(a) Eligibility requirements. Both of the following conditions must be met before you are eligible for a reduced fee:

(1) The certificate is to be used for sale of vehicles or engines within the United States.

(2) The full fee for an application for certification for a model year exceeds 1.0% of the aggregate projected retail sales price of all vehicles or engines covered by the certificate.

(b) Initial reduced fee calculation.

(1) If the conditions of paragraph (a) of this section are met, the initial fee paid must be $750 or 1.0% of the aggregate projected retail sales price of all the vehicles or engines to be covered by the certificate, whichever is greater.

(2) For vehicles or engines that are converted to operate on an alternative fuel using as the basis for the conversion a vehicle or engine that is covered by an existing certificate of conformity, the cost basis used in this section must be the aggregate projected retail value-added to the vehicle or engine by the conversion rather than the full cost of the vehicle or engine. For this provision to apply, the existing certificate must cover the same sales area and model year as the requested certificate for the converted vehicle or engine.

(3) For remanufacturing systems, the cost basis used in this section must be the aggregate projected retail cost of a complete remanufacture, including the cost of the replacement components, software, and assembly.

(4) For ICI certification applications, the cost basis of this section must be the aggregate projected retail cost of the entire vehicle(s) or engine(s), not just the value added by the conversion. If the vehicles/engines covered by an ICI certificate are not being offered for sale, the manufacturer shall use the fair retail market value of the vehicles/engines as the retail sale price required in this section. For an ICI application for certification, the retail sales price (or fair retail market value) must be based on the applicable National Automobile Dealer's Association (NADA) appraisal guide and/or other evidence of the actual market value.

(5) The aggregate cost used in this section must be based on the total projected sales of all vehicles and engines under a certificate, including vehicles and engines modified under the modification and test option in 40 CFR 85.1509 and 89.609. The projection of the number of vehicles or engines to be covered by the certificate and their projected retail selling price must be based on the latest information available at the time of the fee payment.

(6) You may submit a reduced fee as described in this section if it is accompanied by a calculation of the fee based on the number of vehicles covered and the projected aggregate retail sales price as specified on the fee filing form. Your reduced fee calculation shall be deemed approved unless we determine that the criteria of this section have not been met. We may make such a determination either before or after issuing a certificate of conformity. If we determine that the requirements of this section have not been met, we may deny future reduced fee applications and require submission of the full fee payment until you demonstrate to our satisfaction that your reduced fee submissions are based on accurate data and that final fee payments are made within 45 days of the end of the model year.

(7) If we deny your request for a reduced fee, you must send us the appropriate fee within 30 days after we notify you.

(c) Revision of the number of vehicles or engines covered by the certificate.

(1) You must take both of the following steps if the number of vehicles or engines to be produced or imported under the certificate exceeds the number indicated on the certificate (including a certificate under which modification and test vehicles are imported under 40 CFR 85.1509 and 89.609):

(i) Request that we revise the certificate with a number that indicates the new projection of the vehicles or engines to be covered by the certificate. We must issue the revised certificate before the additional number of vehicles or engines may be sold or finally imported into the United States.

(ii) Submit payment of 1.0% of the aggregate projected retail sales price of all the additional vehicles or engines.

(2) You must receive a revised certificate before the sale or final importation of any vehicles or engines, including modification and test vehicles, that are not originally included in the certificate issued under paragraph (b) of this section, or as indicated in a revised certificate issued under paragraph (c)(1) of this section. Such vehicles that are sold or imported before we issue a revised certificate are deemed to be not covered by a certificate of conformity.

(d) Final reduced fee calculation and adjustment.

(1) If the initial fee payment is less than the final reduced fee, you must pay the difference between the initial reduced fee and the final reduced fee using the provisions of §1027.130. Calculate the final reduced fee using the procedures of paragraph (c) of this section but using actual production figures rather than projections and actual retail sales value rather than projected retail sales value.

(2) You must pay the difference between the initial reduced fee and the final reduced fee within 45 days of the end of the model year. The total fees paid for a certificate may not exceed the applicable full fee specified in §1027.105. We may void the applicable certificate if you fail to make a complete payment within the specified period. We may also refuse to grant reduced fee requests submitted under paragraph (b)(5) of this section.

(3) If the initial fee payment exceeds the final reduced fee, you may request a refund using the procedures of §1027.125.

(e) Records retention. You are subject to the applicable requirements to maintain records under this chapter. If you fail to maintain required records or provide them to us, we may void the certificate associated with such records. You must also record the basis you used to calculate the projected sales and fair retail market value and the actual sales and retail price for the vehicles and engines covered by each certificate issued under this section. You must keep this information for at least three years after we issue the certificate and provide it to us within 30 days of our request.


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