[Federal Register Volume 78, Number 78 (Tuesday, April 23, 2013)]
[Rules and Regulations]
[Pages 23832-23835]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-09568]


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FEDERAL TRADE COMMISSION

16 CFR Part 309

[RIN 3084-AB21]


Labeling Requirements for Alternative Fuels and Alternative 
Fueled Vehicles

AGENCY: Federal Trade Commission (FTC or Commission).

ACTION: Final rule.

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SUMMARY: The Commission amends the Alternative Fuels Rule (``Labeling 
Requirements for Alternative Fuels and Alternative Fueled Vehicles'') 
to consolidate the FTC's alternative fueled vehicle (AFV) labels with 
new fuel economy labels required by the Environmental Protection Agency 
(EPA) and the National Highway Traffic Safety Administration (NHTSA). 
The amendments also eliminate labeling requirements for used AFV 
labels.

DATES: The amendments published in this document will become effective 
on May 31, 2013.

ADDRESSES: Requests for copies of this document should be sent to: 
Public Records Branch, Room 130, Federal Trade Commission, 600 
Pennsylvania Avenue NW., Washington, DC 20580. This document, and 
public records related to the FTC's regulatory review, are also 
available at that address and at www.ftc.gov.

FOR FURTHER INFORMATION CONTACT: Hampton Newsome, (202) 326-2889, 
Attorney, Division of Enforcement, Bureau of Consumer Protection, 
Federal Trade Commission, Room M-8102B, 600 Pennsylvania Avenue NW., 
Washington, DC 20580.

SUPPLEMENTARY INFORMATION: 

I. Background

    The Energy Policy Act of 1992 (EPAct 92 or Act) established federal 
programs to encourage the development of alternative fuels and 
alternative fueled vehicles (AFVs). Section 406(a) of the Act directed 
the Commission to establish uniform labeling requirements for 
alternative fuels and AFVs. Under the Act, such labels must provide 
``appropriate information with respect to costs and benefits [of 
alternative fuels and AFVs], so as to reasonably enable the consumer to 
make choices and comparisons.'' \1\ In addition, the required labels 
must be ``simple and, where appropriate, consolidated with other labels 
providing information to the consumer.'' \2\
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    \1\ 42 U.S.C. 13232(a).
    \2\ Id.
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    In response to EPAct 92, the Commission published the Alternative 
Fuels Rule in 1995.\3\ The Rule requires labels on new and used AFVs 
that run on liquid and non-liquid fuels, such as ethanol and other 
alcohols, including E85 ethanol-gasoline mixtures, natural gas, 
liquefied petroleum gas, hydrogen, coal-derived liquid fuels, fuels 
derived from biological materials (e.g., 100% biodiesel), and 
electricity. The labels for new AFVs disclose the vehicle's estimated 
driving range (i.e., the travel distance on a single charge or tank of 
fuel), general factors consumers should consider before buying an AFV, 
and toll-free telephone numbers and Web sites for additional 
information from the Department of Energy (DOE) and NHTSA.\4\ Labels 
for used AFVs contain only the general buying factors and DOE/NHTSA 
contact information.\5\ The Rule also requires labels on fuel 
dispensers for non-liquid alternative fuels, such as electricity, 
compressed natural gas, and hydrogen. The labels for electricity 
provide the charging system's kilowatt capacity, voltage, and other 
related information. The labels for other non-liquid fuels disclose the 
fuel's commonly used name and principal component (expressed as a 
percentage).
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    \3\ 60 FR 26926 (May 19, 1995).
    \4\ The Rule requires manufacturers to have a reasonable basis 
for the vehicle cruising range, and, for certain AFVs, specifies the 
test method for calculating that range. 16 CFR 309.22.
    \5\ The general factors listed on the current label include fuel 
type, operating costs, fuel availability, performance, convenience, 
energy security, energy renewability, and emissions. See 16 CFR part 
309, Appendix A.
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II. Regulatory Review

    In a 2011 Advance Notice of Proposed Rulemaking (ANPR), the 
Commission initiated its regulatory review of the Alternative Fuels 
Rule to, among other

[[Page 23833]]

things, ensure consistency between FTC-required vehicle labels and EPA 
(and NHTSA) fuel economy labeling requirements.\6\ Following the ANPR, 
the Commission issued a Notice of Proposed Rulemaking (NPRM) seeking 
comment on the consolidation of FTC and EPA vehicle labels for all new 
AFVs and the elimination of FTC labels for used AFVs.\7\ The Commission 
did not propose to change other parts of the Rule, such as provisions 
for alternative fuel ratings and dispenser labels. The Commission 
received seven comments in response.\8\
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    \6\ 76 FR 31513 (June 1, 2011) (ANPR on Alternative Fuels Rule). 
In 2011, EPA completed revisions to its fuel economy labeling 
requirements, which, among other things, addressed labels for AFVs 
not specifically addressed in the past EPA requirements. See 76 FR 
39478 (July 6, 2011).
    \7\ 77 FR 36423 (June 19, 2012) (NPRM on Alternative Fuels 
Rule).
    \8\ The Commission received the following comments: Alliance of 
Automobile Manufacturers ( 560902-00006); American Public 
Gas Association ( 560902-00008); Baker, Michael ( 
560902-00005); Clean Energy Fuels Corp. ( 560902-00011); 
General Motors Company (GM) ( 560902-00004); Johnston, 
Jenna ( 560902-00002); National Automobile Dealers 
Association (NADA) ( 560902-00010); NGVAmerica ( 
560902-00009); and the Association of Global Automakers, Inc. 
( 560902-00007). The comments are available at: http://www.ftc.gov/os/comments/alterfuelsnprm/index.shtm.
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III. Final Rule

    After reviewing the comments, the Commission issues final 
amendments to consolidate FTC and EPA label requirements and 
discontinue used vehicle labels, consistent with the NPRM's proposals.

A. EPA and NHTSA Fuel Economy Labels

    Background: In the NPRM, the Commission proposed requiring 
manufacturers to use EPA's fuel economy label for their new AFVs, in 
lieu of existing FTC label requirements. The Commission explained that 
the proposal would eliminate duplicative labels and reduce manufacturer 
burden without negatively affecting consumers. EPA fuel economy labels 
disclose more information than the FTC-required vehicle labels and 
direct consumers to the U.S. government's fuel economy Web site 
(www.fueleconomy.gov), which provides comprehensive comparative 
information for both conventional and alternative fuel vehicles.
    The NPRM also proposed a specific requirement related to driving 
range disclosures for flexible fuel vehicles (FFVs) (i.e., dual-fueled 
vehicles). In contrast to the FTC labels, the EPA requirements allow, 
but do not mandate, driving range disclosures for FFV's. To ensure the 
label provides vehicle buyers with comparative driving range 
performance for both alternative fuel and conventional gasoline, the 
Commission proposed to require manufacturers to use the version of the 
EPA FFV label that discloses the vehicle's alternative fuel and 
gasoline driving range. The Commission pointed to significant 
differences between alternative fuel and gasoline driving ranges to 
support this proposal.\9\
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    \9\ In the NPRM (77 FR at 36424), the Commission also proposed 
to add three categories of vehicles (hydrogen fuel cell, advanced 
lean burn, and hybrid motor vehicles) to the definition of 
``alternative fuel vehicle,'' consistent with statutory amendments 
found in National Defense Authorization Act for Fiscal Year 2008. 42 
U.S.C. 13211(3)(B).
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    Comments: The commenters supported the consolidation of existing 
requirements into a single federal fuel economy label.\10\ For example, 
the Alliance explained that a universal government label will allow 
``apples-to-apples'' vehicle comparisons and eliminate potential 
confusion from two, sometimes-conflicting labels. APGA added that the 
proposal appropriately discards existing ``inefficient, costly, and 
duplicative'' requirements. NADA noted that separate FTC labels will be 
unnecessary and potentially confusing given the presence of the EPA 
labels on 2013 vehicles.\11\ Finally, in the Alliance's view, the 
vehicle-specific information on the EPA labels will be more helpful to 
consumers than the current FTC label content.\12\
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    \10\ See AGPA, Alliance, GM, and NADA comments.
    \11\ The comments also supported the Commission's proposal to 
rely on the EPA label for hydrogen fuel cell, advanced lean burn, 
and hybrid vehicles. See NADA comments.
    \12\ See also GM comments.
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    The commenters also supported the Commission's proposal to use the 
version of the EPA FFV label that discloses the vehicle's alternative 
fuel and gasoline driving ranges.\13\ Clean Energy noted that the 
absence of an alternative fuel range estimate decreases confidence in 
AFVs, and creates an uneven playing field in favor of underperforming 
AFVs with shorter driving ranges. Global Automakers supported the 
proposal but also urged the Commission to clarify whether a 
manufacturer will have the discretion to use the old FTC label if it 
chooses to omit such information from the EPA label.
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    \13\ See, e.g., NADA, AGPA, and the Alliance comments.
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    Though the comments generally supported the proposal, two 
commenters raised concerns about the emissions information on labels 
for electric vehicles.\14\ Specifically, these commenters argued that 
the current EPA label focuses solely on the tailpipe emissions and 
thus, for electric vehicles (EVs), ignores the potential ``upstream 
emissions'' from fossil-fuel electric plants. Although EPA and NHTSA 
provide such EV-related emissions online, the commenters questioned 
whether consumers visit those Web sites. To augment the online 
information, they recommended requiring these disclosures on the label 
to help consumers make fair emissions comparisons between various AFV 
technologies.\15\ In their view, such changes would encourage a level 
playing field and allow all AFVs to compete in the marketplace.\16\
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    \14\ See AGPA, Clean Energy comments.
    \15\ APGA also raised concerns about the marketing practices of 
companies that manufacture ``zero emission vehicles.'' It requested 
that the FTC work with the EPA and NHTSA to restrain manufacturers 
from making inaccurate and misleading marketing claims. The 
Commission may consider these and other advertising issues as part 
of its ongoing review of its ``Guide Concerning Fuel Economy 
Advertising for New Automobiles,'' 16 CFR part 259. See 76 FR 41467 
(June 1, 2011) (notice postponing amendments to the Guide pending 
resolution of the Alternative Fuels Rule review).
    \16\ Finally, Global Automakers encouraged the Commission to 
finalize the proposed changes in advance of the 2014 model year, 
which can begin as early as January 2, 2013. To address electric 
vehicles introduced pending completion of this rulemaking, the 
Commission issued a policy stating that it will not enforce current 
FTC labeling requirements for any electric vehicle bearing an EPA-
mandated fuel economy label and will encourage vehicle manufacturers 
to use the EPA label in lieu of the FTC label. See FTC enforcement 
policy on driving range numbers for electric vehicles at http://www.ftc.gov/opa/2011/05/afr.shtm.
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    Discussion: As proposed in the NPRM, the final rule consolidates 
the FTC labels with EPA's and requires driving range disclosures on the 
EPA labels for FFVs.\17\ The consolidation of federal requirements into 
a single AFV fuel economy label will help consumers by eliminating 
confusion caused from overlapping or inconsistent disclosures. It will 
also reduce industry burden by removing largely duplicative, and 
sometimes contradictory, labeling requirements.\18\ Generally, the EPA 
labels provide more vehicle-specific information than the current FTC 
labels and direct consumers to additional data at www.fueleconomy.gov. 
This Web site provides comprehensive, comparative

[[Page 23834]]

information for conventional vehicles and AFVs. Because the EPA fuel 
economy labels apply to all AFVs subject to the FTC's labeling 
requirements, these amendments eliminate separate FTC label 
requirements for all AFV types.\19\ In addition, as proposed in the 
NPRM, the final rule requires manufacturers to use the EPA fuel economy 
label for FFVs that provides comparative driving range performance for 
both alternative fuel and conventional gasoline in lieu of existing FTC 
requirements. As commenters explained, this will ensure that the label 
provides vehicle buyers with comparative driving range performance for 
both alternative fuel and conventional gasoline.\20\
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    \17\ The amendments are consistent with the EPAct 92, which 
gives the Commission discretion to consolidate its requirements 
``with other labels providing information to the consumer.'' 42 
U.S.C. 13232(a). In addition, the Energy and Policy Conservation 
Act, 42 U.S.C. 32908(e)(2), authorizes the FTC to enforce the EPA 
automobile label requirements issued pursuant to 49 U.S.C. 32908(b).
    \18\ For example, consolidation will eliminate current 
inconsistencies between cruising range values on FTC and EPA 
electric vehicle labels. See FTC enforcement policy on driving range 
numbers for electric vehicles at http://www.ftc.gov/opa/2011/05/afr.shtm.
    \19\ Although EPA regulations (40 CFR part 600) require labeling 
for all vehicles covered under the FTC's Alternative Fuels Rule, 
current EPA rules do not contain a specific label for several 
vehicle types not generally available to individual consumers such 
as those fueled by liquefied petroleum gas, coal-derived liquid 
fuels, or fuels (other than alcohol) derived from biological 
materials. See 76 FR 39478 (July 6, 2011). However, EPA has 
authority to require labels for such vehicles, which are also 
covered by FTC's requirements.
    \20\ As proposed in the NPRM, the amendments also add the 
statutory definitions for ``lean burn,'' ``hybrid,'' and ``fuel 
cell'' vehicles to the Rule. The National Defense Authorization Act 
for Fiscal Year 2008 added these terms to the definition of 
``alternative fuel vehicle'' in the statute. 42 U.S.C. 13211(3)(B). 
No comments opposed this change.
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    Finally, in response to concerns about EPA (and FTC) electric 
vehicle labels, the Commission is not addressing these issues now given 
its decision to eliminate its own labels in lieu of EPA's fuel economy 
labels. The Commission recommends that stakeholders continue to raise 
their concerns with EPA and NHTSA, so that those agencies can consider 
such matters in future revisions to the fuel economy label. The 
Commission's staff will continue to coordinate with EPA, NHTSA, and DOE 
on these and other AFV labeling issues.

B. Labels for Used AFVs

    Background: In the ANPR, the Commission proposed eliminating the 
Rule's labeling requirements for used AFVs. Under the current FTC 
alternative fuel requirements, used AFV dealers must post labels 
containing general tips as well as references to government telephone 
numbers and Web sites. However, these labels do not disclose vehicle-
specific information, such as driving range. Noting that these labels 
provide limited information and may impose increased burdens on used 
car dealers as the AFV market expands, the Commission proposed to 
eliminate the requirement for a AFV label for used vehicles. The 
Commission also sought comment on whether fuel economy information 
(e.g., a reference to www.fueleconomy.gov) should appear on the FTC's 
Used Car Rule Buyers Guide, in the absence of a separate used AFV 
label.
    Comments: The commenters supported the Commission's proposal to 
eliminate the AFV label for used vehicles. The Alliance and NADA argued 
the benefits of a used vehicle label, which contains only generic 
consumer tips, are small compared to the burdens imposed on dealers 
tasked with purchasing, installing, and maintaining such labels.\21\ 
NADA, which noted that the EPAct 92 does not mandate used vehicle 
labels, also supported elimination because www.fueleconomy.gov, which 
did not exist when the FTC first issued the Rule, provides extensive 
fuel-related information for all used vehicles dating back to 1984.\22\ 
NADA also argued that the used AFV label requirement is unfair to used 
car dealers because the requirement does not cover private sales, which 
account for about half of all used vehicle transactions.
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    \21\ Global Automakers and GM provided similar comments.
    \22\ Notwithstanding the usefulness of www.fueleconomy.gov, NADA 
cautioned against including a reference to that Web site on the Used 
Car Rule Buyers Guide, arguing such information could confuse 
consumers given the Buyers Guide's focus on warranty information.
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    Discussion: Consistent with commenter suggestions, the final rule 
eliminates the used vehicle label requirement. Conditions have changed 
since the Commission originally issued the Rule in 1995. Consumers can 
now access detailed used AFV information online at www.fueleconomy.gov, 
including vehicle-specific fuel economy, energy consumption, and 
environmental data. This online source provides much more information 
than the general factors currently required by the Rule for used AFVs, 
without imposing burdens on used car dealers, many of whom are small 
businesses. Accordingly, the Commission concludes that the used vehicle 
label is not necessary to ``reasonably enable the consumer to make 
choices and comparisons'' as contemplated by the statute.\23\ In 
addition, without further information about the efficacy of including 
fuel economy information on the FTC's Used Car Rule Buyers Guide, the 
Commission does not propose changing that label at this time.
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    \23\ 42 U.S.C. 13232(a).
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C. Alternative Fuel Labeling

    As proposed in the NPRM, the final rule retains the Rule's labeling 
requirements for non-liquid alternative fuel requirements. Several 
comments supported the current requirements during this proceeding. No 
commenters proposed changes.\24\
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    \24\ See Alliance comments and 77 FR 36426 (discussion of 
comments on ANPR).
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IV. Paperwork Reduction Act

    The current Rule contains recordkeeping, disclosure, testing, and 
reporting requirements that constitute ``information collection 
requirements'' as defined by 5 CFR 1320.3(c) under the OMB regulations 
that implement the Paperwork Reduction Act (PRA). OMB has approved the 
Rule's existing information collection requirements through April 30, 
2016 (OMB Control No. 3084-0094). The final amendments would reduce the 
burdens associated with the Rule by eliminating FTC labeling 
requirements for vehicles subject to EPA's fuel economy labeling 
requirements.
    In past PRA analyses, FTC staff has estimated the Rule applies to 
1,121,153 alternative fueled vehicles each year, which mostly include 
flex-fuel vehicles. The staff estimated a two-minute average time to 
comply with the posting requirements for each of the approximately 
1,121,153 new and used AFVs made available each year, for a total of 
37,371 hours. The staff also estimated that the Rule's vehicle labeling 
requirements apply to an estimated 1,121,153 new and used AFVs each 
year at 38 cents for each label (per industry sources). Accordingly, 
the annual non-labor AFV labeling cost is estimated to be $426,038 
($0.38 x 1,121,153). The final rule will eliminate the Rule's burden 
for all these vehicles. Accordingly, FTC staff is submitting a related 
clearance request to OMB to adjust these previously submitted burden 
totals.

V. Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA), 5 U.S.C. 601-612, requires 
that the Commission provide an Initial Regulatory Flexibility Analysis 
(IRFA) with a Proposed Rule and a Final Regulatory Flexibility Analysis 
(FRFA), with the final Rule, if any, unless the Commission certifies 
that the Rule will not have a significant economic impact on a 
substantial number of small entities.
    The Commission does not anticipate that the amendments will have a 
significant economic impact on a substantial number of small entities. 
The Commission recognizes that some affected entities may qualify as 
small businesses under the relevant thresholds. Because the amendments

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will lead to a modest burden reduction, however, the Commission does 
not expect that the economic impact of the Rule will be significant.
    Accordingly, this document serves as notice to the Small Business 
Administration of the FTC's certification of no effect. Although the 
Commission certifies under the RFA that the Rule will not have a 
significant impact on a substantial number of small entities, the 
Commission has determined, nonetheless, that it is appropriate to 
publish an FRFA. Therefore, the Commission has prepared the following 
analysis:

A. Description of the Reasons That Action by the Agency Is Being Taken

    To provide clear disclosures to consumers and reduce labeling 
burden, the final rule directs manufacturers to use EPA fuel economy 
labels in lieu of the existing FTC label. Section 406(a) of EPAct 92 
directs the Commission to establish uniform labeling requirements, to 
the greatest extent practicable, for alternative fuels and AFVs.

B. Issues Raised by Comments in Response to the IRFA

    No comments raised concerns with the impacts of the amendments on 
small businesses. By consolidating FTC labels with EPA's labels for new 
AFVs and eliminating the used vehicle label requirement, the amendments 
are likely to reduce impacts on small businesses.

C. Estimate of Number of Small Entities to Which the Amendments Will 
Apply

    Under the Small Business Size Standards issued by the Small 
Business Administration, automobile manufacturers qualify as small 
businesses if they have fewer than 1,000 employees. The Commission 
estimates that approximately six vehicle manufacturers or commercial 
importers subject to the Rule qualify as small businesses.

 D. Projected Reporting, Recordkeeping, and Other Compliance 
Requirements

    The final rule does not impose any additional reporting, 
recordkeeping, or compliance requirements. Rather, it eliminates FTC 
labeling requirements for certain vehicles. The classes of small 
entities affected by the Rule include fuel distributors, vehicle 
manufacturers, and fuel retailers.

E. Description of Steps Taken To Minimize Significant Economic Impact, 
If Any, on Small Entities, Including Alternatives

    As discussed in the Paperwork Reduction Act analysis of this 
Notice, the final rule eliminates duplicative labeling burden for 
alternative fueled vehicles.

Final Rule

List of Subjects in 16 CFR Part 309

    Alternative fuel, Alternative fueled vehicle, Energy conservation, 
Labeling, reporting and recordkeeping, Trade practices.

    For the reasons set forth in the preamble, the Federal Trade 
Commission amends Title 16, Chapter 1, Subchapter C of the Code of 
Federal Regulations, part 309, as follows:

PART 309--LABELING REQUIREMENTS FOR ALTERNATIVE FUELS AND 
ALTERNATIVE FUELED VEHICLES

0
1. The authority citation for part 309 continues to read as follows:

    Authority:  42 U.S.C. 13232(a).


0
2. In Sec.  309.1, revise paragraph (f)(2)(ii), add paragraph (f)(3), 
remove paragraphs (dd), (ee), and (ff), and redesignate (gg) as (dd).
    The revision and addition read as follows:


Sec.  309.1  Definitions.

* * * * *
    (f) * * *
    (2) * * *
    (ii) Designed primarily for transportation of persons and has a 
capacity of more than 12 persons; or
    (3) Any vehicle that is--
    (i) A new qualified fuel cell motor vehicle (as defined in 26 
U.S.C. 30B(b)(3));
    (ii) A new advanced lean burn technology motor vehicle (as defined 
in 26 U.S.C. 30B(c)(3));
    (iii) A new qualified hybrid motor vehicle (as defined in 26 U.S.C. 
30B(d)(3)); or
    (iv) Any other type of vehicle that the Administrator of the 
Environmental Protection Agency demonstrates to the Secretary would 
achieve a significant reduction in petroleum consumption.
* * * * *

0
3. Revise Sec.  309.20 to read as follows:


Sec.  309.20  Labeling requirements for new covered vehicles.

    (a) Before offering a new covered vehicle for acquisition to 
consumers, manufacturers shall affix or cause to be affixed, and new 
vehicle dealers shall maintain or cause to be maintained, fuel economy 
labels as required by 40 CFR part 600. For dual fueled vehicles, such 
labels must include driving range information for alternative fuel and 
gasoline operation and be otherwise consistent with provisions in 40 
CFR part 600.
    (b) If an aftermarket conversion system is installed on a vehicle 
by a person other than the manufacturer prior to such vehicle's being 
acquired by a consumer, the manufacturer shall provide that person with 
the vehicle's fuel economy label prepared pursuant to 40 CFR part 600 
and ensure that new fuel economy vehicle labels are affixed to such 
vehicles as required by paragraph (a) of this section.

Sec. Sec.  309.21 and 309.22  [Removed]

0
4. Remove Sec. Sec.  309.21 and 309.22.


Sec.  309.23  [Redesignated as Sec.  309.21]

0
5. Redesignate Sec.  309.23 as Sec.  309.21.

Appendix A to part 309 [Amended]

0
6. In Appendix A to part 309, remove figures 4, 5, 5.1, and 6.

    By direction of the Commission.
Donald S. Clark,
Secretary.
[FR Doc. 2013-09568 Filed 4-22-13; 8:45 am]
BILLING CODE 6750-01-P