[Code of Federal Regulations]
[Title 49, Volume 6]
[Revised as of October 1, 2006]
From the U.S. Government Printing Office via GPO Access
[CITE: 49CFR535.4]

[Page 104-105]
 
                        TITLE 49--TRANSPORTATION
 
                   CHAPTER V--NATIONAL HIGHWAY TRAFFIC
                    SAFETY ADMINISTRATION, DEPARTMENT
                            OF TRANSPORTATION
 
PART 535_3-YEAR CARRYFOR- WARD AND CARRYBACK OF CREDITS FOR LIGHT TRUCKS--Table of Contents
 
Sec.  535.4  3-year carryforward and carryback of credits

    (a) For purposes of this part, credits under this section shall be 
considered to be available to any manufacturer upon the completion of 
the model year in which such credits are earned under paragraph (b) of 
this section unless under paragraph (c) of this section the credits are 
made available for use at a time prior to the model year in which 
earned.
    (b) Whenever the average fuel economy for a class of light trucks 
manufactured by a manufacturer in a particular model year exceeds an 
applicable average fuel economy standard established in part 533 of this 
chapter, such manufacturer shall be entitled to credit, calculated under 
paragraph (c) of this section, which--
    (1) Shall be available to be taken into account with respect to the 
average fuel economy for the same class of light trucks of that 
manufacturer for any of the three consecutive model years immediately 
prior to the model

[[Page 105]]

year in which such manufacturer exceeds such applicable average fuel 
economy standard, and
    (2) To the extent that such credit is not so taken into account 
pursuant to paragraph (b)(1) of this section, shall be available to be 
taken into account with respect to the average fuel economy for the same 
class of light trucks of that manufacturer for any of the three 
consecutive model years immediately following the model year in which 
such manufacturer exceeds such applicable average fuel economy standard.
    (c)(1) At any time prior to the end of any model year, a 
manufacturer which has reason to believe that its average fuel economy 
for a class of light trucks will be below such applicable standard for 
that model year may submit a plan demonstrating that such manufacturer 
will earn sufficient credits under paragraph (b) of this section within 
the next 3 model years which when taken into account would allow the 
manufacturer to meet that standard for the model year involved.
    (2) Such credits shall be available for the model year involved 
subject to--
    (i) The Administrator approving such plan; and
    (ii) The manufacturer earning credits in accordance with such plan.
    (3) The Administrator approves any such plan unless the 
Administrator finds that it is unlikely that the plan will result in the 
manufacturer earning sufficient credits to allow the manufacturer to 
meet the standard for the model year involved.
    (4) The Administrator provides notice to any manufacturer in any 
case in which the average fuel economy of that manufacturer is below the 
applicable standard under part 533 of this chapter, after taking into 
account credits available under paragraph (b)(1) of this section, and 
affords the manufacturer a reasonable period (of not less than 60 days) 
in which to submit a plan under this paragraph.
    (d) The amount of credit to which a manufacturer is entitled under 
this section shall be equal to--
    (1) The number of tenths of a mile per gallon by which the average 
fuel economy for a class of light trucks manufactured by such 
manufacturer in the model year in which the credit is earned pursuant to 
this section exceeds the applicable average fuel economy standard 
established in part 533 of this chapter, multiplied by
    (2) The total number of light trucks in that class manufactured by 
such manufacturer during such model year.
    (e) The Administrator takes credits into account for any model year 
on the basis of the number of tenths of a mile per gallon by which the 
manufacturer involved was below an applicable average fuel economy 
standard for a class of light trucks for that model year and the volume 
of that class of light trucks manufactured that model year by the 
manufacturer. Credits may not be applied between class of light trucks, 
except as determined by the Administrator to account for changes made in 
the definitions of classes between model years. Credits once taken into 
account for any model year shall not thereafter be available for any 
other model year. Prior to taking any credit into account, the 
Administrator provides the manufacturer involved with written notice and 
reasonable opportunity to comment thereon.