[Federal Register Volume 62, Number 249 (Tuesday, December 30, 1997)]
[Rules and Regulations]
[Pages 67733-67736]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-33769]


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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Parts 85 and 89

[AMS-FRL-5939-5]


Control of Air Pollution: Emission Standards for New Nonroad 
Compression-Ignition Engines at or Above 37 Kilowatts; Preemption of 
State Regulation for Nonroad Engine and Vehicle Standards; Amendments 
to Rules

AGENCY: Environmental Protection Agency.

ACTION: Direct final rule.

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SUMMARY: This direct final rulemaking, consistent with an order and 
opinion from the U.S. Court of Appeals for the District of Columbia 
Circuit, amends EPA's regulations setting emission standards for large 
(at or above 37 kilowatts) nonroad compression ignition engines, and 
EPA's regulations establishing procedures for EPA authorization of 
California nonroad emission standards. Specifically, EPA is withdrawing 
portions of an interpretive rule which set forth the Agency's position 
on the Clean Air Act (Act) regarding the status of certain internal 
combustion engines manufactured before the effective date of the final 
rulemaking promulgating EPA's definition of nonroad engine. 
Additionally, consistent with the D.C. Circuit opinion, EPA also is 
amending the remaining text of this interpretive rule, as well as EPA's 
regulations issued under section 209(e) of the Act regarding the 
Agency's California nonroad standards authorization process, to clarify 
that California must seek authorization from EPA prior to enforcing 
standards and other requirements relating to emissions from any nonroad 
vehicles or engines, and not just new nonroad vehicles and engines, 
which was the original language used in these regulations.

DATES: This direct final rule is effective on March 2, 1998 unless 
notice is received by January 29, 1998 that any person wishes to submit 
adverse comments and/or request a hearing. Should EPA receive such 
notice, EPA will publish a timely document in the Federal Register 
withdrawing this direct final rule. Any party who sends EPA notice of 
intent to submit adverse comments must in turn submit the adverse 
comments by March 2, 1998, unless a hearing is requested. Any party 
objecting to this direct final rule, at the time it notifies EPA of its 
intent to submit adverse comments, can request EPA to hold a public 
hearing on this action. If a hearing is requested, it will take place 
on March 2, 1998, and interested parties will have an additional 30 
days after the hearing (until March 30, 1998) to submit comments on any 
information presented at the hearing. Because no hearing will occur 
absent a request for one, interested parties should contact Robert M. 
Doyle at the number listed below after January 29, 1998 to determine 
whether a hearing will take place.

ADDRESSES: Written comments should be submitted (in duplicate if 
possible) to: Air Docket Section (6102), Attention: Docket No. A-91-24, 
U.S. Environmental Protection Agency, 401 M Street, S.W., Washington, 
D.C. 20460, or hand-delivered to the Air Docket at the above address, 
in Room M-1500, Waterside Mall. A copy of written comments should also 
be submitted to Robert M. Doyle at the address below.

FOR FURTHER INFORMATION CONTACT: Robert M. Doyle, Attorney/Advisor, 
Engine Programs and Compliance Division (6403J), U.S. Environmental 
Protection Agency, 401 M. Street, S.W., Washington, D.C. 20560, (202) 
564-9258, FAX (202) 233-9596, E-Mail, [email protected].

SUPPLEMENTARY INFORMATION:

I. Regulated Entities

    Entities potentially regulated by this direct final rule are the 
California Air Resources Board and other state air quality agencies. 
Regulated categories and entities include:

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                                                Examples of regulated   
                 Category                             entities          
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State and local government................  California Air Resources    
                                             Board.                     
                                            State and local air quality 
                                             agencies.                  
------------------------------------------------------------------------

    This table is not intended to be exhaustive, but rather provides a 
guide for readers regarding entities likely to be regulated by this 
action. This table lists the types of entities that EPA is now aware 
could potentially be regulated by this action. Other types of entities 
not listed in the table could also be regulated. If you have questions 
regarding the applicability of this action to a particular product, 
consult the person listed in the preceding FOR FURTHER INFORMATION 
CONTACT section.

II. Obtaining Electronic Copies of Documents

    Electronic copies of the preamble and the regulatory text of this 
direct final rule are available via the Internet on the Office of 
Mobile Sources (OMS) Home Page (http://www.epa.gov/OMSWWW/). Users can 
find these documents and other nonroad engine and vehicle related 
information and documents by accessing the OMS Home Page and looking at 
the path entitled ``Nonroad engines and vehicles.'' This service is 
free of charge, except for any cost you already incur for Internet 
connectivity. The official Federal Register version is made available 
on the day of publication on the primary Web site (http://www.epa.gov/
docs/fedrgstr/EPA-AIR/).
    Please note that due to differences between the software used to 
develop the documents and the software into which the documents may be 
downloaded, changes in format, page length, etc., may occur.

III. Legal Authority and Background

    Authority for the actions set forth in this direct final rule is 
granted to EPA by sections 209, 213, and 301 of the Clean Air Act as 
amended (42 U.S.C. 7543, 7547, and 7601).

A. Amendments and Redesignation of Appendix Containing Interpretive 
Rule on Date and Scope of Nonroad Preemption

    On May 17, 1993, EPA proposed rules setting standards for emissions 
from nonroad compression ignition engines at or above 37 kilowatts 
(approximately 50 horsepower) in power (large nonroad engine 
rule).1 In this NPRM, EPA was faced with the question (among 
many issues) of the manner and the extent to which states could 
regulate nonroad engines, which some states and localities previously 
had regulated as stationary sources. EPA noted that while emissions 
from nonroad engines are excluded from the Act's section 302(z) 
definition of stationary source,2 the exclusion would apply 
only to those nonroad internal combustion engines that are manufactured 
after the effective

[[Page 67734]]

date of the large nonroad engine rule. EPA also noted that nonroad 
engines may be subject to state-imposed in-use restrictions such as 
limits on hours of use and may be subject to state regulation under 
section 209(e)(2).3
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    \1\ 58 FR 28809 (May 17, 1993).
    \2\ Section 302(z) states that the ``term `stationary source' 
means generally any source of an air pollutant except those 
emissions resulting directly from an internal combustion engine for 
transportation purposes or from a nonroad engine or nonroad vehicle 
as defined in section 216.''
    \3\ Section 209(e)(2)(A) directs EPA to authorize California to 
adopt and enforce standards and other requirements for nonroad 
engines and nonroad vehicles (with some categorical exceptions) if 
California's regulations meet the criteria set forth in the Act. 
Other states may adopt EPA-authorized California nonroad engine or 
vehicle standards if the states comply with the criteria listed in 
section 209(e)(2)(B).
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    During the rulemaking, EPA received comments from several parties 
objecting to its interpretation of the correct effective date. These 
parties generally asserted that the language in section 302(z) applied 
to all nonroad engines in existence on or after November 15, 1990, the 
date of the enactment of the Clean Air Act Amendments of 1990 (CAAA). 
The effect of this assertion would be that states would be preempted 
from promulgating emission standards or other requirements for nonroad 
engines produced after that date.
    On June 17, 1994, EPA published a final rule 4 setting 
the standards for the large nonroad compression ignition engines; the 
effective date for this rule was July 18, 1994, 30 days after its 
Federal Register publication. In that rule, EPA finalized the 
definition of ``nonroad engine,'' which determined whether certain 
engines should be considered ``nonroad engines'' or ``stationary 
sources.'' After careful consideration of the comments on the rule's 
preemption date briefly summarized above, EPA added an interpretive 
rule in the form of an appendix (Appendix A) to the regulations 
summarizing EPA's decisions on these preemption issues. In Appendix A, 
EPA noted basically that it interprets the Act as not precluding state 
regulation of internal combustion engines manufactured prior to July 
18, 1994, except that state regulation of such engines that are used in 
motor vehicles or vehicles used solely for competition is precluded. 
Additionally, EPA noted that it believes that states are not precluded 
under section 209 of the Act from regulating the use and operation of 
nonroad engines. Appendix A has been codified as part of the large 
nonroad engine rule and appears in the current volume of 40 CFR part 89 
(July 1, 1996).
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    \4\ 59 FR 31306 (June 17, 1994).
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    On or before August 16, 1994, nine parties timely filed petitions 
with the United States Court of Appeals for the D.C. Circuit for review 
of the large nonroad engine rule, and of the related rule establishing 
the scope of preemption of state or local standards regulating nonroad 
engines and the procedures that California must follow when seeking EPA 
authorization to adopt and enforce California-specific nonroad engine 
standards under section 209(e) of the Act. These nine petitions were 
consolidated as Engine Manufacturers Association, et. al., v. EPA, 
Docket No. 94-1558, (EMA v. EPA). The petitioners challenged several 
aspects of these rules, including the EPA interpretation contained in 
Appendix A. After preliminary discussions with petitioners, EPA decided 
that it was appropriate to review its interpretation that preemption of 
state and local regulations did not effect engines manufactured prior 
to July 18, 1994. Therefore, on September 19, 1995, EPA filed with the 
Court a Motion for Vacatur and Remand of its interpretation. The 
consolidated petitioners did not oppose EPA's Motion.
    On October 20, 1995, the Court granted EPA's Motion and ordered 
that paragraphs 1 and 2 of Appendix A be vacated and remanded to the 
Agency for further consideration. Today's direct final rule implements 
the order of the Court by removing paragraphs 1 and 2 from Appendix A, 
and retitling Appendix A to be descriptive of its revised content.
    EPA notes that although paragraphs 1 and 2 of Appendix A are now 
vacated, paragraph 3 remains effective, though this rule revises that 
paragraph. This paragraph, which appears in the revised text of 
Appendix A, contains EPA's determination that states are not precluded 
from regulating the use of nonroad engines. On July 12, 1996, the Court 
handed down its decision in EMA v. EPA, and held that EPA had made a 
reasonable interpretation of the Act in finding that the preemption of 
state regulations did not extend to restrictions on the use of nonroad 
engines.5 EPA, however, has deleted the last two sentences 
of paragraph 3 and added a new sentence consistent with the Court's 
ruling on the scope of implied preemption of state standards, discussed 
in detail in Section B. below.
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    \5\ EMA v. EPA, 88 F.3d 1075, 1093-94 (D.C. Cir. 1996).
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B. Scope of Implied Preemption of State Standards

    Under section 209(e) of the Act as amended, EPA was required to 
``issue regulations to implement'' subsection (e), which addressed the 
ability of states to adopt emission standards and other requirements 
for nonroad engines and vehicles. Under section 209(e): (1) All states 
are preempted from adopting emission standards and other requirements 
for new nonroad engines used in construction or farm equipment or 
vehicles which are smaller than 175 horsepower and for new locomotives 
and new engines used in locomotives; (2) California may adopt and 
enforce standards and other requirements for nonroad engines other than 
the specifically preempted categories listed directly above, after 
receiving authorization to do so from EPA; and (3) other states may 
adopt California's nonroad emission standards and other requirements 
after EPA has authorized the standards and other requirements and the 
adopting state has allowed the statutorily required two-year leadtime.
    On July 20, 1994, EPA promulgated regulations which established the 
process under which the Agency would authorize California nonroad 
emission standards and other requirements (section 209(e) regulations). 
During the rulemaking, EPA addressed the issue of the scope of the 
Act's preemption on state regulation of nonroad engines and vehicles. 
Section 209(e)(2) directs EPA to authorize, when all conditions are 
met, California emission standards for ``any nonroad vehicles or 
engines other than [the new under 175 hp farm and construction 
equipment engines and the new locomotive engines] * * * (emphasis 
added).'' EPA interpreted the implied preemption of state standards in 
section 209(e) to apply only to new nonroad engines rather than any 
nonroad engines, which could include both new and used engines. In the 
Preamble to these regulations, EPA stated clearly that it believed 
``that the requirements of section 209(e)(2) apply only to new nonroad 
engines and vehicles (emphasis added).'' 6 Accordingly, the 
regulations required California to seek EPA authorization only for 
``standards and other requirements relating to the control of emissions 
from new nonroad vehicles or engines that are otherwise not 
preempted.'' 7
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    \6\ 59 FR 36969, 36973 (July 20, 1994).
    \7\ 40 CFR 86.1604(a) (July 1, 1996).
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    As discussed above, petitions to the D.C. Circuit for review of the 
section 209(e) regulations and the large nonroad engine rule were filed 
and consolidated as EMA v. EPA. In this litigation, the petitioners 
agreed with EPA that section 209(e)(2) implied preemption of state 
regulation of nonroad engines and vehicles, but argued that the 
preemption applied to standards for all nonroad

[[Page 67735]]

sources, both new and non-new, because the statute did not include the 
word ``new'' in specifying what nonroad vehicles and engines for which 
California and other states could promulgate standards,8 and 
for other reasons. In its opinion in this case handed down July 12, 
1996, the Court agreed with the petitioners on this particular point, 
and granted the EMA petition ``insofar as they challenge the limitation 
of the implied section 209(e)(2) preemption to new nonroad sources.'' 
9
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    \8\Section 209(e)(2)(A) states ``(I)n the case of any nonroad 
vehicles or engines other than those referred to in subparagraph (A) 
or (B) of paragraph (1), * * *''
    \9\EMA v. EPA, 88 F.3d at 1094.
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    Today's direct final rule implements the opinion of the Court 
regarding the scope of preemption of section 209(e)(2) by amending the 
language of the implementing regulations to reflect that California 
must request authorization for its emission standards and other related 
requirements for all nonroad vehicles and engines.10 EPA has 
also deleted the final two sentences of Appendix A, dealing with the 
ability of states to require retrofit technologies, as the language as 
currently written is inconsistent with the opinion of the Court, and 
added a sentence which reflects the Court's holding by noting that 
states may adopt only those retrofit requirements for nonroad engines 
identical to California requirements which have been authorized by EPA 
under section 209 of the Act. EPA has also modified the language of 
Appendix A to state more simply and clearly that state regulation of 
the use and operation of nonroad engines can occur when the engines are 
no longer new.
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    \10\ EPA has also amended the text of the implementing 
regulations in appropriate places by changing ``states'' to ``states 
and any political subdivision thereof'' to make this language fully 
consistent with the applicable language of section 209(e) of the 
Act. Additionally, EPA has revised the Title of Part 85 to reflect 
that this Part contains regulations covering both onroad vehicles 
and engines and nonroad vehicles and engines. These amendments were 
not directed by the Court, but are being done as part of today's 
direct final rule for editorial efficiency.
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C. Public Participation and Effective Date

    EPA is publishing this rule without prior proposal because EPA 
views these amendments as noncontroversial and anticipates no adverse 
comments. However, in the event that adverse or critical comments are 
filed, EPA has prepared a Notice of Proposed Rulemaking (NPRM) 
proposing the same amendments. This NPRM is contained in a separate 
document in this Federal Register publication. The direct final action 
will be effective March 2, 1998 unless adverse or critical comments are 
received by January 29, 1998. If EPA receives adverse or critical 
comments on the revisions discussed in this section, the revisions 
receiving adverse comment will be withdrawn before the effective date. 
In case of the withdrawal of all or part of this action, the withdrawal 
will be announced by a subsequent Federal Register document. All public 
comments will then be addressed in a subsequent final rule based on the 
accompanying proposed rule. EPA will not implement a second comment 
period on this action. Any parties interested in commenting on this 
rule should do so at this time. If no adverse comments are received, 
the public is advised that the rule will be effective March 2, 1998.
    EPA is continuing to review its policy concerns and options 
regarding the date of preemption for the nonroad engine rules. EPA may 
in the future determine that it is appropriate to issue a new 
interpretation to address this issue.

IV. Administrative Requirements

A. Administrative Designation

    Under Executive Order 12866 (58 FR 51735 (October 4, 1993), the 
Agency must determine whether the regulatory action is ``significant'' 
and therefore subject to OMB review and the requirements of the 
Executive Order. The Order defines ``significant regulatory action'' as 
one that is likely to result in a rule that may:

    (1) Have an annual effect on the economy of $100 million or more 
or adversely affect in a material way the economy, a sector of the 
economy, productivity, competition, jobs, the environment, public 
health or safety, or State, local, or tribal governments or 
communities;
    (2) Create a serious inconsistency or otherwise interfere with 
an action taken or planned by another agency;
    (3) Materially alter the budgetary impact of entitlements, 
grants, user fees, or loan programs or the rights and obligations of 
recipients thereof; or,
    (4) Raise novel legal or policy issues arising out of legal 
mandates, the President's priorities, or the principles set forth in 
the Executive Order.

    It has been determined that this rule is not a ``significant 
regulatory action'' under the terms of Executive Order 12866 and is 
therefore not subject to OMB review.

B. Reporting and Recordkeeping Requirements

    This rule does not change the information collection requirements 
submitted to and approved by OMB in association with the large nonroad 
engine final rulemaking (59 FR 31306, June 17, 1994).

C. Regulatory Flexibility

    EPA has determined that it is not necessary to prepare a regulatory 
flexibility analysis in connection with this final rule. This rule will 
not have a significant adverse economic impact on a substantial number 
of small businesses. The only revisions EPA is making in this final 
rule are pursuant to the decision of the Court. These changes are 
directed at state and local governments and are expected to affect few, 
if any, existing or future local or state regulations.

D. Submission to Congress and the General Accounting Office

    Under 5 U.S.C. 801(a)(1)(A) as added by the Small Business 
Regulatory Enforcement Fairness Act of 1996, EPA submitted a report 
containing this rule and other required information to the U.S. Senate, 
the U.S. House of Representatives and the Comptroller General of the 
General Accounting Office prior to publication of the rule in today's 
Federal Register. This rule is not a ``major rule'' as defined by 5 
U.S.C. 804(2).

E. Unfunded Mandates Act

    Under section 202 of the Unfunded Mandates Reform Act of 1995 
(``Unfunded Mandates Act''), signed into law on March 22, 1995, EPA 
must prepare a budgetary impact statement to accompany any proposed or 
final rule that includes a Federal mandate that may result in estimated 
costs to State, local, or tribal governments in the aggregate; or to 
the private sector, of $100 million or more. Under Section 205, EPA 
must select the most cost effective and least burdensome alternative 
that achieves the objectives of the rule and is consistent with 
statutory requirements. Section 203 requires EPA to establish a plan 
for informing and advising any small governments that may be 
significantly or uniquely impacted by the rule.
    EPA has determined that this rule does not include a Federal 
mandate that may result in estimated costs of $100 million or more to 
either State, local, or tribal governments in the aggregate, or to the 
private sector.

List of Subjects

40 CFR Part 85

    Environmental protection, Administrative practice and procedure, 
Air pollution control, Federal preemption, Motor vehicle pollution, 
Nonroad engine and vehicle pollution,

[[Page 67736]]

Reporting and recordkeeping requirements, State controls.

40 CFR Part 89

    Environmental protection, Administrative practice and procedure, 
Air pollution control, Confidential business information, Imports, 
Incorporation by reference, Labeling, Nonroad source pollution, 
Reporting and recordkeeping requirements.

    Dated: December 17, 1997.
Carol M. Browner,
Administrator.

    For the reasons set forth in the preamble, parts 85 and 89 of title 
40 of the Code of Federal Regulations are amended as follows:

PART 85--CONTROL OF AIR POLLUTION FROM MOBILE SOURCES

    1. The heading for part 85 is revised to read as set forth above.

Subpart Q--Preemption of State Standards and Waiver Procedures for 
Nonroad Engines and Nonroad Vehicles

    2. The authority citation for part 85 is revised to read as 
follows:

    Authority: 42 U.S.C. 7521, 7522, 7524, 7525, 7541, 7542, 7543, 
7547, and 7601(a).

    3. Section 85.1603 is amended by revising paragraphs (b), (c) and 
(d) to read as follows:


Sec. 85.1603  Application of definitions; scope of preemption.

* * * * *
    (b) States and any political subdivisions thereof are preempted 
from adopting or enforcing standards or other requirements from new 
engines smaller than 175 horsepower, that are primarily used in farm or 
construction equipment or vehicles, as defined in this subpart.
    (c) States and any political subdivisions thereof are preempted 
from adopting or enforcing standards or other requirements relating to 
the control of emissions from new locomotives or new engines used in 
locomotives.
    (d) No state or any political subdivisions thereof shall enforce 
any standards or other requirements relating to the control of 
emissions from nonroad engines or vehicles except as provided for in 
this subpart.
    4. Section 85.1604 is amended by revising paragraph (a) to read as 
follows:


Sec. 85.1604  Procedures for California nonroad authorization requests.

    (a) California shall request authorization to enforce its adopted 
standards and other requirements relating to the control of emissions 
from nonroad vehicles or engines that are otherwise not preempted by 
Sec. 85.1603(b) or Sec. 85.1603(c) from the Administrator of EPA and 
provide the record on which the state rulemaking was based.
* * * * *
    5. Section 85.1606 is amended by revising the introductory text to 
read as follows:


Sec. 85.1606  Adoption of California standards by other states.

    Any state other than California which has plan provisions approved 
under Part D of Title I of the Clean Air Act may adopt and enforce 
emission standards for any period, for nonroad vehicles and engines 
subject to the following requirements:
* * * * *

PART 89--CONTROL OF EMISSIONS FROM NEW AND IN-USE NONROAD ENGINES

    1. The authority citation for part 89 continues to read as follows:

    Authority: Sections 202, 203, 204, 205, 206, 207, 208, 209, 213, 
215, 216, and 301(a) of the Clean Air Act, as amended (42 U.S.C. 
7521, 7522, 7523, 7524, 7525, 7541, 7542, 7543, 7547, 7549, 7550, 
and 7601(a)).

    2. Appendix A to Subpart A is revised including the appendix 
heading to read as follows:

Appendix A to Subpart A--State Regulation of Nonroad Internal 
Combustion Engines

    This appendix sets forth the Environmental Protection Agency's 
(EPA's) interpretation of the Clean Air Act regarding the authority 
of states to regulate the use and operation of nonroad engines.
    EPA believes that states are not precluded under section 209 
from regulating the use and operation of nonroad engines, such as 
regulations on hours of usage, daily mass emission limits, or sulfur 
limits on fuel; nor are permits regulating such operations 
precluded, once the engine is no longer new. EPA believes that 
states are precluded from requiring retrofitting of used nonroad 
engines except that states are permitted to adopt and enforce any 
such retrofitting requirements identical to California requirements 
which have been authorized by EPA under section 209 of the Clean Air 
Act.

[FR Doc. 97-33769 Filed 12-29-97; 8:45 am]
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