51. COMMENT: Manufacturers should be allowed to phase into compliance with the non-methane organic gases (NMOG) fleet average to ensure that no penalties apply as the program is ramping up. New Jersey should take an approach similar to New York, Massachusetts and Vermont in addressing the issue of transitioning to the fleet average NMOG requirements. (3, 4, 7, 8, 12, 13, 22)
RESPONSE: Effective with model year 2009 passenger cars or light-duty trucks delivered for sale in New Jersey on or after January 1, 2009 and for each subsequent model year, each manufacturer shall demonstrate compliance with the NMOG fleet-wide average exhaust emission requirement as set forth in Title 13, CCR, Section 1961. Consistent with the procedures in Title 13 CCR 1961(b)(1), manufacturers can earn NMOG credits in New Jersey in model years 2009 through 2011. During model years 2009 through 2011, the NMOG fleet average shall apply in New Jersey as set forth at N.J.A.C. 7:27-29.5, but manufacturers will not be required to demonstrate compliance until the reporting required following the 2011 model year. Manufacturers may apply NMOG credits earned during any of the model years 2009 through 2011 when demonstrating compliance. Also, to the extent that manufacturers offer California-certified vehicles for the entire 2009 model year, manufacturers may use those deliveries to earn fleet average NMOG credits. The Department will work with manufacturers to resolve any issues that may arise concerning the 2009 model year reports and calculation of the NMOG fleet average.
The rules should allow manufacturers to earn NMOG credits that can be used to transition into the LEV Program. It encourages all 2009 model year vehicles to be certified to California emissions. To the extent that manufacturers offer California vehicles for the entire 2009 model year to gain fleet average NMOG credits, the rules would address some of the “split model year” issues discussed above. This alternative will encourage early placement of California emission certified vehicles and allow SIP credits with the initial implementation of the LEV program. (3, 4)
RESPONSE: In response to the comment regarding NMOG fleet average compliance, please see the response to Comment 51. In regard to the commenter’s proposal to allow manufacturers to earn NMOG credits for sales prior to model year 2009, the authorizing statute does not direct the Department to provide such early NMOG fleet average credits. The statute does, however, direct the Department to grant ZEV credits for early deliveries for sale in New Jersey of applicable PZEV, ATPZEV and ZEV vehicles. The Department, therefore, encourages all manufacturers to take advantage of the early ZEV crediting opportunities in the adopted rules.
N.J.A.C. 7:27-29.6 ZEV Sales Requirement and 7:27-29.7 ZEV Credit Bank
53. COMMENT: We support adoption of the provisions at N.J.A.C. 7:27-29.7(a) through (k), the guidelines for setting up a Credit Bank and for giving car manufacturers credits for cars sold after 1999 and up until the start of the program in 2009. However, we are concerned with the provisions in N.J.A.C. 7:27-29.7(l) and (m), which allow the manufacturers to apply credits from the California databank.
The Department should amend the rules wherever necessary to ensure that the total number of credits that manufacturers can realize does not exceed the proportional credits that would be allowed under N.J.A.C. 7:27-29.7(l) and (m) minus the credits gained by the early introduction of PZEVs, ATPZEVs and ZEVs, as outlined in N.J.A.C. 7:27-29.7 (a) through (k).
Further, we ask that the Department provide information as to the number of years that these transition provisions would delay the actual need for manufacturers to place additional PZEVs, ATPZEVs and ZEVs in New Jersey. (53)
RESPONSE: The Department appreciates the commenter's concerns regarding the possibility that a manufacturer may accrue an excessive amount of credits prior to program start-up in New Jersey, but believes that the crediting provisions in the rules are appropriate to facilitate a manufacturer's transition into the mandatory ZEV sales requirement in New Jersey.
The Department projects that the amount of credits that a manufacturer may bank prior to the start of the program in 2009 will be between one and two years worth of banked ZEV credits. This includes credits from both the one-time proportional crediting deposit and credits earned through early sales in New Jersey. The Department believes this level will not be excessive but will provide an appropriate level of banked credits when transitioning into the ZEV sales requirement in New Jersey.
Furthermore, the adopted rules reflect the clear intent of the New Jersey Legislature by permitting manufacturers to earn credits for the early introduction of advanced technology vehicles in New Jersey in an effort to provide for air quality benefits in New Jersey as early as possible. If the Department were to require manufacturers to subtract credits earned by early New Jersey sales from their proportional credit balances deposited in 2008, it would lose the incentive for manufacturers to offer California-certified vehicles early in New Jersey.
In summary, the Department believes the crediting provisions in the rules provide both a reasonable incentive for manufacturers to offer advanced technology vehicles early in New Jersey while providing a reasonable level of banked credits for transitioning into the ZEV sales requirements in New Jersey. The Department does not believe that the level of banked credits a manufacturer may accrue prior to program start-up in 2009 will slow the introduction of advanced technology vehicles for 2009 and beyond. Furthermore, the requirement in the rules whereby manufactures must offer for sale in New Jersey the same models they offer in California if they utilize the proportional crediting option will help assure a wide variety of advanced technology vehicles are available in New Jersey.
New Jersey should allow ZEV credits for vehicles delivered for sale at any time prior to January 13, 2004, and not limit them to vehicles delivered for sale on and after January 1, 1999. (3, 4)
RESPONSE: The earliest date for allowing ZEV credits for vehicles delivered for sale in New Jersey is specified in the authorizing statute as January 1, 1999. The rules are consistent with the authorizing statute. The Department has adopted this provision as proposed.
Neighborhood Electric Vehicles (NEVs) are an important part of certain manufacturer’s ZEV compliance plans. In New Jersey, NEVs cannot be registered nor driven on the road. As such, there is no potential for NEV credit generation in New Jersey, thus creating a third vehicle situation. New Jersey should adopt rules that enable NEVs to be registered and operated on roads with a speed limit up to 35 mph. Until this is done, the Department should adopt regulatory language that allows for an annual proportional credit transfer of ZEV credits generated in California through the sale of NEVs. (3, 4, 8)
RESPONSE: The commenter is correct in stating that NEVs cannot currently be registered for highway use in New Jersey. NEVs, however, can be sold for off-highway use in New Jersey and are currently being sold in New Jersey for such application. A manufacturer that delivers NEVs for sale in New Jersey and places NEVs for use in such off-highway applications can earn ZEV credits in New Jersey. Accordingly, the Federal Clean Air Act prescription against creating a “third vehicle” would not be implicated.
Nonetheless, there is merit in the commenters’ suggestion that the Department grant proportional NEV credits until such time as NEVs can be registered for highway use in New Jersey. The Department will consider this concept for possible inclusion in future rulemaking.
For ZEV reporting purposes, New Jersey should not require VIN and date delivered for sale for PZEVs and ATPZEVs. To comply with this reporting requirement would be very cumbersome and not consistent with CARB’s reporting requirements. Also, ZEV updates may occur after September 1 following the close of the model year. New Jersey’s proposal would prohibit such updates. (3, 4, 8)
RESPONSE: The Department proposed the requirement that manufacturers provide the VIN for each vehicle for which a manufacturer claims ZEV credit, including PZEVs and ATPZEVs for quality assurance purposes. However, the Department determined that reporting the VINs for PZEVs and ATPZEVs is not necessary. The Department will be able to audit the manufacturers' records to verify that they are not taking credit for the same vehicle more than once. In addition, tracking VINs would be of limited usefulness to the Department, because no other states are tracking VINs and thus New Jersey could not cross-check individual VINs with other states. The Department has modified the rules on adoption to delete the proposed requirement to provide VINs for PZEVs and ATPZEVs. Specifically, the Department has not adopted N.J.A.C. 7:27-29.7(d)3(viii).
With respect to ZEVs, the September 1 reporting date is consistent with the reporting requirements that CARB has set forth in Manufacturers Advisory Correspondence (MAC) 2004-01. The Department has adopted this provision as proposed.
57. COMMENT: Manufacturers have the ability to trade or acquire credits from another manufacturer that were earned in an earlier model year in order to meet the ZEV compliance requirements in a later model year. For example, a manufacturer seeking to comply with MY 2009 requirements could, in 2009, purchase credits earned by another manufacturer in model year 2005. As proposed, N.J.A.C. 7:27-29.7(g) would not allow this delayed credit transfer, which is inconsistent with the California program. The Department’s reporting and credit generation rules should be consistent with the MAC 2004-01, and the Department should eliminate the second sentence in N.J.A.C. 7:27-29.7(g). (3, 4)
RESPONSE: The Department's intent when proposing the rules was to allow manufacturers to bank, acquire from another manufacturer, and use credits in the same manner as the California program. (See 37 N.J.R. 2766). CARB's rules allow the transfer of credits between manufacturers, provided the transfer is properly documented. CARB does not place a time limit on the transfer. As proposed, N.J.A.C. 7:27-29.7(g) would set the end date until which a manufacturer could acquire credits from another manufacturer as September 1 following the close of the model year during which the vehicle was manufactured. This is not consistent with the California program, and would inhibit the purpose of the ZEV Credit Bank, which is to provide manufacturers a means by which they can earn and obtain credits in order to comply with requirements beginning on January 1, 2009 and later model years. (See 37 N.J.R. 2766.) Therefore, the Department has modified N.J.A.C. 7:27-29.7(g) on adoption to remove the time limitation on acquiring credits from another manufacturer.
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