[Federal Register Volume 64, Number 249 (Wednesday, December 29, 1999)]
[Rules and Regulations]
[Pages 73300-73373]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-31658]



[[Page 73299]]

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Part III





Environmental Protection Agency





_______________________________________________________________________



40 CFR Part 89 et al.



_______________________________________________________________________



Control of Emissions of Air Pollution From New Marine Compression-
Ignition Engines at or Above 37 kW; Final Rule

  Federal Register / Vol. 64, No. 249 / Wednesday, December 29, 1999 / 
Rules and Regulations  

[[Page 73300]]



ENVIRONMENTAL PROTECTION AGENCY

40 CFR Parts 89, 92, and 94

[AMS-FRL-6482-3]
RIN 2060-AI17


Control of Emissions of Air Pollution From New Marine 
Compression-Ignition Engines at or Above 37 kW

AGENCY: Environmental Protection Agency (EPA).

ACTION: Final Rule.

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SUMMARY: In this action, we are establishing an emission control 
program for new marine diesel engines rated at or above 37 kilowatts. 
The affected engines are used for propulsion and auxiliary purposes in 
a wide variety of marine applications. The standards for these engines 
will require substantial reductions in oxides of nitrogen and 
particulate matter emissions to correspond with the next round of 
emission standards for comparable land-based engines. The standards 
will lead to significant reduction in oxides of nitrogen and 
particulate matter emissions from this source. When combined with other 
mobile source emission control programs, the program described in this 
action will help provide long-term improvements in air quality in many 
port cities and other coastal areas. Overall, these emission standards 
provide much-needed assistance to states facing ozone and particulate 
air quality problems, which can cause a range of adverse health effects 
for their residents, especially in terms of respiratory impairment and 
related illnesses.
    The persons potentially affected by this action are those who 
manufacture new marine diesel engines or marine vessels or other 
equipment using such engines. Additional requirements apply to 
companies that rebuild or maintain these engines.

DATES: This final rule is effective January 28, 2000 except the 
amendments to 40 CFR parts 89 and 92 will become effective February 28, 
2000, unless EPA receives adverse comment on or before January 28, 2000 
regarding the amendments to 40 CFR parts 89 and 92. If we receive such 
comment, we will publish a timely withdrawal in the Federal Register 
informing the public that the amendments to 40 CFR parts 89 and 92 will 
not take effect.
    The incorporation by reference of certain publications listed in 
the regulations in 40 CFR part 94 is approved by the Director of the 
Federal Register as of January 28, 2000.

ADDRESSES: Materials relevant to this rulemaking, including the Final 
Regulatory Impact Analysis, are contained in Public Docket A-97-50. 
Additional materials can be found in Public Docket A-92-28 (Control of 
Air Pollution; Emission Standards for New Gasoline Spark-Ignition and 
Diesel Compression-Ignition Marine Engines). For the changes to 40 CFR 
part 92, additional materials can be found in Public Docket A-94-31 
(Emission Standards for Locomotives and Locomotive Engines). These 
dockets are located at Room M-1500, Waterside Mall (ground floor), U.S. 
Environmental Protection Agency, 401 M Street, S.W., Washington, DC 
20460. You may inspect the docket from 8:00 a.m. until 5:30 p.m., 
Monday through Friday. We may charge a reasonable fee for copying 
docket materials.
    For further information on electronic availability of this action, 
see SUPPLEMENTARY INFORMATION below.

FOR FURTHER INFORMATION CONTACT: Alan Stout, Office of Mobile Sources, 
(734) 214-4805, [email protected].
    For a copy of the Information Collection Request, contact Sandy 
Farmer at EPA by phone at (202) 260-2740, by email at 
[email protected], or download it off the Internet at http:/
/www.epa.gov/icr and refer to EPA ICR No. 1897.02.

SUPPLEMENTARY INFORMATION:

Regulated Entities

    You may be regulated by this action if you manufacture or introduce 
into commerce new marine diesel engines or if you make vessels or other 
equipment using these engines. Other requirements may apply to you if 
you rebuild or maintain marine engines. Regulated categories and 
entities include:

------------------------------------------------------------------------
                                   Examples of        NAICS
          Category             regulated entities      Code     SIC Code
------------------------------------------------------------------------
Industry....................  Manufacturers of new     333618       3519
                               marine diesel
                               engines.
Industry....................  Manufacturers of           3366       3731
                               marine vessels.                      3732
Industry....................  Engine repair and        811310       7699
                               maintenance.
------------------------------------------------------------------------

    This list is not intended to be exhaustive, but rather provides a 
guide for readers regarding entities likely to be regulated by this 
action. To determine whether particular activities may be regulated by 
this action, carefully examine the regulations, especially the 
applicability criteria in Sec. 94.1. Direct any questions regarding the 
applicability of this action to the person listed in FOR FURTHER 
INFORMATION CONTACT.

Obtaining Electronic Copies of the Regulatory Documents

    The preamble, regulatory language and Final Regulatory Impact 
Analysis are also available electronically from the EPA Internet Web 
site. This service is free of charge, except for any cost already 
incurred for internet connectivity. The electronic version of this 
rulemaking is made available on the day of publication on the primary 
Web site listed below. The EPA Office of Mobile Sources also publishes 
Federal Register notices and related documents on the secondary Web 
site listed below.

1. http://www.epa.gov/docs/fedrgstr/EPA-AIR/ (either select desired 
date or use Search feature)
2. http://www.epa.gov/oms/ (look in What's New or under the specific 
rulemaking topic)

    Please note that due to differences between the software used to 
develop the document and the software into which the document may be 
downloaded, changes in format, page length, etc., may occur.

Table of Contents

I. Introduction
    A. Background
    B. Statutory Authority
II. Scope of Application
    A. Definition of New
    B. Importing and Exporting Marine Engines
    C. Marine Engine Definitions
    D. Remanufactured Engines
    E. Recreational Engines
    F. Engine Dressing Exemption
    G. Foreign-Trade Exemption
    H. National Security Exemption
    I. Competition Exemptions
    J. Other Exemptions
III. Engine Categories
IV. Emission Standards and Related Provisions
    A. Standards and Dates
    1. MARPOL Annex VI
    2. Tier 2
    B. Total Hydrocarbons

[[Page 73301]]

    C. Crankcase Emissions
    D. Smoke Requirements
    E. Alternative Fuels
    F. Test Procedures
    1. Duty Cycles
    2. In-Use Testing
    3. Test Fuel
    4. Adjustable Parameters
    5. Determination of Maximum Test Speed
    G. Not-to-Exceed Standards and Related Requirements
    H. Voluntary Low-Emitting Engine Program
    I. Durability
    1. Useful Life
    2. Warranty Periods
    3. Deterioration Factors
    4. Rebuilt Engines
    5. Replacement Engines
    J. Certification
    1. Engine Family Definition
    2. Emission Data Engine Selection
    K. Production-Line Testing
    L. Miscellaneous Compliance Issues
    M. Averaging, Banking, and Trading Program
    N. Special Provisions for Post-Manufacture Marinizers
V. Technological Feasibility
VI. Areas for Future Action
    A. Tier 3 Emission Standards
    B. Emission Standards for Remanufactured Engines
    C. NTE Requirements for Auxiliary Engines
    D. Application of Provisions to Marine Diesel Engines Less than 
37 kW
    E. Category 3 Engines
VII. Projected Impacts
    A. Environmental Impacts
    B. Noise, Energy, and Safety
    C. Economic Impacts
    D. Cost-effectiveness
VIII. Direct Final Changes
IX. Public Participation
X. Administrative Requirements
XI. Judicial Review

List of Tables

Table 1  Engine Category Definitions
Table 2  MARPOL Annex VI Emission Limits
Table 3  Final Tier 2 Emission Standards and Dates
Table 4  Voluntary Emission Standards
Table 5  Useful Life and Warranty Periods
Table 6  Category 1 Commercial Propulsion and Auxiliary Emissions 
Inventory
Table 7  Category 2 Emissions Inventory
Table 8  [Reserved]
Table 9  Emission Reductions From Engines Subject to Tier 2 
Standards
Table 10  Projected Cost Impacts by Power Rating
Table 11  Cost-Effectiveness of the Marine Tier 2 Standards for HC 
and NOX
Table 12  Aggregate Cost-Effectiveness for the Marine Tier 2 
Standards for HC and NOX

I. Introduction

A. Background

    The Clean Air Act as amended in 1990 mandated that we establish 
emission regulations for a variety of previously unregulated nonroad 
mobile sources of emissions, including marine engines. We most recently 
proposed emission standards and an associated compliance program for 
commercial marine diesel engines on December 11, 1998 (63 FR 
68508).1 At a public hearing on January 19 and in the rest 
of the comment period we heard from 35 commenters. The program we are 
finalizing here follows from the approach described in the proposal, 
though we made numerous adjustments in response to the comments and 
other information received since the proposal. The proposal included an 
extensive discussion of the air quality problems we are addressing and 
the regulatory history of this rulemaking (see Sections I, II, and XI 
of the proposal). A summary description of the final rule follows in 
this document. Further discussion of issues and the anticipated impacts 
of the final rule are in the Final Regulatory Impact Analysis (Final 
RIA) and the Summary and Analysis of Comments. These documents and all 
the comments we received are contained in Docket A-97-50.
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    \1\ The December 1998 proposal superseded earlier proposed 
emission standards for marine diesel engines (59 FR 55929, November 
9, 1994, and 61 FR 4600, February 7, 1996). References in this 
document to ``the proposal'' or ``the proposed rule'' refer only to 
the December 1998 proposal.
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    The International Maritime Organization (IMO) is the Secretariat 
for the International Convention on the Prevention of Pollution from 
Ships 1973, as modified by the Protocol of 1978 relating thereto 
(better known as MARPOL 73/78). Annex VI to that Convention, adopted on 
September 27, 1997 (but not yet in force) contains, among other 
provisions, requirements to limit NOX emissions from marine 
diesel engines, but sets no limits for other engine pollutants (i.e., 
HC, CO, PM). Other provisions of Annex VI include requirements for 
ozone-depleting substances, sulfur content of fuel, incineration, VOCs 
from refueling, and fuel quality. The United States has signed Annex 
VI, but the Annex has not yet been forwarded to the Senate for its 
advice and consent.

B. Statutory Authority

    We conducted a study of emissions from nonroad engines, vehicles, 
and equipment in 1991, as directed by the Clean Air Act, section 213(a) 
(42 U.S.C. 7547(a)). Based on the results of that study, we determined 
that emissions of NOX, VOCs (including HC), and CO from 
nonroad engines and equipment contribute significantly to ozone and CO 
concentrations in more than one nonattainment area (see 59 FR 31306, 
June 17, 1994). Given this determination, section 213(a)(3) of the Act 
requires us to establish (and from time to time revise) emission 
standards for those classes or categories of new nonroad engines, 
vehicles, and equipment that in our judgment cause or contribute to 
such air pollution. We have determined that commercial and recreational 
marine diesel engines rated over 37 kW cause or contribute to such air 
pollution (See also the preamble to the proposed rule).
    Where we determine that other emissions from new nonroad engines, 
vehicles, or equipment significantly contribute to air pollution that 
may reasonably be anticipated to endanger public health or welfare, 
section 213(a)(4) authorizes EPA to establish (and from time to time 
revise) emission standards from those classes or categories of new 
nonroad engines, vehicles, and equipment that cause or contribute to 
such air pollution. We have determined that commercial and recreational 
marine diesel engines rated over 37 kW cause or contribute to such air 
pollution (See also the preamble to the proposed rule).

II. Scope of Application

    Clean Air Act section 213(a)(3) broadly sets the scope of 
application of this final rule, instructing us to promulgate 
regulations containing standards applicable to emissions from those 
classes or categories of new nonroad engines and new nonroad vehicles 
that are found to cause or contribute to ozone or carbon monoxide 
concentrations in more than one nonattainment area. As explained below 
and in the text of the regulations, the rulemaking generally covers all 
new diesel engines installed in a marine vessel, and all new marine 
vessels that use those engines. This includes both propulsion and 
auxiliary engines.

A. Definition of New

    We are extending the definition of ``new'' contained in 40 CFR 89.2 
to marine diesel engines at or above 37 kW. Under that definition, an 
engine is considered new until its legal or equitable title has been 
transferred, or the engine has been placed into service. Because the 
definition of new in 40 CFR 89.2 applies to both engines and equipment, 
its extension to the marine sector extends as well to vessels. Starting 
with the implementation dates of the new emission standards, we will 
consider vessels new until their equitable or legal title has been 
transferred to an ultimate purchaser. In addition, we will consider a 
vessel new if it undergoes modifications such that the modified vessel 
derives at least half

[[Page 73302]]

of its value from new materials or components. This prevents someone 
from re-using the hull or other parts from a used vessel to avoid 
emission standards.
    To further clarify the definition of ``new,'' 40 CFR 89.2 specifies 
that a nonroad engine, vehicle, or equipment is placed into service 
when it is used for its functional purpose. For the purpose of applying 
this criteria to marine diesel engines and new vessels, we have 
concluded that a marine diesel engine is used for its functional 
purpose when it is installed on a marine vessel. This clarification is 
needed because some marine diesel engines are made by modifying a 
highway or nonroad engine that has already been installed on a vehicle 
or other equipment. In other words, the engine has been transferred to 
an ultimate purchaser after it is used for its functional purpose as a 
land-based nonroad engine (for example, on a truck or a backhoe) and is 
therefore no longer new, but it is later removed for marinization and 
installation on a marine vessel. While the 40 CFR 89 requirements for 
land-based nonroad diesel engines do not contain such a requirement, we 
believe it is reasonable to treat these engines as new marine engines 
when they are installed on a vessel. While the practice of marinizing 
used highway or nonroad engines may be infrequent, it could become more 
common if these engines are not subject to the standards finalized in 
this document.
    As described in the proposal, we are not applying emission 
standards to remanufactured engines. In Section VI we discuss the 
potential for considering this issue in the future.

B. Importing and Exporting Marine Engines

    Engines imported for use in the United States are covered by this 
final rule whether they are imported as loose engines or are already 
installed on a vessel constructed elsewhere. We will require all 
imported engines to have a certificate of conformity from us before 
anyone may enter them into commerce in the United States, subject to 
limited exemptions. Accordingly, we are applying the approach contained 
in other highway and nonroad engine programs, according to which any 
engine or vessel that is imported into the United States without a 
valid certificate of conformity and that was built after the effective 
date of the applicable standards, will be considered new at the time it 
is imported into the United States. As a new engine, it will have to 
comply with the relevant emission limits in effect at the time it was 
manufactured. Thus, for example, a marine vessel manufactured in a 
foreign country in 2007 that is imported into the United States in 2010 
would be considered new, and its engine would have to comply with the 
emission limits in effect for model year 2007. This provision is 
important to prevent manufacturers from avoiding the emission 
requirements by building vessels abroad, transferring their title, and 
then importing them as used vessels.
    Engines that are to be exported to countries with emission 
standards different than ours are exempt from the requirements of this 
final rule. Marine engines that are exported but are subsequently re-
imported into the United States must, however, meet the new emission 
standards that apply based on the manufacturing date of the engine. 
This would be the case when a foreign company purchases marine engines 
manufactured in the United States for installation on a vessel that 
will be subsequently exported to the United States. It would also be 
the case when a foreign company purchases marine engines manufactured 
in the United States for dressing and subsequent re-exportation to the 
United States. Engines that are intended for export but that will be 
re-imported into the United States are subject to the emission 
standards at the time the engine is manufactured, unless the vessel 
manufacturer or marinizer intends to re-certify the engines to comply 
with emission standards before they enter the United States. 
Consequently, foreign purchasers who do not wish to recertify the 
engines will need to make sure they purchase complying engines for 
those marine vessels or engines they intend to subsequently offer for 
sale in the United States. Engines intended for export and sale in a 
foreign country should be easily distinguishable from complying engines 
because complying engines are required to be labeled as such. Any 
person who introduces into commerce in the United States a noncomplying 
engine that is intended for export and use in a foreign country will be 
subject to civil penalties.
    To determine when an engine or vessel will be considered 
``imported'' for the purposes of determining compliance with emission 
standards, we will follow the approach contained in the Harmonized 
Tariff Schedule of the United States (HTSUS). According to HTSUS, 
vessels used in international trade or commerce or vessels brought into 
the territory of the United States by nonresidents for their own use in 
pleasure cruising are admitted without formal customs consumption entry 
or payment of duty.2 This approach is consistent with the 
Treasury Department's ruling, which concluded that vessels coming into 
the United States temporarily as carriers of passengers or merchandise 
are not subject to customs entry or duty, but if brought into the 
United States permanently, they are to be considered and treated as 
imported merchandise. See American Customs Brokerage Co., Inc., a/c 
Astral Corp. v. United States, 375 F. Supp. 1360, 1366 (Cust. Ct. 
1974). This means that engines installed on vessels flagged in another 
country that come into the United States temporarily will not be 
subject to the emission standards, because they are not imported and 
are therefore not new engines under Clean Air Act Section 216(3) and 
213(d).
---------------------------------------------------------------------------

    \2\ HTSUS (1994), Additional U.S. Note 1. In particular, cruise 
ships, ferry boats, cargo ships, barges and ``similar vessels for 
the transportation of persons or goods'' are duty free. HTSUS (1994) 
8901.
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C. Marine Engine Definitions

    In the final land-based nonroad engine rule, we determined that a 
portable auxiliary engine used onboard a marine vessel should not be 
considered a marine engine (October 23, 1998, 63 FR 56967). Instead, a 
portable auxiliary engine is considered to be a land-based engine 
subject to the requirements of 40 CFR Part 89. To distinguish a marine 
auxiliary engine installed on a marine vessel from a land-based 
portable auxiliary engine used on a marine vessel, we specified in that 
rulemaking that an auxiliary engine is installed on a marine vessel if 
its fuel, cooling, or exhaust systems are an integral part of the 
vessel. These auxiliary engines are therefore not fundamentally 
different than land-based engines and we regulate them under 40 CFR 
Part 89.
    With very few exceptions, this final marine engine rule applies 
equally to propulsion and auxiliary engines. Consistent with the 
definitions in 40 CFR Part 89, a propulsion engine is one that is 
intended to move a vessel through the water or assists in guiding the 
direction of the vessel (including, for example, bow thrusters). 
Auxiliary engines are all other marine engines. Propulsion and 
auxiliary engines have different duty cycles and different load factors 
for calculating emission credits. Auxiliary engines will not be subject 
to not-to-exceed requirements until we finalize them for land-based 
nonroad engines. Also, auxiliary engines are not eligible to qualify as 
recreational engines.

[[Page 73303]]

    Marine drilling platforms are another example of an application 
where the question arises of whether an engine is a marine engine 
(subject to 40 CFR Part 94) or a land-based nonroad diesel engine 
(subject to 40 CFR 89). Drill ships are clearly marine vessels, so 
engines installed in drill ships are marine engines. In contrast, 
permanently anchored drilling platforms would not qualify as marine 
vessels, so none of the engines associated with one of these facilities 
would be a marine engine. A third class of drilling equipment is less 
clear. Semi-submersible drilling rigs are moored to the ocean bottom, 
but have some propulsion capability. We consider these to be marine 
vessels, so any engine that is ``installed'' on such a rig would be a 
marine engine. As described above, we would consider portable engines 
on a drilling rig to be land-based nonroad engines, since they are not 
installed on the vessel.

D. Remanufactured Engines

    As described in the proposed rule, we are not setting emission 
standards for engines originally manufactured before the Tier 2 
standards take effect. Section VI describes our ongoing concern with 
remanufactured engines.

E. Recreational Engines

    We continue to believe, as we discussed in the proposal, that it is 
appropriate to distinguish between commercial and recreational marine 
engines for the purpose of establishing requirements for engine and 
vessel manufacturers. This is because the performance characteristics 
for these two kinds of engines can be substantially different, due to 
the different characteristics of the vessels on which they are 
installed. Commercial marine vessels tend to be displacement hull 
vessels, designed and built for a unique application. Power ratings for 
engines used on these vessels are analogous to land-based applications, 
and these engines are warranted for 2,000 to 5,000 hours of use a year. 
Recreational vessels, on the other hand, tend to be planing vessels, 
and engines used on these vessels are designed to achieve higher power 
output with less engine weight. This increase in power reduces the 
lifetime of the engine; recreational marine engines are therefore 
warranted for fewer hours of operation than their commercial 
counterparts.
    We will be pursuing emission limits for recreational marine engines 
in a separate rulemaking. This makes it necessary to clearly define 
recreational marine engine, so engine manufacturers and users will be 
able to know which set of standards apply to their engine.
    In this final rule, we are finalizing a definition of recreational 
marine engine as a propulsion engine that is intended by the 
manufacturer to be installed on a recreational vessel. To ensure that 
users will not install a recreational engine on a commercial vessel his 
engine, we are requiring the following label language (in our proposed 
rulemaking for recreational marine engines, we will also address any 
changes that would be appropriate or necessary for this label):

THIS ENGINE IS CATEGORIZED AS A RECREATIONAL ENGINE UNDER 40 CFR PART 
94, AND IS NOT SUBJECT TO THE EMISSION STANDARDS OF THAT PART. 
INSTALLATION OF THIS ENGINE IN ANY NONRECREATIONAL VESSEL IS A 
VIOLATION OF FEDERAL LAW SUBJECT TO CIVIL PENALTY.

    It should be noted that there is no prohibition against installing 
a certified commercial marine engine on a recreational vessel. In fact, 
we encourage recreational vessel manufacturers to use certified engines 
whenever possible due to the beneficial impact on the environment. 
There is also no prohibition on installing an old marine engine in an 
old vessel.
    We are revising our definition of recreational marine engine, in 
response to comments, to bring it more in line with the Coast Guard 
approach contained in 46 U.S.C. 2101. Specifically, we are defining a 
recreational vessel as a vessel that is intended by the vessel 
manufacturer to be operated primarily for pleasure or leased, rented or 
chartered to another for the latter's pleasure. However, we continue to 
believe that it is necessary to put some boundaries on this definition, 
since certain vessels that are used for pleasure may have operating 
characteristics that are, in fact, similar to commercial marine 
vessels. For example, engines installed on excursion boats should be 
grouped with commercial marine engines because they are used much more 
intensely (more hours, higher load) than engines on a similar vessel 
operated exclusively for one's own pleasure. Therefore, we are drawing 
on the Coast Guard's definition of passenger vessel to further 
delineate what will be considered to be a recreational vessel. 
Specifically, vessels of less than 100 gross tons that carry more than 
six passengers will not be considered recreational vessels, and vessel 
of 100 gross tons or more that carry one or more passengers will not be 
considered recreational vessels. For the purpose of defining a 
recreational vessel, a passenger will have the same meaning as that in 
given by 46 U.S.C. 2101(21), which is generally a person that pays to 
be on the vessel. Finally, a vessel that is used solely for competition 
will not be considered a recreational vessel.
    A vessel will be a considered a recreational vessel if the boat 
builder intends that the customer will operate the boat consistent with 
the recreational-vessel definition. Relying on the boat builder's 
intent is necessary since manufacturers need to establish a vessel's 
classification before it is sold, whereas the Coast Guard definitions 
apply at the time of use. The final definition therefore relies on the 
intent of the boat builder to establish that the vessel will be used 
consistent with the above criteria. If a boat builder manufactures a 
vessel for a customer who intends to use the vessel for recreational 
purposes, we will always consider that a recreational vessel regardless 
of how the owner (or a subsequent owners) actually uses it. To be able 
to verify that boat buyers don't abuse this provision, we would need to 
have some way of verifying the validity of the vessel manufacturer's 
original intent, for example, with written assurance from the buyer. We 
are not finalizing such a requirement in this final rule, but intend to 
address it when we propose emission standards for recreational marine 
engines.

F. Engine Dressing Exemption

    Some companies produce marine engines by marinizing new, land-based 
engines and modifying them for installation on a marine vessel. This 
can be done in a way that does not affect emissions. For example, the 
modifications may consist of adding mounting hardware and a generator 
or reduction gears for propulsion. It can also involve installing a new 
marine cooling system that meets original manufacturer specifications 
and duplicates the cooling characteristics of the land-based engine, 
but with a different cooling medium (i.e., water). This is similar to 
the process of buying certified land-based engines to make a generator 
or other equipment. This simplified approach of producing an engine can 
be described as dressing an engine for a particular application. 
Because the modified land-based engines are subsequently used on a 
marine vessel, however, these modified engines will be considered 
marine diesel engines, which then fall under the requirements in this 
final rule.
    The final rule exempts engines from the marine certification 
requirements if

[[Page 73304]]

the marinizing company meets the following conditions.
    (i) The engine being dressed, (the ``base'' engine) must be a 
heavy-duty highway, land-based nonroad, or locomotive engine, certified 
pursuant to 40 CFR Part 86, 40 CFR Part 89, or 40 CFR Part 92. The base 
engine must be certified to the standards that apply at the time the 
base engine manufacturer completes assembly of the engine. We don't 
allow stockpiling of uncertified engines.
    (ii) The dressing process must not involve any changes that can 
reasonably be expected to increase engine emissions. This includes a 
requirement that engine cooling and aftercooling systems stay within 
the ranges specified by the original engine manufacturer.
    (iii) The original emissions-related label must remain on the 
engine.
    (iv) The dressing company must report annually to us the models 
that are exempt under this provision.
    (v) The engine model must not be primarily for marine application.
    The goal of our engine dressing provisions is to eliminate the 
burden of certification and other compliance requirements where we have 
confidence that engines already certified to comparable standards from 
other programs will meet marine engine emission standards. Moreover, 
the certificate holder for the base engine continues to be liable, 
under the terms of the original certification, for the emissions 
performance of the dressed engine. We will nevertheless require, as we 
proposed, that a company certify dressed engines under 40 CFR Part 94 
if the majority of engines produced are for marine application. This 
prevents a company taking advantage of the engine dressing exemption to 
produce marine diesel engines under, for example, a land-based nonroad 
diesel certificate, even though the engine might be used almost 
exclusively for marine application. Companies that produce engines 
qualifying for the engine dressing exemption will be exempt from the 
certification requirements and prohibited acts of 40 CFR Part 94. 
Minimal reporting and labeling requirements apply to these engines, as 
described below.
    Companies that produce marine versions of their base engines may 
qualify for the engine dressing exemption if they meet the established 
criteria. Base engine manufacturers utilizing the dressing exemption 
must submit marine-specific emission data on their dressed marine 
engines. In addition, we may request marine-specific data from the 
original engine manufacturer if another company is dressing their 
engines for marine application. We would use this data for oversight to 
determine the validity of the exemption. Except for this testing 
responsibility, the discussion of engine dressing applies equally 
whether an original engine manufacturer or a post-manufacture marinizer 
produces the marine engine.
    Heavy-duty highway engines are certified to a much different test 
cycle, which has in the past prevented us from accepting a highway 
engine certificate for nonroad applications for certification. Now that 
we are proposing to revise the standards and test procedures for these 
engines to control steady-state emissions, we can be more confident 
that they will adequately control emissions in a marine application. 
Thus, any certified heavy-duty highway, nonroad, or locomotive engine 
will be eligible for the dressing exemption.
    Engine manufacturers might use averaging, banking, or trading to 
produce land-based engines that are certified with emission levels 
exceeding the comparable marine emission standard. These engines could 
not meet the proposed engine dressing criteria. Unlike an original 
engine manufacturer, a post-manufacture marinizer has no control over 
this. We have therefore simplified the criteria to say that any engine 
must be certified to land-based standards that apply to that engine at 
the time the dressing company buys the engine. This is true regardless 
of whether the original engine was certified using emission credits 
under the ABT program. Similarly, our NTE provisions do not apply to 
dressed engines, unless NTE provisions are in place for the certified 
base engine.
    Engines that qualify as dressed engines are exempt from the marine 
emission standards. We therefore will not treat these as regulated 
marine engines. If we find that a company with an engine dressing 
exemption does not, in fact, meet the criteria spelled out in the 
regulations, the engines are not exempt and we may pursue enforcement 
for selling uncertified marine engines and/or tampering with certified 
engines.
    We are including in the final rule a requirement that dressing 
companies put a label on each exempted engine stating the name of the 
dressing company and the fact that the engine was marinized without 
affecting emission controls. This will make clear that the engine is 
acceptable for use in a marine vessel. In addition, dressing companies 
will need to give us minimal notification that they are modifying 
certified engines. This can be done once annually for a company's whole 
range of dressed marine engines.
    In addition to the labeling requirement, we encourage engine 
manufacturers to inform companies dressing their engines of these 
requirements. This will not only aid us in educating affected 
companies, it may help protect engine manufacturers from exposure to 
liability if their engines are ever found in a marine vessel without 
proper documentation.

G. Foreign-Trade Exemption

    Oceangoing vessels with Category 3 propulsion engines typically 
have additional Category 1 and Category 2 engines onboard. We are 
adopting a provision that will allow owners of qualifying vessels to 
obtain an exemption from the national emission requirements for 
Category 1 and Category 2 engines that are installed on any U.S.-
flagged vessel engaged in foreign trade or other overseas operation. We 
expect that ship owners will buy MARPOL-compliant engines because ships 
that travel to foreign ports will eventually need to demonstrate 
compliance with the Annex VI NOX limits to get an 
International Air Pollution Prevention Certificate for their vessels. 
While the proposed regulation text inadvertently limited this to 
auxiliary engines, the exemption applies equally to propulsion engines 
that meet the criteria. This provision will allow all engines on 
qualifying vessels to meet solely the international requirements. This 
exemption will go into effect at the same time as the implementation of 
the domestic emission standards for these engines.
    A vessel owner can obtain this exemption if it can be demonstrated 
to the Administrator's satisfaction that the vessel: (a) Will spend 
less than 25 percent of its total engine operation time within 320 
nautical kilometers (200 nautical miles) of U.S. territory; or (b) will 
not operate between two United States ports, as evidenced by the vessel 
having solely a registry endorsement from the Coast Guard. The second 
qualifying criterion was described in the preamble to the proposed 
rule, but was inadvertantly omitted from the proposed regulation text. 
For installation of new or replacement engines on used vessels, the 
vessel's service record can be used to show where the vessel will be 
operated. For a new vessel, however, this determination must be made 
before it is placed into service, so it will not be possible to use the 
vessel's service record to make the determination described in (a). 
Instead, application to the Administrator for this exemption

[[Page 73305]]

can rely on the vessel owner's business plans for the vessel, as well 
as on records from other vessels under the owner's control, any 
features of the vessel that will tend to limit its use within the 
specified area, or such other information as the Administrator shall 
request. Similarly, the determination described in (b) will rely on a 
good faith statement by the owner that the vessel is intended to hold 
only a registry endorsement. It should be noted, however, that if we 
learn that a vessel owner subsequently receives a coastwise or other 
registration that would allow the vessel to operate between two U.S. 
ports, we may review the validity of the exemption. This would also 
have a bearing on future requests for an exemption.
    Category 1 and 2 engines that are exempt under this provision must 
be labeled to indicate that they have been certified only to the MARPOL 
Annex VI NOX curve limits and that they are for use solely 
on vessels that meet the above criteria.

H. National Security Exemption

    With regard to the national security exemption, we are applying an 
approach similar to that in our existing land-based nonroad and 
gasoline marine programs (40 CFR 89.908 and 40 CFR 91.1008). Under this 
exemption, only marine engines used in vessels that exhibit substantial 
features ordinarily associated with military combat, such as armor, 
permanently affixed weaponry, specialized electronic warfare systems, 
unique stealth performance requirements, and/or unique combat 
maneuverability requirements and which will be owned and/or used by an 
agency of the federal government with the responsibility for national 
defense, will be exempt from the regulations in this subpart for 
reasons of national security. No request for an exemption is necessary 
for these engines.
    There may be situations in which an exemption from the emission 
controls is necessary for other vessels used for national security. 
Manufacturers may in these cases request a special national security 
exemption. A manufacturer will need to justify this request and get an 
agency of the federal government charged with responsibility for 
national defense to endorse it. We understand that the Navy, and all 
other branches of the government, will do their best to comply with the 
emission standards finalized in this final rule.

I. Competition Exemption

    We are addressing competition engines, also referred to as racing 
engines, in two ways. First, engines produced by the manufacturer 
specifically for competition are exempt from the requirements of the 
rule. The Clean Air Act does not consider these to be nonroad engines, 
so none of the requirements of 40 CFR 94 apply, except for a 
requirement to label the engines. Manufacturers need only get our 
approval to sell engines under this exemption. Second, someone can 
modify a certified engine for competition purposes. Normally we would 
prohibit making such changes to certified engines under the anti-
tampering provisions. The final rule, however, exempts these engines 
from the anti-tampering provisions for engines that are used ``solely 
for competition.''
    Engines or vessels used for amateur or occasional competition do 
not meet the competition exemption criteria. Our review of a request 
from a manufacturer should prevent abuse of this provision for engines 
that are originally produced for competition. There is, however, no 
approval step for someone who modifies engines for competition, so we 
will more clearly spell out criteria indicating whether the engine will 
be used solely for competition. Specifically, owners meeting all the 
following criteria will qualify for the competition exemption:

--The engine and vessel are designed and built to be used solely for 
competition. For example, we would not expect engines used solely for 
competition to have a lifetime until rebuild greater than about 10 
hours.
--The vessel is registered with a nationally recognized organization 
that sanctions professional competitive events.

In addition, once an engine is modified for competition, the engine is 
no longer certified to the requirements of 40 CFR 94 and must therefore 
not be used in an application where we would require a certified 
engine.

J. Other Exemptions

    We are extending other nonroad exemptions to marine diesel engines. 
These include the testing exemption, the manufacturer-owned exemption, 
the display exemption, and the export exemption. Remember that these 
exemptions are not necessarily automatic, and that the engine or vessel 
manufacturer, or ultimate engine owner, may need to apply for them. As 
part of the approval, we may require labels on exempted engines.

III. Engine Categories

    The engines that are the subject of this action are very diverse in 
terms of physical size, engine technology, control hardware, and costs 
associated with reducing emissions. These differences make it difficult 
to design one set of emission requirements for all marine diesel 
engines. For example, numerical emission limits that may be reasonable 
and feasible for a 37 kW engine used on an 5.5-meter (18-foot) boat may 
not be reasonable or feasible for a 1,500 kW engine installed on a tug 
or a 20,000 kW engine installed on an ocean-going container ship. 
Similarly, numerical emission limits appropriate for very large engines 
may be not be appropriately stringent for smaller engines, requiring 
little or no emission reduction.
    Consequently, it is necessary to divide marine diesel engines into 
categories for the purposes of applying emission limits and duty 
cycles. We are adopting the categorization scheme summarized in Table 
1. This relies predominantly on per-cylinder displacement to 
distinguish between categories of engines. This has the advantage that 
per-cylinder displacement is an engine characteristic that is not 
easily changed and is constant for a given engine model or series of 
engine models.

                  Table 1.--Engine Category Definitions
------------------------------------------------------------------------
             Category                     Displacement per cylinder
------------------------------------------------------------------------
1.................................  disp. <5 liters (and power 37 kW).
2.................................  5  disp. <30 liters.
3.................................  disp. 30 liters.
------------------------------------------------------------------------

    We define Category 1 engines as those marine diesel engines that 
are rated above 37 kW and have a per-cylinder displacement of less than 
5 liters. This definition groups together the class of marine engines 
that are serially produced and generally derived from land-based 
nonroad configurations or use the same emission control technologies. 
These engines are typically used as propulsion engines on relatively 
small commercial vessels (fishing vessels, tugboats, crewboats, etc.) 
They are also used as auxiliary engines on vessels of all sizes and 
applications. Category 2 engines are those marine diesel engines with 
per-cylinder displacement at or above 5 liters and up to 30 liters. 
These are the largest engines that are widely used as propulsion 
engines in harbor and coastal vessels in U.S. waters. These engines 
also provide auxiliary power on very large vessels. Many of these 
engines are of similar size and configuration as locomotive engines or 
use comparable emission control technologies. We define Category 3

[[Page 73306]]

engines as those marine diesel engines with a displacement at or above 
30 liters per cylinder. These are very large high-power engines that 
are used almost exclusively for propulsion on vessels engaged in 
international trade.
    We further divide Category 1 engines into several subgroups. These 
subgroups are similar to the land-based nonroad diesel engine 
subgroups, except that the subgroups are based on per-cylinder 
displacement rather than on engine power.
    The final rule also divides Category 2 into subgroups, with 
gradually increasing emission standards for larger engines. Engines 
between 5 and 15 L/cyl are generally derived from locomotive engines 
and have corresponding emission standards. The current range of marine 
engine models over 15 L/cyl have design constraints that limit their 
ability to control emissions. Since engines under 15 L/cyl may not 
currently be capable of providing adequate propulsion power for all 
vessels in this size range, we believe the best approach is to 
accommodate the technology constraints of these engines by setting 
emission standards less stringent than for locomotive-derived engines. 
These standards reflect the reduced capability of controlling emissions 
from engines designed to operate on heavy fuel (and the need to reduce 
emissions from a higher baseline level).
    Engines models between 15 and 20 L/cyl in particular are in a 
somewhat transitional category. These engines are sometimes used in 
harbor and inland river applications alongside locomotive-derived 
engines. Higher-power models are used in coastal and open-sea 
operations alongside engines with much larger per-cylinder 
displacement. The final rule separates engines between 15 and 20 L/cyl 
into two subgroups, those with a rated power less than 3300 kW and 
those with a rated power 3300 kW or greater. Locomotive engine 
manufacturers are developing new locomotive engines between 15 and 20 
L/cyl (up to about 4500 kW), but it is not clear if these engines will 
be made available for marine application. In the Tier 2 time frame, we 
therefore believe it is appropriate to set emission standards based on 
what is achievable for the engines currently available. If it appears 
that these larger locomotive engines will become available as marine 
engines in the future, we would need to reconsider this approach to 
take into account the emission-control capabilities of these engines.
    There are several marine engine models available worldwide with 
per-cylinder displacement between 20 and 30 liters. Very few of these 
engines are currently installed in vessels that are flagged and used in 
the United States. In the final rule we expand Category 2 to include 
engines up to 30 L/cyl. We subdivide the category with graduated 
emission standards for 20 to 25 L/cyl and 25 to 30 L/cyl engines 
reflecting the emission control capability of those engines. This 
should prevent high-emission engines from displacing smaller engines in 
common applications.

IV. Emission Standards and Related Provisions

    This section describes the emission standards for commercial marine 
diesel engines at or above 37 kW. It also describes provisions that 
will ensure that engines comply with the emission limits across all 
engine speed and load combinations, throughout their useful life. We 
discuss in this section requirements related to test procedures, fuel 
specifications, certification, and compliance.

A. Standards and Dates

1. MARPOL Annex VI
    MARPOL Annex VI specifies that any diesel engine over 130 kW 
installed on a vessel constructed on or after January 1, 2000 and to 
any engine that undergoes a major conversion after that date must 
comply with the Annex VI NOX limits.3 These 
NOX requirements, listed in Table 2, are intended to apply 
to all vessels in a country's fleet. However, according to Regulation 
13(1)(b)(ii) of the Annex, a country has the option of setting 
alternative NOX control measures for engines on vessels that 
are not operated internationally. This final rule is intended to be an 
alternative NOX control measure under the Annex for engines 
on US-flagged vessels that are not operated internationally.
---------------------------------------------------------------------------

    \3\ The Annex VI emission limits are not enforceable until the 
annex goes into effect: 12 months after it is ratified by 15 
countries representing at least 50 percent of the gross tonnage of 
the world's merchant shipping.
---------------------------------------------------------------------------

    In this final rule, we are not adopting the MARPOL Annex VI 
NOX emission limits under U.S. law. However, we are 
encouraging engine manufacturers to make Annex VI compliant engines 
available and ship owners to purchase and install them on all vessels 
constructed on or after January 1, 2000. Because this voluntary 
emission control program is the first set of standards for marine 
diesel engines at or above 37 kW in the U.S., we sometimes refer to 
them as Tier 1 standards. We are also not finalizing emission limits 
for Category 3 engines in this rule, and the voluntary MARPOL Annex VI 
NOX limits will be the sole emission control applicable to 
those engines.
    To encourage vessel owners to purchase MARPOL Annex VI compliant 
engines prior to the date the Annex goes into force for the United 
States, we have developed a voluntary certification program that will 
allow engine manufacturers to obtain a Statement of Voluntary 
Compliance to the MARPOL Annex VI NOX limits. Owners of 
vessels that are not operated internationally but that will be subject 
to the MARPOL survey requirements after Annex VI goes into effect for 
the United States should be aware that they may be required to 
demonstrate compliance with the Annex VI NOX limits when 
they apply for their International Air Pollution Prevention (IAPP) 
certificate. Owners of vessels that are operated internationally may 
also be required to demonstrate compliance with the MARPOL limits after 
the Annex goes into effect, both because they will be required to have 
an IAPP and because they may be subject to port state controls. For all 
of these reasons, we expect ship owners to begin purchasing compliant 
engines for installation on ships constructed on or after January 1, 
2000, and to bring engines into compliance when they undergo a major 
conversion after that date. Ship owners who fail to comply with the 
MARPOL VI NOX requirements may face compliance and liability 
problems after U.S. ratification or the Annex goes into force 
internationally. Bringing engines into compliance at that time may 
involve retrofitting or replacing noncomplying engines. Ship owners may 
also be required to remove their vessels from service while these 
issues are resolved.

                Table 2.--MARPOL Annex VI Emission Limits
------------------------------------------------------------------------
             Engine Speed, rpm                     NOX  (g/kW-hr)
------------------------------------------------------------------------
n <130....................................  17.0
130  n <2000...................  45.n (-0.2)
n 2000.........................  9.8
------------------------------------------------------------------------

    This voluntary approach to the MARPOL Annex VI emission limits 
depends on the assumption that manufacturers will produce MARPOL-
compliant engines before the emission limits go into effect 
internationally. Engine manufacturers can use the voluntary 
certification program mentioned above to obtain a Statement of 
Voluntary Compliance to the MARPOL NOX limits. If, however, 
manufacturers continue to sell engines

[[Page 73307]]

with emissions above MARPOL levels or if the Annex is not ratified by 
the United States or does not go into effect internationally, we will 
revisit the need to adopt these emission limits under the Clean Air 
Act.
    Finally, note that after the standards finalized in this final rule 
go into effect, engines meeting these national standards will also meet 
the less stringent MARPOL Annex VI NOX limits and separate 
emission testing will not be required. However, engines intended for 
use on foreign-trade vessels or for sale in foreign countries will 
still be required to comply with the administrative, recordkeeping, and 
survey requirements that will be mandated when MARPOL Annex VI goes 
into force for the United States.
2. Tier 2
    The Clean Air Act provides guidance for setting emission standards 
for nonroad engines in section 213(a)(3), instructing us to set 
standards that

achieve the greatest degree of emission reduction achievable through 
the application of technology the Administrator determines will be 
available for the engines or vehicles to which such standards apply, 
giving appropriate consideration to the cost of applying such 
technology within the period of time available to manufacturers and to 
noise, energy, and safety factors associated with the application of 
such technology.
    As described in the Final Regulatory Impact Assessment, 
manufacturers of marine diesel engines typically start with a partially 
or fully completed land-based nonroad diesel engine or, in some cases, 
a highway diesel engine, and adapt it for use in the marine 
environment. The emission standards that apply to land-based nonroad 
diesel engines therefore serve as the primary basis for the standards 
that apply to marine diesel engines. The land-based nonroad diesel 
engine standards in turn were designed to expand the use of highway 
engine technologies. The marine diesel new emission standards, and the 
underlying technology assumptions, are similarly derived from highway 
engine emission standards and technologies.
    Table 3 contains the emission standards for commercial marine 
diesel engines at or above 37 kW. We are setting a standard of 7.2 g/
kW-hr NOX+HC for most Category 1 engines. For engines under 
0.9 liters per cylinder, a 7.5 g/kW-hr applies to correspond with the 
standard for land-based nonroad engines. The PM standards vary by 
engine size, as shown in Table 3; these values generally match the 
limits that apply to the counterpart land-based engines. The CO 
emission standard is 5 g/kW-hr for all engines. New Category 1 engines 
under 0.9 liters per cylinder produced starting in 2005 must comply 
with these standards. For Category 1 engines over 2.5 liters per 
cylinder, the starting date is 2007. For the rest of Category 1, these 
standards apply to new engines produced beginning in 2004.
    For Category 2 engines between 5 and 15 liters per cylinder, the 
NOX+HC and PM standards are 7.8 g/kW-hr and 0.27 g/kW-hr, 
respectively. Bigger Category 2 engines are subject to graduated 
NOX+HC standards and a PM standard of 0.5 g/kW-hr, as shown 
in Table 3. These standards apply to new engines produced beginning in 
2007.
    These dates refer to the point at which the manufacturer concludes 
the final assembly of the engine. This also applies to remanufactured 
and imported engines that qualify as new marine engines. In addition, 
an engine can become new without being manufactured, remanufactured, or 
imported, if it is an engine that has been placed into service in non-
marine application before being installed on a vessel. In this case, 
these dates refer to the point at which the engine is installed on a 
vessel.

                              Table 3.--Final Tier 2 Emissions Standards and Dates
----------------------------------------------------------------------------------------------------------------
                                                                       Starting   NOX+THC   PM  (g/kW- CO  (g/kW-
           Category               Displacement  (liters/cylinder)        Date    (g/kW-hr)     hr)        hr)
----------------------------------------------------------------------------------------------------------------
1............................  power 37 kW disp. <0.9....       2005        7.5       0.40        5.0
                               0.9  disp. < 1.2..........       2004        7.2       0.30        5.0
                               1.2  disp. < 2.5..........       2004        7.2       0.20        5.0
                               2.5  disp. < 5.0..........       2007        7.2       0.20        5.0
2............................  5.0  disp. < 15.0.........       2007        7.8       0.27        5.0
                               15.0  disp. < 20.0, and          2007        8.7       0.50        5.0
                                power < 3300 kW.
                               15.0  disp. < 20.0, and          2007        9.8       0.50        5.0
                                power 3300 kW.
                               20.0  disp. < 25.0........       2007        9.8       0.50        5.0
                               25.0  disp. < 30.0........       2007       11.0       0.50        5.0
----------------------------------------------------------------------------------------------------------------

    We are finalizing requirements to ensure that engines meet the 
emission standards during real-world operation, not only under 
laboratory testing (see Section IV.G.). Under these requirements, 
marine engines may not exceed the applicable emission standards by a 
fixed percentage while the engine is operated in any load/speed 
combination contained in specified not-to-exceed (NTE) zones.

B. Total Hydrocarbons

    The emission standards specify total hydrocarbons (THC) rather than 
nonmethane hydrocarbons. Organic emissions are sometimes expressed as 
nonmethane hydrocarbons because methane is significantly less reactive 
than other hydrocarbons in the formation of ozone. However, for diesel 
engines, methane makes up only about two percent of the total 
hydrocarbons. In addition, HC generally makes up less than five percent 
of the combined HC+NOX from diesel engines. The combination 
of these two factors makes the methane fraction a mathematically 
insignificant portion of the HC+NOX emission standard.

C. Crankcase Emissions

    We are requiring that all naturally aspirated marine diesel engines 
have closed crankcases, where blowby gases are routed into the engine 
intake air stream. For turbocharged engines, manufacturers may have a 
closed crankcase or route blowby gases directly to the atmosphere. If 
manufacturers do not have a closed crankcase, they must make it 
possible to readily route blowby gases into the exhaust stream or 
otherwise measure them for an in-use test. This approach is similar to 
the approach we adopted for locomotives. The purpose of this 
requirement is to provide manufacturers the incentive to reduce 
crankcase emissions to the maximum extent possible, or eliminate them 
altogether.

[[Page 73308]]

D. Smoke Requirements

    We are not setting smoke requirements for marine diesel engines. 
Manufacturers have stated that many of these engines, though currently 
unregulated, are manufactured with smoke limiting controls at the 
request of the engine purchasers. Users seek low smoke emissions, both 
because they dislike the associated residue on decks and because they 
can be subject to penalties in ports that have smoke emission 
requirements. In many cases, marine engine exhaust gases are mixed with 
water prior to being released. This practice reduces the significance 
of smoke emissions, since smoke becomes significantly less visible when 
mixed with water. Moreover, we believe that the new PM standards will 
have the effect of further limiting smoke emissions.

E. Alternative Fuels

    The new emission standards apply to marine diesel engines, without 
regard to the type of fuel they use. This is consistent with nonroad 
diesel engine regulations of 40 CFR Part 89. It is also generally 
consistent with the locomotive regulations; however, the locomotive 
regulations apply even more broadly because they also include spark-
ignited engines. We are aware that there are currently very few 
alternative-fueled marine engines, but we believe that it is important 
to make clear to manufacturers what standards will apply if they 
produce these engines.
    Heavy fuel (or residual fuel) is fundamentally different than the 
distillate fuel used for testing and most in-use operation. We 
therefore treat it as an alternative fuel. If manufacturers produce 
their engines with sufficient hardware to be capable of operating on 
heavy fuel, they should submit test data with their application for 
certification showing that they meet the emission standards using both 
distillate and heavy fuel. The Clean Air Act prohibits removing or 
rendering inoperative elements of design in regulated engines. If 
operators add fuel heating and filtering equipment and other hardware 
to make a certified engine capable of operating on heavy fuel, we would 
likely consider that to be making the emission control system 
inoperative. We are requiring a statement on the engine label for 
engines that can be modified to operate on heavy fuel to discourage 
operators from making this modification.
    To properly address the range of possible alternative-fuel engines, 
it was necessary to modify the form of the HC standard. In the 
regulation of highway vehicles and engines, we determined that it is 
not appropriate to apply total hydrocarbon standards to engines fueled 
with natural gas, which is primarily methane (59 FR 48472, September 
21, 1994). Rather, nonmethane hydrocarbon (NMHC) standards should apply 
to natural gas engines. We are therefore setting NMHC+NOX 
standards for diesel-cycle marine engines that operate on natural gas. 
The same numerical standards apply to both types of engines. For 
example, an emission standard of 7.2 g/kW-hr THC+THC that applies to 
diesel-fueled engines becomes 7.2 g/kW-hr NMHC+NOX for 
natural gas engines. Similarly, reported emissions from alcohol-fueled 
engines are on a basis of total HC-equivalent (THCE). THC-equivalent 
emissions are calculated from the oxygenated organic components and 
non-oxygenated organic components of the exhaust, summed together based 
on the amount of organic carbon present in the exhaust. Refer to the 
April 11, 1989 final rule for more information regarding the 
determination of HC-equivalence (54 FR 14426). These approaches will 
minimize variations in stringency for different fuel types.

F. Test Procedures

    In this final rule we rely on previously established test 
procedures for land-based diesel engines. Specifically, we require that 
Category 1 marine engines be tested using the land-based nonroad 
procedures of 40 CFR Part 89, and that Category 2 marine engines be 
tested using the locomotive test procedures of 40 CFR Part 92. There 
are two reasons for using this approach. First, most manufacturers of 
marine diesel engines also manufacture land-based engines and will be 
equipped to test engines using these test procedures. Second, marine 
diesel engines are fundamentally similar to their land-based 
counterparts, and it is therefore appropriate to measure their 
emissions in the same way. In addition, the test procedures found in 40 
CFR Parts 89 and 92 include flexibility for testing alternative-fuel 
engines. Some changes are nevertheless necessary. Manufacturers should 
be aware that the test procedures in MARPOL Annex VI are not equivalent 
to the test procedures described here and in Sec. 94.103 and 
Sec. 94.104. We are including the modifications to these test 
procedures as described below.
1. Duty Cycles
    Testing an engine for emissions typically consists of exercising it 
over a prescribed duty cycle of speeds and loads, typically using an 
engine dynamometer. The duty cycle used to measure emissions for 
determining compliance with emission standards during the certification 
process is intended to represent operation in the field. The nature of 
that duty cycle is critical in evaluating the likely emissions 
performance of engines designed to those standards. To address 
operational differences between engines, we are specifying different 
duty cycles for different types of marine diesel propulsion engines. 
These are summarized here and described further in the Final RIA. 
Propulsion engines that operate on a fixed-pitch propeller curve must 
be certified using the International Standards Organization (ISO) E3 
duty cycle. This is a four-mode steady-state cycle developed to 
represent in-use operation of commercial marine diesel engines. The 
four modes lie on an average propeller curve based on in-use 
measurements.
    Fixed-speed marine propulsion engines with variable-pitch or 
electrically coupled propellers will be certified on the ISO E2 duty 
cycle. This duty cycle is also a four-mode steady-state cycle. It uses 
the same power and weighting factors as the E3 cycle, but the engine is 
operated in each mode at rated speed.
    Constant-speed auxiliary engines must be certified to the ISO D2 
duty cycle. Variable-speed auxiliary engines must be certified to the 
ISO C1 duty cycle. These duty cycles are consistent with the 
requirements for land-based nonroad diesel engines.
    There is another class of propulsion engines that run at variable-
speed and use a variable-pitched propeller. These engines are designed 
to operate near the power curve for the engine to maximize fuel 
efficiency. In general, these engines will operate at a constant speed 
near peak torque except when maneuvering in port, where they operate 
along the lug curve. Because of the expense of the system, variable-
speed engines are rarely used with variable-pitched propellers. ISO 
does not have a test duty cycle specifically designed for these 
engines. While we proposed to use the E2 duty cycle for these engines, 
we have since learned the the in-use operation, especially in port 
areas, is best represented by the C1 duty cycle. This is consistent 
with MARPOL Annex VI.
    For larger marine engines, conventional emission testing on a 
dynamometer becomes more difficult because of the size of the engine. 
Often engine mock ups are used for the development of these engines 
where a single block is used for many years and only the power assembly 
is changed out. For Category 2 engines, certification

[[Page 73309]]

tests may be performed on these engine mock-ups, provided that their 
configuration is the same as that of the production engines. To obtain 
approval for single-cylinder testing the manufacturer must rely on the 
provision for special test procedures (40 CFR 94.207). This requires a 
demonstration ``that it is equivalent to the specified procedures.'' We 
will address the concern that single-cylinder testing may not be 
appropriate in some cases by evaluation of the individual situations 
under Sec. 94.27.
2. In-Use Testing
    Before manufacturers produce engines, they certify that their 
engines will meet all the standards that apply, including the standards 
based on testing with the specified duty cycles and based on the 
broader Not-to-Exceed standards, throughout the useful life of the 
engines. We are interested in testing in-use engines to confirm that 
they are emitting within these standards. For any in-use testing for 
purposes of section 207(c), we would depend on receiving the permission 
of the owner to conduct the testing on that vessel. We could do this 
testing one of two ways. First, we could remove the engine from the 
vessel and test it on a laboratory dynamometer, much like the 
manufacturer's certification testing. This would be the most direct way 
to determine if an engine continues to meet the certification standards 
after the engine has been installed on a vessel. However, the cost of 
removing and testing engines this way would be extremely high and a 
ship operator may be unwilling to allow us to remove the engine from 
service for emission testing.
    Onboard testing is a second type of in-use emission measurement. 
Being able to conduct emission testing onboard the vessel can make in-
use testing more accessible since onboard testing eliminates the need 
for engine removal and minimizes the disruption of normal vessel 
operations. The goal is for us to accurately assess the emission 
performance of these engines when they are in service. We may use 
onboard emission testing to identify and hold manufacturers responsible 
for noncompliance with the emission standards (including the Not-to-
Exceed limits). The Clean Air Act authorizes us to pursue an emission-
related recall if we determine that a substantial number of engines, 
when properly maintained and used, do not conform to the regulations 
throughout their useful life. Noncompliance relates to meeting the 
emissions levels under the associated test procedures, as defined in 
the regulations. For example, the test procedure for the NTE emission 
standard calls for nominally steady-state operation within a specified 
zone of engine operation. In-use testing results may provide credible 
and probative information relevant to making a determination of 
compliance. We also recognize that the level of accuracy and precision 
of in-use testing is one of the key factors to take into account when 
making any such evaluation or determination of compliance. We believe 
such systems and procedures would provide a significant benefit to both 
the agency and the industry.
    For marine diesel engines that expel exhaust gases underwater or 
mix exhaust gases with water, we require that manufacturers equip the 
engines with an exhaust sample port, where a probe can be inserted for 
in-use emission tests. It is important that the location of this port 
allows a well mixed and representative sample of the exhaust. The 
purpose of this provision is to simplify in-use testing.
3. Test Fuel
    The test procedure, including the test fuel, must adequately 
represent in-use operation to ensure achievement of emission reductions 
in use. To facilitate the testing process, we generally define a range 
of specifications for a test fuel that is intended to represent in-use 
fuels. Marine diesel engines need to comply with emission standards on 
any fuel falling within the range of the test fuel specifications, with 
one modification described below. This section describes the test fuel 
we are specifying for Category 1 and Category 2 engines (see also 40 
CFR 94.108). This test fuel is for all testing associated with the 
standards in this final rule, including certification, production-line, 
in-use, and NTE testing.
    We are applying the recently finalized test fuel specifications for 
land-based nonroad diesel engines to marine diesel engine testing, with 
a modification to the sulfur specification as described below. We 
believe that largely adopting the nonroad fuel will simplify 
development and certification burdens for marine engines that are 
developed from land-based counterparts. The test fuel for marine diesel 
engine testing has a sulfur specification range of 0.03 to 0.80 weight-
percent (wt%), which covers the range of sulfur levels observed for 
most in-use fuels. Manufacturers are generally responsible for ensuring 
compliance with the emission standards using any fuel within this 
range. Thus, they will be able to harmonize their marine test fuel with 
U.S. highway (<0.05 wt%), nonroad (0.03 to 0.40 wt%), locomotive (0.2 
to 0.4 wt%) and European testing (0.1 to 0.2 wt%). The full range of 
test fuel specifications are presented in Chapter 3 of the Final RIA.
    We are setting a higher upper limit for the marine diesel engine 
sulfur specification (0.8 wt%) than was recently finalized for land-
based nonroad engines (0.4 wt%), because there is some information 
available suggesting that marine fuels may have higher sulfur contents 
than land-based diesel fuels.4 Using ASTM specification D 
2069 as a guide, we considered choosing an upper limit of 1.5 wt% 
sulfur. However, we are setting an upper limit on sulfur content of 0.8 
wt%, because the available data show that most in-use marine fuels have 
sulfur levels lower than this. Moreover, it is not clear that PM 
emission could accurately be measured using the specified testing 
procedures, or if the correction factor would be accurate, if fuels 
with a sulfur content higher than 0.8 wt% are used.5
---------------------------------------------------------------------------

    \4\ ``In-Use Marine Diesel Fuel,'' Final Report by ICF 
Consulting Group for EPA, August 1999 (Docket A-97-50, document IV-
A-4).
    \5\ ``Exhaust Gas Emission Measurements: A Contribution to a 
Realistic Approach,'' D. Bastenhof, dieselMAC, May, 1995.
---------------------------------------------------------------------------

    We determined that the new PM standards are feasible based largely 
on the feasibility of the corresponding standards for land-based 
nonroad and locomotive applications, which have a 0.4 wt% sulfur upper 
limit for the test fuel. Since PM emissions are somewhat fuel sulfur-
dependent, we do not believe it is appropriate to require compliance 
with the PM standards using fuel with a sulfur content above 0.4 wt%. 
We are therefore allowing a correction of PM emissions for testing with 
a fuel sulfur content greater than 0.4 wt%. Thus, the measured PM 
emissions for any test performed using fuel with a sulfur content of 
greater than 0.4 wt% may be corrected to the level that would have been 
measured if the fuel had a sulfur content of 0.4 wt%. This does not 
apply to systems using aftertreatment technologies, since the 
correction equation is not valid for those engines. This correction 
method is the same as that used for land-based nonroad engine testing 
to Tier 1 emission standards. Moreover, in the nonroad rulemaking, for 
engines rated over 37 kW certified to Tier 2 standards, we agreed to 
use only fuel with sulfur levels up to 0.2 wt% for our testing. Because 
Category 1 marine engines are mostly derived from land-based nonroad 
engines, we believe it is appropriate to extend this provision to 
Category 1 marine engines for the period during which they rely on 
land-based engines operating at Tier 2 emission

[[Page 73310]]

levels. In the future effort to set marine Tier 3 emission levels, we 
will revisit the appropriate range of fuel properties for in-use 
testing in the context of the emission standards we set at that time.
4. Adjustable Parameters
    Marine diesel engines are often designed with adjustable components 
to allow the engine to be adjusted for maximum efficiency when used in 
a particular application. This practice simplifies marine diesel engine 
production, since the same basic engine can be used in many 
applications. We recognize the need for this practice, but are also 
concerned about varying emission levels across the range of adjustment. 
We are therefore generally requiring that engines meet the emission 
standards when operated anywhere within the adjustable range (see 40 
CFR 94.205). In most cases, this means engine manufacturers will be 
required to design their engines to prevent adjustments outside the 
specified range to ensure that engines are always operated within the 
specified range of adjustment. However, consistent with the approach 
used in the locomotive rule, we may allow manufacturers to specify in 
their applications for certification a narrower range of adjustment for 
these components across which the engine is certified to comply with 
the applicable emission standards, and demonstrate compliance across 
that range. For these engines, this allowance means that a manufacturer 
would specify a range of fuel injection timing, for example, over which 
the engine complies with the emission standards. This range could be 
designed to account for differences in fuel quality. Operators are then 
prohibited by the anti-tampering provisions from adjusting engines 
outside of this range.

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[[Page 73312]]

5. Determination of Maximum Test Speed
    The determination of maximum test speed, where speed is the angular 
velocity of an engine's crankshaft (usually expressed in revolutions 
per minute, or rpm) is an important aspect of the duty cycles and 
``not-to-exceed'' (NTE) zones described in this document (see also 40 
CFR 94.107). We define the maximum test speed of an engine as the 
single point on an engine's maximum-power versus speed curve that lies 
farthest away from the zero-power, zero-speed point on a normalized 
maximum-power versus speed plot. In other words, consider straight 
lines drawn between the origin (speed = 0, load = 0) and each point on 
an engine's maximum-power versus speed curve (see Figure 1). Maximum 
test speed is defined as that point where the length of this line 
reaches its maximum value. Examples of results from this calculation 
are illustrated by circles superimposed on four maximum-power versus 
speed curves in Figure 1.

G. Not-to-Exceed Standards and Related Requirements

    Our goal is for engines to control emissions over the broad range 
of in-use speed and load combinations that can occur on a vessel, 
achieving real-world emission reductions, rather than just controlling 
emissions under certain laboratory conditions. An important tool for 
achieving this goal is an in-use program with an objective standard and 
an easily implemented test procedure. Historically, we have taken the 
approach of setting a numerical standard on a specified test procedure 
and relying on the prohibition of defeat devices to ensure in-use 
control over a broad range of operation not included in the test 
procedure.6
---------------------------------------------------------------------------

    \6\ EPA letter from Jane Armstrong and Bruce Buckheit, October 
15, 1998.
---------------------------------------------------------------------------

    No single test procedure can cover all real world applications, 
operations, or conditions. Yet to ensure that emission standards 
provide the intended benefits in use, we must have a reasonable 
expectation that emissions under real world conditions reflect those 
measured on the test procedure. The defeat device prohibition is 
designed to ensure that emissions controls are employed during real 
world operation and not just under laboratory or test procedure 
conditions. However, the defeat device prohibition is not a quantified 
standard and does not have an associated test procedure, so it does not 
have the clear objectivity and ready enforceability of a numerical 
standard and test procedure. As a result, the current focus on a 
standardized test procedure makes it harder to ensure that engines will 
operate with the same level of control in the real world as in the test 
cell.
    Because the E3 duty cycle uses only four modes on an average 
propeller curve to characterize marine diesel engine operation, we are 
concerned that an engine designed to the duty cycle would not 
necessarily perform the same way over the range of speed and load 
combinations seen on a vessel. The E3 duty cycle is based on an average 
propeller curve, but a propulsion marine engine may never be fitted 
with an ``average propeller.'' For instance, a light vessel with a 
planing hull may operate at lower torques than average while the same 
engine operated on a heavy vessel with a deep displacement hull may 
operate at higher torques than average. This can largely be a function 
of how well the propeller is matched to the engine and vessel. A 
planing hull vessel can operate at high torques at low speed prior to 
planing.
    To ensure that emissions from propulsion engines are controlled 
over the full range of speed and load combinations seen on vessels, we 
are establishing a zone under the engine's power curve where the engine 
may not exceed a specified emission standard, for any of the regulated 
pollutants, under the kind of operation that could reasonably be 
expected to be seen in the real world. In addition, the whole range of 
real ambient conditions is included in this ``not-to-exceed'' (NTE) 
zone testing. The NTE zone, limit, and ambient conditions are described 
below.
    At the time of certification, manufacturers would have to submit a 
statement that its engines will comply with these requirements under 
all conditions that may reasonably be expected to occur in normal 
vehicle operation and use. The manufacturer must provide a detailed 
description of all testing, engineering analysis, and other information 
that forms the basis for the statement. This certification statement 
must be based on testing and/or research reasonably necessary to 
support such a statement and on good engineering judgment. This 
supporting information would have to be submitted to us at 
certification if we request it; manufacturers would not necessarily be 
required to submit NTE test data for compliance during certification.
    We believe there are significant advantages to taking this sort of 
approach. The test procedure is very flexible so it can represent many 
in-use speed and load combinations and ambient conditions. Therefore, 
the NTE approach takes all of the benefits of a numerical standard and 
test procedure and expands it to cover a broad range of conditions. 
Also, laboratory testing makes it harder to perform in-use testing 
since either the engines would have to be removed from the vessel or 
care would have to be taken that laboratory-type conditions can be 
achieved on the vessel. With the NTE approach, in-use testing and 
compliance become much easier since emissions may be sampled during 
normal vessel use. Because this approach is objective, it makes 
enforcement easier and provides more certainty to the industry of what 
is expected in use versus over a fixed laboratory test procedure.
    Even with the NTE requirements, we believe it is still important to 
retain standards based on the steady-state duty cycles. This is the 
standard that we expect the certified engines to meet on average in 
use. The NTE testing is more focused on maximum emissions for segments 
of operation and should not require additional technology beyond what 
is used to meet the new emission standards. We believe that basing the 
emissions standards on a distinct cycle and using the NTE zone to 
ensure in-use control creates a comprehensive program. In addition, the 
steady-state duty cycles give a basis for calculating credits for use 
in the averaging, banking, and trading program.
    The NTE zone for marine diesel engines certified with the E3 duty 
cycle is illustrated in Figure 2 and is defined by the power curve of 
the engine up to rated speed. This zone is based on the range of 
conditions that a marine diesel propulsion engine typically experiences 
in use. For variable-speed engines with variable-pitch propellers 
certified to the C1 duty cycle, this zone is extended to include all 
torque points between the E3 power curve (between 63 percent and 100 
percent speed) and the lug curve. These NTE zones are divided into two 
subzones above and below 45% of power at maximum test speed.

[[Page 73313]]

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BILLING CODE 6560-80-C

[[Page 73314]]

    We are requiring a similar approach for engines certified using the 
constant-speed E2 duty cycle. In this case, the ``not-to-exceed'' zone 
is at the speed for which the engine is designed to operate for loads 
ranging from 25 to 100 percent of maximum load at that speed. Because a 
constant speed can actually operate over a small range of engine speeds 
in-use, the NTE zone includes this small range of speeds. This zone is 
also split into subzones above and below 45% of maximum power. More 
detail on the development of the boundaries and conditions associated 
with the NTE zones may be found in Chapter 3 of the Final RIA.
    We are requiring emissions caps for the NTE zones that represent a 
multiplier times the weighted test result used for certification for 
all of the regulated pollutants (HC+NOX, CO, and PM). This 
is consistent with the concept of a weighted modal emission test such 
as the steady-state tests included in this rule. The standard itself is 
intended to represent the average emissions under steady-state 
conditions. Since it is an average, some points can be higher, some 
lower, and the manufacturer will design to maximize performance and 
still meet the engine standard. The NTE limit is on top of this. It is 
designed to make sure that no part of the engine operation and that no 
application goes too far from the average level of control.
    For propulsion engines certified to the E3, C1, and E2 duty cycles, 
we believe that a not-to-exceed limit of 1.2 times the emissions 
standard (or FEL) is appropriate for the subzone at or above 45% of 
maximum test power. Below 45% of maximum test power, the cap is 1.5. 
Data presented in Chapter 3 of the Final RIA show that these limits are 
feasible for marine diesel engines, yet challenging because of 
variations in emissions at high versus low speeds and loads for some 
engines. This data show that the 1.2 cap is easily achievable at higher 
power, but may be more challenging at low powers. We set the cap at 1.5 
below 45% of maximum test power for this reason. These subzones and 
caps apply equally to the Tier 2 emission standards for each regulated 
pollutant. Manufacturers may alternatively choose to comply with a cap 
of 1.25 over the whole zone, as we originally proposed. In any future 
tier of standards, we will review the appropriateness of tailoring the 
NTE approach to the unique characteristics of the individual exhaust 
constituents.
    When testing the engine within the NTE zone, only nominally steady-
state operation will be considered. It is unlikely that transient 
operation is necessary under the NTE provisions to ensure that 
emissions reductions are achieved for commercial marine diesel engines. 
We designed the NTE zones to contain the operation near an assumed 
propeller curve that the steady-state cycles are intended to represent. 
We believe that the large majority of commercial marine operation in 
the NTE zone is steady-state. For planing vessels, we believe the 
transient operation as a vessel comes to plane generally is along the 
torque curve and would not be within the NTE zone. However, we don't 
have enough data to reliably say where under the torque curve marine 
engines operate during transient operation. Also, we do not believe the 
NTE zone should include areas where an engine may operate during 
transients but not in steady-state modes. We therefore don't believe 
that adding transient operation to the NTE requirements is necessary at 
this time. This would change if we saw evidence that in-use emissions 
increase due to insufficient emission control under transient 
operation.
    The NTE standards apply under any ambient air conditions. Within 
the following air temperature and humidity ranges, no corrections will 
be allowed to account for the effects of temperature or humidity on 
emissions: 13-30 deg.C for ambient air temperature and 7.1-10.7 grams 
water per kilogram of dry air for humidity. For engines drawing intake 
air from an enclosed engine room, however, the high end of the air 
temperature range is 35 deg.C (measured as intake air temperature). 
Ambient water temperature must be in the range of 5-27 deg.C during NTE 
testing. In addition, the engines must comply with the standards for 
the full range of test fuel specifications. These ranges for ambient 
conditions are discussed in more detail in Chapter 3 of the Final RIA.
    The defeat device provisions established for highway and nonroad 
engines apply to marine diesel engines in addition to the NTE 
requirements. A design in which an engine met the standard at the 
steady-state test points but was intentionally designed to approach the 
NTE limit everywhere else would be considered to be defeating the 
standard, except under limited circumstances discussed below. 
Electronic controls that recognize when the engine is being tested for 
emissions and adjust the emissions from the engine would be another 
example of a defeat device, regardless of the emissions performance of 
the engine.
    We are aware that marine diesel engines may not be able to meet the 
emissions limit under all conditions. Specifically, there are times 
when emission control must be compromised for startability or safety. 
We have excluded engine starting from NTE testing. In addition, our 
defeat device provisions accommodate the manufacturers potential need 
to allow emissions to increase to the extent necessary to protect the 
engine, such as responding to engine overheating.
    Manufacturers may ask us to approve an adjusted size or shape of 
the NTE zone for certain engines if they can show us that the engines 
will only operate within the revised NTE zone in normal use. This way, 
manufacturers can avoid testing their engines under operation they 
would rarely experience in a vessel. However, manufacturers are still 
responsible for any engine operation seen in normal use. They are also 
responsible for ensuring that their specified operation is indicative 
of real-world operation. In addition, if a manufacturer designs an 
engine for operation at speeds and loads outside of the NTE zone, the 
manufacturer is responsible for notifying us so their NTE zone can be 
modified appropriately to include this operation.
    We are not in this final rule setting an NTE limit for auxiliary 
marine engines. We do not yet have enough data on the operating 
characteristics of auxiliary engines to determine NTE zones and the 
associated limits for these engines. We expect to pursue similar 
requirements for land-based nonroad diesel engines. If we adopt NTE 
requirements for land-based nonroad diesel engines, we expect to extend 
those provisions to marine auxiliary engines at the same time.
    The NTE provisions will go into effect in the 2010 model year for 
post-manufacture marinizers and in the 2007 model year for other 
manufacturers for all commercial marine diesel engines. Manufacturers 
have agreed to collect and show us data on their engines operating in 
the NTE zone before the NTE standards take effect. We may also choose 
to require them to give us this data under Sec. 208 of the Clean Air 
Act. This delay in implementation of the NTE provisions for most 
Category 1 engines will provide reasonable lead time by allowing more 
time to collect data and assess engine operation in the NTE zone. For 
larger engines, the early banking program will provide manufacturers 
with an incentive to produce low-emission engines prior to 2007. This 
way, if these manufacturers chose to stagger their product line and 
produce low emission engines early, they will be able to add NTE-type 
testing to the testing they perform while calibrating their engines.

[[Page 73315]]

H. Voluntary Low-Emitting Engine Program

    In the final rule for land-based nonroad diesel engines, we 
included a program of voluntary standards for low-emitting engines, 
referring to these as ``Blue Sky Series'' engines (63 FR 56967, October 
23, 1998). We are setting similar voluntary standards as part of this 
rulemaking. The program, if successful, will lead to the introduction 
and more widespread use of these low-emission technologies. The 
qualifying emission levels are listed in Table 4. The voluntary 
standards for the expanded subcategories above 15 L/cyl all follow the 
pattern of a 40 percent reduction relative to the mandatory standards. 
While the Blue Sky Series emission limits are voluntary, a manufacturer 
choosing to certify an engine under this program must meet all the 
provisions established to demonstrate compliance with these limits, 
including allowable maintenance, warranty, useful life, rebuild, and 
deterioration factor provisions.

            Table 4.--Voluntary Emission Standards (g/kW-hr)
------------------------------------------------------------------------
                    Engine size                       HC+NOX       PM
------------------------------------------------------------------------
Power 37 kW, and displ.<0.9 L..........        4.0       0.24
0.9 L displ.<1.2 L.....................        4.0       0.18
1.2 L displ.<2.5 L.....................        4.0       0.12
2.5 L displ.<5 L.......................        5.0       0.12
5.0 L displ.<15.0 L....................        5.0       0.16
15.0 L disp. <20.0 L, and power <3300          5.2       0.30
 kW...............................................
15.0 L disp. <20.0 L, and power 3300 kW.......................................
20.0 L disp. <25.0 L...................        5.9       0.30
25.0 L disp. <30.0 L...................        6.6       0.30
------------------------------------------------------------------------

    The Blue Sky Series program begins immediately upon publication of 
this final rule and continues through the 2010 model year. We intend to 
evaluate the program to determine if it should be continued for 2011 
and later engines, and if so, whether any changes are needed.
    Creating a program of voluntary standards for low-emitting engines, 
including testing and durability provisions to help ensure adequate in-
use performance, will be a major step forward in advancing innovative 
emission control technologies, because EPA certification will provide 
protection against false claims of environmentally beneficial products. 
For the program to be most effective, however, incentives for the 
production of these engines must be created as well.
    We are concerned that such incentive programs not lead to a net 
detriment to the environment through the double-counting of benefits. 
We have therefore concluded that manufacturers choosing to sell an 
engine with the Blue Sky Series designation should not generate 
averaging, banking, and trading credits for demonstrating compliance 
with EPA programs. Other groups are free to design credit programs 
without concern for any double-counting or other unintended effect of 
overlapping programs.
    In addition to credit-based programs, we see substantial potential 
for users and state and local governments to establish incentive 
programs. For example, state or local governments or individual ports 
may be able to add incentives for introducing low-emitting engine 
technologies in harbor and other coastal vessels.

I. Durability

    As directed by the Clean Air Act, we are requiring that 
manufacturers design and build engines with durable emission controls. 
This means that manufacturers are responsible for the emission results 
for the engines they produce throughout their useful life.7 
We are also establishing provisions to ensure proper maintenance and 
repair of engines throughout their lifetime. The durability provisions, 
described below, are intended to ensure that engines continue to meet 
the applicable standards in use. The specific areas of the durability 
program focused on here are useful life, warranty periods, 
deterioration factors, and rebuilding requirements. Most of these 
provisions are carried over from the land-based or locomotive programs.
---------------------------------------------------------------------------

    \7\ This is different from the approach used in MARPOL Annex VI, 
according to which manufacturers must ensure their engines meet the 
emission limits at the time of certification but ship owners become 
responsible for their continued compliance with the limits. Under 
that program, compliance is verified during flag-state and port-
state inspections.
---------------------------------------------------------------------------

1. Useful Life
    Useful life is the period during which the marine engine is 
required to meet the emission standards. For Category 1 engines, we are 
setting a minimum useful life of 10 years or 10,000 hours of operation. 
Specifically, the 10,000-hour requirement is based on an expected five-
year period until the first time the engine is rebuilt, and an expected 
usage rate of 2,000 hours per year. For Category 2 engines, we are 
setting a minimum useful life of 10 years or 20,000 hours of operation. 
In this case, the 20,000-hour requirement for marine engines is 
calculated based on an operating rate of 4,000 hours of use per year, 
with five years between rebuilds. The useful life figures are minimum 
values to take into account the possibility that manufacturers may in 
the future design their engines for a longer period of operation before 
rebuilding. If an engine is designed to be in service until rebuild 
longer than our minimum useful life period, then the manufacturer must 
specify a corresponding longer useful life for that engine family.
    The above approach of basing useful life on time to first rebuild 
was chosen because it is difficult to justify holding the engine 
manufacturer responsible for an engine's emissions after the engine is 
rebuilt. The original engine manufacturer has little, if any, control 
over the rebuild process. When done improperly, the rebuilding process 
can include changes to the engine that adversely affect emissions. At 
the same time, however, these engines are often kept in service much 
longer than the minimum useful life. Median values for service lives 
are 15 years for Category 1 propulsion engines and 23 years for 
Category 2 engines. These longer service lives mean that the engine may 
be exempt from in-use testing for more than half its service life. We 
therefore believe it is important to be able to conduct recall testing 
on these engines throughout the established useful life period. We are 
also establishing requirements for engine rebuilders.
    To address the possibility of light commercial applications with 
much shorter design lifetimes, the final rule allows manufacturers to 
request a

[[Page 73316]]

shorter useful life for certain engines. Manufacturers in this case 
need to determine the alternate useful life based on the documented 
hourly service life of these engines in the field. This may in some 
cases be much less than 10,000 hours of operation. To prevent abuse of 
this provision, we won't approve any useful life less than 1,000 hours 
and we will require that the manufacturer display the certified useful 
life on the engine label. Also, the shortened useful life may not be 
less the manufacturer's recommended overhaul interval or mechanical 
warranty for that engine.
2. Warranty Periods
    Tied to the useful life is the minimum warranty period imposed 
under the Clean Air Act. The warranty periods for marine diesel engines 
are based on the ratio of useful life and warranty periods established 
for land-based nonroad engines. Specifically, we are setting a warranty 
period that is 50 percent as long as the useful life (in both operating 
hours and years) for both Category 1 and Category 2 engines. Also, the 
emissions warranty may not be less than any mechanical warranties 
offered by the manufacturer. This applies whether the mechanical 
warranty is published or negotiated, and whether it is offered for a 
fee or at no extra charge. Table 5 summarizes the useful life and 
warranty values that apply.
    We are also including defect reporting requirements in the final 
rule. We require engine manufacturers to tell us whenever they identify 
a specific emission-related defect in 25 or more Category 1 engines, 
consistent with the provisions that apply to highway and land-based 
nonroad engines. Similarly, we require notification for specific 
emission-related defects in 10 or more Category 2 engines, which is the 
same threshold that applies to locomotives. This is not limited to a 
single engine model or model year.

                                   Table 5.--Useful Life and Warranty Periods
----------------------------------------------------------------------------------------------------------------
                                                                           Useful Life         Warranty Period
                                                                     -------------------------------------------
                              Category                                  Hours of              Hours of
                                                                       operation    Years    operation    Years
----------------------------------------------------------------------------------------------------------------
Category 1..........................................................       10,000       10        5,000        5
Category 2..........................................................       20,000       10       10,000        5
----------------------------------------------------------------------------------------------------------------

3. Deterioration Factors
    To further ensure that the emission standards are met in use, we 
require the application of a deterioration factor (DeF) in evaluating 
emission control performance during the certification and production-
line testing process. The emissions from new engines are adjusted using 
the DF to account for the expected deterioration in emissions over the 
life of the engine due to wear and aging of the engine and emission 
controls. The resulting emission level (i.e., the final deteriorated 
emission level) represents the expected emissions at the end of the 
useful life period. New emission control technologies such as 
aftertreatment, sophisticated fuel delivery controls, and some cooling 
systems, may lose some of their effectiveness as they age. DFs are 
already required for highway vehicles and engines, land-based nonroad 
engines, and locomotives. We are extending this approach to marine 
diesel engines.
    Marine diesel engine DFs will be determined by the engine 
manufacturers in accordance with good engineering practices. Consistent 
with the land-based nonroad and locomotive programs, we are not 
specifying a detailed procedure. In generating DFs, however, 
manufacturers must observe some general guidelines and get our 
approval. In particular, the DF must be consistent with emissions 
increases observed in-use based on emission testing of similar engines. 
Additionally, the DF should be calculated for the worst-case engine 
calibration offered within the engine family.8 DFs must be 
calculated as an additive value (i.e., the arithmetic difference 
between emission level at full useful life and the emission level at 
the test point) for engines without exhaust aftertreatment devices. In 
contrast, DFs must be calculated as a multiplicative value (i.e., the 
ratio of the emission level at full useful life to the emission level 
at the test point) for engines using exhaust aftertreatment devices. 
This is consistent with the DF requirements applicable to other diesel 
engines, based on observed patterns of emission deterioration.
---------------------------------------------------------------------------

    \8\ The worst case would be the engine calibration expected to 
generate the highest level of emission deterioration over the useful 
life, using good engineering judgement.
---------------------------------------------------------------------------

    It is not our intent to require a great deal of data gathering on 
engines that use established technology for which the manufacturers 
have the experience to develop appropriate DFs. New DF testing may not 
be needed where sufficient data already exists. However, we are 
applying the DF requirement to all engines to be sure that 
manufacturers are using reasonable methods to ascertain the capability 
of engines to meet standards throughout their useful lives. Consistent 
with the land-based engine programs, we will allow marine diesel engine 
manufacturers the flexibility of using carryover and carryacross of 
durability emission data from a single engine that has been certified 
to the same or more stringent standard for which all of the data 
applicable for certification has been submitted. In addition, we are 
allowing deterioration data from highway or land-based nonroad engines 
to be used for similar marine diesel engines.
    Service accumulation is necessary to generate DFs from engines in 
the laboratory. Consistent with the land-based nonroad rule, we are 
specifying minimum allowable maintenance intervals for marine diesel 
engine service accumulation to ensure that durability data represent 
in-use performance (see 40 CFR 94.211(e)). These minimum intervals for 
marine diesel engines are equivalent to those required for nonroad and 
highway diesel engines (40 CFR 89.109; 40 CFR 86.094-25). For Category 
2 engines, we will allow engine manufacturers to request alternate 
minimum maintenance intervals at the time of certification, subject to 
our approval. This allowance for Category 2 engines is necessary to 
allow harmonization with locomotive maintenance practices (63 FR 18978, 
April 16, 1998).
4. Rebuilt Engines
    It is common for marine diesel engines to be rebuilt several times 
during the course of their lifetimes. Similar to land-based nonroad 
engines, we have two concerns regarding the rebuilding of marine diesel 
engines. First, there may not be an incentive to check and repair 
emission controls that do not affect engine performance. Second, there 
may be an incentive to rebuild engines to an older

[[Page 73317]]

configuration due to real or perceived performance penalties associated 
with technologies used to meet the new emission standards. Such 
practices would likely result in increased emissions. To address these 
concerns, we are extending the land-based nonroad rebuild requirements 
to marine diesel engines. Under these requirements, the parties 
involved in the process of rebuilding or remanufacturing engines must 
follow specific provisions to avoid tampering with the engine and 
emission controls. This requirement is based on the statutory 
prohibition against tampering with regulated engines. The rebuild 
requirements apply to any engine built on or after the date that new 
emission standards apply to that engine's specific category or group, 
regardless of the emission levels that the individual engine is 
designed to achieve.
    Anyone who rebuilds engines, in whole or part, and fails to comply 
with these provisions may be liable for tampering. Individuals or 
companies are responsible for the activities over which they have 
control. Therefore, there may be more than one responsible party for a 
single engine in cases where different parties perform different tasks 
during the engine rebuilding process (e.g., engine rebuild, full engine 
assembly, installation). We are not including any certification or in-
use emissions requirements for the rebuilder or engine owner.
    We are adopting modest record keeping requirements that should be 
in line with customary business practices. People involved in the 
process of marine diesel engine rebuilding or remanufacturing will keep 
the records. The required records include the hours of use accumulated 
on the engine at the time of rebuild and a list of the work performed 
on the engine or related systems. For work performed on the engine, 
rebuilders must include a list of replacement parts used, engine 
parameter adjustments, design element changes, and a description of any 
work performed. Parties must keep the information for two years and may 
use any format or system, provided that the information can be readily 
understood by an EPA enforcement officer. We do not require that 
companies keep information that is not reasonably available through 
normal business practices. In cases where it is customary practice to 
keep records for engine families rather than specific engines, where 
the engines within that family are being rebuilt or remanufactured to 
an identical configuration, such record keeping practices are 
satisfactory. Rebuilders may use records such as build lists, parts 
lists, and engineering parameters that they keep of the engine families 
being rebuilt rather than on individual engines, provided that each 
engine is rebuilt in the same way to those specifications.
5. Replacement Engines
    There may be situations in which a marine diesel engine can or must 
be replaced with a new engine. In general, we require that these 
replacement engines meet the certification requirements that apply to 
new engines for the year it is manufactured. The final rule makes 
provision for engine manufacturers to produce new engines to replace an 
older, uncertified model, where the replacement engine doesn't need to 
comply with the emission standards that would otherwise apply to new 
engines. This exemption for replacement engines is available if no new, 
compliant engine is available that meets the physical and performance 
characteristics of the engine being replaced (subject to our approval). 
There is no exemption for engines that are replacing certified engines. 
Consistent with replacement engine provisions in other programs, some 
additional constraints ensure that companies do not circumvent the 
regulations.

J. Certification

    As discussed previously, we expect technology to be shared between 
land-based engines and marine engines. Some engine manufacturers will 
likely produce engines of the same basic design for sale in both areas. 
Specifically, we expect Category 1 marine engines to share the 
technology developed for land-based nonroad engines, and Category 2 
engines to share technology developed for locomotive engines. To 
account for this product overlap, we are basing certification data and 
administration requirements for Category 1 on the existing program for 
land-based nonroad engines, and for Category 2 marine engines on the 
existing program for locomotive engines.9 Specific 
certification provisions are discussed more fully in the following 
sections.
---------------------------------------------------------------------------

    \9\See 40 CFR part 89, subpart B, for the provisions of the 
land-based nonroad engine program and 40 CFR part 92, subpart C, for 
the provisions of the locomotive program.
---------------------------------------------------------------------------

1. Engine Family Definition
    Engine grouping for the purpose of certification is accomplished 
through the application of an ``engine family'' definition. Engines 
expected to have similar emission characteristics throughout the useful 
life are classified in the same engine family. Separate engine family 
classification is also required for each marine engine category (i.e., 
Categories 1, 2, and 3 will be in separate engine families). We are 
establishing specific parameters to define engine family for each 
category of marine engine. To provide for administrative flexibility, 
we may separate engines normally grouped together or to combine engines 
normally grouped separately based upon a manufacturer's request 
substantiated with an evaluation of emission characteristics over the 
engine's useful life.
    For Category 1, we are using the engine family definition for land-
based nonroad engines, with the addition of the type of fuel system and 
whether fuel injection is controlled mechanically or electronically. 
For Category 2, we are using the engine family definition for 
locomotive engines.
    These definitions provide consistency between land-based and marine 
engines of the same basic type. The fuel system type and control type 
were added to the land-based nonroad engine family definition to reduce 
the variability of emissions within an engine family. This change will 
aid manufacturers in selecting the ``worst-case'' engine for emission 
testing. It will lessen the chance of noncompliance in use by ensuring 
that the highest emitting engine is tested during certification.
    Under the provisions of the land-based nonroad rule, engine 
manufacturers have the option to petition for their marine engines to 
be included in land-based engine families. We are not including this 
flexibility for marine engines rated over 37 kW because the ``not-to-
exceed'' provisions in this final rule apply uniquely to marine 
engines. We do, however, allow manufacturers to rely on the land-based 
certification for land-based engines that are marinized without 
affecting emissions (see Section II.F.).
    The engine family definition is fundamental to the certification 
process and to a large degree determines the amount of testing required 
for certification. Manufacturers are required to estimate the rate of 
deterioration for each engine family (see Section IV.I.3. for further 
details). Compliance with the emission standard will also be 
demonstrated for each engine family based upon required testing and the 
application of the deterioration factor. Separate certificates of 
conformity are required for each engine family.
2. Emission Data Engine Selection
    Manufacturers must select the highest emitting engine (i.e., 
``worst-case'' engine) in a family for certification

[[Page 73318]]

testing. In making that determination, the manufacturer must use good 
engineering judgement (considering, for example, all engine 
configurations and power ratings within the engine family and the range 
of installation options allowed). By requiring manufacturers to test 
the worst-case engine, we can be sure that all engines within the 
engine family are complying with emission standards for the least cost 
(as measured by the number of tests required). Manufacturers may 
request the separation of the dissimilar calibrations into separate 
engine families. This may be appropriate, for example, if a 
manufacturer feels that an engine family is grouped too broadly or that 
the worst-case emission data engine underestimates the emission credits 
available under the ABT provisions.

K. Production-Line Testing

    One of the challenges of serial engine production is ensuring that 
each engine produced has the same emission characteristics as the 
original certification engine. We are finalizing a requirement for 
manufacturers to conduct production line testing (PLT). The general 
object of a PLT program is to show, with reasonable certainty, whether 
certification designs have been translated into production engines that 
meet applicable standards (or FELs) at the time of production, before 
excess emissions are generated in use. PLT is performed on a regular 
basis during the year by the engine manufacturer according to our 
criteria.
    With PLT testing, a manufacturer selects engines from its 
production line for confirmatory testing. In general, a manufacturer 
must test one percent of its total projected annual U.S. marine diesel 
engine sales (propulsion and auxiliary) for each category each year. We 
believe that a one percent sampling rate is appropriate for the marine 
diesel engine industry because of its low production volumes, and that 
a higher sampling rate would be overly burdensome for this industry. We 
are not specifying a minimum number of tests for Category 1 engines. If 
a manufacturer sells fewer than 100 Category units in the United States 
in a given year, it is not required to do any PLT testing for those 
engines that year. For Category 2 engines, a manufacturer must conduct 
a minimum of one PLT test per year. Thus, for manufacturers with sales 
of less than 100 Category 2 engines in a given year, one test is 
required that year. For purposes of calculating the number of tests 
required, Category 1 and Category 2 annual engine sales must be 
considered separately.
    The manufacturer selects a random sample of test engines that is 
representative of annual production. We reserve the right to reject any 
engines selected by manufacturers if we determine that such engines do 
not represent production engines. Engines selected should cover the 
broadest range of production possible, and from year to year should be 
varied to cover all engine families if possible. Tests should also be 
distributed evenly throughout the model year, to the extent possible.
    Manufacturers must conduct emission testing of PLT engines in 
accordance with the applicable federal testing procedures. Compliance 
with the NTE provisions must be demonstrated as part of PLT testing. 
The results must be communicated to us in periodic reports that 
summarize emissions results, test procedures, and events such as the 
date, time, and location of each test. These reports allow us to 
continually monitor the PLT data. Reports must be submitted each 
quarter. If no testing is performed during the period, no report is 
required.
    Under this testing scheme, if an engine fails a production line 
test, the manufacturer must test two additional engines out of either 
the next two days' production or the next fifteen engines produced in 
that engine family in accordance with the applicable federal testing 
procedures. This dual approach to testing additional engines accounts 
for variations in production volumes. If production volumes are high, 
then we believe the two-day provision will allow for the orderly 
selection of additional test engines. Likewise, if production volumes 
are low, then the provision allowing the engines to be selected from 
the next fifteen produced will allow for orderly selection. When the 
average of the three test results, for any pollutant, are greater than 
the applicable standard or FEL for any pollutant, the manufacturer 
fails the PLT for that engine family. Such failures must be reported to 
us within two working days of the determination of a failure. Note that 
compliance with the standards is required of every covered engine. 
Thus, every engine failing a PLT test is considered noncompliant with 
the standards and must be brought into compliance. Using the average of 
three tests to determine compliance with the PLT program serves only as 
a tool to decide when it is appropriate to suspend or revoke the 
certificate of conformity for that engine family, and is not meant to 
imply that not all engines have to comply with the standards.
    In the PLT program, the Administrator can suspend or revoke the 
manufacturer's certificate of conformity, in whole or in part, thirty 
days after we determine that an engine family is noncompliant, or if 
the engine manufacturer's report reveals that the PLT tests were not 
performed correctly. During the thirty-day period after we establish 
noncompliance, we will coordinate with the manufacturer to facilitate 
the approval of the required production line remedy to eliminate the 
need to halt production as much as possible. The manufacturer must then 
address the noncompliance for the engines produced prior to the 
suspension or revocation of the certificate of conformity (for example, 
by bringing them into compliance or removing them from service). We can 
reinstate the certificate after a suspension, or reissue one after a 
revocation, if the manufacturer demonstrates through its PLT program 
that improvements, modifications, or replacements have brought the 
engine family into compliance. The regulations include hearing 
provisions that provide a mechanism to resolve disputes between 
manufacturers and us regarding a suspension or revocation decision 
based on noncompliance with the PLT. It is important to point out that 
we retain the legal authority to inspect and test engines if problems 
arise in the PLT program. Note also that the definition of ``failure'' 
of the PLT is limited to the PLT program, and does not define failure 
or noncompliance for other purposes. It is based in part on the 
severity of the result of a failure (suspension or revocation of a 
certificate) and is not meant to limit in any way the overall 
obligation of the manufacturer to produce engines that meet the 
standard.
    We recognize the need for a PLT program that does not impose an 
unreasonable burden on manufacturers. Therefore, consistent with the 
requirement that testing be required on one percent of total marine 
diesel engine production for each category, no PLT is required for 
manufacturers whose Category 1 marine diesel engines sales are less 
than 100 per year. This is because companies with such low sales are 
unlikely to have in-house testing facilities, and requiring such 
companies to send an engine to an independent test facility for PLT 
purposes may be too burdensome. Note that companies exempt from the PLT 
program are not exempt from other certification and compliance 
provisions. Engines exempt from the PLT program must still meet the 
emission limits as produced and in use. We reserve the right to conduct 
an SEA on any manufacturer with engines certified to the requirements 
of this final rule. In addition, we are not extending

[[Page 73319]]

this flexibility provision to the PLT program for Category 2 marine 
diesel engines, since they are typically produced in very small 
volumes.
    Finally, while we believe this PLT program takes into account the 
circumstances of this industry, we also understand that alternative 
plans may be developed that better account for the individual needs of 
an individual manufacturer. Thus, a manufacturer may submit an 
alternative plan for a PLT program, subject to our approval. A 
manufacturer's petition to use an alternative plan needs to address the 
need for the alternative and include justifications for the number and 
representativeness of engines tested. The alternative plan must also 
have specific provisions regarding what constitutes a PLT failure for 
an engine family.

L. Miscellaneous Compliance Issues

    We are extending the general compliance provisions for land-based 
nonroad engines to Category 1 and Category 2 marine diesel engines. 
These include the tampering, defeat device, imported engines and 
vessels, and general prohibition provisions.

M. Averaging, Banking, and Trading Program

    Along with the emission standards, we are including a marine 
averaging, banking, and trading (ABT) program. An ABT program is an 
important factor that EPA takes into consideration in setting emission 
standards that are appropriate under section 213 of the Clean Air Act. 
ABT reduces the cost and improves the technological feasibility of 
achieving the standards, helping to ensure the attainment of the 
standards earlier than would otherwise be possible. Manufacturers gain 
flexibility in product planning and the opportunity for a more cost-
effective introduction of product lines meeting a new standard. ABT 
also creates an incentive for the early introduction of new technology, 
which allows certain engine families to act as trail blazers for new 
technology. This can help provide valuable information to manufacturers 
on the technology before manufacturers need apply the technology 
throughout their product line. This early introduction of clean 
technology improves the feasibility of achieving the standards and can 
provide valuable information for use in other regulatory programs that 
may benefit from similar technologies.
    The voluntary ABT program allows the certification of one or more 
engine families within a given manufacturer's product line at emission 
levels above the applicable emission standards, provided that the 
increased emissions are offset by one or more families certified below 
the emission standards. The average of all emissions for a particular 
manufacturer's production (weighted by sales-weighted average power, 
production volume and useful life) must be at or below the level of the 
applicable emission standards. In addition to the averaging program 
just described, the ABT program contains banking and trading 
provisions, which allow a manufacturer to generate emission credits and 
bank them for future use in its own averaging program or sell them to 
another entity. Compliance is determined on a total mass emissions 
basis to account for differences in production volume, power and useful 
life among engine families.
    The ABT program for marine diesel engines over 37 kW is based on 
the corresponding ABT programs recently adopted for land-based nonroad 
engines (63 FR 56967, October 23, 1998) and locomotives (63 FR 18978, 
April 16, 1998), which roughly correspond to the Category 1 and 
Category 2 engines, respectively. A manufacturer choosing to 
participate in the ABT program must certify each participating engine 
family to a family emission limit (FEL) determined by the manufacturer 
during certification testing. A separate FEL must be determined for 
each pollutant the manufacturer includes in the ABT program. The ABT 
program is limited to HC+NOX and PM emissions. Thus, only 
two different FELs may be generated for a given engine family.
    Consistent with the recently finalized land-based nonroad engine 
program, marine engine credits are to be calculated based on the 
difference between the applicable standard(s) and FEL(s). However, 
credit calculation for marine engines is somewhat different than that 
for land-based nonroad engines, in that a load factor is inserted in 
the equation. This term is necessary because, contrary to land-based 
nonroad case, not all marine engines are expected to operate at the 
same load. The credit calculation equation is as follows:

Emission credits = (Std--FEL)  x  (UL)  x  (Production)  x  (AvgPR)  x  
(10-6)  x  (LF)

Where:

 Std = the applicable cycle-weighted marine engine 
THC+NOX and/or PM emission standard in grams per kilowatt-
hour.
 FEL = the family emission limit for the engine family in grams 
per kilowatt-hour. (The FEL may not exceed the limit established in 
Sec. 94.304(m) for each pollutant.)
 UL = the useful life in hours.
 Production = the number of engines participating in the 
averaging, banking, and trading program within the given engine family 
during the calendar year (or the number of engines in the subset of the 
engine family for which credits are being calculated). Quarterly 
production projections are used for initial certification. Actual 
applicable production/sales volumes are used for end-of-year compliance 
determination.
 AvgPR = average power rating of all of the configurations 
within an engine family, calculated on a sales-weighted basis, in 
kilowatts.
 LF = the load factor, dependent on whether the engine is 
intended for propulsion or auxiliary applications, as follows:
A. 0.69 for propulsion engines
B. 0.51 for auxiliary engines.

    We are prohibiting the generation of credits for one pollutant and 
the simultaneous use of credits for the other pollutant within the same 
engine family. In other words, a manufacturer may not simultaneously 
generate HC+NOX credits and use PM credits on the same 
engine family, and vice versa. This is consistent with the recently 
finalized emission standards for land-based nonroad diesel engines. 
This also reflects the inherent trade-off between NOX and PM 
emissions in diesel engines.
    FEL upper limits apply in the same manner as those in the 
comparable land-based ABT programs to ensure that the emissions from 
any given family certified under this ABT program not be significantly 
higher than the applicable emission standards. In general, these FEL 
upper limits correspond to the existing previous tier of standards for 
the various classes. In other words, the FEL upper limits are generally 
the Tier 1 standards for engines certifying according to the ABT 
provisions relative to the Tier 2 standards. Since we are not including 
any Tier 1 standards for marine engines in this rulemaking, the land-
based Tier 1 standards serve as FEL upper limits for the Tier 2 marine 
engine standards. When the ABT provisions for land-based nonroad 
engines were recently revised, there were no Tier 1 standards in place 
for some land-based categories and pollutants. These cases correspond 
to some Category 1 marine engines. In those cases we chose FEL upper 
limits based on typical in-use emission levels of precontrol engines, 
or existing

[[Page 73320]]

California Air Resources Board emission standards. For a more complete 
discussion of the rationale for the Tier 2 FEL upper limits for 
Category 1 engines the reader is directed to the most recent final rule 
concerning land-based nonroad engine emission standards.
    Consistent with the land-based ABT programs from which the marine 
program is derived, ABT credits generated under this program do not 
expire and are not discounted. Also consistent with the recently 
finalized land-based nonroad diesel rule, credits generated on land-
based engines may not be used for demonstrating compliance for marine 
diesel engines. We are concerned that manufacturers who produce engines 
used in both marine and land-based applications could effectively trade 
out of the marine portion of the program, thereby potentially obtaining 
a competitive advantage over small marinizers who sell only marine 
engines. For similar reasons, credits generated on Category 2 engines 
can not be used for Category 1 engine compliance. For similar reasons 
we proposed to prevent the use of credits generated on Category 1 
engines from being used for Category 2 engines. Since the expressed 
concern does not apply to credit exchanges going from smaller to bigger 
engines, the final rule allows this. However, to account for the 
likelihood that Category 2 engines will undergo more rebuilds in their 
lifetime than Category 1 engines, manufacturers must discount any 
Category 1 engine credits by 25 percent if they are used for Category 2 
engine compliance.
    Effective immediately, early credit generation is available for all 
Category 1 and 2 commercial CI marine engines. Credits will be 
generated relative to the actual Tier 2 standards and will be 
undiscounted. However, if a manufacturer believes it should be allowed 
to generate credits relative to an engine family's pre-control emission 
levels (rather than the Tier 2 standards), it can choose to develop 
engine family-specific baseline emission levels. Credits will then be 
calculated relative to the manufacturer-generated baseline emission 
rates, rather than the Tier 2 standards. Engine manufacturers that are 
not post-manufacture marinizers generate baseline emission rates by 
testing three engines from the family for which the baseline is being 
generated, with the baseline calculated as the average of the three 
engines. Under this option, engines must still meet the Tier 2 
standards for all pollutants to generate credits, but the credits will 
be calculated relative to the generated baseline rather than the Tier 2 
standards. Any credits generated between a measured baseline and the 
Tier 2 levels will be discounted by reducing the measured baseline 
value by 10 percent. This is to account for the variability of testing 
in-use engines to establish the baseline due to differences in hours of 
use and maintenance practices.
    Some early banking provisions apply uniquely to post-manufacture 
marinizers. In recognition of their small size, more difficult resource 
constraints and general reliance on engine manufacturers to produce 
base engines, additional flexibility is warranted to ease the 
transition to these rules. Therefore, post-manufacture marinizers may 
establish a measured baseline by testing a single engine. Consistent 
with the provisions of Sec. 94.209(a), the baseline established by this 
single engine may be used for broadened engine families, provided the 
marinizer starts with certified land-based engines. Also, they may 
certify an engine under the early banking program with an engine that 
does not meet the Tier 2 emission standards. However, since this 
program is only intended to ease the transition to full compliance with 
these standards and rules, the credits will only be available to post-
manufacture marinizers through the 2007 model years
    In the recent rulemaking for nonroad diesel engines, we also set 
emission standards for marine diesel engines below 37 kW. These engines 
were also included in the land-based ABT program in that rule, with 
some restrictions. We are not changing the way we treat these small 
marine diesel engines. We are not integrating the ABT program in that 
rule with the requirements in this final rule, so we don't allow 
manufacturers to exchange credits for engines above and below 37 kW.
    Credits may not be exchanged between Category 1 marine engine 
families and land-based nonroad engine families. As with the 
restriction of credit exchanges between engine families above and below 
37 kW, this restriction applies because the stringency of the land-
based standards was determined in the absence of the availability of 
credit exchange between marine and land-based engines. In addition, 
there are differences in the way that marine and land-based credits are 
calculated that are implicit in the calculation and that make the 
credits somewhat incompatible. The first is that the difference in test 
duty cycles means there is an implicit difference in load factor 
between the two. The second is that there are provisions in this final 
rule for varying useful lives of marine engine families, which are not 
included in the land-based nonroad regulations. In addition, as 
discussed above, the actual credit calculation equations for the two 
programs are different.
    We don't allow trading between Category 2 engines and locomotive 
engines, because locomotive credits are calculated based on expected 
remaining service life (which could be many useful life periods, due to 
the inclusion of the remanufacturing provisions for locomotives), 
whereas Category 2 marine engine credits are only calculated on the 
basis of a single useful life.
    Participation in the marine diesel ABT program is voluntary. For 
those manufacturers choosing to use the program, compliance for 
participating engine families is evaluated in two ways. First, 
compliance of individual engine families with their FELs is determined 
and enforced in the same manner as compliance with the emission 
standards in the absence of an averaging, banking and trading program. 
Each engine family must certify to the FEL (or FELs, as applicable), 
and the FEL is treated as the emission limit for certification, 
production-line and in-use testing (as well as for any other testing 
done for other enforcement purposes) for each engine in the family. 
Second, the final number of credits available to the manufacturer at 
the end of a model year after considering the manufacturer's use of 
credits from averaging, banking and trading must be greater than or 
equal to zero.
    The generation transfer and use of credits in the ABT program does 
not change the obligation of all manufacturers to meet the applicable 
standards. This provision is consistent with other mobile source ABT 
programs. The marine diesel engine certificates of both parties 
involved in the violating trading transaction could be voided ab initio 
(i.e. back to date of issue) if the engine family or families exceed 
emission standards as a result of a credit shortfall. A buyer of 
credits which are shown later to be invalid will only be required to 
make up the credit shortfall. There will be no penalty associated with 
the unknowing purchase of invalid credits.
    The integrity of the marine diesel averaging, banking and trading 
program depends on manufacturers' accuracy in recordkeeping and 
reporting and our effectiveness in tracking and auditing this 
information. Failure of a manufacturer to maintain the required records 
would result in the certificates for the affected engine family or 
families being voided retroactively. Violations of

[[Page 73321]]

reporting requirements could result in a manufacturer being subject to 
civil penalties as authorized by sections 213 and 205 of the Clean Air 
Act. We allow positive reporting errors (i.e., those errors that result 
in an underestimation of the manufacturer's positive credit balance) to 
be corrected provided that the errors are identified within 180 days of 
the time we receive the manufacturer's annual report.

N. Special Provisions for Post-Manufacture Marinizers

    In general, we set engine emission standards that take effect at a 
set point in time, concurrently precluding the installation in vehicles 
or equipment of engines not certified to the new standards. The 
rigidity of this approach is lessened to some extent through averaging, 
banking, and trading programs, which allow engine manufacturers to 
produce engines that exceed the emission limits as long as the added 
emissions can be offset by engines that emit below the required levels. 
While this approach generally works well, additional flexibility 
provisions to help relieve compliance burdens may be needed in special 
cases.
    Marine diesel engines are produced using one of three basic 
manufacturing methods. In the first, least common, method, marine 
engines are designed and built exclusively for marine applications. 
This is typically the case for very large Category 3 engines as well as 
some smaller engines that are produced for special niche markets. In 
the second method, an engine manufacturer produces a marine diesel 
engine using a land-based engine that was built by that same 
manufacturer. In the third method, an unrelated company, referred to 
here as a ``marinizer'' produces a marine diesel engine by purchasing a 
completed or partially completed land-based nonroad or highway engine 
from an engine manufacturer and modifying it for use in the marine 
environment according to the marinizing company's own processes. 
Marinizers tend to be small companies and their output is often 
designed for niche markets. To address their concerns, we are adopting 
several provisions to streamline the certification process for 
marinizers.
1. Application of Flexibility Provisions
    The following flexibility provisions will be available only to 
these marinizers. We define the term post-manufacture marinizer as ``an 
entity that produces a marine engine by modifying a non-marine engine, 
whether certified or uncertified, complete or partially complete, where 
such entity is not controlled by the manufacturer of the base engine or 
by an entity that also controls the manufacturer of the base engine.'' 
This definition no longer refers only to companies that ``substantially 
modify'' non-marine engines because the engine dressing exemption makes 
provision for companies whose marinization process does not include 
steps that might affect emissions.
    A vessel manufacturer that substantially modifies a certified 
engine or an engine certified to a previous tier of emission limits or 
that installs an uncertified engine will be considered a marinizer and 
must comply with the certification and compliance provisions in this 
final rule. This clarification is necessary because it is not uncommon 
for vessel manufacturers to modify marine engines. This may be done to 
increase the power of an engine or to respond to the needs of a 
particular user. By considering these vessel manufacturers as 
marinizers, we will ensure that the engine modifications do not also 
increase the emissions of an otherwise certified engine.
2. Broader Engine Families
    We are allowing marinizers to use a broad engine family definition. 
Under this provision, a marinizer may include any engines that have 
similar emission deterioration characteristics in one engine family. 
Thus, a marinizer could conceivably group all commercial marine diesel 
engines into one engine family. These engines must all be in the same 
category and they must be previously certified to meet land-based 
nonroad, locomotive, or heavy-duty highway emission standards. Separate 
engine families will be required for each category of marine engines
    Note that all other provisions of the final rule apply to this 
broad engine family including, but not limited to, selection and 
testing of an emission data engine, application of a deterioration 
factor (DF), and compliance with the standards.
    Even with these larger engine families, marinizers are responsible 
to conduct testing on a worst-case engine. We can suggest some 
guidelines for identifying worst-emitter engines without the expense of 
conducting a full emission test on each engine calibration of each 
model.
    Marinizers can utilize low-cost equipment and a simple procedure to 
routinely measure parts per million (ppm) levels of gaseous pollutants. 
We expect that every company operates most or all production engines 
for quality control purposes, probably with a small number of fixed 
cycles. Measuring for NOX emissions during that time 
provides an additional diagnostic for engine performance, and should 
provide a good benchmark for comparing emission levels across the 
product line. Measured ppm NOX readings should correlate 
closely with NOX emission levels from a full certification 
test. Conversely, the lowest measured NOX emissions (or 
highest CO emissions) are an indication of the worst PM emitter. The 
marinizer may choose to send in test data from a single duty cycle on a 
single engine, but remains liable for all pollutants on all engines in 
the family, with any applicable duty cycle.
    This guidance suggests a possible means by which a post-manufacture 
marinizer can limit the testing burden in the effort to certify broad 
engine families where it may not be apparent which engine to test. If 
this does not address a marinizer's concerns, the remaining alternative 
is to certify each engine family, using the standard engine-family 
definition.
3. Carryover Provisions
    Engine manufacturers may carry over engine data generated in a 
previous model year's certification to certify for the current year. 
This provision will also apply to the broader engine families of 
marinizers, with the constraint that the marinizer will need to 
generate new data if any model in the broad engine family is modified 
in any way that will make it the highest emitter in the family.
4. Streamlined Certification for Subsequent Years
    We are adopting a streamlined certification process for marinizers. 
This process applies beginning with the year after the relevant 
implementation dates and continues until engine design changes cause a 
different engine model to be the highest emitter in the marinizer's 
broad engine family. Recertification would be required at that point. 
Under this streamlined certification process, the marinizer submits an 
annual certification application stating that there have been no 
changes in the design or production of the engine models that make up 
the engine family. If there have been changes, the marinizer can still 
avoid a complete certification submission with test data by 
demonstrating that there is no change in the identity of the highest 
emitter or its emissions.
5. Additional Compliance Time
    Marinizers generally depend on engine manufacturers producing base 
engines for marinizing and may therefore be affected by circumstances

[[Page 73322]]

beyond their control. This can make it difficult to certify the 
marinized engines. Consequently, there may be situations in which, 
despite its best efforts, a marinizer cannot meet the implementation 
dates, even with the flexibility provisions described in this section. 
Such a situation may occur if an engine supplier without a major 
business interest in a marinizer were to change or drop an engine model 
very late in the implementation process, or was not able to supply the 
marinizer with an engine in sufficient time for the marinizer to 
recertify the engine. Based on this concern, we are allowing a one-year 
delay in the implementation dates for post-manufacture marinizers. In 
this case, marinizers would need only notify us that they are using the 
additional year before meeting emission standards.
    A similar need for additional lead time is appropriate for post-
manufacture marinizers to demonstrate compliance with Not-to-Exceed 
requirements. Post-manufacture marinizer's reliance on another 
company's base engines affects the time needed for the development and 
testing work needed to comply. As described above, engine manufacturers 
generally have until 2007 to comply with Not-to-Exceed requirements. We 
are extending that to 2010 for post-manufacture marinizers. Three years 
of extra lead time (compared to one year for the primary certification 
standards) is appropriate considering their more limited resources.
6. Special Hardship Provision
    As a relief mechanism of last resort, we are also extending to 
post-manufacture marinizers the hardship relief provisions we included 
in the recently finalized land-based nonroad rule (see 40 CFR 
89.102(f)). Under this provision, marinizers can ask us for additional 
time to meet the emission limits. Under this hardship relief provision, 
appeals must be made in writing, be submitted before the earliest date 
of noncompliance, include evidence that failure to comply was not the 
fault of the marinizer (e.g., a supply contract was broken by the 
engine supplier), and include evidence that the inability to sell the 
subject engines will have a major impact on the company's solvency. We 
would work with the applicant to ensure that all other remedies 
available under the flexibility provisions are exhausted before 
granting additional relief, and limit the period of relief to no more 
than one year. Furthermore, any relief may not exceed one year beyond 
the date relief is granted. We expect that this provision will be used 
only rarely. Each granting of relief would be treated as a separate 
agreement, with no prior guarantee of success, and with the inclusion 
of measures, agreed to in writing by the marinizer, for recovering the 
lost environmental benefit. If a marinizer during this hardship period 
produces certified engines (to emission levels less stringent than 
would otherwise be required), we would take that into account in 
determining the lost environmental benefit. This provision is not 
limited to small businesses, as described in the proposal, since all 
post-manufacture marinizers have a similar reliance on other 
manufacturers to produce their engines.
7. Incomplete Marine Engine Exemption
    We finalized the nonroad diesel rule with no allowance to import 
uncertified nonroad engines that will be changed into a marine engine. 
This final rule is changing the definition of marine engines to include 
those that are ``intended'' to be installed on a marine vessel. This is 
necessary to allow post-manufacture marinizers to import loose engines 
for marinizing. We also include provisions specifically allowing post-
manufacture marinizers to import uncertified engines. Once emission 
standards apply, a marinizer importing such engines must already have a 
certificate showing that the engine is part of a certified engine 
family. The regulations also obligate the marinizer to modify all the 
imported engines to comply with the requirements of 40 CFR part 94.

V. Technological Feasibility

    The emissions standards in this final rule apply to a large variety 
of marine diesel engine sizes and applications. Section 213(a)(3) of 
the Clean Air Act directs us to establish standards that provide the 
``greatest degree of emission reduction achievable through the 
application of technology which the Administrator determines will be 
available for the engines or vehicles to which such standards apply, 
giving appropriate consideration to the cost of applying such 
technology within the period of time available to manufacturers and to 
noise, energy, and safety factors associated with the application of 
such technology.''
    We have concluded that the requirements in this final rule are 
appropriate under section 213 of the Clean Air Act and are 
technologically feasible on the prescribed schedule. The Final RIA and 
the Summary and Analysis of Comments contain a detailed treatment of 
emission-control technologies and the basis for selecting the 
individual standards. The costs associated with these technologies are 
discussed in Section VII. We have also concluded, as described in the 
Final RIA, that the emission standards will have no significant 
negative effect on noise, energy, or safety.

VI. Areas for Future Action

A. Tier 3 Emission Standards

    We have decided not to finalize the proposed Tier 3 emission 
standards at this time. We intend to address this next tier of emission 
standards through a separate final rule. This may involve a 
supplemental proposal. Delaying action on Tier 3 standards will allow 
us to learn from the application of Tier 3 technology to land-based 
nonroad diesel engines. Also, it will give us time to consider emission 
control strategies such as aftertreatment.

B. Emission Standards for Remanufactured Engines

    As described in the proposed rule, we are aware of the obstacles to 
implementing emission standards that would apply to existing engines at 
the point of rebuild or remanufacture. The comments in favor of such 
standards did not address these questions. Nevertheless, we are 
concerned that the gradual turnover to new engines and vessels will 
cause a very slow introduction of new technologies. As new technologies 
become available to comply with MARPOL Annex VI emission standards and 
the emission standards in this final rule, we are hopeful that emission 
controls on new engines will improve even before our standards take 
effect. Our early banking provisions add an incentive for this to 
occur.
    To the extent that we observe companies not taking reasonable 
measures to introduce emission control technologies, we will need to 
reconsider the importance of setting standards on remanufactured 
engines. In contrast, introduction and use of emission control 
technologies ahead of the regulated schedule may reduce the need for a 
control program for these engines.

C. NTE Requirements for Auxiliary Engines

    We are not at this time finalizing NTE requirements for auxiliary 
marine engines in this final rule. We are contemplating, however, to 
establish NTE requirements for similar land-based nonroad diesel 
engines. When we adopt such requirements for nonroad diesel engines, we 
expect to apply the same provisions, including zones and caps, to 
auxiliary marine diesel engines at the same time.

[[Page 73323]]

D. Application of Provisions to Marine Diesel Engines Less than 37 kW

    Marine diesel engines less than 37 kW were included in the 
rulemaking for nonroad diesel engines and are subject to the emission 
control program contained in 40 CFR Part 89. That program has two tiers 
of emission limits, phased in from 1999 to 2000 for Tier 1 and 2004 to 
2005 for Tier 2. In general, marine diesel engines less than 37 kW are 
subject to the same certification and compliance program as land-based 
nonroad diesel engines. Exceptions to this general approach include the 
duty cycle (E3, but with a C1 option), ABT program restrictions (land-
based credits cannot be used to offset marine diesel emissions), and 
implementation flexibility provisions that allow post-manufacture 
marinizers to phase in compliance with Tier 1 emission limits according 
to the schedule extended to nonroad equipment manufacturers.
    We intend eventually to consolidate the smaller engines in a 
general marine diesel engine regulation. Consolidating existing 
requirements without reopening those issues may, however, cause 
confusion. Commenters did not feel strongly that there would be an 
advantage to combining programs, so we are not consolidating them at 
this time. We will likely pursue the next tier of emission standards 
(i.e., Tier 3) for all marine diesel engines together. This way we will 
be able to integrate the requirements for varying engines sizes in the 
most sensible way.

E. Category 3 Engines

    State and environmental organization commenters have made clear in 
their comments that they are eager to see greater emission reductions 
from Category 3 engines, including PM emissions. These commenters are 
particularly concerned that the MARPOL NOX limits are not 
stringent enough to appreciably reduce NOX inventories and 
ozone levels. Chapter 5 of the Final RIA describes the expected 
NOX reductions from the MARPOL Annex VI limits in more 
detail. There is enough foreign vessel traffic in U.S. ports that these 
engines contribute substantially to local air pollution in port areas. 
However, imposing separate national requirements on foreign-flagged 
ships that use U.S. ports raises sensitive concerns relating to 
international trade and policy. Consequently, we will recommend that 
the United States urge the International Maritime Organization to 
consider and adopt more stringent NOX limits as well as PM 
limits for marine diesel engines. Technologies currently under 
development for very large marine engines hold a lot of promise for 
reducing their emissions in the future. The emission standards 
finalized in this final rule for engines capable of burning heavy fuels 
(15 L/cyl and larger) also suggest that emission improvements can be 
obtained from slow- and medium-speed engines. Finally, the standards in 
this final rule for smaller marine diesel engines will provide a good 
starting point for a new tier of international standards for those 
engines.

VII. Projected Impacts

A. Environmental Impacts

    Chapter 5 of the Final Regulatory Impact Analysis provides a 
detailed explanation of the methodology we used to determine the 
environmental benefits from marine diesel engines associated with this 
final rule. The following discussion gives a general overview of the 
methodology and the results.
1. Category 1 Engines
    For the purposes of the inventory analysis, Category 1 commercial 
engines were divided into commercial propulsion and auxiliary 
categories. Annual emissions were then calculated using engine 
populations, load factors, annual hours of use, rated power, emission 
factors, turnover, and growth rates. The sources for and the values of 
these factors are provided in the Final RIA. Note that we received some 
indication that the annual use for recreational engines may be lower 
than assumed in the inventory analysis and calculations (Table 5-2 of 
the Final Regulatory Impact Analysis).
    Table 6 presents the projected emissions inventory from Category 1 
commercial propulsion and auxiliary marine engines with and without the 
new emission standards. Table 6 also presents the anticipated effects 
of the MARPOL Annex VI standards on the Category 1 NOX 
inventory. The CO standard places a cap on existing emission levels, so 
no benefits are claimed here.

   Table 6.--Category 1 Commercial Propulsion and Auxiliary Emissions Inventory (thousand short tons per year)
----------------------------------------------------------------------------------------------------------------
                                                 HC                    NOX                    PM            CO
                                         -----------------------------------------------------------------------
                  Year                                                MARPOL
                                            Base   Control    Base    Annex   Control    Base   Control    Base
                                                                        VI
----------------------------------------------------------------------------------------------------------------
2000....................................     11.3     11.3      436      434      434     14.0     14.0       69
2005....................................     11.9     11.5      457      449      435     14.7     14.7       72
2010....................................     12.5     11.1      479      465      406     15.4     12.9       76
2020....................................     13.7     10.4      527      506      368     17.0     11.1       83
2030....................................     15.1     11.2      580      556      392     18.7     11.7       91
----------------------------------------------------------------------------------------------------------------

2. Category 2 Engines
    We developed baseline emission inventories for Category 2 marine 
engines under contract with Carnegie Mellon University.10 
For the purposes of this analysis, emissions are included from all 
Category 2 engines operated in the Great Lakes, inland waterways, and 
coastal waters up to 320 kilometers (200 miles) offshore. Emissions 
from U.S.-flagged vessels were determined using ship registry data, 
fuel consumption, rated power, operation assumptions, and fuel specific 
emission factors. Emissions from foreign-flagged vessels were developed 
based on cargo movements and waterways data, vessel speeds, average 
dead weight tonnage per ship, and assumed cargo capacity factors.
---------------------------------------------------------------------------

    \10\ Corbett, J., Fischbeck, P., ``Commercial Marine Emissions 
Inventory and Analysis for United States Continental and Inland 
Waterways,'' Carnegie Mellon University, Order No. 8A-0516-NATX, 
September 1998 (Docket A-97-50; document II-A-01).
---------------------------------------------------------------------------

    To model the benefits of the new standards, we applied an engine 
replacement schedule and new engine standards to the baseline 
inventory. In this case, no emission reductions are expected beyond the 
already low levels of HC. Also, the PM and CO standards are intended as 
caps, and no benefits are claimed for those pollutants. Table 7 shows 
the projected emissions for

[[Page 73324]]

Category 2 vessels with and without the new emission standards. The 
anticipated NOX impacts for the application of MARPOL Annex 
VI standards to U.S.-flagged vessels are also included. The analysis 
presumes no control of emissions beyond MARPOL levels for foreign-
flagged vessels; these are included in the analysis because they 
operate in U.S. waters.

                     Table 7.--Category 2 Emissions Inventory (thousand short tons per year)
----------------------------------------------------------------------------------------------------------------
                                                               HC               NOX                PM       CO
                                                           -----------------------------------------------------
                           Year                                                MARPOL
                                                              Base     Base    Annex   Control    Base     Base
                                                                                 VI
----------------------------------------------------------------------------------------------------------------
2000......................................................     11.1      267      265      265      6.1     34.1
2010......................................................     12.3      295      278      266      6.8     37.7
2020......................................................     13.6      325      292      250      7.5     41.7
2030......................................................     15.0      360      315      243      8.3     46.0
----------------------------------------------------------------------------------------------------------------

3. Total Impacts
    Table 9 contains the baseline annual emissions from marine diesel 
engines at or above 37 kW as a whole as well as projections of the 
annual emissions with the MARPOL Annex VI requirements and EPA 
standards in place. According to this analysis, the emission standards 
in this final rule will result in reductions, beyond the MARPOL Annex 
VI limits, of 8 percent HC, 15 percent NOX, and 11 percent 
PM percent CO from marine diesel engines in 2020. Nationally, these 
reductions represents reductions of 0.9 percent NOX and 0.1 
percent PM. The percent reduction would clearly be much higher for port 
areas. This is especially true for San Diego, Beaumont-Port Arthur, San 
Francisco and similar ports where marine diesel engines account for a 
large fraction of the NOX emissions.11
---------------------------------------------------------------------------

    \11\ Marine diesel engines make up about approximately 17% of 
the NOX on a summer day for San Diego, 15% for Beaumont-
Port Arthur, and 12% for San Francisco. See the final report 
``Commercial Marine Vessel Contributions to Emission Inventories,'' 
submitted by Booz-Allen & Hamilton, Inc., October 7, 1991 (Docket A-
97-50; document II-A-5).

                     Table 9.--Emission Reductions from Engines Subject to Tier 2 Standards
----------------------------------------------------------------------------------------------------------------
                                                                         2000       2010       2020       2030
----------------------------------------------------------------------------------------------------------------
HC (103 short tons)..................  Baseline.....................       22.4       24.7       27.3       30.1
                                       Controlled...................       22.4       23.3       24.0       26.2
                                       Reduction....................         0%         6%        12%        13%
----------------------------------------------------------------------------------------------------------------
NOX (103 short tons).................  Baseline.....................      702.2      773.5      852.2      939.0
                                       MARPOL.......................      699.6      742.3      797.5      871.1
                                       Controlled...................      699.6      672.1      618.0      634.7
                                       Reduction*...................         0%        13%        27%        32%
----------------------------------------------------------------------------------------------------------------
PM 103 short tons....................  Baseline.....................       20.1       22.2       24.4       27.0
                                       Controlled...................      201.1       19.7       18.6       20.0
                                       Reduction....................         0%        11%        24%        26%
----------------------------------------------------------------------------------------------------------------
*This reduction is from the baseline. The Tier 2 standards are expected to achieve a 23 percent reduction in
  2020 from the levels expected from the MARPOL standards.

    In addition to the effect of the new standards on direct PM 
emissions noted above, the standards are expected to reduce the 
concentrations of secondary PM. Secondary PM is formed when 
NOX reacts with ammonia in the atmosphere to yield ammonium 
nitrate particulate. As described in Chapter 5 of the Final RIA, each 
100 tons of NOX reduction results in about a 4-ton reduction 
in secondary PM. This conversion rate varies from region to region, and 
is greatest in the West. We estimate that the 257,000 tons per year 
total NOX reduction projected for marine engines in 2020 
will simultaneously reduce secondary PM by about 10,300 tons. This 
secondary PM reduction is almost double the direct PM reductions for 
2020 projected for this rulemaking.

B. Noise, Energy, and Safety

    Engines designed to meet the new emission standards will generally 
operate at lower noise levels. One important source of noise in diesel 
combustion is the sound associated with the combustion event itself. 
When a premixed charge of fuel and air ignites, the very rapid 
combustion leads to a sharp increase in pressure, which is easily heard 
and recognized as the characteristic sound of a diesel engine. The 
conditions that lead to high noise levels also cause high levels of 
NOX formation. Fuel injection changes and other 
NOX control strategies therefore typically reduce engine 
noise, sometimes dramatically.
    We do not anticipate any negative impacts on energy or safety as a 
result of this final rule. The impact of the new standards on energy is 
measured by the effect on fuel consumption from complying engines. 
Although it is not expected to be a primary compliance strategy, marine 
engine manufacturers could retard engine timing to comply with emission 
limits. This could lead to an increase in fuel consumption in the 
absence of other changes to the engines. Most of the technology changes 
anticipated in response to the new standards, however, have the 
potential to reduce fuel consumption as well as emissions. Therefore, 
on balance, no increase in energy consumption is expected. As far as 
safety is concerned, we believe that marine engine manufacturers will 
use only proven technology that is currently used in

[[Page 73325]]

other engines such as nonroad land-based diesel applications, 
locomotives, and diesel trucks.

C. Economic Impacts

    In assessing the economic impact of setting emission standards, we 
have made a best estimate of the combination of technologies that an 
engine manufacturer will most likely use to meet the new standards. The 
analysis presents estimated cost increases for new engines and 
equipment. This economic impact is comprised of variable costs (for 
hardware and assembly time) and fixed costs (for research and 
development, retooling, and certification). The analysis considers 
total operating costs, including maintenance and fuel consumption, as 
well. Cost estimates based on these projected technology packages 
represent an expected change in the cost of engines as they begin to 
comply with new emission standards. Separate projected costs were 
derived for engines used in five different ranges of rated power; costs 
were developed for engines near the middle of the listed ranges. All 
costs are presented in 1997 dollars. Full details of our cost analysis 
can be found in Chapter 4 of the Final RIA.
    Table 10 summarizes the projected costs of these technologies for 
meeting the new emission limits. Anticipated incremental cost impacts 
of the Tier 2 emission limits for the first years of production range 
from $1,800 to $54,000 per engine, in general with proportionally 
higher projected costs for larger engines. Long-term impacts on engine 
costs are expected to be much lower, dropping to levels between $500 
and $13,000. Most of this cost reduction is accounted for by the fact 
that development time and other fixed costs dominate the cost analysis, 
but disappear after the projected five-year amortization period.
    The cost analysis also includes an estimated burden resulting from 
the need to do additional maintenance work during periodic rebuilds. 
Complying engines will be equipped with technologies that will require 
replacement of hardware that is either more expensive than from earlier 
models, or that is only used because of emission standards. Using 
typical rebuild schedules, the analysis projects incremental costs for 
multiple rebuilds, resulting in net-present-value costs that range from 
$400 to $12,000. In addition to rebuild cost impacts, Table 10 includes 
an estimated cost burden for conducting production line testing of 1 
percent of total industry-wide production.

                             Table 10.--Projected Cost Impacts by Power Rating (kW)
----------------------------------------------------------------------------------------------------------------
                                                                                                      Increased
                            Power rating (kW)                               Short-term   Long-term    operating
                                                                           cost impact  cost impact   cost (npv)
----------------------------------------------------------------------------------------------------------------
37-225...................................................................       $1,798         $486         $442
225-560..................................................................        3,191          846          704
560-1000.................................................................       25,147          856          206
1000-2000................................................................       22,575        1,120          636
2000+....................................................................       53,923       13,019       12,430
----------------------------------------------------------------------------------------------------------------

    The above analysis presents unit cost estimates for each power 
category. With current data for engine and vessel sales for each 
category and projections for the future, these costs can be translated 
into projected direct costs to the nation for the new emission 
standards in any year. Aggregate costs are estimated at about $10 
million in the first year the new standards apply, increasing to a peak 
of about $16 million in 2008 as increasing numbers of engines become 
subject to the new standards. The following years show a drop in 
aggregate costs as the per-unit cost of compliance decreases, resulting 
in aggregate costs of $2 million to $3 million after 2010.
    Some of the anticipated emission-control technologies improve fuel 
efficiency, while others may have a negative effect. We believe that, 
on average, manufacturers will be able to comply with the emission 
standards without increasing fuel consumption relative to today's 
models. This will be less true for engine models that have already 
incorporated advanced technologies. These engines, however, will not 
need to make the extensive hardware changes projected in our analysis, 
so they should have a much smaller increase in production costs. 
Similarly, manufacturers may choose to avoid the high R&D costs of 
implementing a new technology for an engine family with low sales 
volume by relying on timing retard as a lower-cost alternative. To show 
how this compares, we conducted a sensitivity analysis to show the 
costs associated with a fuel penalty resulting from relying on retarded 
timing. The Final RIA quantifies the cost of a timing retard strategy, 
which results in an estimated net-present-value cost increase from fuel 
consumption ranging from $400 for a 100 kW engine to $19,000 for a 3000 
kW engine. This cost results from increased fuel consumption. 
Considering the established effectiveness of timing retard as a 
strategy to control NOX emissions, this may be a viable 
approach, as either a substitute or a supplemental technology.

D. Cost-effectiveness

    We estimated the cost-effectiveness (i.e., the cost per ton of 
emission reduction) of the new emission standards for the same nominal 
power ratings of marine engines and vessels highlighted earlier in this 
section. This analysis has been performed only for Category 1 and 
Category 2 marine engines, since the final rule does not apply to 
Category 3 engines. Chapter 6 of the Final RIA contains a more detailed 
discussion of the cost-effectiveness analysis.
    As described in the Final RIA, neither costs nor emission benefits 
were specifically attributed to the not-to-exceed provisions. The 
calculated cost-effectiveness of the emission standards presented here 
therefore includes all the anticipated effects on costs and emission 
reductions.
1. Tier 2 Cost-Effectiveness
    For determining the cost-effectiveness of the Tier 2 emission 
standards, only benefits beyond those achieved by the MARPOL Annex VI 
standard were considered. This is a conservative estimate because we 
attributed all the costs of the technology associated with the Tier 2 
levels to this action and did not attribute any of these costs to the 
MARPOL Annex VI standard. For the sake of this analysis, we assigned 
the whole cost increase to reducing HC+NOX emissions. 
NOX reductions represent approximately 98 percent of the 
total HC+NOX emission reductions expected from the new 
standards. Table

[[Page 73326]]

11 presents the cost-effectiveness of the Tier 2 standards.

                   Table 11.--Cost-Effectiveness of the Marine Tier 2 Standards for HC and NOX
----------------------------------------------------------------------------------------------------------------
                                                                                                       Cost-
                                                             NPV of        NPV        Discounted   effectiveness
                    Nominal power(kW)                        total       benefits       cost-       without non-
                                                            lifetime      (short    effectiveness     emission
                                                             costs        tons)                       benefit.
----------------------------------------------------------------------------------------------------------------
100.....................................................       $2,239          4.3          $470           $521
400.....................................................        3,894           26           137            151
750.....................................................       25,354           80           318            319
1500....................................................       23,210          267            87             88
3000....................................................       66,353          750            81             89
----------------------------------------------------------------------------------------------------------------

    Weighting the projected cost and emission benefit numbers presented 
above by the populations of the individual power categories, we 
calculated the cost-effectiveness of the Tier 2 HC+NOX 
standards for Category 1 and 2, both separately and combined. Table 12 
contains the resulting aggregate cost-effectiveness results for the 
Tier 2 standards.

             Table 12.--Aggregate Cost-Effectiveness for the Marine Tier 2 Standards for HC and NOX
----------------------------------------------------------------------------------------------------------------
                                                                                                       Cost-
                                                             NPV of        NPV        Discounted   Effectiveness
                                                             total       Benefits       Cost-       without non-
                                                            lifetime      (short    Effectiveness     emission
                                                             costs        tons)                       benefits
----------------------------------------------------------------------------------------------------------------
Category 1..............................................       $4,333           24          $131           $185
Category 2..............................................       66,353          750            64             89
Combined................................................        5,667           39           103            172
----------------------------------------------------------------------------------------------------------------

    While the cost estimates described under the Economic Impacts do 
not take into account the observed value of performance improvements in 
the field, these non-emission benefits should be taken into account in 
the calculation of cost-effectiveness. We believe that an equal 
weighting of emission and non-emission benefits is justified for those 
technologies which clearly have substantial non-emission benefits, 
namely fuel injection changes and turbocharging. For some or all of 
these technologies, a greater value for the non-emission benefits could 
likely be justified. This has the effect of halving the cost for those 
technologies in the cost-effectiveness calculation. The cost-
effectiveness values in this document are based on this calculation 
methodology. Cost-effectiveness values are shown without adjustment for 
non-emission benefits in Tables 11 and 12 for comparison purposes.
2. Comparison to Other Programs
    In an effort to evaluate the cost-effectiveness of the 
HC+NOX controls for marine engines, we have summarized the 
cost-effectiveness results for five other recent EPA mobile source 
rulemakings that required reductions in NOX (or 
NMHC+NOX) emissions. The heavy-duty vehicle portion of the 
Clean Fuel Fleet Vehicle Program yielded a cost-effectiveness of 
approximately $1,500 per ton of NOX. The most recent 
NMHC+NOX standards for highway heavy-duty diesel engines 
yielded a cost-effectiveness of $100-$600 per ton of 
NMHC+NOX. The newly adopted standards for locomotive engines 
yielded a cost-effectiveness of $160-$250 per ton of NOX. 
Finally, the recent standards for nonroad engines reported a cost-
effectiveness of $410-$600 per ton. The cost-effectiveness of the new 
HC+NOX standards for marine diesel engines presented above 
is more favorable than the cost-effectiveness of many other recent 
programs.
    We have also summarized the cost-effectiveness results for three 
other recent EPA mobile source rulemakings that required reductions in 
PM emissions. The cost-effectiveness of the most recent urban bus 
engine PM standard was estimated to be $10,000-$16,000 per ton, and the 
cost-effectiveness of the urban bus retrofit/rebuild program was 
estimated to be approximately $25,000 per ton. The October 1998 nonroad 
diesel final rule reported a cost-effectiveness for PM of $2,300 per 
ton (using the same conservative method used here for marine engines). 
The cost-effectiveness of the PM emission standard for marine diesel 
engines presented above is more favorable than that of either of the 
urban bus programs and is comparable to that of the nonroad rule.
    We also analyzed the PM cost-effectiveness of the new standards by 
attributing half of the increased costs to controlling PM to compare 
with other PM control strategies. This approach effectively double-
counts these costs, since we already assess the full cost of the 
program in the calculation of NOX+HC cost-effectiveness. 
This aggregate discounted lifetime cost-effectiveness represents the 
highest figure that could be expected for cost-effectiveness of the new 
standards and was calculated to provide an indication of the upper 
bound of PM cost-effectiveness values. The resulting fleet-wide 
discounted lifetime cost-effectiveness of the PM standards is 
approximately $600-$2,600 per ton. This cost-effectiveness is much 
better than for the urban bus PM standard and the urban bus retrofit/
rebuild program and is comparable to the nonroad Tier 2 standards.
    In addition to the benefits of reducing ozone within and 
transported into urban ozone nonattainment areas, the NOX 
reductions from the new standards are expected to have beneficial 
impacts with respect to crop damage, secondary particulate formation, 
acid deposition, eutrophication, visibility, and the viability of 
forests, as described earlier.

[[Page 73327]]

Because it is difficult to quantify the monetary value of these 
societal benefits, the cost-effectiveness values presented do not 
assign any numerical value to them.

VIII. Direct Final Changes

    In the proposal for this rulemaking, we did not include 
modifications to the PLT regulations for locomotives in 40 CFR Part 92. 
However, on May 13, 1999, EMA submitted a comment to the public docket 
stating that they believe it is important to make the PLT provisions 
consistent between locomotives and Category 2 marine engines. We agree 
with this comment. This requires two revisions to the locomotive 
regulations. The first revision is the addition of a regulatory 
provision that authorizes the Administrator to conduct alternate PLT 
programs instead of the program specified in the regulations. The 
locomotive FRM preamble stated that we were finalizing such a 
provision, but the regulatory text was not included in the notice. 
Thus, we believe there is good cause to finalize this provision without 
providing the public additional opportunity to comment on it.
    The second issue is related to a technical detail of the locomotive 
PLT program. The previously finalized regulations require that engines 
tested for PLT have service accumulation ``equivalent to 300 hours of 
operation.'' EMA commented that we should require only that they have 
service accumulation ``up to 300 hours of operation,'' which is the 
same as we proposed for marine engines in this rulemaking. Given the 
technical nature of this issue, we believe that it would be appropriate 
to finalize this revision, without providing the public an opportunity 
to comment on them.
    In addition, we are revising the definition of new in 40 CFR 89.2. 
The existing definition inadvertantly omits a portion of the intended 
definition. The revised definition is consistent with our other control 
programs.
    The revisions to 40 CFR parts 89 and 92 will be effective February 
28, 2000, provided that we do not receive notification on or before 
January 28, 2000 that someone wishes to file an adverse or negative 
comment regarding this issue. If we do not receive such comment, this 
provision will become final and effective without further EPA action. 
If on the other hand, we do receive notification on or before January 
28, 2000 that someone wishes to file an adverse or negative comment 
regarding this issue, we will withdraw this revision, then propose it 
and go through full notice-and-comment procedures before finalizing the 
revision again.

IX. Public Participation

    A wide variety of interested parties participated in the rulemaking 
process that culminates with this final rule. This process provided 
several opportunities for public comment over a period of several 
years. We first proposed emission standards for marine diesel engines 
on November 9, 1994 (59 FR 55929), with a supplemental proposal on 
February 7, 1996 (61 FR 4600). An Advance Notice of Proposed Rulemaking 
published May 22, 1998 announced our plan to pursue a new direction in 
regulating marine diesel engines (63 FR 28309). Comments received on 
that notice were considered in the development of the proposal 
(December 11, 1998, 63 FR 68508). The comment period and public hearing 
associated with that proposal provided another opportunity for public 
input. We have also met with a variety of stakeholders at various 
points in the process, including engine manufacturers, engine 
marinizers, vessel builders, environmental organizations, and states.
    We have described and provided responses to the comments on the 
proposed rule in the Summary and Analysis of Comments, which is 
available in the docket for this rulemaking and on the Office of Mobile 
Sources internet home page. Some of the principal areas of comment are 
highlighted here. Engine manufacturers and others had extensive comment 
on the feasibility, appropriate level and timing of the standards. 
Several commenters focused on the proposed Tier 3 standards and the 
largest Category 2 engines. The final rule divides Category 2 into new 
subcategories with differentiated emission standards. Additional 
comments centered on the timing and level of the Tier 2 standards. We 
address these comments in Chapter 3 of the Final RIA and in Chapter 3 
of the Summary and Analysis of Comments. Manufacturers also expressed 
several concerns with the proposed not-to-exceed provisions. They 
questioned the principle of Not-to-Exceed requirements generally and 
their effect on the stringency of the emission standards. They also 
raised practical issues related to the conditions and ranges associated 
with Not-to-Exceed testing. The Summary and Analysis of Comments in 
Chapter 4 provides responses to these comments and describes the 
several changes we made to the proposed rule to address these concerns.
    Though we are not including recreational engines and vessels in 
this final rule, we need to define these terms here to differentiate 
them from commercial models. Engine and vessel manufacturers had 
objections to our proposed definitions, primarily because of potential 
inconsistencies with Coast Guard requirements and the potential 
liability for vessel manufacturers. To address these concerns, we drew 
directly from the existing Coast Guard definitions, with one necessary 
change. A manufacturer needs to establish a vessel's classification as 
commercial or recreational before it is sold or used, so the final 
definitions specify the intent of the manufacturers to produce vessels 
for recreational purposes as the determining factor. We describe this 
further in Section II.E. above and in Chapter 2 of the Summary and 
Analysis of Comments.

X. Administrative Requirements

A. Administrative Designation and Regulatory Analysis

    Under Executive Order 12866, the Agency must determine whether this 
regulatory action is ``significant'' and therefore subject to Office of 
Management and Budget (OMB) review and the requirements of the 
Executive Order (58 FR 51735, Oct. 4, 1993). The order defines 
``significant regulatory action'' as any regulatory action 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.
    Pursuant to the terms of Executive Order 12866, EPA has submitted 
this rulemaking to the Office of Management and Budget for review and 
prepared a Final RIA, which is available in the docket. Any written 
comments from OMB and any EPA response to OMB comments are also in the 
public docket. EPA estimates total societal costs resulting from this 
final rule between $15 million and $20 million for the early years, 
with a decreasing annual figure once manufacturers fully amortize their 
fixed costs.

[[Page 73328]]

B. Regulatory Flexibility

    The Regulatory Flexibility Act (RFA) generally requires an agency 
to conduct a regulatory flexibility analysis of any rule subject to 
notice and comment requirements, unless the Agency certifies that the 
rule will not have a significant economic impact on a substantial 
number of small entities. Small entities include small businesses, 
small not-for-profit enterprises, and small governmental jurisdictions. 
For the reasons set out below, this rulemaking will not have a 
significant impact on a substantial number of small entities.
    EPA has identified four types of entities that may be affected by 
the final rule: base engine manufacturers, post-manufacture marinizers, 
commercial vessel builders, and boat operators.
    The group of companies that marinize their own base engines 
presents no small business impacts concerns because all of the 
manufacturers are large (using the Small Business Administration 
definitions).
    Numerous manufacturers of commercial vessels and commercial boats 
qualify as small businesses. 12 This final rule, however, is 
expected to impose very little additional cost on these entities. 
According to discussions with several of these vessel and boat builders 
and a related trade association, the production of new commercial 
vessels is generally flexible enough to accommodate physical changes to 
an engine without forcing a redesign of the vessel.
---------------------------------------------------------------------------

    \12\ Commercial vessels are larger merchant vessels, typically 
exceeding 400 feet in length and generally used in waterborne trade 
and/or passenger transport. Commercial boats are smaller service, 
industrial, and fishing vessels generally used in inland and coastal 
waters. A more indepth description of these industry sectors is 
contained in ``Industry Characterization: Commercial Marine Vessel 
Manufacturers'' prepared by ICF, Inc. for US Environmental 
Protection Agency, Contract No. 68-C5-0010, September 1998 (Docket 
A-97-50, document II-A-3).
---------------------------------------------------------------------------

    The small entities likely to be affected by the final rule are 
post-manufacture marinizers. These companies modify a land-based engine 
for use in the marine environment. The following discussion of the 
impacts on these companies is derived from an impact assessment 
prepared for this rulemaking by ICF, Inc. and discussions with several 
potentially affected companies. 13
---------------------------------------------------------------------------

    \13\ ``Characterization and Small Business Impact Assessment for 
Small and Large Marine Compression Ignition Engine Manufacturers/
Marinizers,'' prepared by ICF Incorporated for U.S. Environmental 
Protection Agency, Contract Number 68-C5-0010, September 1998 
(Docket A-97-50; document II-A-4).
---------------------------------------------------------------------------

    Through conversations with engine manufacturers and vessel 
builders, EPA initially identified twelve small post-manufacture 
marinizers. Four of these were subsequently eliminated from the 
Agency's analysis (two were eliminated because there were subsidiary 
companies of other companies on the list; two others were eliminated 
because they do not actually manufacture marine engines). The eight 
remaining companies were used to develop a model small company for 
purposes of exploring the impact of this rulemaking. Using this model 
small company as a guide, it was estimated that average compliance 
costs will range from 1.3 percent to 3.9 percent (relative to total 
revenues), depending on the compliance cost scenario used. 
14 As discussed above, this final rule contains many 
provisions to ease the burden of compliance for small post-manufacture 
marinizers.
---------------------------------------------------------------------------

    \14\ ICF explored three cost scenarios: $100,000, $200,000, and 
$300,000 per engine family.
---------------------------------------------------------------------------

    Because the number of companies examined is so small, EPA also 
performed an analysis using company-specific data instead of the model 
company. According to this data, in the least costly compliance 
scenario, four small post-manufacture marinizers may be affected by 
more than 3 percent of sales, two companies by 1 to 3 percent of sales, 
and two companies by less than 1 percent of sales. Of the four 
companies originally thought to be affected by more than 3 percent of 
sales, two were eliminated because they, in fact, only dress engines. 
The original estimate of 3 percent is therefore an overstatement of 
costs for these companies. As discussed above, a company dressing 
engines needs to label the engines, but does not need to demonstrate 
compliance with emission standards. Under the expanded definition of 
engine dressing in the final rule, one additional company would be 
exempt from certification requirements for most of its engines, which 
undergo an exchange of turbochargers. Consequently, it is expected that 
only one small company may be affected by more than 3 percent of annual 
sales. It may, however, be possible for all marinizers subject to 
certification requirements to reduce the impacts of this rule further. 
For example, they can marinize a cleaner engine, thus reducing the 
design and development costs associated with bringing a previous tier 
engine to the new emission standards. Alternatively, they may be able 
to work more closely with the base engine manufacturer to reduce the 
need for extensive redesign of their marinization process.

C. Paperwork Reduction Act

    The information collection requirements in this final rule have 
been submitted for approval to the Office of Management and Budget 
(OMB) under the Paperwork Reduction Act, 44 U.S.C. 3501 et seq. An 
Information Collection Request has been prepared by EPA, and a copy may 
be obtained from Sandy Farmer, OPPE Regulatory Information Division; 
U.S. Environmental Protection Agency (2137); 401 M St., S.W.; 
Washington, DC 20460 or by calling (202) 260-2740.
    The information being collected is to be used by EPA to ensure that 
new marine diesel engines comply with applicable emissions standards 
through certification requirements and various subsequent compliance 
provisions.
    The annual public reporting and recordkeeping burden for this 
collection of information is estimated to average 589 hours per 
response, with collection required annually. The estimated number of 
respondents is 32. Burden means the total time, effort, or financial 
resources expended by persons to generate, maintain, retain, disclose, 
or provide information to or for a federal agency. This includes the 
time needed to review instructions; develop, acquire, install, and 
utilize technology and systems for the purposes of collecting, 
validating, and verifying information, processing and maintaining 
information, and disclosing and providing information; adjusting the 
existing ways to comply with any previously applicable instructions and 
requirements; train personnel to be able respond to a collection of 
information; search data sources; complete and review the collection of 
information; and transmit or otherwise disclose the information.
    An agency may not conduct or sponsor, and a person is not required 
to respond to a collection of information unless it displays a 
currently valid OMB control number. The OMB control numbers for EPA's 
regulations are displayed in 40 CFR Part 9 and 48 CFR Chapter 15.
    In compliance with the Paperwork Reduction Act (44 U.S.C. 3501 et 
seq.), this document announces that the Information Collection Request 
for this rulemaking has been forwarded to the Office of Management and 
Budget (OMB) for review and approval. The Information Collection 
Request describes the nature of the information collection and its 
expected burden and cost. Sections 94.203, 94.206, 94.213, 94.215, 
94.308, 94.309, 94.403, 94.404, 94.406, 94.508, 94.509, 94.803, 
94.1104, 94.1108 do not apply until the Office of

[[Page 73329]]

Management and Budget has approved the information collection 
requirements contained in them. We will publish a document in the 
Federal Register announcing the information collection requirements are 
approved.

D. Unfunded Mandates Reform Act

    Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Public 
Law 104-4, establishes requirements for federal agencies to assess the 
effects of their regulatory actions on state, local, and tribal 
governments and the private sector. Under section 202 of the UMRA, EPA 
generally must prepare a written statement, including a cost-benefit 
analysis, for proposed and final rules with ``federal mandates'' that 
may result in expenditures to state, local, and tribal governments, in 
the aggregate, or to the private sector, of $100 million or more in any 
one year. Before promulgating an EPA rule for which a written statement 
is needed, section 205 of the UMRA generally requires EPA to identify 
and consider a reasonable number of regulatory alternatives and adopt 
the least costly, most cost-effective, or least burdensome alternative 
that achieves the objectives of the rule. The provisions of section 205 
do not apply when they are inconsistent with applicable law. Moreover, 
section 205 allows EPA to adopt an alternative other than the least 
costly, most cost-effective, or least burdensome alternative if the 
Administrator publishes with the final rule an explanation of why that 
alternative was not adopted. Before EPA establishes any regulatory 
requirements that may significantly or uniquely affect small 
governments, including tribal governments, it must have developed under 
section 203 of the UMRA a small government agency plan. The plan must 
provide for notifying potentially affected small governments, enabling 
officials of affected small governments to have meaningful and timely 
input in the development of EPA regulatory proposals with significant 
federal intergovernmental mandates, and informing, educating, and 
advising small governments on compliance with the regulatory 
requirements.
    EPA has determined that this rule does not contain a federal 
mandate that may result in expenditures of $100 million or more for 
state, local, and tribal governments, in the aggregate, or the private 
sector in any one year. The rule does not impose any enforceable duties 
on state, local, or tribal governments, i.e., they manufacture no 
engines and are therefore not required to comply with the requirements 
of this rule. For the same reason, EPA has determined that this rule 
also contains no regulatory requirements that might significantly or 
uniquely affect small governments. EPA projects that annual economic 
effects will be far less than $100 million. Thus, this final rule is 
not subject to the requirements of sections 202 and 205 of the UMRA.

E. National Technology Transfer and Advancement Act

    Section 12(d) of the National Technology Transfer and Advancement 
Act of 1995 (``NTTAA''), Public Law 104-113, section 12(d) (15 U.S.C. 
272 note) directs EPA to use voluntary consensus standards in its 
regulatory activities unless doing so would be inconsistent with 
applicable law or otherwise impractical. Voluntary consensus standards 
are technical standards (e.g., materials specifications, test methods, 
sampling procedures, and business practices) that are developed or 
adopted by voluntary consensus standards bodies. NTTAA directs EPA to 
provide Congress, through OMB, explanations when the Agency decides not 
to use available and applicable voluntary consensus standards.
    In specifying the proposed test procedures for marine engines, we 
sought to maximize consistency with other nonroad programs in 40 CFR 
Parts 89 and 92. This is because most commercial marine engines in the 
U.S. are derivations of engines that are regulated under 40 CFR Parts 
89 and 92. The test procedures from these EPA programs sections are 
very similar to those specified in ISO 8178, with a few important 
differences. First, the ISO procedures correct measured emissions to a 
narrow set of reference testing conditions to minimize variability in 
measured emission values. This is in conflict with our goal generally 
to ensure to control of emissions over the wide range of engine 
operation and ambient conditions that the engine can reasonably be 
expected to encounter in use. The narrow set of ISO reference testing 
conditions is also in conflict with the not-to-exceed emission 
standards in this final rule, which specifically requires manufacturers 
to control emissions in a zone of engine operation over defined ranges 
of test conditions that are wider. Second, the ISO procedures allow 
wide discretion for manufacturers to set important test parameters such 
as rated speed and fuel properties. We describe in the Summary and 
Analysis of Comments why it is important to define an explicit 
procedure to determine an objective value for an engine's rated speed 
and to establish a range of test fuel properties (especially sulfur). 
Third, an ISO committee is in the process of making various corrections 
to the calculations and sampling and analysis procedures currently 
specified in 8178. EPA is hopeful that future ISO test procedures will 
be developed that are usable for the broad range of testing needed, and 
that such procedures could then be adopted by reference. EPA also 
expects that any development of revised test procedures will be done in 
accordance with ISO procedures and in a balanced manner and thus 
include the opportunity for involvement of a range of interested 
parties (potentially including parties such as industry, EPA, state 
governments, and environmental groups) so that the resulting procedures 
can represent these different interests.

F. Protection of Children

    Executive Order 13045, entitled ``Protection of Children from 
Environmental Health Risks and Safety Risks'' (62 FR 19885, April 23, 
1997), applies to a rule that is determined to be ``economically 
significant,'' as defined under Executive Order 12866, if the 
environmental health or safety risk addressed by the rule has a 
disproportionate effect on children. For these rules, the Agency must 
evaluate the environmental health or safety effects of the planned rule 
on children; and explain why the planned regulation is preferable to 
other potentially effective and reasonably feasible alternatives 
considered by the Agency.
    This final rule is not subject to Executive Order 13045, because it 
does not involve decisions on environmental health or safety risks that 
may disproportionately affect children. Moreover, this rule is 
determined not to be economically significant under Executive Order 
12866.

G. Executive Order 13132 (Federalism)

    Executive Order 13132, entitled ``Federalism'' (64 FR 43255, August 
10, 1999), requires EPA to develop an accountable process to ensure 
``meaningful and timely input by State and local officials in the 
development of regulatory policies that have federalism implications.'' 
``Policies that have federalism implications'' is defined in the 
Executive Order to include regulations that have ``substantial direct 
effects on the States, on the relationship between the national 
government and the States, or on the distribution of power and 
responsibilities among the various levels of government.'' Under 
Executive Order 13132, EPA may not issue a regulation that has 
federalism implications, that imposes substantial direct compliance 
costs, and that is not required by statute, unless the Federal 
government provides the funds

[[Page 73330]]

necessary to pay the direct compliance costs incurred by State and 
local governments, or EPA consults with State and local officials early 
in the process of developing the proposed regulation. EPA also may not 
issue a regulation that has federalism implications and that preempts 
State law unless the Agency consults with State and local officials 
early in the process of developing the proposed regulation.
    If EPA complies by consulting, Executive Order 13132 requires EPA 
to provide to the Office of Management and Budget (OMB), in a 
separately identified section of the preamble to the rule, a federalism 
summary impact statement (FSIS). The FSIS must include a description of 
the extent of EPA's prior consultation with State and local officials, 
a summary of the nature of their concerns and the agency's position 
supporting the need to issue the regulation, and a statement of the 
extent to which the concerns of State and local officials have been 
met. Also, when EPA transmits a draft final rule with federalism 
implications to OMB for review pursuant to Executive Order 12866, EPA 
must include a certification from the agency's Federalism Official 
stating that EPA has met the requirements of Executive Order 13132 in a 
meaningful and timely manner.
    This final rule will not have substantial direct effects on the 
States, on the relationship between the national government and the 
States, or on the distribution of power and responsibilities among the 
various levels of government, as specified in Executive Order 13132. 
This final rule creates no mandate on state, local or tribal 
governments. The rule imposes no enforceable duties on these entities, 
because they do not manufacture any engines that are subject to this 
rule. This rule will be implemented at the federal level and impose 
compliance obligations only on private industry. Thus, the requirements 
of section 6 of the Executive Order do not apply to this rule.

H. Consultation and Coordination with Indian Tribal Governments

    Under Executive Order 13084, EPA may not issue a regulation that is 
not required by statute, that significantly or uniquely affects the 
communities of Indian tribal governments, and that imposes substantial 
direct compliance costs on those communities, unless the federal 
government provides the funds necessary to pay the direct compliance 
costs incurred by the tribal governments, or EPA consults with those 
governments. If EPA complies by consulting, Executive Order 13084 
requires EPA to provide to the Office of Management and Budget, in a 
separately identified section of the preamble to the rule, a 
description of the extent of EPA's prior consultation with 
representatives of affected tribal governments, a summary of the nature 
of their concerns, and a statement supporting the need to issue the 
regulation. In addition, Executive Order 13084 requires EPA to develop 
an effective process permitting elected officials and other 
representatives of Indian tribal governments ``to provide meaningful 
and timely input in the development of regulatory policies on matters 
that significantly or uniquely affect their communities.''
    This final rule will not significantly or uniquely affect the 
communities of Indian tribal governments. As noted above, this rule 
will be implemented at the federal level and impose compliance 
obligations only on private industry. Accordingly, the requirements of 
section 3(b) of Executive Order 13084 do not apply to this rule.

I. Submission to Congress and the Comptroller General

    The Congressional Review Act, 5 U.S.C. 801 et seq., as added by the 
Small Business Regulatory Enforcement Fairness Act of 1996, generally 
provides that before a rule may take effect, the agency promulgating 
the rule must submit a rule report, which includes a copy of the rule, 
to each House of the Congress and to the Comptroller General of the 
United States. EPA will submit 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 United States prior 
to publication of the rule in the Federal Register. This rule is not a 
``major rule'' as defined by 5 U.S.C. 804 (2).

XI. Judicial Review

    Under section 307(b) of the Act, EPA finds that these regulations 
are of national applicability. Accordingly, judicial review of this 
action is available only by filing a petition for review in the United 
States Court of Appeals for the District of Columbia Circuit by 
February 28, 2000. Under section 307 (b)(2) of the Act, the 
requirements published in this document may not be challenged later in 
judicial proceedings brought by EPA to enforce these requirements.

List of Subjects

40 CFR Part 89

    Environmental protection, Administrative practice and procedure, 
Confidential business information, Diesel fuel, Imports, Labeling, 
Motor vehicle pollution, Reporting and recordkeeping requirements, 
Research, Vessels, Warranties.

40 CFR Part 92

    Environmental protection, Administrative practice and procedure, 
Air pollution control, Confidential business information, Imports, 
Labeling, Railroads, Reporting and recordkeeping requirements, 
Warranties.

40 CFR Part 94

    Environmental protection, Administrative practice and procedure, 
Air pollution control, Confidential business information, Diesel fuel, 
Imports, Incorporation by reference, Penalties, Reporting and 
recordkeeping requirements, Research, Vessels, Warranties.

    Dated: November 23, 1999.
Carol M. Browner,
Administrator.

    For the reasons set out in the preamble, title 40, chapter I, of 
the Code of Federal Regulations is amended as set forth below.

PART 89--[AMENDED]

    1. The authority citation for Part 89 is revised to read as 
follows:

    Authority: 42 U.S.C. 7521, 7522, 7523, 7524, 7525, 7541, 7542, 
7543, 7545, 7547, 7549, 7550, and 7601(a).

Subpart A--[Amended]

    2. Section 89.1 is revised to read as follows:


Sec. 89.1  Applicability.

    (a) This part applies for all compression-ignition nonroad engines 
(see definition of ``nonroad engine'' in Sec. 89.2) except those 
specified in paragraph (b) of this section. This means that the engines 
for which this part applies include but are not limited to the 
following:
    (1) Compression-ignition engines exempted from the requirements of 
40 CFR Part 92 by 40 CFR 92.907;
    (2) Compression-ignition engines exempted from the requirements of 
40 CFR Part 94 by 40 CFR 94.907;
    (3) Portable compression-ignition engines that are used in but not 
installed in marine vessels (as defined in the General Provisions of 
the United States Code, 1 U.S.C. 3);

[[Page 73331]]

    (4) Non-propulsion compression-ignition engines used in 
locomotives; and
    (5) Compression-ignition marine engines with rated power under 37 
kW.
    (b) (1) Aircraft engines. This part does not apply for engines used 
in aircraft (as defined in 40 CFR 87.1).
    (2) Mining engines. This part does not apply for engines used in 
underground mining of engines used in underground mining equipment and 
regulated by the Mining Safety and Health Administration (MSHA) in 30 
CFR Parts 7, 31, 32, 36, 56, 57, 70, and 75.
    (3) Locomotive engines. This part does not apply for engines that:
    (i) Are subject to the standards of 40 CFR part 92; or
    (ii) Are exempted from the requirements of 40 CFR part 92 by 
exemption provisions of 40 CFR part 92 other than those specified in 40 
CFR 92.907.
    (4) Marine engines. This part does not apply for engines that:
    (i) Are subject to the standards of 40 CFR part 94;
    (ii) Are exempted from the requirements of 40 CFR part 94 by 
exemption provisions of 40 CFR part 94 other than those specified in 40 
CFR 94.907; or
    (iii) Are marine engines (as defined in 40 CFR part 94) with rated 
power at or above 37kW that are manufactured in calendar years in which 
the standards of 40 CFR part 94 are not yet applicable.
    (5) Hobby engines. This part does not apply for engines with a per-
cylinder displacement of less than 50 cubic centimeters.
    3. Section 89.2 is amended by revising the definition of ``New'' to 
read as follows:


Sec. 89.2  Definitions.

* * * * *
    New for purposes of this part, means a nonroad engine, nonroad 
vehicle, or nonroad equipment the equitable or legal title to which has 
never been transferred to an ultimate purchaser. Where the equitable or 
legal title to the engine, vehicle, or equipment is not transferred to 
an ultimate purchaser until after the engine, vehicle, or equipment is 
placed into service, then the engine, vehicle, or equipment will no 
longer be new after it is placed into service. A nonroad engine, 
vehicle, or equipment is placed into service when it is used for its 
functional purposes. With respect to imported nonroad engines, nonroad 
vehicles, or nonroad equipment, the term new means an engine, vehicle, 
or piece of equipment that is not covered by a certificate of 
conformity issued under this part at the time of importation, and that 
is manufactured after the effective date of a regulation issued under 
this part which is applicable to such engine, vehicle, or equipment (or 
which would be applicable to such engine, vehicle, or equipment had it 
been manufactured for importation into the United States).
* * * * *

PART 92--[AMENDED]

    4. The authority citation for Part 92 continues to read as follows:

    Authority: 42 U.S.C. 7522, 7523, 7524, 7525, 7541, 7542, 7543, 
7545, 7547, 7549, 7550 and 7601(a).

Subpart F--[Amended]

    5. Section 92.503 is amended by adding paragraph (c) to read as 
follows:


Sec. 92.503  General Requirements.

* * * * *
    (c) Upon request, the Administrator may also allow manufacturers 
(and remanufacturers, where applicable) to conduct alternate production 
line testing programs, provided the Administrator determines that the 
alternate production line testing program provides equivalent assurance 
that the locomotives and locomotive engines that are being produced 
conform to the provisions of this part. As part of this allowance or 
for other reasons, the Administrator may waive some or all of the 
requirements of this subpart.
    6. Section 92.506 is amended by revising paragraph (c) to read as 
follows:


Sec. 92.506  Test procedures.

* * * * *
    (c) Service Accumulation/Green Engine factor. The manufacturer or 
remanufacturer shall accumulate service on the locomotives and 
locomotive engines to be tested up to 300 hours of operation. In lieu 
of conducting such service accumulation, the manufacturer or 
remanufacturer may establish a Green Engine factor for each regulated 
pollutant for each engine family to be used in calculating emissions 
test results. The manufacturer or remanufacturer shall obtain the 
approval of the Administrator prior to using a Green Engine factor.
* * * * *
    7. Part 94 is added to read as follows:

PART 94--CONTROL OF AIR POLLUTION FROM MARINE COMPRESSION-IGNITION 
ENGINES

Subpart A--General Provisions for Emission Regulations for Compression-
Ignition Marine Engines

Sec.
94.1  Applicability.
94.2  Definitions.
94.3  Abbreviations.
94.4  Treatment of confidential information.
94.5  Reference materials.
94.6  Regulatory structure.
94.7  General standards and requirements.
94.8  Exhaust emission standards.
94.9  Compliance with emission standards.
94.10  Warranty period.
94.11  Requirements for rebuilding certified engines.
94.12  Interim provisions.

Subpart B--Test Procedures

94.101  Applicability.
94.102  General provisions.
94.103  Test procedures for Category 1 marine engines.
94.104  Test procedures for Category 2 marine engines.
94.105  Duty cycles.
94.106  Supplemental test procedures.
94.107  Determination of maximum test speed.
94.108  Test fuels.

Subpart C--Certification Provisions

94.201  Applicability.
94.202  Definitions.
94.203  Application for certification.
94.204  Designation of engine families.
94.205  Prohibited controls, adjustable parameters.
94.206  Required information.
94.207  Special test procedures.
94.208  Certification.
94.209  Special provisions for post-manufacture marinizers.
94.210  Amending the application and certificate of conformity.
94.211  Emission-related maintenance instructions for purchasers.
94.212  Labeling.
94.213  Submission of engine identification numbers.
94.214  Production engines.
94.215  Maintenance of records; submittal of information; right of 
entry.
94.216  Hearing procedures.
94.217  Emission data engine selection.
94.218  Deterioration factor determination.
94.219  Durability data engine selection.
94.220  Service accumulation.
94.221  Application of good engineering judgment.
94.222  Certification of engines on imported vessels.

Subpart D--Certification Averaging, Banking, and Trading Provisions

94.301  Applicability.
94.302  Definitions.
94.303  General provisions.
94.304  Compliance requirements.
94.305  Credit generation and use calculation.
94.306  Certification.

[[Page 73332]]

94.307  Labeling.
94.308  Maintenance of records.
94.309  Reports.
94.310  Notice of opportunity for hearing.

Subpart  E--Emission-related Defect Reporting Requirements, Voluntary 
Emission  Recall Program

94.401  Applicability.
94.402  Definitions.
94.403  Emission defect information report.
94.404  Voluntary emissions recall reporting.
94.405  Alternative report formats.
94.406  Reports filing: record retention.
94.407  Responsibility under other legal provisions preserved.
94.408  Disclaimer of production warranty applicability.

Subpart F--Manufacturer Production Line Testing Programs

94.501  Applicability.
94.502  Definitions.
94.503  General requirements.
94.504  Right of entry and access.
94.505  Sample selection for testing.
94.506  Test procedures.
94.507  Sequence of testing.
94.508  Calculation and reporting of test results.
94.509  Maintenance of records; submittal of information.
94.510  Compliance with criteria for production line testing.
94.511  [Reserved]
94.512  Suspension and revocation of certificates of conformity.
94.513  Request for public hearing.
94.514  Administrative procedures for public hearing.
94.515  Hearing procedures.
94.516  Appeal of hearing decision.
94.517  Treatment of confidential information.

Subpart G--[Reserved]

Subpart H--Recall Regulations

94.701  Applicability.
94.702  Definitions.
94.703  Applicability of 40 CFR Part 85, Subpart S.

Subpart I--Importation of Nonconforming Engines

94.801  Applicability.
94.802  Definitions.
94.803  Admission.
94.804  Exemptions.
94.805  Prohibited acts; penalties.

Subpart J--Exclusion and Exemption Provisions

94.901  Purpose and applicability.
94.902  Definitions.
94.903  Exclusions.
94.904  Exemptions.
94.905  Testing exemption.
94.906  Manufacturer-owned exemption, display exemption, competition 
exemption, and foreign trade vessel exemption.
94.907  Engine dressing exemption.
94.908  National security exemption.
94.909  Export exemptions.
94.910  Granting of exemptions.
94.911  Submission of exemption requests.

Subpart K--[Reserved]

Subpart L--General Enforcement Provisions and Prohibited Acts

94.1101  Applicability.
94.1102  Definitions.
94.1103  Prohibited acts.
94.1104  General enforcement provisions.
94.1105  Injunction proceedings for prohibited acts.
94.1106  Penalties.
94.1107  Warranty provisions.
94.1108  In-use compliance provisions.
Appendix I to Part 94--Emission-Related Engine Parameters and 
Specifications.

    Authority: 42 U.S.C. 7522, 7523, 7524, 7525, 7541, 7542, 7543, 
7545, 7547, 7549, 7550 and 7601(a).

Subpart A--General Provisions for Emission Regulations for 
Compression-Ignition Marine Engines


Sec. 94.1  Applicability.

    (a) Except as noted in paragraphs (b) and (c) of this section, the 
provisions of this part apply to manufacturers (including post-
manufacture marinizers and dressers), rebuilders, owners and operators 
of:
    (1) Marine engines that are compression-ignition engines 
manufactured (or that otherwise become new) on or after January 1, 
2004;
    (2) Marine vessels manufactured (or that otherwise become new) on 
or after January 1, 2004 and which include a compression-ignition 
marine engine.
    (b) Notwithstanding the provision of paragraph (c) of this section, 
the requirements and prohibitions of this part do not apply with 
respect to the engines identified in paragraphs (a)(1) and (2) of this 
section where such engines are:
    (1) Category 3 marine engines;
    (2) Marine engines with rated power below 37 kW; or
    (3) Marine engines on foreign vessels.
    (c) The provisions of subpart L of this part apply to all persons 
with respect to the engines identified in paragraphs (a)(1) and (2) of 
this section.
    (d) The provisions of this part do not apply to any persons with 
respect to the engines not identified in paragraphs (a)(1) and (2) of 
this section.
    (e) The prohibition specified in Sec. 94.1103(a)(6) applies to all 
persons with respect to recreational marine engines. Notwithstanding 
the provision of paragraph (c) of this section, requirements or 
prohibitions other than the prohibition specified in Sec. 94.1103(a)(6) 
do not apply with respect to recreational marine engines.


Sec. 94.2  Definitions.

    (a) The definitions of this section apply to this subpart. They 
also apply to all subparts of this part, except where noted otherwise.
    (b) As used in this part, all terms not defined in this section 
shall have the meaning given them in the Act: Act means the Clean Air 
Act as amended (42 U.S.C. 7401 et seq.).
    Adjustable Parameter means any device, system, or element of design 
which is physically or electronically capable of being adjusted 
(including those which are difficult to access) and which, if adjusted, 
may affect emissions or engine performance during emission testing.
    Administrator means the Administrator of the Environmental 
Protection Agency or his/her authorized representative.
    Aftertreatment system or aftertreatment component or aftertreatment 
technology means any system or component or technology mounted 
downstream of the exhaust valve or exhaust port whose design function 
is to reduce exhaust emissions.
    Applicable standard means a standard to which an engine is subject; 
or, where an engine is certified to another standard or FEL, applicable 
standard means the other standard or FEL to which the engine is 
certified, as allowed by Sec. 94.8. This definition does not apply to 
subpart D of this part.
    Auxiliary engine means a marine engine that is not a propulsion 
engine.
    Auxiliary emission control device (AECD) means any element of 
design which senses temperature, vessel speed, engine RPM, atmospheric 
pressure, manifold pressure or vacuum, or any other parameter for the 
purpose of activating, modulating, delaying, or deactivating the 
operation of any part of the emission control system (including, but 
not limited to injection timing); or any other feature that causes in-
use emissions to be higher than those measured under test conditions.
    Averaging means the exchange of emission credits among engine 
families within a given manufacturer's product line.
    Banking means the retention of emission credits by a credit holder 
for use in future calendar year averaging or trading as permitted by 
the regulations in this part.
    Base engine means a land-based engine to be marinized, as 
configured prior to marinization.
    Blue Sky Series engine means an engine meeting the requirements of 
Sec. 94.7(e).
    Calibration means the set of specifications, including tolerances, 
specific to a particular design, version, or application of a 
component, or components, or assembly capable of functionally 
describing its operation over its working range.

[[Page 73333]]

    Category 1 means relating to a marine engine with a rated power 
greater than or equal to 37 kilowatts and a specific engine 
displacement less than 5.0 liters per cylinder.
    Category 2 means relating to a marine engine with a specific engine 
displacement greater than or equal to 5.0 liters per cylinder but less 
than 30 liters per cylinder.
    Category 3 means relating to a marine engine with a specific engine 
displacement greater than or equal to 30 liters per cylinder.
    Commercial marine engine means a marine engine that is not a 
recreational marine engine.
    Compliance date means the date on which compliance with a standard 
becomes mandatory. For example, the compliance date for standards which 
first apply to the 2004 model year, is January 1, 2004.
    Compression-ignition means relating to a type of engine with 
operating characteristics significantly similar to the theoretical 
Diesel combustion cycle. The non-use of a throttle to regulate intake 
air flow for controlling power during normal operation is indicative of 
a compression-ignition engine.
    Configuration means any subclassification of an engine family which 
can be described on the basis of gross power, emission control system, 
governed speed, injector size, engine calibration, and other parameters 
as designated by the Administrator.
    Constant-speed engine means an engine that is governed to operate 
only at a single rated speed.
    Crankcase emissions means airborne substances emitted to the 
atmosphere from any portion of the engine crankcase ventilation or 
engine lubrication system.
    Defeat device means an AECD or other control feature that reduces 
the effectiveness of the emission control system under conditions which 
may reasonably be expected to be encountered in normal engine operation 
and use, unless the AECD or other control feature has been identified 
by the manufacturer in the application for certification, and:
    (1) Such conditions are substantially represented by the portion of 
the applicable duty cycle of Sec. 94.105 during which the applicable 
emission rates are measured;
    (2) The need for the AECD or other control feature is justified in 
terms of protecting the engine or vessel against damage or accident; or
    (3) The AECD or other control feature does not go beyond the 
requirements of engine starting.
    Designated Officer means the person designated by the Director of 
the Office of Mobile Sources to act as the Designated Officer under the 
provisions of this part. For marine engines, the address for the 
Designated Officer is: Group Manager, Engine Compliance Group, U.S. EPA 
(mail code 6403J), 401 M Street SW, Washington, DC, 20460.
    Deterioration factor means the difference between exhaust emissions 
at the end of useful life and exhaust emissions at the low hour test 
point expressed as either: the ratio of exhaust emissions at the end of 
useful life to exhaust emissions at the low hour test point (for 
multiplicative deterioration factors); or the difference between 
exhaust emissions at the end of useful life and exhaust emissions at 
the low hour test point (for additive deterioration factors).
    Diesel fuel means any fuel suitable for use in diesel engines which 
is commonly or commercially known or sold as diesel fuel.
    Dresser means any entity that modifies a land-based engine for use 
in a marine vessel, in compliance with the provisions of Sec. 94.907. 
This means that dressers may not modify the engine in a way that would 
affect emissions.
    Emission control system means those devices, systems or elements of 
design which control or reduce the emission of substances from an 
engine. This includes, but is not limited to, mechanical and electronic 
components and controls, and computer software.
    Emission credits means the amount of emission reduction or 
exceedance, by an engine family, below or above the emission standard, 
respectively, as calculated under subpart D of this part. Emission 
reductions below the standard are considered as ``positive credits,'' 
while emission exceedances above the standard are considered as 
``negative credits.'' In addition, ``projected credits'' refer to 
emission credits based on the projected applicable production/sales 
volume of the engine family. ``Reserved credits'' are emission credits 
generated within a calendar year waiting to be reported to EPA at the 
end of the calendar year. ``Actual credits'' refer to emission credits 
based on actual applicable production/sales volume as contained in the 
end-of-year reports submitted to EPA.
    Emission-data engine means an engine which is tested for purposes 
of emission certification or production line testing.
    Emission-related defect means a defect in design, materials, or 
workmanship in a device, system, or assembly which affects any 
parameter or specification enumerated in Appendix I of this part.
    Emission-related maintenance means that maintenance which 
substantially affects emissions or which is likely to affect the 
deterioration of the engine or vessel with respect to emissions.
    Engine family means a group of engine configurations that are 
expected to have similar emission characteristics throughout the useful 
lives of the engines (see Sec. 94.204), and that are (or were) covered 
(or requested to be covered) by a specific certificate of conformity.
    Engineering analysis means a summary of scientific and/or 
engineering principles and facts that support a conclusion made by a 
manufacturer, with respect to compliance with the provisions of this 
part.
    EPA Enforcement Officer means any officer or employee of the 
Environmental Protection Agency so designated in writing by the 
Administrator or his/her designee.
    Exhaust emissions means substances (i.e., gases and particles) 
emitted to the atmosphere from any opening downstream from the exhaust 
port or exhaust valve of an engine.
    Exhaust gas recirculation means an emission control technology that 
reduces emissions by routing gases that had been exhausted from the 
combustion chamber(s) back into the engine to be mixed with incoming 
air prior to or during combustion. The use of valve timing to increase 
the amount of residual exhaust gas in the combustion chamber(s) that is 
mixed with incoming air prior to or during combustion is not considered 
to be exhaust gas recirculation for the purposes of this part.
    Family Emission Limit (FEL) means an emission level declared by the 
certifying manufacturer to serve in lieu of an otherwise applicable 
emission standard for certification and compliance purposes in the 
averaging, banking and trading program. FELs are expressed to the same 
number of decimal places as the applicable emission standard.
    Foreign vessel means a vessel of foreign registry or a vessel 
operated under the authority of a country other than the United States.
    Fuel system means the combination of fuel tank(s), fuel pump(s), 
fuel lines and filters, pressure regulator(s), and fuel injection 
components, fuel system vents, and any other component involved in the 
delivery of fuel to the engine.
    Green Engine Factor means a factor that is applied to emission

[[Page 73334]]

measurements from an engine that has had little or no service 
accumulation. The Green Engine Factor adjusts emission measurements to 
be equivalent to emission measurements from an engine that has had 
approximately 300 hours of use.
    Identification number means a specification (for example, model 
number/serial number combination) which allows a particular engine to 
be distinguished from other similar engines.
    Importer means an entity or person who imports engines from a 
foreign country into the United States (including its territories).
    Intermediate Speed means peak torque speed if peak torque speed 
occurs from 60 to 75 percent of maximum test speed. If peak torque 
speed is less than 60 percent of maximum test speed, intermediate speed 
means 60 percent of maximum test speed. If peak torque speed is greater 
than 75 percent of maximum test speed, intermediate speed means 75 
percent of maximum test speed.
    Low hour engine means an engine during the interval between the 
time that normal assembly operations and adjustments are completed and 
the time that 300 additional operating hours have been accumulated 
(including hours of operation accumulated during emission testing, if 
performed).
    Malfunction means a condition in which the operation of a component 
in an engine occurs in a manner other than that specified by the 
certifying manufacturer (e.g., as specified in the application for 
certification); or the operation of an engine in that condition.
    Manufacturer means any person engaged in the manufacturing or 
assembling of new engines or importing such engines for resale, or who 
acts for and is under the control of any such person in connection with 
the distribution of such engines. The term manufacturer includes post-
manufacturer marinizers, but does not include any dealer with respect 
to new engines received by such person in commerce.
    Manufacturer-owned engine means an uncertified marine engine that 
is owned and controlled by a manufacturer, is used for product 
development, and is not sold or leased.
    Marine engine means an engine that is installed or intended to be 
installed on a marine vessel. This definition does not include portable 
auxiliary engines for which the fueling, cooling and exhaust systems 
are not integral parts of the vessel.
    Marine vessel has the meaning specified in the General Provisions 
of the United States Code, 1 U.S.C. 3.
    Maximum Test Power means:
    (1) For Category 1 engines, the power output observed at the 
maximum test speed with the maximum fueling rate possible.
    (2) For Category 2 engines, 90 percent of the power output observed 
at the maximum test speed with the maximum fueling rate possible.
    Maximum Test Torque means the torque output observed at the test 
speed with the maximum fueling rate possible at that speed.
    Method of aspiration means the method whereby air for fuel 
combustion enters the engine (e.g., naturally aspirated or 
turbocharged).
    Model year means the manufacturer's annual new model production 
period which includes January 1 of the calendar year, ends no later 
than December 31 of the calendar year, and does not begin earlier than 
January 2 of the previous calendar year. Where a manufacturer has no 
annual new model production period, model year means calendar year.
    New marine engine means:
    (1)(i) A marine engine, the equitable or legal title to which has 
never been transferred to an ultimate purchaser;
    (ii) A marine engine installed on a vessel, the equitable or legal 
title to such vessel has never been transferred to an ultimate 
purchaser; or
    (iii) A marine engine that has not been placed into service on a 
vessel.
    (2) Where the equitable or legal title to an engine or vessel is 
not transferred to an ultimate purchaser prior to its being placed into 
service, the engine ceases to be new after it is placed into service.
    (3) With respect to imported engines, the term ``new marine 
engine'' means an engine that is not covered by a certificate of 
conformity under this part at the time of importation, and that was 
manufactured after the starting date of the emission standards in this 
part which are applicable to such engine (or which would be applicable 
to such engine had it been manufactured for importation into the United 
States).
    New vessel means:
    (1)(i) A vessel, the equitable or legal title to which has never 
been transferred to an ultimate purchaser; or
    (ii) A vessel that has been modified such that the value of the 
modifications exceeds 50 percent of the value of the modified vessel.
    (2) Where the equitable or legal title to a vessel is not 
transferred to an ultimate purchaser prior to its being placed into 
service, the vessel ceases to be new when it is placed into service.
    Nonconforming marine engine means a marine engine which is not 
covered by a certificate of conformity prior to importation or being 
offered for importation (or for which such coverage has not been 
adequately demonstrated to EPA); or a marine engine which was 
originally covered by a certificate of conformity, but which is not in 
a certified configuration, or otherwise does not comply with the 
conditions of that certificate of conformity.

    Note: This definition does not include domestic marine engines 
which are not covered by a certificate of conformity prior to their 
introduction into U.S. commerce; such engines are considered to be 
``noncomplying marine engines.''

    Oxides of nitrogen means nitric oxide and nitrogen dioxide. Oxides 
of nitrogen are expressed quantitatively as if the nitric oxide were in 
the form of nitrogen dioxide (oxides of nitrogen are assumed to have a 
molecular weight equivalent to nitrogen dioxide).
    Passenger has the meaning given by 46 U.S.C. 2101(21). This 
generally means that a passenger is a person that pays to be on the 
vessel.
    Post-manufacture marinizer means an entity that produces a marine 
engine by modifying a non-marine engine, whether certified or 
uncertified, complete or partially complete, where such entity is not 
controlled by the manufacturer of the base engine or by an entity that 
also controls the manufacturer of the base engine. In addition, vessel 
manufacturers that substantially modify marine engines are post-
manufacture marinizers. For the purpose of this definition, 
``substantially modify'' means changing an engine in a way that could 
change engine emission characteristics.
    Presentation of credentials means the display of the document 
designating a person as an EPA enforcement officer.
    Primary fuel means that type of fuel (e.g., petroleum distillate 
diesel fuel) that is expected to be consumed in the greatest quantity 
(volume basis) when the engine is operated in use.
    Propulsion engine means an engine that moves a vessel through the 
water or directs the movement of a vessel.
    Recreational marine engine means a propulsion marine engine that is 
intended by the manufacturer to be installed on a recreational vessel, 
and which is permanently labeled as follows: ``THIS ENGINE IS 
CATEGORIZED AS A RECREATIONAL ENGINE UNDER 40 CFR PART 94, AND IS NOT 
SUBJECT TO THE EMISSION STANDARDS OF THAT PART. INSTALLATION OF THIS 
ENGINE IN ANY NONRECREATIONAL VESSEL IS

[[Page 73335]]

A VIOLATION OF FEDERAL LAW SUBJECT TO CIVIL PENALTY.''
    Recreational vessel means a vessel that is intended by the vessel 
manufacturer to be operated primarily for pleasure or leased, rented or 
chartered to another for the latter's pleasure. For this definition, 
the term ``operated primarily for pleasure or leased, rented or 
chartered to another for the latter's pleasure'' does not include the 
following vessels:
    (1) Vessels of less than 100 gross tons that carry more than 6 
passengers (as defined in this section).
    (2) Vessels of 100 gross tons or more that carry one or more 
passengers (as defined in this section).
    (3) Vessels used solely for competition.
    Service life means the total life of an engine. Service life begins 
when the engine is originally manufactured and continues until the 
engine is permanently removed from service.
    Specific emissions means emissions expressed on the basis of 
observed brake power, using units of g/kW-hr. Observed brake power 
measurement includes accessories on the engine if these accessories are 
required for running an emission test (except for the cooling fan). 
When it is not possible to test the engine in the gross conditions, for 
example if the engine and transmission form a single integral unit, the 
engine may be tested in the net condition. Power corrections from net 
to gross conditions will be allowed with prior approval of the 
Administrator.
    Specified by a certificate of conformity or specified in a 
certificate of conformity means stated or otherwise specified in a 
certificate of conformity or an approved application for certification.
    Test engine means an engine in a test sample.
    Test sample means the collection of engines or vessels selected 
from the population of an engine family for emission testing.
    Tier 2 means relating to an engine subject to the Tier 2 emission 
standards listed in Sec. 94.8.
    Total Hydrocarbon Equivalent means the sum of the carbon mass 
contributions of non-oxygenated hydrocarbons, alcohols and aldehydes, 
or other organic compounds that are measured separately as contained in 
a gas sample, expressed as petroleum-fueled engine hydrocarbons. The 
hydrogen-to-carbon ratio of the equivalent hydrocarbon is 1.85:1.
    Trading means the exchange of engine emission credits between 
credit holders.
    Ultimate Purchaser means, with respect to any new engine or vessel, 
the first person who in good faith purchases such new engine or vessel 
for purposes other than resale.
    United States. United States includes the customs territory of the 
United States as defined in 19 U.S.C. 1202, and the Virgin Islands, 
Guam, American Samoa, and the Commonwealth of the Northern Mariana 
Islands.
    U.S.-directed production volume means the number of marine engine 
units, subject to this part, produced by a manufacturer for which the 
manufacturer has reasonable assurance that sale was or will be made to 
ultimate purchasers in the United States.
    Useful life means the period during which an engine is designed to 
properly function in terms of reliability and fuel consumption, without 
being remanufactured, specified as hours of operation and years. It is 
the period during which a new engine is required to comply with all 
applicable emission standards. (Note: Sec. 94.9(a) specifies minimum 
requirements for useful life values.)
    Vessel means a marine vessel.
    Voluntary emission recall means a repair, adjustment, or 
modification program voluntarily initiated and conducted by a 
manufacturer to remedy any emission-related defect for which 
notification of engine or vessel owners has been provided.


Sec. 94.3  Abbreviations.

    The abbreviations of this section apply to all subparts of this 
part and have the following meanings:

AECD--Auxiliary emission control device.
API--American Petroleum Institute.
ASTM--American Society for Testing and Materials.
 deg.C--Degrees Celsius.
CI--Compression ignition.
CO--Carbon monoxide.
CO2--Carbon dioxide.
disp.--volumetric displacement of an engine cylinder.
EGR--Exhaust gas recirculation.
EP--End point.
EPA--Environmental Protection Agency.
FEL--Family emission limit.
ft--foot or feet.
FTP--Federal Test Procedure.
g--gram(s).
g/kW-hr--Grams per kilowatt hour.
gal--U.S. gallon.
h--hour(s).
HC--hydrocarbon.
Hg--Mercury.
hp--horsepower.
ICI--Independent Commercial Importer.
in--inch(es).
K--Kelvin.
kg--kilogram(s).
km--kilometer(s).
kPa--kilopascal(s).
kW--kilowatt.
L/cyl--liters per cylinder.
m--meter(s).
max--maximum.
mg--milligram(s).
min--minute.
ml--milliliter(s).
mm--millimeter.
NIST--National Institute for Standards and Testing.
NMHC--Non-methane hydrocarbons.
NTIS--National Technical Information Service.
NO--nitric oxide.
NO2--nitrogen dioxide.
NOX--oxides of nitrogen.
No.--number.
O2--oxygen.
pct--percent.
PM--particulate matter.
PMM--post-manufacture marinizer.
ppm--parts per million by volume.
ppmC--parts per million, carbon.
rpm--revolutions per minute.
s--second(s).
SAE--Society of Automotive Engineers.
SEA--Selective Enforcement Auditing.
SI--International system of units (i.e., metric).
THC--Total hydrocarbon.
THCE--Total hydrocarbon equivalent.
U.S.--United States.
U.S.C.--United States Code.
vs--versus.
W--watt(s).
wt--weight.


Sec. 94.4  Treatment of confidential information.

    (a) Any manufacturer may assert that some or all of the information 
submitted pursuant to this part is entitled to confidential treatment 
as provided by 40 CFR part 2, subpart B.
    (b) Any claim of confidentiality must accompany the information at 
the time it is submitted to EPA.
    (c) To assert that information submitted pursuant to this part is 
confidential, a person or manufacturer must indicate clearly the items 
of information claimed confidential by marking, circling, bracketing, 
stamping, or otherwise specifying the confidential information. 
Furthermore, EPA requests, but does not require, that the submitter 
also provide a second copy of its submittal from which all confidential 
information has been deleted. If a need arises to publicly release 
nonconfidential information, EPA will assume that the submitter has 
accurately deleted the confidential information from this second copy.
    (d) If a claim is made that some or all of the information 
submitted pursuant to this part is entitled to confidential treatment, 
the information covered by that confidentiality claim will be disclosed 
by EPA only to the extent and by means of the procedures set forth in 
40 CFR part 2, subpart B.
    (e) Information provided without a claim of confidentiality at the 
time of submission may be made available to

[[Page 73336]]

the public by EPA without further notice to the submitter, in 
accordance with 40 CFR 2.204(c)(2)(i)(A).


Sec. 94.5  Reference materials.

    (a) The documents in paragraph (b) of this section have been 
incorporated by reference. The incorporation by reference was approved 
by the Director of the Federal Register in accordance with 5 U.S.C. 
552(a) and 1 CFR part 51. Copies may be inspected at U.S. EPA, OAR, 401 
M Street, SW., Washington, DC 20460, or at the Office of the Federal 
Register, 800 North Capitol Street, NW., suite 700, Washington, DC.
    (b) The following paragraphs and tables set forth the material that 
has been incorporated by reference in this part:
    (1) ASTM material. The following table sets forth material from the 
American Society for Testing and Materials that has been incorporated 
by reference. The first column lists the number and name of the 
material. The second column lists the section(s) of the part, other 
than this section, in which the matter is referenced. The second column 
is presented for information only and may not be all-inclusive. More 
recent versions of these standards may be used with advance approval of 
the Administrator. Copies of these materials may be obtained from 
American Society for Testing and Materials, 100 Barr Harbor Dr., West 
Conshohocken, PA 19428. The table follows:

------------------------------------------------------------------------
        Document number and name             40 CFR part 94 reference
------------------------------------------------------------------------
ASTM D 86-97: ``Standard Test Method     Sec.  94.108 to Subpart D.
 for Distillation of Petroleum Products
 at Atmospheric Pressure''.
ASTM D 93-97: ``Standard Test Methods    Sec.  94.108 to Subpart D.
 for Flash-Point by Pensky-Martens
 Closed Cup Tester''.
ASTM D 129-95: ``Standard Test Method    Sec.  94.108 to Subpart D.
 for Sulfur in Petroleum Products
 (General Bomb Method)''.
ASTM D 287-92: ``Standard Test Method    Sec.  94.108 to Subpart D.
 for API Gravity of Crude Petroleum and
 Petroleum Products'' (Hydrometer
 Method).
ASTM D 445-97: ``Standard Test Method    Sec.  94.108 to Subpart D.
 for Kinematic Viscosity of Transparent
 and Opaque Liquids (and the
 Calculation of Dynamic Viscosity)''.
ASTM D 613-95: ``Standard Test Method    Sec.  94.108 to Subpart D.
 for Cetane Number of Diesel Fuel Oil''.
ASTM D 1319-98: ``Standard Test Method   Sec.  94.108 to Subpart D.
 for Hydrocarbon Types in Liquid
 Petroleum Products by Fluorescent
 Indicator Adsorption''.
ASTM D 2622-98: ``Standard Test Method   Sec.  94.108 to Subpart D.
 for Sulfur in Petroleum Products by
 Wavelength Dispersive X-ray
 Fluorescence Spectrometry''.
ASTM D 5186-96: ``Standard Test Method   Sec.  94.108 to Subpart D.
 for ``Determination of the Aromatic
 Content and Polynuclear Aromatic
 Content of Diesel Fuels and Aviation
 Turbine Fuels By Supercritical Fluid
 Chromatography''.
ASTM E 29-93a: ``Standard Practice for   Secs.  94.9, 94.218, 94.305,
 Using Significant Digits in Test Data    94.508.
 to Determine Conformance with
 Specifications''.
------------------------------------------------------------------------

    (2) [Reserved]


Sec. 94.6  Regulatory structure.

    This section provides an overview of the regulatory structure of 
this part.
    (a) The regulations of this Part 94 are intended to control 
emissions from in-use marine engines.
    (b) The engines for which the regulations of this part (i.e., 40 
CFR part 94) apply are specified by Sec. 94.1, and by the definitions 
of Sec. 94.2. The point at which an engine or vessel becomes subject to 
the regulations of this part is determined by the definitions of new 
marine engine and new marine vessel in Sec. 94.2. Subpart J of this 
part contains provisions exempting certain engines and vessels from the 
emission standards in this part under special circumstances.
    (c) To comply with the requirements of this part, a manufacturer 
must demonstrate to EPA that the engine meets the applicable standards 
of Secs. 94.7 and 94.8, and all other requirements of this part. The 
requirements of this certification process are described in subparts C 
and D of this part.
    (d) Subpart B of this part specifies procedures and equipment to be 
used for conducting emission tests for the purpose of the regulations 
of this part.
    (e) Subparts E, F, and H of this part specify requirements for 
manufacturers after certification; that is during production and use of 
the engines.
    (f) Subpart I of this part contains requirements applicable to the 
importation of marine engines covered by the provisions of this part.
    (g) Subpart L of this part describes prohibited acts and contains 
other enforcement provisions relating to marine engines and vessels 
covered by the provisions of this part.
    (h) Unless specified otherwise, the provisions of this part apply 
to all marine engines and vessels subject to the emission standards of 
this part.


Sec. 94.7  General standards and requirements.

    (a) Marine engines and vessels may not be equipped with a defeat 
device.
    (b) An engine may not be equipped with an emission control system 
for the purpose of complying with emission standards if such a system 
will cause or contribute to an unreasonable risk to public health, 
welfare, or safety in its operation or function.
    (c) An engine with an emission control system may not emit any 
noxious or toxic substance which would not be emitted in the operation 
of the engine in the absence of such a system, except as specifically 
permitted by regulation.
    (d) All engines subject to the emission standards of this part 
shall be equipped with a connection in the engine exhaust system that 
is located downstream of the engine and before any point at which the 
exhaust contacts water (or any other cooling/scrubbing medium) for the 
temporary attachment of gaseous and/or particulate emission sampling 
equipment. This connection shall be internally threaded with standard 
pipe threads of a size not larger than one-half inch, and shall be 
closed by a pipe-plug when not in use. (Equivalent connections are 
allowed.)
    (e) Electronically controlled engines subject to the emission 
standards of this part shall broadcast on engine's controller area 
networks engine torque

[[Page 73337]]

(as percent of maximum) and engine speed.


Sec. 94.8  Exhaust emission standards.

    (a) Exhaust emissions from marine compression-ignition engines 
shall not exceed the applicable exhaust emission standards contained in 
Table A-1 as follows:

                         Table A-1.--Primary Tier 2 Exhaust Emission Standards (g/kw-hr)
----------------------------------------------------------------------------------------------------------------
  Engine size--liters/cylinder, rated                                   Model    THC+NOX g/  CO g/kW-   PM g/kW-
                 power                            Category             Year \1\    /kW-hr       hr         hr
----------------------------------------------------------------------------------------------------------------
Disp. <0.9 and power  37 kW  Category 1..................       2005        7.5        5.0       0.40
0.9 disp. <1.2 all power     Category 1..................       2004        7.2        5.0       0.30
 levels.
1.2 disp. <2.5 all power     Category 1..................       2004        7.2        5.0       0.20
 levels.
2.5 disp. <5.0 all power     Category 1..................       2007        7.2        5.0       0.20
 levels.
5.0 disp. <15.0 all power    Category 2..................       2007        7.8        5.0       0.27
 levels.
15.0 disp. <20.0 power <     Category 2..................       2007        8.7        5.0       0.50
 3300 kW.
15.0 disp. <20.0 power  3300 kW.
20.0 disp. <25.0 all power   Category 2..................       2007        9.8        5.0       0.50
 levels.
25.0 disp. <30.0 all power   Category 2..................       2007       11.0        5.0      0.50
 levels.
----------------------------------------------------------------------------------------------------------------
\1\ The model years listed indicate the model years for which the specified standards start.

    (b) Exhaust emissions of oxides of nitrogen, carbon monoxide, 
hydrocarbon, and particulate matter (and other compounds, as 
applicable) shall be measured using the procedures set forth in subpart 
B of this part.
    (c) In lieu of the THC+NOX standards, and PM standards 
specified in paragraph (a) of this section, manufacturers may elect to 
include engine families in the averaging, banking, and trading program, 
the provisions of which are specified in subpart D of this part. The 
manufacturer shall then set a family emission limit (FEL) which will 
serve as the standard for that engine family.
    (d)(1) Naturally aspirated engines subject to the standards of this 
section shall not discharge crankcase emissions into the ambient 
atmosphere.
    (2) For engines using turbochargers, pumps, blowers, or 
superchargers for air induction, if the engine discharges crankcase 
emissions into the ambient atmosphere in use, these crankcase emissions 
shall be included in all exhaust emission measurements.
    (e) Exhaust emissions from propulsion engines subject to the 
standards (or FELs) in paragraph (a), (c), or (f) of this section shall 
not exceed:
    (1) 1.20 times the applicable standards (or FELs) when tested in 
accordance with the supplemental test procedures specified in 
Sec. 94.106 at loads greater than or equal to 45 percent of the maximum 
power at rated speed or 1.50 times the applicable standards (or FELs) 
at loads less than 45 percent of the maximum power at rated speed; or
    (2) 1.25 times the applicable standards (or FELs) when tested over 
the whole power range in accordance with the supplemental test 
procedures specified in Sec. 94.106.
    (f) The following paragraphs define the requirements for low-
emitting Blue Sky Series engines.
    (1) Voluntary standards. Engines may be designated ``Blue Sky 
Series'' engines through the 2010 model year by meeting the voluntary 
standards listed in Table A-2, which apply to all certification and in-
use testing, as follows:

           Table A-2.--Voluntary Emission Standards (g/kW-hr)
------------------------------------------------------------------------
              Rated Brake Power (kW)                 THC+NOX       PM
------------------------------------------------------------------------
Power 37 kW, and displ.<0.9............        4.0       0.24
0.9displ.<1.2..........................        4.0       0.18
1.2displ.<2.5..........................        4.0       0.12
2.5displ.<5............................        5.0       0.12
5displ.<15.............................        5.0       0.16
15 disp. <20, and power <3300 kW.......        5.2       0.30
15 disp. <20, and power 3300        5.9       0.30
 kW...............................................
20 disp. <25...........................        5.9       0.30
25 disp. <30...........................        6.6       0.30
------------------------------------------------------------------------

    (2) Additional standards. Blue Sky Series engines are subject to 
all provisions that would otherwise apply under this part.
    (3) Test procedures. Manufacturers may use an alternate procedure 
to demonstrate the desired level of emission control if approved in 
advance by the Administrator.
    (g) Standards for alternative fuels. The standards described in 
this section apply to compression-ignition engines, irrespective of 
fuel, with the following two exceptions:
    (1) Engines fueled with natural gas shall comply with 
NMHC+NOX standards that are numerically equivalent to the 
THC+NOX described in paragraph (a) of this section; and
    (2) Engines fueled with alcohol fuel shall comply with 
THCE+NOX standards that are numerically equivalent to the 
THC+NOX described in paragraph (a) of this section.


Sec. 94.9  Compliance with emission standards.

    (a) The general standards and requirements in Sec. 94.7 and the 
emission standards in Sec. 94.8 apply to each new engine throughout its 
useful life period. The useful life is specified both in years and in 
hours of operation, and ends when either of the values (hours of 
operation or years) is exceeded.
    (1) The minimum useful life is 10 years or 10,000 hours of 
operation for Category 1 and 10 years or 20,000 hours of operation for 
Category 2.
    (2) The manufacturer shall specify a longer useful life if the 
engine is designed to remain in service longer than the applicable 
minimum useful life without being rebuilt. A manufacturer's recommended 
time to remanufacture/rebuild longer than the minimum useful life is 
one indicator of a longer design life.
    (3) Upon request by the manufacturer, the Administrator may allow 
useful life values shorter than the minimum values specified in 
paragraph (a)(1) of this section, provided:
    (i) The useful life value may not be shorter than any of the 
following:
    (A) 1000 hours of operation.
    (B) The manufacturer's recommended overhaul interval.
    (C) The mechanical warranty provided by the manufacturer to the 
owner.
    (ii) The manufacturer must have documentation from in-use engines 
showing that these engines will rarely operate longer than the 
alternate useful life.
    (iii) The manufacturer displays the useful life on the engine 
label.
    (b) Certification is the process by which manufacturers apply for 
and obtain certificates of conformity from EPA, which allows the 
manufacturer to introduce into commerce new marine engines for sale or 
use in the U.S.

[[Page 73338]]

    (1) Compliance with the applicable emission standards by an engine 
family shall be demonstrated by the certifying manufacturer before a 
certificate of conformity may be issued under Sec. 94.208. 
Manufacturers shall demonstrate compliance using emission data, 
measured using the procedures specified in Subpart B of this part, from 
a low hour engine. A development engine that is equivalent in design to 
the marine engines being certified may be used for Category 2 
certification.
    (2) The emission values to compare with the standards shall be the 
emission values of a low hour engine, or a development engine, adjusted 
by the deterioration factors developed in accordance with the 
provisions of Sec. 94.219. Before any emission value is compared with 
the standard, it shall be rounded, in accordance with ASTM E 29-93a 
(incorporated by reference at Sec. 94.5), to the same number of 
significant figures as contained in the applicable standard.
    (c) Upon request by the manufacturer, the Administrator may limit 
the applicability of exhaust emission requirements of Sec. 94.8(e) as 
necessary for safety or to otherwise protect the engine.


Sec. 94.10  Warranty period.

    (a) Warranties imposed by Sec. 94.1107 shall apply for a period of 
operating hours equal to at least 50 percent of the useful life in 
operating hours or a period of years equal to at least 50 percent of 
the useful life in years, whichever comes first.
    (b) Warranties imposed by Sec. 94.1107 shall apply for a period not 
less than any mechanical warranties provided by the manufacturer to the 
owner.


Sec. 94.11  Requirements for rebuilding certified engines.

    (a) The provisions of this section apply with respect to engines 
subject to the standards prescribed in Sec. 94.8 and are applicable to 
the process of engine rebuilding. Engine rebuilding means to overhaul 
an engine or to otherwise perform extensive service on the engine (or 
on a portion of the engine or engine system). For the purpose of this 
definition, perform extensive service means to disassemble the engine 
(or portion of the engine or engine system), inspect and/or replace 
many of the parts, and reassemble the engine (or portion of the engine 
or engine system) in such a manner that significantly increases the 
service life of the resultant engine.
    (b) When rebuilding an engine, portions of an engine, or an engine 
system, there must be a reasonable technical basis for knowing that the 
resultant engine is equivalent, from an emissions standpoint, to a 
certified configuration (i.e., tolerances, calibrations, 
specifications), and the model year(s) of the resulting engine 
configuration must be identified. A reasonable basis would exist if:
    (1) Parts installed, whether the parts are new, used, or rebuilt, 
are such that a person familiar with the design and function of motor 
vehicle engines would reasonably believe that the parts perform the 
same function with respect to emission control as the original parts; 
and
    (2) Any parameter adjustment or design element change is made only:
    (i) In accordance with the original engine manufacturer's 
instructions; or
    (ii) Where data or other reasonable technical basis exists that 
such parameter adjustment or design element change, when performed on 
the engine or similar engines, is not expected to adversely affect in-
use emissions.
    (c) When an engine is being rebuilt and remains installed or is 
reinstalled in the same vessel, it must be rebuilt to a configuration 
of the same or later model year as the original engine. When an engine 
is being replaced, the replacement engine must be an engine of (or 
rebuilt to) a certified configuration that is equivalent, from an 
emissions standpoint, to the engine being replaced.
    (d) At time of rebuild, emission-related codes or signals from on-
board monitoring systems may not be erased or reset without diagnosing 
and responding appropriately to the diagnostic codes, regardless of 
whether the systems are installed to satisfy requirements in 
Sec. 94.211 or for other reasons and regardless of form or interface. 
Diagnostic systems must be free of all such codes when the rebuilt 
engine is returned to service. Such signals may not be rendered 
inoperative during the rebuilding process.
    (e)(1) When conducting a rebuild, all critical emission-related 
components listed in Appendix I of this part not otherwise addressed by 
paragraphs (b) through (d) of this section must be checked and cleaned, 
adjusted, repaired, or replaced as necessary, following manufacturer 
recommended practices.
    (2) During the installation of a rebuilt engine, all critical 
emission-related components listed in Appendix I of this part not 
otherwise addressed by paragraphs (b) through (d) of this section must 
be checked as necessary, following manufacturer recommended practices.
    (f) Records shall be kept by parties conducting activities included 
in paragraphs (b) through (e) of this section. At minimum the records 
shall include the hours of operation at the time of rebuild, a listing 
of work performed on the engine and emission-related control components 
(including a listing of parts and components used, engine parameter 
adjustments, emission-related codes or signals responded to and reset), 
and work performed under paragraph (e) of this section.
    (1) Parties may keep records in whatever format or system they 
choose as long as the records are understandable to an EPA enforcement 
officer or can be otherwise provided to an EPA enforcement officer in 
an understandable format when requested.
    (2) Parties are not required to keep records of information that is 
not reasonably available through normal business practices including 
information on activities not conducted by themselves or information 
that they cannot reasonably access.
    (3) Parties may keep records of their rebuilding practices for an 
engine family rather than on each individual engine rebuilt in cases 
where those rebuild practices are followed routinely.
    (4) Records must be kept for a minimum of two years after the 
engine is rebuilt.


Sec. 94.12  Interim provisions.

    This section contains provisions that apply for a limited number of 
calendar years or model years. These provisions apply instead of other 
provisions of this part.
    (a) Compliance date of standards. Post-manufacture marinizers may 
elect to delay the model year of the Tier 2 standards as specified in 
Sec. 94.8 by one year for each engine family. Compliance with the 
standards becomes mandatory after that year. Post-manufacture 
marinizers wishing to take advantage of this provision must inform the 
Designated Officer of their intent to do so in writing before the date 
that compliance with the standards would otherwise be mandatory.
    (b) Early banking of emission credits. (1) A manufacturer may 
optionally certify engines manufactured before the date the Tier 2 
standards take effect to earn emission credits under the averaging, 
banking, and trading program. Such optionally certified engines are 
subject to all provisions relating to mandatory certification and 
enforcement described in this part. Manufacturers may begin earning 
credits on January 28, 2000.

[[Page 73339]]

    (2) Consistent with the provisions of Subpart D of this part, 
NOX and PM emission credits may be generated from engines 
prior to the applicable effective compliance date of the applicable 
standard (i.e., the effective compliance date in Sec. 94.8(a), as 
applicable), relative to baseline emission rates.
    (3)(i) THC+NOX credits generated under this paragraph 
(b) shall be calculated as specified in Sec. 92.305, except that the 
baseline emission rate may be either the applicable standard or a 
measured THC+NOX baseline level for the configuration with 
the lowest NOX emission rate in the applicable engine 
family. The additional credits resulting from using a measured baseline 
(instead of the applicable standard) shall be discounted by 10 percent. 
This discount does not apply to the portion of the credits resulting 
from the engine's emissions being below the applicable standard. 
Baseline emission rates may not exceed the IMO NOX limits.
    (ii) PM credits generated under this paragraph (b) shall be 
calculated as specified in Sec. 94.305, except that the applicable 
standard may be replaced by a measured PM baseline emission rate for 
the configuration with the lowest NOX emission rate in the 
applicable engine family that is approved in advance by the 
Administrator. The additional credits resulting from using a measured 
baseline (instead of the applicable standard) shall be discounted by 10 
percent. This discount does not apply to the portion of the credits 
resulting from the engine's emissions being below the applicable 
standard.
    (4)(i) For post-manufacture marinizers, measured baseline emission 
levels may be based on emissions from a single engine for each engine 
family.
    (ii) For all other manufacturers, measured baseline emission levels 
must be based on the average of emissions from at least three engines 
for each engine family.
    (iii) The Administrator must approve any measured baselines in 
advance.
    (5) For an engine to be eligible to generate early credits under 
this paragraph (b), its certified emission levels for all pollutants 
must be below the Tier 2 standards listed in Sec. 94.8, with the 
following exception: PMMs may include in this early credit program 
Category 1 marine engines with certified emissions above the Tier 2 
standards listed in Sec. 94.8. Early credits generated by Category 1 
marine engines with certified emissions above the Tier 2 standards 
listed in Sec. 94.8 may not be used for model year 2008 or later 
engines.
    (c) Testing of Category 1 engines subject to the requirements of 
this part that is conducted by the Administrator shall be performed 
using test fuels that meet the specifications in Sec. 94.108 and have a 
sulfur content no higher than 0.20 weight percent, unless the PM 
emission rates are corrected for the effect of a higher fuel sulfur 
content.
    (d) Post-manufacture marinizers may import an uncertified engine 
for marinization, in cases where the engine in the final marinized 
configuration is not subject to the standards of this part because:
    (1) The model year of the marinized engine is prior to the first 
model year for which engines of that size are subject to the standards;
    (2) The post-manufacture marinizer is marinizing the engine under 
paragraph (a) of this section; or
    (3) The post-manufacture marinizer is granted hardship relief from 
the Tier 2 standards under Sec. 94.209(c).
    (e) Notwithstanding the other provisions of this part, the 
requirements of Sec. 94.8(e) start with 2010 model year engines for 
post-manufacture marinizers and 2007 model year engines for all other 
engine manufacturers.

Subpart B--Test Procedures


Sec. 94.101  Applicability.

    Provisions of this subpart apply for testing performed by the 
Administrator or a manufacturer.


Sec. 94.102  General provisions.

    (a) The test procedures specified in this part are intended to 
produce emission measurements that are equivalent to emission 
measurements that would result from emission tests performed during in-
use operation using the same engine configuration installed in a 
vessel.
    (b) Test procedures otherwise allowed by the provisions of this 
subpart shall not be used where such procedures are not consistent with 
good engineering practice and the regulatory goal specified in 
paragraph (a) of this section.
    (c) Alternate test procedures may be used if shown to yield 
equivalent results, and if approved in advance by the Administrator.


Sec. 94.103  Test procedures for Category 1 marine engines.

    (a) Gaseous and particulate emissions shall be measured using the 
test procedures specified in 40 CFR part 89, except as otherwise 
specified in this subpart.
    (b) The Administrator may specify changes to the provisions of 
paragraph (a) of this section that are necessary to comply with the 
general provisions of Sec. 94.102.


Sec. 94.104  Test procedures for Category 2 marine engines.

    (a) Gaseous and particulate emissions shall be measured using the 
test procedures specified in 40 CFR part 92, except as otherwise 
specified in this subpart.
    (b)(1) The requirements of 40 CFR part 92 related to charge air 
temperatures, engine speed and load, and engine air inlet restriction 
pressures do not apply for marine engines.
    (2) For marine engine testing, charge air temperatures, engine 
speed and load, and engine air inlet restriction pressures shall be 
representative of typical in-use marine engine conditions.
    (c) The Administrator may specify changes to the provisions of 
paragraph (a) of this section that are necessary to comply with the 
general provisions of Sec. 94.102.


Sec. 94.105  Duty cycles.

    (a) Overview. For the purpose of determining compliance with the 
emission standards of Sec. 94.8, except for those in Sec. 94.8(e), 
engines shall be tested using the appropriate duty cycles described in 
this section.
    (b) General cycle. Propulsion engines that are used with (or 
intended to be used with) fixed-pitch propellers, and any other engines 
for the other duty cycles of this section don't apply, shall be tested 
using the duty cycle described in the following Table B-1:

                                      Table B-1.--General Marine Duty Cycle
----------------------------------------------------------------------------------------------------------------
                                                                 Engine
                                                               speed \1\    Percent of    Minimum
                          Mode No.                            (percent of    maximum      time in     Weighting
                                                                maximum     test power      mode       factors
                                                              test speed)      \2\       (minutes)
----------------------------------------------------------------------------------------------------------------
1...........................................................          100          100          5.0         0.20
2...........................................................           91           75          5.0         0.50

[[Page 73340]]

 
3...........................................................           80           50          5.0         0.15
4...........................................................           63           25          5.0        0.15
----------------------------------------------------------------------------------------------------------------
\1\ Engine speed: 2 percent of point.
\2\ Power: 2 percent of engine maximum value.

    (c) Variable-pitch and electrically coupled propellers. (1) 
Constant-speed propulsion engines that are used with (or intended to be 
used with) variable-pitch propellers or with electrically coupled 
propellers shall be tested using the duty cycle described in the 
following Table B-2:

                          Table B-2.--Duty Cycle for Constant-Speed Propulsion Engines
----------------------------------------------------------------------------------------------------------------
                                                                 Engine
                                                               speed \1\    Percent of    Minimum
                          Mode No.                            (percent of    maximum      time in     Weighting
                                                                maximum     test power      mode       factors
                                                              test speed)      \2\       (minutes)
----------------------------------------------------------------------------------------------------------------
1...........................................................          100          100          5.0         0.20
2...........................................................          100           75          5.0         0.50
3...........................................................          100           50          5.0         0.15
4...........................................................          100           25          5.0        0.15
----------------------------------------------------------------------------------------------------------------
\1\ Engine speed: 2 percent of point.
\2\ Power: 2 percent of engine maximum value.

    (2) For the purpose of determining compliance with the emission 
standards of Sec. 94.8, variable-speed propulsion engines that are used 
with (or intended to be used with) variable-pitch propellers or with 
electrically coupled propellers shall be tested using the duty cycle 
described in Table B-3, which follows:

 Table B-3.--Duty Cycle for Variable Speed Propulsion Engines Used on Non-Propeller Law Vessels and for Variable
                                             Speed Auxiliary Engines
----------------------------------------------------------------------------------------------------------------
                                                                            Percent of    Minimum
                                                                             maximum      time in     Weighting
       Test segment           Mode No.           Engine speed \1\          test torque      mode       factors
                                                                               \2\       (minutes)
----------------------------------------------------------------------------------------------------------------
1.........................            1  Maximum Test Speed..............          100          5.0         0.15
1.........................            2  Maximum Test Speed..............           75          5.0         0.15
1.........................            3  Maximum Test Speed..............           50          5.0         0.15
1.........................            4  Maximum Test Speed..............           10          5.0         0.10
2.........................            5  Intermediate....................          100          5.0         0.10
2.........................            6  Intermediate....................           75          5.0         0.10
2.........................            7  Intermediate....................           50          5.0         0.10
2.........................            8  Idle............................            0          5.0        0.15
----------------------------------------------------------------------------------------------------------------
\1\ Engine speed (non-idle): 2 percent of point. Engine speed (idle): Within manufacturer's
  specifications. Idle speed is specified by the manufacturer.
\2\ Torque (non-idle): 2 percent of engine maximum value. Torque (idle): minimum fueling rate Load
  less than 5 percent of peak torque.

    (d) Auxiliary. For the purpose of determining compliance with the 
emission standards of Sec. 94.8:
    (1) Constant speed auxiliary engines shall be tested using the duty 
cycle described in Table B-4, which follows:

                           Table B-4.--Duty Cycle for Constant-Speed Auxiliary Engines
----------------------------------------------------------------------------------------------------------------
                                                                            Percent of    Minimum
                                                                             maximum      time in     Weighting
            Mode No.                          Engine speed \1\             test torque      mode       factors
                                                                               \2\       (minutes)
----------------------------------------------------------------------------------------------------------------
1...............................  Maximum Test Speed.....................          100          5.0         0.05
2...............................  Maximum Test Speed.....................           75          5.0         0.25
3...............................  Maximum Test Speed.....................           50          5.0         0.30
4...............................  Maximum Test Speed.....................           25          5.0         0.30

[[Page 73341]]

 
5...............................  Maximum Test Speed.....................           10          5.0        0.10
----------------------------------------------------------------------------------------------------------------
\1\ Engine speed: 2 percent of point.
\2\ Torque: 2 percent of engine maximum value.

    (2) Variable speed auxiliary engines shall be tested using the duty 
cycle described in Table B-3 in paragraph (c)(2) of this section.


Sec. 94.106  Supplemental test procedures.

    This section describes the test procedures for supplemental testing 
conducted to determine compliance with the exhaust emission 
requirements of Sec. 94.8(e). In general, the supplemental test 
procedures are the same as those otherwise specified by this subpart, 
except that they cover any speeds, loads, ambient conditions, and 
operating parameters that may be experienced in use. The test 
procedures specified by other sections in this subpart also apply to 
these tests, except as specified in this section.
    (a) Notwithstanding other provisions of this subpart, testing 
conducted to determine compliance with the exhaust emission 
requirements of Sec. 94.8(e) may be conducted:
    (1) At any speed and load (or any combination of speeds and loads 
that is nominally steady-state) within the applicable Not To Exceed 
Zone specified in paragraph (b) of this section;
    (2)(i) Without correction, at any intake air temperature between 
13 deg.C and 35 deg.C (or between 13 deg.C and 30 deg.C for engines not 
drawing intake air directly from a space that could be heated by the 
engine);
    (ii) Without correction at any ambient water temperature (or 
equivalent) between 5 deg.C and 27 deg.C;
    (iii) Without correction at any ambient humidity between 7.1 and 
10.7 grams of moisture per kilogram of dry air; and
    (3) With a continuous sampling period not less than 30 seconds in 
duration.
    (b) The specified Not to Exceed Zones for marine engines are 
defined as follows. These Not to Exceed Zones apply, unless a modified 
zone is established under paragraph (c) of this section.
    (1) For Category 1 engines certified using the duty cycle specified 
in Sec. 94.105(a), the Not to Exceed zones are defined as follows:
    (i) The Not to Exceed zone is the region between the curves power = 
1.15  x  SPD2 and power = 0.85  x  SPD4, 
excluding all operation below 25% of maximum power at rated speed and 
excluding all operation below 63% of maximum test speed.
    (ii) This zone is divided into two subzones, one above and one 
below 45% of maximum power at rated speed.
    (iii) SPD in paragraph (b)(1)(i) of this section refers to percent 
of maximum test speed.

BILLING CODE 6560-50-P

[[Page 73342]]

    (iv) See Figure B-1 for an illustration of this Not to Exceed zone 
which follows:
[GRAPHIC] [TIFF OMITTED] TR29DE99.002


[[Page 73343]]


    (2) For Category 2 engines certified using the duty cycle specified 
in Sec. 94.105(a), the Not to Exceed zones are defined as follows:
    (i) The Not to Exceed zone is the region between the curves power = 
1.04  x  SPD2 and power = 0.76  x  SPD4, 
excluding all operation below 25% of maximum power at rated speed and 
excluding all operation below 63% of maximum test speed.
    (ii) This zone is divided into two subzones, one above and one 
below 45% of maximum power at rated speed.
    (iii) SPD in paragraph (b)(2)(i) of this section refers to percent 
of maximum test speed.
    (iv) See Figure B-2 in paragraph (b)(3) of this section for an 
illustration of this Not to Exceed zone.
    (3) For engines certified using the duty cycle specified in 
Sec. 94.105(b)(2), the Not to Exceed zones are defined as follows:
[GRAPHIC] [TIFF OMITTED] TR29DE99.003


[[Page 73344]]


    (i) The Not to Exceed zone is the region above the curve power = 
0.85  x  SPD2, excluding all operation below 25% of maximum 
power at rated speed and excluding all operation below 63% of maximum 
test speed.
    (ii) This zone is divided into two subzones, one above and one 
below 45% of maximum power at rated speed.
    (iii) SPD in paragraph (b)(3)(i) of this section refers to percent 
of maximum test speed.
    (iv) See Figure B-3 for an illustration of this Not to Exceed zone:
    [GRAPHIC] [TIFF OMITTED] TR29DE99.004
    

[[Page 73345]]


    (4) For engines certified using the duty cycle specified in 
Sec. 94.105(b)(1), the Not to Exceed Zone is defined as any load 
greater than or equal to 25 percent of maximum power at rated speed, 
and at any speed at which the engine operates in use.
    (c)(1) Upon request by the manufacturer, the Administrator may 
specify a narrower Not to Exceed Zone for an engine family at the time 
of certification, provided that the narrower Not to Exceed Zone 
includes all speeds greater than 63 percent of maximum test speed and 
loads greater than 25 percent of maximum power at rated speed at which 
the engines are expected to normally operate in use.
    (2) At the time of certification, the Administrator may specify, or 
require the manufacturer to specify, a broader Not to Exceed Zone for 
an engine family, provided that the broader Not to Exceed Zone includes 
only speeds greater than 63 percent of maximum test speed and loads 
greater than 25 percent of maximum power at rated speed at which the 
engines are expected to normally operate in use.
    (d) Testing conducted to determine compliance with the exhaust 
emission requirements of Sec. 94.8(e) may be conducted at any ambient 
air temperature or humidity outside the ranges specified in paragraph 
(a)(2) of this section, provided that emission measurements are 
corrected to be equivalent to measurements within the ranges specified 
in paragraph (a)(2) of this section. Correction of emission 
measurements made in accordance with this paragraph (d) shall be made 
in accordance with good engineering practice. The measurements shall be 
corrected to be within the range using the minimum possible correction.
    (e) Testing conducted under this section may not include engine 
starting.


Sec. 94.107  Determination of maximum test speed.

    (a) Overview. This section specifies how to determine maximum test 
speed from a lug curve. This maximum test speed is used in Secs. 94.105 
and 94.106 (including the tolerances for engine speed specified in 
Sec. 94.105).
    (b) Generation of lug curve. Prior to beginning emission testing, 
generate maximum measured brakepower versus engine speed data points 
using the applicable method specified in 40 CFR 86.1332. These data 
points form the lug curve. It is not necessary to generate the entire 
lug curve. For the portion of the curve where power increases with 
increasing speed, it is not necessary to generate points with power 
less than 90 percent of the maximum power value. For the portion of the 
curve where power decreases with increasing speed, it is not necessary 
to generate points with power less than 75 percent of the maximum power 
value.
    (c) Normalization of lug curve. (1) Identify the point (power and 
speed) on the lug curve at which maximum power occurs.
    (2) Normalize the power values of the lug curve by dividing them by 
the maximum power value identified in paragraph (b)(1) of this section, 
and multiplying the resulting values by 100.
    (3) Normalize the engine speed values of the lug curve by dividing 
them by the speed at which maximum power occurs, which is identified in 
paragraph (b)(1) of this section, and multiplying the resulting values 
by 100.
    (4) Maximum engine power is located on the normalized lug curve at 
100 percent power and 100 percent speed.
    (d) Determination of maximum test speed. Calculate the maximum test 
speed from the speedfactor analysis described in this paragraph (d).
    (1) For a given combination of engine power and speed (i.e., a 
given power/speed point), the speedfactor is the distance to the 
normalized power/speed point from the zero power, zero speed point. The 
value of the speedfactor is defined as:

[GRAPHIC] [TIFF OMITTED] TR29DE99.005

    (2) Calculate speedfactors for the power/speed data points on the 
lug curve, and determine the maximum value.
    (3) Maximum test speed is the speed at which the maximum value for 
the speedfactor occurs.
    (e) For constant-speed engines, rated speed is the maximum test 
speed.


Sec. 94.108  Test fuels.

    (a) Distillate diesel test fuel. (1) The diesel fuels for testing 
marine engines designed to operate on distillate diesel fuel shall be 
clean and bright, with pour and cloud points adequate for operability. 
The diesel fuel may contain nonmetallic additives as follows: cetane 
improver, metal deactivator, antioxidant, dehazer, antirust, pour 
depressant, dye, dispersant, and biocide. The diesel fuel shall also 
meet the specifications (as determined using methods incorporated by 
reference at Sec. 94.5) in Table B-5, or substantially equivalent 
specifications approved by the Administrator, as follows:

                                  Table B-5.--Federal Test Fuel Specifications
----------------------------------------------------------------------------------------------------------------
                                                                                                     Value (Type
                            Item                                      Procedure (ASTM) \1\               2-D)
----------------------------------------------------------------------------------------------------------------
Cetane.....................................................  D 613-95..............................        40-48
Distillation Range:
    IBP,  deg.C............................................  D 86-97...............................      171-204
    10% point,  deg.C......................................  D 86-97...............................      204-238
    50% point,  deg.C......................................  D 86-97...............................      243-282
    90% point,  deg.C......................................  D 86-97...............................      293-332
    EP,  deg.C.............................................  D 86-97...............................      321-366
    Gravity, API...........................................  D 287-92..............................        32-37
    Total Sulfur, weight%..................................  D 129-95 or D 2622-98.................    0.03-0.80
Hydrocarbon composition:
    Aromatics, % vol.......................................  D 1319-98 or D 5186-96................       10 (2)
    Paraffins, Naphthalenes, Olefins.......................  D 1319-98.............................          (3)
    Flashpoint,  deg.C (minimum)...........................  D 93-97...............................           54
    Viscosity @ 38  deg.C, Centistokes.....................  D 445-97..............................     2.0-3.2
----------------------------------------------------------------------------------------------------------------
\1\ All ASTM procedures in this table have been incorporated by reference. See Sec.  94.6.
\2\ Minimum.
\3\ Remainder.


[[Page 73346]]

    (2) Other diesel fuels may be used for testing provided:
    (i) They are commercially available; and
    (ii) Information, acceptable to the Administrator, is provided to 
show that only the designated fuel would be used in service; and
    (iii) Use of a fuel listed under paragraph (a)(1) of this section 
would have a detrimental effect on emissions or durability; and
    (iv) Written approval from the Administrator of the fuel 
specifications is provided prior to the start of testing.
    (3) The specification of the fuel to be used under paragraphs 
(a)(1), and (a)(2) of this section shall be reported in the application 
for certification.
    (b) Other fuel types. For engines that are designed to be capable 
of using a type of fuel (or mixed fuel) instead of or in addition to 
distillate diesel fuel (e.g., natural gas, methanol, or nondistillate 
diesel), and that are expected to use that type of fuel (or mixed fuel) 
in service, a commercially available fuel of that type shall be used 
for exhaust emission testing. The manufacturer shall propose for the 
Administrator's approval a set of test fuel specifications that take 
into account the engine design and the properties of commercially 
available fuels. The Administrator may require testing on each fuel if 
it is designed to operate on more than one fuel. These test fuel 
specifications shall be reported in the application for certification.
    (c) Service accumulation fuel. Fuel used for service accumulation 
shall be representative of the typical fuel expected to be used by the 
engines in service.
    (d) Correction for sulfur. (1) Particulate emission measurements 
from engines without exhaust aftertreatment obtained using a diesel 
fuel containing more than 0.40 weight percent sulfur may be adjusted to 
a sulfur content of 0.40 weight percent.
    (2) Adjustments to the particulate measurement shall be made using 
the following equation:

PMadj=PM-[BSFC *0.0917 *(FSF-0.0040)]

Where:
PMadj=adjusted measured PM level [g/kW-hr]
PM=measured weighted PM level [g/KW-hr]
BSFC=measured brake specific fuel consumption [g/KW-hr]
FSF=fuel sulfur weight fraction

Subpart C--Certification Provisions


Sec. 94.201  Applicability.

    The requirements of this subpart are applicable to manufacturers of 
engines subject to the standards of subpart A of this part.


Sec. 94.202  Definitions.

    The definitions of subpart A of this part apply to this subpart.


Sec. 94.203  Application for certification.

    (a) For each engine family that complies with all applicable 
standards and requirements, the manufacturer shall submit to the 
Administrator a completed application for a certificate of conformity.
    (b) The application shall be approved and signed by the authorized 
representative of the manufacturer.
    (c) The application shall be updated and corrected by amendment, 
where necessary, as provided for in Sec. 94.210 to accurately reflect 
the manufacturer's production.
    (d) Each application shall include all the following information:
    (1)(i) A description of the basic engine design, including but not 
limited to, the engine family specifications, the provisions of which 
are contained in Sec. 94.204.
    (ii) A list of distinguishable configurations to be included in the 
engine family.
    (2) An explanation of how the emission control system operates, 
including detailed descriptions of:
    (i) All emission control system components;
    (ii) The injection timing map or maps (i.e., degrees before or 
after top-dead-center), and any functional dependence of such timing on 
other operational parameters (e.g., engine coolant temperature or 
engine speed);
    (iii) Each auxiliary emission control device (AECD); and
    (iv) All fuel system components to be installed on any production 
or test engine(s).
    (3) A description of the test engine.
    (4) Special or alternate test procedures, if applicable.
    (5) A description of the operating cycle and the period of 
operation necessary to accumulate service hours on the test engine and 
stabilize emission levels.
    (6) A description of all adjustable operating parameters (e.g., 
injection timing and fuel rate), including all the following:
    (i) The nominal or recommended setting and the associated 
production tolerances.
    (ii) The physically adjustable range (Note: if this is different 
than the intended adjustable range, describe why these are different).
    (iii) The limits or stops used to limit adjustable ranges.
    (iv) Production tolerances of the limits or stops used to establish 
each physically adjustable range.
    (v) Information relating to the reason that the physical limits or 
stops used to establish the physically adjustable range of each 
parameter, or any other means used to inhibit adjustment, are the most 
effective means possible of preventing adjustment of parameters to 
settings outside the manufacturer's specified adjustable ranges on in-
use engines.
    (7) For families participating in the averaging, banking, and 
trading program, the information specified in subpart D of this part.
    (8) Projected U.S.-directed production volume information for each 
configuration.
    (9) A description of the test equipment and fuel used.
    (10) All test data obtained by the manufacturer on each test 
engine.
    (11) The intended useful life period for the engine family, in 
accordance with Sec. 94.9(a).
    (12) The intended deterioration factors for the engine family, in 
accordance with Sec. 94.218.
    (13) All information required for EPA to interpret all messages and 
parameters broadcast on an engine's controller area network, including 
but not limited to message or parameter identification, scaling, limit, 
offset, and transfer function. (The manufacturer may reference publicly 
released controller area network standards where applicable. The format 
of this information shall be provided in a format similar to publicly 
released documents pertaining to controller area network standards.)
    (14) A statement that the all the engines included in the engine 
family comply with the Not To Exceed standards specified in 
Sec. 94.8(e) when operated under all conditions which may reasonably be 
expected to be encountered in normal operation and use; the 
manufacturer also must provide a detailed description of all testing, 
engineering analyses, and other information which provides the basis 
for this statement.
    (15) An unconditional statement certifying that all engines 
included in the engine family comply with all requirements of this part 
and the Clean Air Act.
    (16) A statement indicating duty-cycle and application of the 
engine (e.g., used to propel planing vessels, use to propel vessels 
with variable-pitch propellers, constant-speed auxiliary, etc.).
    (e) At the Administrator's request, the manufacturer shall supply 
such additional information as may be required to evaluate the 
application.
    (f)(1) If the manufacturer submits some or all of the information 
specified in paragraph (d) of this section in

[[Page 73347]]

advance of its full application for certification, the Administrator 
shall review the information and make the determinations required in 
Sec. 94.208 (d) within 90 days of the manufacturer's submittal.
    (2) The 90-day decision period is exclusive of any elapsed time 
during which EPA is waiting for additional information requested from a 
manufacturer regarding an adjustable parameter (the 90-day period 
resumes upon receipt of the manufacturer's response). For example, if 
EPA requests additional information 30 days after the manufacturer 
submits information under paragraph (f)(1) of this section, then the 
Administrator would make a determination within 60 days of the receipt 
of the requested information from the manufacturer.
    (g)(1) The Administrator may modify the information submission 
requirements of paragraph (d) of this section, provided that all of the 
information specified therein is maintained by the manufacturer as 
required by Sec. 94.215, and amended, updated, or corrected as 
necessary.
    (2) For the purposes of this paragraph (g), Sec. 94.215 includes 
all information specified in paragraph (d) of this section, whether or 
not such information is actually submitted to the Administrator for any 
particular model year.
    (3) The Administrator may review a manufacturer's records at any 
time. At the Administrator's discretion, this review may take place 
either at the manufacturer's facility or at another facility designated 
by the Administrator.


Sec. 94.204  Designation of engine families.

    This section specifies the procedure and requirements for grouping 
of engines into engine families.
    (a) Manufacturers shall divide their engines into groupings of 
engines which are expected to have similar emission characteristics 
throughout their useful life. Each group shall be defined as a separate 
engine family.
    (b) For Category 1 marine engines, the following characteristics 
distinguish engine families:
    (1) Fuel;
    (2) Cooling method (including cooling medium);
    (3) Method of air aspiration;
    (4) Method of exhaust aftertreatment (for example, catalytic 
converter or particulate trap);
    (5) Combustion chamber design;
    (6) Bore;
    (7) Stroke;
    (8) Number of cylinders, (engines with aftertreatment devices 
only);
    (9) Cylinder arrangement (engines with aftertreatment devices 
only); and
    (10) Fuel system configuration
    (c) For Category 2 marine engines, the following characteristics 
distinguish engine families:
    (1) The combustion cycle (e.g., diesel cycle);
    (2) The type of engine cooling employed (air-cooled or water-
cooled), and procedure(s) employed to maintain engine temperature 
within desired limits (thermostat, on-off radiator fan(s), radiator 
shutters, etc.);
    (3) The bore and stroke dimensions;
    (4) The approximate intake and exhaust event timing and duration 
(valve or port);
    (5) The location of the intake and exhaust valves (or ports);
    (6) The size of the intake and exhaust valves (or ports);
    (7) The overall injection, or as appropriate ignition, timing 
characteristics (i.e., the deviation of the timing curves from the 
optimal fuel economy timing curve must be similar in degree);
    (8) The combustion chamber configuration and the surface-to-volume 
ratio of the combustion chamber when the piston is at top dead center 
position, using nominal combustion chamber dimensions;
    (9) The location of the piston rings on the piston;
    (10) The method of air aspiration (turbocharged, supercharged, 
naturally aspirated, Roots blown);
    (11) The turbocharger or supercharger general performance 
characteristics (e.g., approximate boost pressure, approximate response 
time, approximate size relative to engine displacement);
    (12) The type of air inlet cooler (air-to-air, air-to-liquid, 
approximate degree to which inlet air is cooled);
    (13) The intake manifold induction port size and configuration;
    (14) The type of fuel and fuel system configuration;
    (15) The configuration of the fuel injectors and approximate 
injection pressure;
    (16) The type of fuel injection system controls (i.e., mechanical 
or electronic);
    (17) The type of smoke control system;
    (18) The exhaust manifold port size and configuration; and
    (19) The type of exhaust aftertreatment system (oxidation catalyst, 
particulate trap), and characteristics of the aftertreatment system 
(catalyst loading, converter size vs engine size).
    (d) Upon request by the manufacturer, engines that are eligible to 
be included in the same engine family based on the criteria in 
paragraph (b) or (c) of this section may be divided into different 
engine families. This request must be accompanied by information the 
manufacturer believes supports the use of these different engine 
families.
    (e) Upon request by the manufacturer, the Administrator may allow 
engines that would be required to be grouped into separate engine 
families based on the criteria in paragraph (b) or (c) of this section 
to be grouped into a single engine family if the manufacturer 
demonstrates that the engines will have similar emission 
characteristics. This request must be accompanied by emission 
information supporting the appropriateness of such combined engine 
families.


Sec. 94.205  Prohibited controls, adjustable parameters.

    (a) Any system installed on, or incorporated in, a new engine to 
enable the engine to conform to the standards contained in this part:
    (1) Shall not cause a violation of the general standards of 
Sec. 94.7.
    (2) Shall function during all in-use operation, except as otherwise 
allowed by this part.
    (b) Nonroad engines equipped with adjustable parameters must comply 
with all requirements of this subpart for any adjustment in the 
physically adjustable range.
    (c) The Administrator may require that adjustable parameters be set 
to any specification within its adjustable range for certification, 
selective enforcement audit, or in-use testing to determine compliance 
with the requirements of this subpart.
    (d) In specifying the adjustable range of each adjustable parameter 
on a new engine, the manufacturer, shall:
    (1) Ensure that safe engine operating characteristics are available 
within that range, as required by section 202(a)(4) of the Clean Air 
Act, taking into consideration the production tolerances; and
    (2) To the maximum extent practicable, limit the physical range of 
adjustability to that which is necessary for proper operation of the 
engine.


Sec. 94.206  Required information.

    (a) The manufacturer shall perform the tests required by the 
applicable test procedures, and submit to the Administrator the 
information required by this section: Provided, that if requested by 
the manufacturer, the Administrator may waive any requirement of this 
section for testing of engines for which the required emission data are 
otherwise available.
    (b) The manufacturer shall submit exhaust emission deterioration 
factors,

[[Page 73348]]

with supporting data. The determination of the deterioration factors 
shall be conducted in accordance with Sec. 94.218 to ensure that the 
engines covered by a certificate issued under Sec. 94.208 will meet all 
of the emission standards in Sec. 94.8 in use for the useful life of 
the engine.
    (c) The manufacturer shall submit emission data on such engines 
tested in accordance with the applicable test procedures of Subpart B 
of this part. These data shall include zero hour data, if generated. In 
lieu of providing the emission data required by paragraph (a) of this 
section, the Administrator may, upon request by the manufacturer, allow 
the manufacturer to demonstrate (on the basis of previous emission 
tests, development tests, or other testing information) that the engine 
will conform with the applicable emission standards of Sec. 94.8.
    (d) The manufacturer shall submit a statement that the engines for 
which certification is requested conform to the requirements in 
Sec. 94.7 and that the descriptions of tests performed to ascertain 
compliance with the general standards in Sec. 94.7, and the data 
derived from such tests, are available to the Administrator upon 
request.
    (e) The manufacturer shall submit a statement that the emission 
data engine used to demonstrate compliance with the applicable 
standards of this part is in all material respects as described in the 
manufacturer's application for certification; that it has been tested 
in accordance with the applicable test procedures utilizing the fuels 
and equipment described in the application for certification; and that 
on the basis of such tests, the engine family conforms to the 
requirements of this part. If, on the basis of the data supplied and 
any additional data as required by the Administrator, the Administrator 
determines that the test engine was not as described in the application 
for certification or was not tested in accordance with the applicable 
test procedures utilizing the fuels and equipment as described in the 
application for certification, the Administrator may make the 
determination that the engine does not meet the applicable standards. 
If the Administrator makes such a determination, he/she may withhold, 
suspend, or revoke the certificate of conformity under Sec. 94.208 
(c)(3)(i).


Sec. 94.207  Special test procedures.

    (a) Establishment of special test procedures by EPA. The 
Administrator may, on the basis of written application by a 
manufacturer, establish special test procedures other than those set 
forth in this part, for any engine that the Administrator determines is 
not susceptible to satisfactory testing under the specified test 
procedures set forth in Subpart B of this part.
    (b) Use of alternate test procedures by a manufacturer. (1) A 
manufacturer may elect to use an alternate test procedure, provided 
that it is equivalent to the specified procedures with respect to the 
demonstration of compliance, its use is approved in advance by the 
Administrator, and the basis for the equivalence with the specified 
test procedures is fully described in the manufacturer's application.
    (2) The Administrator may reject data generated under alternate 
test procedures if the data do not correlate with data generated under 
the specified procedures.


Sec. 94.208  Certification.

    (a) If, after a review of the application for certification, test 
reports and data acquired from an engine or from a development data 
engine, and any other information required or obtained by EPA, the 
Administrator determines that the application is complete and that the 
engine family meets the requirements of the Act and this part, he/she 
will issue a certificate of conformity with respect to such engine 
family, except as provided by paragraph (c)(3) of this section. The 
certificate of conformity is valid for each engine family from the date 
of issuance by EPA until 31 December of the model year or calendar year 
for which it is issued and upon such terms and conditions as the 
Administrator deems necessary or appropriate to ensure that the 
production engines covered by the certificate will meet the 
requirements of the Act and of this part.
    (b) [Reserved]
    (c)(1) The manufacturer shall bear the burden of establishing to 
the satisfaction of the Administrator that the conditions upon which 
the certificates were issued were satisfied or excused.
    (2) The Administrator will determine whether the test data included 
in the application represents all engines of the engine family.
    (3) Notwithstanding the fact that any engine(s) may comply with 
other provisions of this subpart, the Administrator may withhold or 
deny the issuance of any certificate of conformity, or suspend or 
revoke any such certificate(s) which has (have) been issued with 
respect to any such engine(s) if:
    (i) The manufacturer submits false or incomplete information in its 
application for certification thereof;
    (ii) The manufacturer renders inaccurate any test data which it 
submits pertaining thereto or otherwise circumvents the intent of the 
Act, or of this part with respect to such engine;
    (iii) Any EPA Enforcement Officer is denied access on the terms 
specified in Sec. 94.215 to any facility or portion thereof which 
contains any of the following:
    (A) An engine which is scheduled to undergo emissions testing, or 
which is undergoing emissions testing, or which has undergone emissions 
testing; or
    (B) Any components used or considered for use in the construction, 
modification or buildup of any engine which is scheduled to undergo 
emissions testing, or which is undergoing emissions testing, or which 
has undergone emissions testing for purposes of emissions 
certification; or
    (C) Any production engine which is or will be claimed by the 
manufacturer to be covered by the certificate; or
    (D) Any step in the construction of the engine; or
    (E) Any records, documents, reports or histories required by this 
part to be kept concerning any of the items listed in paragraphs 
(c)(3)(iii)(A) through (D) of this section; or
    (iv) Any EPA Enforcement Officer is denied ``reasonable 
assistance'' (as defined in Sec. 94.215).
    (4) In any case in which a manufacturer knowingly submits false or 
inaccurate information or knowingly renders inaccurate or invalid any 
test data or commits any other fraudulent acts and such acts contribute 
substantially to the Administrator's decision to issue a certificate of 
conformity, the Administrator may deem such certificate void ab initio.
    (5) In any case in which certification of an engine is to be 
withheld, denied, revoked or suspended under paragraph (c)(3) of this 
section, and in which the Administrator has presented to the 
manufacturer involved reasonable evidence that a violation of 
Sec. 94.215 in fact occurred, the manufacturer, if it wishes to contend 
that, even though the violation occurred, the engine in question was 
not involved in the violation to a degree that would warrant 
withholding, denial, revocation or suspension of certification under 
paragraph (c)(3) of this section, shall have the burden of establishing 
that contention to the satisfaction of the Administrator.
    (6) Any revocation, suspension, or voiding of certification under 
paragraph (c)(3) of this section shall:
    (i) Be made only after the manufacturer concerned has been offered 
an opportunity for a hearing

[[Page 73349]]

conducted in accordance with Sec. 94.216; and
    (ii) Extend no further than to forbid the introduction into 
commerce of engines previously covered by the certification which are 
still in the hands of the manufacturer, except in cases of such fraud 
or other misconduct that makes the certification invalid ab initio.
    (7) The manufacturer may request, within 30 days of receiving 
notification, that any determination made by the Administrator under 
paragraph (c)(3) of this section to withhold or deny certification be 
reviewed in a hearing conducted in accordance with Sec. 94.216. The 
request shall be in writing, signed by an authorized representative of 
the manufacturer and shall include a statement specifying the 
manufacturer's objections to the Administrator's determinations, and 
data in support of such objections. If the Administrator finds, after a 
review of the request and supporting data, that the request raises a 
substantial factual issue, he/she will grant the request with respect 
to such issue.
    (d) In approving an application for certification, the 
Administrator may specify or require the manufacturer to specify:
    (1) A broader range of adjustability than recommended by the 
manufacturer for those engine parameters which are subject to 
adjustment, if the Administrator determines that it is not reasonable 
to expect the parameter to be kept adjusted within the recommended 
range in use;
    (2) A longer useful life period, if the Administrator determines 
that the useful life of the engines in the engine family, as defined in 
Sec. 94.2, is longer than the period specified by the manufacturer;
    (3) Larger deterioration factors, if the Administrator determines 
that the deterioration factors specified by the manufacturer do not 
meet the requirements of Sec. 94.218; and/or
    (4) A broader Not to Exceed Zone subject to the provisions of 
Sec. 94.106(b).
    (e) Within 30 days following receipt of notification of the 
Administrator's determinations made under paragraph (d) of this 
section, the manufacturer may request a hearing on the Administrator's 
determinations. The request shall be in writing, signed by an 
authorized representative of the manufacturer and shall include a 
statement specifying the manufacturer's objections to the 
Administrator's determinations and data in support of such objections. 
If, after review of the request and supporting data, the Administrator 
finds that the request raises a substantial factual issue, the 
manufacturer shall be provided with a hearing in accordance with 
Sec. 94.216 with respect to such issue.


Sec. 94.209  Special provisions for post-manufacture marinizers.

    (a) Broader engine families. To be eligible to use the provisions 
of this paragraph (a), the manufacturer must demonstrate that it is a 
post-manufacture marinizer as defined in Sec. 94.2 and that the base 
engines used for modification shall have a valid certificate of 
conformity issued under 40 CFR part 89 or 40 CFR part 92 or the heavy-
duty engine provisions of 40 CFR part 86.
    (1) In lieu of the requirements of Sec. 94.204, an eligible 
manufacturer may group all its engine models into an engine family 
consisting of engines within a single category of engines that have 
similar emission deterioration characteristics.
    (2) The manufacturer remains subject to all provisions of this part 
other than Sec. 94.204 for engines using the engine family defined in 
paragraph (a)(1) of this section.
    (b) Hardship relief. Post-manufacture marinizers may take any of 
the otherwise prohibited actions identified in Sec. 94.1103(a)(1) if 
approved in advance by the Administrator, and subject to the following 
requirements:
    (1) Application for relief must be submitted to the Designated 
Officer in writing prior to the earliest date in which the applying 
manufacturer would be in violation of Sec. 94.1103. The manufacturer 
must submit evidence showing that the requirements for approval have 
been met.
    (2) The conditions causing the impending violation must not be 
substantially the fault of the applying manufacturer.
    (3) The conditions causing the impending violation must be such 
that the applying manufacturer will experience serious economic 
hardship if relief is not granted.
    (4) The applying manufacturer must demonstrate that no other 
allowances under this part will be available to avoid the impending 
violation.
    (5) Any relief may not exceed one year beyond the date relief is 
granted.
    (6) The Administrator may impose other conditions on the granting 
of relief including provisions to recover the lost environmental 
benefit.


Sec. 94.210  Amending the application and certificate of conformity.

    (a) The manufacturer shall notify the Administrator when changes to 
information required to be described in the application for 
certification are to be made to a product line covered by a certificate 
of conformity. This notification shall include a request to amend the 
application or the existing certificate of conformity. Except as 
provided in paragraph (e) of this section, no manufacturer shall make 
said changes or produce said engines prior to receiving approval from 
the Administrator.
    (b) A manufacturer's request to amend the application or the 
existing certificate of conformity shall include the following 
information:
    (1) A full description of the change to be made in production, or 
of the engines to be added;
    (2) Engineering evaluations or data showing that the engines as 
modified or added will comply with all applicable emission standards; 
and
    (3) A determination whether the manufacturer's original test fleet 
selection is still appropriate, and if the original test fleet 
selection is determined not to be appropriate, test fleet selection(s) 
representing the engines changed or added which would have been 
required if the engines had been included in the original application 
for certification.
    (c) The Administrator may require the manufacturer to perform tests 
on the engine representing the engine to be added or changed.
    (d)(1) Based on the description of the amendment and data derived 
from such testing as the Administrator may require or conduct, the 
Administrator will determine whether the change or addition would still 
be covered by the certificate of conformity then in effect.
    (2) If the Administrator determines that the change or new 
engine(s) meets the requirements of this part and the Act, the 
appropriate certificate of conformity shall be amended.
    (3) If the Administrator determines that the changed engine(s) does 
not meet the requirements of this part and the Act, the certificate of 
conformity will not be amended. The Administrator shall provide a 
written explanation to the manufacturer of the decision not to amend 
the certificate. The manufacturer may request a hearing on a denial.
    (e) A manufacturer may make changes in or additions to production 
engines concurrently with the notification to the Administrator, as 
required by paragraph (a) of this section, if the manufacturer complies 
with the following requirements:
    (1) In addition to the information required in paragraph (b) of 
this section, the manufacturer shall supply supporting documentation, 
test data, and engineering evaluations as appropriate to demonstrate 
that all

[[Page 73350]]

affected engines will still meet applicable emission standards.
    (2) If, after a review, the Administrator determines additional 
testing is required, the manufacturer shall provide the required test 
data within 30 days or cease production of the affected engines.
    (3) If the Administrator determines that the affected engines do 
not meet applicable requirements, the Administrator will notify the 
manufacturer to cease production of the affected engines and to recall 
and correct at no expense to the owner all affected engines previously 
produced.
    (4) Election to produce engines under this paragraph (e) will be 
deemed to be a consent to recall all engines that the Administrator 
determines do not meet applicable standards and to cause such 
nonconformity to be remedied at no expense to the owner.


Sec. 94.211  Emission-related maintenance instructions for purchasers.

    (a) The manufacturer shall furnish or cause to be furnished to the 
ultimate purchaser of each new engine, subject to the standards 
prescribed in Sec. 94.8, written instructions for the proper 
maintenance and use of the engine as are reasonable and necessary to 
assure the proper functioning of the emissions control system, 
consistent with the applicable provisions of paragraph (b) of this 
section.
    (1) The maintenance and use instructions required by this section 
shall be clear and easily understandable.
    (2) The maintenance instructions required by this section shall 
contain a general description of the documentation that would 
demonstrate for warranty purposes that the ultimate purchaser or any 
subsequent owner had complied with the instructions.
    (b)(1) The manufacturer must provide in boldface type on the first 
page of the written maintenance instructions notice that maintenance, 
replacement, or repair of the emission control devices and systems may 
be performed by any engine repair establishment or individual.
    (2) The instructions under paragraph (b)(1) of this section will 
not include any condition on the ultimate purchaser's or owner's using, 
in connection with such engine, any component or service (other than a 
component or service provided without charge under the terms of the 
purchase agreement) which is identified by brand, trade, or corporate 
name. Such instructions also will not directly or indirectly 
distinguish between service performed by any other service 
establishments with which such manufacturer has a commercial 
relationship and service performed by independent vessel or engine 
repair facilities with which such manufacturer has no commercial 
relationship.
    (3) The prohibition of paragraph (b)(2) of this section may be 
waived by the Administrator if:
    (i) The manufacturer demonstrates to the Administrator's 
satisfaction that the engine will function properly only if the 
component or service so identified is used in connection with such 
engine; and
    (ii) The Administrator finds that such a waiver is in the public 
interest.
    (c) The manufacturer shall provide to the Administrator, no later 
than the time of the submission required by Sec. 94.203, a copy of the 
emission-related maintenance instructions that the manufacturer 
proposes to supply to the ultimate purchaser or owner in accordance 
with this section. The Administrator will review such instructions to 
determine whether they are reasonable and necessary to ensure the 
proper functioning of the engine's emission control systems. If the 
Administrator determines that such instructions are not reasonable and 
necessary to ensure the proper functioning of the emission control 
systems, he/she may disapprove the application for certification or may 
require that the manufacturer modify the instructions.
    (d) Any revision to the maintenance instructions which will affect 
emissions shall be supplied to the Administrator at least 30 days 
before being supplied to the ultimate purchaser or owner unless the 
Administrator consents to a lesser period of time, and is subject to 
the provisions of Sec. 94.210.
    (e) This paragraph (e) specifies emission-related scheduled 
maintenance for purposes of obtaining durability data for marine 
engines. The maintenance intervals specified in this paragraph are 
minimum intervals.
    (1) All emission-related scheduled maintenance for purposes of 
obtaining durability data must occur at the same or longer hours of use 
intervals as those specified in the manufacturer's maintenance 
instructions furnished to the ultimate purchaser of the engine under 
paragraph (a) of this section. This maintenance schedule may be updated 
as necessary throughout the testing of the engine, provided that no 
maintenance operation is deleted from the maintenance schedule after 
the operation has been performed on the test equipment or engine.
    (2) Any emission-related maintenance which is performed on 
equipment, engines, subsystems, or components must be technologically 
necessary to ensure in-use compliance with the emission standards. The 
manufacturer must submit data which demonstrate to the Administrator 
that all of the emission-related scheduled maintenance which is to be 
performed is technologically necessary. Scheduled maintenance must be 
approved by the Administrator prior to being performed or being 
included in the emission-related maintenance instructions provided to 
the purchasers under paragraph (a) of this section.
    (i) The Administrator may require longer maintenance intervals than 
those listed in paragraphs (e)(3) and (e)(4) of this section where the 
listed intervals are not technologically necessary.
    (ii) The Administrator may allow manufacturers to specify shorter 
maintenance intervals than those listed in paragraphs (e)(3) and (e)(4) 
of this section where technologically necessary for Category 2 engines.
    (3) The adjustment, cleaning, repair, or replacement of items 
listed in paragraphs (e)(3)(i) through (e)(3)(iii) of this section 
shall occur at 1,500 hours of use and at 1,500-hour intervals 
thereafter.
    (i) Exhaust gas recirculation system-related filters and coolers.
    (ii) Positive crankcase ventilation valve.
    (iii) Fuel injector tips (cleaning only).
    (4) The adjustment, cleaning and repair of items in paragraphs 
(e)(4)(i) through (e)(4)(vii) of this section shall occur at 3,000 
hours of use and at 3,000-hour intervals thereafter for engines with 
per-cylinder displacement less than 1.2 liters, or at 4,500-hour 
intervals thereafter for engines with per-cylinder displacement greater 
than or equal to 1.2 liters.
    (i) Fuel injectors.
    (ii) Turbocharger.
    (iii) Electronic engine control unit and its associated sensors and 
actuators.
    (iv) Particulate trap or trap-oxidizer system (including related 
components).
    (v) Exhaust gas recirculation system (including all related control 
valves and tubing), except as otherwise provided in paragraph (e)(3)(i) 
of this section.
    (vi) Catalytic convertor.
    (vii) Any other add-on emission-related component (i.e., a 
component whose sole or primary purpose is to reduce emissions or whose 
failure will significantly degrade emission control and whose function 
is not integral to the design and performance of the engine).
    (f) Scheduled maintenance not related to emissions which is 
reasonable and technologically necessary (e.g., oil change, oil filter 
change, fuel filter change, air filter change, cooling system

[[Page 73351]]

maintenance, adjustment of idle speed, governor, engine bolt torque, 
valve lash, injector lash, timing, lubrication of the exhaust manifold 
heat control valve, etc.) may be performed on durability engines at the 
least frequent intervals recommended by the manufacturer to the 
ultimate purchaser, (e.g., not the intervals recommended for severe 
service).
    (g) Adjustment of engine idle speed on emission data engines may be 
performed once before the low-hour emission test point. Any other 
engine, emission control system, or fuel system adjustment, repair, 
removal, disassembly, cleaning, or replacement on emission data 
vehicles shall be performed only with advance approval of the 
Administrator.
    (h) Equipment, instruments, or tools may not be used to identify 
malfunctioning, maladjusted, or defective engine components unless the 
same or equivalent equipment, instruments, or tools will be available 
to dealerships and other service outlets and are:
    (1) Used in conjunction with scheduled maintenance on such 
components; or
    (2) Used subsequent to the identification of an engine malfunction, 
as provided in paragraph (e) of this section for emission data engines; 
or
    (3) Specifically authorized by the Administrator.
    (i) All test data, maintenance reports, and required engineering 
reports shall be compiled and provided to the Administrator in 
accordance with Sec. 94.215.
    (j)(1) The components listed in paragraphs (j)(1)(i) through 
(j)(1)(vi) of this section are defined as critical emission-related 
components.
    (i) Catalytic convertor.
    (ii) Electronic engine control unit and its associated sensors and 
actuators.
    (iii) Exhaust gas recirculation system (including all related 
filters, coolers, control valves, and tubing).
    (iv) Positive crankcase ventilation valve.
    (v) Particulate trap or trap-oxidizer system.
    (vi) Any other add-on emission-related component (i.e., a component 
whose sole or primary purpose is to reduce emissions or whose failure 
will significantly degrade emission control and whose function is not 
integral to the design and performance of the engine).
    (2) All critical emission-related scheduled maintenance must have a 
reasonable likelihood of being performed in use. The manufacturer must 
show the reasonable likelihood of such maintenance being performed in-
use. Critical emission-related scheduled maintenance items which 
satisfy one of the conditions defined in paragraphs (j)(2)(i) through 
(j)(2)(vi) of this section will be accepted as having a reasonable 
likelihood of being performed in use.
    (i) Data are presented which establish for the Administrator a 
connection between emissions and engine performance such that as 
emissions increase due to lack of maintenance, vehicle performance will 
simultaneously deteriorate to a point unacceptable for typical 
operation.
    (ii) Survey data are submitted which adequately demonstrate to the 
Administrator with an 80 percent confidence level that 80 percent of 
such engines already have this critical maintenance item performed in-
use at the recommended interval(s).
    (iii) A clearly displayed visible signal system approved by the 
Administrator is installed to alert the equipment operator that 
maintenance is due. A signal bearing the message ``maintenance needed'' 
or ``check engine,'' or a similar message approved by the 
Administrator, shall be actuated at the appropriate usage point or by 
component failure. This signal must be continuous while the engine is 
in operation and not be easily eliminated without performance of the 
required maintenance. Resetting the signal shall be a required step in 
the maintenance operation. The method for resetting the signal system 
shall be approved by the Administrator. The system must not be designed 
to deactivate upon the end of the useful life of the engine or 
thereafter.
    (iv) A manufacturer may desire to demonstrate through a survey that 
a critical maintenance item is likely to be performed without a visible 
signal on a maintenance item for which there is no prior in-use 
experience without the signal. To that end, the manufacturer may in a 
given model year market up to 200 randomly selected engines per 
critical emission-related maintenance item without such visible 
signals, and monitor the performance of the critical maintenance item 
by the owners to show compliance with paragraph (j)(2)(ii) of this 
section. This option is restricted to two consecutive model years and 
may not be repeated until any previous survey has been completed. If 
the critical maintenance involves more than one engine family, the 
sample will be sales weighted to ensure that it is representative of 
all the families in question.
    (v) The manufacturer provides the maintenance free of charge, and 
clearly informs the customer that the maintenance is free in the 
instructions provided under paragraph (a) of this section.
    (vi) The manufacturer uses any other method which the Administrator 
approves as establishing a reasonable likelihood that the critical 
maintenance will be performed in-use.
    (3) Visible signal systems used under paragraph (j)(2)(iii) of this 
section are considered an element of design of the emission control 
system. Therefore, disabling, resetting, or otherwise rendering such 
signals inoperative without also performing the indicated maintenance 
procedure is a prohibited act.


Sec. 94.212  Labeling.

    (a) General requirements. (1) Each new engine covered by a 
certificate of conformity under Sec. 94.208 shall be labeled by the 
manufacturer in the manner described in this paragraph (b) of this 
section at the time of manufacture.
    (2) Each new marine engine modified from a base engine by post-
manufacture marinizers in accordance with the provisions of Sec. 94.209 
(b) and covered by a certificate of conformity under Sec. 94.208 shall 
be labeled by the PMM in the manner described in paragraph (b) of this 
section.
    (b) Engine labels. Engine labels meeting the specifications of this 
section shall be applied to every engine by the manufacturer at the 
point of original manufacture. Engine labels shall be permanent and 
legible and shall be affixed to the engine in a position in which it 
will be readily visible after installation of the engine in the vessel. 
The label shall be attached to an engine part necessary for normal 
operation and not normally requiring replacement during the useful life 
of the engine. The label shall be affixed by the manufacturer in such 
manner that it cannot be removed without destroying or defacing the 
label. The label shall not be affixed to any equipment which is easily 
detached from such engine. The label may be not be made up of more than 
one piece without the advance approval of the Administrator. The label 
shall contain the following information lettered in the English 
language in block letters and numerals, which shall be of a color that 
contrasts with the background of the label:
    (1) The label heading: Marine Engine Emission Control Information.
    (2) Full corporate name and trademark of the manufacturer.
    (3) The model year.
    (4) The per-cylinder displacement of the engine.
    (5) Engine family and configuration identification.

[[Page 73352]]

    (6) A prominent unconditional statement of compliance with U.S. 
Environmental Protection Agency regulations which apply to marine 
engines designated by the parameters of paragraphs 5(b)(2)(v)(A) 
through (E) of this section.
    (7) The useful life of the engine.
    (8) The standards and/or FELs to which the engine was certified.
    (9) Engine tune-up specifications and adjustments, as recommended 
by the manufacturer in accordance with the applicable emission 
standards, including but not limited to idle speeds(s), injection 
timing, valve lash (as applicable), as well as other parameters deemed 
necessary by the manufacturer.
    (10) The application for which the engine family is certified. (For 
example: constant-speed auxiliary, variable-speed propulsion engines 
used with fixed-pitch propellers, etc.)
    (c) The provisions of this section shall not prevent a manufacturer 
from also providing on the label any other information that such 
manufacturer deems necessary for, or useful to, the proper operation 
and satisfactory maintenance of the vessel or engine.
    (d) Engines certified under the voluntary standards described in 
Sec. 94.8(f) to be designated as Blue Sky Series engines must contain 
the statement on the label: ``Blue Sky Series''.
    (e) If an engine can be modified to operate on residual fuel, but 
has not been certified to meet the standards on such a fuel, it must 
contain the statement on the label: ``THIS ENGINE IS CERTIFIED FOR 
OPERATION ONLY WITH DISTILLATE DIESEL FUEL. MODIFYING THE ENGINE TO 
OPERATE ON RESIDUAL FUEL MAY BE A VIOLATION OF FEDERAL LAW SUBJECT TO 
CIVIL PENALTIES.'' The Administrator may approve alternate language.


Sec. 94.213  Submission of engine identification numbers.

    (a) Upon request of the Administrator, the manufacturer of any 
engine covered by a certificate of conformity shall, within 30 days of 
receipt of such request, identify by engine identification number, the 
engines covered by the certificate of conformity.
    (b) The manufacturer of any engines covered by a certificate of 
conformity shall provide to the Administrator, within 60 days of the 
issuance of a certificate of conformity, an explanation of the elements 
in any engine identification coding system in sufficient detail to 
enable the Administrator to identify those engines which are covered by 
a certificate of conformity.


Sec. 94.214  Production engines.

    Any manufacturer obtaining certification under this part shall 
supply to the Administrator, upon his/her request, a reasonable number 
of production engines, as specified by the Administrator. The engines 
shall be representative of the engines, emission control systems, and 
fuel systems offered and typical of production engines available for 
sale or use under the certificate. These engines shall be supplied for 
testing at such time and place and for such reasonable periods as the 
Administrator may require.


Sec. 94.215  Maintenance of records; submittal of information; right of 
entry.

    (a) Any manufacturer subject to any of the standards or procedures 
prescribed in this subpart shall establish, maintain and retain the 
following adequately organized and indexed records:
    (1) General records. The records required to be maintained by this 
paragraph (a) shall consist of:
    (i) Identification and description of all certification engines for 
which testing is required under this subpart.
    (ii) A description of all emission control systems which are 
installed on or incorporated in each certification engine.
    (iii) A description of all procedures used to test each such 
certification engine.
    (iv) A copy of all applications for certification, filed with the 
Administrator.
    (2) Individual records. (i) A brief history of each engine used for 
certification under this subpart including:
    (A) In the case where a current production engine is modified for 
use as a certification engine, a description of the process by which 
the engine was selected and of the modifications made. In the case 
where the certification engine is not derived from a current production 
engine, a general description of the buildup of the engine (e.g., 
whether experimental heads were cast and machined according to supplied 
drawings). In the cases in the previous two sentences, a description of 
the origin and selection process for fuel system components, ignition 
system components (as applicable), intake air pressurization and 
cooling system components, cylinders, pistons and piston rings, exhaust 
smoke control system components, and exhaust aftertreatment devices as 
applicable, shall be included. The required descriptions shall specify 
the steps taken to assure that the certification engine, with respect 
to its engine, drivetrain, fuel system, emission control system 
components, exhaust aftertreatment devices, or any other devices or 
components as applicable, that can reasonably be expected to influence 
exhaust emissions will be representative of production engines and that 
either: all components and/or engine, construction processes, component 
inspection and selection techniques, and assembly techniques employed 
in constructing such engines are reasonably likely to be implemented 
for production engines; or that they are as close as practicable to 
planned construction and assembly process.
    (B) A complete record of all emission tests performed (except tests 
performed by EPA directly), including test results, the date and 
purpose of each test, and the number of hours accumulated on the 
engine.
    (C) A record and description of all maintenance and other servicing 
performed, giving the date of the maintenance or service and the reason 
for it.
    (D) A record and description of each test performed to diagnose 
engine or emission control system performance, giving the date and time 
of the test and the reason for it.
    (E) A brief description of any significant events affecting the 
engine during the period covered by the history and not described by an 
entry under one of the previous headings, including such extraordinary 
events as accidents involving the engine or dynamometer runaway.
    (ii) Each such history shall be started on the date that the first 
of any of the selection or buildup activities in paragraph (a)(2)(i)(A) 
of this section occurred with respect to the certification engine and 
shall be kept in a designated location.
    (3) All records, other than routine emission test records, required 
to be maintained under this subpart shall be retained by the 
manufacturer for a period of 8 years after issuance of all certificates 
of conformity to which they relate. Routine emission test records shall 
be retained by the manufacturer for a period of one (1) year after 
issuance of all certificates of conformity to which they relate. 
Records may be retained as hard copy or reduced to computer disks, 
etc., depending on the record retention procedures of the manufacturer: 
Provided, that in every case all the information contained in the hard 
copy shall be retained.
    (4) Nothing in this section limits the Administrator's discretion 
in requiring the manufacturer to retain additional

[[Page 73353]]

records or submit information not specifically required by this 
section.
    (5) Pursuant to a request made by the Administrator, the 
manufacturer shall submit to him/her the information that is required 
to be retained.
    (6) EPA may void a certificate of conformity ab initio for an 
engine family for which the manufacturer fails to retain the records 
required in this section or to provide such information to the 
Administrator upon request.
    (b) The manufacturer of engines subject to any of the standards 
prescribed in this part shall submit to the Administrator, at the time 
of issuance by the manufacturer, copies of all instructions or 
explanations regarding the use, repair, adjustment, maintenance, or 
testing of such engine, relevant to the control of crankcase, or 
exhaust emissions issued by the manufacturer, for use by other 
manufacturers, assembly plants, distributors, dealers, owners and 
operators. Any material not translated into the English language need 
not be submitted unless specifically requested by the Administrator.
    (c) Any manufacturer participating in averaging, banking and 
trading program of subpart D of this part must comply with the 
maintenance of records requirements of Sec. 94.308.
    (d)(1) Any manufacturer who has applied for certification of a new 
engine subject to certification testing under this subpart shall admit 
or cause to be admitted any EPA Enforcement Officer during operating 
hours on presentation of credentials to any of the following:
    (i) Any facility where any such tests or any procedures or 
activities connected with such test are or were performed;
    (ii) Any facility where any engine which is being tested (or was 
tested, or is to be tested) is present;
    (iii) Any facility where any construction process or assembly 
process used in the modification or buildup of such an engine into a 
certification engine is taking place or has taken place; or
    (iv) Any facility where any record or other document relating to 
any of the activities listed in this paragraph (d)(1).
    (2) Upon admission to any facility referred to in paragraph (d)(1) 
of this section, any EPA Enforcement Officer shall be allowed:
    (i) To inspect and monitor any part or aspect of such procedures, 
activities and testing facilities including, but not limited to, 
monitoring engine preconditioning, emissions tests, service 
accumulation, maintenance, and engine storage procedures, and to verify 
correlation or calibration of test equipment;
    (ii) To inspect and make copies of any such records, designs, or 
other documents, including those records specified in Subpart D of this 
part; and
    (iii) To inspect and/or photograph any part or aspect of any such 
certification engine and any components to be used in the construction 
thereof.
    (3) In order to allow the Administrator to determine whether or not 
production engines, conform to the conditions upon which a certificate 
of conformity has been issued, or conform in all material respects to 
the design specifications applicable to those engines, as described in 
the application for certification for which a certificate of conformity 
has been issued, any manufacturer shall admit any EPA Enforcement 
Officer on presentation of credentials to:
    (i) Any facility where any document, design or procedure relating 
to the translation of the design and construction of engines and 
emission related components described in the application for 
certification or used for certification testing into production engines 
is located or carried on;
    (ii) Any facility where any engines to be introduced into commerce 
are manufactured; and
    (iii) Any facility where records specified this section are 
located.
    (4) On admission to any such facility referred to in paragraph 
(d)(3) of this section, any EPA Enforcement Officer shall be allowed:
    (i) To inspect and monitor any aspects of such manufacture and 
other procedures;
    (ii) To inspect and make copies of any such records, documents or 
designs;
    (iii) To inspect and photograph any part or aspect of any such 
engine(s) and any component used in the assembly thereof that are 
reasonably related to the purpose of his/her entry; and
    (iv) To inspect and make copies of any records and documents 
specified in this section.
    (5) Any EPA Enforcement Officer shall be furnished by those in 
charge of a facility being inspected with such reasonable assistance as 
he/she may request to help him/her discharge any function listed in 
this part. Each applicant for or recipient of certification is required 
to cause those in charge of a facility operated for its benefit to 
furnish such reasonable assistance without charge to EPA whether or not 
the applicant controls the facility.
    (6) The duty to admit or cause to be admitted any EPA Enforcement 
Officer applies to any facility involved in the manufacturing or 
assembling of engines, whether or not the manufacturer owns or controls 
the facility in question and applies both to domestic and to foreign 
manufacturers and facilities. EPA will not attempt to make any 
inspections which it has been informed that local law forbids. However, 
if local law makes it impossible to do what is necessary to insure the 
accuracy of data generated at a facility, no informed judgment that an 
engine is certifiable or is covered by a certificate can properly be 
based on those data. It is the responsibility of the manufacturer to 
locate its testing and manufacturing facilities in jurisdictions where 
this situation will not arise.
    (7) For purposes of this section:
    (i) ``Presentation of credentials'' shall mean display of the 
document designating a person as an EPA Enforcement Officer.
    (ii) Where component or engine storage areas or facilities are 
concerned, ``operating hours'' shall mean all times during which 
personnel other than custodial personnel are at work in the vicinity of 
the area or facility and have access to it.
    (iii) Where facilities or areas other than those covered by 
paragraph (d)(7)(ii) of this section are concerned, ``operating hours'' 
shall mean all times during which an assembly line is in operation or 
all times during which testing, maintenance, service accumulation, 
production or compilation of records, or any other procedure or 
activity related to certification testing, to translation of designs 
from the test stage to the production stage, or to engine manufacture, 
or assembly is being carried out in a facility.
    (iv) ``Reasonable assistance'' includes, but is not limited to, 
clerical, copying, interpretation and translation services, the making 
available on request of personnel of the facility being inspected 
during their working hours to inform the EPA Enforcement Officer of how 
the facility operates and to answer his questions, and the performance 
on request of emissions tests on any engine which is being, has been, 
or will be used for certification testing. Such tests shall be 
nondestructive, but may require appropriate service accumulation. A 
manufacturer may be compelled to cause the personal appearance of any 
employee at such a facility before an EPA Enforcement Officer by 
written request for his appearance, signed by the Assistant 
Administrator for Air and Radiation or the Assistant Administrator for 
Enforcement and Compliance Assurance, served on the manufacturer. Any 
such employee who has been instructed by the manufacturer to appear 
will be entitled to be

[[Page 73354]]

accompanied, represented and advised by counsel.
    (v) Any entry without 24 hour prior written or oral notification to 
the affected manufacturer shall be authorized in writing by the 
Assistant Administrator for Air and Radiation or the Assistant 
Administrator for Enforcement and Compliance Assurance.
    (8) EPA may void a certificate of conformity ab initio for engines 
introduced into commerce if the manufacturer (or contractor for the 
manufacturer, if applicable) fails to comply with any provision of this 
section.


Sec. 94.216  Hearing procedures.

    (a)(1) After granting a request for a hearing under Sec. 94.210 or 
Sec. 94.208, the Administrator shall designate a Presiding Officer for 
the hearing.
    (2) The hearing shall be held as soon as practicable at a time and 
place fixed by the Administrator or by the Presiding Officer.
    (3) In the case of any hearing requested pursuant to Sec. 94.208, 
the Administrator may in his/her discretion direct that all argument 
and presentation of evidence be concluded within such fixed period not 
less than 30 days as he/she may establish from the date that the first 
written offer of a hearing is made to the manufacturer. To expedite 
proceedings, the Administrator may direct that the decision of the 
Presiding Officer (who may, but need not be the Administrator) shall be 
the final EPA decision.
    (b)(1) Upon his/her appointment pursuant to paragraph (a) of this 
section, the Presiding Officer will establish a hearing file. The file 
shall consist of the notice issued by the Administrator under 
Sec. 94.210 or Sec. 94.208 together with any accompanying material, the 
request for a hearing and the supporting data submitted therewith, and 
all documents relating to the request for certification and all 
documents submitted therewith, and correspondence and other data 
material to the hearing.
    (2) The hearing file will be available for inspection by the 
applicant at the office of the Presiding Officer.
    (c) An applicant may appear in person, or may be represented by 
counsel or by any other duly authorized representative.
    (d)(1) The Presiding Officer, upon the request of any party, or in 
his/her discretion, may arrange for a prehearing conference at a time 
and place specified by him/her to consider the following:
    (i) Simplification of the issues;
    (ii) Stipulations, admissions of fact, and the introduction of 
documents;
    (iii) Limitation of the number of expert witnesses;
    (iv) Possibility of agreement disposing of all or any of the issues 
in dispute;
    (v) Such other matters as may aid in the disposition of the 
hearing, including such additional tests as may be agreed upon by the 
parties.
    (2) The results of the conference shall be reduced to writing by 
the Presiding Officer and made part of the record.
    (e)(1) Hearings shall be conducted by the Presiding Officer in an 
informal but orderly and expeditious manner. The parties may offer oral 
or written evidence, subject to the exclusion by the Presiding Officer 
of irrelevant, immaterial and repetitious evidence.
    (2) Witnesses will not be required to testify under oath. However, 
the Presiding Officer shall call to the attention of witnesses that 
their statements may be subject to the provisions of 18 U.S.C. 1001 
which imposes penalties for knowingly making false statements or 
representations, or using false documents in any matter within the 
jurisdiction of any department or agency of the United States.
    (3) Any witness may be examined or cross-examined by the Presiding 
Officer, the parties, or their representatives.
    (4) Hearings shall be reported verbatim. Copies of transcripts of 
proceedings may be purchased by the applicant from the reporter.
    (5) All written statements, charts, tabulations, and similar data 
offered in evidence at the hearings shall, upon a showing satisfactory 
to the Presiding Officer of their authenticity, relevancy, and 
materiality, be received in evidence and shall constitute a part of the 
record.
    (6) Oral argument may be permitted in the discretion of the 
Presiding Officer and shall be reported as part of the record unless 
otherwise ordered by him/her.
    (f)(1) The Presiding Officer shall make an initial decision which 
shall include written findings and conclusions and the reasons or basis 
therefor on all the material issues of fact, law, or discretion 
presented on the record. The findings, conclusions, and written 
decision shall be provided to the parties and made a part of the 
record. The initial decision shall become the decision of the 
Administrator without further proceedings unless there is an appeal to 
the Administrator or motion for review by the Administrator within 30 
days of the date the initial decision was filed.
    (2) On appeal from or review of the initial decision, the 
Administrator shall have all the powers which he/she would have in 
making the initial decision including the discretion to require or 
allow briefs, oral argument, the taking of additional evidence or the 
remanding to the Presiding Officer for additional proceedings. The 
decision by the Administrator shall include written findings and 
conclusions and the reasons or basis therefor on all the material 
issues of fact, law, or discretion presented on the appeal or 
considered in the review.


Sec. 94.217  Emission data engine selection.

    (a) The manufacturer must select for testing, from each engine 
family, the engine configuration which is expected to be worst-case for 
exhaust emission compliance on in-use engines, considering all exhaust 
emission constituents and the range of installation options available 
to vessel builders. The engines selected for testing are collectively 
described as the test fleet.
    (b) Each engine in the test fleet must be constructed to be 
representative of production engines.
    (c) After review of the manufacturer's test fleet, the 
Administrator may select from the available fleet one additional test 
engine from each engine family.
    (d) Each engine selected shall be tested according to the 
provisions of Subpart B of this part.
    (e) In lieu of testing an emission data engine selected under 
paragraph (a) of this section and submitting the resulting data, a 
manufacturer may, with Administrator approval, use emission data on a 
similar engine for which certification has previously been obtained or 
for which all applicable data required under this subpart have 
previously been submitted. These data must be submitted in the 
application for certification.


Sec. 94.218  Deterioration factor determination.

    Manufacturers shall determine exhaust emission deterioration 
factors using good engineering judgement according to the provisions of 
this section. Every deterioration factor must be, in the 
Administrator's judgment, consistent with emissions increases observed 
in-use based on emission testing of similar engines. Deterioration 
factors that predict emission increases over the useful life of an 
engine that are significantly less than the emission increases over the 
useful life observed from in-use testing of similar engines shall not 
be used.
    (a) A separate exhaust emission deterioration factor shall be 
established for each engine family and for each emission constituent 
applicable to that family.

[[Page 73355]]

    (b) Calculation procedures. (1) For engines not utilizing 
aftertreatment technology (e.g., catalyst). For each applicable 
emission constituent, an additive deterioration factor shall be used; 
that is, a deterioration factor that when added to the low mileage 
emission rate equals the emission rate at the end of useful life. 
However, if the deterioration factor supplied by the manufacturer is 
less than zero, it shall be zero for the purposes of this section.
    (2) For engines utilizing aftertreatment technology (e.g., 
catalyst). For each applicable emission constituent, a multiplicative 
deterioration factor shall be used; that is deterioration factors that 
when multiplied by the low mileage emission rate equal the emission 
rate at the end of useful life. However, if the deterioration factor 
supplied by the manufacturer is less than one, it shall be one for the 
purposes of this section.
    (c) Rounding. (1) In the case of a multiplicative exhaust emission 
deterioration factor, the factor shall be rounded to three places to 
the right of the decimal point in accordance with ASTM E 29-93a 
(incorporated by reference at Sec. 94.5).
    (2) In the case of an additive exhaust emission deterioration 
factor, the factor shall be established to a minimum of two places to 
the right of the decimal in accordance with ASTM E 29-93a (incorporated 
by reference at Sec. 94.5).
    (d)(1) Except as allowed by paragraph (d)(2) of this section, the 
manufacturer shall determine the deterioration factors based on service 
accumulation and related testing, according to the manufacturer's 
procedures, and the provisions of Secs. 94.219 and 94.220. The 
manufacturer shall determine the form and extent of this service 
accumulation, consistent with good engineering practice, and shall 
describe this process in the application for certification.
    (2) Alternatives to service accumulation and testing for the 
determination of a deterioration factor. A written explanation of the 
appropriateness of using an alternative must be included in the 
application for certification.
    (i) Carryover and carryacross of durability emission data. In lieu 
of testing an emission data or durability data engine selected under 
Sec. 94.217 or Sec. 94.219, and submitting the resulting data, a 
manufacturer may, with Administrator approval, use exhaust emission 
deterioration data on a similar engine for which certification to the 
same standard has previously been obtained or for which all applicable 
data required under this subpart have previously been submitted. These 
data must be submitted in the application for certification.
    (ii) Use of non-marine deterioration data. In the case where a 
manufacturer produces a certified motor vehicle engine, locomotive 
engine, or other nonroad engine that is similar to the marine engine to 
be certified, deterioration data from the non-marine engine may be 
applied to the marine engine. This application of deterioration data 
from such an engine to a marine engine is subject to Administrator 
approval, and the determination of whether the engines are similar 
shall be based on good engineering judgment.
    (iii) Engineering analysis for established technologies. In the 
case where an engine family uses technology which is well established, 
an analysis based on good engineering practices may be used in lieu of 
testing to determine a deterioration factor for that engine family. 
Engines using exhaust gas recirculation or aftertreatment are excluded 
from this provision. The manufacturer shall provide a written statement 
to the Administrator that all data, analyses, test procedures, 
evaluations, and other documents, on which the deterioration factor is 
based, are available to the Administrator upon request.


Sec. 94.219  Durability data engine selection.

    (a) The manufacturer shall select for durability testing, from each 
engine family, the engine configuration which is expected to generate 
the highest level of exhaust emission deterioration on engines in use, 
considering all exhaust emission constituents and the range of 
installation options available to vessel builders. The manufacturer 
shall use good engineering judgment in making this selection.
    (b) Carryover data satisfying the provisions of Sec. 94.220 may 
also be used in lieu of testing the configuration selected in paragraph 
(a) of this section.
    (c) Durability data engines shall be built from subsystems and 
components that are representative of actual production engines.


Sec. 94.220  Service accumulation.

    (a) Each test emission data engine in the test fleet may be 
operated with all emission control systems operating properly for a 
period, up to 125 hours of operation, that is sufficient to stabilize 
emissions.
    (b) Durability data engines shall accumulate service in a manner 
which will represent the emission levels from in-use engines over their 
full useful life, consistent with good engineering judgement.
    (1) Components may be removed from the engine and aged separately.
    (2) End of useful life emission levels and deterioration factors 
may be projected from durability data engines which have completed less 
than full useful life service accumulation, provided that the amount of 
service accumulation completed and projection procedures are determined 
using good engineering judgement.
    (c) No maintenance, other than recommended lubrication and filter 
changes or maintenance otherwise allowed by this part, may be performed 
during service accumulation without the Administrator's approval.
    (d) The manufacturer must maintain, and provide to the 
Administrator if requested, records stating the rationale for selecting 
the service accumulation period and records describing the method used 
to accumulate service hours on the test engine(s).


Sec. 94.221  Application of good engineering judgment.

    (a) The manufacturer shall exercise good engineering judgment in 
making all decisions called for under this part, including but not 
limited to selections, categorizations, determinations, and 
applications of the requirements of the part.
    (b) Upon written request by the Administrator, the manufacturer 
shall provide within 15 working days (or such longer period as may be 
allowed by the Administrator) a written description of the engineering 
judgment in question.
    (c) The Administrator may reject any such decision by a 
manufacturer if it is not based on good engineering judgment or is 
otherwise inconsistent with the requirements of this part.
    (d) If the Administrator rejects a decision by a manufacturer with 
respect to the exercise of good engineering judgment, the following 
provisions shall apply:
    (1) If the Administrator determines that incorrect information was 
deliberately used in the decision process, that important information 
was deliberately overlooked, that the decision was not made in good 
faith, or that the decision was not made with a rational basis, the 
Administrator may suspend or void ab initio a certificate of 
conformity.
    (2) If the Administrator determines that the manufacturer's 
decision is not covered by the provisions of paragraph (d) (1) of this 
section, but that a different decision would reflect a better exercise 
of good engineering judgment, then the Administrator will notify the

[[Page 73356]]

manufacturer of this concern and the basis of the concern.
    (i) The manufacturer shall have at least 30 days to respond to this 
notice. The Administrator may extend this response period upon request 
from the manufacturer if it is necessary to generate additional data 
for the manufacturer's response.
    (ii) The Administrator shall make the final ruling after 
considering the information provided by the manufacturer during the 
response period. If the Administrator determines that the 
manufacturer's decision was not made using good engineering judgment, 
he/she may reject that decision and apply the new ruling to future 
corresponding decisions as soon as practicable.
    (e) The Administrator shall notify the manufacturer in writing 
regarding any decision reached under paragraph (d)(1) or (2) of this 
section. The Administrator shall include in this notification the basis 
for reaching the determination.
    (f) Within 30 working days following receipt of notification of the 
Administrator's determinations made under paragraph (d) of this 
section, the manufacturer may request a hearing on those 
determinations. The request shall be in writing, signed by an 
authorized representative of the manufacturer, and shall include a 
statement specifying the manufacturer's objections to the 
Administrator's determinations, and data or other analysis in support 
of such objections. If, after review of the request and supporting data 
or analysis, the Administrator finds that the request raises a 
substantial factual issue, he/she shall provide the manufacturer a 
hearing in accordance with Sec. 94.216 with respect to such issue.


Sec. 94.222  Certification of engines on imported vessels.

    For marine engines subject to the requirements of this part that 
are installed on imported vessels, the Administrator may specify 
alternate certification provisions as necessary.

Subpart D Certification Averaging, Banking, and Trading Provisions


Sec. 94.301  Applicability.

    Marine engine families subject to the standards of Subpart A of 
this part are eligible to participate in the certification averaging, 
banking, and trading program described in this subpart.
    The provisions of this subpart apply to manufacturers of new 
engines that are subject to the emission standards of Sec. 94.8.


Sec. 94.302  Definitions.

    The definitions of Subpart A of this part apply to this subpart. 
The following definitions also apply:
    Applicable standard means a standard that would have otherwise been 
applicable had the engine not been certified under this subpart to an 
FEL different than that standard.
    Broker means any entity that facilitates a trade between a buyer 
and seller.
    Buyer means the entity that receives credits as a result of trade.
    Reserved credits means credits that have been generated but have 
not yet been reviewed by EPA or used to demonstrate compliance under 
the averaging provisions of this subpart.
    Seller means the entity that provides credits during a trade.


Sec. 94.303  General provisions.

    (a) Participation in the averaging, banking, and trading program is 
voluntary. A manufacturer may choose to involve some or all of its 
engine families in any or all aspects of the program.
    (b) An engine family is eligible to participate in the 
certification averaging, banking, and trading program for 
THC+NOX and PM emissions only if it is subject to regulation 
under this part with certain exceptions specified in paragraph (c) of 
this section. No averaging, banking, and trading program is available 
for meeting the CO standards of this part.
    (c) Engines may not participate in the certification averaging, 
banking, and trading program if they are exported. Only engines 
certified under this part are eligible for generation or use of credits 
in this certification averaging, banking, and trading program. Engines 
certified to the Blue Sky provisions of Sec. 94.8(f) are not eligible 
for inclusion in this certification averaging, banking, and trading 
program.
    (d) Averaging involves the generation of credits by a manufacturer 
for use by that same manufacturer in the same calendar year. A 
manufacturer may use averaging during certification to offset an 
emission exceedance of an engine family caused by an FEL above the 
applicable emission standard, subject to the provisions of this 
subpart.
    (e) Banking involves the generation of credits by a manufacturer in 
a given calendar year for use in a subsequent model year. A 
manufacturer may bank actual credits only after the end of the calendar 
year and after EPA has reviewed the manufacturer's end-of-year reports. 
During the calendar year and before submittal of the end-of-year 
report, credits originally designated in the certification process for 
banking will be considered reserved and may be redesignated for trading 
or averaging in the end-of-year report. Credits declared for banking 
from the previous calendar year that have not been reviewed by EPA may 
be used in averaging or trading transactions. However, such credits may 
be revoked at a later time following EPA review of the end-of-year 
report or any subsequent audit actions.
    (f) Trading involves the sale of banked credits for use in 
certification of new engines under this part. Only banked credits may 
be traded; reserved credits may not be traded.


Sec. 94.304  Compliance requirements.

    (a) Manufacturers wishing to participate in certification 
averaging, banking and trading programs shall select a FEL for each 
engine family they wish to include. The level of the FEL shall be 
selected by the manufacturer, subject to the upper limits described in 
paragraph (m) of this section. An engine family certified to an FEL is 
subject to all provisions specified in this part, except that the 
applicable FEL replaces the applicable THC+NOX and PM 
emission standard for the family participating in the averaging, 
banking, and trading program.
    (b) A manufacturer may certify one or more engine families at FELs 
above or below the applicable emission standard, provided the summation 
of the manufacturer's projected balance of all credit transactions in a 
given calendar year is greater than or equal to zero, as calculated for 
each family under Sec. 94.305 and reported under Sec. 94.309.
    (c) Manufacturers certifying engine families with FELs exceeding 
the applicable emission standard shall obtain emission credits in 
amounts sufficient to address the shortfall. Credits may be obtained 
from averaging, banking, or trading, subject to the restrictions 
described in this subpart.
    (d) Manufacturers certifying engine families with FELs below the 
applicable emission standard may generate emission credits to average, 
bank, or trade, or a combination thereof.
    (e) An engine family may not generate credits for one pollutant 
while also using credits for another pollutant in the same model year.
    (f) Credits may only be used for certification; they may not be 
used to remedy a violation of the FEL determined by production line or 
in-use testing. Credits may be used to allow subsequent production of 
engines for an engine family failing production line testing if the 
manufacturer elects to recertify to a higher FEL.
    (g) [Reserved].

[[Page 73357]]

    (h) If an FEL is changed after initial certification in any given 
model year, the manufacturer must conduct production line testing to 
verify that the emission levels are achieved, with one exception: when 
an FEL is changed immediately after (and because of) a production line 
testing failure, additional verification testing is not required.
    (i) Manufacturers participating in the averaging, banking and 
trading program must demonstrate compliance with the applicable 
emission standards at the end of the model year. Manufacturers that 
have certified engine families to FELs above the applicable emission 
standards and do not have sufficient emission credits to offset the 
difference between the emission standard and the FEL for such engine 
families will be in violation of the conditions of the certificate of 
conformity for such engine families. The certificates of conformity may 
be voided ab initio for those engine families.
    (j) In the event of a negative credit balance resulting from a 
credit trade, both the buyer(s) and the seller(s) are liable, except in 
cases involving fraud. Certificates of all engine families 
participating in a negative trade may be voided ab initio.
    (1) Where a buyer of credits is not responsible for causing the 
negative credit balance, the buyer is only liable to supply additional 
credits equivalent to any amount of invalid credits that the buyer used 
for its engine family(ies).
    (2) Credit holders responsible for the credit shortfall may be 
subject to the requirements of Sec. 94.309(g)(3).
    (k) Credits generated by Category 1 engine families may be used for 
compliance by Category 1 or Category 2 engine families. Credits 
generated from Category 1 engine families for use by Category 2 engine 
families must be discounted by 25 percent. Credits generated by 
Category 2 engine families may be used for compliance only by Category 
2 engine families.
    (l) Credit life shall be unlimited.
    (m) Upper limits. The FELs for THC+NOX and PM for new 
engines certified for participation in this averaging, banking and 
trading program may not exceed the following values:
    (1) For Category 1 engines, the FEL may not exceed the levels 
contained in Table D-1, which follows:

                      Table D-1.--Category 1 Upper Limits for Tier 2 Family Emission Limits
----------------------------------------------------------------------------------------------------------------
                                                                            Model year  THC+NOX FEL   PM FEL  g/
                       Subcategory liters/cylinder                             \1\        g/kW-hr       kW-hr
----------------------------------------------------------------------------------------------------------------
Power  37 kW disp. < 0.9......................................         2005         11.5          1.2
0.9  disp. < 1.2..............................................         2004         11.5          1.2
1.2  disp. < 2.5..............................................         2004         10.5         0.54
2.5  disp. < 5.0..............................................         2007         10.5         0.54
----------------------------------------------------------------------------------------------------------------
\1\ The model years listed indicate the model years for which the specified standards start.

    (2) For Category 2 engines, the FEL may not exceed the applicable 
standard by more than 25 percent.


Sec. 94.305  Credit generation and use calculation.

    (a) For each participating engine family, THC+NOX and PM 
emission credits (positive or negative) are to be calculated according 
to the equation in paragraph (b) of this section and rounded in 
accordance with ASTM E 29-93a (incorporated by reference at Sec. 94.5), 
to the nearest one-hundredth of a megagram (Mg). Consistent units are 
to be used throughout the calculation.
    (b) Credits (Mg) for each engine family are calculated as: Emission 
credits = (Std--FEL) X (UL) X (Production) X (AvgPR) X (LF) X 
(10-6)

Where:

    (i) Std = the applicable cycle-weighted marine engine 
THC+NOX or PM emission standard in grams per kilowatt-hour.
    (ii) FEL = the family emission limit for the engine family in grams 
per kilowatt-hour. (The FEL may not exceed the limit established in 
Sec. 94.304(m) for each pollutant.)
    (iii) UL = the useful life in hours of operation.
    (iv) Production = the number of engines participating in the 
averaging, banking, and trading program within the given engine family 
during the calendar year (or the number of engines in the subset of the 
engine family for which credits are being calculated). Quarterly 
production projections are used for initial certification. Actual 
applicable production/sales volumes are used for end-of-year compliance 
determination.
    (v) AvgPR = average power rating of all of the configurations 
within an engine family, calculated on a sales-weighted basis, in 
kilowatts.
    (vi) LF = the load factor, dependent on whether the engine is 
intended for propulsion or auxiliary applications, as follows:
    (A) 0.69 for propulsion engines,
    (B) 0.51 for auxiliary engines.


Sec. 94.306  Certification.

    (a) In the application for certification a manufacturer must:
    (1) Declare its intent to include specific engine families in the 
averaging, banking, and/or trading programs. Separate declarations are 
required for each pollutant (THC+NOX and PM).
    (2) Declare FELs for each engine family participating in 
certification averaging, banking, and/or trading.
    (i) The FELs must be to the same number of significant digits as 
the emission standard.
    (ii) In no case may the FEL exceed the upper limit prescribed in 
Sec. 94.304(m).
    (3) Conduct and submit detailed calculations of projected emission 
credits (positive or negative) based on quarterly production 
projections for each participating family and for each pollutant, using 
the applicable equation in Sec. 94.305 and the applicable values of the 
terms in the equation for the specific family.
    (i) If the engine family is projected to have negative emission 
credits, state specifically the source (manufacturer/engine family) of 
the credits necessary to offset the credit deficit according to 
quarterly projected production.
    (ii) If the engine family is projected to generate credits, state 
specifically where the quarterly projected credits will be applied 
(manufacturer/engine family or reserved).
    (4) Submit a statement that the engines for which certification is 
requested will not, to the best of the manufacturer's belief, cause the 
manufacturer to have a negative credit balance when all credits are 
calculated for all the manufacturer's engine families participating in 
the averaging, banking, and trading program.
    (b) Based on this information, each manufacturer's certification 
application must demonstrate:

[[Page 73358]]

    (1) That at the end of model year production, each engine family 
has a net emissions credit balance equal to or greater than zero for 
any pollutant and program for which participation in certification 
under averaging, banking, and/or trading is being sought. The equation 
in section Sec. 94.305 shall be used in this calculation for each 
engine family.
    (2) That the manufacturer will obtain sufficient credits to be used 
to comply with the emission standard for any engine family with an FEL 
that exceeds the applicable emission standard, or where credits will be 
applied if the FEL is less than the emission standard. In cases where 
credits are being obtained, for each engine family involved the 
manufacturer must identify specifically the source of the credits being 
used (manufacturer/engine family). All such reports shall include all 
credits involved in certification averaging, banking, or trading.
    (3) That in cases where credits are being generated/supplied, the 
use of such credits is specifically designated (manufacturer/engine 
family or reserved). All such reports shall include all credits 
involved in certification averaging, banking, or trading.
    (c) Manufacturers must monitor projected versus actual production 
throughout the model year to ensure that compliance with emission 
standards is achieved at the end of the model year.
    (d) At the end of the model year, the manufacturer must provide the 
end-of-year reports required under Sec. 94.309.
    (1) Projected credits based on the information supplied in the 
certification application may be used to obtain a certificate of 
conformity. However, any such projected credits must be validated based 
on review of the end of model year reports and may be revoked at a 
later time based on follow-up audits or any other verification measure 
deemed appropriate by the Administrator.
    (2) Compliance for engine families using averaging, banking, or 
trading will be determined at the end of the model year. Manufacturers 
that have certified engine families with credit balances for 
THC+NOX and/or PM that do not equal or exceed zero shall be 
in violation of the conditions of the certificate of conformity for 
such engine families. The certificate of conformity may be voided ab 
initio for those engine families.
    (e) Other conditions of certification.
    (1) All certificates issued are conditional upon compliance by the 
manufacturer with the provisions of this subpart both during and after 
the calendar year of production.
    (2) Failure to comply with all provisions of this subpart will be 
considered to be a failure to satisfy the conditions upon which the 
certificate was issued, and the certificate may be deemed void ab 
initio.
    (3) The manufacturer bears the burden of establishing to the 
satisfaction of the Administrator that the conditions upon which the 
certificate was issued were satisfied or waived.


Sec. 94.307  Labeling.

    For all engines included in the certification averaging, banking, 
and trading program, the FEL to which the engine is certified must be 
included on the label required in Sec. 94.212.


Sec. 94.308  Maintenance of records.

    (a) The manufacturer of any engine that is certified under the 
averaging, banking, and trading program must establish, maintain, and 
retain the following adequately organized and indexed records for each 
such engine produced:
    (1) EPA engine family and configuration;
    (2) Engine identification number;
    (3) Engine calendar year and build date;
    (4) Rated power;
    (5) Purchaser and destination; and
    (6) Assembly plant.
    (b) The manufacturer of any engine family that is certified under 
the averaging, banking, and trading program must establish, maintain, 
and retain the following adequately organized and indexed records for 
each such family:
    (1) Model year and EPA engine family;
    (2) Family Emission Limit(s) (FEL);
    (3) Rated power for each configuration;
    (4) Projected applicable production/sales volume for the calendar 
year;
    (5) Actual applicable production/sales volume for the calendar 
year; and
    (6) Useful life.
    (c) Any manufacturer producing an engine family participating in 
trading of credits must maintain the following records on a quarterly 
basis for each engine family in the trading program:
    (1) The model year and engine family;
    (2) The actual quarterly and cumulative applicable production/sales 
volume;
    (3) The values required to calculate credits as given in 
Sec. 94.305;
    (4) The resulting type and number of credits generated/required;
    (5) How and where credit surpluses are dispersed; and
    (6) How and through what means credit deficits are met.
    (d) The manufacturer must retain all records required to be 
maintained under this section for a period of 8 years from the due date 
for the end-of-calendar year report. Records may be retained as hard 
copy or reduced to microfilm, ADP diskettes, and so forth, depending on 
the manufacturer's record retention procedure; provided, that in every 
case all information contained in the hard copy is retained.
    (e) Nothing in this section limits the Administrator's discretion 
in requiring the manufacturer to retain additional records or submit 
information not specifically required by this section.
    (f) Pursuant to a request made by the Administrator, the 
manufacturer must submit to the Administrator the information that the 
manufacturer is required to retain.
    (g) EPA may void ab initio a certificate of conformity for an 
engine family for which the manufacturer fails to retain the records 
required in this section or to provide such information to the 
Administrator upon request.


Sec. 94.309  Reports.

    (a) Manufacturers must submit the certification information as 
required under Sec. 94.306, and end-of-year reports each year as part 
of their participation in certification averaging, banking, and trading 
programs.
    (b) Quarterly reports. All entities involved in credit trades must 
submit quarterly reports. The reports shall include the source or 
recipient of the credits, the amount of credits involved plus remaining 
balances, details regarding the pollutant, and model year as well as 
the information prescribed in Sec. 94.308(c). Copies of contracts 
related to credit trading must be included or supplied by the buyer, 
seller, and broker, as applicable.
    (c) End-of-year reports must include the information prescribed in 
Sec. 94.308(b). The report shall include a calculation of credit 
balances for each family to show that the summation of the 
manufacturer's use of credits results in a credit balance equal to or 
greater than zero. The report shall be consistent in detail with the 
information submitted under Sec. 94.306 and show how credit surpluses 
were dispersed and how credit shortfalls were met on a family specific 
basis. The end-of-year report shall incorporate any information 
reflected in previous quarterly reports.
    (d) The applicable production/sales volume for quarterly and end-
of-year reports must be based on the location of either the point of 
first retail sale by the manufacturer or the point at which the engine 
is placed into service, whichever occurs first. This is called the 
final product purchase location.

[[Page 73359]]

    (e) Each quarterly and end-of-year report submitted shall include a 
statement certifying to the accuracy and authenticity of the material 
reported therein.
    (f) Requirements for submission. (1) Quarterly reports must be 
submitted within 90 days of the end of the calendar quarter to the 
Designated Officer.
    (2) End-of-year reports must be submitted within 120 days of the 
end of the calendar year to the Designated Officer.
    (3) Failure by a manufacturer participating in the averaging, 
banking, or trading program to submit any quarterly or end-of-year 
reports in the specified time for all engines is a violation of 
sections 203(a)(1) and 213 of the Clean Air Act for each engine.
    (4) A manufacturer generating credits for banking only who fails to 
submit end-of-year reports in the applicable specified time period (120 
days after the end of the calendar year) may not use or trade the 
credits until such reports are received and reviewed by EPA. Use of 
projected credits pending EPA review is not permitted in these 
circumstances.
    (g) Reporting errors. (1) Errors discovered by EPA or the 
manufacturer in the end-of-year report, including errors in credit 
calculation, may be corrected 180-days subsequent to submission of the 
end-of-year report. Errors discovered by EPA after 180-days shall be 
correctable if, as a result of the correction, the manufacturer's 
credits are reduced. Errors in the manufacturer's favor are not 
corrected if discovered after the 180-day correction period allowed.
    (2) If EPA or the manufacturer determines that a reporting error 
occurred on an end-of-year report previously submitted to EPA under 
this section, the manufacturer's credits and credit calculations will 
be recalculated. Erroneous positive credits will be void. Erroneous 
negative credit balances may be corrected by EPA.
    (3) If EPA review of a manufacturer's end-of-year report indicates 
a credit shortfall, the manufacturer will be permitted to purchase the 
necessary credits to bring the credit balance to zero. These credits 
must be supplied at the ratio of 1.1 credits for each 1.0 credit 
needed. If sufficient credits are not available to bring the credit 
balance to zero for the family(ies) involved, EPA may void the 
certificate(s) for that family(ies) ab initio. In addition, all engines 
within an engine family for which there are insufficient credits will 
be considered to have violated the conditions of the certificate of 
conformity and therefore are not covered by that certificate.
    (4) If within 180 days of receipt of the manufacturer's end-of-year 
report, EPA review determines a reporting error in the manufacturer's 
favor (that is, resulting in an increased credit balance) or if the 
manufacturer discovers such an error within 180 days of EPA receipt of 
the end-of-year report, the credits are restored for use by the 
manufacturer.


Sec. 94.310  Notice of opportunity for hearing.

    Any voiding of the certificate under this subpart will be made only 
after the manufacturer concerned has been offered an opportunity for a 
hearing conducted in accordance with Sec. 94.216 and, if a manufacturer 
requests such a hearing, will be made only after an initial decision by 
the Presiding Officer.

Subpart E--Emission-related Defect Reporting Requirements, 
Voluntary Emission Recall Program


Sec. 94.401  Applicability.

    The requirements of this subpart are applicable to manufacturers of 
engines subject to the provisions of Subpart A of this part. The 
requirement to report emission-related defects affecting a given class 
or category of engines applies for eight years from the end of the year 
in which such engines were manufactured.


Sec. 94.402  Definitions.

    The definitions of Subpart A of this part apply to this subpart.


Sec. 94.403  Emission defect information report.

    (a) A manufacturer must file a defect information report whenever 
it determines, in accordance with procedures it established to identify 
either safety-related or performance defects (or based on other 
information), that a specific emission-related defect exists in 25 or 
more Category 1 marine engines, or 10 or more Category 2 marine 
engines. No report must be filed under this paragraph for any emission-
related defect corrected prior to the sale of the affected engines to 
an ultimate purchaser. (Note: These limits apply to the occurrence of 
the same defect, and are not constrained by engine family or model 
year.)
    (b) Defect information reports required under paragraph (a) of this 
section must be submitted not more than 15 working days after the same 
emission-related defect is found to effect 25 or more Category 1 marine 
engines, or 10 or more Category 2 marine engines. Information required 
by paragraph (c) of this section that is either not available within 15 
working days or is significantly revised must be submitted as it 
becomes available.
    (c) Except as provided in paragraph (b) of this section, each 
defect report must contain the following information in substantially 
the format outlined:
    (1) The manufacturer's corporate name.
    (2) A description of the defect.
    (3) A description of each class or category of engines potentially 
affected by the defect including make, model, calendar year produced, 
purchaser and any other information as may be required to identify the 
engines affected.
    (4) For each class or category of engines described in response to 
paragraph (c)(3) of this section, the following shall also be provided:
    (i) The number of engines known or estimated to have the defect and 
an explanation of the means by which this number was determined.
    (ii) The address of the plant(s) at which the potentially defective 
engines were produced.
    (5) An evaluation of the emissions impact of the defect and a 
description of any operational or performance problems which a 
defective engine might exhibit.
    (6) Available emissions data which relate to the defect.
    (7) An indication of any anticipated follow-up by the manufacturer.


Sec. 94.404  Voluntary emissions recall reporting.

    (a) When any manufacturer initiates a voluntary emissions recall 
campaign involving an engine, the manufacturer shall submit to EPA a 
report describing the manufacturer's voluntary emissions recall plan as 
prescribed by this section within 15 working days of the date owner 
notification was begun. The report shall contain the following:
    (1) A description of each class or category of engines recalled 
including the number of engines to be recalled, the calendar year if 
applicable, the make, the model, and such other information as may be 
required to identify the engines recalled.
    (2) A description of the specific modifications, alterations, 
repairs, corrections, adjustments, or other changes to be made to 
correct the engines affected by the emission-related defect.
    (3) A description of the method by which the manufacturer will 
notify engine owners.
    (4) A description of the proper maintenance or use, if any, upon 
which the manufacturer conditions eligibility for repair under the 
remedial plan, an explanation of the manufacturer's reasons for 
imposing any such

[[Page 73360]]

condition, and a description of the proof to be required of an engine 
owner to demonstrate compliance with any such condition.
    (5) A description of the procedure to be followed by engine owners 
to obtain correction of the nonconformity. This shall include 
designation of the date on or after which the owner can have the 
nonconformity remedied, the time reasonably necessary to perform the 
labor to remedy the defect, and the designation of facilities at which 
the defect can be remedied.
    (6) If some or all the nonconforming engines are to be remedied by 
persons other than authorized warranty agents of the manufacturer, a 
description of the class of persons other than authorized warranty 
agents of the manufacturer who will remedy the defect.
    (7) A copy of any written notification sent to engine owners.
    (8) A description of the system by which the manufacturer will 
assure that an adequate supply of parts will be available to perform 
the repair under the remedial plan including the date by which an 
adequate supply of parts will be available to initiate the repair 
campaign, the percentage of the total parts requirement of each person 
who is to perform the repair under the remedial plan to be shipped to 
initiate the campaign, and the method to be used to assure the supply 
remains both adequate and responsive to owner demand.
    (9) Three copies of all necessary instructions to be sent to those 
persons who are to perform the repair under the remedial plan.
    (10) A description of the impact of the changes on fuel 
consumption, operation or performance, and safety of each class or 
category of engines to be recalled.
    (11) A sample of any label to be applied to engines which 
participate in the voluntary recall campaign.
    (b) Unless otherwise specified by the Administrator, the 
manufacturer shall report on the progress of the recall campaign by 
submitting subsequent reports for six consecutive quarters, or until 
proven that remedial action has been adequately taken on all affected 
engines, whichever occurs first, commencing with the quarter after the 
voluntary emissions recall campaign actually begins. Such reports shall 
be submitted no later than 25 working days after the close of each 
calendar quarter. For each class or group of engine subject to the 
voluntary emissions recall campaign, the quarterly report shall contain 
the:
    (1) Emission recall campaign number, if any, designated by the 
manufacturer.
    (2) Date owner notification was begun, and date completed.
    (3) Number of engines involved in the voluntary emissions recall 
campaign.
    (4) Number of engines known or estimated to be affected by the 
emission-related defect and an explanation of the means by which this 
number was determined.
    (5) Number of engines inspected pursuant to voluntary emission 
recall plan.
    (6) Number of inspected engines found to be affected by the 
emissions-related defect.
    (7) Number of engines actually receiving repair under the remedial 
plan.
    (8) Number of engines determined to be unavailable for inspection 
or repair under the remedial plan due to exportation, scrappage, or for 
other reasons (specify).
    (9) Number of engines determined to be ineligible for remedial 
action due to a failure to properly maintain or use such engines.
    (10) Three copies of any service bulletins which relate to the 
defect to be corrected and which have not previously been reported.
    (11) Three copies of all communications transmitted to engine 
owners which relate to the defect to be corrected and which have not 
previously been submitted.
    (c) If the manufacturer determines that any of the information 
requested in paragraph (b) of this section has changed or was 
incorrect, revised information and an explanatory note shall be 
submitted. Answers to paragraphs (b)(5), (6), (7), (8), and (9) of this 
section shall be cumulative totals.
    (d) The manufacturer shall maintain in a form suitable for 
inspection, such as computer information storage devices or card files, 
the names and addresses of engine owners:
    (1) To whom notification was given;
    (2) Who received remedial repair or inspection under the remedial 
plan; and
    (3) Who were determined not to qualify for such remedial action 
when eligibility is conditioned on proper maintenance or use.
    (e) The records described in paragraph (d) of this section shall be 
made available to the Administrator upon request.


Sec. 94.405  Alternative report formats.

    (a) Any manufacturer may submit a plan for making either of the 
reports required by Secs. 94.403 and 94.404 on computer diskettes, 
magnetic tape or other machine readable format. The plan shall be 
accompanied by sufficient technical detail to allow a determination 
that data requirements of these sections will be met and that the data 
in such format will be usable by EPA.
    (b) Upon approval by the Administrator of the reporting system, the 
manufacturer may use such system until otherwise notified by the 
Administrator.


Sec. 94.406  Reports filing: record retention.

    (a) The reports required by Secs. 94.403 and 94.404 shall be sent 
to the Designated Officer.
    (b) The information gathered by the manufacturer to compile the 
reports required by Secs. 94.403 and 94.404 shall be retained for not 
less than 8 years from the date of the manufacture of the engines and 
shall be made available to duly authorized officials of the EPA upon 
request.


Sec. 94.407  Responsibility under other legal provisions preserved.

    The filing of any report under the provisions of this subpart shall 
not affect a manufacturer's responsibility to file reports or 
applications, obtain approval, or give notice under any provision of 
law.


Sec. 94.408  Disclaimer of production warranty applicability.

    (a) The act of filing an Emission Defect Information Report 
pursuant to Sec. 94.403 is inconclusive as to the existence of a defect 
subject to the warranty provided by section 207(a) of the Act.
    (b) A manufacturer may include on each page of its Emission Defect 
Information Report a disclaimer stating that the filing of a Defect 
Information Report pursuant to this subpart is not conclusive as to the 
applicability of the Production Warranty provided by section 207(a) of 
the Act.

Subpart F--Manufacturer Production Line Testing Programs


Sec. 94.501  Applicability.

    (a) The requirements of this subpart are applicable to 
manufacturers of engines subject to the provisions of Subpart A of this 
part.
    (b) The provisions of Subpart F of 40 CFR Part 89 (Selective 
Enforcement Audit) apply to engines subject to the provisions of 
Subpart A of this part.


Sec. 94.502  Definitions.

    The definitions in Subpart A of this part apply to this subpart.


Sec. 94.503  General requirements.

    (a) Manufacturers shall test production line engines in accordance 
with sampling procedures specified in Sec. 94.505 and the test 
procedures specified in Sec. 94.506.

[[Page 73361]]

    (b) Upon request, the Administrator may also allow manufacturers to 
conduct alternate production line testing programs, provided the 
Administrator determines that the alternate production line testing 
program provides equivalent assurance that the engines that are being 
produced conform to the provisions of this part. As part of this 
allowance or for other reasons, the Administrator may waive some or all 
of the requirements of this subpart.
    (c) The requirements of this subpart apply with respect to all 
applicable standards and FELs of Subpart A of this part, including the 
supplemental standards of Sec. 94.8(e).


Sec. 94.504  Right of entry and access.

    (a) To allow the Administrator to determine whether a manufacturer 
is complying with the provisions of this part, one or more EPA 
enforcement officers may enter during operating hours and upon 
presentation of credentials any of the following places:
    (1) Any facility, including ports of entry, where any engine is to 
be introduced into commerce or any emission-related component is 
manufactured, assembled, or stored;
    (2) Any facility where any test conducted pursuant to a 
manufacturer's production line testing program or any procedure or 
activity connected with such test is or was performed;
    (3) Any facility where any test engine is present; and
    (4) Any facility where any record required under Sec. 94.509 or 
other document relating to this subpart is located.
    (b) Upon admission to any facility referred to in paragraph (a) of 
this section, EPA enforcement officers are authorized to perform the 
following inspection-related activities:
    (1) To inspect and monitor any aspect of engine manufacture, 
assembly, storage, testing and other procedures, and to inspect and 
monitor the facilities in which these procedures are conducted;
    (2) To inspect and monitor any aspect of engine test procedures or 
activities, including test engine selection, preparation and service 
accumulation, emission duty cycles, and maintenance and verification of 
test equipment calibration;
    (3) To inspect and make copies of any records or documents related 
to the assembly, storage, selection, and testing of a engine; and
    (4) To inspect and photograph any part or aspect of any engine and 
any component used in the assembly thereof that is reasonably related 
to the purpose of the entry.
    (c) EPA enforcement officers are authorized to obtain reasonable 
assistance without cost from those in charge of a facility to help the 
officers perform any function listed in this subpart and they are 
authorized to request the manufacturer to make arrangements with those 
in charge of a facility operated for the manufacturer benefit to 
furnish reasonable assistance without cost to EPA.
    (1) Reasonable assistance includes, but is not limited to, 
clerical, copying, interpretation and translation services; the making 
available on an EPA enforcement officer's request of personnel of the 
facility being inspected during their working hours to inform the EPA 
enforcement officer of how the facility operates and to answer the 
officer's questions; and the performance on request of emission tests 
on any engine which is being, has been, or will be used for production 
line testing.
    (2) By written request, signed by the Assistant Administrator for 
Air and Radiation or the Assistant Administrator for Enforcement and 
Compliance Assurance, and served on the manufacturer, a manufacturer 
may be compelled to cause the personal appearance of any employee at 
such a facility before an EPA enforcement officer. Any such employee 
who has been instructed by the manufacturer to appear will be entitled 
to be accompanied, represented, and advised by counsel.
    (d) EPA enforcement officers are authorized to seek a warrant or 
court order authorizing the EPA enforcement officers to conduct the 
activities authorized in this section, as appropriate, to execute the 
functions specified in this section. EPA enforcement officers may 
proceed ex parte to obtain a warrant or court order whether or not the 
EPA enforcement officers first attempted to seek permission from the 
manufacturer or the party in charge of the facility(ies) in question to 
conduct the activities authorized in this section.
    (e) A manufacturer is responsible for locating its foreign testing 
and manufacturing facilities in jurisdictions where local law does not 
prohibit an EPA enforcement officer(s) from conducting the activities 
specified in this section. EPA will not attempt to make any inspections 
which it has been informed local foreign law prohibits.


Sec. 94.505  Sample selection for testing.

    (a) At the start of each model year, the manufacturer will begin to 
select engines from each engine family for production line testing. 
Each engine will be selected from the end of the production line. 
Testing shall be performed throughout the entire model year to the 
extent possible. Engines selected shall cover the broadest range of 
production possible.
    (1)(i) The required sample size for Category 1 engine manufacturers 
is one percent of projected annual U.S.-directed production for all 
Category 1 engine families, provided that no engine tested fails to 
meet applicable emission standards. Test engines shall include a 
proportional sample from each engine family. The required sample size 
is zero if a manufacturer's projected annual production for all 
Category 1 engine families is less than 100.
    (ii) The required sample size for a Category 2 engine family is one 
percent of projected annual U.S.-directed production for that engine 
family, with a minimum sample size of one test per model year provided 
that no engine tested fails to meet applicable emission standards.
    (2) Manufacturers may elect to test additional engines. All 
additional engines must be tested in accordance with the applicable 
test procedures of this part.
    (3) The Administrator may reject any engines selected by the 
manufacturer if he/she determines that such engines are not 
representative of actual production.
    (b) The manufacturer must assemble the test engines using the same 
mass production process that will be used for engines to be introduced 
into commerce.
    (c) No quality control, testing, or assembly procedures will be 
used on any test engine or any portion thereof, including parts and 
subassemblies, that have not been or will not be used during the 
production and assembly of all other engines of that family, except 
with the approval of the Administrator.


Sec. 94.506  Test procedures.

    (a)(1) For engines subject to the provisions of this subpart, the 
prescribed test procedures are those procedures described in Subpart B 
of this part, except as provided in this section.
    (2) The Administrator may, on the basis of a written application by 
a manufacturer, prescribe test procedures other than those specified in 
paragraph (a)(1) of this section for any engine he/she determines is 
not susceptible to satisfactory testing using procedures specified in 
paragraph (a)(1) of this section.
    (3) If test procedures other than those in Subpart B of this part 
were used in certification of the engine family being

[[Page 73362]]

tested under this subpart (other than alternate test procedures 
necessary for testing of a development engine instead of a low hour 
engine under Sec. 94.9), the manufacturer shall use the test procedures 
used in certification for production line testing.
    (b)(1) The manufacturer may not adjust, repair, prepare, modify, or 
perform any emission test on any test engine unless this adjustment, 
repair, preparation, modification and/or test is documented in the 
manufacturer's engine assembly and inspection procedures and is 
actually performed by the manufacturer or unless this adjustment, 
repair, preparation, modification and/or test is required or permitted 
under this subpart or is approved in advance by the Administrator.
    (2) Any adjustable engine parameter must be set to values or 
positions that are within the range specified in the approved 
application for certification.
    (3) The Administrator may adjust or require to be adjusted any 
engine parameter which the Administrator has determined to be subject 
to adjustment for certification and production line testing, to any 
setting within the specified adjustable range of that parameter, as 
determined by the Administrator, prior to the performance of any test.
    (c) Service Accumulation/Green Engine Factor. The manufacturer 
shall accumulate up to 300 hours of service on the engines to be 
tested. In lieu of conducting such service accumulation, the 
manufacturer may establish a Green Engine Factor for each regulated 
pollutant for each engine family to be used in calculating emissions 
test results. The manufacturer shall obtain the approval of the 
Administrator prior to using a Green Engine Factor.
    (d) The manufacturer may not perform any maintenance on test 
engines after selection for testing.
    (e) If an engine is shipped to a facility other than the production 
facility for production line testing, and an adjustment or repair is 
necessary because of such shipment, the engine manufacturer must 
perform the necessary adjustment or repair only after the initial test 
of the engine, except where the Administrator has determined that the 
test would be impossible to perform or would permanently damage the 
engine.
    (f) If an engine cannot complete the service accumulation or an 
emission test, because of a malfunction, the manufacturer may request 
that the Administrator authorize either the repair of that engine or 
its deletion from the test sequence.
    (g) Retesting. If an engine manufacturer determines that any 
production line emission test of an engine is invalid, the engine must 
be retested in accordance with the requirements of this subpart. 
Emission results from all tests must be reported to EPA, including test 
results the manufacturer determines are invalid. The engine 
manufacturer must also include a detailed explanation of the reasons 
for invalidating any test in the quarterly report required in 
Sec. 94.508(e). In the event a retest is performed, a request may be 
made to the Administrator, within ten days of the end of the production 
quarter, for permission to substitute the after-repair test results for 
the original test results. The Administrator will either affirm or deny 
the request by the engine manufacturer within ten working days from 
receipt of the request.


Sec. 94.507  Sequence of testing.

    (a) If one or more engines fail a production line test, then the 
manufacturer must test two additional engines for each engine that 
fails.
    (b) The two additional engines tested under paragraph (a) of this 
section shall be selected from either the next fifteen produced in that 
engine family, or from those engines produced in that engine family 
within 48 hours of the completion of the failed test.


Sec. 94.508  Calculation and reporting of test results.

    (a) Manufacturers shall calculate initial test results using the 
applicable test procedure specified in Sec. 94.506(a). These results 
must also include the Green Engine Factor, if applicable. The 
manufacturer shall round these results, in accordance with ASTM E 29-
93a (incorporated by reference at Sec. 94.5), to the number of decimal 
places contained in the applicable emission standard expressed to one 
additional significant figure.
    (b) Test results shall be calculated by summing the initial test 
results derived in paragraph (a) of this section for each test engine, 
dividing by the number of tests conducted on the engine, and rounding 
in accordance with ASTM E 29-93a (incorporated by reference at 
Sec. 94.5) to the same number of decimal places contained in the 
applicable standard expressed to one additional decimal place. (For 
example, if the applicable standard is 7.8, then round the test results 
to two places to the right of the decimal.)
    (c) Manufacturers shall calculate the final test results for each 
test engine by applying the appropriate deterioration factors, derived 
in the certification process for the engine family, to the test results 
described in paragraph (b) of this section, and rounding in accordance 
with ASTM E 29-93a (incorporated by reference at Sec. 94.5) to the same 
number of decimal places contained in the applicable standard expressed 
to one additional decimal place. (For example, if the applicable 
standard is 7.8, then round the test results to two places to the right 
of the decimal.)
    (d) If, subsequent to an initial failure of a production line test, 
the average of the test results for the failed engine and the two 
additional engines tested, is greater than any applicable emission 
standard or FEL, the engine family is deemed to be in non-compliance 
with applicable emission standards, and the manufacturer must notify 
the Administrator within 2 working days of such noncompliance.
    (e) Within 30 calendar days of the end of each quarter, each 
manufacturer must submit to the Administrator a report which includes 
the following information:
    (1) The location and description of the manufacturer's emission 
test facilities which were utilized to conduct testing reported 
pursuant to this section;
    (2) Total production and sample size for each engine family;
    (3) The applicable standards and/or FELs against which each engine 
family was tested;
    (4) A description of the test engines;
    (5) For each test conducted:
    (i) A description of the test engine, including:
    (A) Configuration and engine family identification;
    (B) Year, make, and build date;
    (C) Engine identification number;
    (D) Number of hours of service accumulated on engine prior to 
testing; and
    (E) Description of Green Engine Factor; how it is determined and 
how it is applied;
    (ii) Location(s) where service accumulation was conducted and 
description of accumulation procedure and schedule, if applicable;
    (iii) Test number, date, test procedure used, initial test results 
before and after rounding, and final test results for all production 
line emission tests conducted, whether valid or invalid, and the reason 
for invalidation of any test results, if applicable;
    (iv) A complete description of any adjustment, modification, 
repair, preparation, maintenance, and testing which was performed on 
the test engine, has not been reported pursuant to any other paragraph 
of this subpart, and will not be performed on other production engines;

[[Page 73363]]

    (v) Any other information the Administrator may request relevant to 
the determination whether the new engines being manufactured by the 
manufacturer do in fact conform with the regulations with respect to 
which the certificate of conformity was issued;
    (6) For each failed engine as defined in Sec. 94.510(a), a 
description of the remedy and test results for all retests as required 
by Sec. 94.512(g);
    (7) The date of the end of the engine manufacturer's model year 
production for each engine family tested; and
    (8) The following signed statement and endorsement by an authorized 
representative of the manufacturer:

    This report is submitted pursuant to Sections 213 and 208 of the 
Clean Air Act. This production line testing program was conducted in 
complete conformance with all applicable regulations under 40 CFR 
part 94. No emission-related changes to production processes or 
quality control procedures for the engine family tested have been 
made during this production line testing program that affect engines 
from the production line. All data and information reported herein 
is, to the best of (Company Name) knowledge, true and accurate. I am 
aware of the penalties associated with violations of the Clean Air 
Act and the regulations thereunder.
(Authorized Company Representative.)


Sec. 94.509  Maintenance of records; submittal of information.

    (a) The manufacturer for any new engine subject to any of the 
provisions of this subpart must establish, maintain, and retain the 
following adequately organized and indexed records:
    (1) General records. A description of all equipment used to test 
engines in accordance with Sec. 94.503. The equipment requirements in 
Subpart B of this part apply to tests performed under this subpart.
    (2) Individual records. These records pertain to each production 
line test conducted pursuant to this subpart and include:
    (i) The date, time, and location of each test;
    (ii) The method by which the Green Engine Factor was calculated or 
the number of hours of service accumulated on the test engine when the 
test began and ended;
    (iii) The names of all supervisory personnel involved in the 
conduct of the production line test;
    (iv) A record and description of any adjustment, repair, 
preparation or modification performed on test engines, giving the date, 
associated time, justification, name(s) of the authorizing personnel, 
and names of all supervisory personnel responsible for the conduct of 
the action;
    (v) If applicable, the date the engine was shipped from the 
assembly plant, associated storage facility or port facility, and the 
date the engine was received at the testing facility;
    (vi) A complete record of all emission tests performed pursuant to 
this subpart (except tests performed directly by EPA), including all 
individual worksheets and/or other documentation relating to each test, 
or exact copies thereof, in accordance with the record requirements 
specified in Subpart B of this part;
    (vii) A brief description of any significant events during testing 
not otherwise described under this paragraph (a)(2) of this section, 
commencing with the test engine selection process and including such 
extraordinary events as engine damage during shipment.
    (3) The manufacturer must establish, maintain and retain general 
records, pursuant to paragraph (a)(1) of this section, for each test 
cell that can be used to perform emission testing under this subpart.
    (b) The manufacturer must retain all records required to be 
maintained under this subpart for a period of eight (8) years after 
completion of all testing. Records may be retained as hard copy (i.e., 
on paper) or reduced to microfilm, floppy disk, or some other method of 
data storage, depending upon the manufacturer's record retention 
procedure; provided, that in every case, all the information contained 
in the hard copy is retained.
    (c) The manufacturer must, upon request by the Administrator, 
submit the following information with regard to engine production:
    (1) Projected production for each configuration within each engine 
family for which certification has been requested and/or approved.
    (2) Number of engines, by configuration and assembly plant, 
scheduled for production.
    (d) Nothing in this section limits the Administrator's discretion 
to require a manufacturer to establish, maintain, retain or submit to 
EPA information not specified by this section.
    (e) All reports, submissions, notifications, and requests for 
approval made under this subpart must be addressed to the Designated 
Officer.
    (f) The manufacturer must electronically submit the results of its 
production line testing using an EPA information format.


Sec. 94.510  Compliance with criteria for production line testing.

    (a) A failed engine is one whose final test results pursuant to 
Sec. 94.508(c), for one or more of the applicable pollutants, exceed an 
applicable emission standard or FEL.
    (b) An engine family is deemed to be in noncompliance, for purposes 
of this subpart, if at any time throughout the model year, the average 
of an initial failed engine and the two additional engines tested, is 
greater than any applicable emission standard or FEL.


Sec. 94.511  [Reserved]


Sec. 94.512  Suspension and revocation of certificates of conformity.

    (a) The certificate of conformity is suspended with respect to any 
engine that fails a production line test pursuant to Sec. 94.510(a), 
effective from the time the testing of that engine is completed.
    (b) The Administrator may suspend the certificate of conformity for 
an engine family which is in noncompliance pursuant to Sec. 94.510(b), 
thirty days after the engine family is deemed to be in noncompliance.
    (c) If the results of testing pursuant to this subpart indicate 
that engines of a particular family produced at one plant of a 
manufacturer do not conform to the regulations with respect to which 
the certificate of conformity was issued, the Administrator may suspend 
the certificate of conformity with respect to that family for engines 
manufactured by the manufacturer at all other plants.
    (d) The Administrator may suspend a certificate of conformity for 
any engine family in whole or in part if:
    (1) The manufacturer fails to comply with any of the requirements 
of this subpart.
    (2) The manufacturer submits false or incomplete information in any 
report or information provided to the Administrator under this subpart.
    (3) The manufacturer renders inaccurate any test data submitted 
under this subpart.
    (4) An EPA enforcement officer is denied the opportunity to conduct 
activities authorized in this subpart.
    (5) An EPA enforcement officer is unable to conduct activities 
authorized in Sec. 94.504 for any reason.
    (e) The Administrator shall notify the manufacturer in writing of 
any suspension or revocation of a certificate of conformity in whole or 
in part; a suspension or revocation is effective upon receipt of such 
notification or thirty days from the time an engine family is deemed to 
be in noncompliance under Secs. 94.508(d), 94.510(a), or 94.510(b), 
whichever is earlier, except that the certificate is immediately 
suspended with respect to any failed engines as provided for in 
paragraph (a) of this section.
    (f) The Administrator may revoke a certificate of conformity for an 
engine

[[Page 73364]]

family when the certificate has been suspended pursuant to paragraph 
(b) or (c) of this section if the remedy is one requiring a design 
change or changes to the engine and/or emission control system as 
described in the application for certification of the affected engine 
family.
    (g) Once a certificate has been suspended for a failed engine, as 
provided for in paragraph (a) of this section, the manufacturer must 
take the following actions before the certificate is reinstated for 
that failed engine:
    (1) Remedy the nonconformity;
    (2) Demonstrate that the engine conforms to applicable standards or 
family emission limits by retesting if applicable, the engine in 
accordance with this part; and
    (3) Submit a written report to the Administrator, after successful 
completion of testing on the failed engine, which contains a 
description of the remedy and test results for each engine in addition 
to other information that may be required by this part.
    (h) Once a certificate for a failed engine family has been 
suspended pursuant to paragraph (b) or (c) of this section, the 
manufacturer must take the following actions before the Administrator 
will consider reinstating the certificate:
    (1) Submit a written report to the Administrator which identifies 
the reason for the noncompliance of the engines, describes the remedy, 
including a description of any quality control and/or quality assurance 
measures to be taken by the manufacturer to prevent future occurrences 
of the problem, and states the date on which the remedies will be 
implemented.
    (2) Demonstrate that the engine family for which the certificate of 
conformity has been suspended does in fact comply with the regulations 
of this part by testing engines selected from normal production runs of 
that engine family. Such testing must comply with the provisions of 
this subpart. If the manufacturer elects to continue testing individual 
engines after suspension of a certificate, the certificate is 
reinstated for any engine actually determined to be in conformance with 
the applicable standards or family emission limits through testing in 
accordance with the applicable test procedures, provided that the 
Administrator has not revoked the certificate pursuant to paragraph (f) 
of this section.
    (i) Once the certificate has been revoked for an engine family, if 
the manufacturer desires to continue introduction into commerce of a 
modified version of that family, the following actions must be taken 
before the Administrator may issue a certificate for that modified 
family:
    (1) If the Administrator determines that the change(s) in engine 
design may have an effect on emission performance deterioration, the 
Administrator shall notify the manufacturer, within five working days 
after receipt of the report in paragraph (h)(1) of this section, 
whether subsequent testing under this subpart will be sufficient to 
evaluate the change or changes or whether additional testing will be 
required; and
    (2) After implementing the change or changes intended to remedy the 
nonconformity, the manufacturer must demonstrate that the modified 
engine family does in fact conform with the regulations of this part by 
testing engines selected from normal production runs of that engine 
family. When both of these requirements are met, the Administrator 
shall reissue the certificate or issue a new certificate, as the case 
may be, to include that family. If this subsequent testing reveals 
failing data the revocation remains in effect.
    (j) At any time subsequent to an initial suspension of a 
certificate of conformity for a test engine pursuant to paragraph (a) 
of this section, but not later than 30 days (or such other period as 
may be allowed by the Administrator) after notification of the 
Administrator's decision to suspend or revoke a certificate of 
conformity in whole or in part pursuant to paragraph (b), (c), or (f) 
of this section, a manufacturer may request a hearing as to whether the 
tests have been properly conducted or any sampling methods have been 
properly applied.
    (k) Any suspension of a certificate of conformity under paragraphs 
(a),(b),(c) and (d) of this section:
    (1) Shall be made only after the manufacturer concerned has been 
offered an opportunity for a hearing conducted in accordance with 
Secs. 94.513, 94.514, and 94.515; and
    (2) Need not apply to engines no longer in the possession of the 
manufacturer.
    (l) After the Administrator suspends or revokes a certificate of 
conformity pursuant to this section or voids a certificate of 
conformity under paragraph Sec. 94.215, and prior to the commencement 
of a hearing under Sec. 94.513, if the manufacturer demonstrates to the 
Administrator's satisfaction that the decision to suspend, revoke, or 
void the certificate was based on erroneous information, the 
Administrator shall reinstate the certificate.
    (m) To permit a manufacturer to avoid storing non-test engines 
while conducting subsequent testing of the noncomplying family, a 
manufacturer may request that the Administrator conditionally reinstate 
the certificate for that family. The Administrator may reinstate the 
certificate subject to the following condition: the manufacturer must 
commit to recall all engines of that family produced from the time the 
certificate is conditionally reinstated if the family fails subsequent 
testing and must commit to remedy any nonconformity at no expense to 
the owner.


Sec. 94.513  Request for public hearing.

    (a) If the manufacturer disagrees with the Administrator's decision 
to suspend or revoke a certificate or disputes the basis for an 
automatic suspension pursuant to Sec. 94.512(a), the manufacturer may 
request a public hearing.
    (b) The manufacturer's request shall be filed with the 
Administrator not later than 30 days after the Administrator's 
notification of his or her decision to suspend or revoke, unless 
otherwise specified by the Administrator. The manufacturer shall 
simultaneously serve two copies of this request upon the Designated 
Officer and file two copies with the Hearing Clerk of the Agency. 
Failure of the manufacturer to request a hearing within the time 
provided constitutes a waiver of the right to a hearing. Subsequent to 
the expiration of the period for requesting a hearing as of right, the 
Administrator may, in his or her discretion and for good cause shown, 
grant the manufacturer a hearing to contest the suspension or 
revocation.
    (c) A manufacturer shall include in the request for a public 
hearing:
    (1) A statement as to which configuration(s) within a family is to 
be the subject of the hearing;
    (2) A concise statement of the issues to be raised by the 
manufacturer at the hearing, except that in the case of the hearing 
requested under Sec. 94.512(j), the hearing is restricted to the 
following issues:
    (i) Whether tests have been properly conducted (specifically, 
whether the tests were conducted in accordance with applicable 
regulations under this part and whether test equipment was properly 
calibrated and functioning);
    (ii) Whether there exists a basis for distinguishing engines 
produced at plants other than the one from which engines were selected 
for testing which would invalidate the Administrator's decision under 
Sec. 94.512(c));
    (3) A statement specifying reasons why the manufacturer believes it 
will prevail on the merits of each of the issues raised; and

[[Page 73365]]

    (4) A summary of the evidence which supports the manufacturer's 
position on each of the issues raised.
    (d) A copy of all requests for public hearings will be kept on file 
in the Office of the Hearing Clerk and will be made available to the 
public during Agency business hours.


Sec. 94.514  Administrative procedures for public hearing.

    (a) The Presiding Officer shall be an Administrative Law Judge 
appointed pursuant to 5 U.S.C. 3105 (see also 5 CFR part 930).
    (b) The Judicial Officer shall be an officer or employee of the 
Agency appointed as a Judicial Officer by the Administrator, pursuant 
to this section, who shall meet the qualifications and perform 
functions as follows:
    (1) Qualifications. A Judicial Officer may be a permanent or 
temporary employee of the Agency who performs other duties for the 
Agency. The Judicial Officer shall not be employed by the Office of 
Enforcement or have any connection with the preparation or presentation 
of evidence for a hearing held pursuant to this subpart. The Judicial 
Officer shall be a graduate of an accredited law school and a member in 
good standing of a recognized Bar Association of any state or the 
District of Columbia.
    (2) Functions. The Administrator may consult with the Judicial 
Officer or delegate all or part of the Administrator's authority to act 
in a given case under this section to a Judicial Officer, provided that 
this delegation does not preclude the Judicial Officer from referring 
any motion or case to the Administrator when the Judicial Officer 
determines such referral to be appropriate.
    (c) For the purposes of this section, one or more Judicial Officers 
may be designated by the Administrator. As work requires, a Judicial 
Officer may be designated to act for the purposes of a particular case.
    (d)(1) In the case of a hearing requested under Sec. 94.512(j), 
when it clearly appears from the data and other information contained 
in the request for a hearing that no genuine and substantial question 
of fact or law exists with respect to the issues specified in 
Sec. 94.513(c)(2), the Administrator may enter an order denying the 
request for a hearing and reaffirming the original decision to suspend 
or revoke a certificate of conformity.
    (2) In the case of a hearing requested under Sec. 94.513 to 
challenge a suspension of a certificate of conformity for the reason(s) 
specified in Sec. 94.512(d), when it clearly appears from the data and 
other information contained in the request for the hearing that no 
genuine and substantial question of fact or law exists with respect to 
the issue of whether the refusal to comply with this subpart was caused 
by conditions and circumstances outside the control of the 
manufacturer, the Administrator may enter an order denying the request 
for a hearing and suspending the certificate of conformity.
    (3) Any order issued under paragraph (d)(1) or (d)(2) of this 
section has the force and effect of a final decision of the 
Administrator, as issued pursuant to Sec. 94.516.
    (4) If the Administrator determines that a genuine and substantial 
question of fact or law does exist with respect to any of the issues 
referred to in paragraphs (d)(1) and (d)(2) of this section, the 
Administrator shall grant the request for a hearing and publish a 
notice of public hearing in the Federal Register or by such other means 
as the Administrator finds appropriate to provide notice to the public.
    (e) Filing and service. (1) An original and two copies of all 
documents or papers required or permitted to be filed pursuant to this 
section and Sec. 94.513(c) must be filed with the Hearing Clerk of the 
Agency. Filing is considered timely if mailed, as determined by the 
postmark, to the Hearing Clerk within the time allowed by this section 
and Sec. 94.513(b). If filing is to be accomplished by mailing, the 
documents must be sent to the address set forth in the notice of public 
hearing referred to in paragraph (d)(4) of this section.
    (2) To the maximum extent possible, testimony will be presented in 
written form. Copies of written testimony will be served upon all 
parties as soon as practicable prior to the start of the hearing. A 
certificate of service will be provided on or accompany each document 
or paper filed with the Hearing Clerk. Documents to be served upon the 
Director of the Engine Programs and Compliance Division must be sent by 
registered mail to: Director, Engine Programs and Compliance Division 
6403-J, U.S. Environmental Protection Agency, 401 M Street S.W., 
Washington, D.C. 20460. Service by registered mail is complete upon 
mailing.
    (f) Computation of time. (1) In computing any period of time 
prescribed or allowed by this section, except as otherwise provided, 
the day of the act or event from which the designated period of time 
begins to run is not included. Saturdays, Sundays, and federal legal 
holidays are included in computing the period allowed for the filing of 
any document or paper, except that when the period expires on a 
Saturday, Sunday, or federal legal holiday, the period is extended to 
include the next following business day.
    (2) A prescribed period of time within which a party is required or 
permitted to do an act is computed from the time of service, except 
that when service is accomplished by mail, three days will be added to 
the prescribed period.
    (g) Consolidation. The Administrator or the Presiding Officer in 
his or her discretion may consolidate two or more proceedings to be 
held under this section for the purpose of resolving one or more issues 
whenever it appears that consolidation will expedite or simplify 
consideration of these issues. Consolidation does not affect the right 
of any party to raise issues that could have been raised if 
consolidation had not occurred.
    (h) Hearing date. To the extent possible hearings under Sec. 94.513 
will be scheduled to commence within 14 days of receipt of the request 
for a hearing.


Sec. 94.515  Hearing procedures.

    The procedures provided in 40 CFR 86.1014-84(i) through (s) apply 
for hearings requested pursuant to Sec. 94.513 regarding suspension, 
revocation, or voiding of a certificate of conformity.


Sec. 94.516  Appeal of hearing decision.

    The procedures provided in 40 CFR 86.1014-84 (t) through (aa) apply 
for appeals filed with respect to hearings held pursuant to 
Sec. 94.515.


Sec. 94.517  Treatment of confidential information.

    Except for information required by Sec. 94.508(e)(2) and quarterly 
emission test results described in Sec. 94.508(e), information 
submitted pursuant to this subpart shall be made available to the 
public by EPA, notwithstanding any claim of confidentiality made by the 
submitter. The provisions for treatment of confidential information 
described in Sec. 94.4 apply to the information required by 
Sec. 94.508(e)(2) and quarterly emission test results described in 
Sec. 94.508(e).

Subpart G--[Reserved]

Subpart H--Recall Regulations


Sec. 94.701  Applicability.

    The requirements of this subpart are applicable to all engines 
subject to the provisions of this part.


Sec. 94.702  Definitions.

    The definitions in Subpart A of this part apply to this subpart.

[[Page 73366]]

Sec. 94.703  Applicability of 40 CFR part 85, subpart S.

    (a) Engines subject to provisions of this part are subject to 
recall regulations specified in 40 CFR part 85, subpart S, except for 
the items set forth in this section.
    (b) In 40 CFR 85.1801, section 216 of the Clean Air Act applies, 
rather than section 214 of the Act.
    (c) In 40 CFR 85.1802(a), section 213 of the Act applies, rather 
than section 202 of the Act.
    (d) In 40 CFR 85.1803(a) and 85.1805(a)(1) the reference to 
``family emission limits'' as defined in this part 94 promulgated under 
section 213 of the Act applies, rather than the reference to ``family 
particulate emission limits as defined in 40 CFR part 86 promulgated 
under section 202 of the Act''.
    (e) Throughout the subpart references to ``engines'' apply rather 
than references to ``vehicles or engines''.

Subpart I--Importation of Nonconforming Engines


Sec. 94.801  Applicability.

    (a) Except where otherwise indicated, this subpart is applicable to 
importers of engines (and vessels containing engines) for which the 
Administrator has promulgated regulations under this part prescribing 
emission standards, that are offered for importation or imported into 
the United States, but which engines, at the time of importation or 
being offered for importation, are not covered by certificates of 
conformity issued under section 213 and section 206(a) of the Clean Air 
Act (that is, which are nonconforming engines as defined in Sec. 94.2), 
and this part. Compliance with regulations under this subpart does not 
relieve any person or entity from compliance with other applicable 
provisions of the Clean Air Act.
    (b) Regulations prescribing further procedures for the importation 
of engines into the Customs territory of the United States, as defined 
in 19 U.S.C. 1202, are set forth in U.S. Customs Service regulations 
(19 CFR Chapter I).


Sec. 94.802  Definitions.

    The definitions of Subpart A of this part apply to this subpart.


Sec. 94.803  Admission.

    (a) A nonconforming engine offered for importation may be admitted 
into the United States pursuant to the provisions of this subpart. 
Subpart C of this part, including Sec. 94.222, describes how to certify 
engines installed on vessels before they are imported.
    (b) To obtain admission, the importer must submit to the 
Administrator a written request for approval containing the following:
    (1) Identification of the importer of the engine and the importer's 
address, telephone number, and taxpayer identification number;
    (2) Identification of the engine's owner, the owner's address, 
telephone number, and taxpayer identification number;
    (3) Identification of the engine including make, model, 
identification number, and original production year;
    (4) Information indicating the provision in this subpart under 
which the engine is to be imported, including a demonstration of how it 
qualifies for the requested exemption;
    (5) Identification of the place(s) where the engine is to be stored 
until EPA approval of the importer's application to the Administrator 
for final admission;
    (6) Authorization for EPA enforcement officers to conduct 
inspections or testing otherwise permitted by the Act or regulations 
thereunder; and
    (7) Such other information as is deemed necessary by the 
Administrator.


Sec. 94.804  Exemptions.

    (a) General provisions. (1) Unless otherwise specified, any person 
may apply for the exemptions allowed by this section.
    (2) Paragraph (b) of this section describes the provisions that 
apply to temporary exemptions. Paragraph (c) of this section describes 
provisions that apply to permanent exemptions.
    (3) Applications for exemption under this section shall be mailed 
to the Designated Officer.
    (b) Notwithstanding other requirements of this subpart, a 
nonconforming engine that qualifies for a temporary exemption under 
this paragraph (b) may be conditionally admitted into the United States 
if prior written approval for the conditional admission is obtained 
from the Administrator. Conditional admission is to be under bond. The 
Administrator may request that the U.S. Customs Service require a 
specific bond amount to ensure compliance with the requirements of the 
Act and this subpart. A written request for a temporary exemption from 
the Administrator shall contain the information required in 
Sec. 94.803. Noncompliance with the provisions of this paragraph (b) 
will be considered unlawful importation and may result in the 
forfeiture of the total amount of the bond, exportation of the engine, 
and/or imposition of civil penalties.
    (1) Exemption for repairs or alterations. A person may 
conditionally import under bond a nonconforming engine solely for 
purpose of repair(s) or alteration(s). The engine may not be operated 
in the United States other than for the sole purpose of repair or 
alteration or shipment to the point of repair or alteration and to the 
port of export. It may not be sold or leased in the United States and 
is to be exported upon completion of the repair(s) or alteration(s).
    (2) Testing exemption. A person may conditionally import under bond 
a nonconforming engine for testing, subject to the requirements of 
Sec. 94.905. A test engine may be operated in the United States 
provided that the operation is an integral part of the test. This 
exemption is limited to a period not exceeding one year from the date 
of importation unless a request is made by the appropriate importer, 
and subsequently granted by EPA, concerning the engine in accordance 
with Sec. 94.905 for a subsequent one-year period.
    (3) Display exemptions. A person may conditionally import under 
bond a nonconforming engine solely for display purposes, subject to 
both of the following requirements:
    (i) A display engine may be imported by any person for purposes 
related to a business or the public interest. Such purposes do not 
include collections normally inaccessible or unavailable to the public 
on a daily basis, display of an engine at a dealership, private use, or 
other purpose that the Administrator determines is not appropriate for 
display exemptions. A display engine may not be sold or leased in the 
United States and may not be operated in the United States except for 
the operation incident and necessary to the display purpose.
    (ii) A display exemption is granted for 12 months or for the 
duration of the display purpose, whichever is shorter. Extensions of up 
to 12 months each are available upon approval by the Administrator. In 
no circumstances, however, may the total period of exemption exceed 36 
months.
    (c) A nonconforming engine that qualifies for a permanent exemption 
under this paragraph (c) may be admitted into the United States if 
prior written approval is obtained from the Administrator. A written 
request for a permanent exemption from the Administrator shall contain 
the information required in Sec. 94.803. Noncompliance with the 
provisions of this paragraph (c) will be considered unlawful 
importation and may result in the exportation of the engine and/or 
imposition of civil penalties.

[[Page 73367]]

    (1) National security exemption. Notwithstanding any other 
requirement of this subpart, an engine may be permanently imported into 
the United States under the national security exemption found in 
Sec. 94.908.
    (2) Competition exemption. Notwithstanding any other requirement of 
this subpart, an engine may be permanently imported into the United 
States under the competition exemption found in Sec. 94.906(c).
    (3) Incomplete marine engine exemption. An engine that is intended 
to be modified prior to being placed into service as a marine engine 
may be imported in a nonconforming configuration, subject to the 
following provisions:
    (i) The modified engine must be covered by a valid marine engine 
certificate issued under this part prior to importation and held by a 
post-manufacture marinizer. (Note: Prior to certification, 
manufacturers and post-manufacture marinizers may import uncertified 
engines for testing, as specified in paragraph (b)(2) of this section.)
    (ii) The engine may not be placed into non-marine service prior to 
being installed in a vessel.
    (iii) The importer must obtain written approval from the 
Administrator prior to admission.
    (iv) The engine and engine container must be labeled as specified 
by the Administrator.
    (v) A manufacturer importing an engine under this exemption must 
modify the engine to comply with the requirements of this part.


Sec. 94.805  Prohibited acts; penalties.

    (a) The importation of an engine (including an engine incorporated 
in an imported marine vessel) which is not covered by a certificate of 
conformity other than in accordance with this subpart and the entry 
regulations of the U.S. Customs Service is prohibited. Failure to 
comply with this section is a violation of section 213(d) and section 
203 of the Act.
    (b) Unless otherwise permitted by this subpart, during a period of 
conditional admission, the importer of an engine may not:
    (1) Operate the engine in the United States; or
    (2) Sell or lease or offer the engine for sale or lease.
    (c) An engine conditionally admitted pursuant to Sec. 94.804 and 
not otherwise permanently exempted or excluded by the end of the period 
of conditional admission, or within such additional time as the 
Administrator and the U.S. Customs Service may allow, is deemed to be 
unlawfully imported into the United States in violation of section 
213(d) and section 203 of the Act, unless the engine has been delivered 
to the U.S. Customs Service for export or other disposition under 
applicable Customs laws and regulations by the end of the period of 
conditional admission. An engine not so delivered is subject to seizure 
by the U.S. Customs Service.
    (d) An importer who violates section 213(d) and section 203 of the 
Act is subject to a civil penalty under section 205 of the Act and 
Sec. 94.1106. In addition to the penalty provided in the Act and 
Sec. 94.1106, where applicable, a person or entity who imports an 
engine under the exemption provisions of Sec. 94.804 and, who fails to 
deliver the engine to the U.S. Customs Service by the end of the period 
of conditional admission is liable for liquidated damages in the amount 
of the bond required by applicable Customs laws and regulations.

Subpart J--Exclusion and Exemption Provisions


Sec. 94.901  Purpose and applicability.

    The provisions of this subpart identify excluded engines (i.e., 
engines not covered by the Act) and allow for the exemption of engines 
from certain provisions of this part. The applicability of the 
exclusions is described in Sec. 94.903, and the applicability of the 
exemption allowances is described in Secs. 94.904 through 94.909.


Sec. 94.902  Definitions.

    The definitions of Subpart A of this part apply to this subpart.


Sec. 94.903  Exclusions.

    (a) Upon written request with supporting documentation, EPA will 
make written determinations as to whether certain engines are excluded 
from applicability of this part. Any engines that are determined to be 
excluded are not subject to the regulations under this part. Requests 
to determine whether certain engines are excluded should be sent to the 
Designated Officer.
    (b) EPA will maintain a list of models of engines that have been 
determined to be excluded from coverage under this part. This list will 
be available to the public and may be obtained by writing to the 
address in paragraph (a) of this section.
    (c) In addition to the engines excluded in paragraph (a) of this 
section, certain engines are not subject to the requirements and 
prohibitions of this part because they are excluded from the 
definitions of ``marine engine'' in Sec. 94.2.


Sec. 94.904  Exemptions.

    (a) Except as specified otherwise in this subpart, the provisions 
of Secs. 94.904 through 94.911 exempt certain new engines from the 
standards, other requirements, and prohibitions of this part, except 
for the requirements of this subpart and the requirements of 
Sec. 94.1104. Additional requirements may apply for imported engines; 
these are described in subpart I of this part.
    (b)(1) Any person may request a testing exemption subject to the 
provisions of Sec. 94.905.
    (2) Any engine manufacturer may request a national security 
exemption subject to the provisions of Sec. 94.908.
    (3) Engines manufactured for export purposes are exempt without 
application, subject to the provisions of Sec. 94.909, except as 
otherwise specified by Sec. 94.909.
    (4) Manufacturer-owned engines are exempt without application, 
subject to the provisions of Sec. 94.906(a).
    (5) Display engines are exempt without application, subject to the 
provisions of Sec. 94.906(b). This does not apply to imported engines 
(see Sec. 94.804).
    (6) Engines used solely for competition are exempt, subject to the 
provisions of Sec. 94.906(c).
    (7) Engines used on foreign trade vessels are exempt, subject to 
the provisions of Sec. 94.906(d).


Sec. 94.905  Testing exemption.

    (a)(1) The Administrator may exempt from the standards and/or other 
requirements and prohibitions of this part new engines that are being 
used solely for the purpose of conducting a test program. Any person 
requesting an exemption for the purpose of conducting a test program 
must demonstrate the following:
    (i) That the proposed test program has a purpose which constitutes 
an appropriate basis for an exemption in accordance this section;
    (ii) That the proposed test program necessitates the granting of an 
exemption;
    (iii) That the proposed test program exhibits reasonableness in 
scope; and
    (iv) That the proposed test program exhibits a degree of oversight 
and control consonant with the purpose of the test program and EPA's 
monitoring requirements.
    (2) Paragraphs (b), (c), (d), and (e) of this section describe what 
constitutes a sufficient demonstration for each of the four elements 
identified in paragraphs (a)(1)(i) through (iv) of this section.

[[Page 73368]]

    (b) With respect to the purpose of the proposed test program, an 
appropriate purpose would be research, investigations, studies, 
demonstrations, technology development, or training, but not national 
security. A concise statement of purpose is a required item of 
information.
    (c) With respect to the necessity that an exemption be granted, 
necessity arises from an inability to achieve the stated purpose in a 
practicable manner without performing or causing to be performed one or 
more of the prohibited acts under Sec. 94.1103. In appropriate 
circumstances, time constraints may be a sufficient basis for 
necessity, but the cost of certification alone, in the absence of 
extraordinary circumstances, is not a basis for necessity.
    (d) With respect to reasonableness, a test program must exhibit a 
duration of reasonable length and affect a reasonable number of 
engines. In this regard, required items of information include:
    (1) An estimate of the program's duration; and
    (2) The maximum number of engines involved.
    (e) With respect to control, the test program must incorporate 
procedures consistent with the purpose of the test and be capable of 
affording EPA monitoring capability. As a minimum, required items of 
information include:
    (1) The technical nature of the testing;
    (2) The location(s) of the testing;
    (3) The time or work duration of the testing;
    (4) The ownership arrangement with regard to the engines involved 
in the testing;
    (5) The intended final disposition of the engines;
    (6) The manner in which the engine identification numbers will be 
identified, recorded, and made available; and
    (7) The means or procedure whereby test results will be recorded.
    (f) A manufacturer of new engines may request a testing exemption 
to cover engines intended for use in test programs planned or 
anticipated over the course of a subsequent two-year period. Unless 
otherwise required by the Director, Engine Programs and Compliance 
Division, a manufacturer requesting such an exemption need only furnish 
the information required by paragraphs (a)(1) and (d)(2) of this 
section along with a description of the recordkeeping and control 
procedures that will be employed to assure that the engines are used 
for purposes consistent with paragraph (a) of this section.
    (g) For engines being used for the purpose of developing a 
fundamentally new emission control technology related either to an 
alternative fuel or an aftertreatment device, the Administrator may 
exempt the engine from some or all of the applicable standards of this 
part for the full useful life of the engine, subject to the provisions 
of paragraphs (a) through (f) of this section.


Sec. 94.906  Manufacturer-owned exemption, display exemption, 
competition exemption, and foreign trade vessel exemption.

    (a) Manufacturer-owned exemption. Any manufacturer-owned engine, as 
defined by Sec. 94.2, is exempt from Sec. 94.1103, without application, 
if the manufacturer complies with the following terms and conditions:
    (1) The manufacturer must establish, maintain, and retain the 
following adequately organized and indexed information on each exempted 
engine:
    (i) engine identification number;
    (ii) Use of the engine on exempt status; and
    (iii) Final disposition of any engine removed from exempt status.
    (2) The manufacturer must provide right of entry and access to 
these records to EPA Enforcement Officers as outlined in Sec. 94.208.
    (3) The manufacturer must permanently affix a label to each engine 
on exempt status, unless the requirement is waived or an alternate 
procedure is approved by the Director, Engine Programs and Compliance 
Division. This label should:
    (i) Be affixed in a readily visible portion of the engine;
    (ii) Be attached in such a manner that cannot be removed without 
destruction or defacement;
    (iii) State in the English language and in block letters and 
numerals of a color that contrasts with the background of the label, 
the following information:
    (A) The label heading ``Emission Control Information'';
    (B) Full corporate name and trademark of manufacturer;
    (C) Engine displacement, engine family identification, and model 
year of engine; or person of office to be contacted for further 
information about the engine;
    (D) The statement ``This engine is exempt from the prohibitions of 
40 CFR 94.1103.''
    (4) No provision of paragraph (a)(3) of this section prevents a 
manufacturer from including any other information it desires on the 
label.
    (5) The engine is not used in revenue-generating service, or sold.
    (b) Display exemption. An uncertified engine that is to be used 
solely for display purposes, and that will only be operated incident 
and necessary to the display purpose, and will not be sold unless an 
applicable certificate of conformity has been obtained for the engine, 
is exempt without request from the standards of this part. This does 
not apply to imported engines (see Sec. 94.804).
    (c) Competition exemption. The Administrator may exempt, upon 
request, engines that are intended by the manufacturer to be used 
solely for competition. Engines that are modified after they have been 
placed into service and are used solely for competition are exempt 
without request.
    (d) Foreign trade exemption. (1) The Administrator may exempt, upon 
request of the vessel owner, engines used on U.S.-flagged vessels 
meeting the provisions of paragraph (d)(2) of this section.
    (2) Vessel owners requesting an exemption under this paragraph (d) 
must demonstrate to the Administrator that:
    (i) The vessel will spend less than 25 percent of its operating 
time within 320 nautical kilometers of U.S. territory; or
    (ii) That it will not operate between two United States ports.
    (3) For the purpose of this paragraph (d), the term ``vessel 
owner'' includes any entities that have contracted to purchase a new 
marine vessel.
    (4) The engine manufacturer must label the engine, and must include 
on the label the following statement: ``THIS ENGINE IS SUBJECT TO THE 
MARPOL ANNEX VI NOX LIMITS AND IS INTENDED FOR USE SOLELY ON 
VESSELS THAT SERVICE FOREIGN PORTS AS DESCRIBED IN 40 CFR 94.906.'', or 
a similar statement approved by the Administrator.


Sec. 94.907  Engine dressing exemption.

    (a) This section applies to you if you are an engine manufacturer 
(this includes post-manufacture marinizers).
    (b) The only requirements or prohibitions from this part that apply 
to an engine that is exempt under this section are in this section.
    (c) The requirements and prohibitions of this part apply to all 
engines in the scope of Sec. 94.1 that do not qualify for the engine 
dressing exemption.
    (d) New marine engines that meets all the following criteria are 
exempt under this section:
    (1) You must produce it by marinizing an engine covered by a valid 
certificate of conformity from one of the following programs:
    (i) Heavy-duty highway engines (40 CFR part 86).
    (ii) Land-based nonroad diesel engines (40 CFR part 89).
    (iii) Locomotive engines (40 CFR part 92).

[[Page 73369]]

    (2) The engine must have the label that required under 40 CFR part 
86, 89, or 92.
    (3) You must not make any changes to the certified engine that 
could reasonably be expected to increase its emissions. For example, if 
you make any of the following changes to one of these engines, you do 
not qualify for the engine dressing exemption:
    (i) Change any fuel system parameters from the certified 
configuration.
    (ii) Replace an original turbocharger.
    (iii) Modify or design the marine engine cooling or aftercooling 
system so that temperatures or heat rejection rates are outside the 
original engine manufacturer's specified ranges.
    (4) The engine model must not be primarily for marine applications. 
This means that total sales of the engine model, from all companies, 
must be mostly for non-marine applications.
    (e) If you dress an engine under this exemption, you must do all of 
the following:
    (1) Make sure the original engine label will remain clearly visible 
after installation in the vessel.
    (2) Add a permanent supplemental label to the engine in a position 
where it will remain clearly visible after installation in the vessel. 
In your engine label, do the following:
    (i) Include the heading: ``Marine Engine Emission Control 
Information''.
    (ii) Include your full corporate name and trademark.
    (iii) State: ``This engine was marinized without affecting its 
emission controls.''
    (iv) State the date you finished marinizing the engine (month and 
year).
    (3) Send a signed letter to the Designated Officer by the end of 
each calendar year (or less often if we tell you) with all the 
following information:
    (i) Identify your full corporate name, address, and telephone 
number.
    (ii) List the engine models you expect to produce under this 
exemption in the coming year.
    (iii) State: ``We produce each listed engine model for marine 
application without making any changes that could increase its 
certified emission levels, as described in 40 CFR 94.907.''
    (f) In general you may use up your inventory of engines that are 
not certified to new marine emission standards if they were originally 
manufactured before the date of the new standards. However, stockpiling 
these engines is a violation of Sec. 94.1103(a)(1)(i)(A).
    (g) If your engines do not meet the criteria listed in paragraphs 
(d)(2) through (d)(4) of this section, they will be subject to the 
standards and prohibitions of this part. Marinization without an 
exemption would be a violation of Sec. 94.1103(a)(1) and/or the 
tampering prohibitions of the applicable land-based regulations (40 CFR 
Parts 86, 89, or 92).
    (h)(1) If you are the original manufacturer and marinizer of an 
exempted engine, you must send us emission test data on the appropriate 
marine duty cycles. You can include the data in your application for 
certification or in the letter described in paragraph (e)(3) of this 
section.
    (2) If you are the original manufacturer of an exempted engine that 
is marinized by a post-manufacture marinizer, you may be required to 
send us emission test data on the appropriate marine duty cycles. If 
such data are requested you will be allowed a reasonable amount of time 
to collect the data.


Sec. 94.908  National security exemption.

    (a)(1) Any marine engine, otherwise subject to this part, that is 
used in a vessel that exhibits substantial features ordinarily 
associated with military combat such as armor, permanently affixed 
weaponry, specialized electronic warfare systems, unique stealth 
performance requirements, and/or unique combat maneuverability 
requirements and which will be owned and/or used by an agency of the 
federal government with the responsibility for national defense, will 
be exempt from the regulations in this subpart for reasons of national 
security. No request for this exemption is necessary.
    (2) Manufacturers may request a national security exemption for any 
marine engine, otherwise subject to this part, which does not meet the 
conditions described in paragraph (a)(1) of this section. A 
manufacturer requesting a national security exemption must state the 
purpose for which the exemption is required and the request must be 
endorsed by an agency of the federal government charged with 
responsibility for national defense.
    (b) EPA will maintain a list of models of marine engines (and the 
vessels which use them) that have been granted a national security 
exemption under paragraph (a)(2) of this section. This list will be 
available to the public and may be obtained by writing to the 
Designated Officer.


Sec. 94.909  Export exemptions.

    (a) A new engine intended solely for export, and so labeled or 
tagged on the outside of any container and on the engine, is subject to 
the provisions of Sec. 94.1103, unless the importing country has new 
marine engine emission standards which differ from EPA standards.
    (b) For the purpose of paragraph (a) of this section, a country 
having no standards whatsoever is deemed to be a country having 
emission standards which differ from EPA standards.
    (c) It is a condition of any exemption for the purpose of export 
under paragraph (a) of this section, that such exemption is void ab 
initio with respect to a new engine intended solely for export, where 
such engine is sold, or offered for sale, to an ultimate purchaser or 
otherwise distributed or introduced into commerce in the United States 
for purposes other than export.


Sec. 94.910  Granting of exemptions.

    (a) If upon completion of the review of an exemption request made 
pursuant to Sec. 94.905 or Sec. 94.908, EPA determines it is 
appropriate to grant such an exemption, a memorandum of exemption is to 
be prepared and submitted to the person requesting the exemption. The 
memorandum is to set forth the basis for the exemption, its scope, and 
such terms and conditions as are deemed necessary. Such terms and 
conditions generally include, but are not limited to, agreements by the 
applicant to conduct the exempt activity in the manner described to 
EPA, create and maintain adequate records accessible to EPA at 
reasonable times, employ labels for the exempt engines setting forth 
the nature of the exemption, take appropriate measures to assure that 
the terms of the exemption are met, and advise EPA of the termination 
of the activity and the ultimate disposition of the engines.
    (b) Any exemption granted pursuant to paragraph (a) of this section 
is deemed to cover any subject engine only to the extent that the 
specified terms and conditions are complied with. A breach of any term 
or condition causes the exemption to be void ab initio with respect to 
any engine. Consequently, the causing or the performing of an act 
prohibited under Sec. 94.1103(a)(1) or (a)(3), other than in strict 
conformity with all terms and conditions of this exemption, renders the 
person to whom the exemption is granted, and any other person to whom 
the provisions of Sec. 94.1103(a) are applicable, liable to suit under 
sections 204 and 205 of the Act.


Sec. 94.911  Submission of exemption requests.

    Requests for exemption or further information concerning exemptions 
and/or the exemption request review procedure should be addressed to 
the Designated Officer.

[[Page 73370]]

Subpart K--[Reserved]

Subpart L--General Enforcement Provisions and Prohibited Acts


Sec. 94.1101  Applicability.

    The requirements of this subpart are applicable to all persons with 
respect to engines subject to the provisions of Subpart A of this part.


Sec. 94.1102  Definitions.

    The definitions of subpart A of this part apply to this subpart.


Sec. 94.1103  Prohibited acts.

    (a) The following acts and the causing thereof are prohibited:
    (1)(i)(A) In the case of a manufacturer of new engines, the sale, 
the offering for sale, the introduction into commerce, the delivery for 
introduction into commerce, or the distribution in commerce of any new 
engine that is subject to the standards of this part, unless such 
engine is covered by a certificate of conformity issued (and in effect) 
under regulations found in this part.
    (B) The manufacture of a engine for the purpose of an act listed in 
paragraph (a)(1)(i)(A) of this section unless such engine is covered by 
a certificate of conformity issued (and in effect) under regulations 
found in this part prior to its introduction into commerce.
    (ii) In the case of any person, except as provided in Subpart I of 
this part, the importation into the United States of any engine 
manufactured on or after the implementation date of the applicable 
emission limits for the relevant engine, unless such engine is covered 
by a certificate of conformity issued (and in effect) under regulations 
found in this part.
    (2)(i) For a person to fail or refuse to permit access to or 
copying of records or to fail to make reports or provide information 
required under this part.
    (ii) For a person to fail or refuse to permit entry, testing, or 
inspection authorized under this part.
    (iii) For a person to fail or refuse to perform tests, or to have 
tests performed as required by this part.
    (iv) For a person to fail to establish or maintain records as 
required under this part.
    (3)(i) For a person to remove or render inoperative a device or 
element of design installed on or in a engine in compliance with 
regulations under this part, or to set any adjustable parameter to a 
setting outside of the range specified by the manufacturer, as approved 
in the application for certification by the Administrator.
    (ii) For a person to manufacture, sell or offer to sell, or 
install, a part or component intended for use with, or as part of, a 
engine, where a principal effect of the part or component is to bypass, 
defeat, or render inoperative a device or element of design installed 
on or in a engine in compliance with regulations issued under this 
part, and where the person knows or should know that the part or 
component is being offered for sale or installed for this use or put to 
such use.
    (iii) for a person to deviate from the provisions of Sec. 94.11 
when rebuilding an engine (or rebuilding a portion of an engine or 
engine system).
    (4) For a manufacturer of a new engine subject to standards 
prescribed under this part:
    (i) To sell, offer for sale, or introduce or deliver for 
introduction into commerce, a new engine unless the manufacturer has 
complied with the requirements of Sec. 94.1107.
    (ii) To sell, offer for sale, or introduce or deliver for 
introduction into commerce, a new engine unless all required labels and 
tags are affixed to the engine in accordance with Sec. 94.212.
    (iii) To fail or refuse to comply with the requirements of 
Sec. 94.1108.
    (iv) Except as provided in Sec. 94.211, to provide directly or 
indirectly in any communication to the ultimate purchaser or a 
subsequent purchaser that the coverage of a warranty under the Act is 
conditioned upon use of a part, component, or system manufactured by 
the manufacturer or a person acting for the manufacturer or under its 
control, or conditioned upon service performed by such persons.
    (v) To fail or refuse to comply with the terms and conditions of 
the warranty under Sec. 94.1107.
    (5) For a manufacturer of marine vessels to distribute in commerce, 
sell, offer for sale, or deliver for introduction into commerce a new 
vessel containing an engine not covered by a certificate of conformity 
applicable for an engine model year the same as or later than the 
calendar year in which the manufacture of the new vessel is initiated. 
(Note: For the purpose of this paragraph (a)(5), the manufacture of a 
vessel is initiated when the keel is laid, or the vessel is at a 
similar stage of construction.)
    (6) For any person to install a recreational marine engine in a 
vessel that is manufactured on or after the implementation date of the 
applicable standards and that is not a recreational vessel.
    (b) For the purposes of enforcement of this part, the following 
apply:
    (1) Nothing in paragraph (a)(3) of this section is to be construed 
to require the use of any manufacturer's parts in maintaining or 
repairing a engine.
    (2)(i) Actions for the purpose of repair or replacement of a device 
or element of design or any other item are not considered prohibited 
acts under paragraph (a)(3)(i) of this section if the action is a 
necessary and temporary procedure, the device or element is replaced 
upon completion of the procedure, and the action results in the proper 
functioning of the device or element of design.
    (ii) Actions for emergency purposes are not considered prohibited 
acts under paragraph (a)(3)(i) of this section if the action is a 
necessary and temporary procedure and the device or element is replaced 
such that the proper functioning of the device or element of design is 
restored as soon as possible.
    (3) Where the Administrator determines that no engine that is 
certified to the requirements of this part is produced by any 
manufacturer with the appropriate physical or performance 
characteristics to repower a vessel, the Administrator may allow an 
engine manufacturer to introduce into commerce a replacement engine 
without complying with all of the otherwise applicable requirements of 
this part. Such engine shall not be subject to the prohibitions of 
paragraph (a)(1) of this section, provided that:
    (i) The engine requiring replacement is not certified or is 
certified to emission standards that are less stringent than those in 
effect when the replacement engine is built; and
    (ii) The engine manufacturer or its agent takes ownership and 
possession of the engine being replaced in partial exchange for the 
replacement engine; and
    (iii) The replacement engine is clearly labeled with the following 
language, or similar alternate language approved by the Administrator: 
``THIS ENGINE DOES NOT COMPLY WITH FEDERAL MARINE ENGINE EMISSION 
REQUIREMENTS. SALE OR INSTALLATION OF THIS ENGINE FOR ANY PURPOSE OTHER 
THAN AS A REPLACEMENT ENGINE FOR AN ENGINE MANUFACTURED PRIOR TO 
JANUARY 1 [INSERT APPROPRIATE YEAR] IS A VIOLATION OF FEDERAL LAW 
SUBJECT TO CIVIL PENALTY''; and
    (iv) In cases where an engine is to be imported for replacement 
purposes under the provisions of this paragraph (b)(3) of this section, 
the term ``engine manufacturer'' shall not apply to an individual or 
other entity that does not possess a current Certificate of Conformity 
issued by EPA under this part; and
    (v) Where the replacement engine is intended to replace an engine 
that is

[[Page 73371]]

certified to emission standards that are less stringent than those in 
effect when the replacement engine is built, the replacement engine 
shall be identical in all material respects to a certified 
configuration of the same or later model year as the engine being 
replaced; and
    (vi) Engines sold pursuant to the provisions of this paragraph will 
neither generate nor use emission credits and will not be part of any 
accounting under the averaging, banking and trading program.


Sec. 94.1104  General enforcement provisions.

    (a) Information collection provisions. (1)(i) Every manufacturer of 
new engines and other persons subject to the requirements of this part 
must establish and maintain records, perform tests, make reports and 
provide information the Administrator may reasonably require to 
determine whether the manufacturer or other person has acted or is 
acting in compliance with this part or to otherwise carry out the 
provisions of this part, and must, upon request of an officer or 
employee duly designated by the Administrator, permit the officer or 
employee at reasonable times to have access to and copy such records. 
The manufacturer shall comply in all respects with the requirements of 
subpart E of this part.
    (ii) Every manufacturer or owner of engines exempted from the 
standards or requirements of this part must establish and maintain 
records, perform tests, make reports and provide information the 
Administrator may reasonably require regarding the emissions of such 
engines.
    (2) For purposes of enforcement of this part, an officer or 
employee duly designated by the Administrator, upon presenting 
appropriate credentials, is authorized:
    (i) To enter, at reasonable times, any establishment of the 
manufacturer, or of any person whom the manufacturer engaged to perform 
any activity required under paragraph (a)(1) of this section, for the 
purposes of inspecting or observing any activity conducted pursuant to 
paragraph (a)(1) of this section; and
    (ii) To inspect records, files, papers, processes, controls, and 
facilities used in performing an activity required by paragraph (a)(1) 
of this section, by the manufacturer or by a person whom the 
manufacturer engaged to perform the activity.
    (b) Exemption provision. The Administrator may exempt a new engine 
from Sec. 94.1103 upon such terms and conditions as the Administrator 
may find necessary for the purpose of export, research, investigations, 
studies, demonstrations, or training, or for reasons of national 
security, or for other purposes allowed by subpart J of this part.
    (c) Importation provision. (1) A new engine, offered for 
importation or imported by a person in violation of Sec. 94.1103 is to 
be refused admission into the United States, but the Secretary of the 
Treasury and the Administrator may, by joint regulation, provide for 
deferring a final determination as to admission and authorizing the 
delivery of such a engine offered for import to the owner or consignee 
thereof upon such terms and conditions (including the furnishing of a 
bond) as may appear to them appropriate to insure that the engine will 
be brought into conformity with the standards, requirements, and 
limitations applicable to it under this part.
    (2) If a engine is finally refused admission under this paragraph 
(c), the Secretary of the Treasury shall cause disposition thereof in 
accordance with the customs laws unless it is exported, under 
regulations prescribed by the Secretary, within 90 days of the date of 
notice of the refusal or additional time as may be permitted pursuant 
to the Treasury regulations.
    (3) Disposition in accordance with the customs laws may not be made 
in such manner as may result, directly or indirectly, in the sale, to 
the ultimate consumer, of a new engine that fails to comply with 
applicable standards of the Administrator under this part.
    (d) Export provision. A new engine intended solely for export, and 
so labeled or tagged on the outside of the container if used and on the 
engine, shall be subject to the provisions of Sec. 94.1103, except that 
if the country that is to receive the engine has emission standards 
that differ from the standards prescribed under subpart A of this part, 
then the engine must comply with the standards of the country that is 
to receive the engine.
    (e) Recordkeeping. Except where specified otherwise, records 
required by this part must be kept for eight (8) years.


Sec. 94.1105  Injunction proceedings for prohibited acts.

    (a) The district courts of the United States have jurisdiction to 
restrain violations of Sec. 94.1103(a).
    (b) Actions to restrain violations of Sec. 94.1103(a) must be 
brought by and in the name of the United States. In an action, 
subpoenas for witnesses who are required to attend a district court in 
any district may run into any other district.


Sec. 94.1106  Penalties.

    (a) Violations. A violation of the requirements of this subpart is 
a violation of the applicable provisions of the Act, including sections 
213(d) and 203, and is subject to the penalty provisions thereunder.
    (1) A person who violates Sec. 94.1103(a)(1), (a)(4), (a)(5), or 
(a)(6), or a manufacturer or dealer who violates Sec. 94.1103(a)(3)(i) 
or (iii) is subject to a civil penalty of not more than $25,000 for 
each violation unless modified by the Debt Collection Improvement Act 
(31 U.S.C. chapter 37) and/or regulations issued there under.
    (2) A person other than a manufacturer or dealer who violates 
Sec. 94.1103(a)(3)(i) or (iii) or any person who violates 
Sec. 94.1103(a)(3)(ii) is subject to a civil penalty of not more than 
$2,500 for each violation unless modified by the Debt Collection 
Improvement Act and/or regulations issued thereunder.
    (3) A violation with respect to Sec. 94.1103(a)(1), (a)(3)(i), 
(a)(4), or (a)(5) constitutes a separate offense with respect to each 
engine.
    (4) A violation with respect to Sec. 94.1103(a)(3)(ii) constitutes 
a separate offense with respect to each part or component. Each day of 
a violation with respect to Sec. 94.1103(a)(5) constitutes a separate 
offense.
    (5) A person who violates Sec. 94.1103(a)(2) or (a)(5) is subject 
to a civil penalty of not more than $25,000 per day of violation unless 
modified by the Debt Collection Improvement Act and/or regulations 
issued thereunder.
    (b) Civil actions. The Administrator may commence a civil action to 
assess and recover any civil penalty under paragraph (a) of this 
section.
    (1) An action under this paragraph (b) may be brought in the 
district court of the United States for the district in which the 
defendant resides or has the Administrator's principal place of 
business, and the court has jurisdiction to assess a civil penalty.
    (2) In determining the amount of a civil penalty to be assessed 
under this paragraph (b), the court is to take into account the gravity 
of the violation, the economic benefit or savings (if any) resulting 
from the violation, the size of the violator's business, the violator's 
history of compliance with Title II of the Act, action taken to remedy 
the violation, the effect of the penalty on the violator's ability to 
continue in business, and such other matters as justice may require.
    (3) In any such action, subpoenas for witnesses who are required to 
attend a district court in any district may run into any other 
district.

[[Page 73372]]

    (c) Administrative assessment of certain penalties.--(1) 
Administrative penalty authority. In lieu of commencing a civil action 
under paragraph (b) of this section, the Administrator may assess any 
civil penalty prescribed in paragraph (a) of this section, except that 
the maximum amount of penalty sought against each violator in a penalty 
assessment proceeding shall not exceed $200,000, unless the 
Administrator and the Attorney General jointly determine that a matter 
involving a larger penalty amount is appropriate for administrative 
penalty assessment. Any such determination by the Administrator and the 
Attorney General is not subject to judicial review. Assessment of a 
civil penalty shall be by an order made on the record after opportunity 
for a hearing held in accordance with the procedures found at 40 CFR 
Part 22. The Administrator may compromise, or remit, with or without 
conditions, any administrative penalty which may be imposed under this 
section.
    (2) Determining amount. In determining the amount of any civil 
penalty assessed under this paragraph (c), the Administrator shall take 
into account the gravity of the violation, the economic benefit or 
savings (if any) resulting from the violation, the size of the 
violator's business, the violator's history of compliance with Title II 
of the Act, action taken to remedy the violation, the effect of the 
penalty on the violator's ability to continue in business, and such 
other matters as justice may require.
    (3) Effect of administrator's action. (i) Action by the 
Administrator under this paragraph (c) does not affect or limit the 
Administrator's authority to enforce any provisions of the Act; except 
that any violation with respect to which the Administrator has 
commenced and is diligently prosecuting an action under this paragraph 
(c), or for which the Administrator has issued a final order not 
subject to further judicial review and for which the violator has paid 
a penalty assessment under this paragraph shall not be the subject of a 
civil penalty action under paragraph (b) of this section.
    (ii) No action by the Administrator under this paragraph (c) shall 
affect a person's obligation to comply with a section of this part.
    (4) Finality of order. An order issued under this paragraph (c) is 
to become final 30 days after its issuance unless a petition for 
judicial review is filed under paragraph (c)(5) of this section.
    (5) Judicial review. A person against whom a civil penalty is 
assessed in accordance with this paragraph (c) may seek review of the 
assessment in the United States District Court for the District of 
Columbia or for the district in which the violation is alleged to have 
occurred, in which such person resides, or where the person's principal 
place of business is located, within the 30-day period beginning on the 
date a civil penalty order is issued. The person shall simultaneously 
send a copy of the filing by certified mail to the Administrator and 
the Attorney General. The Administrator shall file in the court within 
30 days a certified copy, or certified index, as appropriate, of the 
record on which the order was issued. The court is not to set aside or 
remand any order issued in accordance with the requirements of this 
paragraph (c) unless substantial evidence does not exist in the record, 
taken as a whole, to support the finding of a violation or unless the 
Administrator's assessment of the penalty constitutes an abuse of 
discretion, and the court is not to impose additional civil penalties 
unless the Administrator's assessment of the penalty constitutes an 
abuse of discretion. In any proceedings, the United States may seek to 
recover civil penalties assessed under this section.
    (6) Collection. (i) If any person fails to pay an assessment of a 
civil penalty imposed by the Administrator as provided in this part 
after the order making the assessment has become final or after a court 
in an action brought under paragraph (c)(5) of this section has entered 
a final judgment in favor of the Administrator, the Administrator shall 
request that the Attorney General bring a civil action in an 
appropriate district court to recover the amount assessed (plus 
interest at rates established pursuant to section 6621(a)(2) of the 
Internal Revenue Code of 1986 (26 U.S.C. 6621(a)(2)) from the date of 
the final order or the date of final judgment, as the case may be). In 
such an action, the validity, amount, and appropriateness of the 
penalty is not subject to review.
    (ii) A person who fails to pay on a timely basis the amount of an 
assessment of a civil penalty as described in paragraph (c)(6)(i) of 
this section shall be required to pay, in addition to that amount and 
interest, the United States' enforcement expenses, including attorney's 
fees and costs for collection proceedings, and a quarterly nonpayment 
penalty for each quarter during which the failure to pay persists. The 
nonpayment penalty is an amount equal to ten percent of the aggregate 
amount of that person's penalties and nonpayment penalties which are 
unpaid as of the beginning of such quarter.


Sec. 94.1107  Warranty provisions.

    (a) The manufacturer of each engine must warrant to the ultimate 
purchaser and each subsequent purchaser or owner that the engine is 
designed, built, and equipped so as to conform at the time of sale with 
applicable regulations under section 213 of the Act, and is free from 
defects in materials and workmanship which cause such engine to fail to 
conform with applicable regulations for its warranty period (as 
determined under Sec. 94.10).
    (b) For the purposes of this section, the owner of any engine 
warranted under this part is responsible for the proper maintenance of 
the engine. Proper maintenance includes replacement and/or service, as 
needed, at the owner's expense at a service establishment or facility 
of the owner's choosing, of all parts, items, or devices which were in 
general use with engines prior to 1999. For diesel engines, this would 
generally include replacement or cleaning of the fuel delivery and 
injection system.


Sec. 94.1108  In-use compliance provisions.

    (a) Effective with respect to engines subject to the requirements 
of this part:
    (1) If the Administrator determines that a substantial number of 
any class or category of engines, although properly maintained and 
used, do not conform to the regulations prescribed under section 213 of 
the Act when in actual use throughout their useful life period (as 
defined under Sec. 94.2), the Administrator shall immediately notify 
the manufacturer of such nonconformity and require the manufacturer to 
submit a plan for remedying the nonconformity of the engines with 
respect to which such notification is given.
    (i) The manufacturer's plan shall provide that the nonconformity of 
any such engines which are properly used and maintained will be 
remedied at the expense of the manufacturer.
    (ii) If the manufacturer disagrees with such determination of 
nonconformity and so advises the Administrator, the Administrator shall 
afford the manufacturer and other interested persons an opportunity to 
present their views and evidence in support thereof at a public 
hearing. Unless, as a result of such hearing, the Administrator 
withdraws such determination of nonconformity, the Administrator shall, 
within 60 days after the completion of such hearing, order the 
manufacturer to provide prompt notification of such nonconformity in 
accordance with paragraph (a)(2) of this section.
    (2) Any notification required to be given by the manufacturer under 
paragraph (a)(1) of this section with

[[Page 73373]]

respect to any class or category of engines shall be given to ultimate 
purchasers, subsequent purchasers (if known), and dealers (as 
applicable) in such manner and containing such information as required 
in Subparts E and H of this part.
    (3)(i) The certifying manufacturer shall furnish with each new 
engine written instructions for the proper maintenance and use of the 
engine by the ultimate purchaser as required under Sec. 94.211.
    (ii) The instruction under paragraph (a)(3)(i) of this section must 
not include any condition on the ultimate purchaser's using, in 
connection with such engine, any component or service (other than a 
component or service provided without charge under the terms of the 
purchase agreement) which is identified by brand, trade, or corporate 
name. Such instructions also must not directly or indirectly 
distinguish between service performed by the franchised dealers of such 
manufacturer, or any other service establishments with which such 
manufacturer has a commercial relationship, and service performed by 
independent engine repair facilities with which such manufacturer has 
no commercial relationship.
    (iii) The prohibition of paragraph (a)(3)(ii) of this section may 
be waived by the Administrator if:
    (A) The manufacturer satisfies the Administrator that the engine 
will function properly only if the component or service so identified 
is used in connection with such engine; and
    (B) The Administrator finds that such a waiver is in the public 
interest.
    (iv) In addition, the manufacturer shall indicate by means of a 
label or tag permanently affixed to the engine that the engine is 
covered by a certificate of conformity issued for the purpose of 
assuring achievement of emission standards prescribed under section 213 
of the Act. This label or tag shall also contain information relating 
to control of emissions as prescribed under Sec. 94.212.
    (b) The manufacturer bears all cost obligation any dealer incurs as 
a result of a requirement imposed by paragraph (a) of this section. The 
transfer of any such cost obligation from a manufacturer to a dealer 
through franchise or other agreement is prohibited.
    (c) If a manufacturer includes in an advertisement a statement 
respecting the cost or value of emission control devices or systems, 
the manufacturer shall set forth in the statement the cost or value 
attributed to these devices or systems by the Secretary of Labor 
(through the Bureau of Labor Statistics). The Secretary of Labor, and 
his or her representatives, has the same access for this purpose to the 
books, documents, papers, and records of a manufacturer as the 
Comptroller General has to those of a recipient of assistance for 
purposes of section 311 of the Act.

Appendix I to Part 94--Emission-Related Engine Parameters and 
Specifications

I. Basic Engine Parameters--Reciprocating Engines.
    1. Compression ratio.
    2. Type of air aspiration (natural, Roots blown, supercharged, 
turbocharged).
    3. Valves (intake and exhaust).
    a. Head diameter dimension.
    b. Valve lifter or actuator type and valve lash dimension.
    4. Camshaft timing.
    a. Valve opening--intake exhaust (degrees from TDC or BDC).
    b. Valve closing--intake exhaust (degrees from TDC or BDC).
    c. Valve overlap (degrees).
    5. Ports--two stroke engines (intake and/or exhaust).
    a. Flow area.
    b. Opening timing (degrees from TDC or BDC).
    c. Closing timing (degrees from TDC or BDC).
II. Intake Air System.
    1. Roots blower/supercharger/turbocharger calibration.
    2. Charge air cooling.
    a. Type (air-to-air; air-to-liquid).
    b. Type of liquid cooling (engine coolant, dedicated cooling 
system).
    c. Performance (charge air delivery temperature ( deg.F) at 
rated power and one other power level under ambient conditions of 
80 deg.F and 110 deg.F, and 3 minutes and 15 minutes after selecting 
rated power, and 3 minutes and 5 minutes after selecting other power 
level).
    3. Temperature control system calibration.
    4. Maximum allowable inlet air restriction.
III. Fuel System.
    1. General.
    a. Engine idle speed.
    2. Fuel injection--compression ignition engines.
    a. Control parameters and calibrations.
    b. Transient enrichment system calibration.
    c. Air-fuel flow calibration.
    d. Altitude compensation system calibration.
    e. Operating pressure(s).
    f. Injector timing calibration.
IV. Engine Cooling System.
    1. Thermostat calibration.
V. Exhaust System.
    1. Maximum allowable back pressure.
VI. Exhaust Emission Control System.
    1. Air injection system.
    a. Control parameters and calibrations.
    b. Pump flow rate.
    2. EGR system.
    a. Control parameters and calibrations.
    b. EGR valve flow calibration.
    3. Catalytic converter system.
    a. Active surface area.
    b. Volume of catalyst.
    c. Conversion efficiency.
    4. Backpressure.
VII. Crankcase Emission Control System.
    1. Control parameters and calibrations.
    2. Valve calibrations.
VIII. Auxiliary Emission Control Devices (AECD).
    1. Control parameters and calibrations.
    2. Component calibration(s).

[FR Doc. 99-31658 Filed 12-28-99; 8:45 am]
BILLING CODE 6560-50-P