleased that CARB entered into the record that they have no intention of Title 13 testing of medium-duty vehicles that are not of the same configuration that were used for certifi- cation. However, this is for 1978 I'm speaking now. CHAIRMAN JACKSON: I'm not sure they did that. 5 R. WILSON shorthand reporters (418) 543-3194/461-JOSS ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 FORD 63 MR. BUIST: It's our belief they did. They are indicating they did. CHAIRMAN JACKSON: Title 13 testing under the CARB procedures would not apply to medium-duty trucks, '78, other than those that were those configurations which were actually tested for certification. MS. PETRAUSKAS: The procedure on its face applies to all motor vehicles. For example, if you look at Section 2101, it says "any vehicle," "The Executive Officer may, with respect to any vehicle being sold, offered for sale," etc. If you look at the test procedure that's cross- referenced in Section 2101, that procedure likewise speaks in terms of any vehicle and all vehicles. At the time we made our recommendation to CARB to make these requirements consistent with both certification and assembly-line test requirements, we would have amended Section 2101 to indicate that compliance testing and vehicle selection should be limited to those vehicles which were tested under certification. The testimony this morning is a little bit confusing because, as Mr. Buist pointed out, we understood, at least in part, California to say that their intention is not to do testing of these other vehicles, that is, those that weren't tested for certification purposes. But the written testimony speaks in terms of And I am reading now from Page 6 of the CARB testimony: "We further ask that California be granted a waiver for inspection testing apart from its relationship to assembly-line testing for all vehicles." SR. WILSON SHORTHAND REPORTERS (415) 943-3194/461-30M ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 FORD 64 And I'm not sure I understand what that means. CHAIRMAN JACKSON: Inspection testing being that part where a visual examination as opposed to compliance testing, which is the CVS testing. MS. PETRAUSKAS: I wonder if you can give me a section reference on that, Mr. Jackson, because I don't know where I'm not aware of the procedure that spells it out. CHAIRMAN JACKSON: That's the question I asked when CARB was up here. That's why I asked it. MS. PETRAUSKAS: I'm curious. CHAIRMAN JACKSON: Mr. Austin, do you want to clarify this point for us, or just let us keep on muddling around? MR. AUSTIN: Perhaps I can clarify one of the points by referring to some language that's in our test procedures adopted June 24th, 1976, referring to the compliance testing. Ford has apparently looked at the first paragraph of those procedures and concluded that we intend to apply Title 13 enforcement testing to all medium-duty vehicles for 1978. That paragraph reads: "These procedures are applicable commencing with the '77 model year to any engine family or any subgroup within an engine family selected for compliance testing pursuant to Section 2101 of Title 13, California Administrative Code." That does seem to imply that we will be subjecting all subgroups of medium-duty vehicles to testing. However, the two following paragraphs read as follows: > R. WILSON SHORTHAND mpobtim (418) M3-31S4S4ซ1-30M ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 FORD 65 "The test procedure shall apply to any engine family or subgroup if the engine family is evaluated according to quality audit test procedure, Option 1, 90% pass rate, during assembly-line testing. Test Procedure 2 shall apply to any engine family or subgroup if the engine family is evaluated according to quality audit test procedure, Option 2, during assembly-line testing." Well, for the subgroups of medium-duty vehicles which were not subject to certification testing, neither one of these paragraphs apply, and it was our understanding it was our intent, therefore, to have those subgroups not subject to Title 13 testing. You only have two paragraphs here telling you how you apply the Title 13 test procedure to vehicles and if, in fact, Option 1 or Option 2 for assembly- line testing does not apply to a subgroup, then the compliance testing doesn?t apply to the subgroup. CHAIRMAN JACKSON: That's certainly one way to get there. MS. PETRAUSKAS: I wonder if I can make a comment. If I understand the 1978 assembly-line test procedures correctly, it is a requirement of the test pro- cedure that one test vehicles other than those selected for certification, but the results of that test will not be used in any compliance determination. MR. AUSTIN: That's correct. MS. PETRAUSKAS: So that all vehicles, including those not tested for certification, are vehicles subject to i R. WILSON SHORTHAND REPORTERS (415) 543-3194/481-309# ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 FORD 66 assembly-line test requirements. MR. AUSTIN: Right. But not for enforcement purposes. And we have, I think, been assuming that, if the manufacturer was in no jeopardy, they would have no particular problem with subjecting subgroups to testing for informational purposes only. MS. PETRAUSKAS: Well, Mr. Austin, I don't think we want to beat this one to death much more. I think it's important that any waiver decision reflect the understanding of what the requirements are. MR. AUSTIN: Well, we have stated our intent for the record. This language is not as clear as it probably should be, but that is the way we intend to conduct the program, not to jeopardize the subgroups which were not subject to certification testing for the '78 model year. CHAIRMAN JACKSON: Thank you, Mr. Austin. Does that leave you with continuing concern about the compliance testing for other groups of vehicles? MS. PETRAUSKAS: The concerns we have And they are the ones that are discussed on the first several pages of our statement relate to the fact that California in its January 2 0th letter, January 20th, 1977, letter to EPA puts the issue in terms of need one obtain a waiver for enforcement procedures. Put another way, that same issue is: Are enforcement procedures preempted? The purpose of the first three pages is to say yes, enforcement procedures are preempted, and for the very reasons stated, they must be preempted. i R. WILSON SHORTHAND REPORTERS (415) S43-3194/481-3098 ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 FORD 0/ CHAIRMAN JACKSON: Okay. But getting back to the question, which was: Do you still have problems with the subgroup testing as it relates to other classes of vehicles as opposed to just medium-duty trucks. We have found through clarification by the CARB that they don't intend to use the Title 13 testing on any subgroup that was not subject to actual testing and certification, as well as assembly-line testing. MR. BUIST: Well, I guess we have concern with subgroups. But we have discussed it with CARB at previous workshops. It was our understanding from the workshop that subgroups would be tested only if there was a reason, there was cause to test them; that we would be notified prior to the testing what that particular subgroup represented and why CARB was going to test it, and that the determination of, or the final judgment as a result of testing that subgroup would be addressed under 2101(c), Title 13, which reads that, "The Executive Officer shall consider quality audit test results and any additional test data and other information provided by the manufacturer, prior to reaching a decision." And I guess under those conditions, we are satisfied. CHAIRMAN JACKSON: But you don't have any problems with it, though? It doesn't create the same problem in your mind that General Motors articulated earlier? MR. BUIST: No, I guess not. CHAIRMAN JACKSON: Now, with regard to the question of about whether it needs to be whether it is subject to preemption or not, I'm sure you have read our documents which i R. WILSON SHORTHAND reporters (416) S43-3194/46I-30M ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 FORD (TSf reflect on our view of this, that if if these procedures are in connection with the assembly-line test procedure, it, indeed, is an additional compliance measure that should not incur anymore any technology problems or any lead time problems. In other words, you can view it as sort of covered under the concept of the assembly-line test procedure. Taken by itself without the companion assembly-line test procedure, if a rationale would have to apply and, yes, indeed, I would suggest that it would be the proper subject for consideration for a waiver. Taken in the context, though, of an assembly-line test program in place, then these procedures are merely, as they have pointed out, as the CARB has pointed out and as we have agreed with them, a check procedure to assure what they saw by virtue of the manufacturer's testing on the assembly line is reflected in cars that actually get out to the dealer- ships . So I think if you companion the program, you have got a different argument. Taken by itself, these compliance testing procedures may be a true subject for consideration of a waiver. And I think if, as long as we look at it like that, we don't have to worry about your fear of other states coming in and willy-nilly adopting such things, because they weren't considered something that should have been preempted and a waiver granted. Do you follow me? MS. PETRAUSKAS: Let me restate what I think I understood you to say. 5 R. WILSON SHORTHAND REPORTERS (419) 643-3194/481 '3091 ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 FORD 69 First, you said that enforcement procedures may be eligible for a waiver of preemption, depending on what the underlying if the underlying standard is eligible. CHAIRMAN JACKSON: Right. Right. In other words, you have embraced within the concept of a waiver a number of different things that fall within it, starting with the standards and then certification and then assembly-line testing, and there are other things. So there is only one state that can be granted a waiver for those things, that broad waiver concept, and they have been granted a waiver in that context. And in one particular instance, not before us today, we have agreed that the compliance inspection test procedures were covered, or were a part of another waiver because they didn't involve an additional burden. They were merely an enforcement-checking technique. Okay. Because they were in companionship with certification and assembly-line testing, okay? Now, if we were looking at compliance inspection and testing by itself without these other measures for which we have the umbrella we described, they may be proper subjects for waiver consideration. MS. PETRAUSKAS: I don't know if our difference is really semantical. I'm saying that all of those requirements are preempted. Some of them may be eligible for a waiver of preemption. CHAIRMAN JACKSON: They are preempted, correct, but it depends on where they start from. If you start from 5 R. WILSON SHORTHAND REPORTERS (415) S43-31ซ4/4ซ1-30M ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 FORD/CARB 70 compliance and inspection test procedures, then it may be a subject for consideration of preemption. But if it's a part of another program that's already been granted a waiver MS. PETRAUSKAS: But in any case, it6 eligibility for a waiver would be determined the way it always is, and that's namely by satisfying the requirements of Section 2101. I don't think we are saying anything different, Mr. Jackson. CHAIRMAN JACKSON: I don't think so, either. I just thought it would be helpful to clarify with regard to the first remark you made about where we are coming from on this because there is a potential for confusion in the way that we have handled this precise issue in connection with another control program. MS. PETRAUSKAS; All right. CHAIRMAN JACKSON: Thank you very much. We find ourselves in a most unusual predicament. We find we are ahead of schedule. We have never been ahead of schedule before. We don't know what to do. We are going to ask that the California Air Resources: Board present their statement with regard to reconsideration of the October 1, 1976, motorcycle waiver. We will take that testimony and then break for lunch. MR. AUSTIN: On the subject of exhaust emission standards for motorcycles, in our letter to you of November 1, 1976, we stated our position that since California's exhaust emission stnadards and test procedures for 1978 through 1981 model-year motorcycles were identical to those adopted by EPA, we would not require manufacturers to obtain a separate 5 R. WILSON SHORTHAND REPORTERS (418) 843-31ซ4/461-3098 ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 CARB 71 California approval prior to sale in California. We also indicated that we intend to enforce the federal and California emission standards pursuant to Section 43008 of the California Health and Safety Code. The enforce- ment procedures which we will shortly adopt will be the subject of a future waiver request. No waiver is required for any actions taken to date with respect to 1978 through 1981 model-year motorcycles since California's standards are now identical to EPA's. And that, of course, is subject to the manufacturer submitting certain documentation to the ARB and to continued validity of EPA's standards and test procedures. When we adopted it, adopted the EPA standards for our own, recently we put a provision in our procedures that, should the EPA procedures be struck down subsequent to legal challenge, that the California test procedures would auto- matically revert back to the old procedures for which we were already granted a waiver; and should EPA decide that there is no particular problem in us enforcing federal standards in California, we would like some recognition of our language. That reason states the procedures formerly granted a waiver in that decision. The only item we believe to be subject to discussion regarding motorcycles is the issue of California's 1982 motor- cycle emission standard of 1.0 gm/km, as defined under the new test procedures. In our opinion, the Administrator can only reconsider his waiver allowing California to implement the one gram per kilometer standard in 1982 if he finds that the change 5 R. WILSON SHORTHAND REPORTER8 (4181 S43-31M<4ai.30M ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 CARB 72 from the original California test procedure to the new federal test procedure impinges on lead time or technological feasi- bility. However in his October 1, 1976 decision, the Administrc tor indicated that he was granting California a waiver for the 198 2 hydrocarbon standard, even though he could not find that the requisite technology existed at the time of his decision, because he anticipated that there was sufficient lead time to develop such technology and apply it to most motorcycles. We fail to see how the test procedure changes adopted by California could affect that judgment. The test procedures adopted by EPA differed from those used by California to obtain its motorcycle emissions standard waiver in the definition of useful life, test vehicle requirements, provisions concerning adjustability, and minor test procedure changes. The differences in useful life definitions were differences in language, and have no effect on the period of time manufacturers are subject to the emissions control warranty. The EPA test vehicle require- ments are, if anything, less stringent than the ones originally adopted by ARB, and consequently this change should, if anything, improve the manufacturers' abilities to meet California's 1982 standard. EPA's provisions concerning adjustability of emissions related components should not have any impact on technological feasibility, since these provisions relate primarily to adjustment technology, and are quite independent of the basic emissions control system. Finally, the technical test procedure changes are 5 R. WILSON SHORTHAND REPORTSM (41S) 543-3194/481-3098 ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 CARB 73 basically minor in nature, and should have no discernible effect on the manufacturers* ongoing research and development programs. Consequently, we believe that the Administrator cannot withdraw the waiver previously granted to California for the one gram per kilometer hydrocarbon standard for 1982 and subsequent model motorcycles. I have not included a discussion of technological feasibility of the one-gram standard in my prepared statement for the reasons cited in the statement that we don't believe that's necessarily an issue since the Administrator felt in his decision of last year that it wasn't necessary to make a finding of technological feasibility at this time because of the amount of lead time remaining and the fact, I assume, that the standard was significantly less stringent than standards which already have been applied to similar types of engines used in motor vehicles. If, however, EPA believes it's necessary to have some discussion of technological feasibility of a one-gram standard in the transcript of this hearing, we would be prepared to get into that to some extent, either now or perhaps after we have had comments from the manufacturers. CHAIRMAN JACKSON: I think it would be important to provide your view with regard to that in a little more detail than you have provided here, the effect of the changing standards on your or the change in test procedures on your standard and technological feasibility thereof. And I don't accept your restatement of the Administrator's position with regard to his finding of 5 R. WILSON SHORTHAND rmortim (418) M3-3184M#1-30M ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 CARB 74 technological feasibility, and I would refer that back or my interpretation back to the Federal Register notice of precisely what he said just for purposes of clarification, because I think your restatement was just a little bit different than the way the Administrator stated it in his decision. With regard to your request for continued submission of certification documents, what is your view on a manu- facturer failing to make those submissions timely to the CARB? MR. AUSTIN: Our view is that a manufacturer who fails to make that documentation available to us should not be allowed, will not be allowed to market his product in the State of California. CHAIRMAN JACKSON: Under what authority? MR. AUSTIN: We have under the because of the fact that we are adopting EPA's standards and procedures as our own and intend to enforce those procedures, making our motorcycle control program more stringent than the EPA program and, therefore, allowable under 209 of the Clean Air Act as an independently conducted program. MR. MACOMBER: Mr. Jackson, our regulation, Section 1958, also says, and I am quoting here from Subsection (e) with reference to the document requirement, "The above information," quoting now, "The above information shall be submitted for each engine family prior to sale or offering for sale of 1978. through '81 model year motorcycles in California." 5 R. WILSON SHORTHANO REPORTERS (418) 543-3194/441-3098 ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 CARB 75 CHAIRMAN JACKSON: So it is in this context a prerequisite to sale? MR. MACOMBER: Yes. CHAIRMAN JACKSON: And, therefore, a matter subject to preemption under Section 209? MR. AUSTIN: Yes. MR. MACOMBER: We would have to agree with that. CHAIRMAN JACKSON: Now, this situation is somewhat different than what we have talked about before where we have talked about compliance and inspection test procedures after or following on to assembly-line test procedures as a mere means of checking on what the Administrator what the manufacturers have done pursuant to the assembly-line test requirement. Here you are saying that you are going with these compliance and inspection test procedures in the absence of a CARB assembly-line test program? is that correct? MR. AUSTIN: No, no, no. We are saying that we have yet to act on the assembly-line test procedures and compliance procedures for motorcycles, and we believe that that will have to be the subject of a future waiver hearing. CHAIRMAN JACKSON: So the basis for your request for inspection, compliance testing and inspection, at least compliance -testing, in this context is somewhat different than it is in the case of passenger cars and heavy-duty trucks? MR. AUSTIN: We are not here seeking a waiver for compliance testing of motorcycles at this time. CHAIRMAN JACKSON: That's right. You asked us to 5 R. WILSON BHOBTHANO REPORTERS (419) 543-31M/4ฎ1-3098 ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 CARB 70 put that off and consider it after you have made some sort of amendment or change to the approach. MR. AUSTIN: That's right. We believe that we will have to we will have to come up with a special package for motorcycles because of the fact that they are handled differently, they are prepared differently. We are going to have to have a fairly detailed set of regulations addressing how vehicles will be prepared for tests by the Air Resources Board, and we think that should be the subject of a waiver hearing. CHAIRMAN JACKSON: Now, will that be in the context of an assembly-line test program? MR. AUSTIN: We are not planning to conduct an assembly-line test program for motorcycles in the 1978 model year. We are planning to conduct a compliance testing program alone without assembly-line testing. For that reason, we believe it will probably be necessary for us to seek a waiver of the compliance testing program because we can't use the same approach that's been used on other motor vehicles where the compliance program is little more than an extension of the assembly-line program, because there won't be an assembly-line program for motorcycles, at least not for 1978. CHAIRMAN JACKSON: Do we need to make a decision on the submission of the application now as opposed to after you have come forward with your program for which the application will be required? MR. AUSTIN: I think now you have to make a HOMAS R. WILSON RTIFI60 SHORTHAND REPORTERS (413) S43-31M/4S1-309S ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 CARB 77 decision on the appropriateness of the language we have adopted in Title 13 which requires the submission of certain documents to us and gives us the right to I believe right now, Kingsley Correct me if I am wrong we are also seeking the right to be able to inspect vehicles which are offered for sale in California to see if, in fact, they are built in conformance with the certification documents which we are requesting be submitted to us prior to sale. We are not here seeking a waiver for any testing program at this time. We are only here seeking a waiver of the provisions which have been adopted in Title 13 requiring submission of certain documentation to the State of California and for our right to be able to inspect motorcycles sold in California that were certified under the EPA procedures and standards, which have also been adopted as our own. CHAIRMAN JACKSON: But those procedures, those inspection procedures, have not been finalized; they are not before us. MR. AUSTIN: We are not planning to We are not planning to put together specific inspection procedures for motorcycles. Again, we want the we intend to conduct the inspection as we do with passenger cars and trucks. That is we only intend to look at the vehicle visually to see if proper part numbers are on the fuel metering system, if the proper hardware is installed. Basically, we are just looking for compliance with the Part 2 certification application. That serves as the boundary for the inspection program. CHAIRMAN JACKSON: And for what years is that? 5 R. WILSON SHORTHANO REPORTERS (41S) 543-3194/461-3088 ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 CARB 78 MR. AUSTIN: 1978 and subsequent. CHAIRMAN JACKSON: Under what authority are you going to conduct the inspection testing of California law? MR. MACOMBER: Well CHAIRMAN JACKSON: Just your cite, Title 13, and then what? MR. MACOMBER: We would adopt regulations into Title 13, make appropriate amendments there, but the references will be to the Health and Safety Code. Do you want those specific references now? I can give them to you in a minute. CHAIRMAN JACKSON: It's not under 2101 of the Section 2101 of the existing regulation? MR. MACOMBER: It's conceivable we would amend that section to incorporate compliance testing procedures for motorcycles. We could also add another section, 2101.5. We just haven't decided the mechanics of how we are going to do it yet. CHAIRMAN JACKSON: And you don't have you don't believe you have, unless in the context of the Under what authority do you believe you have the right to conduct your inspection tests? MR. RUBENSTEIN: 2101 of Title 13, California Administrative Code. 2101(a) and (d) in particular for inspection testing. MR. MACOMBER: Which, in turn, is based upon a provision in the Health and Safety Code which requires that all production vehicles be substantially the same in con- struction in all material respects as the certification i R. WILSON 8H0ATHAN0 REPORTERS <41ซ (M3-31*4/411.3008 ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 CARB ?9 vehicles. CHAIRMAN JACKSON: Your telegram of May 2nd, 1977, asked that states that: "This will confirm that Item 1 for the May 16th, 1977, waiver hearing in San Francisco entitled Compliance and Inspection Testing of '77 and subsequent model year motor vehicles except *77 and '78 model year gasoline passenger cars and light-duty trucks should not extend to compliance and inspection testing of motorcycles. We intend to hold a public hearing in June, 1977, to establish specific procedures for guidelines and inspection testing of motorcycles. Thereafter, we will apply for a waiver with respect to compliance and inspection testing of motorcycles." MR. AUSTIN: Okay. The problem is that in that context, we were talking about compliance and inspection test procedures as the package of procedures that we use during the the Title 13 surveillance testing, the testing that's conducted at the Board's laboratory. That's both CVS testing in combination with a detailed review of the hardware that's used on the vehicle. Perhaps we didn't make ourselves clear, but we believe that, when we are granted authority to or waiver of federal preemption to conduct certification testing, that implicit in that approval is the authority for us to inspect vehicles that are sold subject to that certification or approval to see if they are, in fact, similar to the certified vehicles. i R. WILSON SHORTHAND REPORTERS ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 CARB 80 In the context of our mailgram of May 2nd, we were talking about compliance and inspection testing procedures as a package referring to the program which is conducted on other motor vehicles at the Board's laboratory wherein we require a sample to be delivered for CVS testing. And as part of that program, we also conduct some inspection tests of the vehicle, usually inspections which are more detailed than the general type of inspections that we think we implicitly should have we implicitly receive authority for when we are granted an approval to conduct a certification program. CHAIRMAN JACKSON: Okay. Then with regard to your inspection activity, that's all we are talking about now is just the comparison of the parts and the authority for them to submit to you an application for certification? MR. AUSTIN: Yes. CHAIRMAN JACKSON: That's a matter subject to consideration for waiver to give you that authority to sanction them if they don't submit to you an application? That's really what we are talking about here? MR. AUSTIN: Basically. Kingsley, do you agree with that? MR. MACOMBER: Right. I think you can separate it, the issue of compliance and inspection testing. CHAIRMAN JACKSON: So really all you are trying to do is confirm that certified vehicles vehiclescertified by the federal government for sale in California, indeed have the parts on them in accordance with their application sub- mitted to the federal government? i R. WILSON SMORTHANO REPORTERS (A 181 ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 CARB 81 MR. AUSTIN: Yes. MR. RUBENSTEIN: That's correct. MR. DRACHAND: Up to 1981. CHAIRMAN JACKSON: Now, how do you argue that that's more stringent? MR. AUSTIN: The federal government does not have a program for inspecting motorcycles sold in the State of California to see if they are, in fact, built in conformance with the certification application. At least we are not aware of any program. CHAIRMAN JACKSON: But you are suggesting that by itself is a stringency measure? MR. MACOMBER: Yes. MR. AUSTIN: Yes. CHAIRMAN JACKSON: There is no argument about the standards. At least until 1982, the standards are the same as the federal standards; the test procedures are the same as the federal test procedures; it's just an additional measure which looks at, at least for right now, comparison of parts MR. RUBENSTEIN: That's correct. CHAIRMAN JACKSON: for the application? MR. AUSTIN: That's correct. CHAIKMAN JACKSON: Okay. MR. AUSTIN: This reminds me gets back to a question you asked earlier about whether the Board had ever taken enforcement action against a manufacturer for selling vehicles which were not built in conformance with the HOMAS R. WILSON iATiFieo bhorthano ntPoirriM (419) S43-3*MHซt40M ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 CARB certification application, and I think perhaps our answer on that was inaccurate. MR. RUBENSTEIN: No, we said no with respect to used vehicles. The answer, I think, is probably yes with respect to new vehicles. Again, it's not clear whether we ever, in fact, got to court on the issue, but we have, in fact, taken action and gotten to the manufacturer. MR. AUSTIN: Yes, the State of California has taken action against several people attempting to market vehicles in the State of California which were not certified for sale in the State of California; in fact, were not certified for sale in the United States of America. And under the sections of Title 13 we are talking about here, we would have our authority to enforce the federal certification requirements extended to motorcycles. And that's an authority which we think has some significance. It increases the effectiveness of the program because, in fact, we know that without an enforcement program in this area, vehicles do make their way into the state and are sold that are not in compliance with the certification, with the certified configurations of vehicles. CHAIRMAN JACKSON: I have a question here submitted by Mr. Bullwinkle. MR. BULLWINKLE: That's right. CHAIRMAN JACKSON: Is that correct? MR. BULLWINKLE: Yes. Thank you. CHAIRMAN JACKSON: Of Kawasaki Motors. His question is It's to Mr. Austin isn't it JR. WILSON SHORTHAND REPORTERS (41S) 843-31S4/461-30M ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 CARB 8 3 ARB's burden to justify the one-kilogram one-gram per kilometer EC standard for 1982 in terms of feasibility, lead time and economic reasonableness? Please do so so that the manufacturers here will have something to respond to. Before you respond, I might add that a waiver has been granted for that standard. After deliberations in a proceeding similar to this, the Administrator has made a determination with regard to a one-gram per kilometer standard. It's on the books. The issue here seems to be the change in the test procedure that would that has been adopted by the CARB and its effect on the technological feasibility of that standard. And that's the part that I asked Mr. Austin to respond to in addition to what he has presented here in his statement. And if you want to go beyond that, you certainly can. But I think it should be narrowed to the confines of the effect on the technological feasibility of that standard being brought about by the change in test procedure. MR. AUSTIN: Well, I think the question is irrelevant to the issue as to whether the change in test procedure has any impact on the feasibility of a one-gram standard. Further, I might add CHAIRMAN JACKSON: The point being that the change in test procedures doesn't make it more stringent or less stringent? MR. AUSTIN: Not in our opinion. I would not accept Further, I would not accept Mr. Bullwinkle's I R. WILSON SHORTHANO REPORTERS (41S) 543-31My481-3098 ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 CARB suggestion that, in setting all standards, the agency setting the standards carries the burden of proof with respect to feasibility. As long as the standard is within the realm of the types of controls that are capable of being applied to multiple mobile sources, I believe the manufacturers carry the burden with respect to the feasibility of long-range standards which are necessary to protect the public health. MR. MACOMBER: I would like to expand on that notion just a little bit. In the context of this waiver hearing, I think it should be emphasized from our point of view And I think that this is fully consistent with not only the wording of the Clean Air Act, Section 209, but the legislative history and that is that California doesn't have the burden, in effect, of disproving why it's entitled to a waiver. That's what they seem to be suggesting. As I read it, either the Administrator, through its own information or through information submitted by the manufacturers, must give us a waiver unless that information shows that we are not entitled to one. So if there is a burden on anyone, it's certainly not on California, as I think was implied in the question. So I would like to emphasize that. I would also like to make it clear that we are here to talk about the subject if EPA would like to talk about it, and we are prepared to do that. If you think it's important, we will. CHAIRMAN JACKSON: I think it's important that you HOMAS R. WILSON 5RTIFIED SHORTHAND REPORTERS (418) 343-3194/481-3098 ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 CARB 03 supply to the record your basis for believing that the changes in test procedures do not change the stringency of the 1982 standard. MR. AUSTIN: All right. We can give you some more specific comments on that issue. CHAIRMAN JACKSON: I'm not sure I understand. Maybe you can help me a little bit on this articulation of the way you see it working with regard to the preservation of the California program in the event that the federal program is struck down by some court action. MR. AUSTIN: Well, basically, it's our position that the development programs necessary to build cleaner motorcycles will be unchanged by the differences between California's old test procedure and the new federal procedure for motorcycles; that those procedures are very similar, and that the kinds of modifications necessary for bikes to meet California's old standards on California test procedures are essentially the same as the modifications necessary to meet EPA's standards on EPA's test procedures. That being the case, we believe that we should have the right to revert back to our old standards and test pro- cedures in the event that the EPA procedures are struck down in the courts. There's already been a hearing on the issue of lead time associated with building motorcycles that comply with the former California test procedures and standards. There was a finding made that, in fact, those standards were feasible, and lead time did remain. 3 R. WILSON SHORTHAND REPORTERS (~IS) 84M1M/4ซ1-30M ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 CARB 86 It's our contention that bikes which meet the new EPA standards on the EPA procedure should also meet the old California standards on the California procedure in most cases. That being the case, we don't want to see the motor- cycle control program collapse because of legal action that we may have no control over that ends up in the federal pro- cedures and standards being struck down or postponed in some way. CHAIRMAN JACKSON: Well, then, really what you are saying, as I see it, isn't the mechanics of this thing, is that you really want to keep the waiver that you have and the program you have, but you are going to waive in deference to the federal program. MR. AUSTIN: That's right. This is something that we believe we are doing in deference to manufacturers' concerns and comments that have been expressed in the past, that it would be burdensome on them to have to comply with two separate sets of standards on two separate test procedures. And we agree that the standards and procedures that EPA has come up with are going to provide essentially the same degree of control as California's former procedures did and, therefore, there is no there is no problem on our part with modifying our procedures to be identical to those used by EPA. If that's going to reduce the cost of motorcycle emission control in the United States, that's exactly what we would like to see. We don't believe, however, that our decision to go along with the federal procedures and standards )MAS Ft. WILSON IFISO shoathano reporters UM\ 4*1 -30M ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 CARB a ' should end up resulting in the loss of a motorcycle control program for the State of California in 1978. CHAIRMAN JACKSON: Got you. But the point is how do you do that? Do you revoke the waiver presently in existence and carve out some sort of mechanism by which you can recognize its existence in the event that the federal program is halted by legal challenge, or do you leave in effect the waiver and let California move on its own to modify its program in such a way as to accommodate the manufacturers? MR. MACOMBER: If you are looking for an explanation as to how we would characterize what we are asking for, I would say we are asking for a conditional revocation or modification of our existing waiver. CHAIRMAN JACKSON: Do you see a difference between a conditional revocation and modification? MR. MACOMBER: Not essentially, no. I think you could use either term. CHAIRMAN JACKSON: I think I do. MR. MACOMBER: I would say that, if you have questions about whether or not the term "revocation" would be consistent with what we are intending to do, then perhaps the term "modification" would be more appropriate. MR. AUSTIN: Mr. Jackson, I'm giving some further thought to your question about the difference between con- ditional revocation and modification. I think they are probably you probably could argue that there is a significant difference in those two actions. I think that THOMAS R. WILSON CERTIFIED SHORTHAND REPORTERS (41ft ft4A.aift4iMl.SOM ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 CARB/HARLEY-DAVIDSON 88 we prefer to see a modification of our existing waiver rather than any kind of revocation conditioned, as it might be, or that the lead time clock continuing to run in an uninterrupted fashion between now and the date for compliance being required on 1978 motorcycles. CHAIRMAN JACKSON: We are certainly not talking about total revocation because we still haven't placed the 198 2 one-gram per kilometer standard which is more stringent than anything on the federal books. MR. MACOMBER: That's correct. CHAIRMAN JACKSON: Thank you, Mr. Austin. We will adjourn the hearing until 1:45. (Noon recess.) CHAIRMAN JACKSON: Gentlemen, if you are ready, I think we are ready to start up here. MR. JOSEPH R. AUSTIN: Thank you. My name is Joseph R. Austin. I am counsel in this matter to Harley-Davidson Motor Company, Inc., a motorcycle manufacturing subsidiary of AMF Incorporated. With me at the witness table is Mr. Laimonis T. Embrekts, Director, Environmental Control and Energy Resources Planning, AMF Incorporated. Harley-Davidson, in numerous appearances before both the United States Environmental Protection Agency and the California Air Resrouces Board has consistently supported reasonable regulation of emissions from motorcycles. That support is reaffirmed here. Harley-Davidson does not, however, support the duplicative motorcycle emission control regulation for California now advocated by CARB. Given the stringent rHOMAS R. WILSON lEATIFIED SHORTHAND REPORTERS iAttt I ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 .19 20 21 22 23 24 25 26 27 28 HARLEY DAVIDSON motorcycle emissions regulations promulgated by the EPA, there is no longer any legal or practical justification for inde- pendent CARB regulation. Mr. Gray, on May 1st, as required by the notice, we submitted a letter outlining the position of Harley-Davidson in some detail. Subsequently to that, we were advised by EPA that that letter which addressed itself to the CARB regula- tions as amended on March 24, 1977, were not at issue at this hearing. So Harley-Davidson revised its statement applicable to the regulations which were in effect on October 1st, 1976, when the original waiver was granted, and that's the statement which has been distributed to you today. I call this to your attention for two reasons: 1. By( reason of the confusion of what the notice wanted Harley-Davidson to direct itself to, it may be that we still have not touched on what you are really trying to decide today. But, secondly, I.wanted to urge that Inhere be received in evidence at this hearing both the May 1st letter from Harley-Davidson and the statement which we have provided today. Each is different, and each is directed to a different subject, apparently both of which were required by the notice. I don't intend to read either of the statements, but only to make a few comments and then to have primarily Mr. Embrekts available to answer questions. The first comment I would like: to make is. some- thing that we perceive as having been an erroneous assumption during this morning's hearings, ฃซ$ is tkat there is no houthanp reporters <41#J ------- 1 2 3 4 5 6 7 S 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 HARLEY DAVIDSON 90 need to decide anew whether a waiver should be granted for 1982 standards. The reason being suggested this morning was that that waiver decision had already been made on that 1982 standard. We would like to call to your attention that the 1982 standard for which the waiver was originally granted was a standard which was based on a year-of-production criteria. On March 24th, 1977, the California Air Resources Board amended that 1982 standard to make the criteria model-year criteria. Harley-Davidson has a model year which begins in July preceding the calendar year of that model year. In other words, the new California 1982 standard affects Harley- Davidson as of July, .1981. In other words, it's a six-months' shorter period of time. That is a substantial amendment as far as Harley-Davidson is concerned to the 1982 standard that was originally granted a waiver, and Harley-Davidson believes that this significant amendment requires a new decision as to whether or not a waiver will be granted for the 1982 standard. Now, it seems to us that whether or not Whether the decision before you is to continue in effect the October 1, 1976, standard for the standards and test procedures in effect on October 1, .1976, or whether it's to grant a new waiver for the standards adopted on March 24, 1977, the question is basically the same for model years 1978 through '81. For the 1978-79 model year, the prior CARB regula- tions would have resulted, by Harley-Davidson1s calculations, >MAS R. WILSON ~ ' IFIKD &HOATHANO IIBAITBM ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 HARLEY DAVIDSON 91 in a 46% lower control of hydrocarbon emissions. As amended, the standards are the same as EPA's. For model years 1980-81, both before and after the amendments, the standards of five grams per kilometer were the same. Also for those model years, California does not purport to regulate anything other than hydrocarbons whereas EPA has an overall regulatory scheme which regulates both carbon monoxide and crank case emissions. For 1978-79 model years, California regulated only two-stroke motorcycles, whereas EPA regulated four-stroke motorcycles. In the 1982 model year, the standard has been consistently one gram of hydrocarbon per kilometer. It was Harley-Davidson1s testimony that that was not technologically feasible nor cost-effective, and now that it's been amended to reduce the lead time by six months, that problem is even more difficult for Harley-Davidson. What the real question, I submit, before you today is whether Section 209 intended for the California Air Resources Board to enforce regulations which were not more stringent than those which had been adopted by the EPA. For model years 1978 to 1981, the only real issue here is whether California can maintain enforcement provisions when it does not have a more stringent standard. It's the position of Harley-Davidson that Section 209(a) which says that no state can impose any impediment to the marketing of new motorcycles applies to each model year and that, therefore, if the California Air Resources Board is to impose any 5 R. WILSON SHORTHAND REPORTERS ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 HARLEY DAVIDSON 92 impediment to the sale of new motorcycles in California in 1978, there must be a finding along the lines required by Section 209(b) of the Act, and that is a finding that California's standards are more stringent and that they are mandated by extraordinary and compelling circumstances. It's our position that Section 209 was never intended merely to have dual enforcement of a common regula- tion. It was intended to allow California, where necessary, to adopt a more stringent standard. It's Harley-Davidson's position further that, for model years 1978 to 1981, there can be no waiver under Section 209(b) and, therefore, there can be no requirement of enforcement procedures or of their filing of certification documents with the California Air Resources Board. For 1982, the question is whether it's premature now to grant a waiver for a standard that doesn't become effective until 1982 and whether the 1982 standard is technologically feasible. Now, we agree with CARB, I believe, that at the time of the October 1, 1976, waiver decision, the Administrate! said that he couldn't determine whether it was feasible or not. But we submit that in the process that led up to the promulgation of the EPA standard in December of 1976, that the Administrator, in fact, found that a two-gram hydrocarbon standard was feasible until 1983 and that it was also not cost-effective. That decision, made in connection with the promulgation of the EPA standards, has to affect the California standard, and there has to be a new finding if $ R. WILSON SHORTHAND MPOBTMB (41S) S43-31 MMt1-3098 ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 HARLEY DAVIDSON 93 that, in fact, the one-gram per kilometer hydrocarbon standard proposed by California is technologically feasible with the lead time of the model year definition now adopted by California. Other than the change in the model year from production year to model year definition, we agree with the California Air Resources Board that the test procedures originally promulgated by California, which were based on EPA procedures, and the current ones are not of such signifi- cant difference that that will affect materially the stringency of the regulations. Finally, in our May 1st letter, we requested to be heard on May 19th, and I wish to advise you that neither Mr. Embrekts nor myself will be able to be here on May 19th, and we would like only our written submission to be taken as evidence at that time. We are ready to respond to any questions you may have. CHAIRMAN JACKSON: You conclude that the changeover to the federal test procedure by California does not materially affect the stringency of the 1982 standard, but that the adoption of the federal rules which embody a model year concept different from that which California had in their rules has imposed a different time constraint on Harley- Davidson, resulting in a lead time problem with the 1982 standards; is that correct? MR. AUSTIN: Yes. CHAIRMAN JACKSON: Now, does that mean that 5 R. WILSON SHORTHANO REPOATCR8 MIS) M3-31I4/M1-3G9* ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 HARLEY DAVIDSON 94 Harley-Davidson has got built into its model year production scheduling some intractable, inflexible precondition that can't be changed? MR. AUSTIN: I'm not sure. CHAIRMAN JACKSON: I mean there is nobody that says you got to get into it until you have to, get into that model year until you have to. MR. AUSTIN: Well, if you are suggesting that Harley-Davidson could change its model year designation from July to January, it does have real financial problems with that because it's built into the company-union contracts that the plant closes down in the Summertime for model-year changeover, and it's not something that they can just reverse. In other words, currently they are financially and contractually committed to the July model-year changeover date. MR. EMBREKTS: Yes. CHAIRMAN JACKSON: And I'm not sure how this change, in going with the federal definition of model year versus the California model year, is involved in that kind of a problem. MR. AUSTIN: Well CHAIRMAN JACKSON: Can you explain that a little more? MR. AUSTIN: Well, the testimony of Harley-Davidson a little earlier was that, by January 1, 1982, it was technologically infeasible to comply with a one-gram per kilometer hydrocarbon standard. The effect of the amendment by the California Air Resources Board is to tell i R. WILSON shorthand ntPORTtm ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 HARLEY DAVIDSON 95 Harley-Davidson that they have to comply with the one-gram hydrocarbon per kilometer standard as of July of 1981, which means they have to comply six months earlier. CHAIRMAN JACKSON: So it's obvious the decision was made on testimony by Harley-Davidson anyhow, so its relevance is at best marginal. MR. AUSTIN: I'm not sure that I follow that, the testimony CHAIRMAN JACKSON: Well, you said you could not do it anyhow under any circumstances, right? So what difference does it make if it's moved up six months? MR. AUSTIN: Well, it makes it ~ CHAIRMAN JACKSON: Why should we revise it? The issue MR. AUSTIN: Well, the reason you should revise it is it's required by law. CHAIRMAN JACKSON: If you follow MR. AUSTIN: Whether or not you should give any favorable consideration to the fact that Harley-Davidson has six months less time to try to comply is a matter of your discretion, I imagine. CHAIRMAN JACKSON: But that wasn't relevant the first time around by your own admission. MR. AUSTIN: The issue was decided adversely to the testimony of Harley-Davidson. CHAIRMAN JACKSON: Correct. MR. AUSTIN: And I am not saying that you can't decide it adversely to the position of Harley-Davidson again. THOMAS R. WILSON CERTIFIED SHORTHAND REPORTERS (41S) 543-J1M/481-30S8 ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 HARLEY DAVIDSON 96 CHAIRMAN JACKSON: It's just more adverse now? MR. AUSTIN: It's aggravated by the fact that you have six months less time to do it. But I'm not saying as a matter of law you can't say we have already decided the 1982 issue and we don't have to decide it again. I'm saying you do have to decide it again because they materially changed the ground rules. CHAIRMAN JACKSON: In some way that Harley-Davidson cannot effect any change to get themselves back? In other words, it's something that Harley-Davidson does in the normal course of business that keeps them from keeps them from doing what's required by the new regs as opposed to something that's happened with regard to technology or something of that nature? MR. AUSTIN: Harley-Davidson is trying to develop the technology. It has six months less time to do it within. CHAIRMAN JACKSON: But that's of your own choosing. These six months, there's nothing that says you have to have it six months earlier, no requirement that says bikes on the road have got to be meeting the standard, I mean the six months earlier timeframe, is it? MR. AUSTIN: Yes, it is. The law used to say that as, you know, bikes manufactured after January 1, 1982, have to meet certain standards. The law now says that, you know, bicycles manufactured in a certain model year have to meet those standards. CHAIRMAN JACKSON: And you can define your model year the way you want to? i R. WILSON SHORTHAND RIPORTgRS (419) M3-3194/4W-MM ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 HARLEY DAVIDSON 97 MR. AUSTIN: Yes. CHAIRMAN JACKSON: Right. So it's up to you. MR. AUSTIN: Well, it's up to us in the absolute sense. It's beyond our control in the practical sense. CHAIRMAN JACKSON: Now, let's get down to why it's beyond your control in the practical sense. In the normal course of business, it may be difficult. That's the point you have been making; is that correct? MR. AUSTIN: Yes. CHAIRMAN JACKSON: In the normal course of business MR. AUSTIN: Yes. CHAIRMAN JACKSON: why is it impractical to do? Why is it you can't do it? MR. AUSTIN: You mean technologically or CHAIRMAN JACKSON: I don't think the technological issue is involved. You decided that it was some business about union contracts or something like that that made it difficult. MR. EMBREKTS: No, no. What we said is that the model year definition is the way we conduct business. But the fact that we cannot comply with the standard is certainly not influenced by that. In other words, we say we didn't see a way to comply with it by January 1, 1982, and this makes it almost certain. It's a different standard is the way we see it, much different from what it used to be. CHAIRMAN JACKSON: Because? MR. EMBREKTS: Because of a minimum of six months THOMAS R. WILSON CERTIFIED SHORTHAND REPORTERS (411) S43-3194M41 -1096 ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 HARLEY DAVIDSON 98 taken out of complying with the standard. We are talking an entirely new level of technology at these levels. These are the so-called technology levels. It was proposed as a goal by the Board itself. The Board itself, when it adopted the standards, recognized the fact that they had nothing to go on, but it was a goal that they thought could be achieved and they would reconsider it again. But this makes it less probable, much less probable. CHAIRMAN JACKSON: Because of your unwillingness to redefine your model year MR. EMBREKTS: No. CHAIRMAN JACKSON: to correspond MR. EMBREKTS: No. CHAIRMAN JACKSON: with the January 1 date? MR. EMBREKTS: Let's look at the opposite of that. I guess you say we are at liberty to define a model year. It seems to me that, using that rationale, we could just continue with the '79 model year ad infinitum. CHAIRMAN JACKSON: You continue on until January 1 MR. EMBREKTS: Not anymore. CHAIRMAN JACKSON: 1980? MR. EMBREKTS: No. It's a model year '82 now standard. MR. AUSTIN: But it has a limitation that, in any event, after January 1, '82, you have to switch around. MR. GRAY: Maybe a little easier way of getting at the question is why could you not begin your 1982 model year January 1, 198 2? Why is that impossible? THOMAS R. WILSON CERTIFIED SHORTHAND REPORTERS (415) 54S-31M/4t1-30M ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 HARLEY DAVIDSON 99 MR. AUSTIN: I think I answered that in terms of absolutes, that's not impossible; but as a practical way of the manner in which Harley-Davidson has traditionally done business, as have all, you know, of the American automobile manufacturers, the model year changeover is in the Summertime, and they are committed to that legally as a matter of con- tractual obligations to their employees as well as, you know, physically in terms of the expense of retooling and things. You know, they would incur that twice in one year, or just forego a model change for a whole year in order to avoid the expense of it. So, in an absolute sense, yes, they could change their way of doing business. But as a practical matter, you have not required the automobile manufacturers to do that. You know, why should the only American manufacturer of motor- cycles be required to do it? CHAIRMAN JACKSON: We didn't require them to, nor did we prohibit them from doing it. Some manufacturers have built later than normal for their own convenience. It's their election. Whenever you start that depends upon how one defines your model year, and that's entirely up to you. MR. EMBREKTS: Well, it may not be a matter of convenience at all. Just because you are you have always conducted your business that way, in other words, you gear up your production for the next year's sales and you stock at your dealers, you stock the warehouses, you have your production going in anticipation of the sales, and I don't think it's a matter of convenience. 5 R. WILSON SHORTHAND MRORTER8 (418) M3-31M461-MM ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 HARLEY DAVIDSON 100 CHAIRMAN JACKSON: Well, it's really not something that we say you have got to start your model year in June or July of the calendar year preceding that model year. There is nothing that says that. It's tied to when you start producing '82 model year vehicles, motorcycles. MR. EMBREKTS: That's correct. CHAIRMAN JACKSON: And you can do that anytime you want. MR. EMBREKTS: That's correct. MR. GRAY: With regard to the 1982 standard, is it your only concern relative to stringency, the shortening of the lead time, from your perspective, from a practical standpoint, of six months? Is that the only technical feasibility issue in your mind? MR. AUSTIN: No. It's our belief that that aggravates an already-existing problem, and we believe the Administrator of the Environmental Protection Agency concurred in that when he found that a two-gram per kilometer standard wasn't technologically feasible before 1983. But certainly when you you know, when you are breaking your back to achieve a standard that you don't think you can achieve, when you say you have to do it six months more quickly, that aggravates the problem. MR. GRAY: But is that the only problem that you are concerned about relative to the 1982 standard regarding technological feasibility? MR. EMBREKTS: Well, the. problem is much different than it normally comes up. In the case of motorcycle THOMAS R. WILSON CERTIFIED SHORTHAND REPORTERS (416) S4941NMS1-30M ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 HARLEY DAVIDSON 101 manufacturers, it is asked that we deal with three levels of control simultaneously, three different levels of control. It's asked that we today deal not only with the imminent phase-in controls, but that we somehow also cope with the ultimate levels at the same time, whereas just coping with the imminent standards that we are about to certify to is a very big task for a small company such as ours. We have no staff that we can divert, you know, for different purposes. We have the staff working on everything all the time. And right now, we have to stay in business in '78 so that we will be around in '82 to attempt to deal with that. Now, as we progress to that date, we have not yet come upon anything on our existing designs that would lead us to conclude that we may be able to achieve it with what we now know. It probably requires a much different technology than what we are looking at. But we still have to get past January 1 of '79 I mean '78, because then the burden, you know, lifts somewhat, and then we can really concentrate on the next phase. This is a much different perspective than other manufacturers have had in this area. They were able to deal with the standards one at a time. They were able to plan out. So in our case, particularly in a smaller company's case, it's much, much more difficult, and the technical feasibility is a much more complicated question. CHAIRMAN JACKSON: In your statement just then, you said you have got to get by January 1, *78 MR. EMBREKTS: Yes. THOMAS R. WILSON CERTIFIED SHORTHAND REPORTERS (419) S43-31M/4S1-30M ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 HARLEY DAVIDSON 102 CHAIRMAN JACKSON: before you even worry about June. Does that mean for that particular model year you are worried about MR. EMBREKTS: Pardon? CHAIRMAN JACKSON: meeting the standards, that you are going to introduce your models on January 1, '78, for the '79 model year? MR. EMBREKTS: No. MR. AUSTIN: Well, the first year that the regulations take effect is for motorcycles manufactured after December 31, 1977, so that model year isn't relevant until after the first year of the In other words, what we will do on January 1, '78, we will comply for the '78 model year. But in July of '78, we will comply for the '79 model year, so that we, within a six-month period, will have two certifications. MR. EMBREKTS: Two model years. We would be discussing two model years within six months. And that's a unique feature of the motorcycle regulation. MR. GRAY: Perhaps there is some confusion. December of '77, you will be producing one bike; January, '78, you will be producing a different bike? MR. EMBREKTS: We are required to, as the regulation presently stands, whether we like it or not. MR. AUSTIN: I think the confusion, I might have added to it. What I am saying is, for the first year of regulation, that is '78, you don't have to be concerned about the model year. In other words, we will start manufacturing model year '78 motorcycles shortly. But they do not have to 5 R. WILSON SHORTHAND RePOATERS (419) M3>3194f481-30M ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 HARLEY DAVIDSON 103 comply with the regulations until January 1 of '78, so that the '78 model year isn't relevant. It's just the January 1, '78, date that's relevant for compliance for the '78 standards. But for '79, it then becomes relevant when your model year is, and our model year is in July, so that we you know, we hit two model in effect, two certification stages in the same year. MR. GRAY: But it's not a problem of changing technology in midstream because, for *78, you will be producing one bike configuration in December of '77, and change to a different configuration in January of '78? Is that clear? In other words, will you start producing model year 1978 motorcycles in the Summer of '77? MR. AUSTIN: Yes. But they don't have to comply until January of '78. MR. GRAY: And yet midyear in that production, change of configuration model year 1978 motorcycle, so that it will meet the '78 standards, I mean? MR. EMBREKTS: You have to examine what does it take to meet those standards in terms of the '78 model year. We are still talking sort of add-on categories of devices, which does not have a big implication on your basic design or your basic tooling. However, at ultimate levels, we see a fundamental redesign of engines as we make them. In other words, we would whereas you could say you have an uncon- trolled vehicle, and with add-on control, you make it a complying vehicle at the initial phase, provided you pass certification and the other tests. THOMAS R. WILSON CERTIFIED SHORTHAND REPORTERS (41st 543.3194/481.30*1 ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 HARLEY DAVIDSON 104 At the ultimate control levels, that is not the situation anymore. We are now going back, to the root source, and we have to redesign from ground up. MR. GRAY: So you are saying MR. EMBREKTS: It's an entirely different proposition. MR. GRAY: You are saying that for the 1978 standards, the answer is yes; but that for the more stringent standard, you could not carry the same basic design from one year to the next with the transition of the more stringent standards? MR. EMBREKTS: Yes. MR. GRAY: The only technical possibility would be to begin the model year production later than is normal? Independent of the issue of practicality, the only technical technically possible method is to do that? MR. AUSTIN: I think the answer is yes, assuming that we have got the technology developed by January 1, 1982. MR. GRAY: Okay. In pursuing the question I asked earlier about other possible technical issues that you might have with respect to this waiver regarding the 1982 standard, perhaps I can phrase my concern a little more specifically. Do you see any problem in meeting a 12-gram CO standard in '82 if you have achieved the one-gram HC standard? MR. EMBREKTS: Probably not. MR. GRAY: Okay. MR. EMBREKTS: At that point, I think the HC standard is more stringent for our for our bread and butter type motorcycle. MR. GRAY: Okay. I want to go back and ask a THOMAS R. WILSON CERTIFIED SHORTHAND REPORTERS (418) 543-3194^461-3098 ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 HARLEY DAVIDSON 105 general question relative to the 1978 through '80 standards prior to the '82 standard. I didn't get a very specific indication in listening to your testimony as to whether or not you were supporting the waiver request or not for those model years. MR. AUSTIN: Our specific position is that the California standards are either less stringent or the same as the EPA standards. The law requires that, to justify a waiver, California have a more stringent standard. Therefore, it's our feeling that the October 1, 1976, waiver has to be revoked for the standards that were in effect on October 1, 1976, and that a new waiver cannot be granted for model years 1978 through 1981 for the standards as amended on March 24th, 1977, by CARB. MR. GRAY: Okay. As you well know, there are a lot of technicalities that might make that issue more complicated than you just summarized it if we really got into the issue of whether or not the existing California standards and test procedures are more stringent or less stringent than the federal standards. But since California took the initiative and asked the Environmental Protection Agency to essentially rescind that waiver and let them adopt federal standards, do you support that request of the CARB? MR. EMBREKTS: No. MR. AUSTIN: Let me answer two things. 1. Maybe there is some confusion about what we mean by test procedures. But it was the California Air Resources Board's testimony, in which we concur, that the THOMAS R. WILSON CERTIFIE0 3HORTHANO REPORTERS (418) S43-S1tซ4ซ1-30M ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 HARLEY DAVIDSON 106 test procedures originally adopted by CARB and those adopted by EPA are substantially identical and that, if anything, the former CARB procedures might be slightly more stringent. If you mean by test procedures, enforcement proced- ures, that is compliance testing, which in the past CARB has argued made their standards more stringent, you know, CARB has specifically asked that that not be considered today because they haven't adopted any enforcement procedures for motorcycles and that won't be done until June, so it seems to me that the test procedures can't be thought to be more stringent. I mean that can't be a hook on which they could hang their hat. To answer the second part of your question, no, we don't support duplicate enforcement by California. MR. GRAY: Well, I guess the test procedures do define in part the stringency of the standard. MR. AUSTIN: Yes. MR. GRAY: The California test procedures now are different than the federal test procedures. The issue of whether that difference makes them less stringent or more stringent is not clear on its face. So for that reason, I wanted to see if I could direct, the question more specifically and say relative to the requests that California made of the Administrator of EPA regarding dealing with the pre-1982 standards and test procedures, do you support that California request and, if not, specifically why not? MR. AUSTIN: Okay. My understanding And maybe this is where we are not communicating. It is my understand- ing that CARB has asked EPA to revoke -the waiver granted on THOMAS R. WILSON CERTIFIED SHORTHAND REPORTERS C41S) M3-31MM6130M ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 107 HARLEY DAVIDSON October 1st, 1976, because they have changed the rules. If that's their request, we concur in that one. I understand that they have asked, or are about to ask, that CARB grant them a new I mean that EPA grant them a new waiver so that they can enforce EPA standards and test procedures separately in California. We do not concur in that request. MR. GRAY: But in the former, you do concur? MR. AUSTIN: Yes. That the original waiver should be revoked, we agree with that. MR. GRAY: According to the provisions of the requests made of CARB MR. AUSTIN: No. MR. GRAY: which basically says that that is the request subject to no changes to the federal procedure, I think is the basic qualification. MR. AUSTIN: Yes. As I understand the test procedure adopted by, or certification procedure adopted by CARB on March 24th, if for some reason that certification procedure were found invalid, then they would revert to their prior procedure. We are opposed to that on basically due-process grounds. And let me define that somewhat if I can. As far as I know, the only challenge made to the EPA test procedures relates to the definition of "useful life;" that the same definition was utilized by CARB in its prior regulations. If the EPA test procedures were found to be invalid because the useful life definition wasn't in accordance THOMAS R. WILSON CERTIFIED SHORTHAND IMPORTERS I41S) S44-31M/4S1-30M ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 HARLEY DAVIDSON -LUO with what was required by law, then you would automatically revert to the CARB test procedures which used the same "useful life" definition, and the motorcycle manufacturers would have to be foreclosed from ever having an opportunity to challenge those regulations because they didn't exist until such time as the EPA's didn't exist. So you have sort of a springing in real property terms, kind of a springing use. In other words, you have no procedure, and all of a sudden, it springs up and affects you without any opportunity to be heard with respect to it and without any opportunity to find out whether they are really valid regulations. MR. GRAY: Then, in essence, what you are saying is that you feel that the earlier waiver should be revoked on the basis that the federal standards, the pre-1982 standards, are less stringent than the federal standards? MR. AUSTIN: No. We feel that they should be revoked because the California standards are not more stringent than EPA's, and we believe that's the statutory requirement. MR. GRAY: You believe that, for example, the ten- gram per mile HC standard in 1982 is for large two-stroke bikes is not more stringent than 14, I think it is, that the federal standard allows for the large bikes? MR. AUSTIN: Well, that's the '78 standard. If you look at Table I, which is the table which was submitted with our testimony, it shows the calculation of Harley-Davidson, which shows overall there would be a 46% less reduction in hydrocarbons if you use the CARB standards than if you use the $ R. WILSON SHORTHAND REPORTERS (415) M3-3194/4S1-30M ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 HARLEY DAVIDSON -Luy EPA standards. Now, you could go by motorcycle-by-motorcycle and pick out some where CARB's were more stringent and some where EPA's is more stringent. But I don't think, that's the you know, the regulation wasn't adopted on a motorcycle-by-motor- cycle basis, nor was the waiver granted on that basis. MR. GRAY: What about with regards to the durability testing? Do you feel that the so-called half-life testing required by the federal regulations is not more stringent than the requirement for full-life testing by the CARB? MR. EMBREKTS: Excuse me. As a matter of fact, at the present time, that's an option; it's not a requirement. In other words, if you somehow can show that, by testing up to that point, you can project that you would meet the standards, only then you would be allowed to stop the test and say you have demonstrated the capability of doing that. But I think, as you will go on later, that this may or may not become cut off at that half point. And, indeed, the federal test procedure envisions the entire test to be conducted until such a time where, at the so-called final distance, you have demonstrated by actual testing that you "have met the standards. So it's not really a requirement? it's an option provided you can meet certain criteria. In that sense, both test procedures are the same, except with this attached option that the federal procedure carries, which shows if it can be demonstrated beyond a reasonable doubt, that the other half of the test will demonstrate nothing to oppose the conclusion arrived at from i R. WILSON SHORTHAND REPORTERS (41S) 543-S1B4/461-30S6 ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 HARLEY DAVIDSON 110 the previous half, then you stop, and it's been certified. And I think it's an option that was not considered by CARB because traditionally their test procedures have been one or two revisions behind the federal test procedures. As a matter of fact, the CARB test procedure was designed to be identical, was intended to be identical, a mirror image of the federal test procedure, because they did not want to put themselves in a position of rewriting EPA test pro- cedures. They said so repeatedly on the record, and they said they would never entertain any questions on that subject because they wanted not to be in a position to rewrite EPA what they considered EPA's test procedure. CHAIRMAN JACKSON: I have two questions here, gentlemen, from the CARB to Harley-Davidson. One is, based on your statement, the second paragraph, Page 7, I believe, that EPA and the CARB test procedures are virtually identical, and we presume that the change in test procedures does not have a significant impact on Harley- Davidson' s ability to meet the 1.0 grams per kilometer standard. MR. AUSTIN: What we said in our testimony was that the two test procedures were intended to be the same. CARB's got set in place prior to the time that EPA made certain additional amendments. And that since they were slightly different, you would have to have a period of time and experience with both test procedures before you could make a determination that one was more stringent than the other. And we feel the burden is on the Administrator to decide THOMAS R. WILSON CERTIFIED SHORTHAND REPORTERS (418) S43-aiM/441-3098 ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 HARLEY DAVIDSON 111 affirmatively that one test procedure is more stringent than the other one. We haven't had any experience with the test procedures, either, enough to form an absolute opinion that it's easier to meet the 1982 standard with one procedure or the other procedure. Now, to the extent that, you know, the concept of production year that's written into the procedures as well as the standards, then it's going to be harder to comply with the CARB procedures because that gives us less time to do it in. But, other than that, as Mr. Embrekts has said and as I have said, we don't think that anybody's had enough experience actually working through these test procedures to form an opinion that one is going to be more stringent than the other. MR. EMBREKTS: Excuse me. You see, relating to test procedures, it's a document, really a forecasting document, on which you need statistical data to find out what effective- ness did it have on what you attempt to do, and you need historical data to reach any conclusion, whereas in the case of standards, you know at the moment you adopt them which of the two would be more stringent. In terms of test procedures, let's assume now that both result in meeting the standard, what would be the conclusion? Would you count the number of pages? So I think what you have to look at, if both result, even though written perhaps differently, in achieving the standard, then you really have no conclusion on that point. So I think you need some historical background, some THOMAS R. WILSON CERTIFISD SHORTHAND REPORTERS ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 HARLEY DAVIDSON 112 statistical data, that shows under this set of circumstances you have an indication like this, and under another set of circumstances, you have a slightly different set of con- clusions, and then you compare the two. But you need time to draw that conclusion. No one has any experience with it right now. We don't; EPA doesn't, nor does CARB. I think we will all know a few yeari from now. CHAIRMAN JACKSON: Can you say, then, what specific changes to the test procedures significantly affect your ability to meet the one-gram per kilometer standard? MR. AUSTIN: I think that's the same question asked another way, and maybe I can answer it another way. Just reading the test procedures doesn't tell you. There is nothing in any one particular sentence in the test procedure that will tell you a yes-or-no answer to that question. And merely changing one sentence here or there probably won't affect it. They both have for the goal, for a common goal, the meeting of the standards. Whether one achieves the goal and the other one doesn't, you don't know. CHAIRMAN JACKSON: Another question from the CARB is: is it your opinion that the technology used to achieve a one- gram per kilometer standard will result in compliance with the federal 12-gram per kilometer carbon dioxide standard without any additional hardware or change in design? MR. AUSTIN: I don't know if that was asked before you had an opportunity to ask your question. Seemed to me that had already been answered. THOMAS R. WILSON CERTIFIED SHORTHANO REPORTERS (41S) 843-31MM61-30M ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 HARLEY DAVIDSON 113 CHAIRMAN JACKSON: Maybe it had. I was out of the room for a minute. MR. AUSTIN: Yes. MR. EMBREKTS: The response to that was we considered the one-gram hydrocarbon standard to be more stringent, but we now are really, under the present circumstances, regulated by two agencies simultaneously. For instance, if you consider the waiver, the October 1 waiver, we essentially we could market unregulated motorcycles in the state because it and these would be our four-stroke motorcycles, whereas we would have to have con- trolled motorcycles to meet the carbon monoxide standard. So in one case we are talking about an unregulated motorcycle marketed in the states as of, say, manufactured after January 1, '78, and in the other case, a regulated motorcycle with controlled hardware. As an example, the EPA zero conformity, in the instance of the four-stroke motorcycle would entirely relate to hardware in achieving carbon monoxide control. So if the state wanted to inspect whether or not the hardware that was specified on the certificate exists on the marketed motorcycles it would be relating to an entirely different matter, one for which they don't even have a standard. MR. AUSTIN: In part, the answer is that, you know, the standards measure what comes out the tail pipe. But that in developing an engine that meets those standards, you don't necessarily put on one piece of equipment and say this piece of equipment relates entirely to hydrocarbons and this one relates THOMAS R. WILSON CERTIFIfD SHORTHANO REPORTERS (419) >43-3194/44130M ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 HARLEY DAVIDSON entirely to carbon monoxide. You try and develop an engine that burns in such a fashion that you meet both standards. And so it's hard it's hard, you know, the question sort of asks you to play off carbon monoxide against hydro- carbons. It's got to be a merger of the two technologies to achieve an engine that doesn't produce either one, and it's hard to answer that, you know, by adding something that reduces hydrocarbons or that's going to increase carbon monoxide. It can't, and vice versa. CHAIRMAN JACKSON: Is it fair to say that you don't know? Is that your answer? MR. EMBREKTS: I beg your pardon? CHAIRMAN JACKSON: Is it fair to say that you don't know? MR. GRAY: I believe you said a minute ago, as far as you know, you thought the one-gram HC per kilometer level, HC control is limiting and not a 12-gram CO standard. MR. EMBREKTS: Of the two MR. GRAY: That's what I understood you to say earlier. MR. EMBREKTS: At the present time, based on the knowledge that we have today within the confines of, say, our own organization, and there may exist conflicting evidence to that, but within MR. GRAY: Yes. Based on what you know at the present time. MR. EMBREKTS: Because that is the second level of the federal standard. THOMAS R. WILSON CERTIFIED SHORTHAND REPORTERS (418) S4341S4MS1-30SS ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 HARLEY DAVIDSON -1" MR. GRAY: Right. MR. EMBREKTS: And we don't see the fundamental implications to our design such as a new engine, radical design, which essentially is the lead time constraint. It's not the Once we depart from the add-on type technologies, we depart into lead time as a real constraint. You know, talking engine fundamental blocks, huge blocks of design time. CHAIRMAN JACKSON: With regard to the question submitted by CARB in terms of the stringency of the standard in terms of the change in the test procedures, CARB has asked again whether your answer was yes or no to that question. The reason they are doing that is because, when this testimony first started, I asked the question that you are not really concerned about the change in test procedures being making this the '82 standard more stringent; all you are really concerned about is the model year definition and the lead time it takes away from you, given that you want to continue business as in the past. And you made it very clear, at least to me, in response to that question that you didn't feel that the changes in the test procedure were going to make any difference at all on the stringency of the standard. And I think that question was virtually reproduced by the CARB, and your answer came out appearing to be somewhat different. You started talking about this experience and the statistics and other things. MR. AUSTIN: Let me try again. I don't think that we were different. What I intended to say was that the test procedures THOMAS R. WILSON CERTIFIED SHORTHAND REPORTERS (411) S4M1S4/4S1-MS8 ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 HARLEY DAVIDSON ฆL"LO were not the important factor in evaluating the stringency question. You know, as far as we know now, you know, it's the technological feasibility of the one-gram standard. The test procedures are both designed assuming that EPA also had a one-gram standard, everybody's test procedure would be designed to make sure that the manufacturer was really achieving the one-gram standard. You can't read the test procedure, the words put down in the test procedure, assuming they are carefully drafted and there are no glaring errors, and determine that one is going to do it and the other one is not going to do it. You just have to have experience with those. And it's our position that the Administrator, faced with the obligation of making an affirmative finding that one test procedure is more stringent than the other to support a waiver, cannot make that decision unless there's been experience and, therefore, all I intended to say was that the Administrator cannot, given these two procedures, make a finding that the CARB procedure was more stringent than the EPA procedure and, therefore, the Administrator could not base a waiver decision on -the test procedures. CHAIRMAN JACKSON: Okay. Now, aside from what you are telling us that the Administrator has to do, can you tell us what your opinion is about the changes in the procedures as it relates to the ability to meeting the one-gram standard? MR. EMBREKTS: Well, before we get to the one-gram standard, we really have to worry about the 1978 standards, Phase 1, for which California wants us to go through a THOMAS R. WILSON CERTIFIED SHORTHAND REPORTERS (41S) 543-3194/481-30M ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 HARLEY DAVIDSON 117 certification as it relates to their specific purposes, even though the uncontrolled vehicles that we make meet and would not require any control hardware. And to some extent, for some models, that is also true for the '78 standards. And then it would propose to enforce, when they start looking at what essentially amounts to the federal standard to which they have no standard, that's the carbon monoxide standard, and essentially we wind up regulated by dual authority. The test procedure itself offers far less flexibility for comparison than a staff choice, for instance, on an engine family or the configuration that needs to be tested. That alone could override this entire discussion because the staff, the staff decision Let's assume now California were to certify independent of EPA, or perhaps they would disagree with EPA on what the engine family ought to be, or perhaps what configuration it ought to be or what add-on items ought to as options to be tested. That probably has as much, if not more, influence, and we are now talking about certification testing, the test procedure for certification. CHAIRMAN JACKSON: You make the presumption that they all have to meet the standards. How can that make any difference? We are not talking about bikes that are selected * that meet the standards and bikes that aren't selected that don't meet the standards. They all got to meet the standards. MR. EMBREKTS: That's right. CHAIRMAN JACKSON: So how can that make any differ- ence? MR. EMBREKTS: I think that's THOMAS R. WILSON CERTIFIED SHORTHAND REPORTERS (418) S43-31M4C1-S0M ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 HARLEY DAVIDSON 118 CHAIRMAN JACKSON: The one thing common about the whole exercise is the standard. They got to meet the standards. All of them got to meet the standards. MR. EMBREKTS: That's what we say. I think we have been saying it all along, that you really the conclusion on the test procedure alone, in our mind, CARB did not change test procedures; they changed standards and the times when these standards are effective. CHAIRMAN JACKSON: I got the point about the time, but I don't know how they have changed the standard as it relates to the change in test procedures. MR. AUSTIN: Maybe I can answer your question. I'm not sure. But as far as we know from reading and comparing the two test procedures, there is no one, you know, sentence or paragraph or particular requirement of the CARB procedures which would make it any more or less difficult to meet the 1982 standard than of the EPA procedures. MR. GRAYs I have one more question. As far as the lead time is concerned, the lead time difference with respect to the CARB requesting to adopt the model year instead of the calendar year for the effective date of the '82 standard. If I understand your process, the process that you described earlier, you would begin production of 1982 motorcycles, model year motorcycles, in the late Summer of 1981. MR. EMBREKTS: Certified production. We would be conducting certification tests presumably earlier that year. MR. GRAY: Right. MR. EMBREKTS: So we would have to be ready. There THOMAS R. WILSON CERTIFIED SHORTHAND REPORTERS (418) MM1MH61-MM ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 HARLEY DAVIDSON 119 would be certified production approximately July 1. MR. GRAY: But the key is that you are ready to begin production on a certain date, and you target for July 1 of 1981. MR. EMBREKTS: That's what we are talking about. MR. GRAY: I still have a hard time understanding the practical real difference between the existing situation that exists with the existing CARB regulations and the situation that would exist with the implementation of a model year standard relative to your concerns. That is as the CARB regulations now stand, you would still have to begin production of 1982 model year motorcycles in July, and then beginning January 1, 1982, you would be faced with a one-gram standard. And earlier you said for the kind of technology required to meet that standard, you would require a different design entirely, necessitating the introduction of that design at the beginning of the model year. So that's almost circular. It brings you back to say that, from a practical standpoint, the existing requirement is that you begin to introduce the '82 technology on January 1, 1981. Is that logic faulty? MR. AUSTIN: '82, I think you meant to say. MR. GRAY: No, '81. MR. EMBREKTS: Well, are we saying that one kills and the other kills dead? MR. GRAY: No. I'm asking you to clarify that course of logic, which is what I summarized from the previous discussion that was still troubling me. That is that in any THOMAS R. WILSON CERTIFIED SHORTHAND REPORTERS (4IS) M341M/4S1-30M ------- 1 2 3 4 ' 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 HARLEY DAVIDSON 120 case you have to start model year of 1982 production beginning July 1, 1981, and yet earlier you had said that the technology required to meet that level would be so significantly different than the technology of the 1981 motorcycles that it would essentially require the introduction of that technology beginning with the introduction of the model year production. So what I am saying is it's difficult for me, there- fore, to see any practical difference between the current CARB requirement and the requirement that the standard begin with the model year as it deals with Harley-Davidson. MR. EMBREKTS: The practical difference is that you people appear to be telling us in 1977, why don't you plan now on your model year beginning January 1, 1982, because that will give you six more months just in case you can't make it, and we and that if that were the difference between the two, I guess it would it could be entertained, you know, but it seems to me that you have to look at the requirement itself, that one is different from the other in the sense that what it requires us to do, what one required us to do and what does the other require us to do. And to say that it's no change is not even supported by your own commen- tary because you say you ought to change to accommodate it. MR. GRAY: But granted MR. EMBREKTS: So there is a significant change. Perhaps we may not agree as to its you know, depending on the side of the argument you pursue, but it is a very significant change. MR. GRAY: It's definitely a change in terms of the THOMAS R. WILSON CERTIFIED SHORTHAND REPORTERS (41S) 543-31*4/461-3098 ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 HARLEY DAVIDSON 121 requirement. But as I understood your discussion, it seems a bit academic with respect to the type of technology required to meet that level of control and the constraints, the practical constraints, that Harley-Davidson has on the intro- duction of a model year, of a new model year bike. In other words, it seemed to'be saying that the technology required for the 1982 standards is such a departure from previous technology that that in itself would require that technology to be introduced at the beginning of a model year as opposed to, for example, the earlier standards, which you said were more typical of add-on technology and, as such, they could be introduced in the middle of a model year's production. And it just seemed to me like that the current requirement that says that the '82 standards become effective January 1, 1982, is little different as it relates to Harley- Davidson 's situation than the requirement that the standards become effective with the introduction of the model year 1982 because you said that, for that technology, you will have to introduce it at the beginning of the model year anyway. And that's the you know, the difficulty that I had with under- standing, you know, the practical aspects of the argument. Certainly on its face, it's a very different requirement. MR. AUSTIN: I think the only practical aspect, if I understand what you are saying, is that we should, since we have to put out a new motorcycle anyway, we ought to put it out January 1, 1982, instead of July, 1981. CHAIRMAN JACKSON: You may put it out anytime you THOMAS R. WILSON CERTIFIED SHORTHANO REPORTERS (41S) 343-31MMSMOM ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 HARLEY DAVIDSON want to. MR. AUSTIN: As a practical matter, you know, by contract and otherwise, the Harley-Davidson plant shuts down in July. And what you are suggesting is that, you know, they shut down for a month in July, but you don't change over your tooling until the end of the year, and then do the tooling changeover at the end of the year. That's just two shutdowns and, you know, it's not feasible practically. But it's possible, yes. We conceded that. MR. GRAY: Really what I was saying is a little different than that argument, and it's just simply that you had made the statement that the technology required for that level of control would be so new that it would require its introduction at the beginning of the model year. And you had, in addition, said that your model year, for practical considerations, must begin July lf .1981, in this case. And so those two facts seem to go together and say that, inde- pendent of when the '82 regulation goes into effect, that Harley-Davidson will produce 1982 motorcycles meeting the 1982 standards beginning on January 1, 1981. MR. THOMAS AUSTIN (CARB): July. MR. GRAY: I'm sorry. July 1. CHAIRMAN JACKSON: Either with the CARB reg or the changed reg. MR. GRAY: Either you can wait or you can't. And if you can't, you have got to introduce it in July in either case. And that was the sort of circular logic that I was brought to in listening to the statements. And I was just THOMAS R. WILSON CERTIFIED SHORTHANO REPORTERS (41S) MS-SIMMtl-SOM ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 HARLEY DAVIDSON 123 asking for a practical situation, has it really changed with respect to Harley-Davidson, because it didn't appear to. MR. EMBREKTS: As a legal requirement, on the face of it, it doesn't appear to, either, using that analysis to the end because you are saying that January 1 would be the effec- tive date. MR. GRAY: Well, I'm saying that if we were to analyze that issue with respect to Harley-Davidson, we would have the one bit of testimony that said for the technology required, we would have to introduce it in January no matter what I mean July of '81 no matter what. MR. EMBREKTS: I think that's what we are saying, yes. MR. GRAY: And so I for that reason, it's difficult for me to. see how that would impact Harley-Davidson in any case, that is how the effective date model year introduction versus January 1 of 1982 would, in a practical sense, impact what you can or cannot do. MR. EMBREKTS: Well, it could, in the sense that it is conceivable that under those circumstances, the practical you would be conducting your certification testing and, say let's assume now that you were to fail it. I think the difference between the two would be that perhaps some time some type of tuning, assuming that it would not be a fundamental flaw such that cannot be corrected, then in one case we are talking about an introduction of the certifica- tion would be attempted in any case earlier in that same year. Let's say the fundamental technology is in place, I R. WILSON SHORTHAND REPOHTIRS <41ซ) 543-31MV461-30W ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 HARLEY DAVIDSON but for some reason the certification itself cannot be accomplished up to July 1 for some reason. Now, let's further assume that some adjustment allows that to be accomplished. Then we now say you now have to continue certification to what already is your basic '78 say your new model year motorcycle. Meanwhile, all of your projections for that particular year you have geared up your entire organization for this new introduction, that all goes into abatement and you now continue certification, the cut-off point in any case appears to be January 1, '82. So this is these are the extra six months that we are talking about. CHAIRMAN JACKSON: But they are not extra under either they are not different under either program. MR. AUSTIN: I think what you were saying is that you can market your 1982 model year motorcycle, which would be the new motorcycle, from July until December 31st, 1981, in compliance with 1981 production year standards, whereas when you switch to a model year, you cannot market it during that period of time because you have to meet a model year standard. MR. GRAY: I think you can as long as you continue to call it the 1981 model year. CHAIRMAN JACKSON: That's right, but they are not going to do that. They are trying to make this argument about the organization gearing up to selling new model year and all that stuff, right? MR. AUSTIN: Well, it's a matter of good faith. I suppose anybody could lie and say that, you know, this is i R. WILSON SHORTHAND REPORTERS (41S| S4341MMS1.30M ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 HARLEY DAVIDSON 125 our 1982 model, but it's really 1981. CHAIRMAN JACKSON: No, no, no. MR. AUSTIN: You know, that's certainly the purpose of the law isn't to encourage manufacturers to be basically dishonest. CHAIRMAN JACKSON: No, that's not what we were asking and certainly not what we mean. We are saying if you call it a 1982, it's a 1982 instead of a 1981 standard. MR. AUSTIN: Yes. CHAIRMAN JACKSON: I'm saying if you don't call it a 1982 and you say you haven't started your Job 1 for 1982, then it's not going to be meeting the '81 standards until January 1. MR. AUSTIN: Right. CHAIRMAN JACKSON: Then your option's gone away. MR. AUSTIN: All I think Mr. Embrekts was saying was that the major point for a production year, you could market your 1982 vehicles honestly. We could say this is our 1982 motorcycle even though it didn't yet comply with the 1982 certification plans, even if you got certification before 1982, whereas if you go by a model year requirement, you can't honestly start selling your 1982 model until it gets certified as a 1982 model. That's the only difference. CHAIRMAN JACKSON: I don't really think you could have done that because of the umbrella of the federal law as it would apply to those bikes that were being made in 1981. MR. AUSTIN: That's right. CHAIRMAN JACKSON: In other words, then you would THOMAS R. WILSON CERTIFIED SHORTHAND REPORTERS <ซ1t) MJ-31S4M81-30M ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 HARLEY DAVIDSON 126 have the feds to deal with as opposed to just California. MR. AUSTIN: I think that's why the question was asked whether it was the CO standard or the hydrocarbon standard that was the difficult one to meet. CHAIRMAN JACKSON: Well, I don't think I have heard an adequate explanation in response to the point that's been raised here about the difference just by virtue of what you have said. Mr. Gray has made a good point, I think, that there doesn't seem to be any real difference between trying to meet the 1982 standards under the California definition of model year versus the federal definition of model year. I think he's made that point very vividly, that you make the point about your contractors' shutdown. Going with the scenario that we have been presenting here, you would have to do that anyhow under a planned basis. Have you started negotiating with the labor unions to change those contracts? MR. AUSTIN: I don't think it adds to the record to say over again what we have said. I thought Mr. Gray agreed with us that there was a legal difference between the productior. year and the model year. Perhaps he doesn't. MR. GRAY: You can delay your model year introduction to the end of a calendar year and it would be the same situa- tion. If you ran into certification problems in the Summer of 1981, then you could continue to produce 1981 model year bikes until the end of that year, at which point you would have to have certified a 1982 bike or cease production essentially. So, you know, in the ultimate/ the definition would become one. THOMAS R. WILSON CERTIFIID 3HORTHANO REPORTERS (418) 543-3194/481-3098 ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 HARLEY DAVIDSON 127 MR. AUSTIN: The only difference is in the situation you have last hypothecated, Harley-Davidson would have, you know, to shut down for a month in July for no purpose, whereas if you reverse the situation, they could switch over their model year as planned during that shutdown and still have the six months to try and get that production year into compliance with the standard that became effective six months later. CHAIRMAN GRAY: But you would have another shutdown. You would have the shutdown associated with the introduction of the new technology to meet the '82 standards January 1 under the CARB procedure. MR. AUSTIN: Yes. I think what Mr. Embrekts hypothesized, though, was a situation where you developed a new motorcycle which you thought would satisfy the '82 standards, but because of minor, you know, adjustment problems with the new motorcycle, you didn't get your certification until July of '81, and you could mess with those adjustments for a six-month period and get your certification by January 1, which is the date you are required to have it. That doesn't require any shutdown. It just means that, you know, you make the adjustments that you need to make. CHAIRMAN JACKSON: What bikes would you be producing? MR. AUSTIN: What? CHAIRMAN JACKSON: You would be producing 1981 bikes and calling them 1981 bikes? MR. AUSTIN: You would be producing '82 bikes and calling them '81, but you don't have to comply with the '82 standards until the 1st of January, 5 R. WILSON shorthand reporters (415) S43-3194MS1-30M ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 HARLEY DAVIDSON 128 CHAIRMAN JACKSON: Not the way the umbrella of the federal law folds over that. MR. AUSTIN: That's why I said I thought CARB had asked the question whether CO standards are harder to meet than the hydrocarbons. We said the hydrocarbon standards would determine that. Presumably we would meet the five-gram EPA hydrocarbon standard and the 12-gram EPA CO standard, and the only standard we have left to meet is the one-gram hydrocarbon, which is the California edition. MR. GRAY: You would have to recertify for the federal levels for the new bikes for the '82 model year production for the few months that you would produce it, and then have to recertify again for the introduction of the change required for January 1, 1982. MR. AUSTIN: Oh, yes, that's the basic reason we have objected to duplicate certification in California and the federal levels. You always run the risk of having to do things twice. Now, in *82, there is some reason for that because they have a different hydrocarbon standard. In other years, there isn't. And we would have to take that risk assuming we couldn't you know, we couldn't meet the tightest standard initially. But at least we would have the legal option of trying to meet it for another six months. MR. EMBREKTS: In earlier years, really a certificate of conformity for our bikes is not really necessary for sale in California if it were a hydrocarbon standard alone. It is required to meet the carbon monoxide standard, and California THOMAS R. WILSON CERTIFIED SHORTHAND REPORTERS (415) S43-31M/441-30M ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 HARLEY DAVIDSON is out of that anyway. But certainly we could market bicycle configurations that failed the EPA tests all the time if it were the hydrocarbon standard alone, so why not? CHAIRMAN JACKSON: Where are you going to market them? MR. EMBREKTS: I beg your pardon? CHAIRMAN JACKSON: Where are you going to market them? MR. EMBREKTS: Say in California. CHAIRMAN JACKSON: That's still the United States. MR. EMBREKTS: Well, we sometimes ask that, too. Well, you see CHAIRMAN JACKSON: That's why we had the question about the CO standard is because, even though California is given a waiver, or even if they don't have a waiver, you have to meet the federal standard all the time everywhere. MR. EMBREKTS: That's why we don't see the waivers at this time anymore because there are two fundamental different control strategies. California deliberately embarked to control two-stroke motorcycles, and the record is quite clear on that and how they did it,, and the fact that they had philosophical differences with the EPA on non-standard dis- placement, sliding and all that, whereas the EPA strategy is to control all motorcycles. So essentially now we we would be discussing a part of the standard with both agencies, and then the configuration on the other half of the same emissions with one agency alone, and we would be under juris- diction of both. THOMAS R. WILSON CERTIFIED SHORTHAND REPORTERS (41S) S43-31M/4C1-30M ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 HARLEY DAVIDSON/YAMAHA 130 CHAIRMAN JACKSON: Mr. Austin, given that we have had a considerable amount of discussion on this business about the effects of the difference in model year versus calendar year for application of the standards, if you feel any need to supplement the record with any more expanded explanation, we would certainly welcome it, showing in greater detail what kind of implication it would have on Harley-Davidson1s ability to deal with their union, economic impacts, those kinds of things that you could quantify such that we could better assess the impact of that particular aspect of the reg. MR. AUSTIN: That's prior to June 10th, did I hear you say? CHAIRMAN JACKSON: That's right. MR. AUSTIN: All right. Thank you very much. CHAIRMAN JACKSON: Thank you, sir. MR. RUSSELL JURA: Good afternoon. My name is Russell Jura. I'm representing Yamaha Motor Corporation - USA. On July 15, 1975, the California Air Resources Board (CARB) adopted exhaust emissions regulations for motorcycles. The Environmental Protection Agency (EPA) granted the CARB a waiver to enforce these standards on October 7, 1976. In January of 1977, the EPA promulgated national motorcycle exhaust emissions standards, and in consideration of those national standards the CARB. revised its motorcycle standards an procedures on March 24, 1977. Based upon events subsequent to the October 7 grant of the CARB waiver, the EPA indicated that it would hold an additional waiver hearing to consider continued California THOMAS R. WILSON CERTIFIED SHORTHAND REPORTERS (41S) S4S-3194/461-30M ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 YAMAHA 131 compliance with the original, October 7 waiver. This hearing is this additional hearing to consider that continued com- pliance . At this hearing Yamaha would like to comment upon: (1) The continued validity of the waiver for the 1978-81 model years, and (2) The continued validity of the waiver for the 1982 and subsequent model years. Section 2 09(b) of the Clean Air Act states that a waiver may be granted only if certain conditions are met. One of these conditions is that the California standard be more stringent than the applicable federal standard. In the initial waiver grant the Administrator found that there were no federal standards, and thus the California standards were obviously more stringent than the non-existent federal standards. However, with the promulgation of federal standards and the adoption by California of those standards for the 1973-81 model years, it is questionable if a finding of greater stringency can still be supported for the 1978-81 model years. The first reason why such a finding of greater stringency fails is that California has adopted only a hydro- carbon standard while the EPA has promulgated hydrocarbon and carbon monoxide standards. Since a greater total reduction of all pollutants will result from the control of both carbon monoxide and hydrocarbons than just from the control of hydrocarbons, the EPA standard is more stringent as a whole than the CARB standard. Thus, the Clean Air Act 5 R. WILSON SHORTHANO REPORTERS (418) 543-3194/4(1-3098 ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 132 YAMAHA requires that there be no CARB waiver. Further, in terms of technological modifications, greater modification is required to meet the EPA standard than the CARB standard. Uncontrolled four-stroke motorcycles average 2-3 grams per kilometer hydrocarbons, and 20-30 grams per kilometer carbon monoxide. No modification is required of these vehicles for the 1978-81 model year to meet the CARB standards. This fact is reflected in a statement made by Dr. Robert Sawyer at the July 15, 1975 hearing at which CARB adopted motorcycle exhaust emission standards. If I may quote from Dr. Sawyer, he stated: "What we are saying is that we are going to have some standards for '78 that all 4-strokes will meet, and half the motorcycles on the road ought to meet that standard. Then for '80 we are going to have a standard, even if it requires (inaudible) of two-thirds. Again, all 4-strokes are going to meet that 1980 standard. They meet it today. So it will not be until 1983 that the 4-strokes get any suggestion of control." Some control is necessary, however, for four-strokes to meet the EPA carbon monoxide standard of 17 grains per kilometer. This standard is below the average four-stroke uncontrolled carbon monoxide emission, and engine modification is necessary to meet the standard. Thus, technologically, the EPA standard is more difficult or stringent than the CARB standard as regards four-stroke motorcycles? and thus the EPA standard is, within the meaning of Section 209(b), more stringent than the CARB standard. THOMAS R. WILSON CERTIFIED SHORTHAND REPORTERS (41#) ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 133 YAMAHA For many two-stroke motorcycles the modifications necessary to meet the CARB hydrocarbon standard also will enable the vehicles to meet the EPA carbon monoxide standard. However, this is not true for all two-strokes. Some two- strokes, particularly the large vehicles require additional modifications to those done for hydrocarbon control to meet the 17 gram carbon monoxide standard. This situation again emphasizes that the EPA standard is technologically more stringent than the CARB standard; and thus continuation of the CARB waiver would violate Section 209(b). A second reason for finding that continuation of the waiver will violate the Clean Air Act is that the CARB and EPA hydrocarbon standards are identical for 1978-81. If the standards are identical then the only basis for a finding of greater CARB stringency must be based upon a more stringent CARB compliance and inspection procedure. Such a finding is based upon reasoning that a more stringent compliance and inspection procedure results in lower emissions levels for the vehicle population. It cannot be said that the California procedure, for which there is not a specific and more stringent com- pliance and inspection procedure, is more stringent than the federal procedure. Such a specific procedure will be proposed by the CARB staff in June. As stated in the staff report to the CARB on March 24, Page 10, "The staff plans to propose production motorcycle enforcement procedures and evaluation techniques for consideration at the June Board meeting". However, a future proposed procedure cannot be THOMAS R. WILSON CERTIFIED SHORTHANO REPORTERS (41ft) S43-3194M61-30M ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 YAMAHA J--i* considered. Just as at.the first waiver hearing when the Hearin Officer refused to consider whether the proposed EPA motor- cycle standard would be more stringent than the actual California motorcycle standard because a proposed standard has no force in law, so must the Hearing Officer at this hearing refuse to consider the proposed California compliance and inspection procedure, because the California proposal has no force in law. And, without a special California compliance and inspection procedure the waiver is not being fulfilled because the CARB standard is not more stringent than the EPA standard. The CARB has indicated that it recognizes this point, and will apply for a waiver after it has adopted its compliance and inspection procedure for motorcycles in June of this year. The CARB has adopted the. viewpoint that the 1978-81 model year waiver should be revoked. The only condition to such revocation that CARB requests is that if the federal procedure is determined to be unenforceable, that CARB be allowed to revert to the pre-March 1974 Excuse me the pre-March 24, 1977, CARB procedures. Yamaha objects to this condition and possible reversion. Such a reversion could put ฃamaha in an untenable position because Yamaha could not have the necessary time to complete the CARB testing if the EPA procedure were voided. Such position is precluded by the Clean Air Act, which requires adequate lead time before a CARB standard may be enforced. Yamaha does not object, to such reversion with a provision that CARB may enforce its standards only after Yamaha has had the THOMAS R. WILSON CERTIFIED SHORTHAND REPORTERS (418) S43-31t4Mt1-30M ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 YAMAHA 135 necessary lead time to comply with the reverted CARB procedure. Dealing with the 1982 and subsequent model year standards, we would like to state the following: On March 24, 19 77, when the CARB adopted the federal hydrocarbon standards for the 1978-81 model years, the CARB replaced its calendar year designations for the applicability of emissions standards with model year designations. One result of this action was for CARB to change the applicability of its one gram hydrocarbon per kilometer standard from motor- cycles manufactured on and after January 1, 1982 to 1982 model year motorcycles. The importance of this change is that motorcycle model year production usually begins nine to ten months prior to the calendar year. Thus, 1982 model year production will begin in approximately March of 1981. By changing the applicability of the one gram standard to the 1982 model year the CARB has thus advanced the applicability of the one gram standard and reduced the lead time to comply with the standard by approximately nine to ten months. According to the requirements of Section 209(b) a waiver may not be granted if either the necessary technology is not available, or if there is insufficient lead time to apply technology to production vehicles. The Administrator has found in his October 7, 1976 decision that the technology to meet a one gram standard requires conversion to four stroke motorcycles. The Administrator in the first waiver decision found that it was possible to convert sufficient models to four stroke by January 1, 1982 to meet the basic California 3 R. WILSON HOBTHANO REPORTERS <ซ1ซ 543-3194M41-30M ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 YAMAHA 136 market demand for motorcyles after that date. However, Yamaha does not feel that the basic market demand can be met by the 1982 model year by conversion to four stroke. Based upon the Administrator's previously accepted figure of the conversion of two modesl to four stroke per year (beginning three and one-half There is an error in my typed copy here. We will just skip that. Since an incomplete half conversion cannot be produced or marketed, this one and a half models really means two models per manufacturer that cannot be converted by the 1982 model year. As there are three major Japanese two stroke manufacturers which must convert to four strokes, this means that six total models will not be converted by the 1982 model year that would be converted by January 1, 1982. This alone should be a basis for not advancing the one gram standard to the 1982 model year. The lack of these six models, particularly when combined with the lack of models that will not be converted even by January 1, 1982, will create gaps in the three product lines, which will leave the basic market demand unfulfilled. This lack of models will be especially acute in the dual purpose market. To date, only one new four-stroke dual purpose motorcycle has been introduced by the three major two-stroke manufacturers. The other four-stroke introduction by these manufacturers have been on-road bikes only. The dual purpose market represents approximately 35% of the total street legal market', quoting from the 1976 THOMAS R. WILSON CfflTIPIRD SHORTHAND REPORTERS <41ป) 543-31M/481-309* ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 YAMAHA 137 R. L. Polk registration figures, so availability of this type of vehicle is essential to the basic market demand. Further, a street only vehicle is not a substitute for a dual purpose vehicle because the dual purpose vehicle has an off-road capability which the street only vehicle does not have. The lack of our four-stroke dual models will be alleviated by some conversion. But some models will not be converted by the 1982 model years, and this lack of conversion will result in the basic market demand for this type of vehicle being unmet. And since the basic market demand is unmet, the condition for a waiver that it be met is violated; and the waiver must not go into effect until January 1, 1982. In addition to these prepared comments, I would like to make one additional comment on what was discussed this morning regarding whether Title 13 testing waiver was requested for motorcycles or not. I got rather confused in that discussion as to exactly what the CARB was asking for in terms of a waiver.. As the waiver publication in the Federal Register indicated, Title 13 testing was being requested for all non- passenger vehicles. However, as in the May 2nd mailgram that the EPA received, the CARB apparently specifically excluded any waiver for compliance and inspection testing of motorcycles or especially specifically requested that no Title 13 waiver be considered for compliance and inspection testing for motorcycles. And yet today the CARB seemed to be requesting some sort of Title 13 authorization for a compliance, or for at least for inspection of motor vehicles. THOMAS R. WILSON CERTIFIED SHORTHAND REPORTERS (411) SW-41MM81-30M ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 138 YAMAHA And I wonder if I could get some clarification on that because we may wish to comment on that by June 10th. CHAIRMAN JACKSON: I don't know whether you can get clarification on that from me or not. I'm having a little trouble with it myself. Seems like, or at least the impres- sion I got was that California had requested a delay on con- sideration of their compliance and inspection testing program until they had some sort of meeting in June or something and made some changes. And seems to me like that would go hand in glove with the requirement to submit the application and to do the inspection work that they intended to do. And at such time as that whole package is ready, that would be what we would consider. MR. JURA: Well, if that's your understanding, then we will act on that assumption. CHAIRMAN JACKSON: If the CARB disagrees with that, they are welcome to submit clarification to the record. This argument you make about the lead time change MR. JURA: For the 1982 model, you mean? CHAIRMAN JACKSON: Right. What's Yamaha's position with regard to delaying the model year until January 1 of seventy January 1, '82? MR. JURA: We have several problems with that. The first of those problems is a marketing problem that we have in that motorcycles sell the retail marketing period for motorcycles tends to be April, May, June and July. If we are to begin our model year process or building our model years beginning January 1st, we will have insufficient models to meet THOMAS R. WILSON CERTIFIED SHORTHAND REPORTERS (418) S4S-31MSM1-30M ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 YAMAHA J--33 the basic market demand for that calendar year and will be forced to sell previous year's models, which would be a great economic sacrifice to ourselves. CHAIRMAN JACKSON: How great, assuming everybody else does the same thing? MR. JURA: Well, you must admit that a 1982 motorcycle is more attractive in 1932 than a 1981 motorcycle is in 1982 and as is currently CHAIRMAN JACKSON: Now wait. In 1982, we are talking about only '82 bikes either way. MR. JURA: Right. No, no. I understand that. We are not talking about producing 1981 motorcycles in 1982. What we are talking about is whether we will have a sufficient supply of 1982 motorcycles during the peak market demand in 1982 or whether we will only have a few 1982 models during the peak market demand of 1982 and have leftover 1981 models primarily. CHAIRMAN JACKSON: Well, are you talking about production capacity over a period of time? In other words, you need these extra months of production to get you up to the point where you have enough to react to the market? MR. JURA: Yes, yes. We normally begin producing many, many months in advance so that we will have a warehouse full of motorcycles of the new model year which we can sell to our dealers because they are economically more attractive. CHAIRMAN JACKSON: But that's just a matter of shifting down, isn't it? I mean couldn't you just shift that, retain the concept, but you would just have to delay i R. WILSON SHORTHAND REPORTERS (415) S43-31M/4S1-30M ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 140 YAMAHA everything by a certain amount of time? MR. JURA: Well, we could delay everything, but we would be left, since the peak marketing periods are in May, June, July and April, we would be left, since we do not have sufficient production capacity to build sufficient 1982 motorcycles in January, February, March, and then to transport them them over the country, we do not have sufficient 1982 motorcycles to meet the peak marketing demand period. MR. GRAY: Is it possible that you will produce all of your model year 1982 motorcycles before the effective date of the existing CARB 1982 standards? MR. JURA: In other words, would we produce all of our 1982 model motorcycles by December 31st, 1981? MR. GRAY: Yes. MR. JURA: I suppose it's possible, I don't think that we have any plans to do so right now. MR. GRAY: If you don't, then for the remaining small production volume, would you have the same type problem that Harley-Davidson mentioned in terms of the changing technology required to meet the more stringent one-gram standard and it might, therefore, be very difficult to change over your production process to that limited small production? MR. JURA: What we will probably do, if we have any models that can meet the one-gram standard, is we will produce those models either after January 1st, 1982; or if we have enough demand for that model that we need to produce some before January 1st, 1982, we will produce them in 1981 with the same configuration that we would produce them with in rHOMAS R. WILSON :bntified shorthand reporters <41S> 949-3104/441-3OM ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 YAMAHA 141 1982. In other words MR. GRAY: What if you MR. JURA: let us say we had a four-stroke motorcycle that can meet the one-gram standard. Then we would produce in 1981, we would produce 1982 models that were one-gram configuration rather than five-gram configuration if we were also to produce that motorcycle after January 1st, 1982. MR. GRAY: What if you have a motorcycle that can only meet the five-gram level and you are producing it up until the end of December, 1981? Will you continue to produce it in 1982 if it requires significant revision? MR. JURA: We could possibly produce it beginning January 1st, 1982, for the rest of the United States. We would not, I would think, produce a five-gram motorcycle until January 1st, 1982, and then take that same model and turn her into a one-gram motorcycle for the remainder of the 1982 production run. MR. GRAY: So you are saying that generally you would not anticipate changing a motorcycle configuration during the production process, especially that late in the production process, if it was if it had emissions greater than the one-gram level? MR. JURA: That's correct. MR. GRAY: So the issue that Harley-Davidson raised relative to needing to introduce that technology at the beginning of the model year production in your case doesn't really apply because, if it's needed, you are not going to THOMAS R. WILSON CERTIFIED SHORTHAND REPORTERS <418) 543-31M/441-30M ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 YAMAHA produce it; you are going to produce all your 1982 motorcycles before the standards go into effect; if it doesn't need it, you are sure you can produce it after the effective date? MR. JURA: Harley-Davidson speaks for Harley- Davidson, and they may have peculiar problems to themselves. I cannot say whether I cannot really comment on the accuracy of their statements as regards Yamaha or as regards the entire motorcycle industry. MR. GRAY: But as far as their problem of significant conversion, it is just that you would experience a similar problem, but your solution would be just to build all of your motorcycles before the effective, date of the standard? MR. JURA: Yes. MR. GRAY: That's pretty clear. From your discussion of the 1982 standards, it appears that it's limited specifically to: the issue of lead time and the applicability of the standards model year versus calendar year. MR. JURA: If you would like MR. GRAY: It almost emphasizes that point to the extent that it's saying that, in your judgment, it is feasible to meet the 1982 standard January 1, 1982,. but it's not in what did you say May 1, 1981, when you began production of that model year; is that correct? MR. JURA: That would not be a correct interpreta- tion of our message. The position of Yamaha has consistently been that it is too early to discuss whether it's feasible or not to meet the one-gram standard in 1982. The reason the 3 R. WILSON shorthand reporters WW S4S-3tMM1-30M ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 IS 19 20 21 22 23 24 25 26 27 28 YAMAHA 143 argument is worded the way it is is because the Administrator has already made a determination that it is feasible to meet the one-gram standard beginning January 1st, 1982. MR. GRAY: Well, I guess the point is does this lead time difference impact upon the feasibility, in Yamaha's opinion, of meeting the standard? MR. JURA: It most certainly could because it's an additional nine to ten months less lead time that we have to develop motorcycles to meet the standard. CHAIRMAN JACKSON: Just a point of clarification before we leave that point. Have you construed what the Administrator did in his waiver decision in your own words and I think they leave something to be desired in terms of the accuracy of what he actually did, and as far as this proceeding is concerned, we will rely on that decision waiver as to what he did. MR. JURA: Well, all I can say in response to that, if the Administrator does not feel that the one-gram standard is, indeed, feasible beginning January 1st, 1982, then he should not have granted the waiver. CHAIRMAN JACKSON: He did not find that it was infeasible. That's different than saying it's feasible. MR. GRAY: Does Yamaha support the specifics of the time it requires to convert from two strokes to four strokes that was offered in the waiver decision in the background information and that you also summarized in your testimony? Do you consider that as a valid estimate of the time it takes for that conversion? THOMAS R. WILSON CERTIFIED SHORTHAND REPORTERS (41S) S43-31ป4Mซ1-30M ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 YAMAHA 144 MR. JURA: The three-and-one-half year per model figure came from an original Yamaha submission to the Administrator, and I see no reason to change it at this time. MR. GRAY: Will Yamaha be making that conversion at a more rapid pace? MR. JURA: More rapidly than one model every three and a half years? MR. GRAY: Yes. MR. JURA: I can't say that they would. It might be possible, but I will stick with our original estimate that it takes three and a half years to convert.: MR. GRAY: You are making the conversions now, and I just asked the question do you plan to be able to better that time frame for conversion from two strokes to four strokes? MR. JURA: I can't comment on that. MR. GRAY: And in your discussion, .you did not mention the possible technical concern of a CO standard. Is it also your judgment that at the one-gram HC level that that standard would be controlling when compared to a 12-gram CO level? MR. JURA: We intend to meet the 12-gram CO level beginning in 1980 models, and I don't anticipate at this time that we would have additional problems in meeting the standard if we were to go to one-gram hydrocarbon. MR. GRAY: Okay. I have got one question regarding the pre-198 2 standards. It seemed that you were making the argument that 3 R. WILSON 'shorthand reporters (41ซ MV31MSM1-3QM ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 YAMAHA 145 the test procedures between the federal and the California standards and regulations were the differences were minimal, and yet in the last paragraph of your discussion, you conclude that you object to the possibility of CARB reverting back to their old procedures in the event of a some change in the federal procedure because there would be insufficient time in order to certify by that procedure. Would- you elaborate on if they are so similar, why would it require more time and why would it be more difficult? MR. JURA: As of March 24, the test procedures are identical. The Air Resources Board on March 24th adopted a resolution adopting the EPA standards and test procedures. And I think the question here is since the notice was whether California continues to comply with the October waiver of last year, whether the March 24th the question is whether the March 24th CARB action continues to comply with that waiver. So, therefore, our feeling is that the standards presently and test procedures presently are identical. MR. GRAY: With respect to the test procedure that the California Air Resources Board has a waiver for, do you consider those tests procedures more stringent than the federal procedures because those would be the procedures that the CARB would revert back to? MR. JURA: Our point as regards the reversion is that the CARB procedures that for which the waiver in October was granted and which the CARB removed rather changed on March 24th require were modeled after the notice of proposed rule making that the EPA published. They THOMAS R. WILSON CERTIFIED SHORTHAND REPORTERS (418) S43-31MVM130M ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 YAMAHA 146 require a full useful life to run the emissions test vehicle. So our point is that, if the EPA standards are invalidated, it's going to require us a certain amount of time to start all over again and go back to the zero point, run an emissions test data vehicle and then run the durability. It takes a certain amount of time to do this. Now, if we find out on December 31st, 1977, that the EPA test procedures have been invalidated and we then have to run the California Air Resources Board procedures, it's going to take us a certain amount of time to comply, and that's what our point is, that the reversion should not be allowed until we have had sufficient time to comply with the California procedures. MR. GRAY: I understand your point. But the question was do you consider, the test procedures that are covered under the waiver, existing waiver, more stringent than the existing federal procedures? MR. JURA: I don't think that we can comment on I can't comment on that today. MR. GRAY: You can't comment at all. I mean MR. JURA: I don't know if that's the answer you want me to say. I can't say right now. X don't know. I don't think it's relevant because I think that the question is whether the March 24th standard . . . CHAIRMAN JACKSON: Seems to me like whoever it is that's challenging the federal standards in this procedure ought to think about that a little bit. I hope they don't win. i R. WILSON SHORTHAND REPORTERS (418) S4341*4/4ซ1-MM ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 IS 19 20 21 22 23 24 25 26 27 28 YAMAHA 147 MR. JURA: Well, our point is that the Clean Air Act prohibits the Administrator from granting an automatic reversion without giving us sufficient time. CHAIRMAN JACKSON: You are just saying, procedurally speaking, that issue ought to be addressed at such time as a reversion should occur? MR. JURA: I think it should be addressed now. If you grant CARB an automatic reversion, it may take several months for the EPA and us and CARB to get together at another hearing and address the problem. In the meantime, we are stuck with motorcycles we can't certify or sell. CHAIRMAN JACKSON: Then it's primarily because of this durability thing? MR. JURA: Yamaha is not involved in any lawsuit on invalidating the federal test procedure and, you know, we can't comment on these lawsuits. MR. GRAY: Do you think that the California waiver should be revoked? MR. JURA: The Yamaha position is that we are better off with one test procedure than with two test procedures. However, our position is that, since the CARB adopted the federal test procedures, which is identical adopted the federal test procedure on March 24th, and since the standards are identical, that the California waiver should be revoked for the 1978 from January 1st, 1978, to January 1st, 1982. MR. GRAY: Doesn't seem to me to be that's very forward. The California, March the 24th, revised test THOMAS R. WILSON CERTIFIED SHORTHAND REPORTERS (410) UUIMW^ON ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 YAMAHA 148 procedures are not just simply that we adopt the federal standards. They were qualified to the extent that, without that qualification, the ARB may very well feel that the previous test procedures are more appropriate than the federals alone the federal alone. So it is a basic issue, it appears, as to whether or not that waiver should be revoked, and you are in favor of it, you know, what's what's the basis of your support for revoking the waiver? Do you think it's it's not more stringent and, if so, why, or what basis do you have for supporting or MR. JURA: I think we MR. GRAY: revoking the waiver, I guess? MR. JURA: I think the first part of my discussion regarding the absence of a CO standard in the CARB standard, which applies both to the old CARB standard and the new CARB standard, is valid in both cases. The fact is that you must do additional modifications on four strokes and some two strokes in order to comply with the EPA standards that are not necessary just to comply with the CARB standards. In addition to that, the CARB hydrocarbon standard, at least for the 1980 and '81 model years in the case of the old CARB standard, and for the 1978 and '79 model years in the case of the March 24th standard, are absolutely identical to the EPA standards. The Clean Air Act specifically states that the California standards must be more stringent. Now, they can be more stringent if California adopts a more severe compliance and inspection testing program. However, it has not done so and will not do so until June. THOMAS R. WILSON certified shorthand reporters <ซ1S) S43-31M44S1-30M ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 YAMAHA 149 MR. GRAY: As far as the test procedures go, the argument for the federal standard, including a CO CO control, is the basis for your feelings and for your recommenda- tion that the waiver should be revoked in total? MR. JURA: As regards Yes, as regards the old standard. When, you get to the March 24th standard, in addition to the CO standard, the EPA standards are identical. And I may add that the EPA-CARB standards are identical for the 1980 and *81 models so that would objec- tion would also be raised for that point under the old CARB MR. GRAY: You had finished your discussion with a statement that Yamaha does not object to such reversion with a provision that CARB may enforce its standard only after Yamaha had the necessary lead time to comply with the reverted CARB procedure. What is the necessary lead time? MR. JURA: That would depend upon what was invalidatec and where we are. MR. GRAY: Say everything, how much lead time would be necessary to MR. JURA: If it's December 31, 1977, we are going to require what the Administrator in his waiver finding described as 15 months of lead time to certify. MR. GRAY: And you are saying it would take Yamaha 15 months to certify by the California procedure? I'm asking -- MR. JURA: No. The Administrator said that in the waiver decision. MR. GRAY: But my question was what did you mean by THOMAS R. WILSON CERTIFIED SHORTHAND REPORTERS <*1* S4S41WM1-30M ------- 1 2 3 4 5- 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 YAMAHA 150 that statement? What is the necessary lead time with respect to Yamaha? MR. JURA: Well, once again, all I can say is it depends on the date and it depends on what was invalidated. For instance, if the durability testing were invalidated, perhaps it would taJce two or three months. If the entire procedure were invalidated and we had to start over again with a Part 1 application, perhaps it would take eight or nine months. I can't give you an exact period of time because it will depend upon what is invalidated and what must be reverted. If you read the CARB resolution, what they say is that they will revert to the old CARB procedure only for what is invalidated in the EPA procedure. So, since different amounts in the EPA procedure could be invalidated, the amount of lead time would vary. MR. GRAY: What is it in the limit if the entire procedure was invalidated? I mean how much lead time would you have to have in that limit? MR. JURA: To completely certify a year's production of motorcycles? MR. GRAY: Yes. MR. JURA: I would say that we would like at least a year. I may add that the Administrator did quote a 15-month period in his waiver decision. MR. GRAY: I think in terms of quoting the Administrator and his judgments, it's fair to make the THOMAS R. WILSON CERTIFIED SHORTHAND REPORTERS ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 YAMAHA 151 statement that the Administrator might often be conservative since he did not have the same knowledge of factors affecting lead time that the motorcycle manufacturers themselves have. So, of necessity, that might require a more conservative estimate. I guess one other point relative to the 1982 standards, from the discussion, at least implied, that right now Yamaha plans to have converted all of its two-stroke motorcycles to four-stroke motorcycles by 1982 MR. JURA: I did not say that. I said that the Administrator has found that conversion is necessary to meet the 12-gram standard. We, of course, would prefer to develop some means of certifying a two-stroke motorcycle to that standard because we do worldwide production, and it's better for us to continue to sell two strokes in this country. MR. GRAY: That's true, but your whole argument was based upon the lack of your four-stroke models will be alleviated by some conversion. The whole argument was based upon conversion from two strokes to four strokes. If you don't need to convert that many two strokes to four strokes, doesn't that change your lead time picture? MR. JURA: It would change the lead time picture. But at this point we have no way of producing a two-stroke motorcycle and we anticipate no way of producing a two-stroke motorcycle that can meet a one-gram standard by 1982, 1983, 1985 or any other date. At the present time, we don't feel that it can be done. MR. GRAY: So, with that statement, is it fair to 3 R. WILSON SHORTHAND REPORTERS (418) 84941MMS1-MM ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 YAMAHA 152 assume that Yamaha plans to have a full offering of four- stroke motorcycles beginning in 1982? MR. JURA: We will have as full a line as If we cannot have two-stroke motorcycles if we cannot produce two-stroke motorcycles to meet the one-gram standard, we will convert to as many models as possible. However, as the Administrator has indicated, the criteria is whether the basic market demand can be met and not whether every model can be converted. And as the Administrator and his staff found and recommended, a two-gram standard would require conversion to four-stroke motorcycles, and that cannot be done until the 1983 model year. MR. GRAY: I don't think the conclusion was that it required a conversion; it just said a conversion would allow it to be done. I think there is a big difference there. It appears there's been a lot of quoting out of context what the Administrator found, required and/or determined. And in that case, it just doesn't seem to be appropriate. The question is simply are you making an argument that you can't convert all your two-strokes to four-strokes by 1982? MR. JURA: It cannot be done. MR. GRAY: It cannot? MR. JURA: By the 1982 model year, no. MR. GRAY: By 1982? MR. JURA: By January 1st, 1982? MR. GRAY: Yes. Surely you have made plans. You plan to sell motorcycles in 1982. You know whether you are J R. WILSON 8HORTHANO REPORTERS ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 25 24 25 26 27 28 YAMAHA 153 going to two strokes or four strokes., if you have made some commitment to convert lines, or else the Administrator's judgment was very conservative if you can wait this long to decide how many models you are going to convert. Where does it all come out? MR. JURA: Well MR. GRAY: Are you planning to convert? Are you not planning to convert? MR. JURA: We certainly are planning to offer a full line of motorcycles for sale in California in 1982 and, if necessary, we will convert. MR. GRAY: And you have not yet made your decision to convert? MR. JURA: Well, we are hoping we don't have to convert fully. MR. GRAY: But at this point, you previously said that you did not know of any technology that you could use on two strokes to meet those standards. So in light of that and not making plans to convert, and if that's MR. JURA: I didn't say we weren't making plans to convert. I realize what you are trying to say, but, you know, I'm not going to say here and now so it can be quoted back to me two years later yes, we will completely convert to four strokes if we can develop some sort of two-stroke technology to meet a one-gram standard. MR. GRAY: There is a lot of lead time regarding the decision of going from two to four strokes, converting to MR. JURA: Not necessarily. It could be that we i R. WILSON SHORTHAND REPORTERS (41ปป ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 YAMAHA 154 could be going along with parallel development at this point in time. I don't think that we could. CHAIRMAN JACKSON: You could be? MR. GRAY: Are you? MR. JURA: We are working on development of new four-stroke engines, yes. I think we would be foolish not to be, because if we cannot change our two-stroke motorcycles to meet the standard, we will have to produce four-stroke motorcycles. MR. GRAY: And you can produce them in that lead time, yet you aren't making plans to do it? MR. JURA: We are making plans, if necessary, to produce four-stroke motorcycles. MR. GRAY: How many have you converted thus far? MR. JURA: We would say that we really have not converted any thus far because of the differences between two-stroke and four-stroke motorcycles and the market demand for two-stroke motorcycles and four-stroke motorcycles. The Administrator and the CARB would probably take a different point of view. We have a two-stroke 400 cc street motor- cycle. We also have a four-stroke 400 cc street motorcycle. I'm certain the Administrator and the CARB would say that's a conversion. We would say that they appeal to different markets, and that's not a conversion. If I may add just one more point, I think it's important to remark to the Administrator that Yamaha did support the adoption of a unified test procedure if California is, indeed, to have its own its own standard or its own THOMAS R. WILSON CERTIFIED SHORTHAND REPORTERS (41S) 943-11V4MS1-3098 ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 YAMAHA/KAWASAKI 155 enforcement because, you know, it's just it's uneconomical for us to convert, to run two certifications. However, that doesn't change the fact that we don't believe that California should have separate enforcement authority until it adopts a more stringent compliance inspection procedure. CHAIRMAN JACKSON: Thank you, sir. (Short recess.) CHAIRMAN JACKSON: We are ready if you are. MR. DENNIS DAVID: I'm ready. Good afternoon. CHAIRMAN JACKSON: I remember you from before. You were the one that had the trouble with MR. DAVID: Yes. CHAIRMAN JACKSON: the recorder. MR. DAVID: I'm back in second gear today. CHAIRMAN JACKSON: I don't think it will happen today. MR. DAVID: My name is Dennis David. I'm the Manager of the Legislative Section of Kawasaki Motors Corp., U.S.A. With me today is Darrell Johnson, counsel to Kawasaki. I will depart substantially from our prepared testimony as it has been almost totally rewritten. So I will suggest that you need not refer to. it during our testimony. I'm here today to testify in opposition to any waiver to California to enforce separate emission regulations for motorcycles. Before I address those specific points that are 5 R. WILSON SHORTHAND REPOftTCM (41S) M9-31MMS1-30M ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 KAWASAKI 156 germane to the issue before this hearing panel, I will summarize our feelings regarding the situation that now surrounds motorcycle emission regulations. It was California's inability to develop a state implementation plan that caused the courts to direct EPA to develop the plan for California. To avoid the drastic adverse effects that would have resulted from EPA's plan, which included, among other things, restrictions on motor- cycle usage and registrations in California, our company, as well as other members of the motorcycle industry, suggested that a more appropriate action would be the establishment of emission standards for motorcycles. EPA agreed and began the standards development process that has already resulted in national exhaust emission standards for motorcycles. However, during that development process, the California Air Resources Board expressed its concern that EPA would not adopt timely controls for motorcycles that would be sold in California. Therefore, the Air Resources Board adopted EPA's draft regulations, inserting its own hydrocarbon standards. EPA was compelled to grant California's subse- quent request for a waiver of federal preemption for those standards because at that time EPA had not published its motorcycle regulations, and any standard is more severe than no standard. EPA granted the waiver but reserved the right to reconsider its validity. Federal standards were issued in January, 1977. Subsequently, the Air Resources Board has modified its regulations to be the same as EPA's except for a one-gram THOMAS R. WILSON CERTIFIED SHORTHAND REPORTERS M1S> S43-S1M4S1-30M ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 KAWASAKI 157 per kilometer hydrocarbon standard for 1982 motorcycles. It is those revised California regulations that are the subject of today's hearing. The Air Resources Board staff report of March 24th, 1977, states: "EPA's efforts in controlling motorcycle emissions have been made primarily to assist air pollution control in extremely polluted areas such as the Los Angeles Basin. California adopted motorcycle emission standards on its own due to administrative delays on the part of EPA. At present the federal and California standards commence at the same time, and the difference between the levels of control imposed by the two agencies is minimal." We agree with this statement except that "administra- tive delays" on the part of EPA did not prevent the adoption of regulations which are effective on January 1, 1978, the same date that California's regulations became effective. The only significant difference is California's one-gram per kilometer hydrocarbon standard for 1982 models. Based on the nature of motorcycle manufacturing and the background that has led us to today's hesuring, we sincerely believe that EPA is the proper agency to regulate motorcycle emissions and that EPA should be the sole agency to establish emission controls for motorcycles. We oppose motorcycle emission regulations being administered by two separate governmental agencies, EPA and the Air Resources Board. We honestly do not believe that it is in anyone's best interests thait this situation continues. THOMAS R. WILSON CERTIFIED SHORTHAND REPORTERS <4tS> S4341M/4S1-30M ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 KAWASAKI 158 It is overkill and unnecessarily increases the cost of government and motorcycle retail prices. Now, I will address the specific issues for which this hearing is being held. The Air Resources Board The Air Resources Board's amended motorcycle regulations are, in essence, identical to EPA's with two exceptions. First, the Air Resources Board will require that manufacturers submit to the Executive Officer a complete copy of the application for certification submitted to EPA, together with a copy of the Certificate of Conformity issued by EPA. Second, the Air Resources Board has adopted a new one-gram per kilometer 1982 hydrocarbon standard. In order for EPA's October 1, 1976, waiver to remain valid, the Air Resources Board's amended regulations must continue to meet the waiver requirements contained in Section 209 (b) of the Clean Air Act. As the amended California regulations contain standards that vary in stringency according to model year, each level of control must be considered separately. California's revised regulations applicable to 1978 model year motorcycles manufactured on or after January 1, 1978, and 1979 model year motorcycle, and California's revised regulations applicable to 1980 and 1981 model year motorcycles fail to continue to comply with the conditions of the October ] 1976, waiver. Section 209 (b) of the Act requires that the state standards for which a waiver is being sought be more stringent than applicable federal standards. California's '78 through THOMAS R. WILSON CERTIFIED SHORTHAND REPORTERS (418) S43-S194/4S1-30SS ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 KAWASAKI 159 '81 standards are the same as those contained in EPA's regula- tions. The test procedures currently proposed for determining compliance with the California standards are EPA's test pro- cedures. The Air Resources Board has advised EPA that the Title 13 compliance testing and inspection program have been withdrawn and will be the subject of further action by the Air Resources Board and further waiver proceedings. However, the Air Resources Board also states it has the right to inspect motorcycles, which right emanates from: 1. Section 2101(a) and (d) of Title 13, and 2. Is implicit in California's right to certify. With regard to California's implicit right to inspect because of its certification rights, since California no longer has standards and test procedures more stringent than EPA's standards and test procedures for '78 through '81, the Air Resources Board no longer qualifies for the waiver granted October 1st, 1976 and, therefore, no longer has certification rights from which the alleged implicit right to inspect may flow. Secondly, the very sections in Title 13 which the Air Resources Board states are the authority to test are what the Air Resources Board said in its mailgram of May 2nd, 1977, would not be considered today. Finally, to the extent that the Air Resources Board's inspection rights pursuant to Sections 2101(a) and (d) are to be considered, EPA has substantially the same rights in its own test procedure. Please refer to Section 86.441.78 of EPA's regulations. It gives EPA the right of entry, including I R. WILSON SHORTHAND REPORTERS (415) 543-3194/461-3004 ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 KAWASAKI 16o in Subparagraph (b), (d) and (e) the right to inspect produc- tion motorcycles at any facility, whether owned or controlled by the applicant, for the purpose of determining that produc- tion vehicles are the same in all material respects as the vehicle which has been certified. One further point regarding California's '78 through '81 standards, with regard to the proposed requirement that ftianufacturers submit copies of their application for certifica- tion and the certification the Certificate of Conformity to the Air Resources Board Executive Officer, Section 209(a) of the Act specifically prohibits any state from requiring: "certification/ inspection, or any other approval relating to the control of emissions from any new motor vehicle or new motor vehicle engine as condition precedent to the initial retail sale, titling, if any, or registra- tion of such motor vehicle, motor vehicle engine, or equipment." California's proposed requirement that manufacturers submit copies of their EPA documents is a mandatory prerequisite to the sale or offering for sale of motorcycles in California, and is specifically prohibited by Section 209(a) of the Act. Therefore, California's standards and regulations for *78 through '81 motorcycles fail to continue to comply with the requirements of Section 209(b) of the Act. EPA's October 1, 1976, waiver must be found to be invalid and should be revoked. The sole remaining item is California's modified one-gram per kilometer HC standard, for 1982 and subsequent model year motorcycles. We submit that the California THOMAS R. WILSON CERTIFIED SHORTHAND REPORTERS (415) 5*3-31 #4/481-3098 ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 KAWASAKI 161 one-gram hydrocarbon standard for 1982 and thereafter is a new standard requiring EPA's consideration of technological feasibility, cost of compliance and lead time because the implementation date has now been changed by California from that which existed in the prior waiver hearing. We have previously stated that a one-gram per kilometer standard in the 1982 time frame is technologically infeasible. We have no new evidence that changes that opinion. A one-gram per kilometer standard will probably mean the demise of all two-stroke motorcycles. Further, large four-stroke models could not achieve such a level without the addition of bolt-on technologies, such as catalytic converters or thermal reactors. Automotive control technology could not be transplanted onto motorcycles due to the inherent differences in the vehicle and their operation, size, weight, vibration, cost, etc., all are very different. To date, we have not been successful in developing workable technology that would permit compliance with the one-gram per kilometer standard, and we have grave concern that acceptable technology could not be developed by 1982. There is no evidence in this record, or in the records of the ARB's previous hearings that there is sufficient lead time giving consideration to costs to meet the 198 2 one- gram per kilometer HC standard, either as originally proposed or with the Air Resources Board's new shortened effective date. Regardless, California's one-gram per kilometer standard as now amended no longer complies with the conditions i R. WILSON SHORTHAND REPORTERS (415) 543-3194/461 -3098 ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 KAWASAKI 162 of the October 1st, 1976, waiver. In making that waiver decision, the Administrator was considering a standard applicable to new motorcycles manufactured after January 1st, 1982. California's amended standard now applies to 1982 and subsequent model year motorcycles. This difference in the implementation date of the standard decreases the lead time remaining, thereby creating a new one-gram hydrocarbon standard, and changes the conditions of the October 1st, 1976, waiver. On that basis, the waiver for California's 1982 one-gram per kilometer standard must be revoked. I also must comment on the Air Resources Board's proposed qualification that, if all or part of the federal test procedures are found to be invalid or unenforceable, then the old California exhaust emissions standards and test procedures for 1978 and subsequent production year motorcycles, as amended February 20th, 1976, or the equivalent portion thereof, shall govern. Not only would the granting of the waiver for such a contingency plan be outside the permissible boundaries of Section 209(b), but it represents a physical impossibility to manufacturers. To illustrate, we are a little over seven months away from the initial implementation of EPA's standards of January 1st, 1978. Our EPA certification efforts are well underway. If for any reason the Air Resources Board is permitted to require certification testing that differs in any material respect from that required by EPA, it would be physically impossible for us to obtain certification in I R. WILSON SHORTHAND REPORTERS (418) 543-3194/4S1-30SS ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 KAWASAKI 163 California before January 1st, 1978. New proceedings are required before a waiver can be granted to California to enforce motorcycle emission standards. Thank you. CHAIRMAN JACKSON: Would you care to clarify the points you made at the very last, why the if the change occurred, the reversion back to California's standards, why you could not possible certify for '78? MR. DAVID: Certainly. The California exhaust emissions standards and test procedures as amended February 20, 1975, are a working draft EPA document. It differs substan- tially from the existing document that EPA has published. If for any reason California were to enforce that regulation, there just isn't time to go back, start all over with the Part 1 application, do the testing and end up in 1978 with certified motorcycles. CHAIRMAN JACKSON: It's not anything different about the way the two procedures are; it's just having to start over? MR. DAVID: They are entirely different. CHAIRMAN JACKSON: Well, how are they entirely different? MR. DAVID: They are entirely different. CHAIRMAN JACKSON: What's different, significantly different? MR. DAVID: Probably the biggest significant difference is the EPA's draft regulations, which became the February 20th, '76, California test procedures, parallel to the automotive certification requirements in that they require i R. WILSON SHORTHAND RBPORTIR8 (415) S43-31M/461-3098 ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 KAWASAKI 164 an emission data vehicle and a durability data vehicle. The method of testing goes to vehicles and all of the various ins and outs of submitting applications, etc., are totally different than the current existing EPA test procedures. I don't know if I need to expand on that much more. They are just not the same document. CHAIRMAN JACKSON: Well, is there anybody that What's the basis for assuming that anything would happen to the federal test procedures, test procedure itself? MR. DAVID: What's the basis for assuming that something could happen to it? CHAIRMAN JACKSON: Yes. There is no legal challenge to that, is there? MR. JOHNSON: Maybe, Mr. Jackson, I can be of some assistance there. There currently is a there are two petitions filed with the D.C. Circuit Court of Appeals, one of which addresses itself to EPA's regulations, and the other of which addresses itself to the grant by EPA of the October waiver. As you know, if there is any doubt about whether a person would like to address one of one who is affected by those regulations would like to address an issue under there, he must file in a timely manner his petition with that circuit. And so certain precautionary measures have been taken. Now, the basis, at least one of the bases of the action taken addresses useful life and the manner in which it's been defined in both the EPA test procedure and in the California test procedure as waived in October. The basis of THOMAS R. WILSON CERTIFIES} SHORTHAND REPORTERS (419) 543-3194/481-30M ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 KAWASAKI 165 the challenge in the EPA waiver was that, in order to be consistent with Section 202(a), "useful life" had to be defined in a certain manner, and EPA allowed it to be defined in a manner contrary to that. So specifically, the useful life issue is one way in which both the federal procedure and the California procedure possibly could be invalidated. CHAIRMAN JACKSON: Not the test procedure. MR. JOHNSON: Well, at least that aspect of it. CHAIRMAN JACKSON: That's not a part of the test procedure. MR. DAVID: Perhaps I should say here that the concern that the federal test procedures, or a portion thereof, would be found to be invalid is not ours; it's the Air Resources: Board's. The requirement of reversion was inserted into their amended regulations on March 24th, 1977. CHAIRMAN JACKSON: But I'm just trying to get to the point of your concern about if it did go to a reversion, what the effect would be, and you were talking about the test procedures, and I am asking my question relates to what's the likelihood of anything happening to the test procedures under some challenge that was hypothesized by the CARB. And I don't see that there is any challenge to the test procedure per se. Now, there may be a challenge to some of the definitional approaches that are used in certification under the regs, but not the test procedure. The test procedure thing, that measures exhaust emissions. THOMAS R. WILSON CERTIFIED SHORTHAND REPORTERS (415) 543-3194/4$ 1-3098 ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 KAWASAKI 166 MR. JOHNSON: You are quite right. I mean other than the actions which I have just mentioned, I'm not aware of the basis of California's concern. MR. DAVID: When we use the term "test procedures," we refer in general to the certification requirements, which include not only the CVS testing methods, but also the certification requirement, the submission of data, submission of annual reports, preparation of your Part 1 application, the method by which the vehicles are tested under the CVS procedure. So really Subparts (e) and (f) of Part 86 have to be considered as a test procedure. If we revert to the old California test procedure, that is EPA's old working draft, it's much different. CHAIRMAN JACKSON: I see. If we grant the waiver, or if we could, what would be the situation if their con- ditional reversion was based on reverting to the federal program? MR. DAVID: Well, I think that the only way that the federal test procedures could be considered, could be found by courts to be invalid, is that they are not consistent with Section 202.. I'm not sure I understand how that would all hang together there, but CHAIRMAN JACKSON: Your problem MR. DAVID: that's not the way California's regulations CHAIRMAN JACKSON: I understand. MR. DAVID: amended regulations read. ฃ R. WILSON SHORTHAND REPORTERS (418) S43-31MMS1-30M ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 KAWASAKI 167 CHAIRMAN JACKSON: I'm just trying to understand the cause for concern here. If their reversion read revert back to the federal program, which they have adopted, essentially adopted, they have adopted the federal test procedure and the federal approach for certification, and they conclude that they are ostensibly equal and, therefore, that they no longer need a waiver for them, but you say that, because the reversion goes back to the old California program, that causes you a lot of problems? MR. DAVID: It's an impossibility. CHAIRMAN JACKSON: It's an impossibility. But if the reversion went back to the federal program, the federal test procedures and the federal certification procedures, then it wouldn't cause.you any problem because you would be where you were at the time such a court action, adverse court action, came down with regard to the federal approach; is that right? Is that fair? MR. JOHNSON: I think that's probably a fair statement. I don't think that's what's before us CHAIRMAN JACKSON: I understand. MR. JOHNSON: but I think that's fair. CHAIRMAN JACKSON: I understand. I understand. MR. DAVID: I'm troubled by how a court could find that some portion of the federal test procedures could be invalid and then California could revert to those same test procedures. CHAIRMAN JACKSON: I haven't reviewed your petition. I don't know. THOMAS R. WILSON CERTIFIED SHORTHAND REPORTERS (415) 943-3194/461-SON ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 KAWASAKI 168 MR. DAVID: Okay. MR. GRAY: With regard to the 1982 standards MR. DAVID: Yes. MR. GRAY: you discussed primarily the issue of lead time again, the concern over the definition of model year versus the applicability beginning with the first day of 1982. MR. DAVID: Yes. MR. GRAY: Do you have a similar situation to Yamaha or the Harley-Davidson, or do you have a different production situation? MR. DAVID: Well, I think, based on listening to their testimony this morning and knowing our situation, I can't comment on where they are at. We do not consider that the one-gram per kilometer standard in the 1982 time frame is technologically feasible. So I guess our position may be somewhat different than the others. I'm. not sure. MR. GRAY: Would you change a production line beginning January 1, 198 2, to incorporate a different technology? Could you do that in your process? MR. DAVID: No, we wouldn't. MR. GRAY: You would not? MR. DAVID: We would not. That's virtually impossible. We can do that once. MR. GRAY: So it means that, similar to the other manufacturers, that you would have to incorporate that different technology at the beginning of the model year, which for you is when? 3 R. WILSON 9HORTHANO REPORTERS H1S) 544-3194/461-3096 ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 KAWASAKI 169 MR. DAVID: May, actually for us. MR. GRAY: Similar to Yamaha? MR. DAVID: Similar to Yamaha. I think the man from Yamaha said nine to ten months earlier. Actually, our next year's model year begins roughly with May production. MR. GRAY: Would you have a similar strategy as Yamaha explained relative to stockpiling, if you will, of model year production prior to the beginning of that year, calendar year? MR. DAVID: I'm not aware of any strategy that we would consider like that. MR. GRAY: If you could not meet the standard, you would not plan to produce ahead of time for that model year? MR. DAVID: Well, we can't meet the standard now, and we don't foresee any technology being forthcoming which would permit us to meet that standard. MR. GRAY: Are you planning conversions to four strokes? MR. DAVID: I'm bothered by the word "conversion." We build four strokes and two strokes. You don't convert a two-stroke motorcycle to a four-stroke engine. You build a new four-stroke motorcycle. MR. GRAY: Can you offer a full product line offering of four-stroke motorcycles in this time frame? MR. DAVID: No, we cannot. MR. GRAY: How would you qualify that? What part could you not offer in the California market in 1982? MR. DAVID: Well, I think essentially in the area of THOMAS R. WILSON CERTIFIED SHORTHAND REPORTERS (~18) 843-31941491-30M ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 KAWASAKI 170 the lightweight single-cylinder two-stroke Enduros, which are a unique vehicle configuration, we could not offer any of those models under a one-gram standard. Those are a sizeable part of our marketplace in all states. MR. GRAY: That's an exception to the one gram? MR. DAVID: That would be one exception. We are not positive that we will eliminate all of our larger two-stroke multi-cylinder machines. MR. GRAY: What do you mean? You think you can have technological fixes on those motorcycles that could meet the standards? MR. DAVID: Well, we would hope so, but we haven't developed any technology which would make those motorcycles come down to one gram per kilometer. I think one gram per kilometer means the end to two-stroke motorcycles in the United States, or at least in California, if that's their standard. MR. GRAY: You will have four-stroke also to compete with those for similar purposes to satisfy that market? MR. DAVID: No. They don't compete for similar purposes. I think that's the misnomer that we have going here today. A 125 single two-stroke Enduro does not really compete with a 125 single four-stroke Enduro. They are really quite different motorcycles. I .think we all know that. MR. GRAY: They may be different motorcycles, but the question is will the same customers buy a four-stroke instead of a two-stroke. If they won't If they won't compete or won't substitute, then why build them? THOMAS R. WILSON CERTIFIED SHORTHANO REPORTERS (418) S49-31M/481-30M ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 KAWASAKI 171 MR. DAVID: Are you asking me why we wouldn't build them? If we couldn't sell them, we wouldn't build them. That would be the answer. MR. GRAY: I don't know. You say a four-stroke is not a viable alternative to a two-stroke in certain areas. You mentioned specifically the Enduro. What about the other areas, I'm asking. MR. DAVID: Can you satisfy basic market demand in that area. I mean in the absence of specific marketing statistical information to show you, I can relate my own feelings in that area. Different strokes for different folks. Two strokes are not four strokes. And I think the editor of "Cycle News" at one of these hearings says the guy who buys that two stroke probably won't buy that four stroke if it's sitting side by side. In fact, he may not buy the four stroke if the two stroke is absent. MR. GRAY: That may very well be, but you do plan to have four-stroke offerings across the full range MR. DAVID: No. MR. GRAY: of bike sizes except for the two- stroke Enduro? MR. DAVID: I think what's being confused here is this question of conversion to four-stroke engines. MR. GRAY: Well, my question didn't touch on conversion. Do you plan to have four strokes across the general same product mix size that you have today with two strokes? MR. DAVID: Well, that's confidential information. 5 R. WILSON SHORTHAND MPORTERS (415) 545-3184/4ซ1-30M ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 KAWASAKI 172 If you prefer, we would like to submit that in a confidential submission. MR. GRAY: I mean it's relative to the feasibility of the '82 standards. MR. DAVID: That's right. But our future product planning in regards to engine types and sizes is confidential information. I would be happy to submit that under a request for confidential treatment. MR. GRAY: If there is no question that you can't do it, there is no need to say you are doing it confidentially. Regarding the CHAIRMAN JACKSON: Excuse me. If you feel it's necessary to submit something that's otherwise that you can't submit here because of a confidential nature, to amplify upon your point, you may I hasten to say that anything that you submit to us upon which we rely that's of a confi- dential nature is not going to get a whole great deal of reliance. It's very difficult to make to rely on it if it's something that can't be made public. MR. DAVID: I appreciate that. CHAIRMAN JACKSON: I can't deny you ... We can't I don't think we can allow an adverse inference to be drawn because of your claim for confidentiality. On the other hand, I will point out to you that it's very, very difficult for us to make any kind of a decision on information that can't be made generally available to the public. But it's your judgment. We would have to play on how important you think that is to whatever position you may THOMAS R. WILSON CtRTIFIfO SHORTHAND HCPOftTERS (419) M4-31M/M1-30M ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 KAWASAKI 173 have taken. MR. DAVID: I sympathize with your position. You must understand that information regarding our future product planning by engine type, size, use of motorcycles, etc., is extremely confidential information. MR. GRAY: I guess it will suffice to say that you are not arguing that you will not be able to be competitive in '82 in a general sense, at least? MR. DAVID: What we said is we can't make the we won't sell anything in California in '82 under a one-gram standard with the technology we know today or what we can forecast with this compliance by that time. And I suppose if no one else is selling motorcycles, that's competitive. MR. GRAY: Well, I guess we will see how that goes. Do you consider the federal test procedures more stringent, less stringent, equal to the test procedures covered under the existing California waiver? MR. DAVID: I don't know. If you talk about just the test procedures, in other words, how you certify using these two vehicles or one vehicle over here, I don't know; I don't have any experience at that. We don't have any experience testing using both procedures. So if you measure up two motorcycles, two certification vehicles using both test procedures, I don't know. MR. GRAY: Put a different way, you would not argue that the one-gram HC standard by the federal test procedure is more stringent than the one-gram standard by the existing California waived test procedure? i R. WILSON 8HORTHANO ftCPORTERS (419) 543-3194/461-3098 ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 KAWASAKI 174 MR. DAVID: I don't know. MR. GRAY: But you would not make that argument at this hearing? MR. JOHNSON: We can't make it. MR. GRAY: You can't make it? MR. JOHNSON: No. MR. GRAY: Or you won't? MR. JOHNSON: We can't. MR. GRAY: You have also not mentioned anything about the limiting potential of CO control at the 12-gram level. Do you share the technical judgment of the previous witnesses regarding the fact that HC will likely be limiting at the one-gram level, as compared to CO at 12 grams? MR. DAVID: I don't know. I really don't know the answer to that question. I think in the interim time frame, we know for EPA's '78 standards, we know that the 17-gram CO standard will be a limiter for big four stroke, not the hydrocarbon standard. For the future, we don't know. We don't know what is the limiting factor at that point. We believe we can make the 12-gram per kilometer 1980 model to EPA standard. If that's an answer to it. MR. GRAY: Is it fair to say, then, that you are not arguing that at that level, the one-gram HC and the 12-ปgram CO is not more stringent than a one gram alone? Is that an issue with respect to your company? MR. DAVID: Would you say that again? MR. GRAY: I said would you consider a one-gram HC plus the 12-gram CO in any way more stringent than a THOMAS R. WILSON CERTIFIED SHORTHAND REPORTERS <ซ1S> S4341MMS1-3QM ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 KAWASAKI 175 one-gram HCalone? Would you make that argument? Can you foresee how that could happen? MR. DAVID: I really don't know how to answer that question, and I really don't know what the purpose of asking it is. I guess I'm confused. CHAIRMAN JACKSON: He's saying if you are going to if you are going to one gram per kilometer for HC, the fact that already meets the 12, do you anticipate that going to one gram will cause CO to go up? MR. DAVID: I don't know. We haven't gotten to one gram yet with anything that's workable. I don't know if it will cause CO to go up or not. We have no NO standards for motorcycles,; so we have a reasonable latitude in that area. CHAIRMAN JACKSON: Excuse me? MR. DAVID: I say we have no NO standards currently for motorcycles, so we have some latitude in those areas. CHAIRMAN JACKSON: You are not suggesting that we do? MR. DAVID: No, I'm not suggesting that you do, but I don't know the exact relationship of CO and hydrocarbons, and I don't think it's been well established in our testing. CHAIRMAN JACKSON: Let's see. You made the point about this, you made it quite obviously that the new standards for which a waiver the 1982 standard is a new standard for which the California is CARB is seeking a new waiver MR. DAVID: That's correct. CHAIRMAN JACKSON: is that correct? MR. DAVID: That's correct. 5 R. WILSON 8HOMTHANO REPORTERS (418) 843-3194/461-3096 ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 KAWASAKI 176 CHAIRMAN JACKSON: That's based on this lead time argument with the production date being something like eight to ten months sooner than what it might have been. MR. DAVID: Well, it's based on the fact that the regulation applies to different motorcycles than it did before it was amended. In our case, that has the effect of moving the implementation date forward about eight months. But on paper, the two previous revisions, the one for which a waiver has been granted and the March 24th regulation, which is the purpose of this hearing, are not the same regulation. They are a different regulation. CHAIRMAN JACKSON: But what I am getting at is that which makes it a new a new standard. You have said earlier in your testimony here MR. DAVID: Yes. CHAIRMAN JACKSON: ~ that you didn't think there was any differences in the test procedure. MR. DAVID: No. CHAIRMAN JACKSON: The test procedure, that which measures exhaust emissions, not certification procedures. That's the reason I asked that point. MR. DAVID: Okay. CHAIRMAN JACKSON: And you said you didn't think there were MR. DAVID: I think there have been a number of minor and somewhat, in some cases, probably fairly major changes to Subpart (f) of the federal regulations from the original working draft to the final document which was issued 5 R. WILSON SHORTHAND REPORTERS (418) 943-1194M61-3MS ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 KAWASAKI 177 in January. Whether those changes have the effect of making that test procedure more stringent or not, I don't know. I know that EPA decided not to publish the original working draft because they made amendments which are more appropriate for motorcycle emission testing. CHAIRMAN JACKSON: Well, what I am trying to get at here is what is the scope of your basis for saying that it's a new standard? Now, it's either because of the lead time problems MR. DAVID: Yes, sir. CHAIRMAN JACKSON: it's because of the test procedures are different and there is something significant about that difference MR. DAVID: Yes. CHAIRMAN JACKSON: but you haven't said yet. MR. DAVID: I don't know that there is any significant difference in the test procedures, but the lead time has changed tremendously. CHAIRMAN JACKSON: So the basis of your contention for making this argument that it's new. is the earlier day when the standards will be applicable. MR. DAVID: The standards are applicable on a date different than before they were revised. CHAIRMAN JACKSON: It's the lead time. You just don't have the same amount of lead time now that you had before? MR. DAVID: That's true. CHAIRMAN JACKSON: Everi though you still don't know THOMA8 R. WILSON CERTIFIBO SHORTHAND REPORTERS (41S) 543-31W/401-30M ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 KAWASAKI 178 whether you can meet the one-gram standard at all? MR. DAVID: We don't think so. CHAIRMAN JACKSON: But at least the lead time's been cut down according to your view of the newly adopted California procedures? MR. DAVID: Yes. I don't know how you can slice it any other way. CHAIRMAN JACKSON: And you, I think, have extended it to something like eight months, is that it? MR. DAVID: Our model year begins in May, our model year production for the following model year. MR. GRAY: Are you opposed to EPA revoking the existing California waiver for the HC standard? MR. DAVID; We would support EPA revoking the entire waiver to California as far as any motorcycle emission standards. I think it's against the public interest. It's overkill, and that's the best way I can explain it. California adopted their standards to make sure EPA would. EPA did. We really think the waiver should be revoked. We expected California to drop the regulations far before then. MR. GRAY: I can appreciate your broad answer but, you know, the specific question I want to follow up with is why relative to what we are considering here? MR. DAVID: I think in our testimony we made it very clear. California fails to continue to comply with conditions of that waiver. Their '78 through '81 standards do not meet the requirements of Section 209(b). THOMAS R. WILSON CERTIFIED SHORTHAND REPORTERS (41S) 943-3184/461-30M ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 KAWASAKI 179 MR. GRAY: How about the 1982? MR. DAVID: The 1982 standards, we honestly believe that it's not feasible, that it's infeasible from a tech- nological standpoint. I don't know how we believe that waiver should be revoked. It should not have been granted in the first place. MR. GRAY: Well, is it more stringent somehow by the federal test procedures than it is by the test procedures that California would use under the present waiver? What would be the specific basis that can be considered here? I mean revisiting the technology issue seems like a separate MR. DAVID: Well, it's moved in effective date which varies by manufacturer. In our case, it's about eight months earlier. That is one specific point that we can actually say has changed. MR. GRAY: Well, seems like the different effective date is the result of a separate action. That's a result of California adopting the federal test procedures, compliance strategy in total. That's where this model year lead time issue came up. I mean it goes away if they retain their existing strategy. So I guess, you know, more specifically, relative to the waiver they have now, under what basis should the federal government revoke that waiver for 1982? What would be the argument that would support it? MR. DAVID: Well, I think the argument would be that insufficient lead time exists to develop the technology necessary to comply with the one-gram per kilometer standard. THOMA8 R. WILSON CERTIFIED SHORTHAND REPORTERS (419) 843-31M4S1-308S ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 KAWASAKI 180 CHAIRMAN JACKSON: We have already dealt with that. MR. DAVID: We know that you have already dealt with that. MR. GRAY: So nothing MR. DAVID: It's our position hasn't changed. MR. JOHNSON: Just for the record, I think we do take the position that EPA is required to deal with it again as a result of California's recent action/ just so that we are communicating correctly on that. In other words, the one-gram standard in '82, we feel must be reconsidered by EPA as it was back in the Summer months of last year. CHAIRMAN JACKSON: Let me get it clear. You are basing this on the change in model year introduction appli- cability? MR. JOHNSON: Yes, sir. MR. DAVID: I think that's the major change. CHAIRMAN JACKSON: Okay. MR. DAVID: The changes in the test procedures, we have not analyzed those to the point where we could make an informed judgment. CHAIRMAN JACKSON: So they, can't be the basis for your position here? MR. DAVID: No. CHAIRMAN JACKSON: Okay. MR. DAVID: The fact is that California received a waiver for it which no longer exists. CHAIRMAN JACKSON: And now you want us to reconsider THOMAS R. WILSON CERTIFIED SHORTHAND REPORTERS (419) 543-3194M61'3093 ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 KAWASAKI 181 whether or not it is a new standard by virtue of that. Now, how about on your side: what measures can you take to extend your production year until December 31st, 1981? MR. DAVID: I don't think we can take any measures to extend our production year to the end of the year. CHAIRMAN JACKSON: Why? MR. DAVID: Well, there are really probably two reasons, and I haven't thought this all through yet. I think in the same vein that the other manufacturers have testified to. And I would amplify that and say that we are, by com- petitive position and the expectations of the marketplace, locked into providing the next model year vehicles very early in the calendar year. In fact, in almost all cases, those vehicles are available in the late Pall of the preceding year. This is common practice and typical and would be unacceptable to the marketplace if it didn't occur that way. CHAIRMAN JACKSON: Even less unacceptable than not having them on there at all? MR. DAVID: That's a speculative question. CHAIRMAN JACKSON: Well, I think it's all speculative That's the point. That's why I am going into this. MR. DAVID: If I were to speculate on that point, I would have to say that it would be better to have some motorcycles than no motorcycles. CHAIRMAN JACKSON: Even if they were late. Okay. MR. DAVID: What can I say? It's always better to have something than nothing. CHAIRMAN JACKSON: I'm glad you agree. i R. WILSON SHORTHANO REPORTERS (41ซ} 543*3194/461-3096 ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 KAWASAKI 182 MR. DAVID: I think one of the other things that might relate to that point, and I haven't thought it through, is that EPA regulations are five model years, and once those have been fixed, they are fixed. CHAIRMAN JACKSON: It's up to you, though, to initiate your Job 1 date, and that's at your election. MR. DAVID: It's an annual production period. It can't be more than one year. CHAIRMAN JACKSON: Absolutely. We are not saying it should be any more than one year.. We are just saying it could start on January 1, 1982. And if your basis, if your contention for stating that there is something different here that should be considered to do, it seems like you would be prepared to tell us what kind of implications that has to you as a corporation as opposed to speculating about it. I mean if you can show us why that's significant as opposed to why I shouldn't just say move your introductiondate, everybody else is going to be doing it, it's not a competitive issue because, if we stick with it like it is, we have already had some other manufacturers testify that they are going to have to do the same thing, they got the same problem. So it's not a competitive issue because we are talking about the marketplace being affected by the same problem. MR. DAVID: Well, it was our understanding that the purpose of today's hearing was to consider whether the consideration of the October waiver is still, valid and if that waiver should remain in effect, and that waiver was granted for i R. WILSON SHORTHAND REPORTERS (41S) S4]-3lM/4t1-30M ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 KAWASAKI 183 a specific regulation which has been amended. The regulations for which the waiver was granted no longer exist. It's a new regulation. It's a different regulation by implementation date and test procedure. And that change, we believe, should cause EPA to reevaluate. In fact, the word isn't "reevaluate." You must make a determination on the technological feasibility, giving the appropriate consideration to courses under Section 209(b). CHAIRMAN JACKSON: Wait a minute. I would still like to know what are the practical implications of this change to the corporation other than the fact that it's not business as usual? I mean you are making a case for for saying it's new. There has been precedent in the past where we have said changes to existing waivers are minutia covered within the waiver previously granted, and we could look at this under that context. Unless you can come forward and say it's not minutia, look at the impact here that we are talking about with regard to the corporation and what's going to happen to it. Now, you tell me that it's an eight-month lead time that you are not going to have MR. DAVID: Right. CHAIRMAN JACKSON: but it's by your own choosing. MR. DAVID: Not by our own choosing. We are locked into it by the way we build motorcycles. CHAIRMAN JACKSON: That's business as usual. Here we are talking about the implications of the change, what are the implications of having to do business according to the way you have to do business so you can sell cycles in '82. IR. WILSON SHORTHAND REPORTERS <ซ18) M3-31MS4C1-30M ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 KAWASAKI 184 MR. JOHNSON: Mr. Jackson, to properly address your question, it's going to require us to communicate with a nuiriber of people that aren't here today. And I appreciate the thrust of your question. We will respond to it by June 10th in a communication once we have our facts assembled. CHAIRMAN JACKSON: I think that may be most appropriate in some sort of detail where we can understand the significance of what it is you claim to be a problem with regard to the lack of lead time for the '82 models. MR. JOHNSON: We will do that. MR. GRAY: I'm a little bit confused about the various issues that we may be jumping around to try to cover here. It appears to me that there is a basic subject that was announced in the hearing notice. That is that, as a result of EPA action establishing federal motorcycle emission standards, EPA intends to consider whether California continues to comply with the conditions of the October 1st, 1976, waiver, from the hearing notice. MR. DAVID: Yes. MR. GRAY: That's one issue. Another issue is California has adopted new regulations, to use your terminology MR. DAVID: Yes. MR. GRAY: which puts forth a new requirement. That's another subject. If we can try to keep the question constrained just to the reconsideration of the existing California waiver, why 3 R. WILSON SHORTHAND REPORTERS (418) M3-31M/4S1-30M ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 KAWASAKI 185 should EPA revoke that waiver for 1982? MR. DAVID: Those regulations aren't there anymore. They don't exist. MR. GRAY: As far as the California waiver, you know, at one time you argued that the California regulation doesn't exist until it's a federal waiver. And here you are arguing that the federal waiver has been preempted because of a California action. I think by the very notice that we put forth in the Federal Register that EPA intends to consider whether California continues to comply with that requirement. MR. DAVID: I think the requirements that you mentioned are contained in Section 209(b) of the Act, and we do not believe that the California regulations, as amended, continue to comply with the requirements of Section 209(b) and, therefore, the conditions of the October 1st, 1976, waiver are not met. MR. GRAY: As a result of the federal government establishing motorcycle emissions standards? MR. DAVID: That's part of it. MR. GRAY: What changed with respect to the California waiver that should compel the EPA to revoke the waiver for 1982? Anything? MR. DAVID: Lead time changed. MR. GRAY: Not with respect to the waiver. I mean that's why I wanted to separate the two. I mean what aspect? The only it can be argued that the new test procedures, the federal test procedures somehow MR. DAVID: Well, I think i R. WILSON SHORTHAND REPORTIR8 (41S) 543-3194/46MOM ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 KAWASAKI 186 MR. GRAY: Well, you wouldn't even have to argue that. I guess the only thing I can conceive of is the fact that a requirement of a 12-gram CO on top of the one-gram HC level might now be result in the existing waiver being superseded by something more stringent and, therefore, there would have to be a new finding on technological feasibility. So I'm just putting it forth. What basis is there that EPA would have to revoke that existing waiver? MR. DAVID: I'm not quite sure I understand how you relate the one and 12 grams together. You are saying is a one hydrocarbon and a 12 CO more severe than one hydrocarbon by itself? MR. GRAY: I'm simply asking what consequence of the federal action should necessitate the federal government revoking the existing California waiver relative to 1982? MR. JOHNSON: Perhaps I can be of some assistance. With regard to 1978 through '81, we don't believe the conditions are the same anymore as a result of what happened in March of this year, i.e., the same standards are no longer in force as far as California is concerned. With regard to 1982, we don't believe we believe that a new standard has also been adopted as we have already testified on the lead time, on a lead time problem, and, therefore, we don't think that condition that existed in October now exists. But it's a result of the action taken by the Air Resources Board in each case. CHAIRMAN JACKSON: Maybe I can share this conversatio: S R. WILSON SHORTHAND REPORTERS (418) M3-31M/4S1-30S8 ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 KAWASAKI 187 with you. We are talking about the concept of waiver in some- what different terms than we have sort of been communicating back and forth here with you and that the we gave California a waiver which said you can do these things. MR. DAVID: Yes. CHAIRMAN JACKSON: Okay. And whether they do it or not is up to them. MR. DAVID: Yes. CHAIRMAN JACKSON: Okay. But if they ever choose to do that, they can do it, because we made certain findings with regard to the 1982 model year. And if they should choose to do it, then the authority for them to do it is there. Okay. So that's one issue. MR. DAVID: Yes. CHAIRMAN JACKSON: They do have a waiver. And what Mr. Gray was getting at here is what's changed that would say that they don't have that waiver anymore. We made certain findings with regard to that program. Now, what you are saying is well, they have changed that program and now you have got to go back, and look at it again to decide whether or not they still should have a waiver in the context of the changed program, right? MR. DAVID: Two things have happened. That's all. EPA adopted regulations. California amended theirs. Other changes would have to be internal to the industry, or in the US marketplace., or whatever . CHAIRMAN JACKSON: But the only thing that's really i R. WILSON SHORTHAND REPORTCRS <41S> 843-3194/461-3090 ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 KAWASAKI 188 at issue, the only thing that's really changed, is the federal government went in and promulgated regulations. With regard to those things that applied that the federal government took under consideration when it granted the waiver, none of those things have changed: stringency, technological feasibility. We said if you want to have those standards in 1982, you can. MR. DAVID: I think there have been some things that have changed. I think for one thing, the Environmental Protection Agency has entered into a contract to decide technological feasibility questions with the Southwest Research Institute. There will be some additional information forth- coming, already is forthcoming, that's different from what existed in October. I don't know if that's one of the changes that you would suggest here. I'm not quite sure. MR. JOHNSON: One of the changes obviously is that EPA has adopted its own regulations. MR. GRAY: Yes. MR. JOHNSON: That's changed. Also what's changed is back in October, if my understanding is correct, you decided that California's standards, its old standards, were more stringent than federal standards, and there were none. Now, California has taken those old standards and put those on the shelf and has said now we have EPA's standards. I'm talking about '78 through '81, and that condition changes the validity, in quotes, of the waiver that was granted back in October. CHAIRMAN JACKSON: And we grant you that. But } R. WILSON SHORTHAND REPORTERS (41B) S43-31B4J461-3088 ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 KAWASAKI 189 that's the point Mr. Gray was making. What aspect of the federal action was there that applied to the 1982 standards? MR. DAVID: The 198 0 model year and subsequent regulations also apply to 1982. Those include five grams per kilometer, a 12-gram per kilometer CO standard. That's why I was a little confused. You kept talking one and 12, and I can't put those two together. CHAIRMAN JACKSON: You have to meet both standards. MR. DAVID: You have to meet the five and the 12 at the same time for EPA. CHAIRMAN JACKSON: You have to meet a five and 12 with a bike that meets one. MR. DAVID: Okay. CHAIRMAN JACKSON: That's the way it goes. In other words, the federal standards umbrella the California program. MR. DAVID: Yes. Okay. I think I would like to reserve judgment on whether a five and 12 in combination is less or more stringent or equal in stringency to the one-gram per kilometer; is that right? CHAIRMAN JACKSON: That's not the question. MR. DAVID: Well, that's one of the things that has changed, that would change the reading. CHAIRMAN JACKSON: We are talking about one bike MR. DAVID: Yes. CHAIRMAN JACKSON: that has got to meet MR. DAVID: I understand. CHAIRMAN JACKSON: the one rHOMAS R. WILSON JIBTIFIBD SHORTHAND REPORTERS MIS) 549-31M/491-30M ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 KAWASAKI 190 MR. DAVID: As well as the 12. CHAIRMAN JACKSON: as well as the 12 because that's what the feds did. They came in and changed things for 1982. MR. DAVID: Right. CHAIRMAN JACKSON: And if you are coming to us and saying meeting that 12 in combination with that one changes the conditions under which that waiver was granted, then we would have an issue with regard to that waiver, and it's granting authority for California to do something. MR. DAVID: Yes. I don't know the answer to that question, but I will find out and have it to you by June 10th. I really don't Jcnow the answer to. that question. I think that one of the things that has happened, though, and I think that this should be considered from a policy standpoint, and this is that the motivation for EPA's regulations are the major urban areas of the United States. It is the cause of EPA's regulations. That is the need which dictated national emissions standards for motorcycles. EPA's regulations are in answer to that need. MR. GRAY: Would you support a situation where, especially considering the situation where you are right now, wherein the CARB adopted the federal procedures, tests, compliance, the whole regulatory program, but the applicability of those standards was unchanged from their existing standard, waived standard. MR. DAVID: Would you repeat that? Would I support it? J R. WILSON SHORTHAND REPORTERS (418) 543-3194/461-30M ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 KAWASAKI 191 MR. GRAY: Would you support The current situation is that California has a waiver for a one-gram HC standard MR. DAVID: Right. MR. GRAY: in 1982 by the test procedures that involve, among other things, useful life testing and durability emission data vehicles, bikes. MR. DAVID: 220 ARB test procedures, not the current ones, what they got in October? MR. GRAY: What they have already got is what we are dealing with here. That's what they have the authority to enforce. MR. DAVID: Okay. MR. GRAY: That being the situation now, and we say is that you know, can there be a better situation within those constraints? Let's say would that situation be the federal test procedures and compliance procedures with the compliance date the same as it was in the existing waiver, that is January 1, 1982. MR. DAVID: We will have to speculate in that whole area because the one-gram per kilometer standard looks like an impossibility to us. MR. GRAY: Well, that's why I wanted to say within the constraints of getting something constructive out of what we are dealing with today. MR. DAVID: I think it should be obvious that the development work that EPA did in Ann Arbor to develop the final test procedures which were published in January did THOMAS R. WILSON CERTIFIED SHORTHAND REPORTERS (41S) S4341MM1-30M ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 KAWASAKI 192 improve those test procedures so that they would fit motor- cycle testing a lot better than the old draft, which is the 220 '76 CARB regulation. So I can, from that standpoint, just purely from the technical standpoint, EPA's, or the federal test procedures, are more appropriate. In fact, from a technological stand- point, are more accurate than the original working draft. MR. GRAY: Then as far as you MR. DAVID: As far as the effective date goes, it makes a difference to our company of about eight months. MR. GRAY: All right. MR. DAVID: So given the assumption that the one- gram per kilometer standard is feasible, which we don't believe that it is, yes, I would agree with that. MR. GRAY: But you could not see any technical constraint that would make that that would be worth not granting such a revised waiver, if you will? In other words, if California requested a waiver for a revised program which was revised with the federal procedures and the applicability beginning with the beginning of 1982, would you support that particular kind of a revised waiver as opposed to the current situation? MR. DAVID: You mean effective on the same old date, the old January 1st, 1982, production? MR. GRAY: Yeah. It seems like that California came forward here with a mood to help out the motorcycle industry, the certifying agencies, and the extent that they took the initiative to say, "Okay. Let's have one compliance i R. WILSON SHORTHAND REPORTERS (41S) S43*3194/461-3084 ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 KAWASAKI 193 program, one methodology, but we don't want to you know, this should not be a reflection upon the standard that we have,' i.e., that it should not result in us having to have a new waiver, if you will, can you see any way that there is that it could be more technically difficult to meet the one-gram HC standard with the existing situation using the federal test procedures and the old applicability data? MR. DAVID: Boy, that's a hard one to answer because I don't know what the difference in test procedures makes in the the difference in testing a vehicle because we never dealt with EPA's working draft or the ARB test procedures. I don't know anyone that's tested a motorcycle under the old procedures, except perhaps EPA in-house. So our history in that area is very weak. We would have to actually sit down and take a look at the CARB's pre- March 24 test procedure versus you know, rate those up against EPA's current test procedures, which are the federal test procedures, to see which one is more stringent. I would suspect that EPA's test procedures, from a technological standpoint, are more accurate and more appropri- ate, tailored to fit motorcycle operation closer. All the development work between EPA's working draft and this final regulation is in those final regulations. But I would like to submit further information on that point if I could. To my knowledge, no one has ever tested a motorcycle using ARB's draft ~ ARB's regulations as they existed February 20th, '76. MR. GRAY: If these are among the possibilities as a THOMAS R. WILSON CERTIFIED SHORTHAND REPORTERS (415) S43-31M/461-J0M ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 KAWASAKI 194 result of these hearings, one, to not revoke the existing waiver; two, accept a revised or issue a revised waiver as requested by the California Air Resources Board, which would include the revised compliance date, or perhaps a third option, which would be a revised waiver with the old compliance date, are there other ways that we could come out in these hearings that would be reasonable? MR. DAVID: We like Option 1, revoke the waiver. MR. JOHNSON: Did you say revoke the waiver? MR. GRAY: I retained the waiver in the first instance. MR. DAVID: I thought you said revoke the waiver. MR. GRAY: I may have.. MR. JOHNSON: And you are talking solely about a waiver for 1982? MR. GRAY: Yes. I mean setting aside the issue of whether or not the standards are more stringent and the different test procedures or whether the standards are so similar, since there is not a comparable HC standard to the 1982 California HC standard, it appears that there are several options, I guess, that could result after these hearings. One is to leave the waiver as it is, retain that waiver because it's already been granted. Two. Revise it as requested by the California Air Resources Board, which would include a revised implementation date, or Three. I would think it reasonable to revise the waiver similar to the request by the CARB, but not change the 3 R. WILSON SHOMTHANO R1PORTERS <416) 943-3194/4)1-30M ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 KAWASAKI 195 implementation date and set infringes upon the area of technological feasiblity. And I guess to the extent EPA can make the finding that it's feasible, a second option is very real, but I mean is there any of those that you can say you would support? Is there anything that MR. DAVID: Support? Well MR. GRAY: You are opposed to all three of those? MR. DAVID: We think you should revoke the waiver. We think that EPA should regulate motorcycles, not CARB. That's the thing. MR. GRAY: I don't see how that's something we can consider here relative to the MR. DAVID: Yes. MR. GRAY: constraints of these hearings. That's why I am trying to focus the discussion to something we can deal with within those constraints. MR. JOHNSON: Another option you have, however, is to revoke the waiver in its entirety. That's one option that we see, and we see it as acceptable. But all three of the options you referred to impose a standard by 1982 with our present knowledge we consider technologically infeasible. So I don't know how we choose between which way we want to go out of business, assuming that it continues that way. MR. DAVID: I guess what we would say is that EPA designed its control program to satisfy California, specifically Los Angeles' air pollution problem caused by 5 R. WILSON SHORTHAND RfPORTCRS (418) S43-91M/4S1-3098 ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 KAWASAKI 196 motorcycles. Those circumstances are sufficient to satisfy the compelling and extraordinary need in California for regu- lation of motorcycles. Since EPA designed its program, its program was motivated by that requirement. Anything more severe than that is a conclusion that I can't reach logically in my head, and I'm at a loss as to where to go with that particular feeling. I would like to submit further information regarding the lead time question, which is the effective date of the regulation, the changes which the test procedure made to that, and also the question of having a CO and HC standard as opposed to having just an HC standard or having a five and 12 standard and then seeing a one-gram standard come in. We have not addressed that subject here, and I would like to address that in writing before June 10th. MR. GRAY: Among the three options at least that I discussed, do you have a preference, if we can't go beyond the constraints of these hearings, which is a real possibility? MR. DAVID: I think I would take If I had to select from any three of those things, which are all unacceptable to us, I would probably select the circumstance where you would revise the waiver which would require you to make a new determination of cost-effectiveness, whatever. To revise the waiver, you have to make a determination. You can't just revise it. There's got to be a justification, logic and rationale employed and CHAIRMAN JACKSON: Says according to what? MR. DAVID: Pardon me? I R. WILSON SHORTHAND RtPOftTtM (415) S43-31M/461-30M ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 KAWASAKI 197 CHAIRMAN JACKSON: According to what? MR. DAVID: It says the Administrator shall determine in Section 209 of the Act. It doesn't say he shall revise. He needs to make a determination of what's happening. So I think if you were to use the word "revise", the waiver, we would think that that statement means that you would have to make a revised determination also. And so of those three unacceptable solutions, obviously the one where you would revise it, and at least take a look at it again to determine if it is worthwhile, that would be our preferred unacceptable solution, especially where you are picking up the EPA's final test procedures and implementation date. MR. GRA.Y: If there was nothing that is changed relative to the constraints of the hearing process that would impact upon the findings made earlier, then it appears beyond the scope of the hearings to consider revoking the waiver or to make those findings anew. That's why we are trying to focus the discussion on what can we do within those constraints that is more meaningful than the situation we have now. And instead of a lot of confusion resulting after these hearings, seemed like it would be in the best interests of the motorcycle manufacturers, CARB and EPA to at least cover the ground we can that we would all consider as reasonable. MR. DAVID: Well, I think, Mr. Gray, there is no question in my mind that the '78 to '81 standards, as the waiver applies to those standards, should be revoked in total. i R. WILSON SHORTHAND REPORTMS (41t) S43*3194M61-3098 ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 KAWASAKI/SUZUKI 198 Regarding the 1982 standard, we have previously testified that it's not technically feasible, but the testimony of one manufacturer, Kawasaki, was not used in the administra- tive determination. We would like to provide further information on that regarding the impact that change in effective date would have on our company. We would like to analyze the test procedures, the old California test pro- cedures and the final EPA regulations, to find out if there is any significant differences in those test procedures. The determination of technological feasibility of that one-gram per kilometer standard was essentially EPA. What can I say? I would like to provide more information to you. That information is not here with us today. I don't have that in my head. I don't know the differences between those two test procedures. I have never worked We have never dealt with the working draft EPA test procedure, but would like to reserve the right to be able to take a hard look at it, analyze it very thoroughly, and submit our comments on that particular item as well as the combination standards interreaction and also the effective date change in the California '82 standard. CHAIRMAN JACKSON: Thank you very much. MR. DAVID: Thank you. CHAIRMAN JACKSON: Mr. Walsh? MR. JOHN WALSH: Thank you. Good evening. My name is John Walsh, and I am here representing Suzuki Motor Company. Suzuki Motor Company would like to offer the THOMAS R. WILSON CtRTIFICO SHORTHAND REPORTERS (ซ1S) M3-3194M61-30M ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 SUZUKI 199 following comments to EPA's reconsideration of the October 1, 1976, waiver of federal preemption of California exhaust emission standards and test procedures for motorcycles. Since October 1, 1976, there have been two signifi- cant changes in the motorcycle exhaust emission control area. First, the Environmental Protection Agency promul- gated hydrocarbon and carbon monoxide exhaust emission standards for motorcycles. Second, the California Air Resources Board amended California's motorcycle exhaust emission regulations, adopting the EPA hydrocarbon limits for 1978 through 1981 model year motorcycles while maintaining a l.Og/km standard applicable to 1982 model year motorcycles. The ARB also adopted the EPA test procedures for motorcycle emission testing. Suzuki believes, based on these actions by EPA and ARB, that the October 1, 1976 waiver must be reconsidered. The ARB has adopted the EPA hydrocarbon standards and test procedures for the 1978-1981 model years. ARB did not adopt EPA's CO standards for these model years. Because of this, ARB's standards and test procedures are less stringent than the EPA regulations. ARB wants to receive copies of Part I and Part II applications and EPA Certificates of Conformity. EPA has review authority in this area so this part of the ARB program does not add any stringency to the ARB program. ARB also wants to retain authority to perform compliance testing of motorcycles. ARB might argue that this increases the risk that motorcycle manufacturers would be caught selling non-complying motorcycles and thus manufactxirers would use THOMAS R. WILSON CERTIFIED SHORTHAND REPORTERS (41S) S43-31MMS1-MM ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 SUZUKI 200 better quality control measures to reduce emissions so this would make ARB's program more stringent. This argument is not persuasive for two reasons: First, the manufacturers are already required to meet the emissions standards, and will use strict quality control to keep the motorcycles below the limits; and Second, ARB could perform testing at any time and report the results to EPA for EPA enforcement action. In either case, ARB's enforcement authority will not result in lower motorcycle exhaust emissions in California. Air Resources Board Chairman Quinn stated at the 24 March 1977 public hearing that ARB has no intention of merely duplicating EPA enforcement action. Mr. Quinn stated that ARB has been dissatisfied with EPA enforcement action in the past. While we can understand Mr. Quinn's concern that only complying vehicles are sold in California, Congress did not give ARB the authority to review EPA enforcement action. Congress, and Congress only, can review EPA's enforcement activities and direct the Administrator to take specified actions. The Air Resources Board should appeal to Congress if they feel more EPA enforcement action is necessary; development and implementation of an ARB enforcement program just because of ARB dissatisfaction with EPA is both unwise, because the EPA program exists, and not permitted under the Clean Air Act unless California has a more stringent emission control program for the source in question. Overall, the ARB program for 197B-1981 model year motorcycles is less stringent in the emission standards chosen i R. WILSON shorthand reporters (ซ't) S43-31MS461-S0M ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 SUZUKI 201 and the review and enforcement authority sought by ARB will not reduce emissions in California, and not add any stringency to the ARB program. If ARB is permitted to maintain an emissions program which is merely parallel to EPA's, the manufacturers will be forced to waste time and effort dealing with a duplicative California program, and the consumers will be forced to bear this cost. At the ARB meeting of 24 March, the Board changed the effective date of the 1.0 g/km standard from the 1982 production year to the 1982 model year. In effect, this is about a nine month reduction in lead time to meet the 1.0 g/km standard. Almost one year has passed since the EPA waiver hearing in 1976. In this year, no significant advances have been made which indicate that Suzuki would be able to meet the 1.0 g/km HC standard for its 1982 model year motorcycles. Perhaps a review of Suzuki's situation would help to show that a 1.0 g/km HC standard for 1982 model year motorcycles is not consistent with Section 202(a) of the Clean Air Act, and that federal preemption of California's standards therefore cannot be waived. Suzuki is currently in the process of certifying our 1978 model year motorcycles produced on and after January 1, 1978. We will meet these standards by a combina- tion of engine modifications for some two-stroke models and conversion to four-stroke for other models. In order to meet the 1980 model year emission standards, conversion of more models to four-stroke engine designs will be required. We I Ft. WILSON SHORTHAND REPORTERS WIS) 543-3194/461-30M ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 SUZUKI 202 estimate that this conversion would not be completed until after April 1979, and might not be completed until August or September of 1979. Even if conversion is completed by April 1979 for our 1980 models, this leaves only slightly more than one year, until June 1980, to complete research and development to meet the 1982 model year standard of 1.0 g/km. Research and development for 1982 models must be completed by June 1980 to allow for certification of 1982 models to be completed by April 1981, when 1982 model production will begin. For Suzuki to meet a 1.0 g/km standard, this will require conversion of all models to a four-stroke engine design. Clearly, .it will be impossible for Suzuki to convert the rest of its product line to four-stroke engine designs between April 1979 and April 1981,. considering the engineering which is involved in designing new motorcycle models, con- sidering the additional engineering required for exhaust aftertreatment and/or other additional emission control tech- nology required in addition to four-stroke conversion, and considering the great cost involved for conversion of models to four-stroke designs. Suzuki is only now becoming familiar with four-stroke emission control technology, having only recently started producing four-stroke motorcycles. The problem of meeting a 1.0 g/km HC standard for the 1982 model year is not only a problem of unavailability of technology to Suzuki within the remaining three year lead time, but also a problem of unavailability of engineers to work on these programs. In addition to four-stroke conversion and THOMAS R. WILSON CERTIFIED SHORTHAND REPORTER8 (418) 543-3194MS1-30M ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 SUZUKI 203 four-stroke emission control programs, we have recently embarked on a motorcycle evaporative emission control study program and a fuel fill pipe specification program due to recent actions by the California Air Resources Board. Expected action by the U. S. Environmental Protection Agency regarding motorcycle sound level control will place addi- tional major demands on our engineering staff in the same time frame as the 1980 and 1982 emission standards. Our staff will find this burden especiallydifficult not only because of the workload burden but also because of the adverse interaction between emission control technology and sound level control technology. Regulation-related engineering requirements have expanded so greatly and rapidly within the past several years that Suzuki is, quite frankly, overloaded with engineering work. We need more engineers, but our engineers who have been recently assigned to those programs have only limited experience in emission control or sound control problems, and new engineers, like recently reassigned engineers, are limited in availability, and in experience in these areas. In summary, Suzuki cannot meet a 1.0 g/km HC standard for 1982 model year motorcycles taking into account the time necessary for research and development of the technology necessary for us to fulfill market demand for 1982 model year Suzuki motorcycles in California, taking into account the cost of compliance. At the Air Resources Board public hearing of 24 March 1977, the Board adopted the EPA test procedures to i R. WILSON SHORTHANO REPORTERS (419) M3-31M/46i.;joM ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 SUZUKI determine compliance with their HC limits. Section 1958(f) of the amended Title 13, California Administrative Code, provides, however, that if all or part of the EPA test procedures are found to be invalid or unenforceable, then the 1976 California test procedures shall be. used to determine compliance. This Section 1958(f) creates the possibility that all of the mileage accumulation and emission data testing for California motorcycles might be made invalid in the middle or near the end of such testing. This could occur if part of the EPA test procedure is ruled invalid and testing must be redone using the California procedures. Clearly, such a risk is not consistent with Section 202(a) when "... giving appropriate consideration to the cost of compliance...". The cost of compliance could be as expected, or could be much higher if massive retesting is required by a test procedure change. The October 1 waiver must also be reconsidered in its application to ARB's previous HC standards of 10, 5, and 1.0 g/km. The 10 g/km standard for 1978-1979 model motor- cycles is less stringent than applicable federal standards. The five g/km standard for 1980-1981 model motorcycles is identical to the applicable federal HC standard, but is less stringent than the applicable federal regulations of both HC and CO. The waiver for the 1.0 g/km standard for 1982 and later model motorcycles must be withdrawn because, as discussed earlier, it is not consistent with Section 202(a) of the Clean Air Act. The entire October 1, 1976 waiver must be withdrawn since the Administrator's finding No. 2 can no THOMAS R. WILSON CERTIFIED SHORTHAND REPORTERS (416) S43-3194MS1-30M ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 SUZUKI longer be made for the 1978-1981 standards and finding No. 4 can no longer be made for the.1982 standard. In closing, Suzuki feels the October 1, 1976 waiver must be withdrawn since the requisite findings can no longer be made. Suzuki further believes that the existing waiver cannot be modified, and no new waiver can be granted, to waive preemption for the 1978-1981 standards because the California standards are less stringent than applicable federal standards. We feel that the existing waiver cannot be modified, and no new waiver can be granted, for the 1982 and later model year standards at least for the 1982 model year because this standard is not consistent with Section 202(a) of the Clean Air Act. Finally, we feel that the existing waiver cannot be modified, and no- new waiver can be granted, for the entire California program because Section 1958(f) of Title 13, California Administrative Code, makes the California program inconsistentwith Section 202(a) of the Clean Air Act. Thank you. I would be happy to answer any questions that you might have, or ask our staff to supply any information that might be helpful. MR. GRAY: Would you try stating in somewhat different words the basis of your recommendation that the existing waiver for California for the '82 standard should be withdrawn? MR. WALSH: What different words would you like me to use? MR. GRAY: You said it cannot be made. Would you HOMAS R. WILSON KRTIPICD SHORTHAND REPORTERS (418) 543-3194/461-3098 ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 SUZUKI 206 explain why it cannot be made? MR. WALSH: The findings required under Section 209? MR. GRAY: With respect to the constraints, you know, of these hearings, yes. MR. WALSH: For the 1982 model year standard? MR. GRAY: Yes, with respect to the changes that have occurred since that time that would impact upon whether that waiver stays in effect or is revoked, what basis is there to suggest that waiver should be revoked? MR. WALSH: Okay. This is for the one-gram kilometer standard for 1982 model year motorcycles after January 1st, 1982, production? MR. GRAY: Yes. MR. WALSH: Okay. Well, a year has gone by since the last waiver hearing. In this time, Suzuki has made no significant progress towards accelerating our compliance with the one-gram standard. Since the time has passed, the time is closer to implementation of such a program, and the Administra- tor is closer can make a nearer-term finding that the available technology does not exist within the lead time remaining, taking into account the cost of compliance to make that standard consistent with Section 202(a) of the Clean Air Act. MR. GRAY: Since such findings appear to be beyond the factors we can consider here, is there anything else Those findings were made prior to October, 1976 and were the basis of that waiver. Is there anything changed that would THOMA8 R. WILSON CIWIFIID SHORTHAND REPORTINS (418) S4S-31MU61.3QM ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 SUZUKI 207 make that decision improper at that time that we can consider here? MR. WALSH: Well, if the Administrator is going to reconsider his October 1st, 1976, waiver, I think he certainly could, and should, consider the available technology situation as it exists at the time of the new determination. MR. GRAY: I guess I'm I'm at least a bit con- fused in regard to, once again, what we are trying to deal with here. Has the adoption of federal regulations made some aspect of the previous waiver more stringent? MR. WALSH: With regard to 1982? MR. GRAY: Yes. MR. WALSH: No. My comments regarding reconsideratior of the 1982 waiver at this hearing are based on EPA's stated intent of reconsidering this waiver. And so I thought the Administrator would reconsider his waiver in the light of available technology. CHAIRMAN JACKSON: In the light of a federal action, federal action being adoption of standards up to '81, which were encompassed by, or that were paralleled by California standards, and after '81 there was a standard on California books that was different, and we didn't say that we were reconsidering that one. But it's only in light of the federal action. What aspects of the federal action makes the 1982 standard require- ment any different? MR. WALSH: Okay. Well, this federal action, this hearing, seems to me to open for reconsideration the validity i R. WILSON SHORTHAND REPORTERS (418) 543-31S4/461-30M ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 SUZUKI 208 of the preexisting waiver for the 1982 production year standard. And I thought the Administrator would want to take the opportunity to reexamine the 1982 standard in light of the situation as it currently exists. If that is incorrect, then my comments are not perfectly within line. CHAIRMAN JACKSON: What we are looking for is some more concrete indicia of a different situation that has been created as a result of the federal action other than your desire to ask the Administrator to reconsider anew the whole issue of an '82 standard. What aspect of the federal action has changed the situation with regard to the conditions under 'which the waiver was granted to California for 1982 model year standards? MR. WALSH: Okay. Well, the waiver was granted under the condition that the Administrator might review the waiver once he promulgated federal regulations. He has pro- mulgated federal regulations, and the time has come now to reexamine the existing waiver. CHAIRMAN JACKSON: Reexamine it from the point of view is it still more stringent than applicable federal requirements? MR. WALSH: The 1982? CHAIRMAN JACKSON: Yes. MR. WALSH: The older 1982 standards? CHAIRMAN JACKSON: Is the California program still more stringent in 1982 than the recently promulgated federal program? THOMAS R. WILSON C8RTIPICD SHORTHAND REPORTERS (418) 545-3194/461-309ฎ ------- 1 2 3 4 5 6 7 8 9 10 II 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 SUZUKI MR. WALSH: Which California program? The 1982 production year standard or the 1982 CHAIRMAN JACKSON: The one-gram per kilometer. MR. WALSH: It's more stringent in either case, but there is a difference in the date of implementation. CHAIRMAN JACKSON: Okay. Now, what argument are you making with regard to the day of implementation? MR. WALSH: It's lead time. CHAIRMAN JACKSON: Is that a lead-time argument? MR. WALSH: Especially with regard to those models which could comply if the program was effective on a production year basis. It's related to market demand as far as our competitive position goes and being able to meet the standard. It's related to the year of elapsed time since the last waiver hearing as having no significant as there being no signifi- cant technology developments in that time, and in being related to the manufacturers marketing plans in the same way as if the standard had been changed almost by a full model year. CHAIRMAN JACKSON: This questioning has proceeded on this line. What has What impact would it be on Suzuki to change its model year introduction date from normal business to something that comports with the calendar year requirement for 1982 standards? MR. WALSH: Are you looking for a specific impact or a general impact? CHAIRMAN JACKSON: Whatever impact it is upon which you base your contention that you have got a problem now that HOMAS R. WILSON ERTIPIED 8HOHTHANO REPORTERS (418) M-31MM61-30M ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 23 SUZUKI 210 you didn't have before? MR. WALSH: There would be a significant problem that we would have in offering a full line of motorcycles for sale, 198 2 motorcycles for sale, in California, and that would affect our competitive position. CHAIRMAN JACKSON: Why? Everybody else is going to be in the same situation. MR. WALSH: I think it would be hasty to assume that just because Harley-Davidson, Kawasaki, Yamaha and Suzuki might be in that position, that everybody would be in that position. CHAIRMAN JACKSON: Do you know of somebody that won't be? MR. WALSH: I don't work for anybody else. CHAIRMAN JACKSON: I just asked you if you knew there was anybody else in that position? MR. WALSH: No, sir. CHAIRMAN JACKSON: Well, you still haven't given me anything that is very lucid on why you are going to have this competitive problem and what economic effect it's going to have, if any, on the corporation. In other words, if that's the sole difference between the preexisting conditions with regard to the California '82 standards and what they have now, and there is some reason for that impact to be analyzed, you should give us some information upon which we could make some sort of a determination other than you believe that there will be competitive impacts, or it will affect in some way your offerability. MR. WALSH: Okay. We suspect that it's foreseeable I R. WILSON SHORTHAND REPORTERS (418) 543-3194/461-30M ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 SUZUKI 211 that in the 1982 model year, if the ARB program as revised went into effect that we would have competitors who would have models available for which we had no competing model and that these models and we would, therefore, lose that part of the market for which we did not have models available. CHAIRMAN JACKSON: Is that related to the 1982 standards and your inability to meet it with your full model line, or is it related to the introduction date? MR. WALSH: It's related to both, depending on the model. CHAIRMAN JACKSON: Would you tell me how it's related to the introduction date? MR. WALSH: In terms of the date at which a model is introduced? CHAIRMAN JACKSON: In terms of the difference between the amended California procedures which requires the - now requires the federal model year definition as opposed to the previous definition that was calendar year? MR. WALSH: Because we have limited production capacity, there would be some 1982 models which we would manufacture entirely in 1981 in all likelihood. If this was the case, we would not plan a major change on January 1st, 1982, unless those models would be introduced complying with five and 12 regulations of EPA and the five-gram standard of ARB if a waiver is granted for that standard. If the ARB program is changed strictly to a model year program, we would not be able to introduce that model at all, and that could impact us greatly. I R. WILSON SHORTHAND REPORTERS (419) M3-3194f461-MM ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 SUZUKI 212 CHAIRMAN JACKSON: Can you explain to us how that's going to impact you some way or another, definitive way? MR. WALSH: By lost sales to competitors. CHAIRMAN JACKSON: That's sort of a speculative kind of a thing, isn't it? MR. WALSH: As speculative as meeting a one-gram standard in 1982, I suppose. CHAIRMAN JACKSON: Okay. Mr. Walsh, thank you very much. MR. WALSH: Thank you. CHAIRMAN JACKSON: We will reconvene the hearing at 10:00 o'clock in the morning. (Whereupon the hearing was recessed at the hour of 5:55 o'clock p.m.) oOo JR. WILSON SHORTMAMO MHWtTXM (ซ1ป S4341S4/441-30M ------- |