[Federal Register Volume 73, Number 196 (Wednesday, October 8, 2008)]
[Rules and Regulations]
[Pages 59034-59380]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-21093]



[[Page 59033]]

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Part II





Environmental Protection Agency





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40 CFR Parts 9, 60, 80 et al.



Control of Emissions From Nonroad Spark-Ignition Engines and Equipment; 
Final Rule

  Federal Register / Vol. 73, No. 196 / Wednesday, October 8, 2008 / 
Rules and Regulations  

[[Page 59034]]


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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Parts 9, 60, 80, 85, 86, 89, 90, 91, 92, 94, 1027, 1033, 
1039, 1042, 1045, 1048, 1051, 1054, 1060, 1065, 1068, and 1074

[EPA-HQ-OAR-2004-0008; FRL-8712-8]
RIN 2060-AM34


Control of Emissions From Nonroad Spark-Ignition Engines and 
Equipment

AGENCY: Environmental Protection Agency (EPA).

ACTION: Final rule.

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SUMMARY: We are setting emission standards for new nonroad spark-
ignition engines that will substantially reduce emissions from these 
engines. The exhaust emission standards apply starting in 2010 for new 
marine spark-ignition engines, including first-time EPA standards for 
sterndrive and inboard engines. The exhaust emission standards apply 
starting in 2011 and 2012 for different sizes of new land-based, spark-
ignition engines at or below 19 kilowatts (kW). These small engines are 
used primarily in lawn and garden applications. We are also adopting 
evaporative emission standards for vessels and equipment using any of 
these engines. In addition, we are making other minor amendments to our 
regulations.
    We estimate that by 2030, this rule will result in significantly 
reduced pollutant emissions from regulated engine and equipment 
sources, including estimated annual nationwide reductions of 604,000 
tons of volatile organic hydrocarbon emissions, 132,200 tons of 
NOX emissions, and 5,500 tons of directly-emitted 
particulate matter (PM2.5) emissions. These reductions 
correspond to significant reductions in the formation of ground-level 
ozone. We also expect to see annual reductions of 1,461,000 tons of 
carbon monoxide emissions, with the greatest reductions in areas where 
there have been problems with individual exposures. The requirements in 
this rule will substantially benefit public health and welfare and the 
environment. We estimate that by 2030, on an annual basis, these 
emission reductions will prevent 230 PM-related premature deaths, 
between 77 and 350 ozone-related premature deaths, approximately 1,700 
hospitalizations and emergency room visits, 23,000 work days lost, 
180,000 lost school days, 590,000 acute respiratory symptoms, and other 
quantifiable benefits every year. The total annual benefits of this 
rule in 2030 are estimated to be between $1.8 billion and $4.4 billion, 
assuming a 3% discount rate. The total annual benefits of this rule in 
2030 are estimated to be between $1.6 billion and $4.3 billion, 
assuming a 7% discount rate. Estimated costs in 2030 are many times 
less at approximately $190 million.

DATES: This rule is effective on December 8, 2008. The incorporation by 
reference of certain publications listed in this regulation is approved 
by the Director of the Federal Register as of December 8, 2008.

ADDRESSES:
    Docket: All documents in the docket are listed in the 
www.regulations.gov index. Although listed in the index, some 
information is not publicly available, such as CBI or other information 
whose disclosure is restricted by statute. Certain other material, such 
as copyrighted material, will be publicly available only in hard copy. 
Publicly available docket materials are available either electronically 
in www.regulations.gov or in hard copy at the ``Control of Emissions 
from Nonroad Spark-Ignition Engines, Vessels and Equipment'' Docket. 
The docket is located in the EPA Headquarters Library, Room Number 3334 
in the EPA West Building, located at 1301 Constitution Ave., NW., 
Washington, DC. The EPA/DC Public Reading Room hours of operation will 
be 8:30 a.m. to 4:30 p.m. Eastern Standard Time (EST), Monday through 
Friday, excluding holidays. The telephone number for the Public Reading 
Room is (202) 566-1744 and the telephone number for the Docket is (202) 
566-1742.

FOR FURTHER INFORMATION CONTACT: Carol Connell, Environmental 
Protection Agency, Office of Transportation and Air Quality, Assessment 
and Standards Division, 2000 Traverwood Drive, Ann Arbor, Michigan 
48105; telephone number: 734-214-4349; fax number: 734-214-4050; e-mail 
address: [email protected].

SUPPLEMENTARY INFORMATION:

Does This Action Apply to Me?

    This action will affect you if you produce or import new spark-
ignition engines intended for use in marine vessels or in new vessels 
using such engines. This action will also affect you if you produce or 
import new spark-ignition engines below 19 kilowatts used in nonroad 
equipment, including agricultural and construction equipment, or 
produce or import such nonroad vehicles.
    The following table gives some examples of entities that may have 
to follow the regulations; however, since these are only examples, you 
should carefully examine the regulations. Note that we are adopting 
minor changes in the regulations that apply to a wide range of products 
that may not be reflected in the following table (see Section VIII). If 
you have questions, call the person listed in the FOR FURTHER 
INFORMATION CONTACT section above:

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                                                NAICS codes   SIC codes      Examples of potentially regulated
                   Category                         \a\          \b\                     entities
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Industry......................................       333618         3519  Manufacturers of new engines.
Industry......................................       333111         3523  Manufacturers of farm machinery and
                                                                           equipment.
Industry......................................       333112         3524  Manufacturers of lawn and garden
                                                                           tractors (home).
Industry......................................       336612         3731  Manufacturers of marine vessels.
                                                                    3732
Industry......................................       811112         7533  Commercial importers of vehicles and
                                                     811198         7549   vehicle components.
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\a\ North American Industry Classification System (NAICS).
\b\ Standard Industrial Classification (SIC) system code.

Table of Contents

I. Introduction
    A. Overview
    B. Why Is EPA Taking This Action?
    C. What Regulations Currently Apply to Nonroad Engines or 
Vehicles?
    D. Putting This Rule into Perspective
    E. What Requirements Are We Adopting?
    F. How Is This Document Organized?
    G. Judicial Review
II. Public Health and Welfare Effects
    A. Public Health Impacts
    B. Air Toxics
    C. Carbon Monoxide

[[Page 59035]]

III. Sterndrive and Inboard Marine Engines
    A. Overview
    B. Engines Covered by This Rule
    C. Exhaust Emission Standards
    D. Test Procedures for Certification
    E. Additional Certification and Compliance Provisions
    F. Small-Business Provisions
    G. Technological Feasibility
IV. Outboard and Personal Watercraft Engines
    A. Overview
    B. Engines Covered by This Rule
    C. Final Exhaust Emission Standards
    D. Changes to OB/PWC Test Procedures
    E. Additional Certification and Compliance Provisions
    F. Other Adjustments to Regulatory Provisions
    G. Small-Business Provisions
    H. Technological Feasibility
V. Small SI Engines
    A. Overview
    B. Engines Covered by This Rule
    C. Final Requirements
    D. Testing Provisions
    E. Certification and Compliance Provisions for Small SI Engines 
and Equipment
    F. Small-Business Provisions
    G. Technological Feasibility
VI. Evaporative Emissions
    A. Overview
    B. Fuel Systems Covered by This Rule
    C. Final Evaporative Emission Standards
    D. Emission Credit Programs
    E. Testing Requirements
    F. Certification and Compliance Provisions
    G. Small-Business Provisions
    H. Technological Feasibility
VII. Energy, Noise, and Safety
    A. Safety
    B. Noise
    C. Energy
VIII. Requirements Affecting Other Engine and Vehicle Categories
    A. State Preemption
    B. Certification Fees
    C. Amendments to General Compliance Provisions in 40 CFR Part 
1068
    D. Amendments Related to Large SI Engines (40 CFR Part 1048)
    E. Amendments Related to Recreational Vehicles (40 CFR Part 
1051)
    F. Amendments Related to Heavy-Duty Highway Engines (40 CFR Part 
85)
    G. Amendments Related to Stationary Spark-Ignition Engines (40 
CFR Part 60)
    H. Amendments Related to Locomotive, Marine, and Other Nonroad 
Compression-Ignition Engines (40 CFR Parts 89, 92, 94, 1033, 1039, 
and 1042)
IX. Projected Impacts
    A. Emissions from Small Nonroad and Marine Spark-Ignition 
Engines
    B. Estimated Costs
    C. Cost per Ton
    D. Air Quality Impact
    E. Benefits
    F. Economic Impact Analysis
X. Public Participation
XI. Statutory and Executive Order Reviews
    A. Executive Order 12866: Regulatory Planning and Review
    B. Paperwork Reduction Act
    C. Regulatory Flexibility Act
    D. Unfunded Mandates Reform Act
    E. Executive Order 13132: Federalism
    F. Executive Order 13175: Consultation and Coordination With 
Indian Tribal Governments
    G. Executive Order 13045: Protection of Children from 
Environmental Health and Safety Risks
    H. Executive Order 12898: Federal Actions to Address 
Environmental Justice in Minority Populations and Low-Income 
Populations.
    I. Executive Order 13211: Actions that Significantly Affect 
Energy Supply, Distribution, or Use
    J. National Technology Transfer Advancement Act
    K. Congressional Review Act

I. Introduction

A. Overview

    This rule will reduce the mobile-source contribution to air 
pollution in the United States. In particular, we are adopting 
standards that will require manufacturers to substantially reduce 
emissions from marine spark-ignition engines and from nonroad spark-
ignition engines below 19 kW that are generally used in lawn and garden 
applications.\1\ We refer to these as Marine SI engines and Small SI 
engines, respectively. The new emission standards are a continuation of 
the process of establishing standards for nonroad engines and vehicles 
as required by Clean Air Act section 213. All the nonroad engines 
subject to this rule are already regulated under existing emission 
standards, except sterndrive and inboard marine engines, which are 
subject to EPA emission standards for the first time.
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    \1\ Otto-cycle engines (referred to here as spark-ignition or SI 
engines) typically operate on gasoline, liquefied petroleum gas, or 
natural gas. Diesel-cycle engines, referred to simply as ``diesel 
engines'' in this document, may also be referred to as compression-
ignition or CI engines. These engines typically operate on diesel 
fuel, but other fuels may also be used.
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    Nationwide, emissions from Marine SI engines and Small SI engines 
contribute significantly to mobile source air pollution. By 2030 
without this final rule these engines would account for about 33 
percent (1,287,000 tons) of mobile source volatile organic hydrocarbon 
compounds (VOC) emissions, 31 percent (15,605,000 tons) of mobile 
source carbon monoxide (CO) emissions, 6 percent (311,300 tons) of 
mobile source oxides of nitrogen (NOX) emissions, and 12 
percent (44,000 tons) of mobile source particulate matter 
(PM2.5) emissions. The new standards will reduce exposure to 
these emissions and help avoid a range of adverse health effects 
associated with ambient ozone, CO, and PM levels. In addition, the new 
standards will help reduce acute exposure to CO, air toxics, and PM for 
persons who operate or who work with or are otherwise active in close 
proximity to these engines. They will also help address environmental 
problems associated with Marine SI engines and Small SI engines, such 
as injury to vegetation and ecosystems and visibility impairment. These 
effects are described in more detail later in this document.

B. Why Is EPA Taking This Action?

    Clean Air Act section 213(a)(1) directs us to study emissions from 
nonroad engines and vehicles to determine, among other things, whether 
these emissions ``cause, or significantly contribute to, air pollution 
which may reasonably be anticipated to endanger public health or 
welfare.'' Section 213(a)(2) further requires us to determine whether 
emissions of CO, VOC, and NOX from all nonroad engines 
significantly contribute to ozone or CO concentrations in more than one 
nonattainment area. If we determine that emissions from all nonroad 
engines do contribute significantly to these nonattainment areas, 
section 213(a)(3) then requires us to establish emission standards for 
classes or categories of new nonroad engines and vehicles that cause or 
contribute to such pollution. We may also set emission standards under 
section 213(a)(4) regulating any other emissions from nonroad engines 
that we find contribute significantly to air pollution which may 
reasonably be anticipated to endanger public health or welfare.
    Specific statutory direction to set standards for nonroad spark-
ignition engines comes from section 428(b) of the 2004 Consolidated 
Appropriations Act, which requires EPA to adopt regulations under the 
Clean Air Act ``that shall contain standards to reduce emissions from 
new nonroad spark-ignition engines smaller than 50 horsepower.'' \2\ As 
highlighted above and more fully described in Section II, these engines 
emit pollutants that contribute to ground-level ozone and ambient CO 
levels. Human exposure to ozone and CO can cause serious respiratory 
and cardiovascular problems. Additionally, these emissions contribute 
to other serious environmental degradation. This rule implements 
Congress' mandate by adopting new requirements for particular nonroad 
engines and equipment that are regulated as part of

[[Page 59036]]

EPA's overall nonroad emission control program.
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    \2\ Public Law 108-199, Div G, Title IV, Sec.  428(b), 118 Stat. 
418 (January 23, 2004).
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    We are adopting this rule under the procedural authority of section 
307(d) of the Clean Air Act.

C. What Regulations Currently Apply to Nonroad Engines or Vehicles?

    EPA has been setting emission standards for nonroad engines and/or 
vehicles since Congress amended the Clean Air Act in 1990 and included 
section 213. These amendments have led to a series of rulemakings to 
reduce the air pollution from this widely varying set of products. In 
these rulemakings, we divided the broad group of nonroad engines and 
vehicles into several different categories for setting application-
specific requirements. Each category involves many unique 
characteristics related to the participating manufacturers, technology, 
operating characteristics, sales volumes, and market dynamics. 
Requirements for each category therefore take on many unique features 
regarding the stringency of standards, the underlying expectations 
regarding emission control technologies, the nature and extent of 
testing, and the myriad details that comprise the implementation of a 
compliance program.
    At the same time, the requirements and other regulatory provisions 
for each engine category share many characteristics. Each rulemaking 
under section 213 sets technology-based standards consistent with the 
Clean Air Act and requires annual certification based on measured 
emission levels from test engines or vehicles. As a result, the broader 
context of EPA's nonroad emission control programs demonstrates both 
strong similarities between this rulemaking and the requirements 
adopted for other types of engines or vehicles and distinct differences 
as we take into account the unique nature of these engines and the 
companies that produce them.
    We completed the Nonroad Engine and Vehicle Emission Study to 
satisfy Clean Air Act section 213(a)(1) in November 1991.\3\ On June 
17, 1994, we made an affirmative determination under section 213(a)(2) 
that nonroad emissions are significant contributors to ozone or CO in 
more than one nonattainment area (56 FR 31306). Since then we have 
undertaken several rulemakings to set emission standards for the 
various categories of nonroad engines. Table I-1 highlights the 
different engine or vehicle categories we have established and the 
corresponding cites for emission standards and other regulatory 
requirements. Table I-2 summarizes the series of EPA rulemakings that 
have set new or revised emission standards for any of these nonroad 
engines or vehicles. These actions are described in the following 
sections, with additional discussion to explain why we are not adopting 
more stringent standards for certain types of nonroad spark-ignition 
engines below 50 horsepower.
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    \3\ This study is available on EPA's Web site at http://www.epa.gov/otaq/equip-ld.

     Table I-1: Nonroad Engine Categories for EPA Emission Standards
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                                     CFR Cite for
                                     regulations        Cross  reference
       Engine categories        establishing emission    to table  I-2
                                      standards
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1. Locomotives engines........  40 CFR Part 92 and     d, l.
                                 1033.
2. Marine diesel engines......  40 CFR Part 94 and     g, i, j, l.
                                 1042.
3. Other nonroad diesel         40 CFR Parts 89 and    a, e, k.
 engines.                        1039.
4. Marine SI engines \a\......  40 CFR Part 91.......  c.
5. Recreational vehicles......  40 CFR Part 1051.....  i.
6. Small SI engines \b\.......  40 CFR Part 90.......  b, f, h.
7. Large SI engines \b\.......  40 CFR Part 1048.....  i.
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\a\ The term ``Marine SI,'' used throughout this document, refers to all
  spark-ignition engines used to propel marine vessels. This includes
  outboard engines, personal watercraft engines, and sterndrive/inboard
  engines. See Section III for additional information.
\b\ The terms ``Small SI'' and ``Large SI'' are used throughout this
  document. All nonroad spark-ignition engines not covered by our
  programs for Marine SI engines or recreational vehicles are either
  Small SI engines or Large SI engines. Small SI engines include those
  engines with maximum power at or below 19 kW, and Large SI engines
  include engines with maximum power above 19 kW.


                                Table I-2: EPA's Rulemakings for Nonroad Engines
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  Nonroad engines (categories and sub-categories)       Final rulemaking                     Date
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a. Land-based diesel engines >= 37 kW--Tier 1.....  56 FR 31306.............  June 17, 1994.
b. Small SI engines--Phase 1......................  60 FR 34581.............  July 3, 1995.
c. Marine SI engines--outboard and personal         61 FR 52088.............  October 4, 1996.
 watercraft.
d. Locomotives....................................  63 FR 18978.............  April 16, 1998.
e. Land-based diesel engines--Tier 1 and Tier 2     63 FR 56968.............  October 23, 1998.
 for engines < 37 kW--Tier 2 and Tier 3 for
 engines >= 37 kW.
f. Small SI engines (Nonhandheld)--Phase 2........  64 FR 15208.............  March 30, 1999.
g. Commercial marine diesel < 30 liters per         64 FR 73300.............  December 29, 1999.
 cylinder.
h. Small SI engines (Handheld)--Phase 2...........  65 FR 24268.............  April 25, 2000.
i. Recreational vehicles, Industrial spark-         67 FR 68242.............  November 8, 2002.
 ignition engines > 19 kW, and Recreational marine
 diesel.
j. Marine diesel engines >= 2.5 liters/cylinder...  68 FR 9746..............  February 28, 2003.
k. Land-based diesel engines--Tier 4..............  69 FR 38958.............  June 29, 2004.
l. Locomotives and commercial marine diesel < 30    73 FR 37096.............  June 30, 2008.
 liters per cylinder.
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[[Page 59037]]

Small SI Engines
    We have previously adopted emission standards for nonroad spark-
ignition engines at or below 19 kW in two phases. The first phase of 
these standards introduced certification and an initial level of 
emission standards for both handheld and nonhandheld engines. On March 
30, 1999 we adopted a second phase of standards for nonhandheld 
engines, including both Class I and Class II engines (64 FR 15208).\4\ 
The Phase 2 regulations included a phase-in period that has recently 
been completed. These standards involved emission reductions based on 
improving engine calibrations to reduce exhaust emissions and added a 
requirement that emission standards must be met over the engines' 
entire useful life as defined in the regulations. We believe catalyst 
technology has now developed to the point that it can be applied to all 
nonhandheld Small SI engines to reduce exhaust emissions. Various 
emission control technologies are similarly available to address the 
different types of fuel evaporative emissions we have identified.
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    \4\ Handheld engines generally include those engines for which 
the operator holds or supports the equipment during operation; 
nonhandheld engines are Small SI engines that are not handheld 
engines (see Sec.  1054.801). Class I refers to nonhandheld engines 
with displacement below 225 cc; Class II refers to larger 
nonhandheld engines.
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    For handheld engines, we adopted Phase 2 exhaust emission standards 
in April 25, 2000 (65 FR 24268). These standards were based on the 
application of catalyst technology, with the expectation that 
manufacturers would have to make considerable investments to modify 
their engine designs and production processes. A technology review we 
completed in 2003 indicated that manufacturers were making progress 
toward compliance, but that additional implementation flexibility was 
needed if manufacturers were to fully comply with the regulations by 
2010. This finding and a change in the rule were published in the 
Federal Register on January 12, 2004 (69 FR 1824). At this point, we 
have no information to suggest that manufacturers can uniformly apply 
new technology or make design improvements to reduce exhaust emissions 
below the Phase 2 levels. We therefore believe the Phase 2 standards 
continue to represent the greatest degree of emission reduction 
achievable for these engines.\5\ However, we believe it is appropriate 
to apply evaporative emission standards to handheld engines similar to 
the standards we are adopting for the nonhandheld engines. 
Manufacturers can control evaporative emissions from handheld engines 
in a way that has little or no impact on exhaust emissions.
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    \5\ Note that we refer to the handheld exhaust emission 
standards in 40 CFR part 1054 as Phase 3 standards. This is intended 
to maintain consistent terminology with the comparable standards in 
California rather than indicating an increase in stringency.
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Marine SI Engines
    On October 4, 1996 we adopted emission standards for spark-ignition 
outboard and personal watercraft engines that have recently been fully 
phased in (61 FR 52088). We decided not to finalize emission standards 
for sterndrive or inboard marine engines at that time. Uncontrolled 
emission levels from sterndrive and inboard marine engines were already 
significantly lower than the outboard and personal watercraft engines. 
We did, however, leave open the possibility of revisiting the need for 
emission standards for sterndrive and inboard engines in the future. 
See Section III for further discussion of the scope and background of 
past and current rulemakings for these engines.
    We believe existing technology can be applied to all Marine SI 
engines to reduce emissions of harmful pollutants, including both 
exhaust and evaporative emissions. Manufacturers of outboard and 
personal watercraft engines can continue the trend of producing four-
stroke engines and advanced-technology two-stroke engines to further 
reduce emissions. For sterndrive/inboard engines, manufacturers can add 
technologies, such as fuel injection and aftertreatment, that can 
safely and substantially improve the engines' emission control 
capabilities.
Large SI Engines
    We adopted emission standards for Large SI engines on November 8, 
2002 (67 FR 68242). This includes Tier 1 standards for 2004 through 
2006 model years and Tier 2 standards starting with 2007 model year 
engines. Manufacturers are today facing a considerable challenge to 
comply with the Tier 2 standards, which are already substantially more 
stringent than any of the standards for the other engine categories 
subject to this final rule. The Tier 2 standards also include 
evaporative emission standards, new transient test procedures, 
additional exhaust emission standards to address off-cycle emissions, 
and diagnostic requirements. Stringent standards for this category of 
engines, and in particular engines between 25 and 50 horsepower (19 to 
37 kW), have been completed in the recent past, and are currently being 
implemented. We do not have information at this time on possible 
advances in technology beyond Tier 2. We therefore believe the evidence 
provided in the recently promulgated rulemaking continues to represent 
the best available information regarding the appropriate level of 
standards for these engines under section 213 at this time. The 
California Air Resources Board has adopted an additional level of 
emission control for Large SI engines starting with the 2010 model 
year. However, as described in Section I.D.1, their new standards do 
not increase overall stringency beyond that reflected in the federal 
standards. As a result, we believe it is inappropriate to adopt more 
stringent emission standards for these engines in this rulemaking.
    Note that the Large SI standards apply to nonroad spark-ignition 
engines above 19 kW. However, we adopted a special provision for engine 
families where production engines have total displacement at or below 
1000 cc and maximum power at or below 30 kW, allowing these engine 
families to instead certify to the applicable standards for Small SI 
engines. This rule preserves this approach.
 Recreational Vehicles
    We adopted exhaust and evaporative emission standards for 
recreational vehicles in our November 8, 2002 final rule (67 FR 68242). 
These standards apply to all-terrain vehicles, off-highway motorcycles, 
and snowmobiles.\6\ These exhaust emission standards were fully phased 
in starting with the 2007 model year. The evaporative emission 
standards apply starting with the 2008 model year.
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    \6\ Note that we treat certain high-speed off-road utility 
vehicles as all-terrain vehicles (see 40 CFR part 1051).
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    Recreational vehicles will soon be subject to permeation 
requirements that are very similar to the requirements included in this 
rulemaking. We have also learned more about controlling running losses 
and diffusion emissions that may eventually lead us to propose 
comparable standards for recreational vehicles. Considering these new 
requirements for recreational vehicles in a later rulemaking would give 
us additional time to collect information to better understand the 
feasibility, costs, and benefits of applying these requirements to 
recreational vehicles.
    The following sections describe the state of technology and 
regulatory requirements for the different types of recreational 
vehicles.

[[Page 59038]]

All-Terrain Vehicles
    EPA's initial round of exhaust emission standards was fully 
implemented starting with the 2007 model year. The regulations for all-
terrain vehicles (ATV) specify testing based on a chassis-based 
transient procedure. However, we permit manufacturers on an interim 
basis to optionally use a steady-state engine-based procedure. We 
recently completed a change in the regulations to extend this allowance 
from 2009 through 2014, after which manufacturers must certify all 
their ATVs based on the chassis-based transient test procedure that 
applies for off-highway motorcycles (72 FR 20730, April 26, 2007). This 
change does not represent an increase in stringency, but manufacturers 
will be taking time to make the transition to the different test 
procedure. We expect that there will be a good potential to apply 
further emission controls on these engines. However, we do not have 
information at this time on possible advances in technology beyond what 
is required for the current standards.
Off-Highway Motorcycles
    For off-highway motorcycles, manufacturers are in many cases making 
a substantial transition to move away from two-stroke engines in favor 
of four-stroke engines. This transition is now underway. While it may 
eventually be appropriate to apply aftertreatment or other additional 
emission control technologies to off-highway motorcycles, we need more 
time for this transition to be completed and to assess the success of 
aftertreatment technologies such as catalysts on similar applications 
such as highway motorcycles. As EPA and manufacturers learn more in 
implementing emission standards, we expect to be able to better judge 
the potential for broadly applying new technology to achieve further 
emission reductions from off-highway motorcycles.
Snowmobiles
    In our November 8, 2002 final rule we set three phases of exhaust 
emission standards for snowmobiles (67 FR 68242). Environmental and 
industry groups challenged the third phase of these standards. The 
court decision upheld much of EPA's reasoning for the standards, but 
vacated the NOX standard and remanded the CO and HC 
standards to clarify the analysis and evidence upon which the standards 
are based. See Bluewater Network, et al. v. EPA, 370 F 3d 1 (D.C. Cir. 
2004). A large majority of snowmobile engines are rated above 50 hp and 
there is still a fundamental need for time to pass to allow us to 
assess the success of four-stroke engine technology in the 
marketplace.\7\ This is an important aspect of the assessment we need 
to conduct with regard to the Phase 3 emission standards. We believe it 
is best to address this in a separate rulemaking and we have initiated 
that effort to evaluate the appropriate long-term emission standards 
for snowmobiles.
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    \7\ Only about 3 percent of snowmobiles are rated below 50 
horsepower.
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Nonroad Diesel Engines
    The 2004 Consolidated Appropriations Act providing the specific 
statutory direction for this rulemaking focuses on nonroad spark-
ignition engines. Nonroad diesel engines are therefore not included 
within the scope of that Congressional mandate. However, we have gone 
through several rulemakings to set standards for these engines under 
the broader authority of Clean Air Act section 213. In particular, we 
have divided nonroad diesel engines into three groups for setting 
emission standards. We adopted a series of standards for locomotives on 
April 16, 1998, including requirements to certify engines to emission 
standards when they are rebuilt (63 FR 18978). We also adopted emission 
standards for marine diesel engines over several different rulemakings, 
as described in Table I-2. These included separate actions for engines 
below 37 kW, engines installed in oceangoing vessels, engines installed 
in commercial vessels involved in inland and coastal waterways, and 
engines installed in recreational vessels. We recently adopted a new 
round of more stringent emission standards for both locomotives and 
marine diesel engines that will require widespread use of 
aftertreatment technology (73 FR 37096, June 30, 2008).
    Finally, all other nonroad diesel engines are grouped together for 
EPA's emission standards. We have adopted multiple tiers of 
increasingly stringent standards in three separate rulemakings, as 
described in Table I-2. We most recently adopted Tier 4 standards based 
on the use of ultra low-sulfur diesel fuel and the application of 
exhaust aftertreatment technology (69 FR 38958, June 29, 2004).

D. Putting This Rule into Perspective

    Most manufacturers that will be subject to this rulemaking are also 
affected by regulatory developments in California and in other 
countries. Each of these is described in more detail below.
State Initiatives
    Clean Air Act section 209 prohibits California and other states 
from setting emission standards for new motor vehicles and new motor 
vehicle engines, but authorizes EPA to waive this prohibition for 
California, in which case other states may adopt California's 
standards. Similar preemption and waiver provisions apply for emission 
standards for nonroad engines and vehicles, whether new or in-use. 
However for new locomotives, new engines used in locomotives, and new 
engines used in farm or construction equipment with maximum power below 
130 kW, California and other states are preempted and there is no 
provision for a waiver of preemption. In addition, in section 428 of 
the 2004 Consolidated Appropriations Act, Congress further precluded 
other states from adopting new California standards for nonroad spark-
ignition engines below 50 horsepower. In addition, the amendment 
required that we specifically address the safety implications of any 
California standards for these engines before approving a waiver of 
federal preemption. We are codifying these preemption changes in this 
rule.
    The California Air Resources Board (California ARB) has adopted 
requirements for five groups of nonroad engines: (1) Diesel- and Otto-
cycle small off-road engines rated under 19 kW; (2) spark-ignition 
engines used for marine propulsion; (3) land-based nonroad recreational 
engines, including those used in all-terrain vehicles, off-highway 
motorcycles, go-carts, and other similar vehicles; (4) new nonroad 
spark-ignition engines rated over 19 kW not used in recreational 
applications; and (5) new land-based nonroad diesel engines rated over 
130 kW. They have also approved a voluntary registration and control 
program for existing portable equipment.
    In the 1990s California ARB adopted Tier 1 and Tier 2 standards for 
Small SI engines consistent with the federal requirements. In 2003, 
they moved beyond the federal program by adopting exhaust 
HC+NOX emission standards of 10 g/kW-hr for Class I engines 
starting in the 2007 model year and 8 g/kW-hr for Class II engines 
starting in the 2008 model year. In the same rule they adopted 
evaporative emission standards for nonhandheld equipment, requiring 
control of fuel tank permeation, fuel line permeation, diurnal 
emissions, and running losses.

[[Page 59039]]

    California ARB has adopted two tiers of exhaust emission standards 
for outboard and personal watercraft engines beyond EPA's original 
standards. The most recent standards, which apply starting in 2008, 
require HC+NOX emission levels as low as 16 g/kW-hr. For 
sterndrive and inboard engines, California ARB has adopted a 5 g/kW-hr 
HC+NOX emission standard for 2008 and later model year 
engines, with testing underway to confirm the feasibility of standards. 
California ARB's marine programs include no standards for exhaust CO 
emissions or evaporative emissions.
    The California ARB emission standards for recreational vehicles 
have a different form than the comparable EPA standards but are roughly 
equivalent in stringency. The California standards include no standards 
for controlling evaporative emissions. Another important difference 
between the two programs is California ARB's reliance on a provision 
allowing noncompliant vehicles to be used in certain areas that are 
less environmentally sensitive as long as they have a specified red 
sticker for identifying their lack of emission controls to prevent them 
from operating in other areas.
    California ARB in 1998 adopted requirements that apply to new 
nonroad engines rated over 25 hp produced for California, with 
standards phasing in from 2001 through 2004. Texas has adopted these 
initial California ARB emission standards statewide starting in 2004. 
More recently, California ARB adopted exhaust emission standards and 
new evaporative emission standards for these engines, consistent with 
EPA's 2007 model year standards. Their new requirements also included 
an additional level of emission control for Large SI engines starting 
with the 2010 model year. However, their 2010 standards do not increase 
overall stringency beyond that reflected in the federal standards. 
Rather, they aim to achieve reductions in HC+NOX emissions 
by removing the flexibility incorporated into the federal standards 
allowing manufacturers to have higher HC+NOX emissions by 
certifying to a more stringent CO standard.
Actions in Other Countries
    While the new emission standards will apply only to engines sold in 
the United States, we are aware that manufacturers in many cases are 
selling the same products into other countries. To the extent that we 
have the same emission standards as other countries, manufacturers can 
contribute to reducing air emissions without being burdened by the 
costs associated with meeting differing or inconsistent regulatory 
requirements. The following discussion describes our understanding of 
the status of emission standards in countries outside the United 
States.
    Regulations for spark ignition engines in handheld and nonhandheld 
equipment are included in the ``Directive 97/68/EC of the European 
Parliament and of the Council of 16 December 1997 on the approximation 
of the laws of the Member States relating to measures against the 
emission of gaseous and particulate pollutants from internal combustion 
engines to be installed in non-road mobile machinery (OJ L 59, 
27.2.1998, p. 1)'', as amended by ``Directive 2002/88/EC of the 
European Parliament and of the Council of 9 December 2002.'' The Stage 
I emission standards are to be met by all handheld and nonhandheld 
engines by 24 months after entry into force of the Directive (as noted 
in a December 9, 2002 amendment to Directive 97/68/EC). The Stage I 
emission standards are similar to the U.S. EPA's Phase 1 emission 
standards for handheld and nonhandheld engines. The Stage II emission 
standards are implemented over time for the various handheld and 
nonhandheld engine classes from 2005 to 2009 with handheld engines at 
or above 50 cc on August 1, 2008. The Stage II emission standards are 
similar to EPA's Phase 2 emission standards for handheld and 
nonhandheld engines. Six months after these dates Member States must 
require that engines placed on the market meet the requirements of the 
Directive, whether or not they are already installed in machinery.
    The European Commission has adopted emission standards for 
recreational marine engines, including both diesel and gasoline 
engines. These requirements apply to all new engines sold in member 
countries and began in 2006 for four-stroke engines and in 2007 for 
two-stroke engines. Table I-3 presents the European standards for 
diesel and gasoline recreational marine engines. The numerical emission 
standards for NOX are based on the applicable standard from 
MARPOL Annex VI for marine diesel engines (See Table I-3). The European 
standards are roughly equivalent to the nonroad diesel Tier 1 emission 
standards for HC and CO. Emission measurements under the European 
standards rely on the ISO D2 duty cycle for constant-speed engines and 
the ISO E5 duty cycle for other engines.

                Table I-3: European Emission Standards for Recreational Marine Engines (g/kW-hr)
----------------------------------------------------------------------------------------------------------------
              Engine type                          HC                NOX                CO                 PM
----------------------------------------------------------------------------------------------------------------
Two-Stroke Spark-Ignition.............  30 + 100/P \0.75\.......       10.0  150 + 600/P.............         --
Four-Stroke Spark-Ignition............  6 + 50/P \0.75\.........       15.0  150 + 600/P.............         --
Compression-Ignition..................  1.5 + 2/P \0.5\.........        9.8  5.0.....................        1.0
----------------------------------------------------------------------------------------------------------------
Note: P = rated power in kilowatts (kW).

E. What Requirements Are We Adopting?

    EPA's emission control provisions require engine, vessel and 
equipment manufacturers to design and produce their products to meet 
the emission standards we adopt. To ensure that engines and fuel 
systems meet the expected level of emission control, we also require 
compliance with a variety of additional requirements, such as 
certification, labeling engines, and meeting warranty requirements. The 
following sections provide a brief summary of the new requirements in 
this rulemaking. See the later sections for a full discussion of the 
rule.
Marine SI Engines and Vessels
    We are adopting a more stringent level of emission standards for 
outboard and personal watercraft engines starting with the 2010 model 
year. The HC+NOX emission standards are the same as those 
adopted by California ARB for 2008 and later model year engines. The CO 
emission standard is 300 g/kW-hr for engines with maximum engine power 
above 40 kW; the standard increases as a function of maximum engine 
power for smaller engines. We expect manufacturers to meet these 
standards with improved fueling systems and other in-cylinder controls. 
We are not pursuing catalyst-based emission standards for outboard and 
personal watercraft engines. As discussed below, the application of

[[Page 59040]]

catalyst-based standards to the marine environment creates special 
technology challenges that must be addressed. Unlike the sterndrive/
inboard engines discussed in the next paragraph, outboard and personal 
watercraft engines are not built from automotive engine blocks and it 
is not straightforward to apply the fundamental engine modifications, 
fuel system upgrades, and other engine control modifications needed to 
get acceptable catalyst performance. This rule is an appropriate next 
step in the evolution of technology-based standards for outboard and 
personal watercraft engines as they are likely to lead to the 
elimination of carbureted two-stroke engines in favor of four-stroke 
engines or direct-injection two-stroke engines and to encourage the 
fuel system upgrades and related engine modifications needed to achieve 
the required reductions and to potentially set the stage for more 
stringent controls in the future.
    We are adopting new exhaust emission standards for sterndrive and 
inboard marine engines. The standards are 5.0 g/kW-hr for 
HC+NOX and 75.0 g/kW-hr for CO starting with the 2010 model 
year. We expect manufacturers to meet these standards with three-way 
catalysts and closed-loop fuel injection. To ensure proper functioning 
of these emission control systems in use, we will require engines to 
have a diagnostic system for detecting a failure in the emission 
control system. For sterndrive and inboard marine engines above 373 kW 
with high-performance characteristics (generally referred to as ``SD/I 
high-performance engines''), we are adopting less stringent emission 
standards that reflect their limited ability to control emissions with 
catalysts. The HC+NOX standard is 16 g/kW-hr in for engines 
at or below 485 kW and 22 g/kW-hr for bigger engines. The CO standard 
for all SD/I high-performance engines is 350 g/kW-hr. Manufacturers of 
these engines must meet emission standards without generating or using 
emission credits. We also include a variety of other special provisions 
for these engines to reflect unique operating characteristics.
    The emission standards described above relate to engine operation 
over a prescribed duty cycle for testing in the laboratory. We are also 
adopting not-to-exceed (NTE) standards that establish emission limits 
when engines operate under normal speed-load combinations that are not 
included in the duty cycles for the other engine standards (the NTE 
standards do not apply to SD/I high-performance engines).
    We are adopting new standards to control evaporative emissions for 
all Marine SI vessels. The new standards include requirements to 
control fuel tank permeation, fuel line permeation, and diurnal 
emissions, including provisions to ensure that refueling emissions do 
not increase.
    We are including these new regulations for Marine SI engines in 40 
CFR part 1045 rather than in the current regulations in 40 CFR part 91. 
This new part allows us to improve the clarity of regulatory 
requirements and update our regulatory compliance program to be 
consistent with the provisions we have recently adopted for other 
nonroad programs. We are also making a variety of changes to 40 CFR 
part 91 to make minor adjustments to the current regulations and to 
prepare for the transition to 40 CFR part 1045.
Small SI Engines and Equipment
    We are adopting HC+NOX exhaust emission standards of 
10.0 g/kW-hr for Class I engines starting in the 2012 model year and 
8.0 g/kW-hr for Class II engines starting in the 2011 model year. For 
both classes of nonhandheld engines, we are maintaining the existing CO 
standard of 610 g/kW-hr. We expect manufacturers to meet these 
standards by improving engine combustion and adding catalysts. These 
standards are consistent with the requirements recently adopted by 
California ARB.
    For spark-ignition engines used in marine generators, we are 
adopting a more stringent Phase 3 CO emission standard of 5.0 g/kW-hr. 
This applies equally to all sizes of engines subject to the Small SI 
standards.
    We are adopting new evaporative emission standards for both 
handheld and nonhandheld engines. The new standards include 
requirements to control permeation from fuel tanks and fuel lines. For 
nonhandheld engines we will also require control of running loss 
emissions.
    We are drafting the new regulations for Small SI engines from 40 
CFR part 90 rather than changing the current regulations in 40 CFR part 
90. This new part will allow us to improve the clarity of regulatory 
requirements and update our regulatory compliance program to be 
consistent with the provisions we have recently adopted for other 
nonroad programs.

F. How Is This Document Organized?

    Many readers may be interested only in certain aspects of the rule 
since it covers a broad range of engines and equipment that vary in 
design and use. We have therefore attempted to organize this 
information in a way that allows each reader to focus on the material 
of particular interest. The Air Quality discussion in Section II, 
however, is general in nature and applies to all the categories subject 
to the rule.
    The next several sections describe the provisions that apply for 
Small SI engines and equipment and Marine SI engines and vessels. 
Sections III through V describe the new requirements related to exhaust 
emission standards for each of the affected engine categories, 
including standards, effective dates, testing information, and other 
specific requirements. Section VI details the new requirements related 
to evaporative emissions for all categories. Section VII discusses how 
we took energy, noise, and safety factors into consideration for the 
new standards.
    Section VIII describes a variety of provisions that affect other 
categories of engines besides those that are the primary subject of 
this rule. This includes the following changes:
     We are reorganizing the regulatory language related to 
preemption of state standards and to clarify certain provisions.
     We are incorporating new provisions related to 
certification fees for newly regulated products covered by this rule. 
This involves some restructuring of the regulatory language. We are 
also adopting various technical amendments, such as identifying an 
additional payment method, that apply broadly to our certification 
programs.
     We are modifying 40 CFR part 1068 to clarify when engines 
are subject to standards. This includes several new provisions to 
address special cases for partially complete engines.
     We are also modifying part 1068 to clarify how the 
provisions apply with respect to evaporative emission standards and we 
are adopting various technical amendments. These changes apply to all 
types of nonroad engines that are subject to the provisions of part 
1068.
     We are adopting several technical amendments for other 
categories of nonroad engines and vehicles, largely to maintain 
consistency across programs for different categories of engines and 
vehicles.
     We are amending provisions related to delegated assembly. 
The new approach is to adopt a universal set of requirements in Sec.  
1068.261 that applies uniformly to heavy-duty highway engines and 
nonroad engines.
     We are clarifying that the new exhaust and evaporative 
emission standards for Small SI engines also apply to the comparable 
stationary engines.

[[Page 59041]]

    Section IX summarizes the projected impacts and benefits of this 
rule. Finally, Sections X and XI summarize the primary public comments 
received and describe how we satisfy our various administrative 
requirements.

G. Judicial Review

    Under section 307(b)(1) of the Clean Air Act (CAA), judicial review 
of these final rules is available only by filing a petition for review 
in the U.S. Court of Appeals for the District of Columbia Circuit by 
December 8, 2008. Under section 307(b)(2) of the CAA, the requirements 
established by these final rules may not be challenged separately in 
any civil or criminal proceedings brought by EPA to enforce these 
requirements.
    Section 307(d)(7)(B) of the CAA further provides that ``[o]nly an 
objection to a rule or procedure which was raised with reasonable 
specificity during the period for public comment (including any public 
hearing) may be raised during judicial review.'' This section also 
provides a mechanism for us to convene a proceeding for 
reconsideration, ``[i]f the person raising an objection can demonstrate 
to the EPA that it was impracticable to raise such objection within 
[the period for public comment] or if the grounds for such objection 
arose after the period for public comment (but within the time 
specified for judicial review) and if such objection is of central 
relevance to the outcome of the rule.'' Any person seeking to make such 
a demonstration to us should submit a Petition for Reconsideration to 
the Office of the Administrator, U.S. EPA, Room 3000, Ariel Rios 
Building, 1200 Pennsylvania Ave., NW., Washington, DC 20460, with a 
copy to both the person(s) listed in the preceding FOR FURTHER 
INFORMATION CONTACT section and the Associate General Counsel for the 
Air and Radiation Law Office, Office of General Counsel (Mail Code 
2344A), U.S. EPA, 1200 Pennsylvania Ave., NW., Washington, DC 20460.

II. Public Health and Welfare Effects

    The engines and fuel systems subject to this rule generate 
emissions of hydrocarbons (HC), nitrogen oxides (NOX), particulate 
matter (PM) and carbon monoxide (CO) that contribute to nonattainment 
of the National Ambient Air Quality Standards (NAAQS) for ozone, PM and 
CO. These engines and fuel systems also emit hazardous air pollutants 
(air toxics) that are associated with a host of adverse health effects. 
Emissions from these engines and fuel systems also contribute to 
visibility impairment and other welfare and environmental effects.
    This section summarizes the general health and welfare effects of 
these emissions. Interested readers are encouraged to refer to the 
Final RIA for more in-depth discussions.

A. Public Health Impacts

Ozone
    The Small SI engine and Marine SI engine standards finalized in 
this action will result in reductions of volatile organic compounds 
(VOC), of which HC are a subset, and NOX emissions. VOC and NOX 
contribute to the formation of ground-level ozone pollution or smog. 
People in many areas across the U.S. continue to be exposed to 
unhealthy levels of ambient ozone.
Background
    Ground-level ozone pollution is typically formed by the reaction of 
VOC and NOX in the lower atmosphere in the presence of heat and 
sunlight. These pollutants, often referred to as ozone precursors, are 
emitted by many types of pollution sources, such as highway and nonroad 
motor vehicles and engines, power plants, chemical plants, refineries, 
makers of consumer and commercial products, industrial facilities, and 
smaller area sources.
    The science of ozone formation, transport, and accumulation is 
complex.\8\ Ground-level ozone is produced and destroyed in a cyclical 
set of chemical reactions, many of which are sensitive to temperature 
and sunlight. When ambient temperatures and sunlight levels remain high 
for several days and the air is relatively stagnant, ozone and its 
precursors can build up and result in more ozone than typically occurs 
on a single high-temperature day. Ozone can be transported hundreds of 
miles downwind of precursor emissions, resulting in elevated ozone 
levels even in areas with low local VOC or NOX emissions.
---------------------------------------------------------------------------

    \8\ U.S. EPA Air Quality Criteria for Ozone and Related 
Photochemical Oxidants (Final). U.S. Environmental Protection 
Agency, Washington, D.C., EPA 600/R-05/004aF-cF, 2006. This document 
is available in Docket EPA-HQ-OAR-2003-0190. This document may be 
accessed electronically at: http://www.epa.gov/ttn/naaqs/standards/ozone/s_o3_cr_cd.html.
---------------------------------------------------------------------------

    EPA has recently amended the ozone NAAQS (73 FR 16436, March 27, 
2008). The final ozone NAAQS rule addresses revisions to the primary 
and secondary NAAQS for ozone to provide increased protection of public 
health and welfare, respectively. With regard to the primary standard 
for ozone, EPA has revised the level of the 8-hour standard to 0.075 
parts per million (ppm), expressed to three decimal places. With regard 
to the secondary standard for ozone, EPA has revised the current 8-hour 
standard by making it identical to the revised primary standard.
Health Effects of Ozone
    The health and welfare effects of ozone are well documented and are 
assessed in EPA's 2006 ozone Air Quality Criteria Document (ozone AQCD) 
and EPA Staff Paper.9, 10 Ozone can irritate the respiratory 
system, causing coughing, throat irritation, and/or uncomfortable 
sensation in the chest. Ozone can reduce lung function and make it more 
difficult to breathe deeply; breathing may also become more rapid and 
shallow than normal, thereby limiting a person's activity. Ozone can 
also aggravate asthma, leading to more asthma attacks that require 
medical attention and/or the use of additional medication. In addition, 
there is suggestive evidence of a contribution of ozone to 
cardiovascular-related morbidity and highly suggestive evidence that 
short-term ozone exposure directly or indirectly contributes to non-
accidental and cardiopulmonary-related mortality, but additional 
research is needed to clarify the underlying mechanisms causing these 
effects. In a recent report on the estimation of ozone-related 
premature mortality published by the National Research Council (NRC), a 
panel of experts and reviewers concluded that short-term exposure to 
ambient ozone is likely to contribute to premature deaths and that 
ozone-related mortality should be included in estimates of the health 
benefits of reducing ozone exposure.\11\ Animal toxicological evidence 
indicates that with repeated exposure, ozone can inflame and damage the 
lining of the lungs, which may lead to permanent changes in lung tissue 
and irreversible reductions in lung function. People who are more 
susceptible to effects

[[Page 59042]]

associated with exposure to ozone can include children, the elderly, 
and individuals with respiratory disease such as asthma. Those with 
greater exposures to ozone, for instance due to time spent outdoors 
(e.g., children and outdoor workers), are also of particular concern.
---------------------------------------------------------------------------

    \9\ U.S. EPA Air Quality Criteria for Ozone and Related 
Photochemical Oxidants (Final). U.S. Environmental Protection 
Agency, Washington, DC., EPA 600/R-05/004aF-cF, 2006. This document 
is available in Docket EPA-HQ-OAR-2003-0190. This document may be 
accessed electronically at: http://www.epa.gov/ttn/naaqs/standards/ozone/s_o3_cr_cd.html.
    \10\ U.S. EPA (2007) Review of the National Ambient Air Quality 
Standards for Ozone, Policy Assessment of Scientific and Technical 
Information. OAQPS Staff Paper.EPA-452/R-07-003. This document is 
available in Docket EPA-HQ-OAR-2003-0190. This document is available 
electronically at: http:www.epa.gov/ttn/naaqs/standards/ozone/s_o3_cr_sp.html.
    \11\ National Research Council (NRC), 2008. Estimating Mortality 
Risk Reduction and Economic Benefits from Controlling Ozone Air 
Pollution. The National Academies Press: Washington, DC.
---------------------------------------------------------------------------

    The recent ozone AQCD also examined relevant new scientific 
information that has emerged in the past decade, including the impact 
of ozone exposure on such health effects as changes in lung structure 
and biochemistry, inflammation of the lungs, exacerbation and causation 
of asthma, respiratory illness-related school absence, hospital 
admissions and premature mortality. Animal toxicological studies have 
suggested potential interactions between ozone and PM with increased 
responses observed to mixtures of the two pollutants compared to either 
ozone or PM alone. The respiratory morbidity observed in animal studies 
along with the evidence from epidemiologic studies supports a causal 
relationship between acute ambient ozone exposures and increased 
respiratory-related emergency room visits and hospitalizations in the 
warm season. In addition, there is suggestive evidence of a 
contribution of ozone to cardiovascular-related morbidity and non-
accidental and cardiopulmonary mortality.
Plant and Ecosystem Effects of Ozone
    Elevated ozone levels contribute to environmental effects, with 
impacts to plants and ecosystems being of most concern. Ozone can 
produce both acute and chronic injury in sensitive species depending on 
the concentration level and the duration of the exposure. Ozone effects 
also tend to accumulate over the growing season of the plant, so that 
even low concentrations experienced for a longer duration have the 
potential to create chronic stress on vegetation. Ozone damage to 
plants includes visible injury to leaves and a reduction in food 
production through impaired photosynthesis, both of which can lead to 
reduced crop yields, forestry production, and use of sensitive 
ornamentals in landscaping. In addition, the reduced food production in 
plants and subsequent reduced root growth and storage below ground, can 
result in other, more subtle plant and ecosystems impacts. These 
include increased susceptibility of plants to insect attack, disease, 
harsh weather, interspecies competition and overall decreased plant 
vigor. The adverse effects of ozone on forest and other natural 
vegetation can potentially lead to species shifts and loss from the 
affected ecosystems, resulting in a loss or reduction in associated 
ecosystem goods and services. Lastly, visible ozone injury to leaves 
can result in a loss of aesthetic value in areas of special scenic 
significance like national parks and wilderness areas. The final 2006 
Criteria Document presents more detailed information on ozone effects 
on vegetation and ecosystems.
Current and Projected Ozone Levels
    Ozone concentrations exceeding the level of the 1997 8-hour ozone 
NAAQS occur over wide geographic areas, including most of the nation's 
major population centers.\12\ As of March 12, 2008, there were 
approximately 140 million people living in 72 areas (which include all 
or part of 337 counties) designated as not in attainment with the 1997 
8-hour ozone NAAQS.\13\ These numbers do not include the people living 
in areas where there is a future risk of failing to maintain or attain 
the 8-hour ozone NAAQS. The 1997 ozone NAAQS was recently revised and 
the 2008 ozone NAAQS was final on March 12, 2008. Table II-1 presents 
the number of counties in areas currently designated as nonattainment 
for the 1997 ozone NAAQS as well as the number of additional counties 
that have design values greater than the 2008 ozone NAAQS.
---------------------------------------------------------------------------

    \12\ A listing of the 8-hour ozone nonattainment areas is 
included in the RIA for this rule.
    \13\ Population numbers are from 2000 census data.

   Table II-1--Counties With Design Values Greater Than the 2008 Ozone
                NAAQS Based on 2004-2006 Air Quality Data
------------------------------------------------------------------------
                                          Number of
                                          Counties       Population \a\
------------------------------------------------------------------------
 1997 Ozone Standard: Counties                     337       139,633,458
 within the 72 areas currently
 designated as nonattainment........
2008 Ozone Standard: Additional                     74        15,984,135
 counties that would not meet the
 2008 NAAQS \b\.....................
                                     -----------------------------------
    Total...........................               411       155,617,593
------------------------------------------------------------------------
Notes:
\a\ Population numbers are from 2000 census data.
\b\ Attainment designations for 2008 ozone NAAQS have not yet been made.
  Nonattainment for the 2008 Ozone NAAQS will be based on three years of
  air quality data from later years. Also, the county numbers in the
  table include only the counties with monitors violating the 2008 Ozone
  NAAQS. The numbers in this table may be an underestimate of the number
  of counties and populations that will eventually be included in areas
  with multiple counties designated nonattainment.

    States with 8-hour ozone nonattainment areas are required to take 
action to bring those areas into compliance in the future. Based on the 
final rule designating and classifying 8-hour ozone nonattainment areas 
(69 FR 23951, April 30, 2004), most 8-hour ozone nonattainment areas 
will be required to attain the 1997 ozone NAAQS in the 2007 to 2013 
time frame and then maintain the NAAQS thereafter.\14\ Many of these 
nonattainment areas will need to adopt additional emission reduction 
programs and the VOC and NOX reductions from this final action are 
particularly important for these states. The attainment dates 
associated with the potential new 2008 ozone nonattainment areas are 
likely to be in the 2013 to 2021 timeframe, depending on the severity 
of the problem.
---------------------------------------------------------------------------

    \14\ The Los Angeles South Coast Air Basin 8-hour ozone 
nonattainment area will have to attain before June 15, 2021.
---------------------------------------------------------------------------

    EPA has already adopted many emission control programs that are 
expected to reduce ambient ozone levels. Some of these control programs 
are described in Section I.C.1. As a result of existing programs, the 
number of areas that fail to meet the ozone NAAQS in the future is 
expected to decrease. Based on the air quality modeling performed for 
this rule, which does not include any additional local controls, we 
estimate eight counties (where 22 million people are projected to live) 
will exceed the 1997 8-hour

[[Page 59043]]

ozone NAAQS in 2020.\15\ An additional 37 counties (where 27 million 
people are projected to live) are expected to be within 10 percent of 
violating the 1997 8-hour ozone NAAQS in 2020.
---------------------------------------------------------------------------

    \15\ We expect many of the 8-hour ozone nonattainment areas to 
adopt additional emission reduction programs but we are unable to 
quantify or rely upon future reductions from additional state and 
local programs that have not yet been adopted.
---------------------------------------------------------------------------

    Results from the air quality modeling conducted for this final rule 
indicate that the Small SI and Marine SI engine emission reductions in 
2020 and 2030 will improve both the average and population-weighted 
average ozone concentrations for the U.S. In addition, the air quality 
modeling shows that on average this final rule will help bring counties 
closer to ozone attainment as well as assist counties whose ozone 
concentrations are within ten percent below the standard. For example, 
on a population-weighted basis, the average modeled future-year 8-hour 
ozone design values will decrease by 0.57 ppb in 2020 and 0.76 ppb in 
2030.\16\ The air quality modeling methodology and the projected 
reductions are discussed in more detail in Chapter 2 of the RIA.
---------------------------------------------------------------------------

    \16\ Ozone design values are reported in parts per million (ppm) 
as specified in 40 CFR Part 50. Due to the scale of the design value 
changes in this action, results have been presented in parts per 
billion (ppb) format.
---------------------------------------------------------------------------

Particulate Matter
    The Small SI engine and Marine SI engine standards detailed in this 
action will result in reductions in emissions of VOCs and NOX which 
contribute to the formation of secondary PM2.5. In addition, 
the standards finalized today will reduce primary (directly emitted) 
PM2.5 emissions.
Background
    PM represents a broad class of chemically and physically diverse 
substances. It can be principally characterized as discrete particles 
that exist in the condensed (liquid or solid) phase spanning several 
orders of magnitude in size. PM is further described by breaking it 
down into size fractions. PM10 refers to particles generally 
less than or equal to 10 micrometers (m) in aerodynamic diameter. 
PM2.5 refers to fine particles, generally less than or equal 
to 2.5 in aerodynamic diameter. Inhalable (or ``thoracic'') coarse 
particles refer to those particles generally greater than 2.5 [mu]m but 
less than or equal to 10 [mu]m in aerodynamic diameter. Ultrafine PM 
refers to particles less than 100 nanometers (0.1 [mu]m) in aerodynamic 
diameter. Larger particles tend to be removed by the respiratory 
clearance mechanisms (e.g. coughing), whereas smaller particles are 
deposited deeper in the lungs.
    Fine particles are produced primarily by combustion processes and 
by transformations of gaseous emissions (e.g., SOX, NOX and VOC) in the 
atmosphere. The chemical and physical properties of PM2.5 may vary 
greatly with time, region, meteorology, and source category. Thus, 
PM2.5 may include a complex mixture of different pollutants including 
sulfates, nitrates, organic compounds, elemental carbon and metal 
compounds. These particles can remain in the atmosphere for days to 
weeks and travel hundreds to thousands of kilometers.
    The primary PM2.5 NAAQS includes a short-term (24-hour) and a long-
term (annual) standard. The 1997 PM2.5 NAAQS established by EPA set the 
24-hour standard at a level of 65[mu]g/m\3\ based on the 98th 
percentile concentration averaged over three years. The annual standard 
specifies an expected annual arithmetic mean not to exceed 15[mu]g/m\3\ 
averaged over three years.
    In 2006, EPA amended the NAAQS for PM2.5 (71 FR 61144, October 17, 
2006). The final rule addressed revisions to the primary and secondary 
NAAQS for PM to provide increased protection of public health and 
welfare, respectively. The level of the 24-hour PM2.5 NAAQS was revised 
from 65[mu]g/m\3\ to 35 [mu]g/m\3\ and the level of the annual PM2.5 
NAAQS was retained at 15[mu]g/m\3\. With regard to the secondary 
standards for PM2.5, EPA has revised these standards to be identical in 
all respects to the revised primary standards.
Health Effects of PM2.5
    Scientific studies show ambient PM is associated with a series of 
adverse health effects. These health effects are discussed in detail in 
the 2004 EPA Particulate Matter Air Quality Criteria Document (PM 
AQCD), and the 2005 PM Staff Paper.17 18 Further discussion 
of health effects associated with PM can also be found in the RIA for 
this rule.
---------------------------------------------------------------------------

    \17\ U.S. EPA (2004) Air Quality Criteria for Particulate Matter 
(Oct 2004), Volume I Document No. EPA600/P-99/002aF and Volume II 
Document No. EPA600/P-99/002bF. This document is available in Docket 
EPA-HQ-OAR-2003-0190.
    \18\ U.S. EPA (2005) Review of the National Ambient Air Quality 
Standard for Particulate Matter: Policy Assessment of Scientific and 
Technical Information, OAQPS Staff Paper. EPA-452/R-05-005. This 
document is available in Docket EPA-HQ-OAR-2003-0190.
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    Health effects associated with short-term exposures (hours to days) 
to ambient PM include premature mortality, increased hospital 
admissions, heart and lung diseases, increased cough, adverse lower-
respiratory symptoms, decrements in lung function and changes in heart 
rate rhythm and other cardiac effects. Studies examining populations 
exposed to different levels of air pollution over a number of years, 
including the Harvard Six Cities Study and the American Cancer Society 
Study, show associations between long-term exposure to ambient PM2.5 
and both total and cardiovascular and respiratory mortality.\19\ In 
addition, a reanalysis of the American Cancer Society Study shows an 
association between fine particle and sulfate concentrations and lung 
cancer mortality.\20\
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    \19\ Dockery, DW; Pope, CA III: Xu, X; et al. 1993. An 
association between air pollution and mortality in six U.S. cities. 
N Engl J Med 329:1753-1759.
    \20\ Pope, C. A., III; Burnett, R. T.; Thun, M. J.; Calle, E. 
E.; Krewski, D.; Ito, K.; Thurston, G. D. (2002) Lung cancer, 
cardiopulmonary mortality, and long-term exposure to fine 
particulate air pollution. J. Am. Med. Assoc. 287:1132-1141.
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    Recently, several studies have highlighted the adverse effects of 
PM specifically from mobile sources.21 22 Studies have also 
focused on health effects due to PM exposures on or near roadways.\23\ 
Although these studies include all air pollution sources, including 
both spark-ignition (gasoline) and diesel powered vehicles, they 
indicate that exposure to PM emissions near roadways, thus dominated by 
mobile sources, are associated with health effects. The controls 
finalized in this action may help to reduce exposures, and specifically 
exposures near the source, to mobile source related PM2.5.
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    \21\ Laden, F.; Neas, L.M.; Dockery, D.W.; Schwartz, J. (2000) 
Association of Fine Particulate Matter from Different Sources with 
Daily Mortality in Six U.S. Cities. Environmental Health 
Perspectives 108: 941-947.
    \22\ Janssen, N.A.H.; Schwartz, J.; Zanobetti, A.; Suh, H.H. 
(2002) Air Conditioning and Source-Specific Particles as Modifiers 
of the Effect of PM10 on Hospital Admissions for Heart 
and Lung Disease. Environmental Health Perspectives 110: 43-49.
    \23\ Riediker, M.; Cascio, W.E.; Griggs, T.R..; Herbst, M.C.; 
Bromberg, P.A.; Neas, L.; Williams, R.W.; Devlin, R.B. (2003) 
Particulate Matter Exposures in Cars is Associated with 
Cardiovascular Effects in Healthy Young Men. Am. J. Respir. Crit. 
Care Med. 169: 934-940.
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Visibility

    Visibility can be defined as the degree to which the atmosphere is 
transparent to visible light. Airborne particles degrade visibility by 
scattering and absorbing light. Visibility is important because it has 
direct significance to people's enjoyment of daily activities in all 
parts of the country. Individuals value good visibility for the well-
being it provides them directly, where they live and work and in places 
where they enjoy recreational opportunities.

[[Page 59044]]

Visibility is also highly valued in significant natural areas such as 
national parks and wilderness areas and special emphasis is given to 
protecting visibility in these areas. For more information on 
visibility, see the final 2004 PM AQCD as well as the 2005 PM Staff 
Paper.24 25
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    \24\ U.S. EPA (2004) Air Quality Criteria for Particulate Matter 
(Oct 2004), Volume I Document No. EPA600/P-99/002aF and Volume II 
Document No. EPA600/P-99/002bF. This document is available in Docket 
EPA-HQ-OAR-2003-0190.
    \25\ U.S. EPA (2005) Review of the National Ambient Air Quality 
Standard for Particulate Matter: Policy Assessment of Scientific and 
Technical Information, OAQPS Staff Paper. EPA-452/R-05-005. This 
document is available in Docket EPA-HQ-OAR-2003-0190.
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    EPA is pursuing a two-part strategy to address visibility. First, 
to address the welfare effects of PM on visibility, EPA has set 
secondary PM2.5 standards which act in conjunction with the 
establishment of a regional haze program. In setting this secondary 
standard, EPA has concluded that PM2.5 causes adverse effects on 
visibility in various locations, depending on PM concentrations and 
factors such as chemical composition and average relative humidity. 
Second, section 169 of the Clean Air Act provides additional authority 
to address existing visibility impairment and prevent future visibility 
impairment in the 156 national parks, forests and wilderness areas 
categorized as mandatory class I federal areas (62 FR 38680-81, July 
18, 1997).\26\ In July 1999, the regional haze rule (64 FR 35714) was 
put in place to protect the visibility in mandatory class I federal 
areas. Visibility can be said to be impaired in both PM2.5 
nonattainment areas and mandatory class I federal areas.
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    \26\ These areas are defined in section 162 of the Act as those 
national parks exceeding 6,000 acres, wilderness areas and memorial 
parks exceeding 5,000 acres, and all international parks which were 
in existence on August 7, 1977.
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Current Visibility Impairment

    As of March 12, 2008, over 88 million people live in nonattainment 
areas for the 1997 PM2.5 NAAQS.\27\ These populations, as well as large 
numbers of individuals who travel to these areas, are likely to 
experience visibility impairment. In addition, while visibility trends 
have improved in mandatory class I federal areas the most recent data 
show that these areas continue to suffer from visibility 
impairment.\28\ In summary, visibility impairment is experienced 
throughout the U.S., in multi-state regions, urban areas, and remote 
mandatory class I federal areas.29 30
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    \27\ Population numbers are from 2000 census data.
    \28\ U.S. EPA (2002) Latest Findings on National Air Quality--
2002 Status and Trends. EPA 454/K-03-001.
    \29\ U.S. EPA, Air Quality Designations and Classifications for 
the Fine Particles (PM2.5) National Ambient Air Quality 
Standards, December 17, 2004. (70 FR 943, Jan 5. 2005) This document 
is also available on the web at: http://www.epa.gov/pmdesignations/
    \30\ U.S. EPA. Regional Haze Regulations, July 1, 1999. (64 FR 
35714, July 1, 1999).
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Future Visibility Impairment
    Air quality modeling conducted for this final rule was used to 
project visibility conditions in 133 mandatory class I federal areas 
across the U.S. in 2020 and 2030. The results indicate that 
improvements in visibility will occur in the future, although all areas 
will continue to have annual average deciview levels above background 
in 2020 and 2030. Chapter 2 of the RIA contains more detail on the 
visibility portion of the air quality modeling.
Atmospheric Deposition
    Wet and dry deposition of ambient particulate matter delivers a 
complex mixture of metals (e.g., mercury, zinc, lead, nickel, aluminum, 
cadmium), organic compounds (e.g., POM, dioxins, furans) and inorganic 
compounds (e.g., nitrate, sulfate) to terrestrial and aquatic 
ecosystems. The chemical form of the compounds deposited is impacted by 
a variety of factors including ambient conditions (e.g., temperature, 
humidity, oxidant levels) and the sources of the material. Chemical and 
physical transformations of the particulate compounds occur in the 
atmosphere as well as the media onto which they deposit. These 
transformations in turn influence the fate, bioavailability and 
potential toxicity of these compounds. Atmospheric deposition has been 
identified as a key component of the environmental and human health 
hazard posed by several pollutants including mercury, dioxin and 
PCBs.\31\
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    \31\ U.S. EPA (2000) Deposition of Air Pollutants to the Great 
Waters: Third Report to Congress. Office of Air Quality Planning and 
Standards. EPA-453/R-00-0005. This document is available in Docket 
EPA-HQ-OAR-2003-0190.
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    Adverse impacts on water quality can occur when atmospheric 
contaminants deposit to the water surface or when material deposited on 
the land enters a water body through runoff. Potential impacts of 
atmospheric deposition to water bodies include those related to both 
nutrient and toxic inputs. Adverse effects to human health and welfare 
can occur from the addition of excess particulate nitrate nutrient 
enrichment, which contributes to toxic algae blooms and zones of 
depleted oxygen, which can lead to fish kills, frequently in coastal 
waters. Particles contaminated with heavy metals or other toxins may 
lead to the ingestion of contaminated fish, ingestion of contaminated 
water, damage to the marine ecology, and limited recreational uses. 
Several studies have been conducted in U.S. coastal waters and in the 
Great Lakes Region in which the role of ambient PM deposition and 
runoff is investigated.32 33 34 35 36
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    \32\ U.S. EPA (2004) National Coastal Condition Report II. 
Office of Research and Development/ Office of Water. EPA-620/R-03/
002. This document is available in Docket EPA-HQ-OAR-2003-0190.
    \33\ Gao, Y., E.D. Nelson, M.P. Field, et al. 2002. 
Characterization of atmospheric trace elements on PM2.5 
particulate matter over the New York-New Jersey harbor estuary. 
Atmos. Environ. 36: 1077-1086.
    \34\ Kim, G., N. Hussain, J.R. Scudlark, and T.M. Church. 2000. 
Factors influencing the atmospheric depositional fluxes of stable 
Pb, 210Pb, and 7Be into Chesapeake Bay. J. Atmos. Chem. 36: 65-79.
    \35\ Lu, R., R.P. Turco, K. Stolzenbach, et al. 2003. Dry 
deposition of airborne trace metals on the Los Angeles Basin and 
adjacent coastal waters. J. Geophys. Res. 108(D2, 4074): AAC 11-1 to 
11-24.
    \36\ Marvin, C.H., M.N. Charlton, E.J. Reiner, et al. 2002. 
Surficial sediment contamination in Lakes Erie and Ontario: A 
comparative analysis. J. Great Lakes Res. 28(3): 437-450.
---------------------------------------------------------------------------

    Adverse impacts on soil chemistry and plant life have been observed 
for areas heavily impacted by atmospheric deposition of nutrients, 
metals and acid species, resulting in species shifts, loss of 
biodiversity, forest decline and damage to forest productivity. 
Potential impacts also include adverse effects to human health through 
ingestion of contaminated vegetation or livestock (as in the case for 
dioxin deposition), reduction in crop yield, and limited use of land 
due to contamination.
Materials Damage and Soiling
    The deposition of airborne particles can reduce the aesthetic 
appeal of buildings and culturally important articles through soiling, 
and can contribute directly (or in conjunction with other pollutants) 
to structural damage by means of corrosion or erosion.\37\ Particles 
affect materials principally by promoting and accelerating the 
corrosion of metals, by degrading paints, and by deteriorating building 
materials such as concrete and limestone. Particles contribute to these 
effects because of their electrolytic, hygroscopic, and acidic 
properties, and their ability to adsorb corrosive gases (principally 
sulfur dioxide). The rate of metal corrosion depends on a number of 
factors, including the deposition rate and nature of the pollutant; the 
influence of the metal protective

[[Page 59045]]

corrosion film; the amount of moisture present; variability in the 
electrochemical reactions; the presence and concentration of other 
surface electrolytes; and the orientation of the metal surface.
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    \37\ U.S EPA (2005) Review of the National Ambient Air Quality 
Standards for Particulate Matter: Policy Assessment of Scientific 
and Technical Information, OAQPS Staff Paper. This document is 
available in Docket EPA-HQ-OAR-2003-0190.
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Current and Projected PM2.5 Levels
    PM2.5 concentrations exceeding the level of the 
PM2.5 NAAQS occur in many parts of the country.\38\ In 2005 
EPA designated 39 nonattainment areas for the 1997 PM2.5 
NAAQS (70 FR 943, January 5, 2005). These areas are comprised of 208 
full or partial counties with a total population exceeding 88 million. 
The 1997 PM2.5 NAAQS was revised and the 2006 
PM2.5 NAAQS became effective on December 18, 2006. Table II-
2 presents the number of counties in areas currently designated as 
nonattainment for the 1997 PM2.5 NAAQS as well as the number 
of additional counties that have design values greater than the 2006 
PM2.5 NAAQS.
---------------------------------------------------------------------------

    \38\ A listing of the PM2.5 nonattainment areas is 
included in the RIA for this rule.

   Table II-2--Counties With Design Values Greater Than the 2006 PM2.5
                NAAQS Based on 2003-2005 Air Quality Data
------------------------------------------------------------------------
 Nonattainment areas/other violating      Number of
              counties                    counties        Population a
------------------------------------------------------------------------
1997 PM2.5 Standards: Counties                     208        88,394,000
 within the 39 areas currently
 designated as nonattainment........
2006 PM2.5 Standards: Additional                    49        18,198,676
 counties that would not meet the
 2006 NAAQS b.......................
                                     -----------------------------------
    Total...........................               257       106,595,676
------------------------------------------------------------------------
Notes:
a Population numbers are from 2000 census data.
b Attainment designations for 2006 PM2.5 NAAQS have not yet been made.
  Nonattainment for the 2006 PM2.5 NAAQS will be based on 3 years of air
  quality data from later years. Also, the county numbers in the table
  includes only the counties with monitors violating the 2006 PM2.5
  NAAQS. The numbers in this table may be an underestimate of the number
  of counties and populations that will eventually be included in areas
  with multiple counties designated nonattainment.

    Areas designated as not attaining the 1997 PM2.5 NAAQS 
will need to attain the 1997 standards in the 2010 to 2015 time frame, 
and then maintain them thereafter. The attainment dates associated with 
the potential new 2006 PM2.5 nonattainment areas are likely 
to be in the 2014 to 2019 timeframe. The emission standards finalized 
in this action become effective as early as 2009 making the inventory 
reductions from this rulemaking useful to states in attaining or 
maintaining the PM2.5 NAAQS.
    EPA has already adopted many emission control programs that are 
expected to reduce ambient PM2.5 levels and which will 
assist in reducing the number of areas that fail to achieve the 
PM2.5 NAAQS. Even so, our air quality modeling for this 
final rule projects that in 2020, with all current controls but 
excluding the reductions achieved through this rule, up to 11 counties 
with a population of over 24 million may not attain the current annual 
PM2.5 standard of 15 [mu]g/m3. These numbers do 
not account for additional areas that have air quality measurements 
within 10 percent of the annual PM2.5 standard. These areas, 
although not violating the standards, will also benefit from the 
additional reductions from this rule ensuring long term maintenance of 
the PM2.5 NAAQS.
    Air quality modeling performed for this final rule shows the 
emissions reductions will improve both the average and population-
weighted average PM2.5 concentrations for the U.S. On a 
population-weighted basis, the average modeled future-year annual 
PM2.5 design value (DV) for all counties is expected to 
decrease by 0.02 [mu]g/m3 in 2020 and 2030. There are areas 
with larger decreases in their future-year annual PM2.5 DV, 
for instance the Chicago region will experience a 0.08 [mu] g/m\3\ 
reduction by 2030. The air quality modeling methodology and the 
projected reductions are discussed in more detail in Chapter 2 of the 
RIA.

B. Air Toxics

    Small SI and Marine SI emissions also contribute to ambient levels 
of air toxics known or suspected as human or animal carcinogens, or 
that have noncancer health effects. These air toxics include benzene, 
1, 3-butadiene, formaldehyde, acetaldehyde, acrolein, polycyclic 
organic matter (POM), and naphthalene. All of these compounds, except 
acetaldehyde, were identified as national or regional cancer risk or 
noncancer hazard drivers in the 1999 National-Scale Air Toxics 
Assessment (NATA) and have significant inventory contributions from 
mobile sources. That is, for a significant portion of the population, 
these compounds pose a significant portion of the total cancer and 
noncancer risk from breathing outdoor air toxics. In addition, human 
exposure to toxics from spark-ignition engines also occurs as a result 
of operating these engines and from intrusion of emissions in 
residential garages into attached indoor spaces.39 40 The 
emission reductions from Small SI and Marine SI engines that are 
finalized in this rulemaking will help reduce exposure to these harmful 
substances.
---------------------------------------------------------------------------

    \39\ Baldauf, R.; Fortune, C.; Weinstein, J.; Wheeler, M.; 
Blanchard, B. (2006) Air contaminant exposures during the operation 
of lawn and garden equipment. J Expos Sci Environ Epidmeiol 16: 362-
370.
    \40\ Isbell, M.; Ricker, J.; Gordian, M.E.; Duff, L.K. (1999) 
Use of biomarkers in an indoor air study: lack of correlation 
between aromatic VOCs with respective urinary biomarkers. Sci Total 
Environ 241: 151-159.
---------------------------------------------------------------------------

    Benzene: The EPA's IRIS database lists benzene as a known human 
carcinogen (causing leukemia) by all routes of exposure, and concludes 
that exposure is associated with additional health effects, including 
genetic changes in both humans and animals and increased proliferation 
of bone marrow cells in mice.41 42 43 EPA states in its IRIS 
database that data indicate a causal relationship between benzene 
exposure and acute lymphocytic leukemia and suggest a relationship 
between benzene exposure and chronic non-lymphocytic

[[Page 59046]]

leukemia and chronic lymphocytic leukemia. The International Agency for 
Research on Carcinogens (IARC) has determined that benzene is a human 
carcinogen and the U.S. Department of Health and Human Services (DHHS) 
has characterized benzene as a known human carcinogen.44 45
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    \41\ U.S. EPA. 2000. Integrated Risk Information System File for 
Benzene. This material is available electronically at http://www.epa.gov/iris/subst/0276.htm.
    \42\ International Agency for Research on Cancer (IARC). 1982. 
Monographs on the evaluation of carcinogenic risk of chemicals to 
humans, Volume 29, Some industrial chemicals and dyestuffs, World 
Health Organization, Lyon, France, p. 345-389.
    \43\ Irons, R.D.; Stillman, W.S.; Colagiovanni, D.B.; Henry, 
V.A. 1992. Synergistic action of the benzene metabolite hydroquinone 
on myelopoietic stimulating activity of granulocyte/macrophage 
colony-stimulating factor in vitro, Proc. Natl. Acad. Sci. 89:3691-
3695.
    \44\ International Agency for Research on Cancer (IARC). 1987. 
Monographs on the evaluation of carcinogenic risk of chemicals to 
humans, Volume 29, Supplement 7, Some industrial chemicals and 
dyestuffs, World Health Organization, Lyon, France.
    \45\ U.S. Department of Health and Human Services National 
Toxicology Program 11th Report on Carcinogens available at: http://ntp.niehs.nih.gov/go/16183.
---------------------------------------------------------------------------

    A number of adverse noncancer health effects including blood 
disorders, such as preleukemia and aplastic anemia, have also been 
associated with long-term exposure to benzene.46 47 The most 
sensitive noncancer effect observed in humans, based on current data, 
is the depression of the absolute lymphocyte count in 
blood.48 49 In addition, recent work, including studies 
sponsored by the Health Effects Institute (HEI), provides evidence that 
biochemical responses are occurring at lower levels of benzene exposure 
than previously known.50 51 52 53 EPA's IRIS program has not 
yet evaluated these new data.
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    \46\ Aksoy, M. (1989). Hematotoxicity and carcinogenicity of 
benzene. Environ. Health Perspect. 82: 193-197.
    \47\ Goldstein, B.D. (1988). Benzene toxicity. Occupational 
medicine. State of the Art Reviews. 3: 541-554.
    \48\ Rothman, N., G.L. Li, M. Dosemeci, W.E. Bechtold, G.E. 
Marti, Y.Z. Wang, M. Linet, L.Q. Xi, W. Lu, M.T. Smith, N. Titenko-
Holland, L.P. Zhang, W. Blot, S.N. Yin, and R.B. Hayes (1996) 
Hematotoxicity among Chinese workers heavily exposed to benzene. Am. 
J. Ind. Med. 29: 236-246.
    \49\ U.S. EPA (2002) Toxicological Review of Benzene (Noncancer 
Effects). Environmental Protection Agency, Integrated Risk 
Information System (IRIS), Research and Development, National Center 
for Environmental Assessment, Washington DC. This material is 
available electronically at http://www.epa.gov/iris/subst/0276.htm.
    \50\ Qu, O.; Shore, R.; Li, G.; Jin, X.; Chen, C.L.; Cohen, B.; 
Melikian, A.; Eastmond, D.; Rappaport, S.; Li, H.; Rupa, D.; 
Suramaya, R.; Songnian, W.; Huifant, Y.; Meng, M.; Winnik, M.; Kwok, 
E.; Li, Y.; Mu, R.; Xu, B.; Zhang, X.; Li, K. (2003) HEI Report 115, 
Validation & Evaluation of Biomarkers in Workers Exposed to Benzene 
in China.
    \51\ Qu, Q., R. Shore, G. Li, X. Jin, L.C. Chen, B. Cohen, et 
al. (2002) Hematological changes among Chinese workers with a broad 
range of benzene exposures. Am. J. Industr. Med. 42: 275-285.
    \52\ Lan, Qing, Zhang, L., Li, G., Vermeulen, R., et al. (2004) 
Hematotoxically in Workers Exposed to Low Levels of Benzene. Science 
306: 1774-1776.
    \53\ Turtletaub, K.W. and Mani, C. (2003) Benzene metabolism in 
rodents at doses relevant to human exposure from Urban Air. Research 
Reports Health Effect Inst. Report No.113.
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    1,3-Butadiene: EPA has characterized 1,3-butadiene as carcinogenic 
to humans by inhalation.54 55 The IARC has determined that 
1,3-butadiene is a human carcinogen and the U.S. DHHS has characterized 
1,3-butadiene as a known human carcinogen.56 57 There are 
numerous studies consistently demonstrating that 1,3-butadiene is 
metabolized into genotoxic metabolites by experimental animals and 
humans. The specific mechanisms of 1,3-butadiene-induced carcinogenesis 
are unknown; however, the scientific evidence strongly suggests that 
the carcinogenic effects are mediated by genotoxic metabolites. Animal 
data suggest that females may be more sensitive than males for cancer 
effects associated with 1,3-butadiene exposure; there are insufficient 
data in humans from which to draw conclusions about sensitive 
subpopulations. 1,3-butadiene also causes a variety of reproductive and 
developmental effects in mice; no human data on these effects are 
available. The most sensitive effect was ovarian atrophy observed in a 
lifetime bioassay of female mice.\58\
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    \54\ U.S. EPA (2002) Health Assessment of 1,3-Butadiene. Office 
of Research and Development, National Center for Environmental 
Assessment, Washington Office, Washington, DC. Report No. EPA600-P-
98-001F. This document is available electronically at http://www.epa.gov/iris/supdocs/buta-sup.pdf.
    \55\ U.S. EPA (2002) Full IRIS Summary for 1,3-butadiene (CASRN 
106-99-0). Environmental Protection Agency, Integrated Risk 
Information System (IRIS), Research and Development, National Center 
for Environmental Assessment, Washington, DC http://www.epa.gov/iris/subst/0139.htm.
    \56\ International Agency for Research on Cancer (IARC) (1999) 
Monographs on the evaluation of carcinogenic risk of chemicals to 
humans, Volume 71, Re-evaluation of some organic chemicals, 
hydrazine and hydrogen peroxide and Volume 97 (in preparation), 
World Health Organization, Lyon, France.
    \57\ U.S. Department of Health and Human Services (2005) 
National Toxicology Program 11th Report on Carcinogens available at: 
ntp.niehs.nih.gov/index.cfm?objectid=32BA9724-F1F6-975E-7FCE50709CB4C932.
    \58\ Bevan, C.; Stadler, J.C.; Elliot, G.S.; et al. (1996) 
Subchronic toxicity of 4-vinylcyclohexene in rats and mice by 
inhalation. Fundam. Appl. Toxicol. 32:1-10.
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    Formaldehyde: Since 1987, EPA has classified formaldehyde as a 
probable human carcinogen based on evidence in humans and in rats, 
mice, hamsters, and monkeys.\59\ EPA is currently reviewing recently 
published epidemiological data. For instance, research conducted by the 
National Cancer Institute (NCI) found an increased risk of 
nasopharyngeal cancer and lymphohematopoietic malignancies such as 
leukemia among workers exposed to formaldehyde.60 61 NCI is 
currently performing an update of these studies. A recent National 
Institute of Occupational Safety and Health (NIOSH) study of garment 
workers also found increased risk of death due to leukemia among 
workers exposed to formaldehyde.\62\ Extended follow-up of a cohort of 
British chemical workers did not find evidence of an increase in 
nasopharyngeal or lymphohematopoietic cancers, but a continuing 
statistically significant excess in lung cancers was reported.\63\ 
Recently, the IARC re-classified formaldehyde as a human carcinogen 
(Group 1).\64\
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    \59\ U.S. EPA (1987) Assessment of Health Risks to Garment 
Workers and Certain Home Residents from Exposure to Formaldehyde, 
Office of Pesticides and Toxic Substances, April 1987.
    \60\ Hauptmann, M.; Lubin, J. H.; Stewart, P. A.; Hayes, R. B.; 
Blair, A. 2003. Mortality from lymphohematopoetic malignancies among 
workers in formaldehyde industries. Journal of the National Cancer 
Institute 95: 1615-1623.
    \61\ Hauptmann, M.; Lubin, J. H.; Stewart, P. A.; Hayes, R. B.; 
Blair, A. 2004. Mortality from solid cancers among workers in 
formaldehyde industries. American Journal of Epidemiology 159: 1117-
1130.
    \62\ Pinkerton, L. E. 2004. Mortality among a cohort of garment 
workers exposed to formaldehyde: an update. Occup. Environ. Med. 61: 
193-200.
    \63\ Coggon, D, EC Harris, J Poole, KT Palmer. 2003. Extended 
follow-up of a cohort of British chemical workers exposed to 
formaldehyde. J National Cancer Inst. 95:1608-1615.
    \64\ International Agency for Research on Cancer (IARC). 2006. 
Formaldehyde, 2-Butoxyethanol and 1-tert-Butoxypropan-2-ol. Volume 
88. (in preparation), World Health Organization, Lyon, France.
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    Formaldehyde exposure also causes a range of noncancer health 
effects, including irritation of the eyes (burning and watering of the 
eyes), nose and throat. Effects from repeated exposure in humans 
include respiratory tract irritation, chronic bronchitis and nasal 
epithelial lesions such as metaplasia and loss of cilia. Animal studies 
suggest that formaldehyde may also cause airway inflammation--including 
eosinophil infiltration into the airways. There are several studies 
that suggest that formaldehyde may increase the risk of asthma--
particularly in the young.65 66
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    \65\ Agency for Toxic Substances and Disease Registry (ATSDR). 
1999. Toxicological profile for Formaldehyde. Atlanta, GA: U.S. 
Department of Health and Human Services, Public Health Service. 
http://www.atsdr.cdc.gov/toxprofiles/tp111.html
    \66\ WHO (2002) Concise International Chemical Assessment 
Document 40: Formaldehyde. Published under the joint sponsorship of 
the United Nations Environment Programme, the International Labour 
Organization, and the World Health Organization, and produced within 
the framework of the Inter-Organization Programme for the Sound 
Management of Chemicals. Geneva.
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    Acetaldehyde: Acetaldehyde is classified in EPA's IRIS database as 
a probable human carcinogen, based on nasal tumors in rats, and is 
considered toxic by the inhalation, oral, and intravenous 
routes.67 Acetaldehyde is

[[Page 59047]]

reasonably anticipated to be a human carcinogen by the U.S. DHHS in the 
11th Report on Carcinogens and is classified as possibly carcinogenic 
to humans (Group 2B) by the IARC.68 69 EPA is currently 
conducting a reassessment of cancer risk from inhalation exposure to 
acetaldehyde.
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    \67\ U.S. EPA. 191. Integrated Risk Information System File of 
Acetaldehyde. Research and Development, National Center for 
Environmental Assessment, Washington, DC. This material is available 
electronically at http://www.epa.gov/iris/subst/0290.htm.
    \68\ U.S. Department of Health and Human Services National 
Toxicology Program 11th Report on Carcinogens available at: 
ntp.niehs.nih.gov/index.cfm?objectid=32BA9724-F1F6-975E-7FCE50709CB4C932.
    \69\ International Agency for Research on Cancer (IARC). 1999. 
Re-evaluation of some organic chemicals, hydrazine, and hydrogen 
peroxide. IARC Monographs on the Evaluation of Carcinogenic Risk of 
Chemical to Humans, Vol 71. Lyon, France.
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    The primary noncancer effects of exposure to acetaldehyde vapors 
include irritation of the eyes, skin, and respiratory tract.\70\ In 
short-term (4 week) rat studies, degeneration of olfactory epithelium 
was observed at various concentration levels of acetaldehyde 
exposure.71 72 Data from these studies were used by EPA to 
develop an inhalation reference concentration. Some asthmatics have 
been shown to be a sensitive subpopulation to decrements in functional 
expiratory volume (FEV1 test) and bronchoconstriction upon acetaldehyde 
inhalation.\73\ The agency is currently conducting a reassessment of 
the health hazards from inhalation exposure to acetaldehyde.
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    \70\ U.S. EPA. 1991. Integrated Risk Information System File of 
Acetaldehyde. This material is available electronically at http://www.epa.gov/iris/subst/0290.htm.
    \71\ Appleman, L. M., R. A. Woutersen, V. J. Feron, R. N. 
Hooftman, and W. R. F. Notten. 1986. Effects of the variable versus 
fixed exposure levels on the toxicity of acetaldehyde in rats. J. 
Appl. Toxicol. 6: 331-336.
    \72\ Appleman, L.M., R.A. Woutersen, and V.J. Feron. 1982. 
Inhalation toxicity of acetaldehyde in rats. I. Acute and subacute 
studies. Toxicology. 23: 293-297.
    \73\ Myou, S.; Fujimura, M.; Nishi K.; Ohka, T.; and Matsuda, T. 
1993. Aerosolized acetaldehyde induces histamine-mediated 
bronchoconstriction in asthmatics. Am. Rev. Respir.Dis.148(4 Pt 1): 
940-3.
---------------------------------------------------------------------------

    Acrolein: EPA determined in 2003 that the human carcinogenic 
potential of acrolein could not be determined because the available 
data were inadequate. No information was available on the carcinogenic 
effects of acrolein in humans and the animal data provided inadequate 
evidence of carcinogenicity.\74\ The IARC determined in 1995 that 
acrolein was not classifiable as to its carcinogenicity in humans.\75\
---------------------------------------------------------------------------

    \74\ U.S. EPA. 2003. Integrated Risk Information System File of 
Acrolein. Research and Development, National Center for 
Environmental Assessment, Washington, DC. This material is available 
at http://www.epa.gov/iris/subst/0364.htm.
    \75\ International Agency for Research on Cancer (IARC). 1995. 
Monographs on the evaluation of carcinogenic risk of chemicals to 
humans, Volume 63, Dry cleaning, some chlorinated solvents and other 
industrial chemicals, World Health Organization, Lyon, France.
---------------------------------------------------------------------------

    Acrolein is extremely acrid and irritating to humans when inhaled, 
with acute exposure resulting in upper respiratory tract irritation, 
mucus hypersecretion and congestion. Levels considerably lower than 1 
ppm (2.3 mg/m3) elicit subjective complaints of eye and 
nasal irritation and a decrease in the respiratory 
rate.76 77 Lesions to the lungs and upper respiratory tract 
of rats, rabbits, and hamsters have been observed after subchronic 
exposure to acrolein. Based on animal data, individuals with 
compromised respiratory function (e.g., emphysema, asthma) are expected 
to be at increased risk of developing adverse responses to strong 
respiratory irritants such as acrolein. This was demonstrated in mice 
with allergic airway-disease by comparison to non-diseased mice in a 
study of the acute respiratory irritant effects of acrolein.\78\
---------------------------------------------------------------------------

    \76\ Weber-Tschopp, A; Fischer, T; Gierer, R; et al. (1977) 
Experimentelle reizwirkungen von Acrolein auf den Menschen. Int Arch 
Occup Environ Hlth 40(2):117-130. In German.
    \77\ Sim, VM; Pattle, RE. (1957) Effect of possible smog 
irritants on human subjects. J Am Med Assoc 165(15):1908-1913.
    \78\ Morris JB, Symanowicz PT, Olsen JE, et al. 2003. Immediate 
sensory nerve-mediated respiratory responses to irritants in healthy 
and allergic airway-diseased mice. J Appl Physiol 94(4):1563-1571.
---------------------------------------------------------------------------

    EPA is currently in the process of conducting an assessment of 
acute exposure effects for acrolein. The intense irritancy of this 
carbonyl has been demonstrated during controlled tests in human 
subjects, who suffer intolerable eye and nasal mucosal sensory 
reactions within minutes of exposure.\79\
---------------------------------------------------------------------------

    \79\ Sim VM, Pattle RE. Effect of possible smog irritants on 
human subjects JAMA165: 1980-2010, 1957.
---------------------------------------------------------------------------

    Polycyclic Organic Matter (POM): POM is generally defined as a 
large class of organic compounds which have multiple benzene rings and 
a boiling point greater than 100 degrees Celsius. Many of the compounds 
included in the class of compounds known as POM are classified by EPA 
as probable human carcinogens based on animal data. One of these 
compounds, naphthalene, is discussed separately below. Polycyclic 
aromatic hydrocarbons (PAHs) are a subset of POM that contain only 
hydrogen and carbon atoms. A number of PAHs are known or suspected 
carcinogens. Recent studies have found that maternal exposures to PAHs 
(a subclass of POM) in a population of pregnant women were associated 
with several adverse birth outcomes, including low birth weight and 
reduced length at birth, as well as impaired cognitive development at 
age three.80 81 EPA has not yet evaluated these recent 
studies.
---------------------------------------------------------------------------

    \80\ Perera, F.P.; Rauh, V.; Tsai, W-Y.; et al. (2002) Effect of 
transplacental exposure to environmental pollutants on birth 
outcomes in a multiethnic population. Environ Health Perspect. 111: 
201-205.
    \81\ Perera, F.P.; Rauh, V.; Whyatt, R.M.; Tsai, W.Y.; Tang, D.; 
Diaz, D.; Hoepner, L.; Barr, D.; Tu, Y.H.; Camann, D.; Kinney, P. 
(2006) Effect of prenatal exposure to airborne polycyclic aromatic 
hydrocarbons on neurodevelopment in the first 3 years of life among 
inner-city children. Environ Health Perspect 114: 1287-1292.
---------------------------------------------------------------------------

    Naphthalene: Naphthalene is found in small quantities in gasoline 
and diesel fuels. Naphthalene emissions have been measured in larger 
quantities in both gasoline and diesel exhaust compared with 
evaporative emissions from mobile sources, indicating it is primarily a 
product of combustion. EPA recently released an external review draft 
of a reassessment of the inhalation carcinogenicity of naphthalene 
based on a number of recent animal carcinogenicity studies.\82\ The 
draft reassessment recently completed external peer review.\83\ Based 
on external peer review comments received to date, additional analyses 
are being undertaken. This external review draft does not represent 
official agency opinion and was released solely for the purposes of 
external peer review and public comment. Once EPA evaluates public and 
peer reviewer comments, the document will be revised. The National 
Toxicology Program listed naphthalene as ``reasonably anticipated to be 
a human carcinogen'' in 2004 on the basis of bioassays reporting clear 
evidence of carcinogenicity in rats and some evidence of 
carcinogenicity in mice.\84\ California EPA has released a new risk 
assessment for naphthalene, and the IARC has reevaluated naphthalene 
and re-classified it as Group 2B: possibly carcinogenic to humans.\85\ 
Naphthalene

[[Page 59048]]

also causes a number of chronic non-cancer effects in animals, 
including abnormal cell changes and growth in respiratory and nasal 
tissues.\86\
---------------------------------------------------------------------------

    \82\ U.S. EPA (2004) Toxicological Review of Naphthalene 
(Reassessment of the Inhalation Cancer Risk), Environmental 
Protection Agency, Integrated Risk Information System, Research and 
Development, National Center for Environmental Assessment, 
Washington, DC. This material is available electronically at http://www.epa.gov/iris/subst/0436.htm.
    \83\ Oak Ridge Institute for Science and Education (2004) 
External Peer Review for the IRIS Reassessment of the Inhalation 
Carcinogenicity of Naphthalene. August 2004. http://cfpub.epa.gov/ncea/cfm/recordisplay.cfm?deid=84403.
    \84\ National Toxicology Program (NTP). (2004). 11th Report on 
Carcinogens. Public Health Service, U.S. Department of Health and 
Human Services, Research Triangle Park, NC. Available from: http://ntp-server.niehs.nih.gov.
    \85\ International Agency for Research on Cancer (IARC) (2002) 
Monographs on the Evaluation of the Carcinogenic Risk of Chemicals 
for Humans. Vol. 82. Lyon, France.
    \86\ U.S. EPA (1998) Toxicological Review of Naphthalene, 
Environmental Protection Agency, Integrated Risk Information System, 
Research and Development, National Center for Environmental 
Assessment, Washington, DC. This material is available 
electronically at http://www.epa.gov/iris/subst/0436.htm.
---------------------------------------------------------------------------

    The standards finalized in this action will reduce air toxics 
emitted from these engines, vessels and equipment. These emissions 
reductions will help to mitigate some of the adverse health effects 
associated with their operation.

C. Carbon Monoxide

    CO is a colorless, odorless gas produced through the incomplete 
combustion of carbon-based fuels. The current primary NAAQS for CO are 
35 ppm for the 1-hour average and nine ppm for the 8-hour average. 
These values are not to be exceeded more than once per year.
    We previously found that emissions from nonroad engines contribute 
significantly to CO concentrations in more than one nonattainment area 
(59 FR 31306, June 17, 1994). We have also previously found that 
emissions from Small SI engines contribute to CO concentrations in more 
than one nonattainment area. We are adopting a finding, based on the 
information in this section and in Chapters 2 and 3 of the Final RIA, 
that emissions from Marine SI engines and vessels likewise contribute 
to CO concentrations in more than one CO nonattainment area.
    Carbon monoxide enters the bloodstream through the lungs, forming 
carboxyhemoglobin and reducing the delivery of oxygen to the body's 
organs and tissues. The health threat from CO is most serious for those 
who suffer from cardiovascular disease, particularly those with angina 
or peripheral vascular disease. Healthy individuals also are affected, 
but only at higher CO levels. Exposure to elevated CO levels is 
associated with impairment of visual perception, work capacity, manual 
dexterity, learning ability and performance of complex tasks. Carbon 
monoxide also contributes to ozone nonattainment since carbon monoxide 
reacts photochemically in the atmosphere to form ozone.\87\ Additional 
information on CO related health effects can be found in the Carbon 
Monoxide Air Quality Criteria Document (CO AQCD).\88\
---------------------------------------------------------------------------

    \87\ U.S. EPA (2000). Air Quality Criteria for Carbon Monoxide, 
EPA/600/P-99/001F. This document is available in Docket EPA-HQ-OAR-
2004-0008.
    \88\ U.S. EPA (2000). Air Quality Criteria for Carbon Monoxide, 
EPA/600/P-99/001F. This document is available in Docket EPA-HQ-OAR-
2004-0008.
---------------------------------------------------------------------------

    In addition to health effects from chronic exposure to ambient CO 
levels, acute exposures to higher levels are also a problem, see the 
Final RIA for additional information. In recent years a substantial 
number of CO poisonings and deaths have occurred on and around 
recreational boats across the nation.\89\ The actual number of deaths 
attributable to CO poisoning while boating is difficult to estimate 
because CO-related deaths in the water may be labeled as drowning. An 
interagency team consisting of the National Park Service, the U.S. 
Department of the Interior, and the National Institute for Occupational 
Safety and Health maintains a record of published CO-related fatal and 
nonfatal poisonings.\90\ Between 1984 and 2004, 113 CO-related deaths 
and 458 non-fatal CO poisonings have been identified based on hospital 
records, press accounts and other information. Deaths have been 
attributed to exhaust from both onboard generators and propulsion 
engines. Houseboats, cabin cruisers, and ski boats are the most common 
types of boats associated with CO poisoning cases. These incidents have 
prompted other federal agencies, including the United States Coast 
Guard and National Park Service, to issue advisory statements and other 
interventions to boaters to avoid excessive CO exposure.\91\
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    \89\ Mott, J.S.; Wolfe, M.I.; Alverson, C.J.; Macdonald, S.C.; 
Bailey, C.R.; Ball, L.B.; Moorman, J.E.; Somers, J.H.; Mannino, 
D.M.; Redd, S.C. (2002) National Vehicle Emissions Policies and 
Practices and Declining US Carbon Monoxide-Related Mortality. JAMA 
288:988-995.
    \90\ National Park Service; Department of the Interior; National 
Institute for Occupational Safety and Health. (2004) Boat-related 
carbon monoxide poisonings. This document is available 
electronically at http://safetynet.smis.doi.gov/thelistbystate10-19-04.pdf and in docket EPA-HQ-OAR-2004-0008.
    \91\ U.S Department of the Interior. (2004) Carbon monoxide 
dangers from generators and propulsion engines. On-board boats--
compilation of materials. This document is available online at 
http://safetynet.smis.doi.gov/COhouseboats.htm and in docket EPA-HQ-
OAR-2004-0008.
---------------------------------------------------------------------------

    As of March 12, 2008, there were approximately 850,000 people 
living in 4 areas (which include 5 counties) designated as 
nonattainment for CO.\92\ The CO nonattainment areas are presented in 
the Final RIA.
---------------------------------------------------------------------------

    \92\ Population numbers are from 2000 census data.
---------------------------------------------------------------------------

    EPA's NONROAD model indicates that Marine SI emissions are present 
in each of the CO nonattainment areas and thus contribute to CO 
concentrations in those nonattainment areas. The CO contribution from 
Marine SI engines in classified CO nonattainment areas is presented in 
Table II-3.

       Table II-3--CO Emissions From Marine SI Engines and Vessels in Classified CO Nonattainment Areas a
----------------------------------------------------------------------------------------------------------------
                                                                                                  CO (short tons
                  Area                              County                     Category              in 2005)
----------------------------------------------------------------------------------------------------------------
Las Vegas, NV...........................  Clark.....................  Marine SI.................           3,016
Reno, NV................................  Washoe....................  Marine SI.................           3,494
El Paso, TX.............................  El Paso...................  Marine SI.................              37
----------------------------------------------------------------------------------------------------------------
Source: U.S. EPA, NONROAD 2005 model.
\a\ This table does not include Salem, OR which is an unclassified CO nonattainment area.

    Based on the national inventory numbers in Chapter 3 of the Final 
RIA and the local inventory numbers described in this section, we find 
that emissions of CO from Marine SI engines and vessels contribute to 
CO concentrations in more than one CO nonattainment area.

III. Sterndrive and Inboard Marine Engines

A. Overview

    This section applies to sterndrive and inboard marine (SD/I) 
engines. Sterndrive and inboard engines are spark-ignition engines 
typically derived from automotive engine blocks for which a 
manufacturer will take steps to ``marinize'' the engine for use in 
marine applications. This marinization process includes choosing and 
optimizing the fuel management system, configuring a marine cooling 
system, adding intake and exhaust manifolds, and adding accessory 
drives and units. These engines typically have water-jacketed

[[Page 59049]]

exhaust systems to keep surface temperatures low. Ambient surface water 
(seawater or freshwater) is generally added to the exhaust gases before 
the mixture is expelled under water.
    As described in Section I, the initial rulemaking to set standards 
for Marine SI engines did not include final emission standards for SD/I 
engines. In that rulemaking, we finalized the finding under Clean Air 
Act section 213(a)(3) that all Marine SI engines cause or contribute to 
ozone concentrations in two or more ozone nonattainment areas in the 
United States. However, because uncontrolled SD/I engines appeared to 
be a low-emission alternative to outboard and personal watercraft 
engines in the marketplace, even after the emission standards for these 
engines were fully phased in, we decided to set emission standards only 
for outboard and personal watercraft engines. At that time, outboard 
and personal watercraft engines were almost all two-stroke engines with 
much higher emission rates compared to the SD/I engines, which were all 
four-stroke engines. We pointed out in that initial rulemaking that we 
wanted to avoid imposing costs on SD/I engines that could cause a 
market shift to increased use of the higher-emitting outboard engines, 
which will undermine the broader goal of achieving the greatest degree 
of emission control from the full set of Marine SI engines.
    We believe this is an appropriate time to set standards for SD/I 
engines, for several reasons. First, the available technology for SD/I 
engines has developed significantly, so we are now able to anticipate 
substantial emission reductions. With the simultaneous developments in 
technology for outboard and personal watercraft engines, we can set 
standards that achieve substantial emission reductions from all Marine 
SI engines. Second, now that California has adopted standards for SD/I 
engines, the cost impact of setting new standards for manufacturers 
serving the California market is generally limited to the hardware 
costs of adding emission control technology; these manufacturers will 
be undergoing a complete redesign effort for these engines to meet the 
California standards. Third, while an emission control program for SD/I 
engines will increase the price of these engines, we no longer think 
this will result in a market shift to higher-emitting outboard engines. 
The economic impact analysis performed for this final rule, summarized 
in Section XII, suggests that the prices will increase less than 1 
percent and sales will be impacted by less than 2 percent. It is also 
possible that SD/I engine manufacturers may promote higher fuel 
efficiency and other performance advantages of compliant engines which 
would allow them to promote these engines as having a greater value and 
justifying these small expected price increases. As a result, we 
believe we can achieve the maximum emission reductions from Marine SI 
engines by setting standards for SD/I engines based on the use of 
catalyst technology at the same time that we adopt more stringent 
standards for outboard and personal watercraft engines.
    As described in Section II, we are adopting the finding under Clean 
Air Act section 213(a)(3) that Marine SI engines cause or contribute to 
CO concentrations in two or more nonattainment areas of the United 
States. We believe the new CO standards will also reduce the exposure 
of individual boaters and bystanders to potentially dangerous CO 
levels.
    We believe catalyst technology is available for achieving the new 
standards. Catalysts have been used for decades in automotive 
applications to reduce emissions, and catalyst manufacturers have 
continued to develop and improve this technology. Design issues for 
using catalysts in marine applications are primarily centered on 
packaging catalysts in the water-jacketed, wet exhaust systems seen on 
most SD/I engines. Section III.G discusses recent development work that 
has shown success in packaging catalysts in SD/I applications. In 
addition, there are ongoing efforts in evaluating catalyst technology 
in SD/I engines being sponsored by the marine industry, U.S. Coast 
Guard, and California ARB.
    We are adopting the regulatory requirements for marine spark-
ignition engines in 40 CFR part 1045. These requirements are similar to 
the regulations that have been in place for outboard and personal 
watercraft engines for several years, but include updated certification 
procedures, as described in Section IV.A. Engines and vessels subject 
to part 1045 are also subject to the general compliance provisions in 
40 CFR part 1068. These include prohibited acts and penalties, 
exemptions and importation provisions, selective enforcement audits, 
defect reporting and recall, and hearing procedures. See Section VIII 
of the preamble to the proposed rule for further discussion of these 
general compliance provisions.

B. Engines Covered by This Rule

(1) Definition of Sterndrive and Inboard Engines
    For the purpose of this regulation, SD/I engines encompass all 
spark-ignition marine propulsion engines that are not outboard or 
personal watercraft engines. A discussion of the revised definitions 
for outboard and personal watercraft engines is in Section IV.B. We 
consider all the following to be SD/I engines: inboard, sterndrive 
(also known as inboard/outboard), airboat engines, and jet boat 
engines.
    The definitions for sterndrive and inboard engines at 40 CFR part 
91 are presented below:
     Sterndrive engine means a four stroke Marine SI engine 
that is designed such that the drive unit is external to the hull of 
the marine vessel, while the engine is internal to the hull of the 
marine vessel.
     Inboard engine means a four stroke Marine SI engine that 
is designed such that the propeller shaft penetrates the hull of the 
marine vessel while the engine and the remainder of the drive unit is 
internal to the hull of the marine vessel.
    We are amending the above definitions for determining which exhaust 
emission standards apply to spark-ignition marine engines in 2010. The 
new definition establishes a single term to include sterndrive and 
inboard engines together as a single engine category. The new 
definition for sterndrive/inboard also is drafted to include all 
engines not otherwise classified as outboard or personal watercraft 
engines.
    The new definition has several noteworthy impacts. First, it 
removes a requirement that only four-stroke engines can qualify as 
sterndrive/inboard engines. We believe limiting the definition to 
include only four-stroke engines is unnecessarily restrictive and could 
create an incentive to use two-stroke (or rotary) engines to avoid 
catalyst-based standards. Second, it removes limitations caused by 
reference to propellers. The definition should not refer specifically 
to propellers, because there are other propulsion drives on marine 
vessels, such as jet drives, that could be used with SD/I engines. 
Third, as explained in the section on the OB/PWC definitions, the new 
definitions treat engines installed in open-bay vessels (e.g. jet 
boats) and in vessels over 4 meters long as SD/I engines. Finally, the 
definition in part 91 does not clearly specify how to treat specialty 
vessels such as airboats or hovercraft that use engines similar to 
those in conventional SD/I applications. The

[[Page 59050]]

definition of personal watercraft grants EPA the discretion to classify 
engines as SD/I engines if the engine is comparable in technology and 
emissions to an inboard or sterndrive engine. EPA has used this 
discretion to classify airboats as SD/I engines. See 40 CFR 91.3 for 
the existing definitions of the marine engine classes. We continue to 
believe these engines share fundamental characteristics with 
traditional SD/I engines and should therefore be treated the same way. 
However, we believe the definitions should address these applications 
expressly to make clear which standards apply. We are adopting the 
following definition:
     Sterndrive/inboard engine means a spark-ignition engine 
that is used to propel a vessel, but is not an outboard engine or a 
personal watercraft engine. A sterndrive/inboard engine may be either a 
conventional sterndrive/inboard engine or a high-performance engine. 
Engines on propeller-driven vessels, jet boats, air boats, and 
hovercraft are all sterndrive/inboard engines.
    SD/I high-performance engines are generally characterized by high-
speed operation, supercharged air intake, customized parts, very high 
power densities, and a short time until rebuild (50 to 200 hours). 
Based on current SD/I product offerings, we are defining a high-
performance engine as an SD/I engine with maximum power above 373 kW 
(500 hp) that has design features to enhance power output such that the 
expected operating time until rebuild is substantially shorter than 480 
hours.
(2) Exclusions and Exemptions
    We are extending our basic nonroad exemptions to the SD/I engines 
and vessels covered by this rule. These include the testing exemption, 
the manufacturer-owned exemption, the display exemption, and the 
national-security exemption. If the conditions for an exemption are 
met, then the engine is not subject to the exhaust emission standards.
    In the rulemaking for recreational vehicles, we chose not to apply 
standards to hobby products by exempting all reduced-scale models of 
vehicles that are not capable of transporting a person (67 FR 68242, 
November 8, 2002). We are extending that same provision to SD/I marine 
engines (see Sec.  1045.5).
    The Clean Air Act provides for different treatment of engines used 
solely for competition. Rather than relying on engine design features 
that serve as inherent indicators of dedicated competitive use, as 
specified in the current regulations, we have taken the approach in 
more recent programs of more carefully differentiating competition and 
noncompetition models in ways that reflect the nature of the particular 
products. In the case of Marine SI engines, we do not believe there are 
engine design features that allow us to differentiate between engines 
that are used in high-performance recreational applications and those 
that are used solely for competition. Starting January 1, 2009, Marine 
SI engines meeting all the following criteria will therefore be 
considered to be used solely for competition:
     The engine (or a vessel in which the engine is installed) 
may not be displayed for sale in any public dealership or otherwise 
offered for sale to the general public.
     Sale of the vessel in which the engine is installed must 
be limited to professional racers or other qualified racers.
     The engine must have performance characteristics that are 
substantially superior to noncompetitive models (e.g. higher power-to-
weight ratio).
     The engines must be intended for use only in racing events 
sanctioned (with applicable permits) by the Coast Guard or other public 
organization, with operation limited to racing events, speed record 
attempts, and official time trials.
    We are also including a provision allowing us to approve an 
exemption for cases in which an engine manufacturer can provide clear 
and convincing evidence that an engine will be used solely for 
competition even though not all the above criteria apply for a given 
situation. This may occur, for example, if a racing association 
specifies a particular engine model in their competition rules, where 
that engine has design features that prevent it from being certified or 
from being used for purposes other than competition.
    Engine manufacturers will make their request for each new model 
year. We will deny a request for future production if there are 
indications that some engines covered by previous requests are not 
being used solely for competition. Competition engines are generally 
produced and sold in very small quantities, so manufacturers should be 
able to identify which engines qualify for this exemption. We are 
applying the same criteria to outboard and personal watercraft engines 
and vessels. See Sec.  1045.620.
    We are adopting a new exemption to address individuals who 
manufacture recreational marine vessels for personal use (see Sec.  
1045.630). Under this exemption, someone may install a used engine in a 
new vessel where that engine is exempt from standards, subject to 
certain limitations. For example, an individual may produce one such 
vessel over a five-year period, the vessel may not be used for 
commercial purposes, and any exempt engines may not be sold for at 
least five years. The vessel must generally be built from unassembled 
components, rather than simply completing assembly of a vessel that is 
otherwise similar to one that will be certified to meet emission 
standards. This exemption does not apply for freshly manufactured 
engines. This exemption addresses the concern that hobbyists who make 
their own vessels could otherwise be a manufacturer subject to the full 
set of emission standards by introducing these vessels into commerce. 
We expect this exemption to involve a very small number of vessels. We 
revised the provisions of the personal-use exemption since the proposal 
to allow people to build a vessel with an exempted engine once every 
five years instead of ten years. We believe this is more reflective of 
a hobbyists interest in building a boat and using it before moving on 
to the next building project.

C. Exhaust Emission Standards

    We are adopting technology-based exhaust emission standards for new 
SD/I engines. These standards are similar to the exhaust emission 
standards that California ARB recently adopted (see Section I). This 
section describes the provisions related to controlling exhaust 
emissions from SD/I engines. See Section VI for a description of the 
new requirements related to evaporative emissions.
(1) Standards and Dates
    We are adopting exhaust emission standards of 5.0 g/kW-hr 
HC+NOX and 75 g/kW-hr CO for SD/I engines, starting with the 
2010 model year (see Sec.  1045.105). On average, this represents about 
a 70 percent reduction in HC+NOX and a 50 percent reduction 
in CO from baseline engine configurations. Due to the challenges of 
controlling CO emissions at high load, the expected reduction in CO 
emissions from low-to mid-power operation is expected to be more than 
80 percent. We are providing additional lead time for small businesses 
as discussed in Section III.F.2. The new standards are based on the 
same duty cycle that currently is in place for outboard and personal 
watercraft engines, as described in Section III.D. Section III.G 
discusses the technological feasibility of these standards in more 
detail.
    The new standards are largely based on the use of small catalytic 
converters

[[Page 59051]]

that can be packaged in the water-cooled exhaust systems typical for 
these applications. California ARB also adopted an HC+NOX 
standard of 5 g/kW-hr, starting with 2008 model year engines, but they 
did not adopt a standard for CO emissions. We believe the type of 
catalyst used to achieve the HC+NOX standard will also be 
effective in reducing CO emissions enough to meet the new standard with 
the proper calibrations, so no additional hardware will be needed to 
control CO emissions.
    Manufacturers have expressed concern that the implementation dates 
may be difficult to meet, for certain engines, due to anticipated 
changes in engine block designs produced by General Motors. As 
described in the Final RIA and in the docket, the vast majority of SD/I 
engines are based on automotive engine blocks sold by General 
Motors.\93\ There are five basic engine blocks used, and recently GM 
announced that it plans to discontinue production of the 4.3L and 8.1L 
engine blocks. GM anticipates that it will offer a 4.1L engine block 
and a 6.0L supercharged engine block to the marine industry as 
replacements. Full-run production of these new blocks is anticipated 
around the time that manufacturers will be making the transition to 
meeting new EPA emission standards. SD/I engine manufacturers have 
expressed concern that they will not be able to begin the engineering 
processes related to marinizing these engines, including the 
development of catalyst-equipped exhaust manifolds, until they see the 
first prototypes of the two replacement engine models. In addition, 
they are concerned that they do not have enough remaining years of 
sales of the 4.3L and 8.1L engines to justify the cost of developing 
catalyst-equipped exhaust manifolds for these engines and amortizing 
the costs of the required tooling while also developing the two new 
engine models.
---------------------------------------------------------------------------

    \93\ ``GM Product Changes Affecting SD/I Engine Marinizers,'' 
memo from Mike Samulski, EPA, to Docket EPA-HQ-OAR-2004-0008-0528.
---------------------------------------------------------------------------

    These are unique circumstances because the SD/I engine 
manufacturers' plans and products depend on the manufacture of the base 
engine by a company not directly involved in marine engine 
manufacturing. The SD/I sales represent only a small fraction of GM's 
total engine sales and thus did not weigh heavily in their decision to 
replace the existing engine blocks with two comparable versions during 
the timeframe when the SD/I manufacturers are facing new emission 
standards. SD/I manufacturers have stated that alternative engine 
blocks that meet their needs are not available in the interim, and that 
it will be cost-prohibitive for them to produce their own engine 
blocks.
    EPA's SD/I standards start to take effect with the 2010 model year, 
two years after the same standards apply in California. We believe a 
requirement to extend the California standards nationwide after a two-
year delay allows manufacturers adequate time to incorporate catalysts 
across their product lines as they are doing in California. Once the 
technology is developed for use in California, it will be available for 
use nationwide soon thereafter. In fact, one company currently 
certified to the California standards is already offering catalyst-
equipped SD/I engines nationwide. To address the challenge related to 
the transition away from the current 4.3 and 8.1 liter GM engines, we 
are including in the final rule a direct approval for a hardship 
exemption allowing manufacturers to produce these engines for one 
additional year without certifying them (see Sec.  1045.145). Starting 
in the 2011 model year, we would expect manufacturers to have worked 
things out such that they could certify their full product lineup to 
the applicable standards.
    Engines used on jet boats may have been classified under the 
original definitions as personal watercraft engines. As described in 
Section IV, engines used in jet boats or personal watercraft-like 
vessels that are four meters or longer will be classified as SD/I 
engines under the new definitions. Such engines subject to part 91 
today will therefore need to continue meeting EPA emission standards as 
personal watercraft engines through the 2009 model year under part 91, 
after which they will need to meet the new SD/I standards under part 
1045. This is another situation where the transition period discussed 
above may be helpful. In contrast, as discussed above, air boats have 
been classified as SD/I engines under EPA's discretionary authority and 
are not required to comply with part 91, but must meet the new emission 
standards for SD/I engines under part 1045.
    As described above, engines used solely for competition are not 
subject to emission standards, but many SD/I high-performance engines 
are sold for recreational use. SD/I high-performance engines have very 
high power outputs, large exhaust gas flow rates, and relatively high 
concentrations of hydrocarbons and carbon monoxide in the exhaust 
gases. As described in the Final Regulatory Impact Analysis, applying 
catalyst technology to these engines is not practical. California ARB 
initially adopted the same HC+NOX standards that apply for 
other SD/I engines with the expectation that manufacturers would simply 
rely on emission credits from other SD/I engines. We believe a credit-
based solution is not viable for small business manufacturers that do 
not have other products with which to exchange emission credits and 
California ARB has modified their rule to also address this concern.
    We are adopting standards for SD/I high-performance engines based 
on the level of control that can be expected from recalibration with 
electronically controlled fuel injection. These standards are phased in 
over a two-year transition period. In the 2010 model year, the 
HC+NOX emission standards are 20.0 g/kW-hr for engines at or 
below 485 kW and 25.0 g/kW-hr for bigger engines. In 2011 and later 
model years, the HC+NOX emission standards drop to 16.0 g/
kW-hr for engines at or below 485 kW and 22.0 g/kW-hr for bigger 
engines. The CO standard is 350 g/kW-hr for all SD/I high-performance 
engines. We believe this is achievable with more careful control of 
fueling rates, especially under idle conditions. Control of air-fuel 
ratios should result in improved emission control even after multiple 
rebuilds. Note that small-volume manufacturers may delay complying with 
the high-performance standards until 2013. In that year, the standard 
will be the same as the 2011 standards for larger manufacturers.
    We are adopting a variety of provisions to simplify the 
requirements for exhaust emission certification and compliance for SD/I 
high-performance engines, as described in Section IV.F. We have also 
chosen not to apply the Not-to-Exceed emission standards to these 
engines because we have very limited information on their detailed 
emission characteristics and we are concerned about extent of testing 
that would be required by the large number of affected engine 
manufacturers that are small businesses.
    We are also aware that there are some very small sterndrive or 
inboard engines. In particular, sailboats may have small propulsion 
engines for backup power. These engines will fall under the new 
definition of sterndrive/inboard engines, even though they are much 
smaller and may experience very different in-use operation. These 
engines generally have more in common with marine auxiliary engines or 
lawn and garden engines that are subject to land-based standards. We 
are therefore allowing manufacturers to use engines that have been 
certified to current land-

[[Page 59052]]

based emission standards for sterndrive and inboard installation, much 
like we are adopting for outboard and personal watercraft engines (see 
Sec.  1045.610).
    The emission standards apply at the range of atmospheric pressures 
represented by the test conditions specified in part 1065. This 
includes operation at elevated altitudes. Since we expect most or all 
SD/I engines to have three-way catalysts with closed-loop fuel control, 
these engines should be able to include the ability to automatically 
compensate for varying altitude. Manufacturers may choose to use an 
altitude kit for demonstrating compliance with emission standards at 
high altitudes as described for OB/PWC engines in Section IV.C.1. 
Manufacturers using altitude kits would need to take a variety of steps 
to describe their approach and ensure that such altitude kits are in 
fact being used with in-use engines operating at high altitudes, as 
described in Section IV.E.8.
(2) Not-to-Exceed Standards
    We are adopting emission standards that apply over an NTE zone. The 
NTE standards are in the form of a multiplier times the duty-cycle 
standard for HC+NOX and for CO (see Sec.  1045.105. Section 
III.D.2 gives an overview of the NTE standards and compliance 
provisions and describes the NTE test procedures.
    Manufacturers commented that certification to the NTE standards 
requires additional testing for engine models that are already 
certified to the new emission standards for California. In addition, 
they expressed concern that they may need to recalibrate existing 
engine models to meet the NTE standards. Manufacturers commented that 
this would not be possible by the date of the duty cycle standard. For 
engines already certified in California, manufacturers carry over 
preexisting certification test data from year to year. Manufacturers 
commented that additional time would be necessary to retest, and 
potentially recalibrate, these engines for certification to the NTE 
standards. To address these issues regarding lead time needed to retest 
these engines, we are not applying the NTE standards for 2010-2012 
model year engines that are certified using preexisting data (i.e., 
carryover engine families). For new engine models, manufacturers 
indicated that they will be able to perform the NTE testing and duty-
cycle testing as part of their efforts to certify to the new standards. 
Therefore the primary implementation date of 2010 applies to these 
engines. Beginning in the 2013 model year, all conventional SD/I 
engines must be certified to meet the NTE standards.
    This NTE approach complements the weighted modal emission tests 
included in this rule. These steady-state duty cycles and standards are 
intended to establish average emission levels over several discrete 
modes of engine operation. Because it is an average, manufacturers 
design their engines with emission levels at individual points varying 
as needed to maintain maximum engine performance and still meet the 
engine standard. The NTE limit will be an additional requirement. It is 
intended to ensure that emission controls function with relative 
consistency across the full range of expected operating conditions.
(3) Emission Credit Programs
(a) Averaging, Banking, and Trading
    We are adopting provisions for averaging, banking, and trading of 
emission credits for conventional SD/I engines to meet the new 
HC+NOX and CO standards (see Sec.  1045.105 and part 1045, 
subpart H). See Section VII.C.5 of the preamble to the proposed rule 
for a description of general provisions related to averaging, banking, 
and trading programs. A description of the ABT provisions for the new 
SD/I standards is provided in this section.
    EPA proposed that manufacturers would not be able to earn credits 
for one pollutant while using credits to comply with the emissions 
standard for another pollutant. The proposed restriction was modeled on 
similar requirements in other ABT programs where there was concern that 
a manufacturer could use technologies to reduce one pollutant while 
increasing another pollutant. Manufacturers are expected to comply with 
the new SD/I standards by using a combination of improved engine 
designs and catalysts. This should result in reductions in both 
HC+NOX emissions and CO emissions compared to current 
designs. While the technology is expected to reduce both 
HC+NOX emissions and CO emissions, there could be situations 
where the engines are capable of meeting one of the emission standards 
but not the other. EPA does not want to preclude such engines from 
being able to certify using the provisions of the ABT program and is 
therefore dropping the proposed restriction from the final rule.
    Credit generation and use is calculated based on the FEL of the 
engine family and the standard. We are adopting FEL caps to prevent the 
sale of very high-emitting engines. The HC+NOX FEL cap for 
conventional SD/I engines is 16 g/kW-hr while the CO FEL cap is 150 g/
kW-hr and applies starting in 2010, except as noted below. These FEL 
caps represent the average baseline emission levels of SD/I engines, 
based on data described in the Final RIA. However, through the 2013 
model year we are separately allowing small-volume engine manufacturers 
to certify their four-stroke conventional SD/I engines without testing 
by assuming an HC+NOX FEL of 22.0 g/kW-hr and a CO FEL of 
150 g/kW-hr. Manufacturers using this provision would not be subject to 
the FEL cap for those engine families.
    We are specifying that SD/I engines are in a separate averaging set 
from OB/PWC engines, with a limited exception for certain jet boat 
engines as described below. This means that credits earned by SD/I 
engines may be used only to offset higher emissions from other SD/I 
engines. Likewise, credits earned by OB/PWC engines may be used only to 
offset higher emissions from other OB/PWC engines (except where we 
allow those credits to be used for certain jet boat engines).
    Emission credits earned for SD/I engines will have an indefinite 
credit life with no discounting. We consider these emission credits to 
be part of the overall program for complying with the new standards. 
Given that we may consider further reductions beyond these standards in 
the future, we believe it will be important to assess the ABT credit 
situation that exists at the time any further standards are considered. 
Emission credit balances will be part of the analysis for determining 
the appropriate level and timing of new standards, consistent with the 
statutory requirement to establish standards that represent the 
greatest degree of emission reduction achievable, considering cost, 
safety, lead time, and other factors. If we were to allow the use of 
credits generated under the standards adopted in this rule to meet more 
stringent standards adopted in a future rulemaking, we may need to 
adopt emission standards at more stringent levels or with an earlier 
start date than we would absent the continued use of existing emission 
credits, depending on the level of emission credit banks. 
Alternatively, we may adopt future standards without allowing the use 
of existing emission credits.
    Finally, manufacturers may include as part of their federal credit 
calculation the sales of engines in California as long as they don't 
separately account for those emission credits under the California 
regulations. We originally proposed to exclude engines sold in 
California that are subject to the California ABR standards. However, 
we

[[Page 59053]]

consider California's current HC+NOX standards to be 
equivalent to those we are adopting in this rulemaking, so we would 
expect a widespread practice of producing and marketing 50-state 
products. Therefore, as long as a manufacturer is not generating 
credits under California's regulations for SD/I engines, we would allow 
manufacturers to count those engines when calculating credits under 
EPA's program. This is consistent with how EPA allows credits to be 
calculated in other nonroad sectors, such as recreational vehicles.
(b) Early-Credit Approaches
    We are adopting an early-credit program in which a manufacturer 
could earn emission credits before 2010 with early introduction of 
emission controls designed to meet the new standards (see Sec.  
1045.145). For engines produced by small-volume SD/I manufacturers that 
are eligible for the one-year delay described in Section III.F.2, early 
credits could be earned before 2011. As proposed, use of these early 
credits would be limited to the first three years that the new 
standards apply. While we believe adequate lead time is provided to 
meet the new standards, we recognize that flexibility in timing could 
help some manufacturers--particularly small manufacturers--to meet the 
new standards. Other manufacturers that are able to comply early on 
certain models will be better able to transition their full product 
line to the new standards by spreading out the transition over two 
years or more. Under this approach, we anticipate that manufacturers 
will generate credits through the use of catalysts.
    Manufacturers will generate these early credits based on the 
difference between the measured emission level of the clean engines and 
an assigned baseline level (16 g/kW-hr HC+NOX and 150 g/kW-
hr CO). These assigned baseline levels are based on data presented in 
Chapter 4 of the Final RIA representing the average level observed for 
uncontrolled engines. We also provide bonus credits for any small-
volume SD/I engine manufacturer that certifies early to the new 
standards to provide a further incentive for introducing catalysts in 
SD/I engines. The bonus credits will take the form of a multiplier 
times the earned credits. The multipliers are 1.25 for being one year 
early, 1.5 for being two years early, and 2.0 for being three years 
early. For example, a small-volume manufacturer certifying an engine to 
5.0 g/kW-hr HC+NOX in 2009 (two years early) will get a 
bonus multiplier of 1.5. Early HC+NOX credits will therefore 
be calculated using the following equation: credits [grams] = (16-5) mu 
Power [kW] x Useful Life [hours] x Load Factor x 1.5. The specified 
load factor is 0.207, which is currently used in the OB/PWC 
calculations.
    To earn these early credits, the engine must meet both the new 
HC+NOX standard and the new CO standard. These early credits 
will be treated the same as emission credits generated after the 
emission standards start to apply. This approach provides an incentive 
for manufacturers to pull ahead significantly cleaner technologies. We 
believe such an incentive will lead to early introduction of catalysts 
on SD/I engines and help promote earlier market acceptance of this 
technology. We believe this early credit program will allow 
manufactures to comply with the new standards in an earlier time frame 
because it allows them to spread out their development resources over 
multiple years. To ensure that manufacturers do not generate credits 
for meeting standards that already apply, no EPA credits will be 
generated for engines that are produced for sale in California.
(c) Jet Boats
    Sterndrive and inboard vessels are typically propelled by 
traditional SD/I engines based on automotive engine blocks. As 
explained in Section IV, we are changing the definition of personal 
watercraft to ensure that engines used on jet boats will no longer be 
classified as personal watercraft engines but instead as SD/I engines 
because jet boats are more like SD/I vessels. However, manufacturers in 
many cases make these jet boats by installing an engine also used in 
outboard or personal watercraft applications (less than 4 meters in 
length) and coupling the engine to a jet drive for propelling the jet 
boat. Thus, manufacturers of outboard or personal watercraft engines 
may also manufacture the same or a similar engine for use on what we 
consider to be a jet boat.
    Engines used in jet boats will be subject to SD/I emission 
standards. However, we are providing some flexibility in meeting the 
new emission standards for jet boat engines because they are currently 
designed to use engines derived from OB/PWC applications and because of 
their relatively low sales volumes. We will allow manufacturers to use 
emission credits generated from OB/PWC engines to demonstrate that 
their jet boat engines meet the new HC+NOX and CO standards 
for SD/I engines if the same or similar engine is certified as an 
outboard or personal watercraft engine, and if the majority of units 
sold in the United States from those related engine families are sold 
for use as outboard or personal watercraft engines (see Sec.  1045.660 
and Sec.  1045.701). Manufacturers will need to group SD/I engines used 
for jet boats in a separate engine family from the outboard or personal 
watercraft engines to ensure proper labeling and calculation of 
emission credits, but manufacturers could rely on emission data from 
the same prototype engine for certifying both engine families.
    Finally, manufacturers of jet boat engines subject to SD/I 
standards and using credits from outboard or personal watercraft 
engines must certify these jet boat engines to an FEL that meets or 
exceeds the newly adopted standards for outboard and personal 
watercraft engines. This limits the degree to which manufacturers may 
take advantage of emission credits to produce engines that are emitting 
at higher levels than competitive engines.
(d) SD/I High-Performance Engines
    For the reasons described in Section III.C.1, the standards being 
adopted for SD/I high-performance engines are less stringent than 
originally proposed. As a result, we are not including the SD/I high-
performance engines in the ABT program. Manufacturers are required to 
meet the emission standards for SD/I high-performance engines without 
using emission credits.
(4) Crankcase Emissions
    Due to blowby of combustion gases and the reciprocating action of 
the piston, exhaust emissions can accumulate in the crankcase. 
Uncontrolled engine designs route these vapors directly to the 
atmosphere. Closed crankcases have become standard technology for 
automotive engines and for outboard and personal watercraft engines. 
Manufacturers generally do this by routing crankcase vapors through a 
valve into the engine's air intake system. We are requiring 
manufacturers to prevent crankcase emissions from SD/I marine engines 
(see Sec.  1045.115). Because automotive engine blocks are already 
tooled for closed crankcases, the cost of adding a valve for positive 
crankcase ventilation is small for SD/I engines. Even with non-
automotive blocks, the tooling changes necessary for closing the 
crankcase are straightforward.
(5) Durability Provisions
    We rely on pre-production certification, and other programs, to 
ensure that engines control emissions throughout their intended 
lifetime of operation. Section VII of the preamble to

[[Page 59054]]

the proposed rule describes how we require manufacturers to incorporate 
laboratory aging in the certification process, how we limit the extent 
of maintenance that manufacturers may specify to keep engines operating 
as designed, and other general provisions related to certification. The 
following sections describe additional provisions that are specific to 
SD/I engines.
(a) Useful Life
    We are specifying a useful life period of ten years or 480 hours of 
engine operation, whichever comes first (see Sec.  1045.105). 
Manufacturers are responsible for meeting emission standards during 
this useful life period. This is consistent with the requirements 
adopted by California ARB. We are further requiring that the 480-hour 
useful life period is a baseline value, which may be extended if data 
show that the average service life for engines in the family is longer. 
For example, we may require that the manufacturer certify the engine 
over a longer useful life period that more accurately represents the 
engines' expected operating life if we find that in-use engines are 
typically operating substantially more than 480 hours. This approach is 
similar to what we adopted for recreational vehicles.
    For SD/I high-performance engines, we are specifying a useful life 
of 150 hours or 3 years for engines at or below 485 kW and a useful 
life of 50 hours or 1 year for engines above 485 kW. Due to the high 
power and high speed of these engines, mechanical parts are often 
expected to wear out quickly. For instance, one manufacturer indicated 
that some engines above 485 kW have scheduled head rebuilds between 50 
and 75 hours of operation. These useful life values are consistent with 
the California ARB regulations for SD/I high-performance engines.
    Some SD/I engines below 373 kW may be designed for high power 
output even though they do not reach the power threshold to qualify as 
SD/I high-performance engines. Because they do not qualify for the 
shorter useful life that applies to SD/I high-performance engines, they 
will be subject to the default value of 480 hours for other SD/I 
engines. However, to address the limited operating life for engines 
that are designed for especially high power output, we are allowing 
manufacturers to request a shorter useful life for such an engine 
family based on information showing that engines in the family rarely 
operate beyond the requested shorter period. For example, if engines 
designed for extremely high-performance are typically rebuilt after 250 
hours of operation, this will form the basis for establishing a shorter 
useful life period for those engines. See Sec.  1045.105 for additional 
detail in establishing a shorter useful life.
    Jet boat engines that are certified in conjunction with outboard or 
personal watercraft engine families are subject to the shorter useful 
life period that applies for outboard or personal watercraft engines. 
This is necessary to prevent a situation where the original 
certification data is insufficient for certifying the jet boat engines 
without some further testing or analysis to show that the engines meet 
emission standards over a longer period.
(b) Warranty Periods
    We are requiring that manufacturers provide an emission-related 
warranty during the first three years or 480 hours of engine operation, 
whichever comes first (see Sec.  1045.120). This warranty period 
applies equally to emission-related electronic components on SD/I high-
performance engines. However, we are allowing shorter warranty periods 
(in hours) for emission-related mechanical components on SD/I high-
performance engines because these parts are expected to wear out more 
rapidly than comparable parts on traditional SD/I engines. 
Specifically, we are specifying a warranty period for emission-related 
mechanical components of 3 years or 150 hours for high-performance 
engines between 373 and 485 kW, and 1 year or 50 hours for high-
performance engines above 485 kW. These warranty periods are the same 
as those adopted by the California ARB.
    If the manufacturer offers a longer warranty for the engine or any 
of its components at no additional charge, we require that the 
emission-related warranty for the respective engine or component must 
be extended by the same amount. The emission-related warranty includes 
components related to controlling exhaust, evaporative, and crankcase 
emissions from the engine. These warranty requirements are consistent 
with provisions that apply in most other programs for nonroad engines.
(6) Engine Diagnostics
    We are requiring that manufacturers design their catalyst-equipped 
SD/I engines to diagnose malfunctioning emission control systems 
starting with the introduction of the final standards (see Sec.  
1045.110). As discussed in the Final RIA, three-way catalyst systems 
with closed-loop fueling control work well only when the air-fuel 
ratios are controlled to stay within a narrow range around 
stoichiometry. Worn or broken components or drifting calibrations over 
time can prevent an engine from operating within the specified range. 
This increases emissions and can lead to significantly increased fuel 
consumption and engine wear. The operator may or may not notice the 
change in the way the engine operates. We are not requiring similar 
diagnostic controls for OB/PWC engines because the anticipated emission 
control technologies for these other applications are generally less 
susceptible to drift and gradual deterioration. We have adopted similar 
diagnostic requirements for Large SI engines operating in forklifts and 
other industrial equipment that also use three-way catalysts to meet 
emission standards.
    This diagnostic requirement focuses solely on maintaining 
stoichiometric control of air-fuel ratios. This kind of design detects 
problems such as broken oxygen sensors, leaking exhaust pipes (upstream 
of sensors and catalysts), fuel deposits, and other things that require 
maintenance to keep the engine at the proper air-fuel ratio.
    Diagnostic monitoring provides a mechanism to help keep engines 
tuned to operate properly, with benefits for both controlling emissions 
and maintaining optimal performance. There are currently no inspection 
and maintenance programs for marine engines, so the most important 
variable in making the emission control and diagnostic systems 
effective is getting operators to repair the engine when the diagnostic 
light comes on. This calls for a relatively simple design to avoid 
signaling false failures as much as possible. The diagnostic 
requirements in this final rule, therefore, focus on detecting 
inappropriate air-fuel ratios, which is the most likely failure mode 
for three-way catalyst systems. The malfunction indicator must go on 
when an engine runs for a full minute under closed-loop operation 
without reaching a stoichiometric air-fuel ratio.
    California ARB has adopted diagnostic requirements for SD/I engines 
that involve a more extensive system for monitoring catalyst 
performance and other parameters. We will accept a California-approved 
system as meeting EPA requirements. The final regulations direct 
manufacturers to follow standard practices defined in documents adopted 
recently by the Society of Automotive Engineers in SAE J1939-5. See 
Sec.  1045.110 for detailed information.

[[Page 59055]]

D. Test Procedures for Certification

(1) General Provisions
    The marine engine test procedures are generally the same for both 
SD/I and OB/PWC engines. This involves laboratory measurement of 
emissions while the engine operates over the ISO E4 duty cycle. This is 
a five-mode steady-state duty cycle including an idle mode and four 
modes lying on a propeller curve with an exponent of 2.5, as shown in 
Appendix II to part 1045. The International Organization for 
Standardization (ISO) intended for this cycle to be used for 
recreational spark-ignition marine engines installed in vessels up to 
24 m in length. Because most or all vessels over 24 m have diesel 
engines, we believe the E4 duty cycle is most appropriate for SD/I 
engines covered by this rule. There may be some spark-ignition engines 
installed in vessels somewhat longer than 24 m, but we believe the E4 
duty cycle is no less appropriate in these cases. See Section IV.D for 
a discussion of adjustments to the test procedures related to the 
migration to 40 CFR part 1065, testing with a ramped-modal cycle, 
determining maximum test speed for denormalizing the duty cycle, and 
testing at high altitude.
    The E4 duty cycle includes a weighting of 40 percent for idle. For 
SD/I high-performance engines, commenters suggested that these engines 
typically have substantial auxiliary loads and parasitic losses even 
when the vessel does not need propulsion power. While the specified 
duty cycle for SD/I high-performance engines is identical to that for 
other Marine SI engines, we would expect manufacturers to use the 
provisions of Sec.  1065.510(b)(3) to target a reference torque of 15 
percent instead of zero at idle.
(2) Not-to-Exceed Test Procedures and Standards
    We are adopting not-to-exceed (NTE) requirements similar to those 
established for marine diesel engines. Engines will be required to meet 
the NTE standards during normal in-use operation.
(a) Concept
    Our goal is to achieve control of emissions over a wide range of 
ambient conditions and over the broad range of in-use speed and load 
combinations that can occur on a marine engine. This will ensure real-
world emission control, rather than just controlling emissions under 
certain laboratory conditions. This allows us to evaluate an engine's 
compliance during in-use testing without removing the engine from the 
vessel because the NTE requirements establish an objective standard and 
an easily implemented test procedure. Our traditional approach has been 
to set a numerical standard on a specified test procedure and rely on 
the additional prohibition of defeat devices to ensure in-use control 
over a broad range of operation not included in the test procedure. We 
are establishing the same prohibition on defeat devices for OB/PWC and 
SD/I engines (see Sec.  1045.115).
    No single test procedure or test cycle can cover all real-world 
applications, operations, or conditions. Yet to ensure that emission 
standards are providing 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 emission controls are employed 
during real-world operation, not just under laboratory testing 
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. We believe using the traditional approach, 
i.e., using only a standardized laboratory test procedure and test 
cycle, makes it difficult to ensure that engines will operate with the 
same level of emission control in use as in the laboratory.
    Because the duty cycle we have adopted uses only five modes on an 
average propeller curve to characterize marine engine operation, we are 
concerned that an engine designed to that duty cycle will not 
necessarily perform the same way over the range of speed and load 
combinations seen on a boat. This duty cycle is based on an average 
propeller curve, but a marine propulsion engine may never be fitted 
with an ``average propeller.'' For instance, an engine installed in a 
specific boat with a particular propeller may operate differently based 
on the design of the boat and how heavily the boat is loaded, among 
other factors.
    To ensure that engines control emissions over a wide range of speed 
and load combinations normally seen on boats, we are including a zone 
under the engine's power curve where the engine may not exceed a 
specified emission limit (see Sec.  1045.105 and Sec.  1045.515). This 
limit will apply to all regulated pollutants during steady-state 
operation. In addition, we are requiring that a wide range of real 
ambient conditions be included in testing with this NTE zone. The NTE 
zone, limit, and ambient conditions are described below.
    We believe there are significant advantages to establishing NTE 
standards. The final NTE test procedure is flexible, so it can 
represent the majority of in-use engine operation and ambient 
conditions. The NTE approach thus takes all 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 because either the engines will have to be removed from the 
vessel or care will have to be taken to achieve laboratory-type 
conditions on the vessel. With the NTE approach, in-use testing and 
compliance become much easier since emissions may be sampled during 
normal boating. By establishing an objective measurement, this approach 
makes enforcement of defeat device provisions easier and provides more 
certainty to the industry.
    Even with the NTE requirements, we believe it is still appropriate 
to retain standards based on the steady-state duty cycle. This is the 
standard that we expect the certified marine engines to meet on average 
in use. The NTE testing is focused more on maximum emissions for 
segments of operation and, in most cases, will not require additional 
technology beyond what is used to meet the final standards. In some 
cases, the calibration of the engine may need to be adjusted. We 
believe that basing the emission standards on a distinct cycle and 
using the NTE zone to ensure in-use control creates a comprehensive 
program.
    We believe the technology used to meet the standards over the five-
mode duty cycle, when properly calibrated, will meet the caps that 
apply across the NTE zone. We therefore do not expect the final NTE 
standards to cause manufacturers to need additional hardware. We 
believe the NTE standard will not result in a large amount of 
additional testing, because these engines should be designed to perform 
as well in use as they do over the five-mode test. However, our cost 
analysis in the Final RIA accounts for some additional testing, 
especially in the early years, to provide manufacturers with assurance 
that their engines will meet the NTE requirements.
(b) Shape of NTE Zone
    We developed the NTE zone based on the range of conditions that 
these engines typically see in use. Manufacturers collected data on 
several engines installed on vessels and operated under light and heavy 
load. Chapter 4 of the Final RIA presents this data and describes the 
development of the boundaries and conditions

[[Page 59056]]

associated with the NTE zone. Although significant in-use engine 
operation occurs at low speeds, we are excluding operation below 40 
percent of maximum test speed because brake-specific emissions increase 
dramatically as power approaches zero. An NTE limit for low-speed or 
low-power operation will be very hard for manufacturers and EPA to 
implement in a meaningful way.
    We anticipate that most, if not all SD/I engines subject to the NTE 
standards will use three-way catalytic controls to meet the exhaust 
emission standards. For that reason, this discussion focuses on the NTE 
zone and subzones for catalyst-equipped engines. Catalysts are most 
effective when the fuel-air ratio in the exhaust is near stoichiometry, 
and engine manufacturers use closed-loop electronic control to monitor 
and maintain the proper fuel-air ratio in the exhaust for optimum 
catalyst efficiency. However, at high power, engine manufacturers must 
increase the fueling rate to reduce the exhaust temperatures. 
Otherwise, if the exhaust temperature becomes too high, exhaust valves 
and catalysts may be damaged. During rich, open-loop operation at high 
power, the catalyst is oxygen-limited and less effective at oxidizing 
HC and CO. To address the issue of open-loop catalyst efficiency, we 
created a high power subzone for catalyst-equipped engines. The shape 
of this subzone is based on data presented in the RIA on engine 
protection strategies.
    Figure III-1 illustrates the final NTE zone for engines equipped 
with catalysts. Section IV.D.5 discusses the NTE test procedures and 
limits for non-catalyzed engines. The NTE zones and standards apply 
depending on whether the engine has a catalyst or not, so outboard or 
personal watercraft engines may be subject to the NTE approach 
described in this section and sterndrive/inboard engines may be subject 
to the NTE provisions described in Section IV.D.5. However, we expect 
these situations to be rather uncommon.
[GRAPHIC] [TIFF OMITTED] TR08OC08.061

    The final regulations allow manufacturers to request approval for 
adjustments to the size and shape of the NTE zone for certain engines 
if they can show that the engine will not normally operate outside the 
revised NTE zone in use (see Sec.  1045.515). We do not want 
manufacturers to go to extra lengths to design and test their engines 
to control emissions for operation that will not occur in use. However, 
manufacturers will still be responsible for all operation of an engine 
on a vessel that will reasonably be expected to be seen in use, and 
they will be responsible for ensuring that their specified operation is 
indicative of real-world operation. EPA testing may include any normal 
operation observed on in-use vessels, consistent with the applicable 
regulatory provisions. In addition, if a manufacturer designs an engine 
for operation at speeds and loads outside of the NTE zone, the 
manufacturer is required to notify us so the NTE zone used to comply 
with the applicable standards can be modified appropriately to include 
this operation for that engine family.
(c) NTE Emission Limits
    We are establishing NTE limits for the individual subzones shown in 
Figure III-1 above based on data collected from several SD/I engines 
equipped with catalysts. These data and our analysis are presented in 
Chapter 4 of the Final RIA. See Section IV.D.5 for a discussion

[[Page 59057]]

of NTE limits for engines not equipped with catalysts.
    For catalyst-equipped engines, the largest contribution of 
emissions over the 5-mode duty cycle comes from open-loop operation at 
Mode 1. In addition, the idle point (Mode 5) is weighted 40 percent in 
the 5-mode duty cycle, but not included in the NTE zone. For this 
reason, brake-specific emissions throughout most of the NTE zone are 
less than the weighted average from the steady-state testing. For most 
of the NTE zone, we are therefore establishing a limit equal to the 
duty-cycle standard (i.e., NTE multiplier = 1.0). This means that these 
engines may not have steady-state emissions at any point inside the NTE 
zone, except in the subzone around full-load operation, that exceed the 
HC+NOX or CO emission standards.
    Emission data on catalyst-equipped engines also show higher 
emissions near full-power operation. As discussed above, this is due to 
the need for richer fuel-air ratios under high-power operation to 
protect the engines from overheating. Under rich conditions, a three-
way catalyst does not effectively oxidize CO emissions. Therefore, we 
are not setting an NTE limit in Subzone 1 for CO. Some 
HC+NOX control is expected in Subzone 1 because a three-way 
catalyst will efficiently reduce NOX emissions under rich 
conditions. Similar to CO, HC emissions are not effectively oxidized in 
a catalyst during rich operation. We are therefore establishing a 
higher NTE limit of 1.5 for HC+NOX in Subzone 1. This limit 
is based on emission control performance during open-loop operation.
(d) Excluded Operation
    As with marine diesel engines, only steady-state operation is 
included for NTE testing (see Sec.  1045.515). Steady-state operation 
will generally mean setting the throttle (or speed control) in a fixed 
position. We believe most operation with Marine SI engines involves 
nominally steady-state operator demand. It is true that boats often 
experience rapid accelerations, such as with water skiing. However, 
boats are typically designed for planing operation at relatively high 
speeds. This limits the degree to which we would expect engines to 
experience frequent accelerations during extended operation. Also, 
because most of the transient events involve acceleration from idle to 
reach a planing condition, most transient engine operation is outside 
the NTE zone and will therefore not be covered by NTE testing anyway. 
Moreover, we believe OB/PWC and SD/I engines designed to comply with 
steady-state NTE requirements will be using technologies that also work 
effectively under the changing speed and load conditions that may 
occur. If we find there is substantial transient operation within the 
NTE zone that causes significantly increased emissions from installed 
engines, we will revisit this provision in the future.
    We are aware that engines may not be able to meet emission 
standards under all conditions, such as times when emission control 
must be compromised for startability or safety. As with outboard and 
personal watercraft engines, NTE testing excludes engine starting and 
warm-up. We are allowing manufacturers to design their engines to 
utilize engine protection strategies that will not be covered by defeat 
device provisions or NTE standards. This is analogous to the tampering 
exemptions incorporated into 40 CFR 1068.101(b)(1) to address 
emergencies. We believe it is appropriate to allow manufacturers to 
design their engines with ``limp-home'' capabilities to prevent a 
scenario where an engine fails to function, leaving an operator on the 
water without any means of propulsion.
(e) Ambient Conditions
    Variations in ambient conditions can affect emissions. Such 
conditions include air temperature, water temperature, barometric 
pressure, and humidity. We are applying the comparable ranges for these 
variables as for marine diesel engines (see Sec.  1045.515). Within the 
specified ranges, there is no provision to correct emission levels to 
standard conditions. Outside of the specified ranges, emissions may be 
corrected back to the nearest end of the range using good engineering 
practice. The specified ranges are 13 to 35 [deg]C (55 to 95 [deg]F) 
for ambient air temperature, 5 to 27 [deg]C (41 to 80 [deg]F) for 
ambient water temperature, and 94.0 to 103.325 kPa for atmospheric 
pressure. NTE testing may take place at any humidity level, but 
manufacturers may correct for humidity effects as described in Sec.  
1065.670.
(f) Measurement Methods
    While it may be easier to test outboard engines in the laboratory, 
there is a strong advantage to using portable measurement equipment to 
test SD/I engines and personal watercraft without removing the engine 
from the vessel. Field testing will also provide a much better means of 
measuring emissions to establish compliance with the NTE standards, 
because it is intended to ensure control of emissions during normal in-
use operation that may not occur during laboratory testing over the 
specified duty cycle. We are adopting field-testing provisions for all 
SD/I engines. These field-testing procedures are described further in 
Section IV.E.2.
    A parameter to consider is the minimum sampling time for field 
testing. A longer period allows for greater accuracy, due mainly to the 
smoothing effect of measuring over several transient events. On the 
other hand, an overly long sampling period can mask areas of engine 
operation with poor emission control characteristics. To balance these 
concerns, we are applying a minimum sampling period of 30 seconds. This 
is consistent with the requirement for marine diesel engines. Spark-
ignition engines generally don't have turbochargers and they control 
emissions largely by maintaining air-fuel ratio. Spark-ignition engines 
are therefore much less prone to consistent emission spikes from off-
cycle or unusual engine operation. We believe the minimum 30 second 
sampling time will ensure sufficient measurement accuracy and will 
allow for meaningful measurements.
    We do not specify a maximum sampling time. We expect manufacturers 
testing in-use engines to select an approximate sampling time before 
measuring emissions. However, for any sampling period, each 30-second 
period of operation would be subject to the NTE standards. For example, 
manufacturers may measure emissions for ten minutes. The engine's 
emissions over the ten-minute period would need to meet the applicable 
NTE standards, but each 30-second period of operation during the ten-
minute period should also be evaluated to determine that the engine 
complies.
(g) Certification
    We are requiring that manufacturers state in their application for 
certification that their engines will comply with the NTE standards 
under any nominally steady-state combination of speeds and loads within 
the new NTE zone (see Sec.  1045.205). The manufacturer must also 
provide a detailed description of all testing, engineering analysis, 
and other information that forms the basis for the statement. This 
statement will be based on testing and, if applicable, other research 
that supports such a statement, consistent with good engineering 
judgment. We will review the basis for this statement during the 
certification process. For marine diesel engines, we have provided 
guidance that manufacturers may demonstrate compliance with NTE 
standards by testing their engines at a number of standard points 
throughout the NTE zone. In addition, manufacturers must test at a few 
random points chosen by EPA prior to the testing.

[[Page 59058]]

E. Additional Certification and Compliance Provisions

(1) Production-Line Testing
    There are several factors that have led us to conclude that we 
should not finalize production-line testing requirements for SD/I 
engines in this rulemaking. First, California ARB has not yet adopted 
production-line testing requirements for these engines. Second, the 
companies producing these engines are predominantly small businesses. 
Third, the relatively short useful life and small sales volumes limit 
the overall emissions effect from these engines. Fourth, we are aware 
that marine engines may need additional setup time for testing to 
simulate the marine configuration. We do not consider any of these 
issues to be fundamental, but we believe it is best to defer further 
consideration of a requirement for production-line testing until a 
later rulemaking. This would allow us to better understand the degree 
of compliance with emission standards, the effectiveness of diagnostic 
controls, and California ARB's interest in requiring production-line 
testing. However, we may require the manufacturer to conduct a 
reasonable degree of testing under Clean Air Act section 208 if we have 
reason to believe that an engine family does not conform to the 
regulations. This testing may take the form of a Selective Enforcement 
Audit.
(2) In-Use Testing
    Manufacturers of OB/PWC engines have been required to test in-use 
engines to show that they continue to meet emission standards. We 
contemplated a similar requirement for SD/I engines, but have decided 
not to adopt a requirement for a manufacturer-run in-use testing 
program at this time. Manufacturers have pointed out that it would be 
very difficult to identify a commercial fleet of boats that could be 
set up to operate for hundreds of hours because it is very uncommon for 
commercial operators to have significant numbers of SD/I vessels. Where 
there are commercial fleets of vessels that may be conducive to 
accelerated in-use service accumulation, these vessels generally use 
outboard engines. Manufacturers could instead hire drivers to operate 
the boats, but this may be cost-prohibitive. There is also a question 
about access to the engines for testing. If engines need to be removed 
from vessels for testing in the laboratory for some reason, it is 
unlikely that owners will cooperate.
    While we are not establishing a program to require manufacturers to 
routinely test in-use engines, the Clean Air Act allows us to perform 
our own testing at any time with in-use engines to evaluate whether 
they continue to meet emission standards throughout the useful life. 
This may involve either laboratory testing or in-field testing with 
portable measurement equipment. For laboratory tests, we could evaluate 
compliance with either the duty-cycle standards or the not-to-exceed 
standards. For testing with engines that remain installed on marine 
vessels, we will evaluate compliance with the not-to-exceed standards. 
In addition, as described above for production-line testing, we may 
require manufacturers to perform a reasonable degree of testing. This 
may include testing in-use engines.
(3) Certification Fees
    Under our current certification program, manufacturers pay a fee to 
cover the costs for various certification and other compliance 
activities associated with implementing the emission standards. As 
explained below, we are assessing EPA's compliance costs associated 
with SD/I engines based on EPA's existing fees regulation. Section VI 
describes a new fees category we are adopting, based on the cost study 
methodology used in establishing EPA's original fees regulation, for 
costs related to the final evaporative emission standards for both 
vessels and equipment that are subject to this final rule.
    EPA established a fee structure by grouping together various 
manufacturers and industries into fee categories, with an explanation 
that separation of industries into groups was appropriate to tailor the 
applicable fee to the level of effort expected for EPA to oversee the 
range of certification and compliance responsibilities (69 FR 26222, 
May 11, 2004). As part of this process, EPA conducted a cost analysis 
to determine the various compliance activities associated with each fee 
category and EPA's associated annual cost burden. Once the total EPA 
costs were determined for each fee category, the total number of 
certificates involved within a fee category was added together and 
divided into the total costs to determine the appropriate assessment 
for each anticipated certificate.\94\ One of the fee categories created 
was for ``Other Engines and Vehicles,'' which includes marine engines 
(both compression-ignition and spark-ignition), nonroad spark-ignition 
engines (above and below 19 kW), locomotive engines, recreational 
vehicles, heavy-duty evaporative systems, and heavy-duty engines 
certified only for sale in California. These engine and vehicle types 
were grouped together because EPA planned a more basic certification 
review than, for example, for light-duty motor vehicles.
---------------------------------------------------------------------------

    \94\ See Cost Analysis Document at p. 21 associated with the 
proposed fees rule (http://www.epa.gov/otaq/fees.htm).
---------------------------------------------------------------------------

    EPA determined in the final fees rulemaking that it was premature 
to assess fees for SD/I engines since they were not yet subject to 
emission standards. The fee calculation nevertheless includes a 
projection that there will eventually be 25 certificates of conformity 
annually for SD/I engines. We are now formally including SD/I engines 
in the ``Other Engines and Vehicles'' category such that the baseline 
fee is $839 for each certificate of conformity. Note that we will 
continue to update assessed fees each year, so the actual fee in 2010 
and later model years will depend on these annual calculations (see 
Sec.  1027.105).
(4) Special Provisions Related to Partially Complete Engines
    It is common practice for one company to produce engine blocks that 
a second company modifies for use as a marine engine. Since our 
regulations prohibit the sale of uncertified engines, we are 
establishing provisions to clarify the status of these engines and 
defining a path by which these engines can be handled without violating 
the regulations. See Section VIII.C.1 for more information.
(5) Use of Engines Already Certified to Other Programs
    In some cases, manufacturers may want to use engines already 
certified under our other programs. Engines certified to the emission 
standards for highway applications in part 86 or Large SI applications 
in part 1048 are meeting more stringent standards. We are therefore 
allowing the pre-existing certification to be valid for engines used in 
marine applications, on the condition that the engine is not changed 
from its certified configuration in any way (see Sec.  1045.605). 
Manufacturers will need to demonstrate that fewer than five percent of 
the total sales of the engine model are for marine applications. There 
are also a few minor notification and labeling requirements to allow 
for EPA oversight of this provision. We are adopting similar provisions 
for engines below 19 kW that are certified to Small SI standards as 
described in Section III.C.1.

[[Page 59059]]

(6) Import-specific Information at Certification
    We are requiring additional information to improve our ability to 
oversee compliance related to imported engines (see Sec.  1045.205). In 
the application for certification, we require the following additional 
information: (1) The port or ports at which the manufacturer has 
imported engines over the previous 12 months, (2) the names and 
addresses of the agents the manufacturer has authorized to import the 
engines, and (3) the location of the test facilities in the United 
States where the manufacturer will test the engines if we select them 
for testing under a selective enforcement audit. See Section 1.3 of the 
Summary and Analysis of Comments for further discussion related to 
naming test facilities in the United States.
(7) Alternate Fuels
    See Section IV.E.7 for a discussion of requirements that apply to 
spark-ignition SD/I engines that operate on fuels other than gasoline.

F. Small-Business Provisions

(1) Small Business Advocacy Review Panel
    On June 7, 1999, we convened a Small Business Advocacy Review Panel 
under section 609(b) of the Regulatory Flexibility Act as amended by 
the Small Business Regulatory Enforcement Fairness Act of 1996 (RFA). 
The purpose of the Panel was to collect the advice and recommendations 
of representatives of small entities that could be affected by the 
proposal and to report on those comments and the Panel's findings and 
recommendations as to issues related to the key elements of the Initial 
Regulatory Flexibility Analysis under section 603 of the Regulatory 
Flexibility Act. We re-convened the Panel on August 17, 2006 to update 
our review for the proposal. The Panel reports have been placed in the 
rulemaking record for this final rule. Section 609(b) of the Regulatory 
Flexibility Act directs the review Panel to report on the comments of 
small entity representatives and make findings as to issues related to 
certain elements of an initial regulatory flexibility analysis (IRFA) 
under RFA section 603. Those elements of an IRFA are:
     A description of, and where feasible, an estimate of the 
number of small entities to which the rule will apply;
     A description of projected reporting, recordkeeping, and 
other compliance requirements of the rule, including an estimate of the 
classes of small entities that will be subject to the requirements and 
the type of professional skills necessary for preparation of the report 
or record;
     An identification, to the extent practicable, of all 
relevant Federal rules that may duplicate, overlap, or conflict with 
the rule; and
     A description of any significant alternative to the rule 
that accomplishes the stated objectives of applicable statutes and that 
minimizes any significant economic impact of the rule on small 
entities.
    In addition to the EPA's Small Business Advocacy Chairperson, the 
Panel consisted of the Director of the Assessment and Standards 
Division of the Office of Transportation and Air Quality, the 
Administrator of the Office of Information and Regulatory Affairs 
within the Office of Management and Budget, and the Chief Counsel for 
Advocacy of the Small Business Administration.
    EPA used the size standards provided by the Small Business 
Administration (SBA) at 13 CFR part 121 to identify small entities for 
the purposes of its regulatory flexibility analysis. Companies that 
manufacture internal-combustion engines and that employ fewer than 1000 
employees are considered small businesses for the purpose of the RFA 
analysis for this rule. Equipment manufacturers, boat builders, and 
fuel system component manufacturers that employ fewer than 500 people 
are considered small businesses for the purpose of the RFA analysis for 
this rule. Based on this information, we asked 25 companies that met 
the SBA small business thresholds to serve as small entity 
representatives for the duration of the Panel process. Of these 25 
companies, 13 were involved in the marine industry. These companies 
represented a cross-section of SD/I engine manufacturers, boat 
builders, and fuel system component manufacturers.
    With input from small entity representatives, the Panel reports 
provide findings and recommendations on how to reduce potential burden 
on small businesses that may occur as a result of the proposed rule. 
The Panel reports are included in the rulemaking record for this 
action. In light of the Panel report, and where appropriate, we 
proposed a number of provisions for small business SD/I engine 
manufacturers. With this final rule we are adopting many of the 
flexibility options proposed with some changes due to the different 
standards we are adopting for SD/I high-performance engines. In 
addition, we are making a change to the criteria for determining which 
companies are eligible for the flexibility options. The following 
section describes the flexibility options being adopted as part of this 
final rule and the criteria for determining which manufacturers are 
eligible.
(2) Final Burden Reduction Approaches for Small-Volume SD/I Engine 
Manufacturers
    We are establishing several options for small-volume SD/I engine 
manufacturers. For purposes of determining which engine manufacturers 
are eligible for the small business provisions described below for SD/I 
engine manufacturers, we are adopting a 250 employee limit. EPA 
believes this limit will cover all the existing small business SD/I 
engine manufacturers (as defined by SBA), but places a reasonable limit 
on how large a company could grow before they are no longer eligible 
for EPA's flexibilities for small volume engine manufacturers.
(a) Additional Lead Time
    As recommended in the SBAR Panel report and as proposed, EPA is 
establishing an implementation date of 2011 for conventional SD/I 
engines produced by small volume engine manufacturers. In addition, EPA 
is establishing an implementation date of 2013 for SD/I high-
performance engines produced by small volume engine manufacturers (see 
Sec.  1045.145).
(b) Exhaust Emission ABT
    In the proposal, EPA cited concerns raised by small businesses that 
ABT could give a competitive advantage to large businesses and 
requested comment on the desirability of credit trading between high-
performance and conventional SD/I marine engines. As described earlier 
in Section III.C.1, EPA is adopting different standards for SD/I high-
performance engines than originally proposed. While we are adopting an 
averaging, banking, and trading (ABT) credit program for conventional 
SD/I marine engines (see part 1045, subpart H), SD/I high-performance 
engines are required to meet the new standards without an ABT program.
(c) Early Credit Generation for ABT
    As recommended in the SBAR Panel report and as proposed, we are 
adopting an early banking program in which small volume engine 
manufacturers can earn bonus credits for certifying earlier than 
required (see Sec.  1045.145). This program, combined with the 
additional lead time for small businesses, will give small-volume SD/I 
engine manufacturers ample opportunity to

[[Page 59060]]

bank emission credits prior to the implementation date of the standards 
and will provide greater incentive for more small business engine 
manufacturers to introduce advanced technology earlier across the 
nation than will otherwise occur. The ABT program applies only to 
conventional SD/I engines so the early credit provisions will not apply 
to SD/I high-performance engines.
(d) Assigned Emission Rates for SD/I High-Performance Engines
    In the proposal, EPA noted that engine manufacturers using emission 
credits to comply with the standard will still need to test engines to 
calculate how many emission credits are needed. To minimize this 
testing burden, we proposed to allow manufacturers to use assigned 
baseline emission rates for certification based on previously generated 
emission data. As discussed above, we are adopting less stringent 
standards for SD/I high-performance engines that do not allow for the 
use of the ABT program for demonstrating compliance with the standards. 
We are not adopting baseline HC+NOX and CO emission rates 
for SD/I high-performance engines since the proposed levels were higher 
than the standards being adopted and therefore are of no use without an 
ABT program.
(e) Alternative Standards for SD/I High-Performance Engines
    In the proposal, EPA cited concerns raised by small businesses that 
catalysts had not been demonstrated on high-performance engines and 
that they may not be practicable for this application and therefore 
requested comment on the need for and level of alternative standards 
for SD/I high-performance engines. As described in Section III.C.1, we 
are adopting a less stringent set of exhaust emission standards for SD/
I high-performance engines than originally proposed.
    In addition, as described in Section III.C.2, we are not adopting 
NTE standards for SD/I high-performance engines (See Sec.  1045.105). 
This is consistent with the SBAR Panel recommendation that NTE 
standards not apply to SD/I high-performance engines.
(f) Broad Engine Families for SD/I High-Performance Engines
    In the proposal, EPA noted that the testing burden could be reduced 
by using broader definitions of engine families. As proposed, we are 
adopting provisions to allow small businesses to group all their SD/I 
high-performance engines into a single engine family for certification 
(see Sec.  1045.230). A manufacturer will need to perform emission 
tests only on the engine in that family that is most likely to exceed 
an emission standard.
(g) Simplified Test Procedures for SD/I High-Performance Engines
    Existing testing requirements include detailed specifications for 
the calibration and maintenance of testing equipment and tolerances for 
performing the actual tests. For laboratory equipment and testing, 
these specifications and tolerances are intended to achieve the most 
repeatable results feasible given testing hardware capabilities. For 
SD/I high-performance engines, EPA is adopting a provision that allows 
for different equipment than is specified for the laboratory and with 
less restrictive specifications and tolerances more typical of in-use 
testing (see Sec.  1045.501(h)). These less restrictive specifications 
will facilitate less expensive testing for businesses, with little or 
no negative effect on the environment. The relaxation on these 
specifications is especially helpful for testing high-performance 
engines due to their high exhaust flow rates, temperatures, and 
emission concentrations. This provision is available to all SD/I high-
performance engine manufacturers, regardless of business size.
(h) Reduced Testing Requirements for SD/I Engines
    We are adopting provisions to allow small-volume engine 
manufacturers to use an assigned deterioration factor to demonstrate 
compliance with the standards for certification rather than doing 
service accumulation and additional testing to measure deteriorated 
emission levels at the end of the regulatory useful life (see Sec.  
1045.240). EPA is not specifying actual levels for the assigned 
deterioration factors in this final rule. EPA intends to analyze 
available emission deterioration information to determine appropriate 
deterioration factors for SD/I engines. The data will likely include 
durability information from engines certified to California ARB's 
standards and may also include engines certified early to EPA's 
standards. Prior to the implementation date for the SD/I standards, EPA 
will provide guidance to engine manufacturers specifying the levels of 
the assigned deterioration factors for small-volume engine 
manufacturers.
    We proposed to exempt small-volume manufacturers of SD/I engines 
from the production-line testing requirements. However, we are dropping 
the production-line testing requirements for all SD/I engine 
manufacturers. Therefore, no production-line testing will be required 
of any SD/I engine manufacturer, whether large or small (see Sec.  
1045.301).
(i) Hardship Provisions
    We are adopting two types of hardship provisions for SD/I engine 
manufacturers, consistent with the Panel recommendations. EPA used the 
SBA size standards for purposes of defining ``small businesses'' for 
its regulatory flexibility analysis. The eligibility criteria for the 
hardship provisions described below reflect EPA's consideration of the 
Panel's recommendations and a reasonable application of existing 
hardship provisions. As has been our experience with similar provisions 
already adopted, we anticipate that hardship mechanisms will be used 
sparingly. First, under the unusual circumstances hardship provision, 
any manufacturer subject to the new standards may apply for hardship 
relief if circumstances outside their control cause the failure to 
comply and if failure to sell the subject engines or equipment or fuel 
system component would have a major impact on the company's solvency 
(see Sec.  1068.245). An example of an unusual circumstance outside a 
manufacturer's control may be an ``Act of God,'' a fire at the 
manufacturing plant, or the unforeseen shutdown of a supplier with no 
alternative available. The terms and time frame of the relief will 
depend on the specific circumstances of the company and the situation 
involved. As part of its application for hardship, a company will be 
required to provide a compliance plan detailing when and how it will 
achieve compliance with the standards. This hardship provision will be 
available to all manufacturers of engines, equipment, boats, and fuel 
system components subject to the new standards, regardless of business 
size.
    Second, an economic hardship provision allows small businesses 
subject to the new standards to petition EPA for limited additional 
lead time to comply with the standards (see Sec.  1068.250). A small 
business must make the case that it has taken all possible business, 
technical, and economic steps to comply, but the burden of compliance 
costs would jeopardize the company's solvency. Hardship relief could 
include requirements for interim emission reductions and/or the 
purchase and use of emission credits. The length of the hardship relief 
decided during review of the hardship application will be up to one 
year, with the potential to extend the relief as needed. We anticipate 
that

[[Page 59061]]

one to two years will normally be sufficient. As part of its 
application for hardship, a company will be required to provide a 
compliance plan detailing when and how it will achieve compliance with 
the standards. This hardship provision will be available only to 
qualifying small businesses.
    Because boat builders in many cases will depend on engine 
manufacturers to supply certified engines in time to produce complying 
boats, we are also providing a hardship provision for all boat 
builders, regardless of size, that will allow the builder to request 
more time if they are unable to obtain a certified engine and they are 
not at fault and will face serious economic hardship without an 
extension (see Sec.  1068.255).

G. Technological Feasibility

(1) Level of Standards
    Over the past few years, developmental programs have demonstrated 
the capabilities of achieving significant reductions in exhaust 
emissions from SD/I engines. California ARB has acted on this 
information to set an HC+NOX emission standard of 5 g/kW-hr 
for SD/I engines, starting in 2008. At this time, three engine 
manufacturers have certified SD/I engines to these standards. Chapter 4 
of the Final RIA presents data from these engines as well as detailed 
data on several developmental SD/I engines with catalysts packaged 
within water-cooled exhaust manifolds. Four of these developmental 
engines were operated with catalysts in vessels for 480 hours. The 
remaining developmental engines were tested with catalysts that had 
been subjected to a rapid-aging cycle in the laboratory. Data from 
these catalyst-equipped engines support the level of the standards.
    SD/I high-performance engines have very high power outputs, large 
exhaust gas flow rates, and relatively high concentrations of 
hydrocarbons and carbon monoxide in the exhaust gases. As a result, we 
believe it is not practical to apply catalyst technology to these 
engines. We are therefore adopting standards for SD/I high-performance 
engines based on the level of control that can be expected from 
recalibration with electronically controlled fuel injection.
(2) Implementation Dates
    We anticipate that manufacturers will use the same catalyst designs 
to meet the final standards that they will use to meet the California 
ARB standards for SD/I engines in 2008. We believe a requirement to 
extend the California standards nationwide after a two-year delay 
allows manufacturers adequate time to incorporate catalysts across 
their product lines. Once the technology is developed for use in 
California, it will be available for use nationwide. In fact, several 
engine models currently certified to the California standards are 
already available with catalysts nationwide. As discussed above, we are 
accommodating the transition to new base engines by agreeing to one 
year of hardship relief for companies that would otherwise need to 
design and certify an engine for that one year before it becomes 
obsolete.
(3) Technological Approaches
    Engine manufacturers can adapt readily available technologies to 
control emissions from SD/I engines. Electronically controlled fuel 
injection gives manufacturers more precise control of the air/fuel 
ratio in each cylinder, thereby giving them greater flexibility in how 
they calibrate their engines. With the addition of an oxygen sensor, 
electronic controls give manufacturers the ability to use closed-loop 
control, which is especially valuable when using a catalyst. In 
addition, manufacturers can achieve HC+NOX reductions 
through the use of exhaust gas recirculation. However, the most 
effective technology for controlling emissions is a three-way catalyst 
in the exhaust stream.
    In SD/I engines, the exhaust manifolds are water-jacketed and the 
water mixes with the exhaust stream before exiting the vessel. 
Manufacturers add a water jacket to the exhaust manifold to meet 
temperature-safety protocol. They route this cooling water into the 
exhaust to protect the exhaust couplings and to reduce engine noise. 
Catalysts must therefore be placed upstream of the point where the 
exhaust and water mix-this ensures the effectiveness and durability of 
the catalyst. Because the catalyst must be small enough to fit in the 
exhaust manifold, potential emission reductions are not likely to 
exceed 90 percent, as is common in land-based applications. However, as 
discussed in Chapter 4 of the Final RIA, data on catalyst-equipped SD/I 
engines show that emissions may be reduced by 70 to 80 percent for 
HC+NOX and 30 to 50 percent for CO over the test cycle. 
Larger reductions, especially for CO, have been achieved at lower-speed 
operation.
    There have been concerns that aspects of the marine environment 
could result in unique durability problems for catalysts. The primary 
aspects that could affect catalyst durability are sustained operation 
at high load, saltwater effects on catalyst efficiency, and thermal 
shock from cold water coming into contact with a hot catalyst. Modern 
catalysts perform well at temperatures up to 1100 [deg]C, which is much 
higher than expected in a marine exhaust manifold. These catalysts have 
also been shown to withstand the thermal shock of being immersed in 
water. More detail on catalyst durability is presented in the Final 
RIA. In addition, use of catalysts in automotive, motorcycle, and 
handheld equipment has shown that catalysts can be packaged to 
withstand vibration in the exhaust manifold.
    Manufacturers already strive to design their exhaust systems to 
prevent water from reaching the exhaust ports. If too much water 
reaches the exhaust ports, significant durability problems will result 
from corrosion or hydraulic lock. As discussed in the Final RIA, 
industry and government worked on a number of cooperative test programs 
in which several SD/I engines were equipped with catalysts and 
installed in vessels to prove out the technology. Early in the 
development work, a study was performed on an SD/I engine operating in 
a boat to see if water was entering the part of the manifold where 
catalysts will be installed. Although some water was collected in the 
exhaust manifold, it was found that this water came from water vapor 
that condensed out of the combustion products. This was easily 
corrected using a thermostat to prevent overcooling from the water 
jacket.
    Four SD/I engines equipped with catalysts were operated in vessels 
for 480 hours in fresh water. This time period was intended to 
represent the full expected operating life of a typical SD/I engine. No 
significant deterioration was observed on any of these catalysts, nor 
was there any evidence of water reaching the catalysts. In addition, 
the catalysts were packaged such that the exhaust system met industry 
standards for maximum surface temperatures.
    Testing has been performed on one engine in a vessel on both fresh 
water and saltwater over a test protocol designed by industry to 
simulate the worst-case operation for water reversion. No evidence was 
found of water reaching the catalysts. After the testing, the engine 
had emission rates below the HC+NOX standard. We later 
engaged in a test program to evaluate three additional engines with 
catalysts in vessels operating on saltwater for extended periods. Early 
in the program, two of the three manifolds experienced corrosion in the 
salt-water environment resulting in water leaks and damage to the 
catalyst. These manifolds were rebuilt with guidance from experts in 
the marine industry and additional

[[Page 59062]]

hours were accumulated on the boats. Although the accumulated hours are 
well below the 480 hours performed on fresh water, the operation 
completed showed no visible evidence of water reversion or damage to 
the catalysts.
    Three SD/I engine manufacturers have certified SD/I engines to the 
California ARB standards, and some catalyst-equipped engines are 
available for purchase nationwide. Manufacturers have indicated that 
they have successfully completed durability testing, including extended 
in-use testing on saltwater.
(4) Regulatory Alternatives
    In developing the final emission standards, we considered both what 
was achievable without catalysts and what could be achieved with 
larger, more efficient catalysts than those used in our test programs. 
Chapter 4 of the Final RIA presents data on SD/I engines equipped with 
exhaust gas recirculation (EGR). HC+NOX emission levels 
below 10 g/kW-hr were achieved for each of the engines. CO emissions 
ranged from 25 to 185 g/kW-hr. We believe EGR will be a technologically 
feasible and cost-effective approach to reducing emissions from SD/I 
marine engines. However, we believe greater reductions could be 
achieved through the use of catalysts. We considered basing an interim 
standard on EGR, but were concerned that this will divert 
manufacturers' resources away from catalyst development and could have 
the effect of delaying emission reductions from this sector.
    Several of the marine engines with catalysts that were tested as 
part of the development of the standards had HC+NOX emission 
rates appreciably lower that 5 g/kW-hr, even with consideration of 
expected in-use emissions deterioration associated with catalyst aging. 
However, we believe a standard of 5 g/kW-hr is still appropriate given 
the potential variability in in-use performance and in test data. The 
test programs described in Chapter 4 of the Final RIA did not 
investigate larger catalysts for SD/I applications. The goal of the 
testing was to demonstrate catalysts that will work within the 
packaging constraints associated with water jacketing the exhaust and 
fitting the engines into engine compartments on boats. However, we did 
perform testing on engines equipped with both catalysts and EGR. These 
engines showed emission results in the 2-3 g/kW-hr range. We expect 
that these same reductions could be achieved more simply through the 
use of larger catalysts or catalysts with higher precious metal 
loading. Past experience indicates that most manufacturers will strive 
to achieve emission reductions well below the final standards to give 
them certainty that they will pass the standards in-use, especially as 
catalysts on SD/I engines are a new technology. Therefore, we do not 
believe it is necessary at this time to set a lower standard for these 
engines.
    For SD/I high-performance engines, we originally proposed a 
standard based on the use of catalysts and then considered a less 
stringent alternative based on engine fuel system upgrades, 
calibration, or other minor changes such as an air injection pump 
rather than catalytic control. However, manufacturers commented that 
catalysts are not practical for these engines due to the high exhaust 
flow rates, high emission rates, and short time between rebuilds. In 
the final rule, we are establishing standards that can be met through 
the use of engine controls, similar to the alternative standard that 
was analyzed in the proposal. Because we do not consider catalyst-based 
standards to be feasible for high-performance engines at this time, we 
did not model a more stringent alternative for these engines.
(5) Our Conclusions
    We believe the final 2010 exhaust emission standards for SD/I 
engines represent the greatest degree of emission reduction achievable 
in this time frame. Manufacturers of conventional SD/I engines can meet 
the standards through the use of three-way catalysts packaged in the 
exhaust systems upstream of where the water and exhaust mix. 
Manufacturers are already selling engines with this technology. By 2010 
there will be widespread experience in applying emission controls to a 
large number of engine models.
    As discussed in Section VII, we do not believe the final standards 
will have negative effects on energy, noise, or safety and may lead to 
some positive effects.

IV. Outboard and Personal Watercraft Engines

A. Overview

    This section applies to spark-ignition outboard and personal 
watercraft (OB/PWC) marine engines and vessels. OB/PWC engines are 
currently required to meet the HC+NOX exhaust emissions and 
other related requirements under 40 CFR part 91. As a result of these 
standards, manufacturers have spent the last several years developing 
new technologies to replace traditional carbureted two-stroke engine 
designs. Many of these technologies are capable of emission levels well 
below the current standards. We are adopting new HC+NOX and 
CO exhaust emission standards for OB/PWC marine engines reflecting the 
capabilities of these new technologies.
    For outboard and personal watercraft engines, the current emission 
standards regulate only HC+NOX emissions. As described in 
Section II, we are making the finding under Clean Air Act section 
213(a)(3) that Marine SI engines cause or contribute to CO 
nonattainment in two or more areas of the United States.
    We believe manufacturers can use readily available technological 
approaches to design their engines to meet the new standards. In fact, 
as discussed in Chapter 4 of the Final RIA, manufacturers are already 
producing several models of four-stroke engines and direction-injection 
two-stroke engines that meet the new standards. The most important 
compliance step for the standards will be to retire high-emitting 
designs that are still available and replace them with these cleaner 
engines. We are not establishing standards based on the use of 
catalytic converters in OB/PWC engines. While this may be an attractive 
technology in the future, we do not believe there has been sufficient 
development work on the application of catalysts to OB/PWC engines to 
use as a basis for standards at this time.
    Note that we are migrating the regulatory requirements for marine 
spark-ignition engines from 40 CFR part 91 to 40 CFR part 1045. 
Manufacturers must comply with the provisions in part 1045 for an 
engine once the exhaust emission standards begin to apply in 2010. This 
gives us the opportunity to update the details of our certification and 
compliance program to be consistent with the comparable provisions that 
apply to other engine categories and describe regulatory requirements 
in plain language. Most of the change in regulatory text provides 
improved clarity without substantially changing procedures or 
compliance obligations. Where there is a change that warrants further 
attention, we describe the need for the change below.
    Engines and vessels subject to part 1045 are also subject to the 
general compliance provisions in 40 CFR part 1068. These include 
prohibited acts and penalties, exemptions and importation provisions, 
selective enforcement audits, defect reporting and recall, and hearing 
procedures. See Section VIII of the preamble to the proposed rule for 
further discussion of these general compliance provisions.

[[Page 59063]]

B. Engines Covered by This Rule

(1) Definition of Outboard and Personal Watercraft Engines and Vessels
    The final standards are intended to apply to outboard marine 
engines and engines used to propel personal watercraft. We are changing 
the definitions of outboard and personal watercraft to reflect this 
intent. The original definitions of outboard engine and personal 
watercraft marine engine adopted in 40 CFR part 91 are presented below:
     Outboard engine is a Marine SI engine that, when properly 
mounted on a marine vessel in the position to operate, houses the 
engine and drive unit external to the hull of the marine vessel.
     Personal watercraft engine (PWC) is a Marine SI engine 
that does not meet the definition of outboard engine, inboard engine, 
or sterndrive engine, except that the Administrator in his or her 
discretion may classify a PWC as an inboard or sterndrive engine if it 
is comparable in technology and emissions to an inboard or sterndrive 
engine.
    With the implementation of catalyst-based standards for sterndrive 
and inboard marine engines, we believe the above definitions could be 
problematic. Certain applications using SD/I engines and able to apply 
catalyst control will not be categorized as SD/I under the original 
definitions in at least two cases. First, an airboat engine, which is 
often mounted well above the hull of the engine and used to drive an 
aircraft-like propeller could be misconstrued as an outboard engine. 
However, like traditional sterndrive and inboard engines, airboat 
engines are typically derived from automotive-based engines without 
substantial modifications for marine application. Airboat engines can 
use the same technologies that are available to sterndrive and inboard 
engines, so we believe they should be subject to the same standards. To 
address the concerns about classifying airboats, we are changing the 
outboard definition to specify that the engine and drive unit be a 
single, self-contained unit that is designed to be lifted out of the 
water. This clarifies that air boats are not outboard engines; air 
boats do not have engines and drive units that are designed to be 
lifted out of the water. We are adopting the following definition:
     Outboard engine means an assembly of a spark-ignition 
engine and drive unit used to propel a marine vessel from a properly 
mounted position external to the hull of the marine vessel. An outboard 
drive unit is partially submerged during operation and can be tilted 
out of the water when not in use.
    Second, engines used on jet boats (with an open bay for passengers) 
have size, power, and usage characteristics that are very similar to 
sterndrive and inboard applications, but these engines may be the same 
as OB/PWC engines, rather than the marinized automotive engines 
traditionally used on sterndrive vessels. Because jet boat engines may 
be the same as OB/PWC engines, the regulations classified them as OB/
PWC engines unless the Agency classified them as SD/I due to comparable 
technology and emissions as SD/I engines. However, as explained in the 
proposed rule, we believe classifying such engines as personal 
watercraft engines is inappropriate because it will subject the jet 
boats to less stringent emission standards than other boats with 
similar size, power, and usage characteristics, and thus potentially 
lead to increased use of high-emitting engines in these vessels. 
Because the current regulations authorize engines powering jet boats to 
be treated as SD/I engines at the discretion of the Agency, but do not 
compel such classification, we are finalizing amendments to the 
definition to explicitly exclude jet boats and their engines from being 
treated as personal watercraft engines or vessels. Instead, we are 
classifying jet boat engines as SD/I engines.
    The new definition conforms to the definition of personal 
watercraft established by the International Organization for 
Standardization (ISO 13590). This ISO standard excludes open-bay 
vessels and specifies a maximum vessel length of 4 meters. The ISO 
standard for personal watercraft therefore excludes personal 
watercraft-like vessels 4 meters or greater and jet boats. Thus, 
engines powering such vessels will be classified as sterndrive/inboard 
engines. We believe this definition effectively serves to differentiate 
vessels in a way that groups propulsion engines into categories that 
are appropriate for meeting different emission standards. This approach 
is shown below with the corresponding definition of personal watercraft 
engine. We are making one change to the ISO definition for domestic 
regulatory purposes; we are removing the word ``inboard'' to prevent 
confusion between PWC and inboard engines and state specifically that a 
vessel powered by an outboard marine engine is not a PWC. We are 
revising the definitions as follows:
     Personal watercraft means a vessel less than 4.0 meters 
(13 feet) in length that uses an installed spark-ignition engine 
powering a water jet pump as its primary source of propulsion and is 
designed with no open load carrying area that would retain water. The 
vessel is designed to be operated by a person or persons positioned on, 
rather than within the confines of the hull. A vessel using an outboard 
engine as its primary source of propulsion is not a personal 
watercraft.
     Personal watercraft engine means a spark-ignition engine 
used to propel a personal watercraft.
    Section III.C.3 describes special provisions that will allow 
manufacturers extra flexibility with emission credits if they want to 
continue using outboard or personal watercraft engines in jet boats. 
These engines will need to meet the standards for sterndrive/inboard 
engines, but we believe it is appropriate for them to make this 
demonstration using emission credits generated by other outboard and 
personal watercraft engines because these vessels are currently using 
these engine types.
(2) Exclusions and Exemptions
    We are maintaining the current exemptions for OB/PWC engines. These 
include the testing exemption, the manufacturer-owned exemption, the 
display exemption, and the national-security exemption. If the 
conditions for an exemption are met, the engine is not subject to the 
exhaust emission standards. These exemptions are described in more 
detail in Section VIII of the preamble to the proposed rule.
    The Clean Air Act provides for different treatment of engines used 
solely for competition. In the initial rulemaking to set standards for 
OB/PWC engines, we adopted the conventional definitions that excluded 
engines from the regulations if they had features that were difficult 
to remove and that made it unsafe, impractical, or unlikely to be used 
for noncompetitive purposes. We have more recently taken the approach 
in other programs of more carefully differentiating competition and 
noncompetition models, and are adopting these kinds of changes in this 
rule. The changes to the provisions relating to competition engines 
apply equally to all types of Marine SI engines. See Section III.B and 
Sec.  1045.620 of the regulations for a full discussion of the new 
approach.
    We are incorporating a new exemption to address individuals who 
manufacture recreational marine vessels for personal use as described 
in Section III.B.2.
    In the rulemaking for recreational vehicles, we chose not to apply 
standards to hobby products by

[[Page 59064]]

exempting all reduced-scale models of vehicles that are not capable of 
transporting a person (67 FR 68242, November 8, 2002). We are extending 
that same provision to OB/PWC marine engines (see Sec.  1045.5).

C. Final Exhaust Emission Standards

    We are requiring more stringent exhaust emission standards for new 
OB/PWC marine engines. These standards can be met through expanded 
reliance on four-stroke engines and two-stroke direct-injection 
engines. This section describes the new requirements for OB/PWC engines 
for controlling exhaust emissions. See Section VI for a description of 
the final requirements related to evaporative emissions.
(1) Standards and Dates
    We are requiring new HC+NOX standards for OB/PWC engines 
starting in model year 2010 that will achieve more than a 60 percent 
reduction from the 2006 standards (see Sec.  1045.103). We are also 
establishing new CO emission standards. These standards will result in 
meaningful CO reductions from many engines and prevent CO from 
increasing for engines that already use technologies with lower CO 
emissions. The new emission standards are largely based on 
certification data from cleaner-burning four-stroke engines and two-
stroke direct-injection engines that are certified under part 91. 
Section IV.H discusses the technological feasibility of these standards 
in more detail. Table IV-1 presents the exhaust emission standards for 
OB/PWC. The HC+NOX emission standards are the same as those 
adopted by California ARB for 2008 and later model years. We are also 
applying not-to-exceed emission standards over a range of engine 
operating conditions, as described in Section IV.C.2.

                             Table IV-1: OB/PWC Exhaust Emission Standards [g/kW-hr]
----------------------------------------------------------------------------------------------------------------
             Pollutant                    Power                           Emission standard
----------------------------------------------------------------------------------------------------------------
HC+NOX.............................     P <= 4.3 kW  30.0
                                         P > 4.3 kW  2.1 + 0.09 x (151 + 557/P\0.9\))
CO.................................      P <= 40 kW  500--5.0 x P
                                           P> 40 kW  300
----------------------------------------------------------------------------------------------------------------
Note: P = maximum engine power in kilowatts (kW).

    Our implementation date allows two additional years beyond the 
implementation date of the same standards in California. Manufacturers 
generally sell their lower-emission engines, which are already meeting 
the 2008 California standards, nationwide. However, the additional time 
will give manufacturers time to address any models that may not meet 
the upcoming California standards or are not sold in California. This 
also accommodates the lead time concerns with the timing of this final 
rule as expressed by the commenters.
    The emission standards apply at the range of atmospheric pressures 
represented by the test conditions specified in part 1065. This 
includes operation at elevated altitudes. Since not all engines have 
electronic engines with feedback controls to incorporate altitude 
compensation, we are taking the same approach here as for Small SI 
engines where a similar dynamic is in place. Specifically, we are 
requiring that all engines must comply with emission standards in the 
standard configuration (i.e., without an altitude kit) at barometric 
pressures above 94.0 kPa, which corresponds to altitudes up to about 
2,000 feet above sea level (see Sec.  1045.115). This will ensure that 
all areas east of the Rocky Mountains and most of the populated areas 
in Pacific Coast states will have compliant engines without depending 
on engine adjustments. This becomes more important as we anticipate 
manufacturers increasingly relying on technologies that are sensitive 
to controlling air-fuel ratio for reducing emissions. For operation at 
higher altitudes, manufacturers may rely on an altitude kit that allows 
their engines to meet emission standards at higher elevations. In this 
case, engine manufacturers must describe the kit specifications in 
their application for certification and identify in the owner's manual 
the altitude ranges for proper engine performance and emission control 
that are expected with and without the altitude kit. The owner's manual 
must also state that operating the engine with the wrong engine 
configuration at a given altitude may increase its emissions and 
decrease fuel efficiency and performance. The regulations specify that 
owners may follow the manufacturer's instructions to modify their 
engines with altitude kits without violating the tampering prohibition. 
See Section IV.E.8 for further discussion related to the deployment of 
altitude kits where the manufacturers rely on them for operation at 
higher altitudes.
    The new standards include the same general provisions that apply 
today. For example, engines must control crankcase emissions. The 
regulations also require compliance over the full range of adjustable 
parameters and prohibit the use of defeat devices. (See Sec.  
1045.115.)
(2) Not-to-Exceed Standards
    We are adopting emission standards that apply over an NTE zone. The 
NTE standards are in the form of a multiplier times the duty-cycle 
standard for HC+NOX and for CO (see Sec.  1045.105). Section 
IV.D.5 gives an overview of the NTE standards and compliance provisions 
and describes the NTE test procedures.
    Manufacturers commented that certification to the NTE standards 
requires additional testing even for engine models that are currently 
certified to emission levels below the new duty-cycle based standards. 
In addition, they expressed concern that they may need to recalibrate 
existing engine models to meet the NTE standards. Manufacturers 
commented that this would not be possible by 2010 because of the large 
number of engine models. For most engines, manufacturers carry over 
preexisting certification test data from year to year. Manufacturers 
commented that additional time would be necessary to retest, and 
potentially recalibrate, all these engines for certification to the NTE 
standards. To address these issues regarding lead time needed to retest 
these engines, we are not applying the NTE standards for 2010-2012 
model year engines that are certified using preexisting data (i.e., 
carryover engine families). For new engine models, manufacturers 
indicated that they will be able to perform the NTE testing and duty-
cycle testing as part of their efforts to certify to the new standards. 
Therefore the primary implementation date of 2010 applies to these 
engines. Beginning in the 2013 model year, all conventional OB/PWC 
engines must be certified to meet the NTE standards.

[[Page 59065]]

    This NTE approach complements the weighted modal emission tests 
included in this rule. These steady-state duty cycles and standards are 
intended to establish average emission levels over several discrete 
modes of engine operation. Because it is an average, manufacturers 
design their engines with emission levels at individual points varying 
as needed to maintain maximum engine performance and still meet the 
engine standard. The NTE limit will be an additional requirement. It is 
intended to ensure that emission controls function with relative 
consistency across the full range of expected operating conditions.
(3) Emission Credit Programs
    Engine manufacturers may use emission credits to meet OB/PWC 
standards under part 91. We are adopting an ABT program for the new 
HC+NOX emission standards that is similar to the previous 
program (see part 1045, subpart H). A description of the ABT provisions 
for the new OB/PWC standards is described below.
    OB/PWC engine manufacturers that have generated HC+NOX 
credits under the 2006 standards will be able to use those credits to 
demonstrate compliance with the new HC+NOX standards being 
adopted in this final rule. The credits generated under the 2006 
standards are subject to a three-year credit life. Therefore, a 
manufacturer will be able to use those credits for demonstrating 
compliance with the new standards as long as the credits have not 
expired.
    We are allowing an indefinite life for emission credits earned 
under the new standards for OB/PWC engines. We consider these emission 
credits to be part of the overall program for complying with standards. 
Given that we may consider further reductions beyond these standards in 
the future, we believe it will be important to assess the ABT credit 
situation that exists at the time any further standards are considered. 
Emission credit balances will be part of the analysis for determining 
the appropriate level and timing of new standards, consistent with the 
statutory requirement to establish standards that represent the 
greatest degree of emission reduction achievable, considering cost, 
safety, lead time, and other factors. If we were to allow the use of 
credits generated under the standards adopted in this rule to meet more 
stringent standards adopt in a future rulemaking, we may need to adopt 
emission standards at more stringent levels or with an earlier start 
date than we would absent the continued use of existing emission 
credits, depending on the level of emission credit banks. 
Alternatively, we may adopt future standards without allowing the use 
of existing emission credits.
    We are adopting the equation for calculating emission credits for 
OB/PWC engines as proposed. This equation represents a simpler 
calculation than is currently used for OB/PWC engines and is based on 
the equation that is common in many of our other ABT programs. The 
primary difference is that the regulatory useful life will be used in 
the credit calculation rather than a discounted useful life function 
based on engine type and power rating. In addition, the emission 
credits will be reported in units of kilograms rather than grams.
    We are also adopting an averaging program for CO emissions. Under 
this program, manufacturers can generate credits with engine families 
that have FELs below the CO emission standard to be used for engine 
families in their product line in the same model year that are above 
the CO standard. However, we are not establishing a banking program for 
CO emissions. As noted in the proposal, we are concerned that a banking 
program could result in a large accumulation of credits based on a 
given company's mix of engine technologies. Furthermore, because we 
generally allow trading only with banked credits, we are not allowing 
trading of CO emission credits.
    EPA proposed that manufacturers would not be able to earn credits 
for one pollutant while using credits to comply with the emissions 
standard for another pollutant. We are dropping that provision for the 
final rule. The proposed restriction was modeled on similar 
requirements in other ABT programs where there was concern that a 
manufacturer could use technologies to reduce one pollutant while 
increasing another pollutant. The types of technologies manufacturers 
are expected to use to comply with the new standards include direct-
injection two-stroke engines or four-stroke engines. Both of these 
technologies should result in reductions in both HC+NOX 
emissions and CO emissions compared to current designs. While the 
technologies are expected to reduce both HC+NOX emissions 
and CO emissions, there could be situations where these technologies 
are capable of meeting one of the emission standards but not the other. 
EPA does not want to preclude such engines from being able to certify 
using the provisions of the ABT program and is therefore dropping the 
proposed restriction from the final rule.
    For OB/PWC engines subject to the new emission standards, we are 
adopting FEL caps to prevent the sale of very high-emitting engines. 
For HC+NOX, the FEL cap will be the applicable 2006 and 
later model year HC+NOX standard, which is dependent on the 
average power of an engine family. For CO, the FEL cap will be 150 g/
kW-hr above the newly adopted CO standard, which is also dependent on 
the average power of an engine family. We believe these FEL caps will 
allow a great deal of flexibility for manufacturers using credits, but 
will require manufacturers to stop producing engines that emit 
pollutants at essentially uncontrolled levels.
    We are specifying that OB/PWC engines are in a separate averaging 
set from SD/I engines, with an exception for certain jet boat engines. 
This means that credits earned by OB/PWC engines may be used only to 
offset higher emissions from other OB/PWC engines. Likewise, credits 
earned by SD/I engines may be used only to offset higher emissions from 
other SD/I engines. As described in Section III.C.2, manufacturers will 
be able to use credits generated from OB/PWC engines to demonstrate 
that their jet boat engines meet the HC+NOX and CO standards 
for SD/I engines if the majority of units sold in the United States 
from those related OB/PWC engine families are sold for use as OB/PWC 
engines.
    Finally, manufacturers may include as part of their federal credit 
calculation the sales of engines in California as long as they don't 
separately account for those emission credits under the California 
regulations. We originally proposed to exclude engines sold in 
California that are subject to the California ARB standards. However, 
we consider California's current HC+NOX standards to be 
equivalent to those we are adopting in this rulemaking, so we would 
expect a widespread practice of producing and marketing 50-state 
products. Therefore, as long as a manufacturer is not generating 
credits under California's averaging program for OB/PWC engines, we 
would allow manufacturers to count those engines when calculating 
credits under EPA's program. This is consistent with how EPA allows 
credits to be calculated in other nonroad sectors, such as recreational 
vehicles.
(4) Durability Provisions
    We are keeping the useful life periods from 40 CFR part 91. The 
specified useful life for outboard engines is 10 years or 350 hours of 
operation, whichever comes first. The useful life for personal 
watercraft engines is 5

[[Page 59066]]

years or 350 hours of operation, whichever comes first. (See Sec.  
1045.103.)
    We are updating the specified emissions warranty periods for 
outboard and personal watercraft engines to align with our other 
emission control programs (see Sec.  1045.120). Most nonroad engines 
have emissions warranty periods that are half of the total useful life 
period. Accordingly, the new warranty period for outboard engines is 
five years or 175 hours of operation, whichever comes first. The new 
warranty period for personal watercraft engines is 30 months or 175 
hours, whichever comes first. This contrasts somewhat with the 
currently specified warranty period of 200 hours or two years (or three 
years for specified major emission control components). The new 
approach will slightly decrease the warranty period in terms of hours, 
but will somewhat increase the period in terms of calendar years (or 
months).
    If the manufacturer offers a longer mechanical warranty for the 
engine or any of its components at no additional charge, we are 
requiring that the emission-related warranty for the respective engine 
or component must be extended by the same amount. The emission-related 
warranty includes components related to controlling exhaust, 
evaporative, and crankcase emissions from the engine. This approach to 
setting warranty requirements is consistent with provisions that apply 
in most other programs for nonroad engines.
    We are keeping the requirements related to demonstrating the 
durability of emission controls for purposes of certification (see 
Sec.  1045.235, Sec.  1045.240, and Sec.  1045.245). Manufacturers must 
run engines long enough to develop and justify full-life deterioration 
factors. This allows manufacturers to generate a deterioration factor 
that helps ensure that the engines will continue to control emissions 
over a lifetime of operation. The new requirement to generate 
deterioration factors for CO emissions is the same as that for 
HC+NOX emissions. For the HC+NOX standard, we are 
requiring that manufacturers use a single deterioration factor for the 
sum of HC and NOX emissions. However, if manufacturers get 
our approval to establish a deterioration factor on an engine that is 
tested with service accumulation representing less than the full useful 
life for any reason, we will require separate deterioration factors for 
HC and NOX emissions. The advantage of a combined 
deterioration factor is that it can account for an improvement in 
emission levels with aging. However, for engines that have service 
accumulation representing less than the full useful life, we believe it 
is not appropriate to extrapolate measured values indicating that 
emission levels for a particular pollutant will decrease.
    Under the current regulations, emission-related maintenance is not 
allowed during service accumulation to establish deterioration factors. 
The only maintenance that may be done must be (1) regularly scheduled, 
(2) unrelated to emissions, and (3) technologically necessary. This 
typically includes changing engine oil, oil filter, fuel filter, and 
air filter. In addition, we are specifying that manufacturers may not 
schedule critical emission-related maintenance during the useful life 
period (see Sec.  1045.125). This will prevent manufacturers from 
designing engines with emission controls that depend on scheduled 
maintenance that is not likely to occur with in-use engines.

D. Changes to OB/PWC Test Procedures

    We are making a number of minor changes to the test procedures for 
OB/PWC to make them more consistent with the test procedures for other 
nonroad spark-ignition engines. These test provisions will apply to SD/
I marine engines as well.
(1) Duty Cycle
    A duty cycle is the set of modes (engine speed and load) over which 
an engine is operated during a test. For purposes of exhaust emission 
testing, we are keeping the duty cycle specified for OB/PWC engines, 
with two adjustments (see Sec.  1045.505). First, we are requiring that 
manufacturers may choose to run the specified duty cycle as a ramped-
modal cycle. Second, we are changing the low-power test mode from a 
specified 25 percent load condition to 25.3 percent load, which will 
complete the intended alignment with the E4 duty cycle adopted by the 
International Organization for Standardization.
(2) Maximum Test Speed
    The definition 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 for 
testing. Engine manufacturers currently declare the rated speeds for 
their engines and then used the rated speed as the maximum speed for 
testing. However, we have established an objective procedure for 
measuring this engine parameter to have a clearer reference point for 
an engine's maximum test speed. This is important to ensure that 
engines are tested at operating points that correspond with in-use 
operation. This also helps ensure that the NTE zone is appropriately 
matched to in-use operating conditions.
    We are defining the maximum test speed for any engine to be 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 normalized maximum-power versus speed curve. The nominal 
value of maximum test speed is defined at that point where the length 
of this line reaches its maximum value.
    The engine mapping procedures in part 1065 that we referenced in 
the proposal allow manufacturers to declare a value for maximum test 
speed that is within 2.5 percent of the calculated (or measured) 
nominal value. Based on the manufacturers' descriptions of the way they 
instruct boat builders to match propellers to their engines, we have 
included in the final rule a special allowance for manufacturers to 
declare a value for maximum test speed that is up to 500 rpm below the 
calculated value. This equates to about 8 percent of the calculated 
value for most engines; however, we would never expect manufacturers to 
select a value for maximum test speed that is above the nominal value, 
so the total allowable range is not much greater than for other 
engines. We also note that the maximum test speed for a four-stroke 
engine that remains installed in a vessel is the highest engine speed 
that can occur. As long as the propeller matching and other vessel 
characteristics do not take the engine outside of the manufacturer's 
specified range, the engine would need to meet the Not-to-Exceed 
standards based on the in-use value for maximum test speed. These 
provisions related to maximum test speed apply equally to OB/PWC 
engines and SD/I engines.
(3) 40 CFR Part 1065
    We are requiring that OB/PWC engines certified to the new exhaust 
emission standards use the test procedures in 40 CFR part 1065 instead 
of those in 40 CFR part 91.\95\ Part 1065 includes detailed laboratory 
and equipment specifications and procedures for equipment calibration 
and emission measurements. These new procedures will apply starting 
with the introduction of new exhaust standards,

[[Page 59067]]

though we will allow manufacturers to start using these new procedures 
earlier as an alternative procedure. The procedures in part 1065 
include updated provisions to account for newer measurement 
technologies and improved calculation and corrections procedures. Part 
1065 also specifies more detailed provisions related to alternate 
procedures, including a requirement to conduct testing representative 
of in-use operation. In many cases, we allow carryover of emission test 
data from one year to another. After the implementation of the new 
standards, we will allow the carryover of any test data generated prior 
to 2009 under the test procedures in 40 CFR part 91.
---------------------------------------------------------------------------

    \95\ See our previous rulemakings related to 40 CFR part 1065 
for more information about the changes in test provisions (70 FR 
40420, July 13, 2005 and 67 FR 68242, November 8, 2002).
---------------------------------------------------------------------------

(4) Engine Break-in
    Testing new engines requires a period of engine operation to 
stabilize emission levels. The regulations specify two separate figures 
for break-in periods. First, for certification, we establish a limit on 
how much an engine may operate and still be considered a ``low-hour'' 
engine. The results of testing with the low-hour engine are compared 
with a deteriorated value after some degree of service accumulation to 
establish a deterioration factor. For Large SI engines, we require that 
low-hour test engines have no more than 300 hours of engine operation. 
However, given the shorter useful life for marine engines, this will 
not make for a meaningful process for establishing deterioration 
factors, even if there is a degree of commonality between the two types 
of engines. We are requiring that low-hour marine spark-ignition 
engines generally have no more than 30 hours of engine operation (see 
Sec.  1045.801). This allows some substantial time for break-in, 
stabilization, and running multiple tests, without approaching a 
significant fraction of the useful life. The current regulation in part 
91 specifies that manufacturers perform the low-hour measurement after 
no more than 12 hours of engine operation (see Sec.  91.408(a)(1)). The 
new allowance for up to 30 hours of engine operation is consistent with 
what we have done for recreational vehicles and will give manufacturers 
more time to complete a valid low-hour test.
    For production-line testing there is also a concern about how long 
an engine should operate to reach a stabilized emission level. We are 
keeping the provision in part 91 that allows for a presumed 
stabilization period of 12 hours (see Sec.  90.117(a)). We believe 12 
hours is sufficient to stabilize the emissions from the engine.
(5) Not-to-Exceed Test Procedures and Standards
    Section III.D.2 discusses the general concept and approach behind 
NTE standards for Marine SI engines. In addition, Section III.D.2 
presents specific zones and limits for catalyst-equipped marine 
engines. We are applying the same general NTE testing provisions to OB/
PWC engines, including the same broad NTE zone and ambient conditions 
(see Sec.  1045.515).
    We anticipate that most OB/PWC engines subject to the NTE standards 
will use engine-based controls to meet the exhaust emission standards. 
For that reason, this discussion focuses on the NTE zone and subzones 
for engines not equipped with catalysts. Data presented in Chapter 4 of 
the RIA suggests that the emissions characteristics of marine engines 
are largely dependent on technology type. Four-stroke engines tend to 
have relatively constant emission levels throughout the NTE zone. In 
contrast, two-stroke engines tend to have high variability in 
emissions, not only within the NTE zone but between different engine 
designs as well. Therefore, we developed separate NTE approaches and 
standards for four-stroke and two-stroke engines. These approaches and 
standards are discussed below.
(a) Four-Stroke Marine Engines
    The NTE approach for four-stroke marine engines without catalysts 
is similar to that for catalyst-equipped engines as described in 
Section III. We are applying the same NTE zone; however, we are 
establishing different subzones and emission limits based on data 
presented in the Final RIA. Emission data for four-stroke marine 
engines suggest that brake-specific emission rates are relatively 
constant throughout the NTE zone. One exception is slightly higher 
HC+NOX emissions at low power. To account for this, we are 
subdividing the NTE zone to have a low-power subzone below 50 percent 
of maximum test speed. In this low-power subzone, the HC+NOX 
NTE limit is 1.6, while it is 1.4 for the remainder of the NTE zone. 
The CO NTE limit is 1.5 throughout the NTE zone. Figure IV-1 presents 
the NTE zone and subzones. These limits would apply to all non-
catalyzed four-stroke engines. See Section III.D.2 for a detailed 
discussion of NTE requirements that apply for catalyst-equipped engines 
(including OB/PWC engines).
    As discussed above in Section IV.C.2, we are providing extra lead 
time for 2010-2012 model year engines certified using preexisting data. 
The purpose of this provision is to allow testing and calibration work 
to better fit into product development cycles. We have received an 
indication that a small subset of existing outboard engines may need 
additional time to meet the 1.4 NTE limit at mid-range speeds due to 
technological challenges associated with high-power supercharging. 
Manufacturers have indicated that a slightly higher limit of 1.6 would 
be feasible in the 2013 time frame, but additional time would be needed 
for hardware changes to meet the 1.4 limit. To address this issue, we 
are temporarily expanding Subzone 2 to include mid-range speeds up to 
70 percent of maximum test speed for supercharged outboard engines 
greater than 150 kW. Beginning with the 2015 model year, these engines 
would be subject to the same NTE zone and standards as other four-
stroke engines.

[[Page 59068]]

[GRAPHIC] [TIFF OMITTED] TR08OC08.062

(b) Two-Stroke Marine Engines
    The emission data presented in Chapter 4 of the Final RIA for two-
stroke direct-injection marine engines suggest that these engines have 
high variability in emissions, not only within the NTE zone but between 
different engine designs as well. Due to this variability, we do not 
believe that a flat (or stepped) limit in the NTE zone could be 
effectively used to establish meaningful standards for these engines. 
At the same time, we continue to believe that NTE standards are 
valuable for facilitating in-use testing. We therefore developed a 
weighted NTE approach specifically for these engines. In the long term, 
we may consider further emission reductions based on catalytic control 
applied to OB/PWC engines. In this case, we would revisit the 
appropriateness of the weighted NTE approach in the context of those 
standards.
    Under the weighted NTE approach, emission data is collected at five 
test points. These test points are idle, full power, and the speeds 
specified in Modes 2 through 4 of the 5-mode duty cycle. Similar to the 
5-mode duty cycle, the five test points are weighted to achieve a 
composite value. This composite value must be no higher than 1.2 times 
the FEL for that engine family.
    The difference in this approach from the 5-mode duty cycle is that 
the test torque is not specified. During an in-use test, the engine 
would be set to the target speed and the torque value would be allowed 
to float. The actual torque would depend on the propeller design, the 
weight and condition of the boat, and other factors. In addition, the 
engine speed at wide open throttle would be based on actual performance 
on the boat. Because in-use engines installed in boats do not generally 
operate on the theoretical propeller curve used to define the 5-mode 
duty cycle, this approach helps facilitate NTE testing.
    At each test mode, limits are placed on allowable engine operation. 
These limits are generally based on the NTE zone presented above for 
four-stroke engines, but there are two exceptions. First, the lower 
torque limit at 40 percent speed is lowered slightly to better ensure 
that an engine on an in-use boat is capable of operating within the NTE 
zone. Second, the speed range is extended at wide-open throttle for the 
same reason. Figure IV-3 presents the NTE zone and subzones. These 
limits would apply to all non-catalyzed two-stroke engines. See Section 
III.D.2 for a detailed discussion of NTE requirements that apply to 
catalyst-equipped engines (including OB/PWC engines).

[[Page 59069]]

[GRAPHIC] [TIFF OMITTED] TR08OC08.063

    During laboratory testing, any point within each of the four non-
idle subzones may be chosen as test points. These test points do not 
necessarily need to lie on a propeller curve. Note that measured power 
should be used in the calculation of the weighted brake-specific 
emissions.
(6) Test Fuel
    As described below in Section V.D.3, we are adopting provisions 
that will allow manufacturers to use a 10 percent ethanol blend for 
certification testing of exhaust emissions from Small SI engines as an 
alternative to the standard gasoline test fuel. We are adopting similar 
provisions for Marine SI engines in this rule. This option to use a 10 
percent ethanol blend will begin with the implementation date of the 
new exhaust standards for both OB/PWC engines and SD/I engines. The 
option to use a 10 percent ethanol blend would apply to PLT testing as 
well if the manufacturer based their certification on the 10 percent 
ethanol blend. The test fuel specifications are based on using the 
current gasoline test fuel and adding ethanol until the blended fuel 
has 10 percent ethanol by volume. While we will allow use of a 10 
percent ethanol blend for certification, we expect to use our test fuel 
without oxygenates for all confirmatory testing for exhaust emissions. 
Therefore, an engine manufacturer will want to consider the impacts of 
ethanol on emissions in evaluating the compliance margin for the 
standard, or in setting the FEL for the engine family if it is 
participating in the ABT program. We could decide at our own discretion 
to do exhaust emissions testing using a 10 percent ethanol blend if the 
manufacturer certified on that fuel.
    Ethanol has been blended into in-use gasoline for many years and 
its use has been increasing in recent years. Under provisions of the 
Energy Independence and Security Act of 2007, ethanol is required to be 
used in significantly greater quantities. We project that potentially 
80 percent of the national gasoline pool will contain ethanol by 2010, 
making ethanol blends (up to 10 percent) the de facto in-use fuel. As 
ethanol blends become the main in-use fuel, we believe it makes sense 
for manufacturers to optimize their engine designs with regard to 
emissions, performance, and durability on such a fuel. While limited 
data on Marine SI engines operated on a 10 percent ethanol blend 
suggests the HC emissions will decrease and NOX emission 
will increase or stay the same, these effects result in small decreases 
in total HC+NOX emission levels, with the difference 
generally being around 10 percent. CARB is currently running a test 
program to look at the emission impacts of ethanol blends on a range of 
Marine SI engines. Based on the results of that test program, we may 
consider changes to the provisions allowing the use of a 10 percent 
ethanol blend for certification and production-line testing.

E. Additional Certification and Compliance Provisions

(1) Production-Line Testing
    We are continuing to require that manufacturers routinely test 
engines at the point of production to ensure that production 
variability does not affect the engine family's compliance with 
emission standards. The final rule includes a variety of amendments and 
adjustments as described in the proposal. We may also require 
manufacturers to perform production line testing under the selective 
enforcement auditing provisions of 40 CFR part 1068, subpart E.
(2) In-Use Testing
    We are also continuing the requirements related to the

[[Page 59070]]

manufacturer-run in-use testing program. Under this program, 
manufacturers test field-aged engines to determine whether they 
continue to meet emission standards (see part 1045, subpart E). We are, 
however, making a variety of changes and clarifications to the current 
requirements, as described in the following sections.
(a) Adjustments Related to Engine Selection
    Both EPA and manufacturers have gained insights from implementing 
the current program. Manufacturers have expressed a concern that engine 
families are selected rather late in the model year, which makes it 
harder to prepare a test fleet for fulfilling testing obligations. On 
the other hand, we have seen that manufacturers certify some of their 
engine families well into the model year. By making selections early in 
the model year, we will generally be foregoing the opportunity to 
select engine families for which manufacturers don't apply for 
certification until after the selections occur.
    To address these competing interests, we are adopting an approach 
that allows for early selection of engine families, while preserving 
the potential to require testing for engines that are certified later 
in the model year. For complete applications we receive by December 31 
of a given calendar year for the following model year, we expect to 
select engine families for testing by the end of February of the 
following year. If we have not made a complete selection of engine 
families by the end of February, manufacturers have the option of 
making their own selections for in-use testing. The regulations include 
criteria to serve as guidance for manufacturers to make appropriate 
selections. For example, we expect manufacturers to most strongly 
consider those engine families with the highest projected sales volume 
and the smallest compliance margins. Manufacturers may also take into 
account past experience with engine families if they have already 
passed an in-use testing regimen and have not undergone significant 
design changes since that time.
    We will treat engine families differently for in-use testing if we 
receive the application after December 31. This applies, for example, 
if we receive a complete application for a 2010 engine family in 
February 2010. In these cases, the engine family will automatically be 
subject to in-use testing, without regard to the 25 percent limitation 
that will otherwise dictate our selections. This may appear to increase 
the potential test burden, but the clear majority of applications for 
certification are completed before the end of the calendar year for the 
following model year. This provision will eliminate the manufacturers' 
ability to game the testing system by delaying a family of potential 
concern until the next calendar year. We expect to receive few new 
applications after the end of the calendar year. This will be 
consistent with the manufacturers' interest in early family selections, 
without jeopardizing EPA's interest in being able to select from a 
manufacturer's full product lineup.
(b) Crankcase Emissions
    Because the crankcase requirements are based on a design 
specification rather than emission measurements, the anticipated 
crankcase technologies are best evaluated simply by checking whether or 
not they continue to function as designed. As a result, we intend for 
an inspection of in-use engines to show whether these systems continue 
to function properly throughout the useful life, but we are not 
requiring manufacturers to include crankcase emission measurements as 
part of the in-use testing program described in this section. This is 
consistent with the approach we have taken in other programs.
(c) In-Use Emission Credits
    Clean Air Act section 213 requires engines to comply with emission 
standards throughout the regulatory useful life, and section 207 
requires a manufacturer to remedy in-use nonconformity when we 
determine that a substantial number of properly maintained and used 
engines fail to conform with the applicable emission standards (42 
U.S.C. 7541). As described in the original rulemaking, a potential 
option to address a nonconformity is that manufacturers could use a 
calculation of emission credits generated under the in-use testing 
program to avoid a recall determination if an engine family's in-use 
testing results exceeded emission standards (61 FR 52095, October 4, 
1996).
    We are adopting a more general approach to addressing potential 
noncompliance under the in-use testing program than is specified in 40 
CFR part 91. The final regulations do not specify how manufacturers 
could generate emission credits to offset a nonconforming engine 
family. This new approach is preferred for two primary reasons. First, 
manufacturers will be able to use emission data generated from field 
testing to characterize an engine family's average emission level. This 
becomes necessarily more subjective, but allows us to consider a wider 
range of information in evaluating the degree to which manufacturers 
are complying with emission standards across their product line. 
Second, this approach makes clearer the role of the emission credits in 
our consideration to recall failing engines. We plan to consider, among 
other information, average emission levels from multiple engine 
families in deciding whether to recall engines from a failing engine 
family. We therefore believe it is not appropriate to have a detailed 
emission credit program defining precisely how and when to calculate, 
generate, and use credits that do not necessarily have value elsewhere.
    Not specifying how manufacturers generate emission credits under 
the in-use testing program gives us the ability to consider any 
appropriate test data in deciding what action to take. In generating 
this kind of information, some general guidelines will apply. For 
example, we expect manufacturers to share test data from all engines 
and all engine families tested under the in-use testing program, 
including nonstandard tests that might be used to screen engines for 
later measurement. This allows us to understand the manufacturers' 
overall level of performance in controlling emissions to meet emission 
standards. Average emission levels should be calculated over a running 
three-year period to include a broad range of testing without skewing 
the results based on old designs. Emission values from engines 
certified to different tiers of emission standards or tested using 
different measurement procedures should not be combined to calculate a 
single average emission level. Average emission levels should be 
calculated according to the following equation, rounding the results to 
0.1 g/kW-hr:

Average EL = [Sigma]i[(STD-CL)i x (UL)i x (Sales)i x Poweri x LFi] / 
[Sigma]i [(UL)i x (Sales)i x Poweri x LFi]

Where:

Average EL = Average emission level in g/kW-hr.
Salesi = The number of eligible sales, tracked to the point of first 
retail sale in the U.S., for the given engine family during the 
model year.
(STD-CL)i = The difference between the emission standard (or Family 
Emission Limit) and the average emission level for an in-use testing 
family in g/kW-hr.
ULi = Useful life in hours.
Poweri = The sales-weighted average maximum engine power for an 
engine family in kW.
LFi = Load factor or fraction of maximum engine power utilized in 
use; use 0.50 for engine families used only in constant-

[[Page 59071]]

speed applications and 0.32 for all other engine families.

    We have adopted this same approach for the in-use testing program 
that applies for Large SI engines in 40 CFR part 1048.
(3) Optional Procedures for Field Testing
    Outboard engines are inherently portable, so it may be easier to 
test them in the laboratory than in the field. However, there is a 
strong advantage to using portable measurement equipment to test 
personal watercraft and SD/I engines while the engine remains installed 
to avoid the effort of taking the engine out and setting it up in a 
laboratory. Field testing will also provide a much better means of 
measuring emissions to establish compliance with the NTE standards, 
because it is intended to ensure control of emissions during normal in-
use operation that may not occur during laboratory testing over the 
specified duty cycle. We are adopting the field testing provisions 
described below as an option for all OB/PWC and SD/I engines.
    The regulations at 40 CFR part 1065, subpart J, specify how to 
measure emissions using portable measurement equipment. To test engines 
while they remain installed, analyzers are connected to the engine's 
exhaust to detect emission concentrations during normal operation. 
Exhaust volumetric flow rate and continuous power output are also 
needed to convert the analyzer responses to units of g/kW-hr for 
comparing to emission standards. These values can be calculated from 
measurements of the engine intake flow rate, the exhaust air-fuel ratio 
and the engine speed, and from torque information.
    Available small analyzers and other equipment may be adapted for 
measuring emissions in the field. A portable flame ionization detector 
can measure total hydrocarbon concentrations. A portable analyzer based 
on zirconia technology can measure NOX emissions. A 
nondispersive infrared (NDIR) unit can measure CO. We are requiring 
manufacturers to specify how they will intend to draw emission samples 
from in-use engines for testing installed engines. For example, 
emission samples can be drawn from the exhaust flow directly upstream 
of the point at which water is mixed into the exhaust flow. This should 
minimize collection of water in the extracted sample, though a water 
separator may be needed to maintain a sufficiently dry sample. Mass 
flow rates also factor into the torque calculation; this may be 
measured either in the intake or exhaust manifold.
    Calculating brake-specific emissions depends on determining 
instantaneous engine speed and torque levels. We are therefore 
requiring manufacturers to design their engine control systems to be 
able to continuously monitor engine speed and torque. We have already 
adopted this requirement for other mobile source programs where 
electronic engine control is used. Monitoring speed values is 
straightforward. For torque, the onboard computer needs to convert 
measured engine parameters into useful units. Manufacturers generally 
will need to monitor a surrogate value such as intake manifold pressure 
or throttle position (or both), then rely on a look-up table programmed 
into the onboard computer to convert these torque indicators into 
Newton-meters. Manufacturers may also want to program look-up tables 
for torque conversion into a remote scan tool. Part 1065 specifies the 
performance requirements for accuracy, repeatability, and noise related 
to speed and torque measurements. These tolerances are taken into 
account in the selection of the new NTE standards. We are adopting the 
requirement to meet the torque-broadcasting requirements in the 2013 
model year, which aligns with the final implementation of the NTE 
standards.
(4) Other Changes for In-Use Testing
    A question has been raised regarding the extent of liability if an 
engine family is found to be noncompliant during in-use testing. 
Because it can take up to two years to complete the in-use testing 
regimen for an engine family, we want to clarify the status of engines 
produced under that engine family's certificate, and under the 
certificates of earlier and later engine families that were effectively 
of the same design. For example, manufacturers in many cases use 
carryover data to continue certifying new engine families for a 
subsequent model year; this avoids the need to produce new test data 
for engines whose design does not change from year to year. For these 
cases, absent any contrary information from the manufacturer, we will 
maintain the discretion to include other applicable engine families in 
the scope of any eventual recall, as allowed by the Act.
    In response to comments received from manufacturers, we have agreed 
to adopt a provision allowing manufacturers to request hardship relief 
under the in-use testing program if conditions outside their control 
prevent them from completing the required testing. We would expect this 
to be a rare occurrence, but this provision will allow us to 
accommodate manufacturers if extreme unforeseen circumstances prevent a 
manufacturer from completing a test program.
    There are a variety of smaller changes to the in-use testing 
provisions as a result of updating the regulatory language to reflect 
the language changes that we adopted for similar testing with Large SI 
engines. First, we are removing the requirement to select engines that 
have had service accumulation representing less than 75 percent of the 
useful life. This gives manufacturers the flexibility to test somewhat 
older engines if they want to. Second, we are slightly adjusting the 
description of the timing of the test program, specifying that the 
manufacturer must submit a test plan within 12 months of EPA selecting 
the family for testing, with a requirement to complete all testing 
within 24 months. This contrasts with the current requirement to 
complete testing within 12 months after the start of testing, which in 
turn must occur within 12 months of family selection. We believe the 
modified approach allows additional flexibility without delaying the 
conclusion of testing. Third, we are requiring that manufacturers 
explain why they excluded any particular engines from testing. Finally, 
we are requiring manufacturers to report any noncompliance within 15 
days after completion of testing for a family, rather than 15 days 
after an individual engine fails. This has the advantage for 
manufacturers and the Agency of a more unified reporting after testing 
is complete, rather than piecemeal reporting before conclusions can be 
drawn.
(5) Use of Engines Already Certified to Other Programs
    In some cases, manufacturers may want to use engines already 
certified under our other programs. Engines certified to the emission 
standards for highway applications in part 86 or Large SI applications 
in part 1048 are meeting more stringent standards. We are therefore 
accepting the pre-existing certification for these engines used in 
marine applications, on the condition that the engine is not changed 
from its certified configuration in any way (see Sec.  1045.605). We 
allow this in a similar way for a limited number of engines certified 
to the Small SI emission standards (see Sec.  1045.610). The number of 
installed marine engines must generally be less then five percent of 
the total U.S. sales of that engine model in all applications.

[[Page 59072]]

(6) Import-Specific Information at Certification
    We are requiring additional information to improve our ability to 
oversee compliance related to imported engines (see Sec.  1045.205). In 
the application for certification, the following additional information 
is necessary: (1) The port or ports at which the manufacturer has 
imported engines over the previous 12 months, (2) the names and 
addresses of the agents the manufacturer has authorized to import the 
engines, and (3) the location of the test facilities in the United 
States where the manufacturer will test the engines if we select them 
for testing under a selective enforcement audit. See Section 1.3 of the 
Summary and Analysis of Comments for further discussion related to 
naming test facilities in the United States.
(7) Alternate Fuels
    The emission standards apply to all spark-ignition engines 
regardless of the fuel they use. Almost all Marine SI engines operate 
on gasoline, but these engines may also operate on other fuels, such as 
natural gas, liquefied petroleum gas, ethanol, or methanol. The test 
procedures in 40 CFR part 1065 describe adjustments needed for 
operating test engines with oxygenated fuels.
    In some special cases, a single engine is designed to alternately 
run on different fuels. For example, some engines can switch back and 
forth between natural gas and LPG. We are adding a clarification to the 
regulations to describe how manufacturers would submit certification 
data and divide such engines into engine families. We would expect a 
manufacturer to submit test data on each fuel type. If manufacturers 
produce engines that run only on one fuel where that dedicated-fuel 
engine is identical to a dual-fuel engine with respect to that fuel, 
those engines could be included in the same family. This is also true 
for the second fuel. For example, if a manufacturer produces an engine 
that can run on both gasoline and LPG and also produces that engine 
model in gasoline-only and LPG-only versions without adjusting the 
calibration or other aspects of that configuration, those engines may 
all be included in the same engine family.
    Once an engine is placed into service, someone might want to 
convert it to operate on a different fuel. This would take the engine 
out of its certified configuration, so we are requiring that someone 
performing such a fuel conversion to go through a certification 
process. We will allow certification of the complete engine using 
normal certification procedures, or the aftermarket conversion kit 
could be certified using the provisions of 40 CFR part 85, subpart V. 
This contrasts with the provisions in part 91 that allow for fuel 
conversions that can be demonstrated not to increase emission levels 
above the applicable standard. We propose to apply this requirement 
starting January 1, 2010. (See Sec.  91.1103 and Sec.  1045.645.)
(8) Special Provisions Related to Altitude
    As described in Section IV.C.1, we are allowing manufacturers to 
comply with emission standards at high altitudes using an altitude kit. 
Manufacturers using altitude kits to comply at altitude must take steps 
to describe their altitude kits in the application for certification 
and explain their basis for believing that engines with these altitude 
kits will comply with emission standards at high altitude. 
Manufacturers must also describe a plan for making information and 
parts available such that the widespread use of altitude kits will 
reasonably be expected in high-altitude areas. For a more thorough 
description of these compliance provisions, see the discussion in 
Section V.E.5 for nonhandheld Small SI engines.

F. Other Adjustments to Regulatory Provisions

    We are moving the regulatory requirements for marine spark-ignition 
engines from 40 CFR part 91 to 40 CFR part 1045. This gives us the 
opportunity to update the details of our certification and compliance 
program to be consistent with the comparable provisions that apply to 
other engine categories. The following paragraphs highlight some of the 
provisions in the new language that may involve noteworthy changes from 
the current regulations in part 91. All these provisions apply equally 
to SD/I engines, except that they are not subject to the current 
requirements in 40 CFR part 91.
    We are making some adjustments to the criteria for defining engine 
families (see Sec.  1045.230). The fundamental principle behind engine 
families is to group together engines that will have similar emission 
characteristics over the useful life. As a result, all engines within 
an engine family must have the same approximate bore diameter and use 
the same method of air aspiration (for example, naturally aspirated vs. 
turbocharged). Under the previous regulation, manufacturers were 
allowed the discretion to consider bore and stroke dimensions and 
aspiration method for subdividing engine families beyond what was 
required under the primary criteria in Sec.  91.115. We believe engines 
with substantially different bore diameters will have combustion and 
operating characteristics that must be taken into account with unique 
engineering. Similarly, adding a turbocharger or supercharger changes 
the engine's combustion and emission control in important ways. We are 
also requiring that all the engines in an engine family use the same 
type of fuel. This may have been a simple oversight in the current 
regulations, since all OB/PWC engines operate on gasoline. However, if 
a manufacturer were to produce an engine model that runs on natural gas 
or another alternative fuel, that engine model should be in its own 
engine family. See Section IV.E.7 for a discussion of dual-fuel 
engines. Finally we are removing the provision currently in part 91 
related to the engine-cooling mechanism. Manufacturers pointed out that 
raw-water cooling and separate-circuit cooling do not have a 
significant effect on an engine's emission characteristics.
    The new regulatory language related to engine labels remains 
largely unchanged from the previous requirements (see Sec.  1045.135). 
We are including a provision to allow manufacturers to print labels 
that have a different company's trademark. Some manufacturers in other 
programs have requested this flexibility for marketing purposes.
    The warranty provisions are described above. We are adding an 
administrative requirement to describe the provisions of the emission-
related warranty in the owners manual (see Sec.  1045.120). We expect 
that many manufacturers already do this, but believe it is appropriate 
to require this as a routine practice.
    Certification procedures depend on establishing deterioration 
factors to predict the degradation in emission controls that occurs 
over the course of an engine's useful life. This typically involves 
service accumulation in the laboratory to simulate in-use operation. 
Since manufacturers do in-use testing to further characterize this 
deterioration rate, we are specifying that deterioration factors for 
certification must take into account any available data from in-use 
testing with similar engines. This provision applies in most of our 
emission control programs that involve routine in-use testing. To the 
extent this information is available, it should be factored into the 
certification process. For example, if in-use testing shows that 
emission deterioration is substantially higher than that characterized 
by the deterioration factor, we expect the manufacturer to factor the 
in-use data

[[Page 59073]]

into a new deterioration factor, or to revise durability testing 
procedures to better represent the observed in-use degradation.
    Maximum engine power for an engine family is an important 
parameter. For example, maximum engine power determines the applicable 
CO standard for engines at or below 40 kW. For bigger engines, emission 
credits are calculated based on total power output. As a result, we are 
specifying that manufacturers determine their engines' maximum engine 
power as the point of maximum engine power on the engine's nominal 
power curve (see Sec.  1045.140). This value may be established as a 
design value, but must be determined consistent with the engine mapping 
procedures in Sec.  1065.510. The manufacturer must adjust the declared 
value for maximum engine power if it does not fall within the range of 
values from production engines.
    The new requirements related to the application for certification 
will involve some new information, most of which is described above, 
such as installation instructions and a description of how engines 
comply with not-to-exceed standards (see Sec.  1045.205). In addition, 
we are requiring that manufacturers submit projected sales volumes for 
each family, rather than allowing manufacturers to keep these records 
and make them available upon request. Manufacturers already do this 
routinely and it is helpful to have ready access to this information to 
maintain compliance oversight for such things as emission credit 
calculations. We are also requiring that each manufacturer identify an 
agent for service in the United States. For companies based outside the 
United States, this ensures that we will be able to maintain contact 
regarding any official communication that may be required. We have 
adopted these same requirements for other nonroad programs.
    We are requiring that manufacturers use good engineering judgment 
in all aspects of their effort to comply with regulatory requirements. 
The regulations at Sec.  1068.5 describe how we will apply this 
provision and what we will require of manufacturers where we disagree 
with a manufacturer's judgment.
    We are also establishing new defect-reporting requirements. These 
requirements are described in Section VIII of the preamble to the 
proposed rule.
    It is common practice for one company to produce engine blocks that 
a second company modifies for use as a marine engine. Since our 
regulations prohibit the sale of uncertified engines, we are 
establishing provisions to clarify the status of these engines and 
defining a path by which these engines can be handled without violating 
the regulations. See Section VIII.C.1 for more information.

G. Small-Business Provisions

    The OB/PWC market has traditionally been made up of large 
businesses. We anticipate that the OB/PWC standards will be met through 
the expanded use of existing cleaner engine technologies. Small 
businesses certifying to standards today are already using technologies 
that could be used to meet the new standards. As a result, we are 
adopting only three small business regulatory relief provisions for 
small business manufacturers of OB/PWC engines. We are allowing small 
business OB/PWC engine manufacturers to be exempt from PLT testing and 
to use assigned deterioration factors for certification. (EPA will 
provide guidance to engine manufacturers on the assigned deterioration 
factors prior to implementation of the new OB/PWC standards.) We are 
also extending the economic hardship relief to OB/PWC engine 
manufacturers that qualify as small businesses (see Sec.  1068.250). We 
are defining small business eligibility criteria for OB/PWC engine 
manufacturers based on an employee cut-off of 250 employees.
    In addition to the flexibilities noted above, all OB/PWC engine 
manufacturers, regardless of size, will be able to apply for the 
unusual circumstances hardship in Sec.  1068.245. Finally, all OB/PWC 
vessel manufacturers that rely on other companies to provide certified 
engines or fuel system components for their product will be able to 
apply for the hardship provisions in Sec.  1068.255.

H. Technological Feasibility

(1) Level of Standards
    Over the past several years, manufacturers have demonstrated their 
ability to achieve significant HC+NOX emission reductions 
from outboard and personal watercraft engines. This has largely been 
accomplished through the introduction of two-stroke direct injection 
engines and conversion to four-stroke engines. Recent certification 
data for these types of engines show that these technologies may be 
used to achieve emission levels significantly below the current exhaust 
emission standards. In fact, California standards require a 65 percent 
reduction beyond the current federal standards.
    Our own analysis of recent certification data shows that most four-
stroke outboard engines and many two-stroke direct injection outboard 
engines can meet the final HC+NOX standard. Similarly, 
although PWC engines tend to have higher HC+NOX emissions, 
presumably due to their higher power densities, many of these engines 
can also meet the new HC+NOX standard. Although there is 
currently no CO standard for OB/PWC engines, OB/PWC manufacturers are 
required to report CO emissions from their engines (see Sec.  
91.107(d)(9)). These emissions are based on test data from new engines 
and do not consider deterioration or compliance margins. Based on this 
data, all the two-stroke direct injection engines show emissions well 
below the new standards. In addition, the majority of four-stroke 
engines meet the new CO standards as well.
    We therefore believe the HC+NOX and CO emission 
standards will be achieved by phasing out conventional carbureted two-
stroke engines and replacing them with four-stroke engines or two-
stroke direct injection engines. This has been the market-driven trend 
over the last five years. Chapter 4 of the Final RIA presents charts 
that compare certification data to the new standards.
(2) Implementation Dates
    We are implementing the new emission standards beginning with the 
2010 model year. This gives two additional years beyond the 
implementation date of the same standards in California. This 
additional time may be necessary for manufacturers that do not sell 
engine models in California or that sell less than their full product 
lineup into the California market. We believe the same technology used 
to meet the 2008 standards in California could be used nationwide with 
the additional year allowed for any engine models not sold in 
California. Low-emission engines sold in California are generally sold 
nationwide as part of manufacturer compliance strategies for EPA's 2006 
standards. Manufacturers have indicated that they are calibrating their 
four-stroke and direct-injection two-stroke engines to meet the 
California requirements. To meet the new standards, manufacturers' 
efforts will primarily center on phasing out their higher-emission 
carbureted two-stroke engines and producing more of their lower 
emission engines.
(3) Technological Approaches
    Conventional two-stroke engines add a fuel-oil mixture to the 
intake air with a carburetor, and use the crankcase to force this mixed 
charge air into the combustion chamber. In the two-stroke

[[Page 59074]]

design, the exhaust gases must be purged from the cylinder while the 
fresh charge enters the cylinder. With traditional two-stroke designs, 
the fresh charge, with unburned fuel and oil, will push the exhaust 
gases out of the combustion chamber as the combustion event concludes. 
As a result, 25 percent or more of the fresh fuel-oil could pass 
through the engine unburned. This is known as scavenging losses. 
Manufacturers have phased out sales of the majority of their 
traditional two-stroke engines to meet the federal 2006 OB/PWC exhaust 
emission standards. However, many of these engines still remain in the 
product mix as a result of emission credits.
    One approach to minimizing scavenging losses in a two-stroke engine 
is through the use of direct fuel injection into the combustion 
chamber. The primary advantage of direct injection for a two-stroke 
engine is that the exhaust gases can be scavenged with fresh air and 
fuel can be injected into the combustion chamber after the exhaust port 
closes. As a result, hydrocarbon emissions, fuel economy, and oil 
consumption are greatly improved. Some users prefer two-stroke direct 
injection engines over four-stroke engines due to the higher power-to-
weight ratio. Most of the two-stroke direct injection engines certified 
to the current OB/PWC emission standards have HC+NOX 
emissions levels somewhat higher than certified four-stroke engines. 
However, these engines also typically have lower CO emissions due to 
the nature of a heterogeneous charge. By injecting the fuel directly 
into a charge of air in the combustion chamber, localized areas of lean 
air/fuel mixtures are created where CO is efficiently oxidized.
    OB/PWC manufacturers are also achieving lower emissions through the 
use of four-stroke engine designs. Because a single combustion event 
takes place over two revolutions of the crankshaft, the fresh fuel-air 
charge can enter the combustion chamber after the exhaust valve is 
closed. This minimizes scavenging losses. Manufacturers currently offer 
four-stroke marine engines with maximum engine power ranging from 1.5 
to more than 250 kW. These engines are available with carburetion, 
throttle-body fuel injection, or multi-point fuel injection. Based on 
the certification data, whether the engine is carbureted or fuel-
injected does not have a significant effect on combined 
HC+NOX emissions. For PWC engines, the HC+NOX 
levels are somewhat higher, primarily due to their higher power-to-
weight ratio. CO emissions from PWC engines are similar to those for 
four-stroke outboard engines.
    One manufacturer has certified two PWC engine models with oxidation 
catalysts. One engine model uses the oxidation catalyst in conjunction 
with a carburetor while the other uses throttle-body fuel injection. In 
this application, the exhaust system is shaped in such a way to protect 
the catalyst from water. The exhaust system is relatively large 
compared to the size of the engine. We are not aware of any efforts to 
develop a three-way catalyst system for PWC engines. We are also not 
aware of any development efforts to package a catalyst into the exhaust 
system of an outboard marine engine. In current designs, water and 
exhaust are mixed in the exhaust system to help cool the exhaust and 
tune the engine. Water can work its way up through the exhaust system 
because the lower end is under water and varying pressures in the 
exhaust stream can draw water against the prevailing gas flow. As 
discussed in Chapter 4 of the Final RIA, saltwater can be detrimental 
to catalyst performance and durability. In addition, outboard engines 
are designed with lower units that are designed to be as thin as 
possible to improve the ability to turn the engine on the back of the 
boat and to reduce drag on the lowest part of the unit. This raises 
concerns about the placement and packaging of catalysts in the exhaust 
stream. Certainly, the success of packaging catalysts in sterndrive and 
inboard boats in recent development efforts (see Section III) suggests 
that catalysts may be feasible for outboards with additional effort. 
However, this has not yet been demonstrated and significant development 
efforts will be necessary.
(4) Regulatory Alternatives
    We considered a level of 10 g/kW-hr HC+NOX for OB/PWC 
engines above 40 kW with an equivalent percent reduction below the new 
standards for engines at or below 40 kW. This second tier of standards 
could apply in the 2012 or later time frame. Such a standard would be 
consistent with currently certified emission levels from a significant 
number of four-stroke outboard engines. We had three concerns with 
adopting this second tier of OB/PWC standards. First, while some four-
stroke engines may be able to meet a 10 g/kW-hr standard with improved 
calibrations, it is not clear that all engines could meet this standard 
without applying catalyst technology. As described in Section IV.H.3, 
we believe it is not appropriate to base standards in this rule on the 
use of catalysts for OB/PWC engines. Second, certification data for 
personal watercraft engines show somewhat higher exhaust emission 
levels, so setting the standard at 10 g/kW-hr would likely require 
catalysts for many models. Third, it is not clear that two-stroke 
engines would be able to meet the more stringent standard, even with 
direct injection and catalysts. These engines operate with lean air-
fuel ratios, so reducing NOX emissions with any kind of 
aftertreatment is especially challenging.
    Therefore, unlike the new standards for sterndrive and inboard 
engines, we are not adopting OB/PWC standards that require the use of 
catalysts. Catalyst technology would be necessary for significant 
additional control of HC+NOX and CO emissions for these 
engines. While there is good potential for eventual application of 
catalyst technology to outboard and personal watercraft engines, we 
believe the technology is not adequately demonstrated at this point. 
Much laboratory and in-water work is needed.
(5) Our Conclusions
    We believe the final emission standards can be achieved by phasing 
out conventional carbureted two-stroke engines in favor of four-stroke 
engines or two-stroke direct injection engines. The four-stroke engines 
or two-stroke direct injection engines are already widely available 
from marine engine manufacturers. One or both of these technologies are 
currently in place for the whole range of outboard and personal 
watercraft engines.
    The new exhaust emission standards represent the greatest degree of 
emission control achievable in the contemplated time frame. While 
manufacturers can meet the standards with their full product line in 
2010, requiring full compliance with a nationwide program earlier, such 
as in the same year that California introduces new emission standards, 
will pose an unreasonable requirement. Allowing two years beyond 
California's requirements is necessary to allow manufacturers to 
certify their full product line to the new standards, not only those 
products they will make available in California. Also, as described 
above, we believe the catalyst technology that will be required to meet 
emission standards substantially more stringent than we are adopting 
has not been adequately demonstrated for outboard or personal 
watercraft engines. As such, we believe the new standards for 
HC+NOX and CO emissions are the most stringent possible in 
this rulemaking. More time to gain experience with catalysts on 
sterndrive and inboard engines and a substantial engineering effort to 
apply that learning

[[Page 59075]]

to outboard and personal watercraft engines may allow us to pursue more 
stringent standards in a future rulemaking.
    As discussed in Section VII, we do not believe the final standards 
will have negative effects on energy, noise, or safety and may lead to 
some positive effects.

V. Small SI Engines

A. Overview

    This section applies to new nonroad spark-ignition engines with 
rated power at or below 19 kW (``Small SI engines''). These engines are 
most often used in lawn and garden applications, typically by 
individual consumers; they are many times also used by commercial 
operators and they provide power for a wide range of other home, 
industrial, farm, and construction applications. The engines are 
typically air-cooled single-cylinder models, though Class II engines 
(with displacement over 225 cc) may have two or three cylinders, and 
premium models with higher power may be water-cooled.
    We have already adopted two phases of exhaust standards for Small 
SI engines. The first phase of standards for nonhandheld engines 
generally led manufacturers to convert any two-stroke engines to four-
stroke engines. These standards applied only at the time of sale. The 
second phase of standards for nonhandheld engines generally led 
manufacturers to apply emission control technologies, such as in-
cylinder controls and improved carburetion, with the additional 
requirement that manufacturers needed to meet emission standards over a 
useful life period.
    As described in Section I, this final rule is the result of a 
Congressional mandate that springs from the new California ARB 
standards. In 2003, California ARB adopted more stringent standards for 
nonhandheld engines. These standards target emission reductions of 
approximately 35 percent below EPA's Phase 2 standards and are based on 
the expectation that manufacturers will use relatively low-efficiency 
three-way catalysts to control HC+NOX emissions. California 
ARB did not change the applicable CO emission standard.\96\
---------------------------------------------------------------------------

    \96\ California ARB also adopted new fuel evaporative emission 
standards for equipment using handheld and nonhandheld engines. 
These included tank permeation standards for both types of equipment 
and hose permeation, running loss, and diurnal emission standards 
for nonhandheld equipment. See Section VI for additional information 
related to evaporative emissions.
---------------------------------------------------------------------------

    We are adding these new regulations for Small SI engines in 40 CFR 
part 1054 rather than changing the current regulations in 40 CFR part 
90. This gives us the opportunity to update the details of our 
certification and compliance program that are consistent with the 
comparable provisions that apply to other engine categories and 
describe regulatory requirements in plain language. Most of the change 
in regulatory text provides improved clarity without changing 
procedures or compliance obligations. Where there is a change that 
warrants further attention, we describe the need for the change below. 
For nonhandheld engines, manufacturers must comply with all the 
provisions in part 1054 once the Phase 3 standards begin to apply in 
2011 or 2012. For handheld engines, manufacturers must comply with the 
provisions in part 1054 starting in 2010. Note, however, that part 1054 
specifies that certain provisions do not apply for handheld engines 
until sometime after 2010.
    Engines and equipment subject to part 1054 are also subject to the 
general compliance provisions in 40 CFR part 1068. These include 
prohibited acts and penalties, exemptions and importation provisions, 
selective enforcement audits, defect reporting and recall, and hearing 
procedures. See Section VIII of the preamble to the proposed rule for 
further discussion of these general compliance provisions.

B. Engines Covered by This Rule

    This action includes more stringent exhaust emission standards for 
new nonroad engines with rated power at or below 19 kW that are sold in 
the United States. The exhaust standards are for nonhandheld engines 
(Classes I and II). As described in Section I, handheld Small SI 
engines (Classes III, IV, and V) are also subject to standards, but we 
are not changing the level of exhaust emission standards for these 
engines. As described in Section VI, we are also adopting new standards 
for controlling evaporative emissions from Small SI engines, including 
both handheld and nonhandheld engines. Certain of the provisions 
discussed in this Section V apply to both handheld and nonhandheld 
engines, as noted. Reference to both handheld and nonhandheld engines 
also includes marine auxiliary engines subject to the Small SI engine 
standards for that size engine.
(1) Engines Covered by Other Programs
    The Small SI engine standards do not apply to recreational vehicles 
covered by EPA emission standards in 40 CFR part 1051. The regulations 
in part 1051 apply to off-highway motorcycles, snowmobiles, all-terrain 
vehicles, and certain offroad utility vehicles. However, if an 
amphibious vehicle or other recreational vehicle with an engine at or 
below 19 kW is not subject to standards under part 1051, its engine 
will need to meet the Small SI engine standards. We also do not 
consider vehicles such as go karts or golf carts to be subject to part 
1051 because they are not intended for high-speed operation over rough 
terrain; these engines are also subject to Small SI engine standards. 
The Small SI engine standards do not apply to engines used in scooters 
or other vehicles that qualify as motor vehicles.
    Consistent with the current regulation under 40 CFR part 90, Small 
SI engine standards apply to spark-ignition engines used as generators 
or for other auxiliary power on marine vessels, but not to marine 
propulsion engines. As described below, we are finalizing more 
stringent exhaust emission standards that will apply uniquely to marine 
generator engines.
    Engines with rated power above 19 kW are subject to emission 
standards under 40 CFR part 1048. However, we adopted a special 
provision under part 1048 allowing engines with total displacement at 
or below 1000 cc and with rated power at or below 30 kW to meet the 
applicable Small SI engine standards instead of the standards in part 
1048. For any engines that are certified using this provision, any 
emission standards that we adopt for Class II engines and equipment in 
this rulemaking (or in later rulemakings) will also apply at the same 
time. Since these engines are not required to meet the Small SI engine 
standards we have not included them in the analyses associated with 
this final rule.
(2) Maximum Engine Power and Engine Displacement
    Under the current regulations, ``rated power'' and ``power rating'' 
are determined by the manufacturer with little or no direction for 
selecting appropriate values. We are establishing an objective approach 
to establishing the alternative term ``maximum engine power'' under the 
regulations (see Sec.  1054.140). This value has regulatory 
significance for Small SI engines only to establish whether or not 
engines are instead subject to Large SI engine standards. Determining 
maximum engine power is therefore relevant only for those engines that 
are approaching the line separating these two engine categories. We are 
requiring that manufacturers determine and report maximum engine power 
if their emission-data engine has a maximum modal power at or above 15 
kW (at or

[[Page 59076]]

above 25 kW if engine displacement is at or below 1000 cc).
    Similarly, the regulations depend on engine displacement to 
differentiate engines for the applicability of different standards. The 
regulations currently provide no objective direction or restriction 
regarding the determination of engine displacement. We are defining 
displacement as the intended swept volume of the engine to the nearest 
cubic centimeter, where the engine's swept volume is the product of the 
internal cross-sectional area of the cylinders, the stroke length, and 
the number of cylinders.
    For both maximum engine power and displacement, the declared values 
must be within the range of the values from production engines 
considering normal production variability. This does not imply that 
production engines need to be routinely tested or measured to verify 
the declared values, but it serves to define a range of appropriate 
values and provides a mechanism by which we can ensure that the 
declared values conform to the production engines in question. If 
production engines are found to have different values for maximum 
engine power or displacement, this should be noted in a change to the 
application for certification.
(3) Exempted or Excluded Engines
    Under the Clean Air Act, engines that are used in stationary 
applications are not nonroad engines. States are generally preempted 
from setting emission standards for nonroad engines but this preemption 
does not apply to stationary engines. EPA has adopted emission 
standards for stationary compression-ignition engines sold or used in 
the United States (71 FR 39154, July 11, 2006). EPA also recently 
adopted emission standards for stationary spark-ignition engines in a 
separate action (73 FR 3568, January 18, 2008). In pursuing emission 
standards for stationary engines, we have attempted to maintain 
consistency between stationary and nonroad requirements as much as 
possible. As explained in the stationary rule, stationary spark-
ignition engines below 19 kW are almost all sold into residential 
applications so we believe it is not appropriate to include 
requirements for owners or operators that will normally be part of a 
program for implementing standards for stationary engines. As a result, 
we indicated in the stationary rule that it is most appropriate to set 
exhaust and evaporative emission standards for stationary spark-
ignition engines and equipment below 19 kW as if they were used in 
nonroad applications. This will allow manufacturers to make a single 
product that meets all applicable EPA standards for both stationary and 
nonroad applications.
    The Clean Air Act provides for a different regulatory approach for 
engines used solely in competition. Rather than relying on engine 
design features that serve as inherent indicators of dedicated 
competitive use, we have taken the approach in other programs of more 
carefully differentiating competition and noncompetition models in ways 
that reflect the nature of the particular products. In the case of 
Small SI engines, we believe there are no particular engine design 
features that allow us to differentiate between engines that are used 
solely for competition from those with racing-type features that are 
not used solely for competition. We are requiring that handheld and 
nonhandheld equipment with engines meeting all the following criteria 
will be considered as being used solely for competition:
     The engine (or equipment in which the engine is installed) 
may not be displayed for sale in any public dealership;
     Sale of the equipment in which the engine is installed 
must be limited to professional competitors or other qualified 
competitors;
     The engine must have performance characteristics that are 
substantially superior to noncompetitive models;
     The engines must be intended for use only in competition 
events sanctioned (with applicable permits) by a state or federal 
government agency or other widely recognized public organization, with 
operation limited to competition events, performance-record attempts, 
and official time trials.
    We are also including a provision allowing us to approve an 
exemption for cases in which an engine manufacturer can provide clear 
and convincing evidence that an engine will be used solely for 
competition even though not all the above criteria apply for a given 
situation. This may occur, for example, if a racing association 
specifies a particular engine model in the competition rules, where 
that engine has design features that prevent it from being certified, 
or from being used for purposes other than competition.
    Engine manufacturers will make their request for each new model 
year and we will deny a request for future production if there are 
indications that some engines covered by previous requests are not 
being used solely for competition. Competition engines are produced and 
sold in very small quantities so manufacturers should be able to 
identify which engines qualify for this exemption.
    In the rulemaking for recreational vehicles, we chose not to apply 
standards to hobby products by exempting all reduced-scale models of 
vehicles that were not capable of transporting a person (67 FR 68242, 
November 8, 2002). We are extending that same provision to handheld and 
nonhandheld Small SI engines. (See Sec.  1054.5.)
    In the rulemaking to establish Phase 2 emission standards, we 
adopted an exemption for handheld and nonhandheld engines used in 
rescue equipment. The regulation does not require any request, 
approval, or recordkeeping related to the exemption. We discovered 
while conducting the SBAR Panel described in Section VI.G that some 
companies are producing noncompliant engines under this exemption. As a 
result, we are keeping this exemption but are adding several provisions 
to allow us to better monitor how it is used (see Sec.  1054.660). We 
are also keeping the requirement that equipment manufacturers use 
certified engines if they are available. We are updating this provision 
by adding a requirement that equipment manufacturers use an engine that 
has been certified to less stringent Phase 1 or Phase 2 standards if 
such an engine is available. We are explicitly allowing engine 
manufacturers to produce engines for this exemption (with permanent 
labels identifying the particular exemption), but only if they have a 
written request for each equipment model from the equipment 
manufacturer. We are further requiring that the equipment manufacturer 
notify EPA of the intent to produce emergency equipment with exempted 
engines. Also, to clarify the scope of this provision, we are defining 
``emergency rescue situations'' as firefighting or other situations in 
which a person is retrieved from imminent danger. Finally, we are 
clarifying that EPA may discontinue the exemption on a case-by-case 
basis if we find that such engines are not used solely for emergency 
and rescue equipment or if we find that a certified engine is available 
to power the equipment safely and practically. We are applying the 
provisions of this section for new equipment built on or after January 
1, 2010.
    The current regulations also specify an exemption allowing 
individuals to import up to three nonconforming handheld or nonhandheld 
engines one time. We are keeping this exemption with three adjustments 
(see Sec.  1054.630). First, we are allowing this exemption only for 
used equipment. Allowing

[[Page 59077]]

importation of new equipment under this exemption is not consistent 
with the intent of the provision, which is to allow people to move to 
the United States from another country and continue to use lawn and 
garden equipment that may already be in their possession. Second, we 
are allowing such an importation once every five years but are 
requiring a statement that the person importing the exempted equipment 
has not used this provision in the preceding five years. The current 
regulations allow only one importation in a person's lifetime without 
including any way of making that enforceable. We believe the new 
combination of provisions represents an appropriate balance between 
preserving the enforceability of the exemption within the normal flow 
of personal property for people coming into the country. Third, we are 
no longer requiring submission of the taxpayer identification number 
since this is not essential for ensuring compliance. We are applying 
these changes starting January 1, 2010.

C. Final Requirements

    A key element of the new requirements for Small SI engines is the 
more stringent exhaust emission standards for nonhandheld engines. We 
are also finalizing several changes to the certification program that 
will apply to both handheld and nonhandheld engines. For example, we 
are clarifying the process for selecting an engine family's useful 
life, which defines the length of time over which manufacturers are 
responsible for meeting emission standards. We are also adding several 
provisions to update the program for allowing manufacturers to use 
emission credits to show that they meet emission standards. The 
following sections describe the elements of this rule.
    The timing for implementation of the new exhaust emission standards 
is described below. Unless we specify otherwise, all the additional 
regulatory changes will apply when engines are subject to the emission 
standards and the other provisions under 40 CFR part 1054. This will be 
model year 2012 for Class I engines and model year 2011 for Class II 
engines. For handheld engines, we are generally requiring that 
manufacturers comply with the provisions of part 1054, including the 
certification provisions, starting in the 2010 model year. These new 
requirements apply to handheld engines unless stated otherwise. For 
convenience we refer to the handheld emission standards in part 1054 as 
Phase 3 standards even though the numerical values remain unchanged 
from the Phase 2 standards.
(1) Emission Standards
    Extensive testing and dialogue with manufacturers and other 
interested parties has led us to a much better understanding of the 
capabilities and limitations of applying emission control technologies 
to nonhandheld Small SI engines. As described in the Final RIA, we have 
collected a wealth of information related to the feasibility, 
performance characteristics, and safety implications of applying 
catalyst technology to these engines. We have concluded within the 
context of Clean Air Act section 213 that it is appropriate to 
establish emission standards that are consistent with those adopted by 
California ARB. We are finalizing HC+NOX emission standards 
of 10.0 g/kW-hr for Class I engines starting in the 2012 model year, 
and 8.0 g/kW-hr for Class II engines starting in the 2011 model year 
(see Sec.  1054.105). For both classes of nonhandheld engines we are 
maintaining the existing CO standard of 610 g/kW-hr.
    We are eliminating the defined subclasses for the smallest sizes of 
nonhandheld engines starting with implementation of the Phase 3 
standards. Under the current regulations in part 90, Class I-A is 
designated for engines with displacement below 66 cc that may be used 
in nonhandheld applications. To address the technological constraints 
of these engines, all the current requirements for these engines are 
the same as for handheld engines. Class I-B is similarly designated for 
engines with displacement between 66 and 100 cc that may be used in 
nonhandheld applications. These engines are currently subject to a mix 
of provisions that result in an overall stringency that lies between 
handheld and nonhandheld engines. We are revising the regulations such 
that engines at or below 80 cc are subject to the Phase 3 standards for 
handheld engines and equipment in part 1054 starting in the 2010 model 
year. We are allowing engines at or below 80 cc to be used without 
restriction in nonhandheld equipment. The 80 cc threshold aligns with 
the California ARB program. For nonhandheld engines above 80 cc, we are 
treating them in every way as Class I engines. Based on the fact that 
it is more difficult for smaller displacement engines to achieve the 
same g/kW-hr emission level as larger displacement engines, it will be 
more of a challenge for manufacturers to achieve a 10.0 g/kW-hr 
HC+NOX level on these smallest Class I engines. However, for 
those engines unable to achieve the level of the new standards (either 
with or without a catalyst), manufacturers may elect to rely on 
emission credits to comply with emission standards. We believe all 
manufacturers producing engines formerly included in Class I-B also 
have a wide enough range of engine models that they will be able to 
generate sufficient credits to meet standards across the full product 
line. (See Sec.  1054.101 and Sec.  1054.801.)
    We are making another slight change to the definition of handheld 
engines that may affect whether an engine is subject to handheld or 
nonhandheld standards. The handheld definition relies on a weight 
threshold for certain engines. As recently as 1999, we affirmed that 
the regulation should allow for the fact that switching to a heavier 
four-stroke engine to meet emission standards might inappropriately 
cause an engine to no longer qualify as a handheld engine (64 FR 5252, 
February 3, 1999). The regulation accordingly specifies that the weight 
limit is 20 kilograms for one-person augers and 14 kilograms for other 
types of equipment, based on the weight of the engine that was in place 
before applying emission control technologies. We believe it is 
impractical to base a weight limit on product specifications that have 
become difficult to establish. We are therefore increasing each of the 
specified weight limits by two kilograms, representing the approximate 
additional weight related to switching to a four-stroke engine, and 
applying the new weight limit to all engines and equipment (see Sec.  
1054.801).
    Finally, we are revising the list of applications identified in the 
handheld definition as being subject to the handheld standards. We are 
specifically adding hand-supported jackhammers or rammer/compactor to 
the handheld definition as we have approved these types of applications 
in the past as meeting the attributes laid out in the definition. We 
are removing the ``one-person'' term from the auger description in the 
handheld definition because some augers can be operated by two people, 
but still have other attributes that would lead to the equipment being 
considered handheld. We are also removing the specific mention of pumps 
and generators from the handheld definition if they are below the 
specified weight limit. With the change noted earlier that allows 
manufacturers to use engines below 80cc in either handheld or 
nonhandheld applications, we believe these applications no longer need 
to be cited for special treatment in the handheld definition.

[[Page 59078]]

    The regulations in part 90 allow manufacturers to rely on altitude 
kits to comply with emission requirements at high altitude. We are 
continuing this approach but are clarifying that all nonhandheld 
engines must comply with Phase 3 standards without altitude kits at 
barometric pressures above 94.0 kPa, which corresponds to altitudes up 
to about 2,000 feet above sea level (see Sec.  1054.115). This will 
ensure that all areas east of the Rocky Mountains and most of the 
populated areas in Pacific Coast states will have compliant engines 
without depending on engine modifications. This becomes increasingly 
important as we anticipate manufacturers relying on technologies that 
are sensitive to controlling air-fuel ratio for reducing emissions. 
Engine manufacturers must identify in the owner's manual the altitude 
ranges for proper engine performance and emission control that are 
expected with and without the altitude kit. The owner's manual must 
also state that operating the engine with the wrong engine 
configuration at a given altitude may increase its emissions and 
decrease fuel efficiency and performance. See Section V.E.5 for further 
discussion related to the deployment of altitude kits where the 
manufacturers rely on them for operation at higher altitudes.
    We are adopting a slightly different approach for handheld engines 
with respect to altitude. Since we are not adopting more stringent 
exhaust emission standards, we believe it is appropriate to adopt 
provisions that are consistent with current practice at this time. We 
are therefore requiring handheld engines to comply with the current 
standards without altitude kits at barometric pressures above 96.0 kPa, 
which will allow for testing in most weather conditions at all 
altitudes up to about 1,100 feet above sea level.
    Spark-ignition engines used for marine auxiliary power (i.e., 
marine generator engines) are covered by the same regulations as land-
based engines of the same size. However, the marine generator versions 
of Small SI engines are able to make use of ambient water for enhanced 
cooling of the engine and exhaust system. Exhaust systems for these 
engines are water-jacketed to maintain low surface temperatures to 
minimize the risk of fires on boats, where the generator is often 
installed in small compartments within the boat. Manufacturers of 
marine generator engines have recently developed advanced technology in 
an effort to improve fuel consumption and CO emission controls for 
marine generators. This advanced technology includes the use of 
electronic fuel injection and three-way catalysts. As a result, 
manufacturers are offering new products with more than a 99 percent 
reduction in CO and have expressed their intent to offer only these 
advanced-technology engines in the near future. They have stated that 
these low-CO engines are responsive to market demand. We are 
establishing a CO standard of 5.0 g/kW-hr CO for marine generator 
engines to reflect the recent trend in marine generator engine designs 
(see Sec.  1054.105). We believe this standard is necessary to prevent 
backsliding in CO emissions that could occur if new manufacturers were 
to attempt to enter the market with less expensive, high-CO designs. 
See Section II for a discussion of air quality concerns related to CO 
emissions.
    At this time, we are continuing the current regulatory approach for 
wintertime engines (e.g., engines used exclusively to power equipment 
such as snowthrowers and ice augers). Under this final rule, the 
HC+NOX exhaust emission standards will be optional for 
wintertime engines. However, if a manufacturer chooses to certify its 
wintertime engines to such standards, those engines will be subject to 
all the requirements as if the optional standards were mandatory. We 
are adopting a definition of wintertime engines to clarify which 
engines qualify for these special provisions.
    All engines subject to standards must continue to control crankcase 
emissions. In the case of snowthrower engines, crankcase emissions may 
be vented to the ambient air as long as manufacturers take crankcase 
emissions into account in demonstrating compliance with exhaust 
emission standards.
(2) Useful Life
    The Phase 2 standards for Small SI engines included the concept 
that manufacturers are responsible for meeting emission standards over 
a useful life period. The useful life defines the design target for 
ensuring the durability of emission controls under normal in-use 
operation for properly maintained engines. Given the very wide range of 
engine applications, from very low-cost consumer products to commercial 
models designed for long-term continuous operation, we determined that 
a single useful life value for all products, which is typical for other 
engine programs, was not appropriate for Small SI engines. We proposed 
at that time to determine the useful life for an engine family based on 
specific criteria, but commenters suggested that such a requirement was 
overly rigid and unnecessary. The final rule instead specified three 
alternative useful life values, giving manufacturers the responsibility 
to select the useful life that was most appropriate for their engines 
and the corresponding types of equipment. The preamble to the Phase 2 
final rule expressed a remaining concern that manufacturers might not 
select the most appropriate useful life value. This concern related to 
both ensuring effective in-use emission control and maintaining the 
integrity of emission-credit calculations. The preamble also stated our 
intent to periodically review the manufacturers' decisions to determine 
whether modifications to these rules would be appropriate.
    The regulations in Sec.  90.105 provide a benchmark for determining 
the appropriate useful life value for an engine family. The regulations 
direct manufacturers to select the useful life value that ``most 
closely approximates the expected useful lives of the equipment into 
which the engines are anticipated to be installed.'' To maintain a 
measure of accountability, we included a requirement that manufacturers 
document the basis for their selected useful life values. The suggested 
data included, among other things: (1) Surveys of the life spans of the 
equipment in which the subject engines are installed; (2) engineering 
evaluations of field-aged engines to ascertain when engine performance 
deteriorates to the point where utility and/or reliability is impacted 
to a degree sufficient to necessitate overhaul or replacement; and (3) 
failure reports from engine customers. These regulatory provisions 
identify the median time to retirement for in-use equipment as the 
marker for defining the useful life period. This allows manufacturers 
to consider that equipment models may fail before the engine has 
reached the point of failure and that engines may be installed in 
different types of equipment with varying usage patterns. Engines used 
in different types of equipment, or even engines used in the same 
equipment models used by different operators, may experience widely 
varying usage rates. The manufacturer is expected to make judgments 
that take this variability into account when estimating the median life 
of in-use engines and equipment.
    Several manufacturers have made a good faith effort to select 
appropriate useful life values for their engine families, either by 
selecting only the highest value, or by selecting higher values for 
families that appear more likely to be used in commercial applications. 
At the same time, we have observed several instances in which engine 
models are installed in

[[Page 59079]]

commercial equipment and marketed as long-life products but are 
certified to the minimum allowable useful life period.
    After assessing several ideas, we chose to adopt an approach that 
preserves the fundamental elements of the current provisions related to 
useful life but clarifies and enhances its implementation (see Sec.  
1054.107). Manufacturers will continue to select the most appropriate 
useful life from the same nominal values to best match the expected in-
use lifetime of the equipment into which the engines in the engine 
family will be installed. Manufacturers must continue to document the 
information supporting their selected useful life. We are adopting 
three provisions to address remaining concerns with the process of 
selecting useful life values.
    First, for manufacturers not selecting the highest available 
nominal value for useful life, we expect to routinely review the 
information to confirm that it complies with the regulation. Where our 
review indicates that the selected useful life may not be appropriate 
for an engine family, we may request further justification. If we 
determine from available information that a longer useful life is 
appropriate, the manufacturer must either provide additional 
justification or select a longer useful life for that engine family. We 
will encourage manufacturers to use the new provisions related to 
preliminary approval in Sec.  1054.210 if there is any uncertainty 
related to the useful life selection. We would rather work together 
early to establish this in the certification process rather than 
reviewing a completed application for certification to evaluate whether 
the completed durability demonstration is sufficient.
    Second, we are modifying the regulations to allow nonhandheld 
engine manufacturers to select a useful life value that is longer than 
the three specified nominal values. Manufacturers may choose to do this 
for the marketing advantage of selling a long-life product or they may 
want to generate emission credits that correspond to an expected 
lifetime that is substantially longer than we would otherwise allow. We 
are allowing manufacturers to select longer useful life values in 100-
hour increments, up to 3,000 hours for Class I engines and up to 5,000 
hours for Class II engines. Durability testing for certification will 
need to correspond to the selected useful life period. We have 
considered the possibility that a manufacturer might overstate an 
engine family's useful life to generate emission credits while knowing 
that engines may not operate that long. We believe the inherent testing 
burden and compliance liability is enough to avoid such a problem, but 
we are including the specified maximum values corresponding with the 
applicable useful life for comparable diesel engines or Large SI 
engines. We are not allowing for longer useful life values for handheld 
engines.
    Third, we are requiring that engines and equipment be labeled to 
identify the applicable useful life period. The current requirement 
allows manufacturers to identify the useful life with code letters on 
the engine's emission control information label, with the numerical 
value of the useful life spelled out in the owner's manual. We believe 
it is important for equipment manufacturers and consumers to be able to 
find an unambiguous designation showing the engine manufacturer's 
expectations about the useful life of the engine. Comments on the 
proposed rule also indicated an interest in using descriptive terms to 
identify the useful life on the label. We believe any terminology will 
communicate less effectively than the numerical value of the useful 
life, but we will allow manufacturers to use specified descriptive 
terms in addition to the number of hours.
    We are also including a provision in the final rule stating that 
the useful life is defined as a five-year period if the engine has not 
yet exceeded the specified number of operating hours during that time. 
This is consistent with our other engine programs. This does not affect 
the certification process. If we test an in-use engine within the five-
year useful life period and there is no clear indication that it has 
not yet exceeded the specified number of operating hours, it would need 
to meet applicable emission standards. Conversely, if an engine has not 
yet exceeded the number of operating hours but the engine is six years 
old, it is no longer required to meet emission standards.
(3) Averaging, Banking, and Trading
    EPA has included averaging, banking, and trading (ABT) programs in 
most of the emission control programs for highway and nonroad engines. 
EPA's existing Phase 2 regulations for Small SI engines include an 
exhaust ABT program (see 40 CFR 90.201 through 90.211). We are adopting 
an ABT program for the Phase 3 HC+NOX exhaust emission 
standards that is similar to the existing program (see part 1054, 
subpart H). The new exhaust ABT program is intended to enhance the 
ability of engine manufacturers to meet more stringent emission 
standards. The exhaust ABT program is also structured to avoid delay of 
the transition to the new exhaust emission controls. As described in 
Section VI.D, we are establishing a separate evaporative ABT program 
for fuel tanks used in Small SI equipment. Credits may not be exchanged 
between the exhaust ABT program and the evaporative ABT program.
    The exhaust ABT program has three main components. Averaging means 
the exchange of emission credits between engine families within a given 
engine manufacturer's product line for a specific model year. Engine 
manufacturers divide their product line into ``engine families'' that 
are comprised of engines expected to have similar emission 
characteristics throughout their useful life. Averaging allows a 
manufacturer to certify one or more engine families at levels above the 
applicable emission standard, but below a set upper limit. This level 
then becomes the applicable standard for all the engines in that engine 
family, for purposes of certification, in-use testing, and the like. 
However, the increased emissions must be offset by one or more engine 
families within that manufacturer's product line that are certified 
below the same emission standard, such that the average standard from 
all the manufacturer's engine families, weighted by engine power, 
regulatory useful life, and production volume, is at or below the level 
of the emission standard. Banking means the retention of emission 
credits by the engine manufacturer for use in averaging or trading for 
future model years. Trading means the exchange of emission credits 
between engine manufacturers which can then be used for averaging 
purposes, banked for future use, or traded to another engine 
manufacturer.
    Because we are not adopting any change in the general equation 
under which emission credits are calculated, EPA is allowing 
manufacturers to use Phase 2 credits generated under the part 90 ABT 
program for engines that are certified in the Phase 3 program under 
part 1054, within the limits described below. Furthermore, even though 
we are not establishing new exhaust emission standards for handheld 
engines, the handheld engine regulations are migrating to part 1054. 
Therefore, handheld engines will be included in the new ABT program 
under part 1054 with one change in the overall program as described 
below.
    Under an ABT program, averaging is allowed only between engine 
families in the same averaging set, as defined in the

[[Page 59080]]

regulations. For the exhaust ABT program, we are separating handheld 
engines and nonhandheld engines into two distinct averaging sets 
starting with the 2011 model year. Under the new program, credits may 
generally be used interchangeably between Class I and Class II engine 
families, with a limited restriction on Phase 3 credits during model 
years 2011 and 2012 as noted below. Likewise, credits can be used 
interchangeably between all three handheld engine classes (Classes III, 
IV, and V). Because the Phase 2 exhaust ABT program allowed exchange 
across all engine classes (i.e., allowing exchanges between handheld 
engines and nonhandheld engines), manufacturers using credits beginning 
with the 2011 model year will need to show that the credits were 
generated within the allowed category of engines. For many companies, 
especially those in the handheld market, this will potentially be 
straightforward since they are primarily in the handheld market. For 
companies that have a commingled pool of emission credits generated by 
both handheld engines and nonhandheld engines, this will take more 
careful accounting. Because manufacturers have been aware of this new 
requirement since the proposal, keeping records to distinguish handheld 
credits and nonhandheld credits will be relatively straightforward for 
2006 and later model years.
    We are making two exceptions to the provision restricting credit 
exchanges between handheld engines and nonhandheld engines. Currently, 
some companies that are primarily nonhandheld engine manufacturers also 
sell a limited number of handheld engines. Under the Phase 2 program, 
these engine manufacturers can use credits from nonhandheld engines to 
offset the higher emissions of their handheld engines. Because we are 
not adopting new exhaust requirements for handheld engines, we are 
addressing this existing practice by specifying that an engine 
manufacturer may use emission credits from their nonhandheld engines 
for their handheld engines under certain conditions. Specifically, a 
manufacturer may use credits from their nonhandheld engines for their 
handheld engines only where the handheld engine family is certified in 
2008 and later model years without any design changes from the 2007 
model year and the FEL of the handheld engine family does not increase 
above the level that applied in the 2007 model year, unless such an 
increase is based on emission data from production engines. 
Furthermore, we are limiting the number of handheld engines for which a 
manufacturer can use emission credits from their nonhandheld engines to 
30,000 per year. We believe these provisions allow for engine 
manufacturers to continue producing these handheld engines for use in 
existing handheld models of low-volume equipment applications while 
preventing new high-emitting handheld engine families from entering the 
market through the use of nonhandheld engine credits. (See Sec.  
1054.740.)
    A second exception to the provision restricting credit exchanges 
between handheld engines and nonhandheld engines arises because of our 
handling of engines below 80cc. Under the new Phase 3 program, all 
engines below 80cc are considered handheld engines for the purposes of 
the emission standards. However, a few of these engines are used in 
nonhandheld applications. Therefore, EPA will allow a manufacturer to 
generate nonhandheld ABT credits from engines below 80cc for those 
engines a manufacturer has determined are used in nonhandheld 
applications. (The credits will be generated against the applicable 
handheld engine standard.) These nonhandheld credits could be used 
within the Class I and Class II engine classes to demonstrate 
compliance with the Phase 3 exhaust standards (subject to applicable 
restrictions). The credits generated by engines below 80cc used in 
handheld applications could only be used for other handheld engines. 
(See Sec.  1054.701.)
    Under an ABT program, a manufacturer establishes a ``family 
emission limit'' (FEL) for each participating engine family. This FEL 
may be above or below the standard. The FEL becomes the enforceable 
emission limit for all the engines in that family for purposes of 
compliance testing. FELs that are established above the standard may 
not exceed an upper limit specified in the ABT regulations. For 
nonhandheld engines we are establishing FEL caps to prevent the sale of 
very high-emitting engines. Under the new FEL caps, manufacturers will 
need to establish FELs at or below the levels of the Phase 2 
HC+NOX emission standards of 16.1 g/kW-hr for Class I 
engines and 12.1 g/kW-hr for Class II engines. (The Phase 3 FEL cap for 
Class I engines with a displacement between 80 cc and 100 cc will be 
40.0 g/kW-hr since these engines were Class I-B engines under the Phase 
2 regulations and subject to this higher level.) For handheld engines, 
where we are not adopting new exhaust emission standards, we are 
maintaining the FEL caps as currently specified in the part 90 ABT 
regulations.
    For nonhandheld engines we are adding two special provisions 
related to the transition from Phase 2 to Phase 3 standards in Sec.  
1054.740. First, we are providing incentives for manufacturers to 
produce and sell engines certified at or below the Phase 3 standards 
before the standards are scheduled to be implemented. Second, we are 
establishing provisions to allow the use of Phase 2 credits for a 
limited time under specific conditions. The following discussions 
describe each of these provisions in more detail for Class I engines 
and Class II engines separately.
    For Class I engines, engine manufacturers can generate early Phase 
3 credits by producing engines with an FEL at or below 10.0 g/kW-hr 
prior to 2012. These early Phase 3 credits will be calculated and 
categorized into two distinct types of credits, Transitional Phase 3 
credits and Enduring Phase 3 credits. For engines certified with an FEL 
at or below 10.0 g/kW-hr, the manufacturer will earn Transitional Phase 
3 credits. The Transitional Phase 3 credits will be calculated based on 
the difference between 10.0 g/kW-hr and 15.0 g/kW-hr. (The 15.0 g/kW-hr 
level is the production-weighted average of Class I FEL values under 
the Phase 2 program.) Manufacturers could use the Transitional Phase 3 
credits from Class I engines in 2012 through 2014 model years. For 
engines certified with an FEL below 10.0 g/kW-hr, manufacturers will 
earn Enduring Phase 3 credits in addition to the Transitional Phase 3 
credits described above. The Enduring Phase 3 credits will be 
calculated based on the difference between the FEL for the engine 
family and 10.0 g/kW-hr (i.e., the applicable Phase 3 standard). The 
Enduring Phase 3 credits could be used once the Phase 3 standards are 
implemented without the model year restriction noted above for 
Transitional Phase 3 credits.
    Engine manufacturers may certify their Class I engines using Phase 
2 credits generated by Class I or Class II engines for the first two 
years of the Phase 3 standards (i.e., model years 2012 and 2013) under 
certain conditions. The manufacturer must first use all of its 
available transitional Phase 3 credits to demonstrate compliance with 
the Phase 3 standards, subject to the cross-class credit restriction 
noted below which applies prior to model year 2013. If these 
Transitional Phase 3 credits are sufficient to demonstrate compliance, 
the manufacturer may not use Phase 2 credits. If these Transitional 
Phase 3 credits are insufficient to

[[Page 59081]]

demonstrate compliance, the manufacturer could use Phase 2 credits to a 
limited degree (under the conditions described below) to cover the 
remaining amount of credits needed to demonstrate compliance. If 
manufacturers still need credits to demonstrate compliance, they may 
then use their remaining Phase 3 credits (i.e., their Enduring Phase 3 
credits or any other Phase 3 credits generated in 2012 or 2013, subject 
to the cross-class credit restriction noted below which applies prior 
to model year 2013).
    The maximum number of Phase 2 HC+NOX exhaust emission 
credits that manufacturers could use for their Class I engines will be 
calculated based on the characteristics of Class I engines produced 
during the 2007, 2008, and 2009 model years. For each of those years, 
the manufacturer will calculate a Phase 2 credit allowance using the 
ABT credit equation and inserting 1.6 g/kW-hr for the ``Standard--FEL'' 
term, and basing the rest of the values on the total production of 
Class I engines, the production-weighted power for all Class I engines, 
and production-weighted useful life value for all Class I engines 
produced in each of those years. Manufacturers will not include their 
wintertime engines in the calculations unless the engines are certified 
to meet the otherwise applicable HC+NOX emission standard. 
The maximum number of Phase 2 HC+NOX exhaust emission 
credits a manufacturer could use for their Class I engines (calculated 
in kilograms) will be the average of the three values calculated for 
model years 2007, 2008, and 2009. The calculation described above 
allows a manufacturer to use Phase 2 credits to cover a cumulative 
shortfall over the first two years for their Class I engines of 1.6 g/
kW-hr above the Phase 3 standard.
    The Phase 2 credit allowance for Class I engines could be used all 
in 2012, all in 2013, or partially in either or both model year's ABT 
compliance calculations. Because ABT compliance calculations must be 
done annually, the manufacturer will know its 2013 remaining allowance 
based on its 2012 calculation. For example, if a manufacturer uses all 
of its Phase 2 credit allowance in 2012, it will have no use of Phase 2 
credits for 2013. Conversely, if a manufacturer doesn't use any Phase 2 
credits in 2012, it will have all of its Phase 2 credit allowance 
available for use in 2013. If a manufacturer uses less than its 
calculated total credits based on the 1.6 g/kW-hr limit in 2012, the 
remainder will be available for use in 2013. This provision allows for 
limited use of Phase 2 emission credits to address the possibility of 
unanticipated challenges in reaching the Phase 3 emission levels in 
some cases or selling Phase 3 compliant engines early nationwide, 
without creating a situation that will allow manufacturers to 
substantially delay the introduction of Phase 3 emission controls.
    For Class II engines, engine manufacturers could generate early 
Phase 3 credits by producing engines with an FEL at or below 8.0 g/kW-
hr prior to 2011. These early Phase 3 credits will be calculated and 
categorized as Transitional Phase 3 credits and Enduring Phase 3 
credits. For engines certified with an FEL at or below 8.0 g/kW-hr, the 
manufacturer will earn Transitional Phase 3 credits. The Transitional 
Phase 3 credits will be calculated based on the difference between 8.0 
g/kW-hr and 11.0 g/kW-hr. (The 11.0 g/kW-hr level is the production-
weighted average of Class II FEL values under the Phase 2 program.) 
Manufacturers could use the Transitional Phase 3 credits from Class II 
engines in 2011 through 2013 model years. For engines certified with an 
FEL below 8.0 g/kW-hr, manufacturers will earn Enduring Phase 3 credits 
in addition to the Transitional Phase 3 credits described above. The 
Enduring Phase 3 credits will be calculated based on the difference 
between the FEL for the engine family and 8.0 g/kW-hr (i.e., the 
applicable Phase 3 standard). The Enduring Phase 3 credits could be 
used once the Phase 3 standards are implemented without the model year 
restriction noted above for Transitional Phase 3 credits.
    Engine manufacturers may certify their Class II engines using Phase 
2 credits generated by Class I or Class II engines for the first three 
years of the Phase 3 standards (i.e., model years 2011, 2012 and 2013) 
under certain conditions. The manufacturer must first use all of its 
transitional Phase 3 credits to demonstrate compliance with the Phase 3 
standards, subject to the cross-class credit restriction noted below 
which applies prior to model year 2013. If these Transitional credits 
are sufficient to demonstrate compliance, the manufacturer may not use 
Phase 2 credits. If these Transitional Phase 3 credits are insufficient 
to demonstrate compliance, the manufacturer could use Phase 2 credits 
to a limited degree (under the conditions described below) to cover the 
remaining amount of credits needed to demonstrate compliance. If the 
manufacturer still needs credits to demonstrate compliance, they may 
then use their remaining Phase 3 credits (i.e., their Enduring Phase 3 
credits or any other Phase 3 credits generated in 2011, 2012, or 2013, 
subject to the cross-class credit restriction noted below which applies 
prior to model year 2013).
    The maximum number of Phase 2 HC+NOX exhaust emission 
credits a manufacturer could use for their Class II engines will be 
calculated based on the characteristics of Class II engines produced 
during the 2007, 2008, and 2009 model years. For each of those years, 
the manufacturer will calculate a Phase 2 credit allowance using the 
ABT credit equation and inserting 2.1 g/kW-hr for the ``Standard--FEL'' 
term, and basing the rest of the values on the total production of 
Class II engines, the production-weighted power for all Class II 
engines, and production-weighted useful life value for all Class II 
engines produced in each of those years. Manufacturers will not include 
their wintertime engines in the calculations unless the engines are 
certified to meet the otherwise applicable HC+NOX emission 
standard. The maximum number of Phase 2 HC+NOX exhaust 
emission credits a manufacturer could use for their Class II engines 
(calculated in kilograms) will be the average of the three values 
calculated for model years 2007, 2008, and 2009. The calculation 
described above allows a manufacturer to use Phase 2 credits to cover a 
cumulative shortfall over the first three years for their Class II 
engines of 2.1 g/kW-hr above the Phase 3 standard.
    The Phase 2 credit allowance for Class II engines could be used all 
in 2011, all in 2012, all in 2013, or partially in any or all three 
model year's ABT compliance calculations. Because ABT compliance 
calculations must be done annually, the manufacturer will know its 
remaining allowance based on its previous calculations. For example, if 
a manufacturer uses all of its Phase 2 credit allowance in 2011, it 
will have no Phase 2 credits for 2012 or 2013. However, if a 
manufacturer uses less than its calculated total credits based on the 
2.1 g/kW-hr limit in 2011, it will have the remainder of its allowance 
available for use in 2012 and 2013. This provision allows for some use 
of Phase 2 emission credits to address the possibility of unanticipated 
challenges in reaching the Phase 3 emission levels in some cases or 
selling Phase 3 engines nationwide, without creating a situation that 
will allow manufacturers to substantially delay the introduction of 
Phase 3 emission controls.
    To avoid the use of credits to delay the introduction of Phase 3 
technologies, we are also not allowing manufacturers to use Phase 3 
credits from Class I engines to demonstrate compliance with Class II 
engines in the 2011 and 2012 model years. Similarly,

[[Page 59082]]

we are not allowing manufacturers to use Phase 3 credits from Class II 
engines to demonstrate compliance with Class I engines in the 2012 
model year. The 1.6 kW-hr and 2.1 g/kW-hr allowances discussed above 
may not be exchanged across engine classes or traded among 
manufacturers.
    We are making one additional adjustment related to the exhaust ABT 
program for engines subject to the new emission standards. We are 
adopting a requirement that lowering an FEL after the start of 
production may occur only if the manufacturer has emission data from 
production engines justifying the lower FEL (see Sec.  1054.225). This 
prevents manufacturers from making FEL changes late in the model year 
to generate more emission credits (or use fewer emission credits) when 
there is little or no opportunity to verify whether the revised FEL is 
appropriate for the engine family. This provision is common in EPA's 
emission control programs for other engine categories. We are also 
requiring that any revised FEL can apply only for engines produced 
after the FEL change. This is necessary to prevent manufacturers from 
recalculating emission credits in a way that leaves no way of verifying 
that the engines produced prior to the FEL change met the applicable 
requirements.
    As described below in Section V.E.3, we are allowing equipment 
manufacturers to install a limited number of Class II engines, 
certified by engine manufacturers with a catalyst as Phase 3 engines, 
into equipment without the catalyst. (This is only allowed when the 
engine is shipped separately from the exhaust system under the 
provisions described in Section V.E.2.) Because engine manufacturers 
may be generating emission credits from these engines based on the use 
of a catalyst, EPA is concerned that engine manufacturers could be 
earning exhaust ABT credits for engines that are sold but never have 
the catalyst installed. Therefore, EPA believes it is appropriate to 
adjust such credits to account for the fact that equipment 
manufacturers may in many cases legally install a non-catalyzed muffler 
on an engine that is part of a family whose certification depends on 
the use of a catalyst. Therefore, EPA is adopting a 0.9 adjustment 
factor for calculating credits for engine families that are available 
under the delegated assembly provisions and are also participating in 
the TPEM program. In addition, EPA is including an option that will 
allow engine manufacturers to track the final configuration of the 
engines to determine the actual number of engines that were downgraded 
under the TPEM program. A manufacturer would need to track sales for 
all the equipment manufacturers purchasing the given engine family. The 
engine manufacturer could use the resulting number of engines that were 
not downgraded in its calculation of ABT credits for that specific 
engine family. Engine manufacturers may specifically direct equipment 
manufacturers not to participate in the TPEM program for certain engine 
models, which would allow for a more straightforward accounting of the 
number of engines that are downgraded under the TPEM program.
    For all emission credits generated by engines under the Phase 3 
exhaust ABT program, we are allowing an indefinite credit life. We 
consider these emission credits to be part of the overall program for 
complying with Phase 3 standards. Given that we may consider further 
reductions beyond these standards in the future, we believe it will be 
important to assess the ABT credit situation that exists at the time 
any further standards are considered. Emission credit balances will be 
part of the analysis for determining the appropriate level and timing 
of new standards, consistent with the statutory requirement to 
establish standards that represent the greatest degree of emission 
reduction achievable, considering cost, safety, lead time, and other 
factors. If we were to allow the use of Phase 3 credits to meet future 
standards, we may need to adopt emission standards at more stringent 
levels or with an earlier start date than we would absent the continued 
(or limited) use of Phase 3 credits, depending on the level of Phase 3 
credit banks. Alternatively, we could adopt future standards without 
allowing the use of Phase 3 credits. The final requirements in this 
rulemaking describe a middle path in which we allow the use of Phase 2 
credits to meet the Phase 3 standards, with provisions that limit the 
extent and timing of using these credits.
    Finally, manufacturers may include as part of their federal credit 
calculation the sales of engines in California as long as they don't 
separately account for those emission credits under the California 
regulations. We originally proposed to exclude engines sold in 
California which are subject to the California ABR standards. However, 
we consider California's current HC+NOX standards to be 
equivalent to those we are adopting in this rulemaking, so we would 
expect a widespread practice of producing and marketing 50-state 
products. Therefore, as long as a manufacturer is not generating 
credits under California's averaging program for small engines, we 
would allow manufacturers to count those engines when calculating 
credits under EPA's program. This is consistent with how EPA allows 
credits to be calculated in other nonroad sectors, such as recreational 
vehicles.

D. Testing Provisions

    The test procedures provide an objective measurement for 
establishing whether engines comply with emission standards. The 
following sections describe a variety of changes to the current test 
procedures. Except as identified in the following sections, we are 
preserving the testing-related regulatory provisions that currently 
apply under 40 CFR part 90 for Phase 2 engines. Note that there is no 
presumption that any previous approvals, guidance, or judgments related 
to alternatives, deviations, or interpretations of the testing 
requirements under the Phase 1 or Phase 2 program will continue to 
apply; any decisions on such issues will be handled going forward on a 
case-by-case basis.
(1) Migrating Procedures to 40 CFR Part 1065
    Manufacturers have been using the procedures in 40 CFR part 90 to 
test their engines for certification of Phase 1 and Phase 2 engines. As 
part of a much broader effort, we have adopted comprehensive testing 
specifications in 40 CFR part 1065 that are intended to serve as the 
basis for testing all types of engines. The procedures in part 1065 
include updated information reflecting the current state of available 
technology. We are applying the procedures in part 1065 to nonhandheld 
engines starting with new certification testing in 2013 and later model 
years as specified in 40 CFR part 1054, subpart F. The procedures in 
part 1065 identify new types of analyzers and update a wide range of 
testing specifications, but leave intact the fundamental approach for 
measuring exhaust emissions. There is no need to shift to the part 1065 
procedures for nonhandheld engines before 2013. This allows 
manufacturers time to make any necessary adjustments or upgrades in 
their lab equipment and procedures. While any new certification testing 
for nonhandheld engines will be subject to the part 1065 procedures 
starting in model year 2013, manufacturers will be allowed to continue 
certifying nonhandheld engines using carryover data generated under the 
part 90 procedures.
    We are not setting new exhaust emission standards for handheld 
engines so there is no natural point in

[[Page 59083]]

time for shifting to the part 1065 procedures. We nevertheless believe 
handheld engines should also use the part 1065 procedures for measuring 
exhaust emissions. We are requiring manufacturers to start using the 
part 1065 procedures in the 2013 model year as described above for 
nonhandheld engines. Manufacturers will be allowed to continue 
certifying handheld engines using carryover data generated under the 
part 90 procedures, but any new certification testing will be subject 
to the part 1065 procedures starting with the 2013 model year.
    We have taken several steps to address the concerns raised by 
engine manufacturers related to the specified test procedures in part 
1065. First, we have confirmed that the calculations in part 1065 yield 
the same emission results for a given set of raw data from testing. The 
two calculation methods resulted in differences that were less than 1 
percent for both handheld and nonhandheld engines. We have identified a 
variety of clarifications and adjustments that we need to make to the 
equations in Sec.  1065.655 to ensure accurate calculations for engines 
operating with rich air-fuel mixtures. Second, we have modified the 
cycle-validation criteria in Sec.  1054.505 to more carefully reflect 
achievable torque control for small engines. The new criteria are based 
on a combination of specifications for continuous measurements and mean 
values, including specification of absolute thresholds where a 
percentage approach would not work for very small torque values. Third, 
we are adjusting the fueling instructions in part 1065 to allow for 
fuel-oil mixtures with two-stroke engines.
    We also acknowledge that handheld engines that depend on special 
fixtures for proper testing should be tested under the provisions of 
Sec.  1065.10(c) for special test procedures. This would require that 
manufacturers describe their test fixtures and make them available upon 
request. Further effort may be required to incorporate more specific 
requirements or specifications related to these test fixtures. We 
expect to cooperate with government agencies from California and from 
other countries in an effort to harmonize Small SI test procedures, for 
part 1065 procedures generally and for these special test procedures in 
particular.
(2) Duty Cycle
    The regulations under part 90 currently specify duty cycles for 
testing engines for exhaust emissions. The current requirements specify 
how to control speeds and loads and describe the situations in which 
the installed engine governor controls engine speed. We are extending 
these provisions to testing under the new standards with a few 
adjustments described below. For engines equipped with an engine speed 
governor, the current regulations at 40 CFR 90.409(a)(3) state:
    For Class I, Class I-B, and Class II engines subject to Phase 2 
standards that are equipped with an engine speed governor, the governor 
must be used to control engine speed during all test cycle modes except 
for Mode 1 or Mode 6, and no external throttle control may be used that 
interferes with the function of the engine's governor; a controller may 
be used to adjust the governor setting for the desired engine speed in 
Modes 2-5 or Modes 7-10; and during Mode 1 or Mode 6 fixed throttle 
operation may be used to determine the 100 percent torque value.
    In addition, the current regulations at 40 CFR 90.410(b) state:

    For Phase 2 Class I, I-B, and II engines equipped with an engine 
speed governor, during Mode 1 or Mode 6 hold both the specified 
speed and load within  five percent of point, during 
Modes 2-3, or Modes 7-8 hold the specified load with  
five percent of point, during Modes 4-5 or Modes 9-10, hold the 
specified load within the larger range provided by 0.27 
Nm (0.2 lb-ft), or  ten (10) percent of 
point, and during the idle mode hold the specified speed within 
 ten percent of the manufacturer's specified idle engine 
speed (see Table 1 in Appendix A of this subpart for a description 
of test Modes).

    Manufacturers have raised questions about the interpretation of 
these provisions. Our intent is that the current requirements specify 
that testing be conducted as follows:
     Full-load testing occurs at wide-open throttle to maintain 
engines at rated speed, which is defined as the speed at which the 
engine's maximum power occurs (as declared by the manufacturer).
     Idle testing occurs at the manufacturer's specified idle 
speed with a maximum load of five percent of maximum torque. The 
regulation allows adjustment to control speeds that are different than 
will be maintained by the installed governor.
     The installed governor must be used to control engine 
speed for testing at all modes with torque values between idle and 
full-load modes. The regulation allows adjustments for nominal speed 
settings that are different than will be maintained by the installed 
governor without modification.
    We are adopting the Phase 3 standards with adjustments to the 
regulatory requirements currently described in 40 CFR part 90 (see 
Sec.  1054.505). Since each of these adjustments may have some effect 
on measured emission levels, we believe it is appropriate to implement 
these changes concurrent with the Phase 3 standards. To the extent the 
adjustments apply to handheld engines, we believe it is appropriate to 
apply the changes for new testing with 2013 and later model year 
engines for the reasons described above for adopting the test 
procedures in part 1065.
    First, for engines with installed governors we are requiring the 
engine speed during the idle mode to be controlled by the governor. We 
believe there is no testing limitation that will call for engine 
operation at idle to depart from the engine's governed speed. Allowing 
manufacturers to arbitrarily declare an idle speed only allows 
manufacturers to select an idle speed that gives them an advantage in 
achieving lower measured emission results but not in a way that 
corresponds to in-use emission control. We are also aware that some 
production engines have a user-selectable control for selecting high-
speed or low-speed idle (commonly identified as ``rabbit/turtle'' 
settings). We believe this parameter adjustment may have a significant 
effect on emissions that should be captured in the certification test 
procedure. As a result, we are requiring that manufacturers conduct 
testing with user-selectable controls set to keep the engine operating 
at low-speed idle if any production engines in the engine family have 
such an option. For engines with no installed governor, part 1065 
specifies that the engine should operate at the idle speed declared by 
the manufacturer.
    Second, we are allowing an option in which manufacturers will test 
their nonhandheld engines using a ramped-modal version of the specified 
duty cycle. We expect this testing to be equivalent to the modal 
testing described above but it will have advantages for streamlining 
test efforts by allowing for a single result for the full cycle instead 
of relying on a calculation from separate modal results. Under the new 
requirement we will allow manufacturers the option to select this type 
of testing. Manufacturers must use the same test method for production-
line testing that they use for certifying the engine family. 
Manufacturers may include results from both types of testing in their 
application for certification, in which case they could use either 
method for production-line testing. EPA's confirmatory testing will 
involve the same type of testing

[[Page 59084]]

performed by the manufacturers for certification.
    Third, the part 90 regulations currently specify two duty cycles 
for nonhandheld engines: (1) Testing at rated speed; and (2) testing at 
85 percent of rated speed. The regulations direct manufacturers simply 
to select the most appropriate cycle and declare the rated speed for 
their engines. We are making this more objective by stating that rated 
speed is 3,600 rpm and intermediate speed is 3,060 rpm, unless the 
manufacturer demonstrates that a different speed better represents the 
in-use operation for their engines. This is consistent with the most 
common in-use settings and most manufacturers' current practice.
    In addition, we are adding regulatory provisions to clarify how 
nonhandheld engines are operated to follow the prescribed duty cycle. 
As described in part 90, we are requiring that the engines operate 
ungoverned at wide-open throttle for the full-power mode. This test 
mode is used to denormalize the rest of the duty cycle. This operation 
is intentionally not representative of in-use operation, but disabling 
the governor allows for more uniform testing that is not dependent on 
the various governing strategies that manufacturers might use. To avoid 
a situation where engines are designed to control emissions over the 
test cycle, with less effective controls under similar modes of 
operation that engines experience in use, we are adding a requirement 
for manufacturers to provide an explanation in the application for 
certification if air-fuel ratios are significantly different for 
governed and ungoverned operation at wide-open throttle, especially for 
fuel-injected engines. Manufacturers would need to explain why this 
emission control strategy is not a defeat device. If we test engines 
governed and ungoverned at wide open throttle, we would expect to see 
little or no difference in emission rates. If we would observe higher 
emission rates with governed engine operation, manufacturers would 
again need to justify why this discrepancy is not a defeat device. 
Engines with conventional carburetors offer a limited ability to 
manipulate air-fuel ratios at different operating points, so in these 
cases manufacturers would simply state that air-fuel ratios do not vary 
significantly at governed and ungoverned points of full-load operation.
    Testing at other modes occurs with the governor controlling engine 
speed. Before each test mode, manufacturers may adjust the governor to 
target the same nominal speed used for the full-power mode, with a 
tolerance limiting the variation in engine speed at each mode. 
Alternatively, testing may be done by letting the installed governor 
control engine speed, in which case only the torque value will need to 
be controlled within an established range. Any EPA testing will be done 
only with installed governors controlling engine speed in the standard 
configuration, regardless of the method used by manufacturers for their 
own testing. Any such engine with test results that exceed applicable 
emission standards would be considered to fail, without regard to 
emission results that might be different with testing in which the 
governor is adjusted to target a given nominal speed.
    A different duty cycle applies to handheld engines, which are 
generally not equipped with governors to control engine speed. The 
current regulations allow manufacturers to name their operating speed 
for testing at each of the test modes. However, we are concerned that 
this approach allows manufacturers too much discretion for selecting a 
rated speed for high-load testing. We are revising this approach to 
specify that manufacturers must select a speed that best represents in-
use operation for the engine family if the in-use applications involve 
operation centered on a given nominal speed (350 rpm). 
Engine manufacturers generally also make their own equipment, so this 
can often be established for engines in an engine family. For engine 
families without such a predominant operating speed, we require that 
engine manufacturers test their engines within 350 rpm of the speed at 
which the engine produces maximum power. Some engine families may have 
a dominant engine speed, but also include a variety of applications 
that operate at different in-use speeds. We specify for these cases 
that engine manufacturers must test at both of the test speeds 
identified above, in which case EPA testing might also involve emission 
measurements using either (or both) test speeds. We are further 
requiring manufacturers to describe in their application for 
certification how they select the value for rated speed.
(3) Test Fuel
    We are requiring Phase 3 exhaust emission testing with a standard 
test fuel consistent with the existing requirements under 40 CFR part 
90 (see 40 CFR part 1065, subpart H). The existing regulatory 
specifications allow for no oxygenates in the test fuel. Because 
California ARB specifies a test fuel which contains the oxygenate MTBE 
(but also allows for the use of EPA's test fuel), we understand that 
some engine manufacturers will have emission data from engines that 
meet EPA's Phase 3 standards based on testing to meet California's Tier 
3 Small Off-Road Engine requirements for 2007 and later model years. In 
some cases the test data will be based on California's oxygenated test 
fuel, although manufacturers have the option to certify using a test 
fuel such as that specified by EPA in 40 CFR part 90. To allow for a 
quicker transition to the new EPA standards, we will allow for use of 
this pre-existing exhaust emission test data (based on California's 
oxygenated test fuel) for EPA certification purposes through the 2012 
model year. Manufacturers could also use the California ARB test fuel 
for their PLT testing, if they based their certification on that fuel. 
The use of the California ARB data would be subject to the provisions 
for carryover data for demonstrating compliance with the standards in 
effect. (The carryover provisions for Phase 3 are specified in Sec.  
1054.235.) While we will allow use of California ARB data for 
certification through the 2012 model year, we will use our test fuel 
without oxygenates for all confirmatory testing we perform for exhaust 
emissions. We are limiting the timeframe for such a provision because 
we ultimately want the exhaust emission test results to be performed 
using the EPA specified test fuel.
    In the proposal we noted our concerns about testing with oxygenated 
fuels since this could affect an engine's air-fuel ratio, which in turn 
could affect the engine's combustion and emission characteristics. 
Because of the relatively recent dramatic increase in the use of 
ethanol (another oxygenate) in the broad motor gasoline pool, we have 
reexamined our position (as discussed below) and are adopting 
provisions that will allow manufacturers to use a 10 percent ethanol 
blend for certification testing for exhaust emissions from nonhandheld 
engines, as an alternative to the standard test fuel. This option to 
use a 10 percent ethanol blend will begin with the implementation date 
of the Phase 3 exhaust standards. The use of the ethanol blend would 
apply to production-line testing as well if the manufacturer based 
their certification on the 10 percent ethanol blend. We are also 
committing to using a 10 percent ethanol blend for all confirmatory 
testing we perform for exhaust emissions under the provisions described 
below.
    Ethanol has been blended into in-use gasoline for many years, and 
until as recently as 2005, was used in less than one-third of the 
national gasoline pool.

[[Page 59085]]

However, ethanol use has been increasing in recent years and, under 
provisions of the Energy Independence and Security Act of 2007, ethanol 
will be required in significantly greater quantities. We project that 
potentially 80 percent of the national gasoline pool will contain 
ethanol by 2010, making ethanol blends up to 10 percent the de facto 
in-use fuel. As ethanol blends become the primary in-use fuel, we 
believe it makes sense for manufacturers to optimize their engine 
designs with regard to emissions, performance, and durability on such a 
fuel. We also believe manufacturers need to know that any confirmatory 
testing we do on their engines will be performed on the same fuel the 
manufacturer used for certification since the fuel can impact the 
ability to demonstrate compliance with the emission standards.
    Limited data of nonhandheld engine emissions tested on 10 percent 
ethanol blends suggests the HC emissions will decrease and 
NOX emissions will increase compared to emissions from the 
same engine operated on current certification fuel without oxygenates. 
Depending on the relative HC and NOX levels of the engines, 
these offsetting effects can result in small increases or decreases in 
total HC+NOX emission levels. Because the impact on 
HC+NOX emissions can vary slightly from engine family to 
engine family, we do not want manufacturers varying their certification 
fuel from one family to another to gain advantage with regard to 
emissions certification.
    Therefore, if a manufacturer wishes to use a 10 percent ethanol 
blend for certification, they should use the 10 percent ethanol blend 
for all their Phase 3 nonhandheld engines for a given engine class by 
the third year of the Phase 3 standard (i.e., by the 2014 model year 
for Class I engines and by the 2013 model year for Class II engines). 
During the transition period, we will perform any confirmatory testing 
on the 10 percent ethanol blend if that is the fuel used by the 
manufacturer for certification. At the end of the transition period, we 
will perform any confirmatory testing on the 10 percent ethanol blend 
if that is the fuel used by the manufacturer for certification, but 
only if the manufacturer has certified all their nonhandheld engines in 
that engine class on the 10 percent ethanol blend. If the manufacturer 
has not certified all its engines in a given engine class on the 10 
percent ethanol blend, we may decide to test the engine on our current 
test fuel without oxygenates. (See Sec.  1054.145 and Sec.  1054.501.)
    For handheld engines, where we do not have sufficient data on the 
impact of ethanol blends on emissions, we are adopting a slightly 
different approach. Manufacturers will have the option to use a 10 
percent ethanol blend for certification beginning with the 2010 model 
year. The option to use a 10 percent ethanol blend would apply to PLT 
testing as well if the manufacturer based their certification on the 10 
percent ethanol blend. While we will allow use of a 10 percent ethanol 
blend for certification, we expect to use our test fuel without 
oxygenates for all confirmatory testing for exhaust emissions. 
Therefore, an engine manufacturer will want to consider the impacts of 
ethanol on emissions in evaluating the compliance margin for the 
standard, or in setting the FEL for the engine family if it is 
participating in the ABT program. We could decide at our own discretion 
to do exhaust emissions testing using a 10 percent ethanol blend if the 
manufacturer certified on that fuel. It should be noted that both EPA 
and the California ARB are currently running test programs to assess 
the emission impacts of a 10 percent ethanol blend on a range of Small 
SI engines, including handheld engines. Based on the results of that 
test program, we may want to consider changes to the provisions 
allowing the use of a 10 percent ethanol blend for certification and 
PLT testing for handheld engines. If the results of the handheld engine 
testing show that emissions are comparable on both fuels, we would 
expect to revise the provisions for handheld engines and take a similar 
approach to that described above for nonhandheld engines. (See Sec.  
1054.501.)
    The test fuel specifications for the 10 percent ethanol blend are 
based on using the current gasoline test fuel and adding fuel-grade 
ethanol until the blended fuel contains 10 percent ethanol by volume. 
In addition, we recognize that in some cases using fuel-grade ethanol 
may be less practical than using other grades and so we will allow the 
use of other grades, provided they do not affect a manufacturer's 
ability to demonstrate compliance with the emission standards. To 
understand this allowance, it is helpful to remember that one of the 
main purposes of certification is for the manufacturer to use test data 
to show that the engines produced will conform to the regulations. 
Implicit in this is the concept that if EPA were to test an engine in 
the family according to the specified procedures, its measured 
emissions would be below the standards. Allowing a manufacturer to 
deviate from the specified test procedures could potentially hinder our 
ability to determine whether the engines would meet the standards when 
tested according to the specified procedures. Nevertheless, it is 
possible to overcome this concern based on the expected impact of the 
deviation on measured emissions and on the manufacturer's compliance 
margin (that is, the degree to which the measured certification 
emissions are below the standard). For example, we would conclude that 
a deviation that was expected to change measured emission rates by less 
than 0.1 g/kW-hr would clearly not affect a manufacturer's ``ability to 
demonstrate compliance with the emission standards'' if the certified 
emission level was 1.0 g/kW-hr below the standard (or below the Family 
Emission Limit). On the other hand, a deviation that was expected to 
change measured emission rates by 0.1 to 0.5 g/kW-hr would affect a 
manufacturer's ``ability to demonstrate compliance with the emission 
standards'' if the compliance margin was only 0.5 g/kW-hr. Another way 
to show that a deviation will not affect a manufacturer's ``ability to 
demonstrate compliance with the emission standards'' is to show through 
engineering analysis that a deviation will actually cause measured 
emissions to increase relative to the specified procedures.
    It should be noted that this is the first time EPA regulations 
specify the use of an ethanol test fuel for exhaust emissions testing 
for certification purposes. It is likely that EPA will consider similar 
test fuel changes in the future for other vehicle and engine categories 
including those addressed in this final rule. As part of those 
deliberations, it is possible that EPA could decide that the test fuel 
specifications for the ethanol blend should be different than those 
adopted in this rule. Should that occur, EPA would need to consider 
whether changes to the test fuel specifications adopted in this rule 
for the 10 percent ethanol blend are appropriate for Small SI engine 
testing.

E. Certification and Compliance Provisions for Small SI Engines and 
Equipment

(1) Deterioration Factors
    As part of the certification process, manufacturers generate 
deterioration factors to demonstrate that their engines meet emission 
standards over the full useful life. We are adopting some changes from 
the procedures currently included in part 90 (see Sec.  1054.240 and 
Sec.  1054.245). Much of the basis for these

[[Page 59086]]

changes comes from the experience gained in testing many different 
engines in preparation for this final rule. First, we are discontinuing 
bench aging of emission components. Testing has shown that operating 
and testing the complete engine is necessary to get accurate 
deterioration factors. Second, we are allowing assigned deterioration 
factors for a limited number of small-volume nonhandheld engine 
families. Manufacturers could use assigned deterioration factors for 
multiple small-volume nonhandheld engine families as long as the total 
production for all the nonhandheld engine families for which the 
manufacturer is using assigned deterioration factors is estimated at 
the time of certification to be no more than 10,000 units per year. 
Third, we are allowing assigned deterioration factors for all engines 
produced by small-volume nonhandheld engine manufacturers.
    For the HC+NOX standard, we are specifying that 
manufacturers use a single deterioration factor for the sum of HC and 
NOX emissions. However, if manufacturers get approval to 
establish a deterioration factor on an engine that is tested with 
service accumulation representing less than the full useful life for 
any reason, we will require separate deterioration factors for HC and 
NOX emissions. The advantage of a combined deterioration 
factor is that it can account for an improvement in emission levels for 
a given pollutant with aging. However, for engines that have service 
accumulation representing less than the full useful life, we believe it 
is not appropriate to extrapolate measured values indicating that 
emission levels for a particular pollutant will decrease. This is the 
same approach we adopted for recreational vehicles.
    EPA is not establishing the values for the assigned deterioration 
factors for small-volume nonhandheld engine manufacturers in this final 
rule. In an effort to develop deterioration factors that are 
appropriate for Small SI engines, we plan to evaluate certification 
data from Phase 3 engines certified early with EPA and from engines 
certified under California ARB's Tier 3 standards (which began in 2007 
and 2008). Because we are not promulgating new exhaust standards for 
handheld engines, the assigned deterioration factor provisions adopted 
for Phase 2 handheld engines are being retained.
    Although we are not establishing new exhaust standards for handheld 
engines, handheld engine manufacturers noted that California ARB has 
approved certain durability cycles for accumulating hours on engines 
for the purpose of demonstrating the durability of emission controls. 
The durability cycles approved by California ARB vary from a 30-second 
cycle for chainsaws to a 20-minute cycle for blowers, with 85 percent 
of the time operated at wide open throttle and 15 percent of the time 
operated at idle. Engine manufacturers can run the durability cycles 
repeatedly until they accumulate the hours of operation equivalent to 
the useful life for the engine family. Our current regulations state 
that ``service accumulation is to be performed in a manner using good 
judgment to ensure that emissions are representative of production 
engines.'' While we are not changing the regulatory language regarding 
service accumulation, the California ARB-approved durability cycles are 
appropriate and acceptable to EPA for accumulating hours on handheld 
engines for demonstrating the durability of emission controls.
(2) Delegated Final Assembly
    The current practice of attaching exhaust systems to engines 
varies. Class I engines are typically designed and produced by the 
engine manufacturer with complete emission control systems. Equipment 
manufacturers generally buy these engines and install them in their 
equipment, adjusting equipment designs if necessary to accommodate the 
mufflers and the rest of the exhaust system from the engine 
manufacturer.
    Engine manufacturers generally produce Class II engines without 
exhaust systems, relying instead on installation instructions to ensure 
that equipment manufacturers get mufflers that fall within a specified 
range of backpressures that is appropriate for a given engine model. 
Equipment manufacturers are free to work with muffler manufacturers to 
design mufflers that fit into the space available for a given equipment 
model, paying attention to the need to stay within the design 
specifications from the engine manufacturers. A similar situation 
applies for air filters, where equipment manufacturers in some cases 
work with component manufacturers to use air filters that are tailored 
to the individual equipment model while staying within the design 
specifications defined by the engine manufacturer.
    The existing regulations require that certified engines be in their 
certified configuration when they are introduced into commerce. We 
therefore need special provisions to address the possibility that 
engines will need to be produced and shipped without exhaust systems or 
air intake systems that are part of the certified configuration. We 
have adopted such provisions for heavy-duty highway engines and for 
other nonroad engines in 40 CFR 85.1713 and 40 CFR 1068.260, 
respectively. These provisions generally require that engine 
manufacturers establish a contractual arrangement with equipment 
manufacturers and take additional steps to ensure that engines are in 
their certified configuration before reaching the ultimate purchaser.
    We are applying delegated-assembly provisions for nonhandheld 
engines that are similar to those adopted for heavy-duty highway 
engines. In fact, we have modified the proposed requirements and the 
requirements that apply to heavy-duty highway engines (and to other 
nonroad engines) such that a single set of requirements in part 1068 
will simultaneously apply to all these engine categories. This combined 
approach incorporates substantial elements of the program we proposed 
for Small SI engines.
    This approach generally requires that engine manufacturers apply 
for certification in the normal way, identifying all the engine parts 
that make up the engine configurations covered by the certification. 
Equipment manufacturers will be able to work with muffler manufacturers 
to get mufflers with installed catalysts as specified in the engine 
manufacturer's application for certification. If equipment 
manufacturers need a muffler or catalyst that is not covered by the 
engine manufacturer's certification, the engine manufacturer will need 
to amend the application for certification. This may require new 
testing if the data from the original emission-data engine are not 
appropriate for showing that the new configuration will meet emission 
standards, as described in Sec.  1054.225. (Alternatively, the 
equipment manufacturer may take on the responsibility for certifying 
the new configuration, as described in Sec.  1054.612.) Engine 
manufacturers will also identify in the application for certification 
their plans to sell engines without emission-related components. We are 
adopting several provisions to ensure that engines will eventually be 
in their certified configuration. For example, engine manufacturers 
will establish contracts with affected equipment manufacturers, include 
installation instructions to make clear how engine assembly should be 
completed, keep records of the number of engines produced under these 
provisions, and obtain annual affidavits from affected equipment 
manufacturers to confirm that they are installing the proper emission-
related components on the engines and that they have ordered

[[Page 59087]]

the number of components that corresponds to the number of engines 
involved.
    While the delegated-assembly provisions are designed for direct 
shipment of engines from engine manufacturers to equipment 
manufacturers, we are aware that distributors play an important role in 
providing engines to large numbers of equipment manufacturers. We are 
requiring that these provisions apply to distributors in one of two 
ways. First, engine manufacturers may have an especially close working 
relationship with primary distributors. In such a case, the engine 
manufacturer can establish a contractual arrangement allowing the 
distributor to act as the engine manufacturer's agent for all matters 
related to compliance with the delegated-assembly provisions. This 
allows the distributor to make arrangements with equipment 
manufacturers to address design needs and perform oversight functions. 
We will hold the engine manufacturer directly responsible if the 
distributor fails to meet the regulatory obligations that will 
otherwise apply to the engine manufacturer. However, starting in 2015, 
we are allowing this approach only with our specific approval for 
individual manufacturers and distributors. While this arrangement is 
necessary to facilitate making engines available under the Transition 
Program for Equipment Manufacturers, we are concerned that it will be 
difficult for EPA and for manufacturers to properly ensure that all 
engines are built up to a certified configuration when assembly 
responsibilities are so far removed from the engine manufacturer. This 
is underscored by a recent finding that an equipment manufacturer was 
intentionally not following an engine manufacturer's instructions when 
installing Small SI engines such that the final installation involved 
an engine that was not in a certified configuration. In the years 
before 2015, we expect that EPA and manufacturers will learn a lot 
about delegated assembly, including the extent to which there are cases 
in which engines are improperly assembled, whether those problems 
represent intentional violations or mistakes as part of a good-faith 
effort to meet applicable requirements. We will be prepared to judge 
individual requests based on the experience gained under the initial 
years of the Phase 3 standards. However, given the challenges 
associated with engine manufacturers allowing distributors to act as 
their agents with respect to delegated assembly, we expect 
manufacturers to ask us to allow this only in unusual circumstances 
when the standard approach would be very impractical. Also, depending 
on the broader experience with this provision before 2015, we may 
consider changing the regulation to allow this to continue without our 
specific approval, for Small SI engines or for all types of engines. If 
we find that there are substantial problems in implementing this 
provision, we may also consider removing the allowance to continue 
using distributors this way for delegated assembly past 2014.
    Second, other distributors may receive shipment of engines without 
exhaust systems, but they will add any aftertreatment components before 
sending the engines on to equipment manufacturers. Engine manufacturers 
will treat these distributors as equipment manufacturers for the 
purposes of delegated assembly. Equipment manufacturers buying engines 
from such a distributor will not have the option of separately 
obtaining mufflers from muffler manufacturers. However, we would expect 
distributors to cooperate with small equipment manufacturers to work 
out any necessary arrangements to specify and design their components 
and equipment. This second situation involves a more straightforward 
compliance scenario so this provision does not expire. In both of these 
scenarios, the engine manufacturer continues to be responsible for the 
in-use compliance of all their engines.
    Engine manufacturers will need to affix a label to the engine to 
clarify that it needs certain emission-related components before it is 
in its certified configuration. This labeling information is important 
for alerting assembly personnel to select mufflers with installed 
catalysts; the label will also give in-house inspectors or others with 
responsibility for quality control a tool for confirming that all 
engines have been properly assembled and installed. Given the large 
numbers of engine and equipment models and the interchangeability of 
mufflers with and without catalysts, we believe proper labeling will 
reduce the possibility that engines will be misbuilt. This labeling can 
be done with either of two approaches. First, a temporary label may be 
applied such that it could not be removed without a deliberate action 
on the part of the equipment manufacturer. We believe it is not 
difficult to create a label that will stay on the engine until it is 
deliberately removed. Second, manufacturers may add the words 
``delegated assembly'' to the engine's permanent emission control 
information label (or ``DEL ASSY'' where limited space requires an 
abbreviation).
    In addition, engine manufacturers will need to perform or arrange 
for audits to verify that equipment manufacturers are properly 
assembling engines. Engine manufacturers may rely on third-party agents 
to perform auditing functions. Since the purpose of the audit is to 
verify that equipment manufacturers are properly assembling products, 
they may not perform audits on behalf of engine manufacturers. We are 
requiring that audits involve at a minimum reviewing the equipment 
manufacturer's production records and procedures, inspecting the 
equipment manufacturer's production operations, and inspecting the 
final assembled products. Inspection of final assembled products may 
occur at any point in the product distribution system. For example, 
products may be inspected at the equipment manufacturer's assembly or 
storage facilities, at regional distribution centers, or at retail 
locations. The audit must also include confirmation that the number of 
aftertreatment devices shipped was sufficient for the number of engines 
involved. Engine manufacturers would keep records of the audit results 
and make these records available to us upon request. These auditing 
specifications represent a minimum level of oversight. In certain 
circumstances we may expect engine manufacturers to take additional 
steps to ensure that engines are assembled and installed in their 
certified configuration. For example, equipment manufacturers with very 
low order volumes, an unclear history of compliance, or other 
characteristics that will cause some concern may prompt us to require a 
more extensive audit to ensure effective oversight in confirming that 
engines are always built properly. Engine manufacturers must describe 
in the application for certification their plan for taking steps to 
ensure that all engines will be in their certified configuration when 
installed by the equipment manufacturer. EPA approval of a 
manufacturer's plan for delegated assembly will be handled as part of 
the overall certification process.
    We are requiring that engine manufacturers annually audit twelve 
equipment manufacturers, or fewer if they are able to audit all 
participating equipment manufacturers on average once every four years. 
These audits will be divided over different equipment manufacturers 
based on the number of engines sold to each equipment manufacturer. We 
specify that these auditing rates are reduced to a maximum of four 
equipment manufacturers per year starting in 2015.

[[Page 59088]]

In 2019 and later, manufacturers would continue to perform a maximum of 
four audits annually, but we specify that audits may be divided evenly 
to cover all equipment manufacturers over a ten-year period.
    We are not adopting the proposed requirement for engine 
manufacturers to establish an alphanumeric designation to identify each 
unique catalyst design and instruct equipment manufacturers to stamp 
this code on the external surface of the exhaust system. However, 
manufacturers may choose to do this voluntarily as a means of more 
readily assessing whether engines have been properly assembled.
    We are requiring that all the same provisions apply for separate 
shipment related to air filters if they are part of an engine's 
certified configuration, except for the auditing. However, this does 
not apply if manufacturers identify intake systems, including air 
filters, by simply instructing equipment manufacturers to maintain the 
pressure drop within a certain range. This is typical of the way many 
exhaust systems are handled today. We will require auditing related to 
air filters that are specifically identified in the application for 
certification only if engine manufacturers are already performing 
audits related to catalysts. We believe there is much less incentive or 
potential for problems with equipment manufacturers producing engines 
with noncompliant air filters so we believe a separate auditing 
requirement for air filters is unnecessary.
    The final regulation specifies that the exemption expires when the 
equipment manufacturer takes possession of the engine and the engine 
reaches the point of final equipment assembly. The point of final 
equipment assembly for purposes of delegated assembly for 
aftertreatment components is the point at which the equipment 
manufacturer attaches a muffler to the engine. Engines observed in 
production or inventory assembled with improper mufflers will be 
considered to have been built contrary to the engine manufacturer's 
installation instructions. Catalysts are invariably designed as part of 
the muffler, so no reason exists for installing a different muffler 
once a given muffler has been installed using normal production 
procedures. If equipment manufacturers sell equipment without following 
these instructions, they will be considered in violation of the 
prohibited acts i.e., selling uncertified engines). If there is a 
problem with any given equipment manufacturer, we will disallow 
continued use of the delegated-assembly provisions for that equipment 
manufacturer until the engine manufacturer has taken sufficient steps 
to remedy the problem.
    We are aware that the new approach of allowing equipment 
manufacturers to make their own arrangements to order mufflers results 
in a situation in which the equipment manufacturer must spend time and 
money to fulfill their responsibilities under the regulations. This 
introduces a financial incentive to install mufflers with inferior 
catalysts, or to omit the catalyst altogether. To address this concern, 
we are requiring that engine manufacturers get written confirmation 
from each equipment manufacturer before an initial shipment of engines 
for a given engine model. This confirmation will document the equipment 
manufacturer's understanding that they are using the appropriate 
aftertreatment components. The written confirmation will be due within 
30 days after shipping the engines and will be required before shipping 
any additional engines from that engine family to that equipment 
manufacturer.
    The shipping confirmation included in the rule for heavy-duty 
highway engines is a very substantial provision to address the fact 
that vehicle manufacturers will gain a competitive advantage by 
producing noncompliant products, and that engines in commerce will be 
labeled as if they were fully compliant even though they are not yet in 
their certified configuration. This is especially problematic when a 
muffler with no catalyst can easily be installed and can perform 
without indicating a problem. To address this concern we are requiring 
that equipment manufacturers include in their annual affidavits an 
accounting for the number of aftertreatment components they have 
ordered relative to the number of engines shipped without the catalysts 
that the mufflers will otherwise require.
    Production-line testing normally involves building production 
engines using normal assembly procedures. For engines shipped without 
catalysts under the delegated-assembly provisions, it is not normally 
possible to do this at the engine manufacturer's facility, where such 
testing will normally occur. To address this, we are specifying that 
engine manufacturers must arrange to get a randomly selected catalyst 
that will be used with the engine. The catalyst must come from any 
point in the normal distribution from the aftertreatment component 
manufacturer to the equipment manufacturer. The catalyst may come from 
the engine manufacturer's own inventory as long as it is randomly 
procured. Engine manufacturers are required to keep records showing how 
they randomly selected catalysts.
    See Section 2.8 of the Summary and Analysis of Comments for further 
discussion of issues related to delegated assembly.
(3) Transition Program for Equipment Manufacturers
    Given the level of the new Phase 3 exhaust emission standards for 
Class II engines, we believe there may be situations where the use of a 
catalyzed muffler could require equipment manufacturers to modify their 
equipment. We are therefore establishing a set of provisions to provide 
equipment manufacturers with reasonable lead time for transitioning to 
the new standards. These provisions are similar to the program we 
adopted for nonroad diesel engines (69 FR 38958, June 29, 2004).
    Equipment manufacturers will not be obligated to use any of these 
provisions, but all equipment manufacturers that produce Class II 
equipment are eligible to do so. We are also requiring that all 
companies under the control of a common entity will be considered 
together for the purposes of applying these allowances. Manufacturers 
will be eligible for the allowances described below only if they have 
primary responsibility for designing and manufacturing equipment, and 
if their manufacturing procedures include installing engines in the 
equipment.
(a) General Provisions
    Under the final rule, beginning in the 2011 model year and lasting 
through the 2014 model year, each equipment manufacturer may install 
Class II engines not certified to the Phase 3 emission standards in a 
limited number of equipment applications produced for the U.S. market 
(see Sec.  1054.625). We refer to these here as ``flex engines.'' These 
flex engines will need to meet the Phase 2 standards. The maximum 
number of ``allowances'' each manufacturer can use are based on 30 
percent of an average year's production of Class II equipment. The 
number of allowances is calculated by determining the average annual 
U.S.-directed production of equipment using Class II engines produced 
from January 1, 2007 through December 31, 2009. Thirty percent of this 
average annual production level is the total number of allowances an 
equipment manufacturer may use under this transition program over four 
years. Manufacturers can use these allowances for their Class II 
equipment over four model years from 2011 through 2014, with the usage 
spread over these model years as

[[Page 59089]]

determined by the equipment manufacturer. Equipment produced under 
these provisions can use engines that meet the Phase 2 emission 
standards instead of the Phase 3 standards. If an equipment 
manufacturer newly enters the Class II equipment market during 2007, 
2008 or 2009, the manufacturer will calculate its average annual 
production level based only on the years during which it actually 
produced Class II equipment. Equipment manufacturers newly entering the 
Class II equipment market after 2009 will not receive any allowances 
under the transition program and will need to incorporate Phase 3 
compliant engines into the Class II equipment beginning in 2011.
    Equipment using engines built before the effective date of the 
Phase 3 standards will not count toward an equipment manufacturer's 
allowances. Equipment using engines that are exempted from the Phase 3 
standards for any reason will also not count toward an equipment 
manufacturer's allowances. For example, we are allowing small-volume 
engine manufacturers to continue producing Phase 2 engines for two 
model years after the Phase 3 standards apply. All engines subject to 
the Phase 3 standards, including those engines that are certified to 
FELs at higher levels than the standard, but for which an engine 
manufacturer uses exhaust ABT credits to demonstrate compliance, will 
count as Phase 3 complying engines and will not be included in an 
equipment manufacturer's count of allowances.
    The choice of the allowances based on 30 percent of one year's 
production is based on our best estimate of the degree of reasonable 
lead time needed by the largest equipment manufacturers to modify their 
equipment designs as needed to accommodate engines and exhaust systems 
that have changed as a result of more stringent emission standards. We 
believe this level of allowances responds to the need for lead time to 
accommodate the workload related to redesigning equipment models to 
incorporate catalyzed mufflers while ensuring a significant level of 
emission reductions in the early years of the new program.
    As described in Section VI, technologies for controlling running 
losses may involve a significant degree of integration between engine 
and equipment designs. In particular, routing a vapor line from the 
fuel tank to the engine's intake system depends on engine modifications 
that will allow for this connection. As a result, any equipment using 
flex engines will not need to meet running loss standards.
(b) Coordination Between Engine and Equipment Manufacturers
    We are establishing two separate paths for complying with 
administrative requirements related to the new transition program, 
depending on how the engine manufacturer chooses to make flex engines 
available. Engine manufacturers choosing to use the delegated-assembly 
provisions described above will be enabling equipment manufacturers to 
make the decision whether to complete the engine assembly in the Phase 
3 configuration or to use a non-catalyzed muffler such that the engine 
will meet Phase 2 standards and will therefore need to be counted as a 
flex engine. If engine manufacturers do not use the delegated-assembly 
provisions, equipment manufacturers will need to depend on engine 
manufacturers to produce and ship flex engines that are already in a 
configuration meeting Phase 2 standards and labeled accordingly. Each 
of these scenarios involves a different set of compliance provisions, 
which we describe below. Note that in no case may an equipment 
manufacturer remove a catalyzed muffler from an engine and replace it 
with a noncatalyzed muffler; this would be a violation of the 
prohibition against tampering.
(i) Compliance Based on Engine Manufacturers
    Engine manufacturers will in many cases produce complete engines. 
This will be the case if the engine does not require a catalyst or if 
the engine manufacturer chooses to design their own exhaust systems and 
ship complete engine assemblies to equipment manufacturers.
    Under this scenario, we are requiring that equipment manufacturers 
request a certain number of flex engines from the engine manufacturer. 
The regulatory provisions specifically allow engine manufacturers to 
continue to build and sell Phase 2 engines needed to meet the market 
demand created by the transition program for equipment manufacturers, 
provided they receive the written assurance from the equipment 
manufacturer that such engines are being procured for this purpose. We 
are requiring that engine manufacturers keep copies of the written 
assurance from equipment manufacturers for at least five years after 
the final year in which allowances are available.
    Engine manufacturers are currently required to label their 
certified engines with a variety of information. We are requiring that 
engine manufacturers producing complete flex engines under this program 
identify on the engine label that they are flex engines. In addition, 
equipment manufacturers are required to apply an Equipment Flexibility 
Label to the engine or piece of equipment that identifies the equipment 
as using an engine produced under the Phase 3 transition program for 
equipment manufacturers. These labeling requirements allow EPA to 
easily identify flex engines and equipment, verify which equipment 
manufacturers are using these flex engines, and more easily monitor 
compliance with the transition provisions. Labeling of the equipment 
could also help U.S. Customs to quickly identify equipment being 
imported lawfully using the Transition Program for Equipment 
Manufacturers.
    While manufacturers will need to meet Phase 2 standards with their 
flex engines, they will not need to certify them for the current model 
year. We are instead applying the provisions of 40 CFR 1068.265, which 
require manufacturers to keep records showing that they meet emission 
standards without requiring submission of an application for 
certification.
(ii) Compliance Based on Equipment Manufacturers
    We are adopting a different set of compliance provisions for engine 
manufacturers that make arrangements to ship engines separately from 
exhaust-system components. Under this scenario, as discussed above, the 
engine manufacturers must establish a relationship with the equipment 
manufacturers allowing the equipment manufacturer to install catalysts 
to complete engine assembly in compliance with Phase 3 standards.
    In this case, engine manufacturers will design and produce their 
Phase 3 engines and label them accordingly. The normal path for these 
engines covered by the delegated-assembly provisions will involve 
shipment of the engine without an exhaust system to the equipment 
manufacturer. The equipment manufacturer will then follow the engine 
manufacturer's instructions to add the exhaust system including the 
catalyst to bring the engine into a certified Phase 3 configuration. 
Under the transition program, equipment manufacturers will choose for 
each of these engines to either follow the engine manufacturer's 
instructions to install a catalyst to make it compliant with Phase 3 
standards or install a non-catalyzed muffler to make it compliant with 
Phase 2 standards. Any such engines downgraded to Phase 2 standards 
will count toward the equipment manufacturer's total number

[[Page 59090]]

of allowances under the transition program.
    To make this work, engine manufacturers will need to take certain 
steps to ensure overall compliance. First, engine manufacturers will 
need to include emission data in the application for certification 
showing that the engine meets Phase 2 standards without any 
modification other than installing a non-catalyzed exhaust system. This 
may include a specified range of backpressures that equipment 
manufacturers must meet in procuring a non-catalyst muffler. If the 
Phase 3 engine without a catalyst will otherwise still be covered by 
the emission data from engines produced in earlier model years under 
the Phase 2 standards, manufacturers could rely on carryover emission 
data to make this showing. Second, the installation instructions we 
specify under the delegated-assembly provisions will need to describe 
the steps equipment manufacturers must take to make either Phase 3 
engines or Phase 2 flex engines. Third, for engine families that 
generate positive emission credits under the exhaust ABT program, 
engine manufacturers must generally decrease the number of ABT credits 
generated by the engine family by 10 percent. We believe the 10 percent 
decrease should provide an emission adjustment commensurate with the 
potential use of the equipment manufacturer flexibility provisions. (As 
described earlier in Section V.C.3, EPA is including an option that 
will allow engine manufacturers to track the final configuration of the 
engines to determine the actual number of engines that were downgraded 
for the TPEM program.)
    Equipment manufacturers using allowances under these provisions 
must keep records that allow EPA or engine manufacturers to confirm 
that equipment manufacturers followed appropriate procedures and 
produced an appropriate number of engines without catalysts. In 
addition, we are requiring that equipment manufacturers place a label 
on the engine as close as possible to the engine manufacturer's 
emission control information label to identify it as a flex engine. The 
location of this label is important since it effectively serves as an 
extension of the engine manufacturer's label, clarifying that the 
engine meets Phase 2 standards, not the Phase 3 standards referenced on 
the original label. This avoids the problematic situation of changing 
or replacing labels, or requiring engine manufacturers to send 
different labels.
    Engine manufacturers might choose to produce Class II engines that 
are compliant with the Phase 3 standards before the 2011 model year and 
set up arrangements for separate shipment of catalyzed mufflers as 
described in Section V.E.2. We expect any engine manufacturers 
producing these early Phase 3 engines to continue production of 
comparable engine models that meet Phase 2 standards rather than 
forcing all equipment manufacturers to accommodate the new engine 
design early. We believe it will not be appropriate for equipment 
manufacturers to buy Phase 3 engines in 2010 or earlier model years and 
downgrade them to meet Phase 2 emission standards as described above. 
We are therefore allowing the downgrading of Phase 3 engines only for 
2011 and later model years.
    Because equipment manufacturers in many cases depend on engine 
manufacturers to supply certified engines in time to produce complying 
equipment, we are also adopting a hardship provision for all equipment 
manufacturers (see Sec.  1068.255). An equipment manufacturer will be 
required to use all its allowances under the transition program 
described above before being eligible to use this hardship.
(iii) Reporting and Recordkeeping Requirements
    Equipment manufacturers choosing to participate in the transition 
program will be required to keep records of the U.S-directed production 
volumes of Class II equipment in 2007 through 2009 broken down by 
equipment model and calendar year. Equipment manufacturers will also 
need to keep records of the number of flex engines they use under this 
program.
    We are also establishing certain notification requirements for 
equipment manufacturers. Any manufacturer wishing to participate in the 
new transition provisions need to notify EPA before producing equipment 
with flex engines. They must submit information on production of Class 
II equipment over the three-year period from 2007 through 2009, 
calculate the number of allowances available, and provide basic 
business information about the company. For example, we will want to 
know the names of related companies operating under the same parent 
company that are required to count engines together under this program. 
This early notification will not be a significant burden to the 
equipment manufacturer and will greatly enhance our ability to ensure 
compliance. Indeed, equipment manufacturers will need to have the 
information required in the notification to know how to use the 
allowances.
    We are establishing an ongoing reporting requirement for equipment 
manufacturers participating in the Phase 3 transition program. Under 
the program, participating equipment manufacturers will be required to 
submit an annual report to EPA that shows its annual number of 
equipment produced with flex engines under the transition provisions in 
the previous year. Each report must include a cumulative count of the 
number of equipment produced with flex engines for all years. To ease 
the reporting burden on equipment manufacturers, EPA intends to work 
with the manufacturers to develop an electronic means for submitting 
information to EPA.
(c) Additional Allowances for Small and Medium-Sized Companies
    We believe small-volume equipment manufacturers will need a greater 
degree of lead time than manufacturers that sell large volumes of 
equipment. The small companies are less likely to have access to 
prototype engines from engine manufacturers and generally have smaller 
engineering departments for making the necessary design changes. 
Allowances representing thirty percent of annual U.S.-directed 
production provide larger companies with substantial lead time to plan 
their product development for compliance but smaller companies may have 
a product mix that requires extensive work to redesign products in a 
short amount of time. We are therefore specifying that small-volume 
equipment manufacturers may use this same transition program with 
allowances totaling 200 percent of the average annual U.S.-directed 
production of equipment using Class II engines from 2007 through 2009. 
For purposes of this program, a small-volume equipment manufacturer is 
defined as a manufacturer that produces fewer than 5,000 pieces of 
nonhandheld equipment per year subject to EPA regulations in each of 
the three years from 2007 through 2009 or meets the SBA definition of 
small business equipment manufacturer (i.e., generally fewer than 500 
employees for manufacturers of most types of equipment). These 
allowances are spread over the same four-year period between 2011 and 
2014. For example, a small-volume equipment manufacturer could 
potentially use Phase 2 engines on all their Class II equipment for two 
years or they might sell half their Class II equipment with Phase 2 
engines for four years assuming production stayed constant over the 
four years.

[[Page 59091]]

    Medium-sized equipment manufacturers, i.e., companies that produce 
too much equipment to be considered a small-volume equipment 
manufacturer but produce fewer than 50,000 pieces of Class II equipment 
annually, may also face difficulties similar to that of small-volume 
equipment manufacturers. These companies may be like small-volume 
manufacturers if they have numerous product lines with varied 
approaches to installing engines and mufflers. Other companies may be 
more like bigger companies if they produce most of their equipment in a 
small number of high-volume models or have consistent designs related 
to engine and muffler installations. We are therefore creating special 
provisions that will enable us to increase the number of transition 
allowances that are available to these medium-sized companies that have 
annual U.S.-directed production of Class II equipment of between 5,000 
and 50,000 in each of the three years from 2007 through 2009. To obtain 
allowances greater than 30 percent of average annual production, a 
medium-sized manufacturer will need to notify us before they produce 
equipment with flex engines by January 31, 2010 if they believe the 
standard allowances based on 30 percent of average annual production of 
Class II equipment do not provide adequate lead time starting in the 
2011 model year. Additional allowances may be requested only if the 
equipment manufacturer can show they are on track to produce a number 
of equipment models representing at least half of their total U.S.-
directed production volume of Class II equipment in the 2011 model year 
compliant with all exhaust and evaporative emission standards. As part 
of their request, the equipment manufacturer will need to describe why 
more allowances are needed to accommodate anticipated changes in engine 
designs resulting from engine manufacturers' compliance with changing 
exhaust emission standards. The equipment manufacturer will also need 
to request a specific number of additional allowances needed with 
supporting information to show why that many allowances are needed. We 
may approve additional allowances up to 70 percent of the average 
annual U.S.-directed production of Class II equipment from 2007 through 
2009. If a medium-sized company were granted the full amount of 
additional allowances, they will have allowances equivalent to 100 
percent of the average annual production volume of Class II equipment.
    As noted above, the determination of whether a company is a small- 
or medium-sized manufacturer will be based primarily on production data 
over the 2007 through 2009 period submitted to EPA before 2011. After a 
company's status as a small- or medium-sized company has been 
established based on the data, EPA is requiring that manufactures keep 
that status even if a company's production volume grows during the next 
few years, such that the company will no longer qualify as a small- or 
medium-sized company. EPA believes equipment manufacturers need to know 
at the beginning of the transition program (i.e., 2011) how many 
allowances they will receive under the program. Changing a company's 
size determination during the program, which could affect the number of 
allowances available, will make it difficult for companies to plan and 
could lead to situations where a company is in violation of the 
provisions based on the use of allowances that were previously allowed. 
Likewise, if a company is purchased by another company or merges with 
another company after the determination of small- or medium-size status 
is established in 2010, the combined company could, at its option, keep 
the preexisting status for the individual portions of the combined 
company. If the combined company chooses to keep the individual 
designations, the combined company must submit the annual reports on 
the use of allowances broken down for each of the previously separate 
companies.
(d) Requirements for Importers and Imported Equipment
    Under this final rule, only companies that manufacture equipment 
can qualify for the relief provided under the Phase 3 transition 
provisions. Equipment manufacturers producing equipment outside the 
United States that comply with the provisions discussed below can enjoy 
the same transition provisions as domestic manufacturers. Such 
equipment manufacturers that do not comply with the compliance-related 
provisions discussed below will not receive allowances. Importers that 
do not manufacture equipment will not receive any transition relief 
directly, but could import equipment with a flex engine if it is 
covered by an allowance or transition provision associated with a 
foreign equipment manufacturer. This will allow transition provisions 
to be used by equipment manufacturers producing equipment outside the 
United States in the same way as equipment manufacturers producing 
equipment domestically, at the option of the overseas manufacturer, 
while avoiding the potential for importers to inappropriately use 
allowances. These regulations apply equally to foreign equipment 
manufacturers and to domestic equipment manufacturers that build 
equipment outside the country that is eventually sold in the United 
States.
    All equipment manufacturers wishing to use the transition 
provisions for equipment produced outside the United States must comply 
with all the requirements discussed above. Along with the equipment 
manufacturer's notification described earlier, an overseas equipment 
manufacturer will have to comply with various compliance related 
provisions (see Sec.  1054.626). These provisions are similar to those 
adopted for nonroad diesel engines. As part of the notification, such 
an equipment manufacturer will have to:
     Agree to provide EPA with full, complete and immediate 
access to conduct inspections and audits;
     Name an agent in the United States for service;
     Agree that any enforcement action related to these 
provisions will be governed by the Clean Air Act;
     Submit to the substantive and procedural laws of the 
United States;
     Agree to additional jurisdictional provisions;
     Agree that the equipment manufacturer will not seek to 
detain or to impose civil or criminal remedies against EPA inspectors 
or auditors for actions performed within the scope of EPA employment 
related to the provisions of this program;
     Agree that the equipment manufacturer becomes subject to 
the full operation of the administrative and judicial enforcement 
powers and provisions of the United States without limitation based on 
sovereign immunity; and
     Submit all reports or other documents in the English 
language, or include an English language translation.
    In addition to these provisions, we are requiring equipment 
manufacturers producing equipment for importation under the transition 
program to comply with a bond requirement for equipment imported into 
the United States. We believe a bond program is an important tool for 
ensuring that importing equipment manufacturers are subject to the same 
level of enforcement as equipment manufacturers producing equipment 
domestically. Specifically, we believe a bonding requirement for these 
equipment manufacturers is an important enforcement tool for ensuring 
that EPA has the ability to collect any

[[Page 59092]]

judgments assessed against an overseas equipment manufacturer for 
violations of these transition provisions.
    Under a bond program, the participating equipment manufacturer will 
have to maintain a bond in the proper amount that is payable to satisfy 
judgments that result from U.S. administrative or judicial enforcement 
actions for conduct in violation of the Clean Air Act. The equipment 
manufacturer will generally obtain a bond in the proper amount from a 
third party surety agent that has been listed with the Department of 
the Treasury. As discussed in Sections V.E.6, EPA is establishing other 
bond requirements as well. An equipment manufacturer that is required 
to post a bond under any of these provisions will be required to obtain 
only one bond of the amount specified for those sections. Equipment 
manufacturers may avoid the bond requirements based on the level of 
assets in the United States, as described in Section V.E.6.
    In addition to the equipment manufacturer requirements discussed 
above, EPA is also requiring importers of equipment with flex engines 
from a complying equipment manufacturer to comply with certain 
provisions. EPA believes these importer provisions are essential to 
EPA's ability to monitor compliance with the transition provisions. 
Therefore, the regulations require each importer to notify EPA prior to 
their initial importation of equipment with flex engines. Importers 
will be required to submit their notification before importing 
equipment with flex engines from a complying equipment manufacturer. 
The importer's notification will need to include the following 
information:
     The name and address of importer (and any parent company);
     The name and address of the manufacturers of the equipment 
and engines the importer expects to import; and
     Number of units of equipment with flex engines the 
importer expects to import for each year broken down by equipment 
manufacturer.
    In addition, EPA is requiring that any importer electing to import 
to the United States equipment with flex engines from a complying 
equipment manufacturer must submit annual reports to EPA. The annual 
report will include the number of units of equipment with flex engines 
the importer actually imported to the United States in the previous 
calendar year; and identify the equipment manufacturers and engine 
manufacturers whose equipment and engines were imported.
(e) Provisions for Rotation-Molded Fuel Tanks
    Equipment manufacturers may face challenges in transitioning to 
rotation-molded fuel tanks that meet the new permeation standards. 
These modified fuel tanks may require equipment manufacturers to adjust 
the designs of their equipment to ensure that the new fuel tanks can be 
incorporated without problems. We are therefore allowing equipment 
manufacturers to use noncompliant rotational-molded fuel tanks for two 
additional years on limited numbers of 2011 and 2012 model year 
equipment using Class II engines. Equipment manufacturers may use 
noncompliant rotational-molded fuel tanks if the production volume of 
the fuel tank design used in Class II equipment models is collectively 
no more than 5,000 units in the 2011 model year. In the 2012 model 
year, equipment manufacturers may use noncompliant rotational-molded 
fuel tanks if the production volume of the fuel tank design used in 
Class II equipment models is collectively no more than 5,000 units in 
the 2012 model year, but the total number of exempted rotational-molded 
fuel tanks across the manufacturer's Class II equipment is limited to 
10,000 units. If production volumes are greater than 5,000 for a given 
fuel tank design (or greater than 10,000 corporate-wide in 2012), all 
those tanks must comply with emission standards. Tank designs would be 
considered identical if they are produced under a single part number to 
conform to a single design or blueprint. In addition, tank designs 
would be considered identical if they differ only with respect to 
production variability, post-production changes (such as different 
fittings or grommets), supplier, color, or other extraneous design 
variables. We originally proposed to allow noncompliant rotation-molded 
fuel tanks for any equipment that was counted under the allowances 
described in this section which used flex engines meeting Phase 2 
exhaust emission standards. However, the approach being finalized today 
could be applied to any equipment using Class II engines (subject to 
the constraints noted above), whether or not the equipment uses a flex 
engine.
(4) Equipment Manufacturer Recertification
    It has generally been engine manufacturers that certify with EPA 
for exhaust emissions because the standards are engine-based. However, 
because the Phase 3 nonhandheld standards are expected to result in the 
use of catalysts, a number of equipment manufacturers, especially those 
that make low-volume models, believe it may be necessary to produce 
their own unique engine/muffler designs, but using the same catalyst 
substrate already used in a muffler that is part of an engine 
manufacturers certified configuration. In this situation, the engine 
will not be covered by the engine manufacturer's certificate, as the 
engine/muffler design is not within the specifications for the 
certified engine. The equipment manufacturer is therefore producing a 
new distinct engine which is not covered by a certificate and therefore 
needs to be certified with EPA.
    To allow the possibility of an equipment manufacturer certifying 
such an engine/muffler design with EPA, we are establishing a 
simplified engine certification process for nonhandheld equipment 
manufacturers (see Sec.  1054.612). Under the simplified certification 
process, the nonhandheld equipment manufacturer will need to 
demonstrate that it is using the same catalyst substrate as the 
approved engine manufacturer's engine family, provide information on 
the differences between their engine/exhaust system and the engine/
exhaust system certified by the engine manufacturer, and explain why 
the emissions deterioration data generated by the engine manufacturer 
will be representative for the equipment manufacturer's configuration. 
The equipment manufacturer will need to perform low-hour emission 
testing on an engine equipped with their modified exhaust system and 
demonstrate that it meets the emission standards after applying the 
engine manufacturer's deterioration factors for the certified engine 
family. We will not require production-line testing for these engines. 
The equipment manufacturer will be responsible to meet all the other 
requirements of an engine manufacturer under the regulations, including 
labeling, warranty, defect reporting, payment of certification fees, 
and other things. The useful life period selected for the original 
certification will also apply for the equipment manufacturer's 
streamlined certification. This provision is primarily intended for 
easing the transition to new standards. Starting in the 2015 model 
year, we are therefore limiting these recertification provisions to 
small-volume emission families (sales below 5,000 units).
(5) Special Provisions Related to Altitude
    For nonhandheld engines we are requiring compliance with our 
standards at all altitudes, consistent

[[Page 59093]]

with other engine categories.\97\ However, since spark-ignition engines 
without electronic control of air/fuel ratio cannot compensate for 
changing air density, their emissions generally change with changing 
altitude. In recognition of this technological limit, we are adopting 
special testing and compliance provisions related to altitude. As 
described in Section V.C.1, we are requiring that nonhandheld engines 
meet emission standards without an altitude kit, but will allow, in 
certain cases, testing at barometric pressures below 94.0 kPa (which is 
roughly equivalent to an elevation of 2,000 feet above sea level) using 
an altitude kit. (An altitude kit may be as simple as a single 
replacement part for the carburetor that allows a greater volumetric 
flow of air into the carburetor to make the engine operate as it would 
at low altitudes.) Such kits were allowed under part 90 and we are 
keeping the provisions that already apply in part 90 related to 
descriptions of these altitude kits in the application for 
certification. This includes a description of how engines comply with 
emission standards at varying atmospheric pressures, a description of 
the altitude kits, and the associated part numbers.
---------------------------------------------------------------------------

    \97\ Note that we are not changing exhaust standards for 
handheld engines and are therefore codifying altitude provisions in 
the new part 1054 that are consistent with those that apply under 
part 90.
---------------------------------------------------------------------------

    During certification, manufacturers will have two choices regarding 
testing and compliance at barometric pressures below 94.0 kPa: (1) Test 
engines for demonstrating compliance with the standards without an 
altitude kit; or (2) test engines for demonstrating compliance with the 
standards using an altitude kit. Those manufacturers choosing Option 2 
will be required to identify the altitude range for which it expects 
proper engine performance and emission control will occur with and 
without the altitude kit, state that engines will comply with 
applicable emission standards throughout the useful life with the 
altitude kit installed according to instructions, and include any 
supporting information. Manufacturers choosing Option 2 will also need 
to describe a plan for making information and parts available to 
consumers such that widespread use of altitude kits will reasonably be 
expected in high-altitude areas. For nonhandheld engines, this will 
involve all counties with elevations substantially above 4,000 feet 
(see Appendix III to part 1068). This includes all U.S. counties where 
75 percent of the land mass and 75 percent of the population are above 
4,000 feet (see 45 FR 5988, January 24, 1980 and 45 FR 14079, March 4, 
1980).
    Assuming we grant a certificate that includes a manufacturer's 
reliance on an altitude kit during testing, any compliance testing at 
higher altitudes (more precisely, lower barometric pressures) would be 
conducted with the altitude kit installed on the engine according to 
the manufacturer's instructions. Note that manufacturers would not be 
required to submit test data from high-altitude testing in their 
applications, provided they could demonstrate through engineering 
analysis the basis for knowing the altitude kits will allow the engines 
to meet the emission standards at high altitude. Any high-altitude 
testing of an engine family that does not use these high altitude 
provisions will be tested without an altitude kit installed.
    We considered requiring manufacturers relying on altitude kits to 
ensure that all engines sold in high-altitude areas were sold with 
altitude kits installed, but determined that such a requirement would 
have been burdensome to the manufacturers, impractical, and very 
disruptive to the market, and may not work in practice. Certificate 
holders will be the engine manufacturers, which generally have little 
or no control over the location at which the sale to the ultimate 
purchaser is made. In most cases, the engines will be sold to equipment 
manufacturers and/or through distributors or large retailers. However, 
even in cases when a manufacturer might have control over the location 
at which the sale to the ultimate purchaser is made, it is not clear 
that the manufacturer could ensure that every piece of equipment sold 
in a high-altitude area has an engine with an altitude kit installed. 
In light of these potential problems, we believe the approach being 
finalized will be effective and is the most appropriate approach. It is 
not tampering for a consumer not to install the altitude kit. We expect 
it will be common practice for consumers to install altitude kits 
because they are inexpensive, easy to install, and improve performance 
at higher altitudes. Manufacturers have also emphasized that retailers 
and consumers are well aware of the need to modify engines for proper 
operation in high-altitude areas. Toward that end, we are requiring 
manufacturers to make the information and parts sufficiently easy for 
the consumer to obtain so that the manufacturer ``would reasonably 
expect that altitude kits would be widely used in the high-altitude 
counties.'' This approach should result in effective control of 
emissions in high-altitude areas while still addressing the 
manufacturers' concerns regarding control over distribution practices 
and point of sale. In fact, it is worth noting that we expect this 
overall approach to be more effective in achieving emission reductions 
than the current regulations under Phase 2. Nevertheless, should we 
determine that operation of engines in high-altitude areas without 
altitude kits installed is widespread, we would reconsider the need for 
additional requirements.
(6) Special Provisions for Compliance Assurance
    EPA's experiences in recent years have highlighted the need for 
more effective tools for preventing the introduction of noncompliant 
engines into U.S. commerce. These include noncompliant engines sold 
without engine labels or with counterfeit engine labels. We are 
adopting the special provisions in the following sections to help us 
address these problems.
(a) Importation Form
    Importation of engines is regulated both by EPA and by U.S. Customs 
and Border Protection. Current Customs regulations specify that anyone 
importing a nonroad engine (or equipment containing a nonroad engine) 
must complete a declaration form before importation. EPA has created 
Declaration Form 3520-21 for this purpose. Customs requires this in 
many cases, but there are times when they allow engines to be imported 
without the proper form. It will be an important advantage for EPA's 
own compliance efforts to be able to enforce this requirement. We are 
therefore modifying part 90 to mirror the existing Customs requirement 
(and the EPA requirement in Sec.  1068.301) for importers to complete 
and retain the declaration form before importing engines (see Sec.  
90.601). This will facilitate a more straightforward processing of 
cases in which noncompliant products are brought to a U.S. port for 
importation because currently no requirement exists for measuring 
emissions or otherwise proving that engines are noncompliant at the 
port facility. Since this is already a federal requirement, we are 
making this effective immediately with the final rule.
(b) Assurance of Warranty Coverage
    Manufacturers of Small SI engines subject to the standards are 
required to provide an emission-related warranty so owners are able to 
have repairs done at no expense for emission-related defects during an 
initial warranty period. Established companies are able to do

[[Page 59094]]

this with a network of authorized repair facilities that can access 
replacement parts and properly correct any defects. In contrast, we are 
aware that some manufacturers are selling certified engines in the 
United States without any such network for processing warranty claims. 
As such, owners who find that their engines have an emission-related 
defect are unable to properly file a warranty claim or get repairs that 
should be covered by the warranty. In effect, this allows companies to 
certify their engines and agree to provide warranty coverage without 
ever paying for legitimate repairs that should be covered by the 
warranty. We are therefore requiring that all manufacturers demonstrate 
several things before we will approve certification for their engines 
(see Sec.  90.1103 and Sec.  1054.120). The following provisions apply 
to manufacturers who certify engines, and include importers who certify 
engines. First, we are requiring manufacturers to provide and monitor a 
toll-free telephone number and an e-mail address for owners to receive 
information about how to make a warranty claim and how to make 
arrangements for authorized repairs. Second, we are requiring 
manufacturers to provide a source of replacement parts within the 
United States. For imported parts, this will require at least one 
distributor within the United States.
    Finally, we are requiring manufacturers to have a network of 
authorized repair facilities or to take one of multiple alternate 
approaches to ensure that owners will be able to get free repair work 
done under warranty. In the proposal we specified that warranty-related 
repairs may be limited to authorized repair facilities as long as 
owners did not have to travel more than 100 miles for repairs (or 
further in remote areas of the country). For companies without a 
nationwide repair network, we proposed alternative methods for meeting 
warranty obligations, including free shipping, free service calls, or 
reimbursement of costs through local nonauthorized service centers. 
Manufacturers suggested a different metric for demonstrating a 
readiness to meet warranty obligations, focusing on maintaining 
authorized service centers in every metropolitan area with a population 
of 100,000 or greater (according to the 2000 census). We agree that the 
suggested approach would provide an effective demonstration of a valid 
warranty network and are including that in the regulation; however, we 
believe it is still appropriate to include the proposed provisions 
related to the 100-mile specification in the final rule. For example, 
there may be some companies with a regional market that have an 
effective network of repair facilities in that region, but not in other 
parts of the country. In this circumstance, it is appropriate to allow 
the manufacturer multiple paths for showing that it will be able to 
respond effectively to all warranty claims nationwide. We are therefore 
including the 100-mile approach as an additional alternative in the 
regulations, as well as including a variety of adjustments to address 
the concerns raised in the comments.
    We believe these requirements are both necessary and effective for 
ensuring proper warranty coverage for all owners. At the same time, we 
are adopting a flexible approach that allows companies to choose from a 
variety of alternatives for providing warranty service. We therefore 
believe these requirements are readily achievable for any company. We 
are therefore implementing these requirements starting with the 2010 
model year. This should allow time for the administrative steps 
necessary to arrange for any of the allowable compliance options 
described above.
(c) Bond Requirements Related to Enforcement and Compliance Assurance
    Certification initially involves a variety of requirements to 
demonstrate that engines and equipment are designed to meet applicable 
emission standards. After certification is complete, however, several 
important obligations apply to the certifying manufacturer or importer. 
For example, we require ongoing testing of production engines, as well 
as reporting of recurring defects. Manufacturers may also need to pay 
penalties if there is a violation and may need to perform a recall if 
their products are found to be noncompliant. For companies operating 
within the United States, we are generally able to take steps to 
communicate clearly and insist on compliance with applicable 
regulations. For example, in certain circumstances we may meet with 
specific company representatives, halt production, or seize assets. For 
companies without staff or assets in the United States, these 
alternatives are not available. Accordingly, we have limited ability to 
enforce our requirements or recover any appropriate penalties, which 
increases the risk of environmental problems as well as problems for 
owners. This creates the potential for a company to gain a competitive 
advantage if they do not have substantial assets or operations in the 
United States by avoiding some of the costs of complying with EPA 
regulations.
    To address this concern, we are adopting a requirement for 
manufacturers of certified engines and equipment (including importers) 
to post a bond to cover any potential compliance or enforcement actions 
under the Clean Air Act. Manufacturers and importers will be exempt 
from the bond requirement if they are able to sufficiently demonstrate 
an assurance that they will meet any compliance- or enforcement-related 
obligations. The bonding requirements apply for companies that do not 
have fixed assets in the United States meeting the smallest applicable 
thresholds from the following:
     A threshold of $3 million applies for manufacturers that 
have been certificate holders in each of the preceding ten years 
without failing a test conducted by EPA officials or having been found 
by EPA to be noncompliant under applicable regulations.
     A threshold of $6 million applies for secondary engine 
manufacturers or for equipment manufacturers that certify no engines 
with respect to exhaust emission standards. A secondary engine 
manufacturer is generally a certifying company that buys partially 
complete engines for final assembly from another engine manufacturer.
     A threshold of $10 million applies for companies that do 
not qualify for the smaller specified bond thresholds.
    The value of the bond must be at least $500,000, though a higher 
bond value may apply based on multiplying the annual volume of 
shipments by a per-engine rate. The per-engine bond amount is $25 for 
handheld engines and Class I engines. Class II engines cover a much 
wider range of applications, so we further differentiate the bond for 
those engines. The proposed per-engine bond amounts for Class II 
engines is $50 for engines between 225 and 740 cc, $100 for engines 
between 740 and 1,000 cc, and $200 for engines above 1,000 cc. These 
values are generally scaled to be approximately 10 to 15 percent of the 
retail value. In the case of handheld engines, this is based on the 
retail value of equipment with installed engines, since these products 
are generally marketed that way. Class II engines are very often sold 
as loose engines to equipment manufacturers, so the corresponding per-
engine bond values are based on the retail value of the engine alone. 
This approach is similar to the bond requirements that apply for 
nonroad diesel engines (see Sec.  1039.626).
    The total bond amount will be based on the value of imported 
products over

[[Page 59095]]

a one-year period. If a bond is used to satisfy a judgment, the company 
will then be required to increase the amount of the bond within 90 days 
of the date the bond is used to cover the amount that was used. Also, 
we will require the bond to remain in place for five years after the 
company no longer imports Small SI engines.
    These bonding requirements apply for 2010 and later model year 
engines and are enforceable for all products introduced into U.S. 
commerce starting January 1, 2010.
(d) Bond Requirements Related to Warranty
    Warranty is an additional potential compliance obligation. Engine 
manufacturers must service warranty claims for emission-related defects 
that occur during the prescribed warranty period. We have experience 
with companies that have faced compliance-related problems where it was 
clear that they did not have the resources to make warranty repairs if 
that were necessary. Such companies benefit from certification without 
bearing the full range of associated obligations. We believe it is 
appropriate to add a requirement to post a bond to ensure that a 
company can meet their warranty obligations. The concern for being able 
to meet these obligations applies equally to domestic and foreign 
manufacturers. The biggest indicator of a manufacturer's ability to 
make warranty repairs relates to the presence of repair facilities in 
the United States. We are therefore adopting a bond requirement 
starting with the 2010 model year for all manufacturers (including 
importers) that do not have a repair network in the United States that 
is available for processing warranty repairs (see Sec.  90.1007 and 
Sec.  1054.120). Such a repair network will need to involve at least 
100 authorized repair facilities in the United States, or at least one 
such facility for each 5,000 engines sold in the United States, 
whichever is less. Companies not meeting these criteria will need to 
post a bond as described above for compliance assurance. We will allow 
companies that must post bond to arrange for warranty repairs to be 
done at independent facilities. Note that a single bond payment will be 
required for companies that must post bond for compliance-related 
obligations, as described above, in addition to the bond for warranty-
related obligations.
(e) Restrictions Related to Naming Model Years
    We are adopting the proposed provisions that restrict what model 
years can be assigned to imported products. Importers can only declare 
a model year up to one year before the calendar year of importation in 
cases where new emission standards start to apply. We are adopting this 
requirement for all engine categories subject to part 1068. See the 
detailed discussion of this issue in Section VIII.C.
(f) Import-Specific Information at Certification
    We are requiring additional information to improve our ability to 
oversee compliance related to imported engines (see Sec.  90.107 and 
Sec.  1054.205). In the application for certification, we are requiring 
the following additional information starting with the 2010 model year: 
(1) The port or ports at which the manufacturer has imported engines 
over the previous 12 months, (2) the names and addresses of the agents 
the manufacturer has authorized to import the engines, and (3) the 
location of the test facilities in the United States where the 
manufacturer will test the engines if we select them for testing under 
a selective enforcement audit. See Section 1.3 of the Summary and 
Analysis of Comments for further discussion related to naming test 
facilities in the United States. The current regulations in part 90 do 
not include these specific requirements; however, we do specify already 
that we may select imported engines at a port of entry. In such a case, 
we will generally direct the manufacturer to do testing at a facility 
in the United States. The new provision allows the manufacturers to 
make these arrangements ahead of time rather than relying on EPA's 
selection of a test lab. Also, the current regulations state in Sec.  
90.119 that EPA may conduct testing at any facility to determine 
whether engines meet emission standards.
(g) Counterfeit Emission Labels
    We have observed that some importers attempt to import noncompliant 
products by creating an emission control information label that is an 
imitation of a valid label from another company. We are not requiring 
that certifying manufacturers take steps to prevent this, but we are 
including a provision that specifically allows manufacturers to add 
appropriate features to prevent counterfeit labels. This may include 
the engine's serial number, a hologram, or some other unique 
identifying feature. This provision is effective immediately upon 
completion of the final rule since it is an allowance and not a 
requirement (see Sec.  90.114 and Sec.  1054.135).
(h) Partially Complete Engines
    As described in Section VIII, we are clarifying the engine 
manufacturers' responsibilities for certification with respect to 
partially complete engines. While this is intended to establish a path 
for secondary engine manufacturers to get their engines from the 
original engine manufacturer, we are aware that this will also prevent 
manufacturers from selling partially complete engines as a strategy to 
circumvent certification requirements. If long blocks or engines 
without fuel systems are introduced into U.S. commerce, either the 
original manufacturer or the company completing engine assembly will 
need to hold a certificate for that engine.
(7) Using Certified Small SI Engines in Marine Applications
    Manufacturers have described situations in which Small SI engines 
are used in marine applications. As described in Section III.E.5, we 
are allowing limited numbers of certified Small SI engines to be used 
as marine propulsion engines without certifying to the Marine SI 
emission standards in part 1045 (see Sec.  1045.610).
(8) Alternate Fuels
    The emission standards apply to all spark-ignition engines 
regardless of the fuel they use. Almost all Small SI engines operate on 
gasoline, but these engines may also operate on other fuels, such as 
natural gas, liquefied petroleum gas, ethanol, or methanol. The test 
procedures in 40 CFR part 1065 describe adjustments needed for 
operating test engines with oxygenated fuels.
    In some special cases, a single engine is designed to alternately 
run on different fuels. For example, some engines can switch back and 
forth between natural gas and LPG. We are adding a clarification to the 
regulations to describe how manufacturers would submit certification 
data and divide such engines into engine families. Manufacturers would 
submit test data for each type of fuel. If a manufacturer certifies a 
dual-fuel engine family, but produces engines that run only on one fuel 
where that dedicated-fuel engine is identical to the certified dual-
fuel engine with respect to that fuel, those engines could be included 
in the same family. This is also true for the second fuel. For example, 
if a manufacturer produces an engine that can run on both gasoline and 
LPG, and also produces that engine model in gasoline-only and LPG-only 
versions, without adjusting the calibration or other aspects of each 
respective configuration, those engines

[[Page 59096]]

may all be included in the same engine family. In effect, these engines 
are covered by the original certificate because they are made to 
conform to the description included in the original application for 
certification except that they do not have the full functionality of 
the dual-fuel engines.
    Once an engine is placed into service, someone might want to 
convert it to operate on a different fuel. This would take the engine 
out of its certified configuration, so we are requiring that someone 
performing such a fuel conversion go through a certification process. 
We will allow certification of the complete engine using normal 
certification procedures, or the aftermarket conversion kit could be 
certified using the provisions of 40 CFR part 85, subpart V. This 
contrasts with the existing provisions that allow for fuel conversions 
that can be demonstrated not to increase emission levels above the 
applicable standard. We are applying this requirement starting January 
1, 2010. (See Sec.  90.1003 and Sec.  1054.635.)
(9) Other Provisions
    We are also making a variety of changes in the provisions that make 
up the certification and compliance program. Most of these changes 
serve primarily to align with the regulations we have started to apply 
to other types of engines.
    The new warranty provisions are based on the requirements that 
already apply under 40 CFR part 90. We are adding an administrative 
requirement to describe the provisions of the emission-related warranty 
in the owners manual. We expect that many manufacturers already do this 
but believe it is appropriate to require this as a routine practice. 
(See Sec.  1054.120.)
    Testing new engines requires a period of engine operation to 
stabilize emission levels. The regulations specify two separate figures 
for break-in periods for purposes of certification testing. First, 
engines are generally operated long enough to stabilize emission 
levels. Second, we establish a limit on how much an engine may operate 
and still be considered a ``low-hour'' engine. The results of testing 
with the low-hour engine are compared with a deteriorated value after 
some degree of service accumulation to establish a deterioration 
factor. For Marine SI engines, we are requiring that the engine can be 
presumed to have stabilized emission levels after 12 hours of engine 
operation, with a provision allowing approval for more time if needed, 
and we generally require that low-hour test engines have no more than 
30 hours of engine operation. However, given the shorter useful life 
for many Small SI engines, this will not make for a meaningful process 
for establishing deterioration factors. For example, emission levels in 
Small SI engines may not stabilize before deterioration begins to 
affect emission levels, which will prevent the engine from ever truly 
having stabilized emission levels. Also, the low-hour emission test 
should occur early enough for the deterioration factor to adequately 
represent the deterioration over the engine's lifetime.
    We are requiring that Small SI engines with a useful life above 300 
hours can be presumed stable after 12 hours with low-hour testing 
generally occurring after no more than 24 hours of engine operation. 
For Small SI engines with useful life below 300 hours, we are requiring 
a combination of provisions to address this concern. First, we are 
allowing manufacturers to establish a stabilization period that is less 
than 12 hours without showing that emission levels have fully 
stabilized (see Sec.  1054.501). Second, we are specifying that low-
hour testing must generally occur after no more than 15 hours of engine 
operation (see Sec.  1054.801). This allows some substantial time for 
break-in, stabilization, and running multiple tests, without 
approaching a significant fraction of the useful life. Third, we are 
requiring that manufacturers consistently test low-hour production-line 
engines (and emission-data engines in the case of carryover 
deterioration factors for certification) using the same degree of 
service accumulation to avoid inaccurate application of deterioration 
factors (see Sec.  1054.240 and Sec.  1054.305).
    We are clarifying the maintenance that manufacturers may perform 
during service accumulation as part of the certification process. The 
general approach is to allow any amount of maintenance that is not 
emission-related, but to allow emission-related maintenance only if it 
is a routine practice with in-use engines. In most of our emission 
control programs we specify that 80 percent of in-use engines should 
undergo a particular maintenance step before manufacturers can do that 
maintenance during service accumulation for certification testing. We 
are aware that Small SI engines are predominantly operated by 
homeowners with widely varying practices in servicing their lawn and 
garden equipment. As such, achieving a rate of 80 percent may be 
possible only for the most obvious maintenance steps. We are therefore 
adopting a more accommodating approach for Small SI engines. In 
particular, we are allowing manufacturers to perform a maintenance step 
during certification based on information showing that 60 to 80 percent 
of in-use engines get the specified maintenance at the recommended 
interval. We will approve the use of such maintenance based on the 
relative effect on performance and emissions. For example, we may allow 
scheduled fuel-injector replacement if survey data show this is done at 
the recommended interval for 65 percent of engines and performance 
degradation is shown to be roughly proportional to the degradation in 
emission control for engines that do not have their fuel injectors 
replaced.
    One maintenance step of particular interest is replacement of air 
filters. In larger spark-ignition engines, we do not treat replacement 
of air filters as critical emission-related maintenance, largely 
because those engines have feedback controls to compensate for changes 
in varying pressure drop across the air filter. However, for Small SI 
engines varying air flow through the air filter has a direct effect on 
the engine's air-fuel ratio, which in turn directly affects the 
engine's emission rates for each of the regulated pollutants. Service 
accumulation generally takes place in laboratory conditions with far 
less debris, dust, or other ambient particles that will cause filter 
loading, so filter changes should be unnecessary to address this 
conventional concern. We are concerned that the greater effect is from 
fuel and oil that may deposit on the back side of the filter, 
especially from crankcase ventilation into the intake. This effect will 
go undetected if there are no measurements with filters that have 
experienced significant engine operation. We believe it would be 
appropriate for this rulemaking to allow manufacturers to clean or 
change air filters as long as manufacturers perform emission 
measurements before and after these maintenance steps. It would be best 
to perform testing with each air filter change; however, we would find 
it acceptable if manufacturers tested engines before and after every 
other air filter change. This approach allows for continued air filter 
changes, consistent with our testing to establish the feasibility of 
the Phase 3 emission standards, but properly identifies the effect on 
emissions. We are taking a similar approach for maintenance with spark 
plugs, except that tests must occur before and after each step to clean 
or replace the spark plugs. We will be interested in a future 
rulemaking to set emission standards based on less optimistic 
assumptions regarding the degree of air filter and spark plug 
maintenance with in-use equipment.

[[Page 59097]]

See Section 2.4 of the Summary and Analysis of Comments for a more 
detailed discussion related to maintenance.
    We are defining criteria for establishing engine families that are 
very similar to what is currently specified in 40 CFR part 90. We are 
requiring that engines with turbochargers be in a different family than 
naturally aspirated engines since that will be likely to substantially 
change the engine's emission characteristics. Very few if any Small SI 
engines are turbocharged today so this change will not be disruptive 
for any manufacturer. We are also specifying that engines must have the 
same number and arrangement of cylinders and approximately the same 
total displacement. This will help us avoid the situation where 
manufacturers argue that engines with substantially different engine 
blocks should be in the same engine family. We will implement this 
provision consistent with the approach adopted by California ARB in 
which they limit engine families to include no more than 15 percent 
variation in total engine displacement. Similarly, the current 
regulations in part 90 do not provide a clear way of distinguishing 
engine families by cylinder dimensions (bore and stroke) so we are also 
changing part 90 to limit the variation in displacement within an 
engine family to 15 percent. (See Sec.  1054.230 and Sec.  90.116.)
    The test procedures for Small SI engines are designed for engines 
operating in constant-speed applications. This covers the large 
majority of affected equipment; however, we are aware that engines 
installed in some types of equipment, such as small utility vehicles or 
go carts, are not governed to operate only at a single rated speed. 
These engines will be certified based on their emission control over 
the constant-speed duty cycle even though they do not experience 
constant-speed operation in use. We are not prepared to establish a new 
duty cycle for these engines but we are requiring engine manufacturers 
to explain how their emission control strategy is not a defeat device 
in the application for certification. For example, if engines will 
routinely experience in-use operation that differs from the specified 
duty cycle for certification, the manufacturer should describe how the 
fuel-metering system responds to varying speeds and loads not 
represented by the duty cycle. We are also requiring that engine 
distributors and equipment manufacturers that replace installed 
governors must get a new certificate of conformity for those engines to 
avoid a tampering violation.

F. Small-Business Provisions

(1) Small Business Advocacy Review Panel
    On August 17, 2006, we convened a Small Business Advocacy Review 
Panel (SBAR Panel or the Panel) under section 609(b) of the Regulatory 
Flexibility Act (RFA), as amended by the Small Business Regulatory 
Enforcement Fairness Act of 1996 (SBREFA). The purpose of the Panel was 
to collect the advice and recommendations of representatives of small 
entities that could be affected by this rule and to prepare a report 
containing the Panel's recommendations for small entity flexibilities 
based on those comments, as well as on the Panel's findings and 
recommendations regarding the elements of the Initial Regulatory 
Flexibility Analysis (IRFA) under section 603 of the RFA. Those 
elements of an IRFA are:
     A description of, and where feasible, an estimate of the 
number of small entities to which the rule will apply;
     A description of projected reporting, recordkeeping, and 
other compliance requirements of the rule, including an estimate of the 
classes of small entities that will be subject to the requirements and 
the type of professional skills necessary for preparation of the report 
or record;
     An identification, to the extent practicable, of all 
relevant Federal rules that may duplicate, overlap, or conflict with 
the rule; and
     A description of any significant alternative to the rule 
that accomplishes the stated objectives of applicable statutes and that 
minimizes any significant economic impact of the rule on small 
entities.
    The report of the Panel has been placed in the rulemaking record 
for this final rule.
    In addition to EPA's Director of the Office of Regulatory 
Management and Information who acted as chairperson, the Panel 
consisted of the Director of EPA's Assessment and Standards Division of 
the Office of Transportation and Air Quality, the Administrator of the 
Office of Management and Budget's Office of Information and Regulatory 
Affairs, and the Chief Counsel for Advocacy of the Small Business 
Administration.
    Using definitions provided by the Small Business Administration 
(SBA), companies that manufacture internal-combustion engines and that 
employ fewer than 1,000 people are considered small businesses for the 
SBAR Panel. Companies that manufacture equipment and that employ fewer 
than 500 people, or fewer than 750 people for manufacturers of 
construction equipment, or fewer than 1,000 people for manufacturers of 
generators, are considered small businesses for the SBAR Panel. Based 
on this information, we asked 25 companies that met the SBA small 
business thresholds to serve as small entity representatives for the 
duration of the Panel process. Of these 25 companies, 14 of them 
represented a cross-section of Small SI engine manufacturers, equipment 
manufacturers, and fuel system component manufacturers. (The rest of 
the companies were involved in the Marine SI market.)
    With input from small entity representatives, the Panel drafted a 
report providing findings and recommendations to us on how to reduce 
the potential burden on small businesses that may occur as a result of 
the proposed rule. The Panel report is included in the rulemaking 
record for this final rule. In light of the Panel report, and where 
appropriate, we proposed a number of provisions for small business 
engine manufacturers and small business equipment manufacturers. We are 
adopting all the flexibility options as proposed. The following section 
describes the flexibility options being adopted in this final rule.
    (2) Burden Reduction Approaches for Small-Volume Nonhandheld Engine 
Manufacturers
    We are incorporating several provisions for small business 
nonhandheld engine manufacturers. The purpose of these provisions is to 
reduce the burden on companies for which fixed costs cannot be 
distributed over a large number of engines.
    Under EPA's current Phase 2 regulations, EPA provided a number of 
provisions for small-volume engine manufacturers. For the Phase 2 
regulations, the criteria for determining if a company was a ``small-
volume engine manufacturer'' was based on whether the company projected 
at certification to have production of no more than 10,000 nonhandheld 
engines per year (excluding engines sold in California that are subject 
to the California ARB standards). Based on past experience, EPA 
believes that determining the applicability of the provisions based on 
number of employees, as compared to volume of products, can be more 
problematic given the nature of the workforce in terms of full-time, 
part-time, contract, overseas versus domestic, and parent

[[Page 59098]]

companies. EPA believes it can avoid these potential complications and 
still provide relief to nearly all small businesses by continuing to 
use the annual sales criteria for determining which entities qualify as 
a small volume engine manufacturer under the Phase 3 program. For these 
reasons, EPA is retaining the current production-based criteria for 
determining who is a small-volume engine manufacturer and, as a result, 
eligible for the Phase 3 flexibilities described below (see Sec.  
1054.801).
    Based on confidential sales data provided to EPA by engine 
manufacturers, the 10,000 unit cut-off for engine manufacturers will 
include all the small business engine manufacturers currently 
identified using SBA's employee-based definition. To ensure all small 
businesses have access to the flexibilities described below, EPA is 
also allowing engine manufacturers exceeding the production cut-off 
level noted above but having fewer than 1,000 employees to request 
treatment as a small-volume engine manufacturer (see Sec.  1054.635). 
In such a case, the manufacturer will need to provide information to 
EPA demonstrating that the manufacturer has fewer employees than the 
1,000 cut-off level to be approved as a small-volume engine 
manufacturer.
    If a small-volume engine manufacturer grows over time and exceeds 
the production volume limit of 10,000 nonhandheld engines per year, the 
engine manufacturer will no longer be eligible for the small-volume 
flexibilities. However, because some of the flexibilities described 
below provide manufacturers with the ability to avoid certain testing 
such as durability testing or production line testing, it may be 
difficult for a manufacturer to fully comply with all the testing 
requirements immediately upon losing its small-volume status. In such 
cases, the engine manufacturer can contact EPA and request additional 
time, subject to EPA approval, before they would be required to meet 
the testing requirements that generally apply to engine manufacturers.
(a) Assigned Deterioration Factors
    We are allowing small-volume engine manufacturers to rely on an 
assigned deterioration factor to demonstrate compliance with the 
standards for the purposes of certification rather than doing service 
accumulation and additional testing to measure deteriorated emission 
levels at the end of the regulatory useful life (see Sec.  1054.240). 
EPA is not establishing actual levels for the assigned deterioration 
factors with this final rule. EPA intends to analyze emissions 
deterioration information that becomes available over the next few 
years to determine what deterioration factors will be appropriate for 
nonhandheld engines. This is likely to include deterioration data for 
engines certified to comply with California ARB's Tier 3 standards and 
engines certified early to EPA's Phase 3 standards. Prior to the 
implementation date for the Phase 3 standards, EPA will provide 
guidance to engine manufacturers specifying the levels of the assigned 
deterioration factors for small-volume engine manufacturers.
(b) Exemption From Production-Line Testing
    We are exempting small-volume engine manufacturers from the 
production-line testing requirements (see Sec.  1054.301). Therefore, 
small-volume engine manufacturers will not be required to perform 
production-line testing on any of their engine families.
(c) Additional Lead Time
    We are allowing small-volume engine manufacturers to delay 
implementation of the Phase 3 exhaust emission standards for two years 
(see Sec.  1054.145). Small-volume engine manufacturers will be 
required to comply with the Phase 3 exhaust emission standards 
beginning in model year 2014 for Class I engines and model year 2013 
for Class II engines. Under this approach, manufacturers will be able 
to apply this delay to all their nonhandheld engines or to just a 
portion of their production. For those engine families that are 
certified to meet the Phase 3 standards prior to these delayed dates by 
selecting an FEL at or below the Phase 3 standards, small volume engine 
manufacturers can generate early Phase 3 credits (as discussed in 
Section V.C.3) through the 2013 model year for Class I engines and 
through the 2012 model years for Class II engines. This option provides 
more lead time for small-volume engine manufacturers to redesign their 
products. They will also be able to learn from some of the hurdles 
overcome by larger manufacturers.
(d) Broad Engine Families
    We are also allowing small-volume engine manufacturers to use a 
broader definition of engine family for certification purposes. Under 
the existing engine family criteria specified in the regulations, 
manufacturers group their various engine lines into engine families 
that have similar design characteristics including the combustion 
cycle, cooling system, cylinder configuration, number of cylinders, 
engine class, valve location, fuel type, aftertreatment design, and 
useful life category. We are allowing small-volume engine manufacturers 
to group all their Small SI engines into a single engine family for 
certification by engine class and useful life category, subject to good 
engineering judgment (see Sec.  1054.230).
(e) Hardship Provisions
    We are also establishing two types of hardship provisions for 
nonhandheld engine manufacturers consistent with the Panel 
recommendations. As has been our experience with similar provisions 
already adopted, we anticipate that hardship mechanisms will be used 
sparingly. First, under the unusual circumstances hardship provision, 
any manufacturer subject to the new standards may apply for hardship 
relief if circumstances outside their control cause the failure to 
comply and if failure to sell the subject engines or equipment or fuel 
system component would have a major impact on the company's solvency 
(see Sec.  1068.245). An example of an unusual circumstance outside a 
manufacturer's control may be an ``Act of God,'' a fire at the 
manufacturing plant, or the unforeseen shutdown of a supplier with no 
alternative available. The terms and time frame of the relief will 
depend on the specific circumstances of the company and the situation 
involved. As part of its application for hardship, a company will be 
required to provide a compliance plan detailing when and how it will 
achieve compliance with the standards. This hardship provision will be 
available to all manufacturers of engines, equipment, boats, and fuel 
system components subject to the new standards, regardless of business 
size.
    Second, an economic hardship provision allows small businesses 
subject to the new standards to petition EPA for limited additional 
lead time to comply with the standards (see Sec.  1068.250). A small 
business must make the case that it has taken all possible business, 
technical, and economic steps to comply, but the burden of compliance 
costs would have a significant impact on the company's solvency. 
Hardship relief could include requirements for interim emission 
reductions and/or the purchase and use of emission credits. The length 
of the hardship relief decided during review of the hardship 
application will be up to one year, with the potential to extend the 
relief as needed. We anticipate that one to two years will normally be 
sufficient. As part of its application for

[[Page 59099]]

hardship, a company will be required to provide a compliance plan 
detailing when and how it will achieve compliance with the standards. 
This hardship provision will be available only to qualifying small 
businesses.
(3) Burden Reduction Approaches for Small-Volume Nonhandheld Equipment 
Manufacturers
    We are establishing three provisions for small-volume nonhandheld 
equipment manufacturers. The purpose of these provisions is to reduce 
the burden on companies for which fixed costs cannot be distributed 
over large sales volumes. That is useful for small-volume equipment 
manufacturers that may need more lead time to redesign their equipment 
to accommodate the new Phase 3 engine designs.
    Under EPA's current Phase 2 regulations, EPA provided a number of 
lead time provisions for small-volume equipment manufacturers. For the 
Phase 2 regulations, the criteria for determining if a company was a 
``small-volume equipment manufacturer'' was based on whether the 
company produced fewer than 5,000 nonhandheld pieces of equipment per 
year (excluding equipment sold in California that are subject to the 
California ARB standards). For the same reasons noted above for engine 
manufacturers, EPA is retaining the current production-based criteria 
for determining who is a small-volume equipment manufacturer and, as a 
result, eligible for the Phase 3 flexibilities described below (see 
Sec.  1054.801). The determination of which companies qualify as small-
volume equipment manufacturers for the purposes of the flexibilities 
described below will be based on the average annual U.S.-directed 
production of nonhandheld equipment over three years from 2007 through 
2009.
    Based on estimated sales data for equipment manufacturers, EPA 
believes the 5,000 unit cut-off for equipment manufacturers will 
include almost all the small business equipment manufacturers using 
SBA's employee-based definition. However, to ensure all small 
businesses have access to the flexibilities described below, EPA is 
also allowing equipment manufacturers which exceed the production cut-
off level noted above, but comply with SBA's employee-based definition 
(e.g., 500 employees for equipment manufacturers, 750 employees for 
construction equipment manufacturers, and 1,000 employees for generator 
manufacturers), to request treatment as a small-volume equipment 
manufacturer (see Sec.  1054.635). In such a case, the manufacturer 
must provide information to EPA demonstrating that the manufacturer has 
fewer employees than the applicable employee cut-off level to be 
approved as a small-volume equipment manufacturer.
(a) Additional Lead Time
    As described in Section V.E.3., EPA is implementing a transition 
program for all equipment manufacturers that produce Class II 
equipment. Under that program, equipment manufacturers can install 
Phase 2 engines in limited numbers of Class II equipment over the first 
four years the Phase 3 standards apply (i.e., 2011 through 2014). The 
number of equipment that can use Phase 2 engines is based on 30 percent 
of an average annual production level of Class II equipment. However, 
for small-volume equipment manufacturers, EPA is allowing a higher 
level of allowances. Small-volume equipment manufacturers can install 
Phase 2 engines at a level of 200 percent of an average annual 
production level of Class II equipment. Small-volume equipment 
manufacturers can use these allowances over the same four year period 
of the transition program noted above (see Sec.  1054.625). Therefore, 
a small-volume equipment manufacturer could potentially use Phase 2 
engines on all their Class II equipment for two years, consistent with 
the SBAR Panel's recommendation, or they might, for example, sell half 
their Class II equipment with Phase 2 engines for four years assuming 
sales stay constant over time.
(b) Simplified Certification Procedure
    We are establishing a simplified engine certification procedure for 
all equipment manufacturers, including small-volume equipment 
manufacturers (see Sec.  1054.612). See Section V.E.4 for further 
discussion of this provision.
(c) Hardship Provisions
    Because nonhandheld equipment manufacturers in many cases depend on 
engine manufacturers to supply certified engines in time to produce 
complying equipment, we are also establishing a hardship provision for 
all nonhandheld equipment manufacturers, regardless of size. The 
provision will allow an equipment manufacturer to request more time if 
they are unable to obtain a certified engine and they are not at fault 
and will face serious economic hardship without an extension (see Sec.  
1068.255).

G. Technological Feasibility

(1) Level of Standards
    We are promulgating new, more stringent exhaust HC+NOX 
standards for Class I and II Small SI engines. We are also establishing 
a new CO standard for Small SI engines used in marine generator 
applications.
    For the 2008 model year manufacturers have certified nearly 500 
Class I and II engine families to the Phase 2 standards using a variety 
of engine designs and emission control technology. All Class I engines 
were produced using carbureted air-fuel induction systems. A small 
number of engines used catalyst-based emission control technology. 
Similarly, Class II engines were predominantly carbureted. A limited 
number of these engines used catalyst technology, electronic engine 
controls and fuel injection, or were water-cooled. In both classes, 
several engine families were certified at levels that will comply with 
the new Phase 3 standards. Also, several families were very close to 
the new emission standards. This suggests that, even accounting for the 
relative increase in stringency associated with the Phase 3 
requirements, some families either will not need to do anything or will 
require only modest reductions in their emission performance to meet 
the new standards. However, many engine families clearly will have to 
do more to improve their emission controls.
    Based on our own testing of advanced technology for these engines, 
our engineering assessments, and statements from the affected industry, 
we believe the new requirements will require many engine manufacturers 
to adopt exhaust aftertreatment technology using catalyst-based 
systems. Other likely changes include improved engine designs and fuel 
delivery systems. Finally, adding electronic controls or fuel injection 
systems may obviate the need for catalytic aftertreatment for some 
engine families, with the most likely candidates being multi-cylinder 
engine designs.
(2) Implementation Dates
    We are establishing HC+NOX exhaust emission standards of 
10.0 g/kW-hr for Class I engines starting in the 2012 model year and 
8.0 g/kW-hr for Class II engines starting in the 2011 model year. For 
both classes of nonhandheld engines, we are maintaining the existing CO 
standard of 610 g/kW-hr. We expect manufacturers to meet these 
standards by improving engine combustion and adding catalysts on most 
engines.
    For spark-ignition engines used in marine generators, we are 
promulgating a more stringent Phase 3 CO emission

[[Page 59100]]

standard of 5.0 g/kW-hr. This will apply equally to all sizes of 
engines subject to the Class I and II Small SI engine standards, with 
implementation dates as described above relative to Class I and Class 
II engines.
(3) Technological Approaches
    Our feasibility assessment began by evaluating the emissions 
performance of current technology for Small SI engines and equipment. 
These initial efforts focused on developing a baseline for emissions 
and general engine performance so we could assess the potential for new 
emission standards for engines and equipment in this category. This 
process involved laboratory and field evaluations of the current 
engines and equipment. We reviewed engineering information and data on 
existing engine designs and their emissions performance. Patents of 
existing catalyst/muffler designs for Class I engines were also 
reviewed. We engaged engine manufacturers and suppliers of emission 
control-related engine components in discussions regarding recent and 
expected advances in emissions performance beyond that required to 
comply with the current Phase 2 standards. Finally, we purchased 
catalyst/muffler units that were already in mass production by an 
engine manufacturer for use on European walk-behind lawn mowers and 
conducted engineering and chemical analyses on the design and materials 
of those units.
    We used the information and experience gathered in the above 
effort, along with the previous catalyst design experience of our 
engineering staff, to design and build prototype catalyst-based 
emission control systems that were capable of effectively and safely 
achieving the new Phase 3 requirement based on dynamometer and field 
testing. We also used the information and the results of our engine 
testing to assess the potential need for improvements to engine and 
fuel system designs, and the selective use of electronic engine 
controls and fuel injection on some engine types. A great deal of this 
effort was conducted in association with our more exhaustive study 
regarding the efficacy and safety of implementing advanced exhaust 
emission controls on Small SI engines, as well as new evaporative 
requirements for these engines. In other testing, we evaluated advanced 
emission controls on a multi-cylinder Class II engine with electronic 
fuel injection. The results of that study are also discussed in Section 
VII.
    In our test program to assess the feasibility of achieving the 
Phase 3 HC+NOX standard, we evaluated 15 Class I engines of 
varying displacements and valve-train designs. Each of these engines 
was equipped with a catalyst-based control system and all achieved the 
applicable standard at the end of their regulatory useful lives. Our 
work also suggests that manufacturers of Class I engines may need to 
improve the durability of their basic engine designs, ignition systems, 
or fuel metering systems for some engines to comply with the emission 
regulations.
    We tested five single-cylinder, overhead-valve Class II engines 
with prototype catalyst/muffler control systems. Three of the engines 
were carbureted and two were equipped with electronic engine and fuel 
controls. This latter technology improves the management of air-fuel 
mixtures and ignition spark timing. Each of the engines achieved the 
requisite emission limit for HC+NOX (i.e., 8.0 g/kW-hr). 
Based on this work and information from one manufacturer of emission 
controls, we believe either a catalyst-based system or electronic 
engine controls appear sufficient to meet the standard. Recent 
certification data also suggests a number of Class II engines may be 
able to comply with the new standard with engine modifications only. 
Finally, similar to Class I engines, we found that manufacturers of 
Class II engines may also need to improve the durability of their 
ignition systems or fuel metering systems for some engines to comply 
with the emission regulations.
    Multi-cylinder Class II engines are very similar to their single-
cylinder counterparts regarding engine design and combustion 
characteristics. There are no multi-cylinder Class I engines. Based on 
these attributes and our testing of two twin-cylinder engines, we 
conclude that the Phase 3 HC+NOX standard is technically 
feasible.
    Nonetheless, we also found that multi-cylinder engines may present 
a unique concern with the application of catalytic control technology 
under atypical operating conditions. More specifically, the concern 
relates to the potential consequences of combustion misfire or a 
complete lack of combustion in one of the two or more cylinders when a 
single catalyst/muffler design is used. A single muffler is typically 
used in Class II applications. In a single-catalyst system, the 
unburned fuel and air mixture from the malfunctioning cylinder could 
combine with hot exhaust gases from the other, properly operating 
cylinder. This condition can create high temperatures within the 
muffler system as the unburned fuel and air charge from the misfiring 
cylinder combusts within the exhaust system. This could potentially 
destroy the catalyst.
    One solution is simply to have a separate catalyst/muffler for each 
cylinder. Another solution is to employ electronic engine controls to 
monitor ignition and put the engine into ``limp-mode'' until necessary 
repairs are made. For engines using carburetors, this would effectively 
require the addition of electronic controls. For engines employing 
electronic fuel injection that may need to add a small catalyst, it 
will require that the electronic controls incorporate ignition misfire 
detection if they do not already utilize the inherent capabilities 
within the engine management system.
    As described earlier, we also expect some engine families to use 
electronic fuel injection to meet the Phase 3 standard without 
employing catalytic aftertreatment. Engine families that already use 
these fuel metering systems and are reasonably close to complying with 
the new requirement are likely to need only additional calibration 
changes to the engine management system for compliance. In addition, we 
expect that some engine families that currently use carbureted fuel 
systems will convert directly to electronic fuel injection. 
Manufacturers may adopt this strategy to couple achieving the standard 
without a catalyst and realizing other advantages of using fuel 
injection such as easier starting, more stable and reliable engine 
operation, and reduced fuel consumption.
    Our evaluation of electronic fuel injection systems that could be 
used to attain the new standard found that a rather simple, low-cost 
system should be sufficient. We demonstrated this proof of concept as 
part of the engine test program we conducted in anticipation of the 
proposed rule. In that program, we fitted two single-cylinder Class II 
engines with an electronic control unit and fuel system components 
developed for motor-scooters and small-displacement motorcycles for 
Asian markets. The sensors for the system were minimized to include a 
throttle position sensor, air charge temperature sensor, oil 
temperature sensor, manifold absolute pressure sensor, and a crankshaft 
position sensor. This is in contrast to the fuel injection systems 
currently used in some equipment with two-cylinder Class II engine 
applications that employ more sophisticated and expensive automotive-
based components.
    Finally, there are a number of Class II engines that use gaseous 
fuels (i.e., liquefied petroleum gas or natural gas). Based on our 
engineering evaluation of current and likely emission control

[[Page 59101]]

technology for these engines, we conclude that there are no special 
concerns relative to achieving the Phase 3 HC+NOX standard.
    Turning to the Phase 3 CO standard for Class I and II Small SI 
engines used in marine generator applications, these engines have 
several rather unique design considerations that are relevant to 
achieving the new standard. Marine generator engines are designed to 
operate for very long periods. Manufacturers generally design the 
engines to operate at lower loads to accommodate continuous operation. 
Manufacturers also design them to take advantage of the cooling 
available from the water in the lake or river where the boat is 
operating (seawater). By routing seawater through the engine block, or 
using a heat exchanger that transfers heat from the engine coolant to 
the seawater, manufacturers are able to maintain engine temperatures as 
well as or better than automotive engines. Stable temperatures in the 
engine block make a very significant difference in engine operation, 
enabling much less distortion of the cylinders and a much more 
consistent combustion event. These operating characteristics make it 
possible to introduce advanced technology for controlling emissions. 
Manufacturers also use this cooling water in a jacketing system around 
the exhaust in order to minimize surface temperatures and reduce the 
risk of fires on boats.
    The vast majority of gasoline marine generators are produced by two 
engine manufacturers. Recently, these two manufacturers have converted 
their marine generator product lines to new designs which can reduce CO 
emissions by more than 99 percent. These manufacturers stated that this 
action is to reduce the risk of CO poisoning in response to demands 
from boat builders. These low-CO emission designs use closed-loop 
electronic fuel injection and catalytic control. Both of these 
manufacturers have certified low-CO engines capable of complying with 
the new standards. These manufacturers also use electronic controls to 
monitor catalyst function.
(4) Consideration of Regulatory Alternatives
    In developing the final emission standards, we considered what was 
achievable with catalyst technology. Our technology assessment work 
indicated that the new emission standards are feasible in the context 
of provisions for establishing emission standards prescribed in section 
213 of the Clean Air Act. We also considered what could be achieved 
with larger, more efficient catalysts and improved fuel induction 
systems. In particular, Chapter 4 of the Final RIA presents data on 
Class I engines with more active catalysts and on Class II engines with 
closed-loop control fuel injection systems in addition to a catalyst. 
In both cases larger emission reductions were achieved.
    Based on this work we considered HC+NOX standards 
involving a 50 percent reduction for Class I engines and a 65-70 
percent reduction for Class II engines. Chapter 11 of the Final RIA 
evaluates these alternatives, including an assessment of the overall 
technology and costs of meeting more stringent standards. For Class I 
engines a 50 percent reduction standard would require base engine 
changes not necessarily involved with the standards we are finalizing 
and the use of a more active catalyst. For Class II engines this would 
likely require the widespread use of closed-loop fuel injection systems 
rather than carburetors and some other engine upgrades in addition to 
the use of three-way catalysts.
    We believe it is not appropriate at this time to adopt more 
stringent exhaust emission standards for Small SI engines. Our key 
concern is lead time. More stringent standards will require three to 
five years of lead time beyond the 2011 model year start date we are 
allowing for the program contained in this final rule. We believe it 
will be more effective to implement the new Phase 3 standards to 
achieve near-term emission reductions needed to reduce ozone precursor 
emissions and to minimize growth in the Small SI exhaust emissions 
inventory in the post 2010 time frame. More efficient catalysts, engine 
improvements, and closed-loop electronic fuel injection could be the 
basis for more stringent Phase 4 emission standards at some point in 
the future.
(5) Our Conclusions
    We believe the Phase 3 exhaust emission standards for nonhandheld 
Small SI engines will achieve significant emission reductions. 
Manufacturers will likely meet the new standards with a variety of 
strategies including catalysts packaged in mufflers, engine 
modifications, and fuel-injection systems. Test data from readily 
available technologies have demonstrated the feasibility of achieving 
the new emission levels.
    As discussed in Section VII, we believe the new standards will have 
no negative effects on energy, noise, or safety and may lead to some 
positive effects.

VI. Evaporative Emissions

A. Overview

    In this final rule, we are also establishing standards for 
controlling evaporative emissions from fuel systems in marine vessels 
and equipment powered by Small SI engines. These new standards include 
requirements for controlling permeation and diurnal emissions from 
marine vessels and permeation and running loss emissions from Small SI 
equipment.
    Evaporative emissions refer to hydrocarbons released into the 
atmosphere when gasoline or other volatile fuels escape from a fuel 
system. The primary source of evaporative emissions from nonroad 
gasoline engines and equipment is known as permeation, which occurs 
when fuel penetrates the material used in the fuel system and reaches 
the ambient air. This is especially common through rubber and plastic 
fuel-system components such as fuel lines and fuel tanks. Diurnal 
emissions are another important source of evaporative emissions. 
Diurnal emissions occur as the fuel heats up due to increases in 
ambient temperature. As the fuel heats, liquid fuel evaporates into the 
vapor space inside the tank. In a sealed tank, these vapors will 
increase the pressure inside the tank; however, most tanks are vented 
to prevent this pressure buildup. The evaporating fuel therefore drives 
vapors out of the tank into the atmosphere. Running loss emissions are 
similar to diurnal emissions except that vapors escape the fuel tank as 
a result of heating from the engine or some other source of heat during 
operation rather than from normal daily temperature changes.
    Other sources of evaporative emissions include diffusion and 
refueling. Diffusion emissions occur when vapor escapes the fuel tank 
through an opening as a result of random molecular motion, independent 
of changing temperature. Although we are not adopting a specific 
standard for diffusion emissions, we expect that these emissions will 
be controlled through the running loss and diurnal emission controls. 
Refueling losses are vapors that are displaced from the fuel tank to 
the atmosphere when someone fills a fuel tank. Refueling spitback is 
the spattering of liquid fuel droplets coming out of the filler neck 
during a refueling event. Spillage is fuel that is spilled while 
refueling. We are continuing to work with manufacturers to develop 
industry standards for refueling emission control, and we are adopting 
a requirement that manufacturers use fuel system designs

[[Page 59102]]

that will help facilitate a reduction in fuel spillage.

B. Fuel Systems Covered by This Rule

    The new evaporative emission standards will apply to fuel systems 
for both Small SI engines and Marine SI engines. The marine standards 
apply to fuel systems related to both propulsion and auxiliary engines. 
In some cases, specific standards are required only for certain types 
of equipment, as described below. These standards will apply only to 
new products.
    We are incorporating the regulations related to evaporative 
emission standards in 40 CFR part 1060, as described in Section VI.C. 
Also, as described in Section VIII, we are allowing component 
manufacturers and some equipment manufacturers to certify products 
under the provisions of part 1060 with respect to recreational vehicles 
and Large SI engine. We have also adopted requirements for controlling 
evaporative emissions from marine compression-ignition engines that 
operate on volatile liquid fuels (such as methanol or ethanol). Now 
that we are adopting final requirements in part 1060, we are including 
a reference to part 1060 for these marine compression-ignition engines.
    The following definitions are important in establishing which 
components are covered by the new standards: ``evaporative,'' ``fuel 
system,'' ``fuel line,'' ``portable nonroad fuel tank,'' and 
``installed marine fuel tank.'' See the full text of these definitions 
in the final regulations at Sec.  1060.801.
    Note in particular that the new standards will apply to fuel lines, 
including hose or tubing that contains liquid fuel. This includes fuel 
supply lines but not vapor lines or vent lines that are not normally 
exposed to liquid fuel. We consider fuel return lines for handheld 
engines to be vapor lines, not fuel lines. Data in Chapter 5 of the 
Final RIA suggest that permeation rates through vapor lines and vent 
lines are already lower than the new standard; this is due to the low 
vapor concentration in the vapor line. In contrast, permeation rates 
for materials that are consistently exposed to saturated fuel vapor are 
generally considered to be about the same as that for liquid fuel. The 
new standards also do not apply to primer bulbs exposed to liquid fuel 
only for priming, but would apply to primer bulbs that are directly in 
the fuel supply line. This standard will apply to marine filler necks 
that are filled or partially filled with liquid fuel after a refueling 
event where the operator fills the tank as full as possible. In the 
case where the fuel system is designed to prevent liquid fuel from 
standing in the fill neck, the fill neck will be considered a vapor 
line and not subject to the new fuel line permeation standard.
    A special note applies to fuel systems for auxiliary marine 
engines. These engines must meet exhaust emission standards that apply 
to land-based engines. For evaporative emissions, however, it is 
important that the fuel systems for propulsion and auxiliary engines be 
subject to the same standards because these engines typically draw fuel 
from a common fuel tank and share other fuel-system components. We are 
therefore applying the Marine SI evaporative emission standards and 
certification requirements to the fuel systems for both auxiliary and 
propulsion marine engines on marine vessels. We apply a similar 
approach for nonroad engines installed in motor vehicles (such as 
generators used to power motor homes). These engines must meet exhaust 
emission standards for nonroad engines, but the evaporative 
requirements apply under the motor-vehicle program.
    Our evaporative emission standards for automotive applications are 
based on a comprehensive measurement from the whole vehicle. However, 
the evaporative standards in this final rule are generally based on 
individual fuel-system components. For instance, we are promulgating 
permeation standards for fuel lines and fuel tanks rather than for the 
equipment as a whole.\98\ We have taken this approach for several 
reasons. First, most production of Small SI equipment and Marine SI 
vessels is not vertically integrated. In other words, the fuel line 
manufacturer, the engine manufacturer, the fuel tank manufacturer, and 
the equipment manufacturer are typically separate companies. In 
addition, there are several hundred equipment manufacturers and boat 
builders, many of which are small businesses. Testing the systems as a 
whole will place the entire certification burden on the equipment 
manufacturers and boat builders. Specifying emission standards and 
testing for individual components allows for measurements that are 
narrowly focused on the source of emissions and on the technology 
changes for controlling emissions. This correspondingly allows for 
component manufacturers to certify that their products meet applicable 
standards. We believe it is most appropriate for component 
manufacturers to certify their products since they are best positioned 
to apply emission control technologies and demonstrate compliance. 
Equipment manufacturers and boat builders will then be able to purchase 
certified fuel-system components rather than doing all their own 
testing on individual components or whole systems to demonstrate 
compliance with every requirement. In contrast, controlling running 
loss emissions cannot be done on a component basis so we are requiring 
engine or equipment manufacturers to certify that they meet the running 
loss standard. We will otherwise expect most equipment manufacturers to 
simply identify a range of certified components and install the 
components as directed by the component manufacturer to demonstrate 
compliance with the final emission standards.
---------------------------------------------------------------------------

    \98\ An exception to component certification is the design 
standard for controlling running loss emissions.
---------------------------------------------------------------------------

    Second, a great deal of diversity exists in fuel-system designs 
(hose lengths, tank sizes/shapes, number of connections, etc.). In most 
cases, the specific equipment types are low-volume production runs so 
sales will not be large enough to cover the expense of SHED-type 
testing. Third, there are similarities in fuel lines and tanks that 
allow for component data to be used broadly across products in spite of 
extensive variety in the geometry and design of fuel systems. Fourth, 
many equipment types, primarily boats, will not fit in standard-size 
SHEDs and will require the development of very large, very expensive 
test facilities if the entire vessel were tested.
    Finally, by adopting separate standards for fuel line permeation, 
fuel tank permeation, diurnal emissions, and running loss emissions, we 
are able to include simplified certification requirements without 
affecting the level of the standards. Specifying a comprehensive test 
with a single standard for all types of evaporative emissions will make 
it difficult or impossible to rely on design-based certification. 
Requiring emission tests to cover the wide range of equipment models 
would greatly increase the cost of compliance with little or no 
increase in the effectiveness of the certification program. We believe 
the approach being adopted will allow substantial opportunities for 
market forces to appropriately divide compliance responsibilities among 
affected manufacturers and accordingly result in an effective 
compliance program at the lowest possible cost to society.
    The new emission standards generally apply to the particular 
engines and their associated fuel systems. However, for ease of 
reference, we may refer to evaporative standards as being related to

[[Page 59103]]

Small SI equipment or Marine SI vessels, meaning the relevant 
evaporative standards for engines and fuel systems used in such 
equipment or vessels.\99\ See Section VI.F for a more detailed 
description of certification responsibilities for all the new 
evaporative standards.
---------------------------------------------------------------------------

    \99\ ``Small SI equipment'' includes all nonroad equipment 
powered by Small SI engines. ``Marine SI vessels'' includes all 
vessels powered by engines that run on volatile liquid fuels. In 
almost all cases these engines are powered by gasoline. Note also 
that volatile liquid fuels include methanol or ethanol, which could 
be used in a compression-ignition engine. While we are aware of no 
such equipment or vessels today, they will be covered by the final 
regulations. In this preamble, we nevertheless refer to all the 
vessels that fall within the scope of the final regulations as 
Marine SI vessels. Throughout this section, we generally refer to 
Small SI equipment and Marine SI vessels as ``equipment,'' 
consistent with the regulatory text.
---------------------------------------------------------------------------

C. Final Evaporative Emission Standards

    We are establishing permeation standards for Small SI equipment and 
Marine SI vessels, covering permeation from fuel tanks and fuel lines. 
We are also adopting diurnal emission standards for Marine SI vessels. 
In addition, we are promulgating a running loss standard for 
nonhandheld Small SI equipment (except wintertime engines), with a 
variety of specified options for manufacturers to demonstrate 
compliance.
    All the new evaporative emission standards apply to new equipment 
over a useful life period in years that matches the useful life of the 
corresponding engine (generally five or ten years). Manufacturers have 
expressed concern that they will not have time to gain five years of 
in-use experience on low-permeation fuel tanks by the effective dates 
of the tank permeation standards. Unlike barrier fuel line, which is 
well established technology, some fuel tanks may use barrier 
technologies that have not been used extensively in other applications. 
An example of this technology will be barrier surface treatments that 
must be properly matched to the fuel tank material. Therefore, we are 
finalizing a shorter useful life of two years for Marine SI and Small 
SI fuel tanks through the 2013 model year to allow manufacturers to 
gain experience in use (see Sec. Sec.  1045.145 and 1054.145).
    Handheld manufacturers have also expressed concerns about the 
durability of fuel lines used on cold-weather products. As noted below, 
we are adopting a separate fuel line requirement for cold-weather 
products. The manufacturers' concerns are similar to those noted in 
Section VI.C.2 below regarding fuel cap gasket/O-ring materials and how 
they may degrade in the field such that they have excessively high 
permeation rates but without leaking liquid fuel. Therefore, we are 
adopting a shorter useful life of two years for fuel lines used on 
cold-weather products through the 2013 model year to allow 
manufacturers to gain experience in use (see Sec.  1054.145). 
Manufacturers have noted that they plan to gather in-use data on the 
permeation levels of cold-weather equipment. While we believe 
manufacturers will be able to design and produce cold-weather products 
that comply with fuel line permeation requirements for five years, we 
will review any industry-generated data on in-use fuel lines. Should 
the data demonstrate concerns with regard to in-use durability, we 
would consider options for addressing those concerns.
    The new requirements for evaporative emissions are described in 40 
CFR part 1060, with some category-specific provisions in 40 CFR parts 
1045 and 1054, which are referred to as the exhaust standard-setting 
parts for each category of engine. The regulations in 40 CFR parts 1045 
and 1054 highlight the standards that apply and provide any specific 
directions in applying the general provisions in part 1060. The 
standards, test procedures, and certification provisions are almost 
completely uniform across our programs so this combined set of 
evaporative-related provisions makes it much easier for companies to 
certify their products if they are not subject to the exhaust emission 
standards.
    The rest of this section summarizes the new standards, additional 
requirements, and implementation dates. Unless otherwise stated, 
implementation dates specified below refer to the model year. Section 
VI.D describes how manufacturers may use emission credits to meet fuel 
tank permeation standards. Section VI.E describes the test procedures 
corresponding to each standard. Section VI.F describes how component 
and equipment manufacturers certify their products and how their 
responsibilities overlap in some cases. Section VI.F also describes the 
simplified process of design-based certification for meeting many of 
the new standards.
(1) Fuel Line Permeation Standards and Dates
    Except as noted below, the new fuel line permeation standard is 15 
g/m\2\/day at 23 [deg]C using a test fuel containing 10 percent ethanol 
and applies to fuel lines intended for use in new Small SI equipment 
and Marine SI vessels (see Sec.  1060.102 and Sec.  1060.515). The form 
of the standard refers to grams of permeation over a 24-hour period 
divided by the inside surface area of the fuel line. This is consistent 
with the standard we adopted for fuel lines in recreational vehicles.
    The move toward low-permeation fuel lines in recreational 
vehicles--and further development work in this area since the first 
proposed rule for marine evaporative emissions--demonstrates that low-
permeation fuel lines are available on the market today for Small SI 
equipment and Marine SI vessels. In addition, many manufacturers are 
already using low-permeation technologies in response to permeation 
standards in California. We are therefore requiring that this standard 
apply beginning January 1, 2009 for Marine SI vessels and for 
nonhandheld Small SI equipment. Manufacturers have expressed concern 
that these early dates may cause them to have to transition to using 
new hose designs before they can use up their existing inventory. Under 
the provisions of Sec.  1060.601(g), manufacturers would be able to use 
up existing inventory under normal business practices, even beyond the 
standard date. However, manufacturers would not be permitted to 
circumvent the standards by stockpiling noncompliant hose prior to the 
implementation of the standards.
    For handheld equipment, we are promulgating a fuel line permeation 
implementation date of 2012, except that small-volume emission families 
as defined in Sec.  1054.801 will have until 2013. Although low-
permeation fuel line technology is available, handheld equipment is not 
currently subject to fuel line permeation requirements in California 
and does not typically use low-permeation fuel lines today. In 
addition, much of the fuel line used on handheld equipment is not 
straight-run fuel line for which low-permeation replacements are 
readily available; thus, more lead time is required.
    Fuel line manufacturers have the primary responsibility to certify 
to the new emission standard. Equipment manufacturers may make 
arrangements to take on the certification responsibility if they find 
that to be to their advantage. If equipment manufacturers notify the 
fuel line manufacturer in writing that they commit to certifying the 
fuel line, then the fuel line manufacturer may ship uncertified and 
unlabeled fuel line to the equipment manufacturer.
    By specifying standards for fuel-system components rather than the 
entire fuel system, we are separately addressing appropriate 
requirements for fuel line fittings that are exposed to liquid fuel but 
are not part of the fuel line. We are requiring that these fuel

[[Page 59104]]

line fittings meet the broad specifications described in Sec.  
1060.101(f), which generally require that fittings and connections be 
designed to prevent leaks. As described in Section VI.E.1, we are 
allowing the fuel line assembly to be tested as a single unit. This 
includes connecting pieces, primer bulbs, and other fuel line 
components as a single item (see Sec.  1060.102). For example, 
manufacturers may certify fuel lines for portable marine fuel tanks as 
assemblies of fuel line, primer bulbs, and self-sealing end 
connections. Finally, we are requiring that detachable fuel lines be 
self-sealing when they are removed from the fuel tank or the engine 
because this will otherwise result in high evaporative emissions (see 
Sec.  1060.101). To the extent that equipment manufacturers and boat 
builders certify their products, they will need to describe how they 
meet the equipment-based requirements in Sec.  1060.101(f) in their 
application for certification (see Sec.  1060.202). If boat builders 
rely on certified components instead of certifying, they will need to 
keep records describing how they meet the equipment-based requirements 
contained in Sec.  1060.101(f) (see Sec.  1060.210).
    Handheld equipment manufacturers have raised concerns that fuel 
lines constructed of available low-permeation materials may not perform 
well in some handheld applications under extreme cold weather 
conditions such as below -30 [deg]C. These products often use injected 
molded fuel lines with complex shapes and designs needed to address the 
unique equipment packaging issues and the high vibration and random 
movement of the fuel lines within the overall equipment when in use. 
Industry has expressed concern and the data in Chapter 5 of the Final 
RIA suggest that durability issues may occur from using certain low-
permeation materials in these applications when the weather is 
extremely cold and that these could lead to unexpected fuel line leaks. 
Cold-weather equipment is limited to the following types of handheld 
equipment: chainsaws, cut-off saws, clearing saws, brush cutters with 
engines at or above 40cc, commercial earth and wood drills, and ice 
augers. This includes earth augers if they are also marketed as ice 
augers.
    As discussed in the Final RIA, rubbers with high acrylonitrile 
(ACN) content are used in some handheld applications. These materials 
have about half the permeation of lower ACN-content rubbers also used 
in handheld applications. To capture the capability of these materials 
to reduce permeation emissions without creating other issues for cold-
weather products, we are adopting a set of declining fuel line 
permeation standards for fuel lines used in cold-weather equipment that 
would phase-in from 2012 to 2016. The standard starts at 290 g/m\2\/day 
in 2012 and declines to 275 g/m\2\/day in 2013, 260 g/m\2\/day in 2014, 
and 245 g/m\2\/day in 2015. The standard for 2016 and later model years 
is 225 g/m\2\/day. The standards would apply to all cold-weather 
products, including small-volume families. Manufacturers would be 
allowed to demonstrate compliance with the 2012 through 2015 standards 
with a fuel line averaging program that is limited to cold-weather fuel 
lines. There would not be any banking or trading of these credits. 
Manufacturers comply with the averaging standard by naming a Family 
Emission Limit for each family of fuel lines; this Family Emission 
Limit serves as the emission standard for the family. Manufacturers may 
not name a Family Emission Limit higher than 400 g/m\2\/day during this 
period. Beginning in the 2016 model year, all fuel lines on cold-
weather equipment must meet the 225 g/m\2\/day standard without 
averaging.
    Outboard engine manufacturers have expressed concern that it will 
be difficult for them to meet final 2009 date for the sections of fuel 
lines that are mounted on their engines under the engine cowl. While 
some sections of straight-run fuel line are used with outboard engines, 
many of the smaller sections between engine mounted fuel-system 
components and connectors are preformed or injection-molded parts. 
Outboard engine manufacturers stated that they will need additional 
time to redesign and perform testing on low-permeation under-cowl fuel 
lines. To address this issue, we are finalizing a phase-in of under-
cowl fuel line permeation standards. For each engine model, we are 
adopting a phase-in, by hose length, of 30 percent in 2010, 60 percent 
in 2011, 90 percent in 2012-2014 and 100 percent in 2015 and later. 
This will allow manufacturers to transition to the use of low-
permeation fuel lines in an orderly fashion. Manufacturers also 
commented that additional lead time is necessary to develop low 
permeation primer bulbs such as those in fuel line assemblies for 
portable marine fuel tanks. To address this development time, we are 
finalizing an implementation date of 2011 for primer bulbs.
(2) Fuel Tank Permeation Standards and Dates
    Except as noted below, we are requiring a fuel tank permeation 
standard of 1.5 g/m\2\/day for tanks intended for use in new Small SI 
equipment and Marine SI vessels based on the permeation rate of 
gasoline containing 10 percent ethanol at a test temperature of 28 
[deg]C (see Sec.  1060.103 and Sec.  1060.520). The emission standard 
is based on the inside surface area of the fuel tank and is consistent 
with that adopted for fuel tanks in recreational vehicles.
    Many Small SI equipment manufacturers are currently using low-
permeation fuel tanks for products certified in California. The 
California tank permeation test procedures use a nominal test 
temperature of 40 [deg]C with California certification gasoline while 
we are requiring testing at 28 [deg]C with gasoline containing 10 
percent ethanol. We are allowing manufacturers the alternative of 
testing their fuel tanks at 40 [deg]C with the EPA test fuel. Because 
permeation increases as a function of temperature, we are establishing 
an alternative standard of 2.5 g/m\2\/day for fuel tanks tested at 40 
[deg]C.
    We consider three distinct classes of marine fuel tanks: (1) 
Portable marine fuel tanks (generally used with small outboard 
engines); (2) personal watercraft (PWC) fuel tanks; and (3) other 
installed marine fuel tanks (generally used with SD/I engines and 
larger outboard engines). The fuel tank permeation standards start in 
2011 for all Small SI equipment using Class II engines and for personal 
watercraft and portable marine fuel tanks. For Small SI equipment using 
Class I engines and for other installed marine fuel tanks (including 
engine-mounted tanks), we are applying the same standard starting in 
2012. Most of the marine fuel tanks with the later standards are 
produced in low volumes using rotation-molded cross-link polyethylene 
or fiberglass construction, both of which generally present a greater 
design challenge. We believe the additional lead time is necessary for 
these fuel tanks to allow for a smooth transition to low-permeation 
designs. For Small SI equipment, these dates also align with the 
schedule for introducing the Phase 3 exhaust emission standards.
    For handheld equipment, we are adopting a phased-in implementation 
of the fuel tank permeation standards. Manufacturers will be required 
to meet the new fuel tank permeation standards in 2009 for products 
that they already certify in California (see Sec.  90.129). The 
remaining equipment, except for structurally integrated nylon fuel 
tanks and small-volume families, will be subject to the new tank 
permeation standards in 2010 (see Sec.  1054.110). Structurally 
integrated nylon fuel tanks will be subject to the new standards in

[[Page 59105]]

2011 and small-volume families will have to meet the new tank 
permeation standards beginning in 2013. Manufacturers will need to 
start using EPA-specified procedures starting in 2010, except that 
equipment certified using carryover data will be allowed to use data 
collected using procedures specified for compliance in California for 
model years 2010 and 2011 (see Sec.  1054.145).
    Fuel tank manufacturers have the primary responsibility to certify 
to the new emission standard. Equipment manufacturers may make 
arrangements to take on the certification responsibility if they find 
that to be to their advantage. If equipment manufacturers notify the 
fuel tank manufacturer in writing that they commit to certifying the 
fuel tank, then the fuel tank manufacturer may ship uncertified and 
unlabeled fuel tanks to the equipment manufacturer. Equipment 
manufacturers must certify that their fuel tanks meet the new emission 
standards if they comply using emission credits (whether the fuel tank 
manufacturer certifies or not), as described in Section VI.F. We are 
requiring that manufacturers of portable marine fuel tanks certify that 
their products meet the new permeation standard. This is necessary 
because portable fuel tanks are not sold to boat builders for 
installation in a vessel. Therefore, there is no other manufacturer who 
could be treated as the manufacturer responsible for meeting emission 
standards that apply to portable marine fuel tanks.
    For the purpose of the new fuel tank permeation standards, a fuel 
cap directly mounted on the fuel tank is considered to be part of the 
fuel tank. The fuel cap would then be included in the tank permeation 
standard and test. The cap may optionally be tested separately from the 
tank and the results combined to determine the total tank permeation 
rate (see Sec.  1060.521). Cap manufacturers could also test their caps 
and certify them separately to the 1.5 g/m\2\/day permeation standard. 
Alternatively, manufacturers may use a default cap permeation rate as 
described in Section IV.F.8.
    As discussed above, manufacturers have expressed concerns with the 
long-term durability of known low-permeation elastomers in cold-weather 
applications. At the same time, manufacturers have commented that 
existing fuel cap gasket/O-ring materials may degrade in the field 
within a one-year period (depending on the weather and the fuel 
characteristics) such that they have excessively high permeation rates, 
but without leaking liquid fuel. To address this issue, we are allowing 
manufacturers to treat fuel cap seals on cold-weather equipment as an 
annual maintenance item. In the case of an in-use evaluation with cold-
weather equipment where the manufacturer specified this scheduled 
maintenance at certification, any elastomeric fuel cap seal more than 
one year old would be replaced prior to preconditioning the tank for 
permeation testing. At the same time, it is not certain that low-
permeation materials will deteriorate when used for fuel cap seals in 
cold-weather equipment. We intend to perform testing on fuel cap seals 
to determine the appropriateness of allowing manufacturers to specify 
scheduled maintenance to address these concerns. In the event that 
durable materials are identified, we may remove the provision allowing 
for this scheduled maintenance for purposes of compliance with fuel 
tank permeation standards.
(3) Diurnal Emission Standards and Dates
    We are promulgating diurnal emission standards for gasoline fuel 
tanks intended for use in new Marine SI vessels (see Sec.  1045.107). 
We consider three distinct classes of marine fuel tanks: (1) Portable 
marine fuel tanks (used with small outboards); (2) personal watercraft 
(PWC) fuel tanks; and (3) other installed fuel tanks (including engine-
mounted fuel tanks). We believe the new requirements will achieve at 
least a 50 percent reduction in diurnal emissions from PWC and other 
installed marine fuel tanks and nearly a 100 percent reduction from 
portable marine fuel tanks.
    For portable fuel tanks, we are adopting a design requirement that 
the tank remain sealed up to a pressure of 5.0 psi, starting on January 
1, 2010 (see Sec.  1060.105). We are also requiring that portable fuel 
tanks continue to be self-sealing when disconnected from an engine. We 
are requiring manufacturers of portable marine fuel tanks to certify 
that they meet the new diurnal emission standards. As described above 
for permeation standards, this certification responsibility may not be 
delegated to boat builders.
    For installed fuel tanks, we are adopting a general diurnal 
emission standard of 0.40 g/gal/day based on a 25.6-32.2 [deg]C 
temperature profile. The applicable test procedures are described in 
Section VI.E.3. Manufacturers have expressed concerns that some very 
large boats stay in the water throughout the boating season and 
therefore will see a much smaller daily swing in fuel temperatures, 
which corresponds with a smaller degree of diurnal emissions. We are 
addressing this concern with an alternative standard and test procedure 
that will apply only for nontrailerable boats. Using available 
measurements related to fuel temperatures and emission models to relate 
temperatures to projected diurnal emission levels, we are adopting an 
alternative standard of 0.16 g/gal/day based on a 27.6-30.2 [deg]C 
temperature profile for fuel tanks installed in nontrailerable boats. 
For the purposes of this rule, we are defining a nontrailerable boat as 
one that is 26.0 feet or more in length, or more than 8.5 feet in 
width. The length specification is consistent with the U.S. Fish and 
Wildlife Service definition for ``nontrailerable recreational vessels'' 
in 50 CFR 86.12. The width specification is consistent with the width 
limitation specified in 49 CFR 658.15 by the Federal Motor Carrier 
Safety Administration for vehicles operating on the National Network.
    Manufacturers will likely control diurnal emissions from installed 
marine fuel tanks either by sealing the fuel system up to 1.0 psi or by 
using a carbon canister in the vent line. As discussed below, we 
believe PWC manufacturers will likely seal the fuel tank with a 
pressure-relief valve while manufacturers of other boats with installed 
fuel tanks are more likely to use carbon canisters. However, either 
technology will be acceptable for either kind of installed marine fuel 
tank as long as every system meets the numerical standard applicable to 
the specific tank.
    Personal watercraft currently use sealed fuel systems for 
preventing fuel from exiting, or water from entering, the fuel tank 
during typical operation. These vessels use pressure-relief valves for 
preventing excessive positive pressure in the fuel system; the pressure 
to trigger the valve may range from 0.5 to 4.0 psi. Such fuel systems 
also use a low-pressure vacuum-relief valve to allow the engine to draw 
fuel from the tank during operation without creating negative pressures 
in the tank. For personal watercraft, we are implementing the diurnal 
emission standards beginning with the 2010 model year.
    Other vessels with installed fuel tanks typically are designed with 
open vent systems. In their comments, boat builders expressed general 
support of the feasibility of using carbon canisters on boats. In 
addition, the marine industry has expressed an interest in developing 
consensus standards for the installation of carbon canisters in boats. 
However, they commented that the development of these installation 
standards will take time and that a

[[Page 59106]]

phase-in would be needed for an orderly transition to installing 
diurnal emission controls in their boat models. Therefore, we are 
giving additional lead time beyond what we specified in the proposal. 
For fuel tanks installed on a marine engine (such as under-cowl fuel 
tanks on outboard engines), the diurnal emission standard will apply 
beginning on July 31, 2011. For other installed fuel tanks we are 
adopting a phase-in that begins July 31, 2011. In the period from July 
31, 2011 through July 31, 2012, 50 percent of the boats produced by 
each company must meet the diurnal standard described above. Beginning 
August 1, 2012, all marine fuel tanks and boats must meet the diurnal 
emission standard.\100\
---------------------------------------------------------------------------

    \100\ In this context, the date of production means the date on 
which the fuel tank is installed in the vessel. In the case of boats 
using outboard engines, it is the date that the fuel tank is 
installed on the vessel.
---------------------------------------------------------------------------

    In addition, the industry expressed concern that there are many 
small boat builders that may need additional time to become familiar 
with installation of carbon canisters in their boats. To address this, 
we will allow small boat builders to make a limited number of boats 
without diurnal emission controls from July 31, 2011 until July 31, 
2013. These allowances would be an alternative to the 50 percent phase-
in concept described above. See Section VI.G.2.f for further 
information about the allowances for small boat builders.
    If a manufacturer uses a canister-based system to comply with the 
standard, we are also requiring that manufacturers design their systems 
not to allow liquid gasoline to reach the canister during refueling or 
from fuel sloshing or volume expansion (see Sec.  1060.105). Exposing 
carbon to liquid gasoline will significantly degrade its ability to 
capture and release hydrocarbon vapors. Currently, industry consensus 
standards in ABYC H-24 to some extent address spillage during refueling 
and due to fuel expansion.\101\ However, under these guidelines, the 
refueling ``blow back'' test is only for a partial fill and does not 
necessarily prevent fuel from spilling out the vent line (where a 
canister would likely be installed) during refueling. In addition, 
although ABYC recommends that a fuel system be designed to contain 5 
percent fuel expansion, the actual requirement can be met by the 
manufacturer by simply lowering the fuel tank capacity rating without 
designing the fuel system to prevent overfilling. A system that meets 
the current ABYC requirements in this manner would not adequately 
demonstrate that liquid fuel will not reach the carbon canister. 
However, ABYC commented that it intends to revisit its standards to 
include proper canister installation instructions and an improved fuel 
spillage performance test. One example of an approach to protect the 
canister from exposure to liquid gasoline is a design in which the 
canister is mounted higher than the fuel level and a small orifice or a 
float valve is installed in the vent line to stop the flow of liquid 
gasoline to the canister.
---------------------------------------------------------------------------

    \101\ American Boat and Yacht Council, ``Standards and Technical 
Information Reports for Small Craft; H-24 Gasoline Fuel Systems,'' 
July, 2007.
---------------------------------------------------------------------------

    Fuel tank manufacturers have the primary responsibility to certify 
to the new diurnal emission standard. Equipment manufacturers, canister 
manufacturers, or system integrators may alternatively make 
arrangements to take on the certification responsibility. If another 
party notifies the fuel tank manufacturer in writing that it commits to 
certifying the product, then the fuel tank manufacturer may ship 
uncertified and unlabeled fuel tanks. We are requiring that 
manufacturers of portable marine fuel tanks certify that their products 
meet the new permeation standard. This is necessary because portable 
fuel tanks are not sold to boat builders for installation in a vessel. 
Therefore, there is no other manufacturer who could be treated as the 
manufacturer responsible for meeting emission standards that apply to 
portable marine fuel tanks.
    We are requiring that manufacturers meet certain specifications 
with their fuel tank caps, including requirements to tether the cap to 
the equipment and to design the cap to provide visual, audible, or 
other physical feedback when the vapor seal is established.
    Any increase in fuel temperature resulting from engine operation 
will cause a potential for fuel tank vapor emissions that are generated 
in a manner similar to fuel tank diurnal emissions. We are therefore 
not allowing manufacturers to disable their approaches for controlling 
diurnal emissions during engine operation (see Sec.  1060.105). This 
will ensure that any running loss emissions that would otherwise occur 
will be controlled to a comparable degree as diurnal emissions.
    Although we are not finalizing diurnal emission standards for Small 
SI equipment, we are allowing manufacturers the option of using the 
SHED-based procedures and standards adopted by California ARB for 
nonhandheld Small SI equipment. We proposed to adopt this provision 
only on an interim basis to allow for a transition to EPA's standards; 
however, as recommended by commenters, we are adopting this as a 
permanent provision. Under this approach, the evaporative emission test 
would be for the whole equipment rather than the individual components. 
The SHED-based approach might allow manufacturers to use fuel tanks or 
fuel lines with emission levels above the component standards, but we 
believe the overall emission control (including control of diurnal 
emissions) from SHED-certified systems will be at least as great as we 
would achieve from requiring manufacturers to comply with the separate 
permeation standards. We are therefore incorporating the California ARB 
SHED procedure by reference and allow for certification using those 
procedures.
(4) Diffusion Standards and Dates
    Diffusion emissions occur when vapor escapes the fuel tank through 
an opening as a result of random molecular motion, independent of 
changing temperature. Diffusion emissions can be easily controlled by 
venting fuel tanks in a way that forces fuel vapors to go through a 
long, narrow path to escape.
    We did not propose diffusion standards for handheld equipment or 
for marine vessels. Handheld equipment use fuel caps that are either 
sealed or have tortuous venting pathways to prevent fuel from spilling 
during operation. We believe these fuel cap designs limit diffusion 
emissions sufficiently so that we do not need to establish a separate 
diffusion standard. For marine vessels, we believe the diurnal emission 
standard will lead manufacturers to adopt technologies that 
automatically limit diffusion losses, so they will also control 
diffusion emissions without a separate standard.
    We are not finalizing the proposed diffusion standards for 
nonhandheld Small SI equipment. As described below, one of the design 
options specified in the proposal for controlling running loss 
emissions was an open vent system with limits on fuel temperature 
increases during operation. That approach would be effective for 
limiting running losses, but diffusion emissions could occur through 
the open vent. However, we believe all the remaining design options for 
controlling running loss emissions will effectively control diffusion 
emissions because there will be no direct path for vapor to escape 
through diffusion. A separate diffusion standard would therefore be 
redundant.
(5) Running Loss Emission Standards and Dates
    We are establishing standards to control running loss emissions 
from nonhandheld Small SI equipment beginning in the same year as the 
Phase

[[Page 59107]]

3 exhaust emission standards--2012 for Class I engines and 2011 for 
Class II engines (see Sec.  1060.104). Equipment manufacturers will 
need to certify that their equipment models meet the new running loss 
requirements since component certification is not practical.
    We have measured fuel temperatures and found that some types of 
equipment experience significant fuel heating during engine operation. 
This was especially true for fuel tanks mounted on or near the engine. 
This occurs in many types of Small SI equipment.
    It is very difficult to define a measurement procedure to 
consistently and accurately quantify running losses. Also, a 
performance standard with such a procedure introduces a challenging 
testing requirement for hundreds of small-volume equipment 
manufacturers. Moreover, we believe there are several different design 
approaches that will reliably and effectively control running losses. 
We are therefore not controlling running losses using the conventional 
approach of establishing a procedure to measure running losses and 
adopting a corresponding emission standard. Manufacturers can choose 
from one of the following approaches to demonstrate control of running 
loss emissions:
     Vent running loss fuel vapors from the fuel tank to the 
engine's intake manifold in a way that burns the fuel vapors in the 
engine instead of venting them to the atmosphere. The use of an 
actively purged carbon canister would qualify under this approach.
     Use a sealed fuel tank. A fuel bladder could be used to 
minimize fuel vapor volume in a sealed fuel tank without increasing 
tank pressure.
     Use a system with an approved executive order from the 
California Air Resources Board. This might involve a design in which a 
fuel cap is fitted with a small carbon canister and mounted on a tank 
that is not exposed to excessive engine heat.
    In the NPRM, we proposed another running loss design option whereby 
manufacturers could demonstrate, through testing, that the fuel 
temperature in the tank does not increase by more than 8 [deg]C during 
normal operation. Manufacturers commented that the temperature testing 
associated with this design option was too complex, the temperature 
limit was too low, and the associated diffusion requirements were 
infeasible. In later conversations, industry stated that these 
objections were significant enough that they were confident they would 
never use the temperature design option; we are therefore removing this 
approach from the final rule.
    We believe any of the above approaches will ensure that 
manufacturers will be substantially controlling running losses, either 
by preventing the vapors from escaping the fuel tank or by directing 
the flow of running loss vapors to prevent them from escaping to the 
atmosphere. While none of these approaches are expected to require 
extensive design changes or lead time, any manufacturer choosing the 
option to vent running loss fuel vapors into the engine's intake 
manifold will need to make this change in coordination with the overall 
engine design. As a result, we believe it is appropriate to align the 
timing of the running loss standards with the introduction of the Phase 
3 standards.
    We are not applying the running loss requirements to handheld Small 
SI engines. We believe running loss emission standards should not apply 
to handheld engines at this time because the likely approach for 
controlling running losses could affect the manufacturers' ability to 
meet the current exhaust emission standards. As described above, we are 
not changing the exhaust emission standards for handheld engines in 
this rulemaking. In addition, there are some technical challenges that 
will require further investigation. For example, the compact nature of 
the equipment makes it harder to isolate the fuel tank from the engine 
and the multi-positional nature of the operation may prevent a reliable 
means of venting fuel vapors into the intake manifold while the engine 
is running.
    We are also not applying the running loss requirements to Marine SI 
engines. Installed marine fuel tanks are generally not mounted near the 
engine or other heat sources so running losses should be very low. A 
possible exception to this is for personal watercraft or other small 
boats where the fuel tank may be closer to the engine. However, under 
the new standard for controlling diurnal emissions, we expect that PWC 
manufacturers will design their fuel tanks to stay pressurized up to 1 
psi. This will also help to control running loss emissions. For other 
applications, the use of a carbon canister for controlling diurnal 
emissions will also limit the potential for running loss vapors to 
escape to the atmosphere.
(6) Requirements Related to Refueling
    Refueling spitback and spillage emissions represent a substantial 
additional amount of fuel evaporation that contributes to overall 
emissions from equipment with gasoline-fueled engines. We are not 
adopting measurement procedures with corresponding emission standards 
to address these emission sources. However, we believe equipment 
manufacturers can take significant steps to address these refueling 
issues by designing their equipment based on sound practices. For 
example, designing a marine filler neck with a horizontal segment near 
the fuel inlet will almost inevitably lead to high levels of spillage 
since fuel flow will often reach the nozzle, leading to substantial 
fuel flow out of the fuel system. Maintaining a vertically angled 
orientation of the filler neck will allow the fuel to flow back into 
the filler neck and into the tank after the nozzle shuts off. Designing 
fuel systems for automatic shutoff would also prevent this.
    For Small SI equipment, designing fuel inlets that are readily 
accessible and large enough to see the rising fuel level (either 
through the tank wall or the fuel inlet) will substantially reduce 
accidental spillage during refueling. We are therefore requiring that 
equipment manufacturers design and build their equipment such that 
operators could reasonably be expected to fill the fuel tank without 
spitback or spillage during the refueling event (see Sec.  1060.101). 
This new requirement mirrors the following requirement recently adopted 
with respect to portable fuel containers (72 FR 8428, February 26, 
2007):
    You are required to design your portable fuel containers to 
minimize spillage during refueling to the extent practical. This 
requires that you use good engineering judgment to avoid designs 
that will make it difficult to refuel typical vehicle and equipment 
designs without spillage. (40 CFR 59.611(c)(3))
    While the final requirement is not as objective and quantifiable as 
the other standards and requirements we are adopting, we believe this 
is important, both to set a requirement for manufacturers in designing 
their products and to give EPA the ability to require manufacturers to 
select designs that are consistent with good engineering practice 
regarding effective refueling strategies. To the extent that equipment 
manufacturers and boat builders certify their products to emission 
standards, they will need to describe how they meet this refueling-
related requirement in their application for certification (see Sec.  
1060.202). If boat builders rely on certified components instead of 
applying for certification, they will need to keep records describing 
how they meet this refueling-related requirement (see Sec.  1060.210); 
Section VI.F describes how such companies can meet certification 
requirements without applying for a certificate.
    Spitback and spillage are a particular concern for gasoline-fueled 
boats.

[[Page 59108]]

Marine operators have reported that relatively large quantities of 
gasoline are released into the marina environment during refueling 
events. The American Boat and Yacht Council (ABYC) has a procedure in 
place to define a standard practice to address refueling. However, this 
procedure calls for testing by refueling up to a 75 percent fill level 
at a nominal flow rate of 5 gallons per minute. This procedure is not 
consistent with prevailing practices and is clearly not effective in 
preventing spills. We believe the most effective means of addressing 
this problem is for ABYC to revise their test procedure to reflect 
current practices and adopt a standard that would establish appropriate 
designs for preventing refueling emissions. ABYC and several boat 
builders announced after the proposal that they have initiated a 
process to work toward this outcome. The estimated time frame is to 
have the information and product testing in place to be able to 
implement these industry standards by 2012.
    A variety of technological solutions are available to address 
spitback and spillage from marine vessels. The simplest will be a 
system similar to that used on cars. A small-diameter tube could run 
along the filler neck from the top of the tank to a point near the top 
of the filler neck. Once liquid fuel reaches the opening of the filler 
neck and the extra tube, the fuel goes faster up the small-diameter 
tube and triggers automatic shutoff before the fuel climbs up the 
filler neck. This design depends on operators using the equipment 
properly and may not be fully effective, for example, with long filler 
necks and low refueling rates. An alternative design involves a snug 
fit between the nozzle's spout and the filler neck, which allows for a 
tube to run from a point inside the tank (at any predetermined level) 
directly to the shutoff venturi on the spout. The pressure change from 
the liquid fuel in the tank reaching the tube's opening triggers 
automatic shutoff of the nozzle. This system prevents overflowing fuel 
without depending on the user. These are two of several possible 
configurations to address fuel spillage from marine vessels.
    It is very likely that any effective design for preventing 
refueling losses would depend on a standardized nozzle geometry for 
interfacing with the filler neck. Although they have indicated that 
they are working to address refueling spillage, ABYC does not have the 
capability to regulate nozzle geometries. Therefore, as described in 
the proposal, we will require marina operators to transition to 
standardized nozzles. We are specifying that marine nozzles must have 
(1) a nominal spout diameter of 0.824 inches, (2) nominal placement of 
an aspirator hole 0.67 inches from the terminal end of the spout, (3) a 
straight segment for at least 2.5 inches at the end of the spout, and 
(4) a spring (if used) that terminates at least 3.0 inches from the end 
of the spout. These specifications are consistent with the products 
currently used for refueling motor vehicles. We therefore expect no 
incompatibilities for vessels that may get fuel at a marina or at a 
roadside refueling station. These nozzles will also cost no more than 
other nozzles that would have been available without this regulation. 
Rather than specifying a date certain by which marinas would need to 
convert their nozzles, we believe it is appropriate simply to specify 
that marinas start using compliant nozzles for any new construction or 
new replacement nozzles. We expect this to result in widespread use of 
standardized nozzles by 2012, when ABYC expects to have their refueling 
procedures and specifications in place. To the extent that boat 
builders start implementing refueling controls, we would expect market 
forces to accelerate the turnover to standardized nozzles. Depending on 
the designs selected for preventing refueling losses from vessels, we 
may need to also consider a maximum flow rate for marine refueling 
events. We understand that such a limit would need to be higher than 10 
gallons per minute (the current requirement for motor vehicles), but a 
higher limit may be necessary to ensure that refueling controls work 
properly. We will continue to work with manufacturers to be aware of 
the need for any further standardization in fuel supply to enable their 
designs for controlling emissions.
(7) Summary Table of Final Evaporative Emission Standards
    Table VI-1 summarizes the new standards and implementation dates 
discussed above for evaporative emissions from Small SI equipment and 
Marine SI vessels. Where a standard does not apply to a given class of 
equipment, ``NA'' is used in the table to indicate ``not applicable.''

                    Table VI-1--Final Evaporative Emission Standards and Implementation Dates
----------------------------------------------------------------------------------------------------------------
                                       Fuel line
        Standard/category             permeation        Tank permeation         Diurnal          Running loss
----------------------------------------------------------------------------------------------------------------
Standard level..................  15 g/m\2\/day.....  1.5 g/m\2\/day....  0.40 g/gal/day....  Design standard.
Handheld........................  Model year 2012 a   Model year 2009-    NA................  NA.
                                   b.                  2013 c.
Class I.........................  January 1, 2009...  Model year 2012...  NA................  Model year 2012.
Class II........................  January 1, 2009...  Model year 2011...  NA................  Model year 2011.
Portable tanks..................  January 1, 2009 d.  January 1, 2011...  January 1, 2010 e.  NA.
Personal watercraft.............  January 1, 2009...  Model year 2011...  Model year 2010...  NA.
Other vessels with installed      January 1, 2009 d.  Model year 2012...  July 31, 2011 f g.  NA.
 tanks.
----------------------------------------------------------------------------------------------------------------
a 2013 for small-volume families not used in cold-weather equipment.
b A separate set of declining fuel line permeation standards applies for cold-weather equipment from 2012
  through 2016.
c 2009 for families certified in California, 2013 for small-volume families, 2011 for structurally integrated
  nylon fuel tanks, and 2010 for remaining families.
d January 1, 2011 for primer bulbs. Phase-in for under-cowl fuel lines on outboard engines, by length: 30% in
  2010, 60% in 2011, 90% in 2012-2014, 100% in 2015.
e Design standard.
f Fuel tanks installed in nontrailerable boats ([gteqt] 26 ft. in length or > 8.5 ft. in width) may meet a
  standard of 0.16 g/gal/day over an alternative test cycle.
g See Sec.   1045.625 for allowances to delay implementation of the diurnal standard for a limited number of
  vessels over the first two years.

D. Emission Credit Programs

    A common feature of emission control programs for motor vehicles 
and nonroad engines and equipment is an emission credit program that 
allows manufacturers to generate emission credits based on certified 
emission levels for engine families that are more stringent than the 
standard. See Section VII.C.5 of the preamble to the proposed rule for 
background information and

[[Page 59109]]

general provisions related to emission credit programs.
    We believe it is appropriate to consider compliance based on 
emission credits relative to fuel tank permeation standards. As 
described above, the emission standards apply to the fuel tanks 
directly, such that we generally expect component manufacturers to 
certify their products. However, we believe it is best to avoid placing 
the responsibility for demonstrating a proper emission credit balance 
on component manufacturers for three main reasons. First, it is in many 
cases not clear whether these components will be produced for one type 
of application or another. Component manufacturers might therefore be 
selling similar products into different applications that are subject 
to different standards--or no standards at all. Component manufacturers 
may or may not know in which application their products will be used. 
Second, there will be situations in which equipment manufacturers and 
boat builders take on the responsibility for certifying components. 
This may be the result of an arrangement with the component 
manufacturer, or equipment manufacturers and boat builders might build 
their own fuel tanks. We believe it will be much more difficult to 
manage an emission credit program in which manufacturers at different 
places in the manufacturing chain will be keeping credit balances. 
There will also be a significant risk of double-counting of emission 
credits. Third, most component manufacturers will be in a position to 
use credits or generate credits, but not both. Equipment manufacturers 
and boat builders are more likely to be in a position where they can 
keep an internal balance of generating and using credits to meet 
applicable requirements. Our experience with other programs leads us to 
believe that an emission credit program that depends on trading is not 
likely to be successful.
    We are therefore promulgating emission credit provisions in which 
equipment manufacturers and boat builders keep a balance of credits for 
their product line. Equipment manufacturers and boat builders choosing 
to comply based on emission credits will need to certify all their 
products that either generate or use emission credits. Fuel tank 
manufacturers will be able to produce their fuel tanks with emission 
levels above or below applicable emission standards but will not be 
able to generate emission credits and will not need to maintain an 
accounting to demonstrate a balance of emission credits. Small SI 
engine manufacturers that provide a complete fuel system may also 
participate in the fuel tank credit program.
(1) Averaging, Banking, and Trading for Small SI Equipment and Marine 
SI Vessels
    We are establishing averaging, banking, and trading (ABT) 
provisions for fuel tank permeation from Small SI equipment and Marine 
SI vessels (see subpart H in parts 1045 and 1054).
    We are aware of certain control technologies that will allow 
manufacturers to produce fuel tanks that reduce emissions more 
effectively than we are requiring. These technologies may not be 
feasible or practical in all applications, but we are allowing 
equipment manufacturers using such low-emission technologies to 
generate emission credits. In other cases, an equipment manufacturer 
may want, or need, to use emission credits that will allow for fuel 
tanks with permeation rates above the applicable standards. Equipment 
manufacturers can quantify positive or negative emission credits by 
using the Family Emission Limit (FEL) to define the applicable emission 
level, then factoring in internal surface area, sales volumes, and 
useful life to calculate a credit total. This FEL would be established 
by the tank certifier (generally the fuel tank manufacturer) and would 
be based on permeation testing done either by the component 
manufacturer or the equipment or vessel manufacturer. Through 
averaging, these emission credits could be used by the same equipment 
or vessel manufacturer to offset other fuel tanks in the same model 
year that do not have control technologies that control emissions to 
the level of the standard. Through banking, such an equipment 
manufacturer could use the emission credits in later model years to 
offset high-emitting fuel tanks. The emission credits could also be 
traded to another equipment manufacturer to offset that company's high-
emitting fuel tanks.
    We believe an ABT program is potentially very advantageous for fuel 
tanks because of the wide variety of tank designs. The geometry, 
materials, production volumes, and market dynamics for some fuel tanks 
are well suited to applying emission controls, but other fuel tanks 
pose a bigger challenge. The new emission credit program allows us to 
set a single standard that applies broadly without dictating that all 
fuel tanks be converted to low-permeation technology at the same time.
    Emission credits earned under the evaporative emission ABT program 
will have an indefinite credit life with no discounting. We consider 
these emission credits to be part of the overall program for complying 
with the new standards. Given that we may consider further reductions 
beyond these standards in the future, we believe it will be important 
to assess the evaporative ABT credit situation that exists at the time 
any further standards are considered. We will set such future emission 
standards based on the statutory direction that emission standards must 
represent the greatest degree of emission reduction achievable, 
considering cost, safety, lead time, and other factors. Emission credit 
balances will be part of the analysis for determining the appropriate 
level and timing of new standards. If we were to allow the use of 
credits generated under the standards adopted in this rule for 
complying with more stringent future standards, we may need to adopt 
emission standards at more stringent levels or with an earlier start 
date than we would absent the continued use of existing emission 
credits, depending on the level of emission credit banks. 
Alternatively, we could adopt future standards without allowing the use 
of existing emission credits, or we could place limits on the amount of 
credits a manufacturer could use.
    We are not allowing manufacturers to generate emission credits by 
using metal fuel tanks. These tanks will have permeation rates well 
below the standard, but there is extensive use of metal tanks today, so 
it would be difficult to allow these emission credits without 
undercutting the stringency of the standard and the expected emission 
reductions from the standard.
    Within an ABT program, manufacturers are allowed to use credits 
only within a defined averaging set. For the evaporative emission ABT 
program, we are not allowing the exchange of emission credits between 
Small SI equipment and Marine SI vessels. The new standards are 
intended to be technology-forcing for each of these equipment 
categories. We are concerned that cross-trading may allow marginal 
credits in one area to hamper technological advances in another area. 
For Small SI equipment, we will not allow credit exchanges between 
handheld and nonhandheld equipment. For handheld equipment, we will 
allow credit exchanges between Class III, Class IV and Class V 
equipment. For nonhandheld equipment, we will allow credit exchanges 
between Class I and Class II equipment. For Marine SI vessels, we will 
allow credit exchanges between all types of vessels, except those using 
portable marine fuel tanks

[[Page 59110]]

which, as noted below, are not included in the ABT program.
    We are requiring portable marine fuel tanks to meet emission 
standards without an emission credit program. Emission control 
technologies and marketing related to portable marine fuel tanks are 
quite different than for installed tanks. Most, if not all, portable 
fuel tanks are made using high-density polyethylene in a blow-molding 
process. The control technologies for these tanks are relatively 
straightforward and readily available so we do not anticipate that 
these companies will need emission credits to meet the new standards. 
In addition, because these fuel tanks are not installed in vessels that 
are subject to emission standards, the fuel tank manufacturer will need 
to take on the responsibility for certification. As a result, we will 
treat these portable fuel tank manufacturers as both the component 
manufacturer and the equipment manufacturer with respect to their 
portable fuel tanks.
    In the early years of the ABT program we are not establishing an 
FEL cap. This will give manufacturers additional time to use 
uncontrolled fuel tanks, primarily in small-volume applications, until 
they can convert their full product lines to having fuel tanks with 
permeation control. We are setting an FEL cap of 5.0 g/m\2\/day (8.3 g/
m\2\/day if tested at 40 [deg]C) starting a few years after 
implementing the tank permeation standards. For Class II equipment and 
personal watercraft, the FEL cap will begin in 2014. For Class I 
equipment and other installed marine fuel tanks, the FEL cap will begin 
in 2015. For handheld equipment, the FEL cap will begin in 2015. (See 
Sec.  1045.107 and Sec.  1054.110.) For Small SI equipment qualifying 
as small-volume emission families, we are setting an FEL cap of 8.0 g/
m\2\/day (13.3 g/m\2\/day if tested at 40 [deg]C.) This is generally 
limited to equipment models where the manufacturer produces no more 
than 5,000 units with a given fuel tank design. The purpose of the FEL 
cap will be to prevent the long-term production of fuel tanks with no 
permeation control while still providing the regulatory flexibility 
associated with emission credit programs.
    Evaporative emission credits under the tank permeation standards 
will be calculated using the following equation: credits [grams] = 
(Standard- FEL) x useful life [years] x 365 days/year x inside surface 
area [m\2\]. Both the standard and the FEL are in units of g/m\2\/day 
based on testing at 28[deg]C.
    As discussed earlier, we are establishing an alternative standard 
for tank permeation testing performed at 40[deg]C of 2.5 g/m\2\/day. 
Because permeation is higher at this temperature than the primary test 
temperature, emissions credits and debits calculated at this test 
temperature will be expected to be higher as well. When determining 
credits for a tank certified to the alternative standard, manufacturers 
will use the alternative standard in the credit equation. Plus, we are 
requiring that credits and debits that are calculated be adjusted using 
a multiplicative factor of 0.60 to account for the effect of 
temperature.
    We are also allowing handheld equipment manufacturers to earn 
credits for equipment using fuel tanks certified earlier than required. 
As noted in Section VI.D.3 below, manufacturers of nonhandheld 
equipment and Marine SI vessels can also be rewarded for introducing 
products that comply with evaporative standards earlier than required.
(2) Other Evaporative Sources
    We are not promulgating an emission credit program for other 
evaporative sources. We believe technologies are readily available to 
meet the applicable standards for fuel line permeation and diurnal 
emissions (see Section VI.H.). The exception to this is for fuel lines 
on cold-weather equipment and under-cowl fuel lines on outboard 
engines, as discussed above in Section VI.C.1, where we are adopting 
temporary averaging provisions (see Sec.  1045.112 and Sec.  1054.145). 
In addition, the diurnal emission standards for portable marine fuel 
tanks and PWC fuel tanks are largely based on existing technology so 
any meaningful emission credit program with the new standards would 
result in windfall credits. The running loss standard is not based on 
emission measurements, and refueling-related requirements are based on 
design specifications only, so it is not appropriate or even possible 
to calculate emission credits.
(3) Early-Allowance Programs
    In some cases manufacturers may be able to meet the new emission 
standards earlier than we are requiring. We are adopting provisions for 
equipment manufacturers using low-emission evaporative systems early to 
generate allowances before the standards apply. These early allowances 
could be used for a limited time after the implementation date of the 
standards to sell equipment or fuel tanks that have emissions above the 
standards. We are establishing two types of allowances. The first is 
for Small SI nonhandheld equipment as a whole where for every year a 
piece of equipment is certified early, another piece of equipment could 
delay complying with the new standards by an equal time period beyond 
the implementation date. The second is similar but is just for the fuel 
tank rather than the whole equipment (nonhandheld Small SI or Marine 
SI). Equipment or fuel tanks certified for purposes of generating early 
allowances would need to be certified with EPA and will be subject to 
all applicable requirements. Manufacturers will be required to report 
to EPA the number of early allowances generated under these programs 
and how the allowances are used. These allowances are similar to the 
emission credit program elements described above but they are based on 
counting compliant products rather than calculating emission credits. 
Establishing appropriate credit calculations would be difficult because 
the early compliance is in some cases based on products meeting 
different standards using different procedures.
(a) Nonhandheld Small SI Equipment
    Many Small SI equipment manufacturers are currently certifying 
products to evaporative emission standards in California. The purpose 
of the early-allowance program is to provide an incentive for 
manufacturers to begin selling low-emission products nationwide. We are 
providing allowances to manufacturers for equipment meeting the 
California evaporative emission standards that are sold in the United 
States outside of California and are therefore not subject to 
California's emission standards. Manufacturers will need to have 
California certificates for these equipment types. (See Sec.  
1054.145.)
    Allowances could be earned in any year before 2012 for Class I 
equipment and before 2011 for Class II equipment. The allowances may be 
used through the 2014 model year for Class I equipment and through the 
2013 model year for Class II equipment. Allowances cannot be traded 
between Class I and Class II equipment. To keep this program simple, we 
are not adjusting the allowances based on the anticipated emission 
rates from the equipment. Therefore, we believe it is necessary to at 
least distinguish between Class I and Class II equipment.
(b) Fuel Tanks
    We are also providing an early-allowance program for nonhandheld 
Small SI equipment for fuel tanks (see Sec.  1054.145). This program is 
similar to the program described above for equipment allowances, except 
that it will be for fuel tanks only. We will

[[Page 59111]]

accept California-certified configurations. Allowances could be earned 
prior to 2011 for Class II equipment and prior to 2012 for Class I 
equipment; allowances could be used through 2013 for Class II equipment 
and through 2014 for Class I equipment. Allowances will not be 
exchangeable between Class I and Class II equipment.
    The early-allowance program for marine fuel tanks is similar except 
that there are no California standards for these tanks (see Sec.  
1045.145). Manufacturers certifying early to the new fuel tank 
permeation standards will be able to earn allowances that they could 
use to offset high-emitting fuel tanks after the new standards go into 
place. The early-allowance program would apply to all marine fuel 
tanks, including portable fuel tanks, personal watercraft, and other 
installed fuel tanks. For portable fuel tanks, the tank manufacturer 
would earn the allowances, whereas the vessel manufacturer would earn 
the allowances for personal watercraft and other installed fuel tanks. 
We are not allowing the cross-trading of allowances between portable 
fuel tanks, personal watercraft, and other installed fuel tanks. Each 
of these categories includes significantly different tank sizes and 
installed tanks have different implementation dates and are expected to 
use different permeation control technology. For portable fuel tanks 
and personal watercraft, allowances could be earned prior to 2011 and 
may be used through the 2013 model year. For other installed tanks, 
allowances could be earned prior to 2012 and used through the 2014 
model year.

E. Testing Requirements

    Compliance with the evaporative emission standards is determined by 
following specific testing procedures. This section describes the new 
test procedures for measuring fuel line permeation, fuel tank 
permeation, and diurnal emissions. As discussed in Section VI.F.8, we 
are adopting design-based certification as an alternative to testing 
for certain standards.
(1) Fuel Line Permeation Testing Procedures
    We are requiring that fuel line permeation be measured at a 
temperature of 23  2 [deg]C using a weight-loss method 
similar to that specified in SAE J30 and J1527 recommended practices 
(see Sec.  1060.515).102 103 We are making two modifications 
to the SAE recommended practice. The first modification is for the test 
fuel to contain ethanol; the second modification is to require 
preconditioning of the fuel line through a fuel soak. These 
modifications are described below and are consistent with our current 
requirements for recreational vehicles.
---------------------------------------------------------------------------

    \102\ Society of Automotive Engineers Surface Vehicle Standard, 
``Fuel and Oil Hoses,'' SAE J30, June 1998 (Docket EPA-HQ-OAR-2004-
0008-0176).
    \103\ SAE Recommended Practice J1527, ``Marine Fuel Hoses,'' 
1993, (Docket EPA-HQ-OAR-2004-0008-0195-0177).
---------------------------------------------------------------------------

(a) Test Fuel
    The recommended practice in SAE J30 and J1527 is to use ASTM Fuel C 
(defined in ASTM D471-98) as a test fuel. We are requiring the use of a 
test fuel containing 10 percent ethanol. We believe the test fuel must 
contain ethanol because it is commonly blended into in-use gasoline and 
because ethanol substantially increases permeation rates for many 
materials.
    Specifically, we are requiring the use of a test fuel consisting of 
an ASTM Fuel C blended with ethanol such that the blended fuel contains 
10 percent ethanol by volume (CE10).\104\ Manufacturers have expressed 
support for this test fuel because it is more consistent than testing 
with gasoline and because it is widely used today by industry for 
permeation testing. In addition, most of the data used to develop the 
new fuel line permeation standards were collected on this test fuel. 
This fuel is allowed today as one of two test fuels for measuring 
permeation from fuel lines under the recreational vehicle standards. 
California ARB also specifies Fuel CE10 as the test for fuel line 
permeation measurements with small offroad engines.
---------------------------------------------------------------------------

    \104\ ASTM Fuel C is a mix of equal parts toluene and isooctane. 
We refer to gasoline blended with ethanol as E10.
---------------------------------------------------------------------------

    One exception is for fuel lines on cold-weather handheld products. 
In this case, the standard is based on a test fuel of IE10, which is 
EPA certification gasoline blended with 10 percent ethanol by volume.
    We are finalizing specifications for fuel ethanol blended into test 
gasoline based on standard industry practice. Specifically, we are 
incorporating by reference ASTM D4806-07, which specifies, among other 
things, acceptable denaturants and maximum water content.\105\
---------------------------------------------------------------------------

    \105\ ASTM International, ``Standard Specification for Denatured 
Fuel Ethanol for Blending with Gasoline for Use as Automotive Spark-
Ignition Engine Fuel,'' ASTM D4806-07, 2007.
---------------------------------------------------------------------------

(b) Preconditioning Soak
    The second difference from weight-loss procedures in SAE practices 
is in fuel line preconditioning. We believe the fuel line should be 
preconditioned with an initial fuel fill followed by a long enough soak 
to ensure that the permeation rate has stabilized. Manufacturers may 
choose one of two alternative specifications for the soak period--
either four weeks at 43  5 [deg]C or eight weeks at 23 
 5 [deg]C. Either of these approaches should adequately 
stabilize permeation rates for most materials. However, manufacturers 
may need a longer soak period to stabilize the permeation rate for 
certain fuel line designs, consistent with good engineering judgment. 
For instance, a thick-walled fuel line may take longer to reach a 
stable permeation rate than a thinner-walled fuel line. After this fuel 
soak, the fuel reservoir and fuel line must be drained and immediately 
refilled with fresh test fuel prior to the weight-loss test.
(c) Alternative Approaches
    California's regulations, in CCR 2754(a)(1)(C), reference SAE J1737 
as the method for measuring permeation from fuel lines. These 
recommended procedures use a recirculation technique whereby nitrogen 
flows over the test sample to carry the permeating vapors to adsorption 
canisters. Permeation is determined based on the weight change of the 
canisters. This method was intended to provide a greater level of 
sensitivity than the weight loss method specified in SAE J30 and J1527 
so that lower rates of permeation could be measured. As an alternative, 
we will accept permeation data collected using the methodology in SAE 
J1737 under Sec.  1060.505(c).\106\ If this alternative is used, the 
same test fuel, test temperature, and preconditioning period must be 
used as for the primary (weight-loss) test method.
---------------------------------------------------------------------------

    \106\ SAE Recommended Practice J1737, ``Test Procedure to 
Determine the Hydrocarbon Losses from Fuel Tubes, Hoses, Fittings, 
and Fuel Line Assemblies by Recirculation,'' 1997, (Docket EPA-HQ-
OAR-2004-0008-0178).
---------------------------------------------------------------------------

    We are allowing permeation measurements using alternative equipment 
and procedures that provide equivalent results (see Sec.  1060.505). To 
use these alternative methods, manufacturers will first need to get our 
approval. An example of an alternative approach would be enclosure-type 
testing such as in 40 CFR part 86. In the case of enclosure-type 
testing, the manufacturer would need to demonstrate that it is 
correctly accounting for the ethanol content in

[[Page 59112]]

the fuel. Note that the test fuel, test temperatures, and 
preconditioning soak described above will still apply. Because 
permeation increases with temperature we will accept data collected at 
higher temperatures (greater than 23 [deg]C) for a demonstration of 
compliance.
    For portable marine fuel tanks, the fuel line assembly from the 
engine to the fuel tank typically includes two sections of fuel line 
with a primer bulb in between and quick-connect assemblies on either 
end. We are adopting a provision to allow manufacturers to test a full 
assembly as a single fuel line to simplify testing for these fuel line 
assemblies (see Sec.  1060.102). This gives manufacturers the 
flexibility to use a variety of materials as needed for performance 
reasons while meeting the fuel line permeation standard for the fully 
assembled product. Measured values will be based on the total measured 
permeation divided by the total internal surface area of the fuel line 
assembly. However, where it is impractical to calculate the internal 
surface area of individual parts of the assembly, such as a primer 
bulb, we will allow a simplified calculation that treats the full 
assembly as a straight fuel line. This small inaccuracy will cause 
reported emission levels (in g/m2/day) to be slightly higher 
so it will not jeopardize a manufacturer's effort to demonstrate 
compliance with the applicable standard.
(2) Fuel Tank Permeation Testing Procedures
    The new test procedure for fuel tank permeation includes 
preconditioning, durability simulation, and a weight-loss permeation 
test (see Sec.  1060.520). The preconditioning and the durability 
testing may be conducted simultaneously; manufacturers must put the 
tank through durability testing while the tank is undergoing its 
preconditioning fuel soak to reach a stabilized permeation level.
(a) Test Fuel
    Similar to the new fuel line testing procedures, we are requiring 
the use of a test fuel containing 10 percent ethanol to help ensure in-
use emission reductions with the full range of in-use fuels. 
Specifically, we are requiring the use of IE10 as the test fuel which 
is made up of 90 percent certification gasoline and 10 percent ethanol 
by volume. This is the same test fuel specified for testing fuel tanks 
for recreational vehicles. In addition, IE10 is representative of in-
use test fuels. We are allowing Fuel CE10 as an alternative test fuel. 
Data in Chapter 5 of the Final RIA suggest that fuel tank permeation 
tends to be somewhat higher on CE10 than IE10, so testing on CE10 
should be an acceptable demonstration of compliance.
    We are finalizing specifications for fuel ethanol blended into test 
gasoline based on standard industry practice. Specifically, we are 
incorporating by reference ASTM D4806-07 which specifies, among other 
things, acceptable denaturants and maximum water content.
(b) Preconditioning Fuel Soak
    Before permeation testing, the fuel tank must be preconditioned by 
allowing it to sit with fuel inside until the hydrocarbon permeation 
rate has stabilized. Under this step, we are requiring that the fuel 
tank be filled with test fuel and soaked--either for 20 weeks at 28 
 5 [deg]C or for 10 weeks at 43  5 [deg]C. 
Either of these approaches should adequately stabilize permeation rates 
for most materials. However, manufacturers may need a longer soak 
period to stabilize the permeation rate for certain fuel tank designs, 
consistent with good engineering judgment.
    The tank will have to be sealed during this fuel soak and any 
components that are directly mounted to the fuel tank, such as a fuel 
cap, must be attached. Other openings, such as fittings for fuel lines, 
openings for grommets, or petcocks, will be sealed with impermeable 
plugs (or left unmachined so there is no hole in the tested 
configuration). In addition, if there is a vent path through the fuel 
cap, that vent path may be sealed. Alternatively, the opening could be 
sealed for testing and the fuel cap tested separately for permeation 
(discussed below). If the fuel cap is not directly mounted on the fuel 
tank (i.e., the fuel tank is designed to have a separate fill neck 
between the fuel cap and the tank), the tank may be sealed with 
something other than a production fuel cap.
    If the test fuel is dispensed at a temperature below the soak 
temperature, it would be possible for the fuel tank to pressurize if 
the tank were sealed prior to the fuel temperature reaching the soak 
temperature. In this case, it would be acceptable to allow reasonable 
time for the test fuel to approach the soak temperature, prior to 
sealing, to prevent over-pressurization of the fuel tank. To prevent 
gross evaporation of fuel vapors during this period, the venting of the 
tank should be no greater than needed to prevent over-pressurization of 
the fuel tank. The regulation specifies that the fuel tank must be 
sealed within a maximum of eight hours after refueling. Manufacturers 
should also take steps to minimize vapor losses during the time that 
the fuel is warming, such as leaving the fuel cap loosely in place or 
routing vapors through a vent line.
    Manufacturers may do the durability testing described below during 
the time period specified for preconditioning. The time spent in 
durability testing may count as preconditioning time as long as ambient 
temperatures are within the specified limits and the fuel tank has fuel 
inside the entire time. During the slosh testing, a fuel fill level of 
40 percent will be considered acceptable for the fuel soak. Otherwise, 
we are requiring that the fuel tank be filled to nominal capacity 
during the fuel soak.
(c) Durability Tests
    We are adopting three tests for the evaluation of the durability of 
fuel tank permeation controls: (1) Fuel sloshing; (2) pressure-vacuum 
cycling; and (3) ultraviolet exposure. The purpose of these 
deterioration tests is to help ensure that the technology is durable 
under the wide range of in-use operating conditions. For sloshing, the 
fuel tank must be filled to 40-50 percent capacity with the specified 
test fuel and rocked for one million cycles. Pressure-vacuum testing 
must consist of 10,000 cycles between -0.5 and 2.0 psi with a cycle 
time of 60 seconds. These two new durability tests are based on draft 
recommended SAE practice.\107\ The third durability test is intended to 
assess potential impacts of ultraviolet sunlight on the durability of 
surface treatment. In this test, the tank will be exposed to 
ultraviolet light wavelength ranging from 300 to 400 nanometers with an 
intensity of at least 0.40 W-hr/m2/min on the tank surface 
for 450 hours. Alternatively, the tank could be exposed to direct 
natural sunlight for an equivalent period of time.
---------------------------------------------------------------------------

    \107\ Draft SAE Information Report J1769, ``Test Protocol for 
Evaluation of Long Term Permeation Barrier Durability on Non-
Metallic Fuel Tanks,'' (Docket EPA-HQ-OAR-2004-0008-0195).
---------------------------------------------------------------------------

    We do not believe the durability testing requirements are necessary 
for all fuel tank designs. Therefore, we are excluding metal tanks and 
other tanks using direct material solutions in the molding process from 
the durability test procedures. However, these durability procedures 
will apply to fuel tanks using surface treatments or post-processing 
barrier coatings as a permeation barrier. We are concerned that 
improperly applied treatments or coatings may deteriorate. The 
specified durability demonstrations are necessary to ensure that fuel 
tanks properly

[[Page 59113]]

control emissions throughout the useful life.
(d) Weight-loss Test
    Following the fuel soak, the fuel tank must be drained and refilled 
with fresh fuel as described above. The permeation rate from the fuel 
tanks are determined by comparing mass measurements of the fuel tank 
over the test period while ambient temperatures are held at 28  2 [deg]C. Testing may alternatively be performed at 40  2 [deg]C, in which case a higher numerical standard applies.
    We received several comments that the test procedure should require 
daily mass measurements similar to the procedures required by CARB in 
TP-901. We agree with commenters that making daily recordings of the 
fuel tank weight is consistent with good engineering practices. These 
daily mass measurements can be used to determine the stability of the 
permeation rate of the fuel tank and can help identify if anything 
unusual is occurring during the test such as a lost seal during 
testing. The test procedures in TP-901 require that the weight loss 
test continue until the coefficient of determination (r\2\), from a 
plot of the cumulative daily weight loss versus time for 10 consecutive 
24-hour cycles, is 95 percent or greater. (California ARB mistakenly 
refers to the r\2\ value as the correlation coefficient.) We believe 
this approach gives testing facilities flexibility for basing the 
length of the test on good engineering judgment rather than a fixed 
time period. We are therefore adopting this general method of using 
daily measurements to determine the length of the test, with one 
modification. The CARB method would require test facilities to make 
measurements over at least one weekend. We believe weight loss 
measurements can be suspended for short periods of time without a 
negative impact on the test. We therefore do not require that the 11 
weight loss measurements (including the 0-hour measurement) be on 
consecutive days, provided that measurements are made on at least five 
different days of any given seven-day period of the test. Measurements 
must be made at roughly the same time on each test day.
    A change in atmospheric pressure over the weeks of testing can 
affect the accuracy of measured weights for testing due to the buoyancy 
of the fuel tank. The buoyancy effect on emission measurements is 
proportional to the volume of the fuel tank, so this procedure is 
appropriate even for testing very small fuel tanks. To address this we 
are adopting a procedure in which a reference fuel tank is filled with 
an amount of glass bead or some other inert material such that the 
weight of the reference tank is approximately the same as the total 
weight of the test tank. The reference tank is used to zero the scale 
before measuring the weight of the test tank. This will result in 
measured and reported values representing the change in mass from 
permeation losses rather than a comparison of absolute masses. This is 
similar to an approach in which weighing will determine absolute masses 
with a mathematical correction to account for the effects of buoyancy. 
We believe the specified approach is better because it minimizes the 
possibility of introducing or propagating error.
    We are allowing permeation measurements for certification using 
alternative equipment and procedures that provide equivalent results. 
To use these alternative methods, manufacturers would first need to get 
our approval. An example of an alternative weight-loss measurement 
procedure would be to test the fuel tank in a SHED and determine the 
permeation by measuring the concentration of hydrocarbons in the 
enclosure. In the case of SHED testing, the manufacturer would need to 
demonstrate that it is correctly accounting for the ethanol content in 
the fuel.
(e) Fuel Cap Permeation Testing
    As discussed above, manufacturers have the option to test the fuel 
cap separately from the tank and combine the results to determine the 
total tank permeation rate. In this case, the permeation test must be 
performed as described above except that the fuel cap will be mounted 
on an impermeable reservoir such as a metal or glass tank. The volume 
of the test reservoir must be at least one liter to ensure sufficient 
fuel vapor exposure. We are requiring that the ``tank'' surface area 
for calculating the results will be the smallest inside the cross 
sectional area of the opening on which the cap is mounted. The fuel cap 
will need to be tested in conjunction with a representative gasket. In 
the case where the vent path is through grooves in the gasket, another 
gasket of the same material and dimensions, without the vent grooves, 
may be used. In the case where the vent is through the cap, that vent 
must be sealed for testing. Alternatively, manufacturers may use the 
default cap permeation rate described in Section IV.F.8.
    Handheld equipment manufacturers commented that fuel caps should be 
subject to durability testing and recommended that the cap should be 
subjected to 300 on-off cycles as a durability test.\108\ For handheld 
products, data in the Final RIA suggests that rubber fuel cap seals may 
contribute a significant portion of the permeation measured in the fuel 
tank permeation test. We are concerned that a coating used on the 
gaskets to reduce the measured permeation during the test may wear off 
during in-use operation. We are therefore adopting this additional 
durability testing for fuel caps on handheld tanks.
---------------------------------------------------------------------------

    \108\ ``OPEI HHPC Comments on EPA Proposed Phase 3 Rule for HH 
Fuel Tank Permeation,'' Outdoor Power Equipment Institute, February 
5, 2008.
---------------------------------------------------------------------------

    Handheld equipment manufacturers also commented that cold-weather 
products cannot use existing low permeation rubbers for their seals due 
to potential dynamic cracking issues at very low temperatures. In 
addition, materials used today degrade after a year of exposure to fuel 
containing ethanol. While this does not appear to lead to fuel leakage, 
data in the Final RIA suggest that this degradation may have a large 
effect on tank permeation. To address this issue, EPA intends to 
conduct a technical study of cold-weather fuel cap seals. For this 
final rule we are adopting an allowance for manufacturers to specify 
rubber fuel cap seals on cold-weather equipment as maintenance items. 
These seals could therefore be replaced prior to the fuel 
preconditioning soak when permeation testing is performed on in-use 
fuel tanks if the seals are more than one year old. If the technical 
study or other information reveals that a fuel resistant material or 
other solution can safely be used in cold-weather applications, we will 
consider removing the provision allowing manufacturers to identify 
gasket replacement as a scheduled maintenance item in the application 
for certification.
(3) Diurnal Emission Testing Procedures
    The new test procedure for diurnal emissions from installed marine 
fuel tanks involves placing the fuel tank in a SHED, varying the fuel 
temperature over a prescribed profile, and measuring the hydrocarbons 
escaping from the fuel tank (see Sec.  1060.525). The final results are 
reported in grams per gallon where the grams are the mass of 
hydrocarbons escaping from the fuel tank over 24 hours and the gallons 
are the nominal fuel tank capacity. The new test procedure is derived 
from the automotive evaporative emission test

[[Page 59114]]

with modifications specific to marine applications.\109\
---------------------------------------------------------------------------

    \109\ See 40 CFR part 86, subpart B, for the automotive 
evaporative emission test procedures.
---------------------------------------------------------------------------

(a) Temperature Profile
    We believe it is appropriate to base diurnal measurements on a 
summer day with ambient temperatures ranging from 72 to 96 [deg]F (22.2 
to 35.6 [deg]C). This temperature profile, which is also used for 
automotive testing, represents a hot summer day when ground-level ozone 
formation is most prominent. Due to the thermal mass of the fuel and, 
in some cases, the inherent insulation provided by the boat hull, the 
fuel temperatures would cover a narrower range. Data presented in 
Chapter 5 of the Final RIA suggest that the fuel temperature in an 
installed marine fuel tank will see a total change of about half the 
ambient temperature swing. We are therefore adopting a test temperature 
range of 78 to 90 [deg]F (25.6 to 32.2 [deg]C) for installed marine 
fuel tanks. This testing is based on fuel temperature instead of 
ambient temperature.
    We are adopting an alternative, narrower temperature range for fuel 
tanks installed in nontrailerable boats ([gteqt] 26 ft. in length or > 
8.5 ft. in width). Data presented in Chapter 5 of the Final RIA suggest 
that the fuel temperature swing for a boat stored in the water is about 
20 percent of the ambient temperature swing. Based on this 
relationship, we are adopting an alternative temperature cycle for 
tanks installed in nontrailerable boats of 81.6 to 86.4 [deg]F (27.6 to 
30.2 [deg]C). This alternative temperature cycle is associated with an 
alternative standard as described in Section VI.C.3.
    Diurnal emission measurements for cars include a three-day 
temperature cycle to ensure that the carbon canister can hold at least 
three days of diurnal emissions without substantial escape of 
hydrocarbon vapors to the atmosphere. For marine vessels using carbon 
canisters as a strategy for controlling evaporative emissions, we are 
also requiring a three-day cycle in this final rule. In the automotive 
test, the canister is loaded and then purged by the engine during a 
warm-up drive before the first day of testing. We are adopting a 
different approach for marine vessels because we anticipate that 
canisters on marine applications will be passively purged. Before the 
first day of testing, the canister would be loaded to its working 
capacity and then run over the diurnal test temperature cycle, starting 
and ending at the lowest temperature, to allow one day of passive 
purging. The test result would then be based on the highest recorded 
value during the following three days.
    For fuel systems using a sealed system, we believe a three-day test 
will not be necessary. In this case, the fuel tank would be sealed once 
the fuel reaches equilibrium at the starting temperature for testing. 
The SHED would then be purged and the test would consist of a single 
run through the diurnal temperature cycle. We are establishing this 
one-day test for the following technologies: sealed systems, sealed 
systems with a pressure-relief valve, limiting flow orifices, bladder 
fuel tanks, and sealed fuel tanks with a volume-compensating air bag.
(b) Test Fuel
    Consistent with the automotive test procedures, we are specifying a 
gasoline test fuel with a nominal volatility of 9 psi.\110\ We are not 
requiring that the fuel used in diurnal emission testing include 
ethanol for two reasons. First, we do not believe that ethanol affects 
the diurnal emissions or control effectiveness other than the effect 
that ethanol in the fuel may have on fuel volatility. Second, in many 
areas of the country, in-use fuels containing ethanol are blended in 
such a way as to control for ethanol effects in order to meet fuel 
volatility requirements.
---------------------------------------------------------------------------

    \110\ Volatility is specified based on a procedure known as Reid 
Vapor Pressure (see ASTM D 323-99a).
---------------------------------------------------------------------------

    Diurnal emissions from vented systems are a function not only of 
temperature and fuel volatility, but also of the size of the vapor 
space in the fuel tank. Consistent with the automotive procedures, we 
are requiring that the fuel tank be filled at the start of the test to 
40 percent of its nominal capacity. Nominal capacity is defined as the 
fuel tank's volume as specified by the fuel tank manufacturer, using at 
least two significant figures, based on the maximum volume of fuel the 
tank can hold with standard refueling techniques. The ``permanent'' 
vapor space above a fuel tank that has been filled to capacity should 
not be considered as part of the fuel tank's nominal capacity.
(c) Fuel Tank Configuration
    The majority of marine fuel tanks are made of plastic. Plastic fuel 
tanks designed to meet our new standards will still be expected to have 
some amount of permeation. However, the effect of permeation on the 
test results should be very small if the test tank was a new model that 
had not been previously exposed to fuel. For fuel tanks that have 
reached a stabilized permeation rate (such as testing on in-use tanks), 
we believe it is appropriate to correct for permeation. The regulation 
specifies that manufacturers may measure the permeation rate and 
subtract it from the final diurnal test result. The fuel tank 
permeation rate would be measured with the established procedure for 
measuring permeation emissions, except that the fuel for testing 
(including preconditioning) would be the same as that used for diurnal 
emission testing and the permeation testing must occur at a nominal 
ambient temperature of 28[deg]C. This test measurement would have to be 
made just before the diurnal emission test to ensure that the 
permeation rate does not change significantly over the course of the 
diurnal emission measurement. In no case will we allow a permeation 
correction higher than that corresponding to the applicable permeation 
standard for a tank with a given inside surface area. Because not 
correcting for permeation represents the worst-case test result, we 
will accept data from manufacturers in which no permeation correction 
is applied.
    As with the permeation test procedures, a manufacturer may request 
EPA approval of an alternative method provided that this method 
provides measurements that are equivalent to the primary method.

F. Certification and Compliance Provisions

    Sections VII and VIII of the preamble to the proposed rule describe 
several general provisions for certifying emission families and meeting 
other regulatory requirements. This section notes several particulars 
for applying these general provisions to evaporative emissions.
    Marine vessels do not always include installed fuel systems. 
Manufacturers of vessels without installed fuel systems do not have the 
ability to control engine or fuel system design parameters. We are 
therefore excluding vessels that do not have installed fuel systems 
from the new standards (see Sec.  1045.5). As a result, it is necessary 
for us to treat manufacturers of uninstalled fuel-system components as 
the equipment manufacturer with respect to evaporative emission 
standards. This includes manufacturers of outboard engines (including 
any fuel lines or fuel tanks produced with the engine), portable fuel 
tanks, and the fuel line assembly (including fuel line, primer bulb, 
and connectors).
    For ease of reference, Small SI equipment manufacturers, Marine SI 
boat builders, and manufacturers of portable marine fuel tanks (and

[[Page 59115]]

associated fuel-system components) are all referred to as equipment 
manufacturers in this section.
(1) Liability for Certification and Compliance
    The new standards for fuel lines and fuel tanks apply to any such 
components that are used with or intended to be used with Small SI 
engines or Marine SI engines (see Sec.  1060.1 and Sec.  1060.601). 
Section VI.C describes for each standard which manufacturer is expected 
to certify.
    In most cases, nonroad standards apply to the manufacturer of the 
engine or the manufacturer of the nonroad equipment. Here, the products 
subject to the standards (fuel lines and fuel tanks) are typically 
manufactured by a different manufacturer. In most cases the engine 
manufacturers do not produce complete fuel systems and therefore are 
not in a position to do all the testing and certification work 
necessary to cover the whole range of products that will be used. We 
are therefore providing an arrangement in which manufacturers of fuel-
system components are in most cases subject to the standards and are 
subject to certification and other compliance requirements associated 
with the applicable standards. We are prohibiting the introduction into 
commerce of noncompliant fuel-system components that are intended for 
installation in Small SI equipment or Marine SI vessels unless the 
component manufacturer either certifies the component or has a 
contractual arrangement with each equipment manufacturer using its 
products that the equipment manufacturer will certify those components. 
As a matter of good practice, any components not intended for 
installation in Small SI equipment or Marine SI vessels should be 
labeled accordingly to prevent the possibility of improper 
installation.
    As described in Section VI.D, component manufacturers generally 
certify their products using measured emission levels showing that the 
components meet the applicable emission standard. In the case of 
permeation standards for fuel tanks, component manufacturers may 
alternatively certify to an FEL above or below the standard. If any 
fuel tank manufacturer certifies using an FEL, the FEL becomes the 
emission standard for that emission family for all practical purposes. 
The fuel tank manufacturer will have the option to certify to an FEL 
above or below the standard, but will not be required to meet any 
overall average or maintain a positive balance of credits for their 
products. This is to facilitate the use of ABT by equipment 
manufacturers, which must balance their positive and negative credits, 
as discussed below.
    Equipment manufacturers are subject to all the new evaporative 
emission standards. This applies for the general standards described 
above with respect to fuel caps, miscellaneous fuel-system components, 
and refueling (see Sec.  1060.101(f)). These standards generally depend 
on design specifications rather than emission measurements, so we 
believe it is appropriate to simply deem these products to be certified 
if they are designed and produced to meet the standards we specify. The 
equipment manufacturer will also need to keep records of the components 
used (see Sec.  1060.210). This will allow us, by operation of the 
regulation, to have certified products without requiring the paperwork 
burden associated with demonstrating compliance with these relatively 
straightforward specifications. Manufacturers could optionally apply 
for and receive a certificate of conformity with respect to these 
general standards, but this is not necessary and we will expect this to 
be a rare occurrence.
    Equipment manufacturers will also be subject to all the new 
permeation, diurnal, and running loss standards that apply. Equipment 
manufacturers may comply with requirements related to evaporative 
emission standards in three different situations. First, equipment 
manufacturers might install only components certified by the component 
manufacturer, without using emission credits. In this case all the 
components must meet the emission standard or have an FEL below the 
standard. Manufacturers of Marine SI vessels will be subject to the 
fuel line and fuel tank standards (including diurnal standards), but 
will be able to satisfy their requirements by using certified 
components. Such a vessel manufacturer will generally need to use 
certified components, add an emission label, and follow any applicable 
emission-related installation instructions to ensure that certified 
components are properly installed. This is similar to an equipment 
manufacturer that is required to properly install certified engines in 
its equipment, except that the equipment manufacturer must meet general 
design standards and shares the liability for meeting emission 
standards. We are requiring manufacturers of Small SI equipment to 
certify with respect to evaporative emission standards even if they use 
certified components, largely because they are still responsible for 
running loss requirements.
    Second, equipment manufacturers may be required to certify certain 
components based on contractual arrangements with the manufacturer of 
those components. In this case, the equipment manufacturer's 
certification causes the component manufacturer to no longer be subject 
to the standard. This approach might involve the equipment manufacturer 
relying on test data from the component manufacturer. The equipment 
manufacturer might also be producing its own fuel tanks for 
installation in its equipment, in which case it will be subject to the 
standards and all requirements related to certification and compliance. 
In either case, the equipment manufacturer will take on all the 
responsibilities associated with certification and compliance with 
respect to those components.
    Third, equipment manufacturers may comply with evaporative emission 
requirements by using certified components, some of which are certified 
to an FEL above the standard. The equipment manufacturer would then 
comply based on emission credits. In this case, the equipment 
manufacturer takes on all the certification and compliance 
responsibilities with respect to any fuel tanks that are part of the 
equipment manufacturer's emission credit calculations. Equipment 
manufacturers will generally use only certified components for meeting 
evaporative emission requirements, but they might also hold the 
certificate for such components. For purposes of certification, 
equipment manufacturers will not need to submit new test data if they 
use certified components. Equipment manufacturers must make an annual 
accounting to demonstrate a net balance of credits for the model year. 
Under this approach, the fuel tank manufacturer will continue to be 
subject to the standards for its products and be required to meet the 
certification and compliance responsibilities related to the standard. 
However, as in the first option, the fuel tank manufacturer will not be 
required to meet any averaging requirements or be required to use 
emissions credits. Where equipment manufacturers use ABT with fuel 
tanks that have already been certified by the component manufacturer, 
there would be overlapping certifications between the two parties. We 
address this by specifying that all parties are responsible for meeting 
applicable requirements associated with the standards to which they 
have certified, but if any specific requirement is met by one company, 
we will consider the

[[Page 59116]]

requirement to be met for all companies (see Sec.  1060.5). For 
example, either the component manufacturer or the equipment 
manufacturer could honor warranty claims, but we may hold both 
companies responsible for the violation if there is a failure to meet 
warranty obligations.
    Similarly, if we find that new equipment is sold without a valid 
certificate of conformity for the fuel lines or fuel tanks, then the 
equipment manufacturer and all the affected fuel-system manufacturers 
subject to the standards will be liable for the noncompliance (see 
Sec.  1060.601).
    Liability for recall of noncompliant products will similarly fall 
to any manufacturer whose product is subject to the standard, as 
described above. If more than one manufacturer is subject to the 
standards for a noncompliant product, we will have the discretion to 
assign recall liability to any one of those manufacturers. In assigning 
this liability, we will generally consider factors such as which 
manufacturer has substantial manufacturing responsibility and which 
manufacturer holds the certificate (see Sec.  1060.5). However, we may 
hold equipment manufacturers liable for recall even if they do not 
manufacture or certify the defective product. This will generally be 
limited to cases where the component manufacturer is unavailable to 
execute any remedial action. For example, if a foreign component 
manufacturer discontinues their participation in the U.S. market or a 
component manufacturer goes out of business, we will turn to the 
equipment manufacturer.
(2) Regulatory Requirements Related to Certification
    The established provisions for implementing exhaust emission 
standards apply similarly for evaporative emission standards; however, 
because the control technologies are very different, these requirements 
require further clarification. For example, scheduled maintenance is an 
important part of certifying engines to exhaust emission standards. 
However, there is little or no maintenance involved for the expected 
technologies for controlling evaporative emissions. The regulations 
still require manufacturers to identify specified maintenance 
procedures, if there are any, but there are no specific limitations on 
the maintenance intervals and there is no distinction for emission-
related maintenance. Manufacturers may not do any maintenance during 
testing for certification. (See Sec.  1060.125 and Sec.  1060.235.) We 
also do not expect that emission-related warranty claims will be 
common, but we are requiring a two-year period for emission-related 
warranties with respect to evaporative emission controls.
    Similarly, we do not expect manufacturers to use evaporative 
emission control technologies that involve adjustable parameters or 
auxiliary emission control devices. Technologies that control 
evaporative emissions are generally passive designs that prevent vapors 
from escaping, in contrast to the active systems engines used to 
control exhaust emissions. The regulations state the basic expectation 
that systems must comply with standards throughout any adjustable range 
without auxiliary emission control devices, but it is clear that these 
provisions will not apply to most evaporative systems. We also do not 
allow emission control strategies that cause or contribute to an 
unreasonable risk to public health or welfare or that involve defeat 
devices. While these are additional statutory provisions that are 
meaningful primarily in the context of controlling exhaust emissions, 
we are including them for evaporative emissions for completeness (see 
Sec.  1060.101). This also addresses the possibility that future 
technologies may be different in a way that makes these provisions more 
meaningful.
    The testing specified for certifying fuel systems to the 
evaporative emission standards includes measurements for evaluating the 
durability of emission control technologies where appropriate. While we 
adopted evaporative requirements for recreational vehicles relying on a 
testing approach that used deterioration factors, we believe it is more 
appropriate to incorporate the durability testing for each family 
directly. Therefore, no requirement (or opportunity) exists for 
generating deterioration factors for any evaporative emission standard.
    We are requiring that component manufacturers label the fuel lines, 
fuel tanks, and other fuel-system components that they certify (see 
Sec.  1060.137). These labels generally identify the manufacturer, the 
applicable emission standard (or Family Emission Limit), and family 
identification. We are including a provision to allow manufacturers to 
use an abbreviated code that would allow for referring to the 
information filed for certification under the engine family name. 
Manufacturers may also design their fuel lines to include a continuous 
stripe or other pattern to help identify the particular type or grade 
of fuel line. This would be in addition to the other labeling 
requirements.
    Engine or equipment manufacturers must also add an emission control 
information label to identify the evaporative emission controls (see 
Sec.  1060.135). If engine, equipment, or vessel manufacturers also 
certify fuel-system components separately, they may include that 
additional information in a combined label. If the equipment is 
produced by the same company that certifies the engine for exhaust 
standards, the emission control information label for the engine may 
include all the appropriate information related to evaporative 
emissions.
    While we are not adopting specific requirements for manufacturers 
to evaluate production-line or in-use products, we require that 
manufacturers set up their own quality plan for evaluating their 
products to ensure compliance. Also, we may pursue testing of certified 
products to evaluate compliance with evaporative emission standards 
(see Sec.  1060.301).
(3) Emission Families
    To certify equipment or components, manufacturers will first define 
their emission families. This is generally based on selecting groups of 
products that have similar emission characteristics throughout the 
useful life (see Sec.  1060.230). For example, fuel tanks could be 
grouped together if they were made of the same material (including 
consideration of additives such as pigments, plasticizers, and UV 
inhibitors that are expected to affect emissions) and the same control 
technology. For running loss control for nonhandheld Small SI engines 
and equipment, emission families are based on the selected compliance 
demonstration. For example, certifying manufacturers may have one 
emission family for all their products that vent fuel vapors to the 
engine's air intake system.
    The manufacturer selects a single product from the emission family 
for certification testing. This product will be the one that is most 
likely to exceed the applicable emission standard. For instance, the 
``worst-case'' fuel tank in a family of monolayer tanks will likely be 
the tank with the thinnest average wall thickness. For fuel lines or 
co-extruded fuel tanks with a permeation barrier layer, the worst-case 
configuration may be the one with the thinnest barrier.
    Testing with those products, as specified above, will need to meet 
applicable emission standards. The manufacturer then sends us an 
application for certification. After reviewing the information in the 
application to verify that the

[[Page 59117]]

manufacturer demonstrates compliance with all applicable requirements, 
we will issue a certificate of conformity allowing equipment 
manufacturers to introduce into commerce certified components or 
equipment.
(4) Compliance Provisions From 40 CFR Part 1068
    We are applying the provisions of 40 CFR part 1068 to Small SI and 
Marine SI engines, equipment, and vessels. This section describes how 
some of the provisions of part 1068 apply specifically with respect to 
evaporative emissions.
    The provisions of Sec.  1068.101 prohibit introducing into commerce 
new nonroad engines and equipment unless they are covered by a 
certificate of conformity and labeled appropriately. Section VI.F.1 
describes the responsibilities for engine manufacturers, equipment 
manufacturers, and manufacturers of fuel-system components with respect 
to the prohibition against introducing uncertified products into 
commerce. In the case of portable marine fuel tanks and outboard 
engines, there is no equipment manufacturer so we are treating 
manufacturers of these items as equipment manufacturers relative to 
this prohibition.
    While engine rebuilding or extensive engine maintenance is 
commonplace in the context of exhaust emission controls, there is very 
little analogous servicing related to evaporative emission controls. 
Nevertheless, it can be expected that individual fuel lines, fuel 
tanks, or other fuel-system components may be replaced periodically. 
While the detailed rebuilding provisions of Sec.  1068.120 have no 
meaning for evaporative emission controls, the underlying requirement 
applies generally. Specifically, if someone is servicing a certified 
system, there must be a reasonable basis to believe that the modified 
emission control system will perform at least as well as the original 
system. We are not imposing any recordkeeping requirements related to 
maintenance of evaporative emission control systems.
    There are many instances where we specify in 40 CFR part 1068, 
subparts C and D, that engines (and the associated equipment) are 
exempt from emission standards under certain circumstances, such as for 
testing, national security, or export. Our principle objective in 
applying these provisions to evaporative emission standards is to avoid 
confusion. We are therefore adding a provision that any exemption from 
exhaust emission standards automatically triggers a corresponding 
exemption from evaporative emission standards for the same products. We 
believe it is unlikely that an equipment manufacturer will need a 
separate exemption from evaporative emission standards, but the 
exemptions related to national security, testing, and economic hardship 
will apply if such a situation were to occur. We believe the other 
exemptions available for engines would not be necessary for equipment 
manufacturers with respect to evaporative emissions.
    Given the extended times required to precondition fuel-system 
components, we have no plans to initiate selective enforcement audits 
to test for compliance with products coming off the assembly line. On 
the other hand, we may require certifying manufacturers to supply us 
with production equipment or components as needed for our own testing 
or we may find our own source of products for testing.
    The defect-reporting requirements of Sec.  1068.501 apply to 
certified evaporative systems. This requires the certifying 
manufacturer to maintain information, such as warranty claims, that may 
indicate an emission-related defect. The regulations describe when 
manufacturers must pursue an investigation of apparent defects and when 
to report defects to EPA. These provisions apply to every certifying 
manufacturer and their certified products, including component 
manufacturers.
(5) Interim Standards and Provisions for Small SI Equipment
    Most Small SI equipment manufacturers are currently certifying 
products to evaporative emission requirements in California. However, 
these standards and their associated test procedures differ somewhat 
from those contained in this final rule. Although the standards are 
different, we believe evaporative emission control technologies are 
available to meet the California ARB's standards and our new emission 
standards. To help manufacturers transition to selling low-emission 
equipment nationwide, we are accepting California ARB certification of 
equipment and components in the early years of the new federal program.
    As discussed above, we are accepting California ARB certification 
for nonhandheld equipment and fuel tanks for the purposes of the early-
allowance program (see Sec. Sec.  1045.145 and 1054.145). We are also 
accepting California ARB certification of handheld fuel tanks through 
the 2011 model year (see Sec.  90.129).
    We are accepting California ARB certification or certain SAE 
specifications through the 2010 model year for Class II engines and 
through the 2010 model year for Class I engines (see Sec.  90.127). 
These SAE specifications include SAE J30 R11A, SAE J30 R12, and SAE 
J2260 Category 1.
(6) Replacement Parts
    We are applying the tampering prohibition in Sec.  1068.101(b)(1) 
for evaporative systems. This means that it will be a violation to 
replace compliant fuel tanks or fuel lines with noncompliant products 
that effectively disable the applicable emission controls. Low-cost 
replacement products would be easy to make available and it would be 
difficult to prevent or control their use. We are therefore adopting 
several provisions to address this concern. In Sec.  1060.610 we 
clarify the meaning of tampering for evaporative systems and finalize 
specific labeling requirements. First, for the period from January 1, 
2012 to December 31, 2019, we require that manufacturers, distributors, 
retailers, and importers of replacement parts clearly label their 
products with respect to the applicable requirements. For example, a 
package might be labeled as compliant with the requirements in 40 CFR 
part 1060 or it might be labeled as noncompliant and appropriately used 
only for applications not covered by EPA standards. Unless the 
packaging clearly states otherwise, the product is presumed to be 
intended for applications that are subject to EPA standards. Second, 
starting in 2020 we are establishing a provision stating that it is 
presumed that all replacement parts that could be used in applications 
covered by EPA standards will in fact be installed in such equipment. 
This presumption significantly enhances our ability to enforce the 
tampering prohibition because the replacement part is then noncompliant 
before it is installed in a vessel or a piece of equipment. We believe 
shifting to a blanket presumption in 2020 is appropriate since in-use 
vessels and equipment will be almost universally meeting EPA's 
evaporative emission standards by that time.
    The obligation for owners who replace certified fuel tanks or fuel 
lines with new components is to use components that have been certified 
under the applicable regulations. We have made a change from the 
proposal to remove the requirement for owners to use certified tanks 
that meet or exceed the FEL from the component being replaced, if 
applicable. Commenters emphasized that the proposed approach would be 
unworkable. We agree that the best approach for ensuring that we

[[Page 59118]]

preserve emission controls without adopting unreasonable requirements 
is to specify simply that new replacement components need to be 
certified.
(7) Certification Fees
    Under our current certification program, manufacturers pay a fee to 
cover the costs associated with various certification and other 
compliance activities associated with an EPA issued certificate of 
conformity. These fees are based on the projected costs to EPA per 
emission family. For the fees rule published May 2004, we conducted a 
cost study to assess EPA's costs associated with conducting programs 
for the industries that we certify (69 FR 26222, May 11, 2004).\111\ We 
are establishing a new fees category for certification related to the 
new evaporative emission standards. The costs for this category will be 
determined using the same method used in conducting the previous cost 
study.
---------------------------------------------------------------------------

    \111\ A copy of the cost worksheets that were used to assess the 
fees per category may be found on EPA's fees Web site at http://www.epa.gov/otaq/proprule.htm.
---------------------------------------------------------------------------

    As under the current program, this depends on an assessment of the 
anticipated number of emission families and the corresponding EPA 
staffing necessary to perform this work. At this time, EPA plans to 
perform a basic level of certification review of information and data 
submitted to issue certificates of conformity for the evaporative 
emission standards, as well as conducting some testing to measure 
evaporative emissions. This is especially the case for equipment 
manufacturers that use only certified components for meeting applicable 
emission standards. We are establishing a fee of $241 based on Agency 
costs for half of a federal employee's time and three employees hired 
through the National Senior Citizens Education and Research Center 
dedicated to the administration of the evaporative certification 
program, including the administrative, testing, and overhead costs 
associated with these people. The total cost to administer the program 
is estimated to be $362,225. We divided this cost by the estimated 
number of certificates, 1,503, to calculate the fee.
    The fee of $241 per certificate applies through the 2014 model 
year. Starting in 2015, we will update the fees related to evaporative 
emission certificates each year when we update the fees for all 
categories. The fees update will be based upon EPA's costs of 
implementing the evaporative category multiplied by the consumer price 
index (CPI), then divided by the average of the number of certificates 
received in the two years prior to the update. The CPI will be applied 
to all of EPA's costs except overhead. This is a departure from EPA's 
current fees program wherein the CPI is applied only to EPA's labor 
costs. In the most recent fees rulemaking, commenters objected to 
applying the CPI to EPA's fixed costs. In the new fee program for the 
evaporative category, however, there are no fixed costs. EPA expects 
all its costs to increase with inflation and we therefore think it is 
appropriate to apply the inflation adjustment to all the program costs.
    Where a manufacturer holds the certificates for compliance with 
exhaust emission standards and includes certification for evaporative 
emissions for the same engine/equipment model, we will assess an 
additional charge related to compliance with evaporative emission 
standards to that for the exhaust emission certification.
    EPA believes it appropriate to charge less for a certificate 
related to evaporative emissions relative to the existing charge for 
certificates of conformity for exhaust emissions from the engines in 
these same vessels and equipment. The amount of time and level of 
effort associated with reviewing the latter certificates is higher than 
that projected for the certificates for evaporative emissions.
(8) Design-Based Certification
    Certification of equipment or components that are subject to 
performance-based emission standards depends on test data showing that 
products meet the applicable standards. We are adopting a variety of 
approaches that reduce the level of testing needed to show compliance. 
As described above, we allow manufacturers to group their products into 
emission families so that a test on a single worst-case configuration 
can be used to show that all products in the emission family are 
compliant. Also, test data from a given year could be ``carried over'' 
for later years for a given emission control design (see Sec.  
1060.235). These steps help reduce the overall cost of testing.
    Design-based certification is another method that may be available 
for reducing testing requirements (see Sec.  1060.240). To certify 
their products using design-based certification, manufacturers will 
describe, from an engineering perspective, how their fuel systems meet 
the applicable design specifications. We believe there are several 
designs that use established technologies that are well understood to 
have certain emission characteristics that ensure compliance with 
applicable emission standards. At the same time, while design-based 
certification is a useful tool for reducing the test burden associated 
with certification, this does not remove a manufacturer's liability for 
meeting all applicable requirements throughout the useful life of the 
engine, equipment, vessel, or component.
    The following sections describe how we propose to implement design-
based certification for each of the different performance standards. We 
are adopting design-based certification provisions for fuel tank 
permeation and diurnal emissions. The emission data we used to develop 
these new design-based certification options are presented in Chapter 5 
of the Final RIA.
    We are not adopting design-based certification provisions for fuel 
lines. This contrasts with the approach we adopted for recreational 
vehicles, where we specified that fuel lines meeting certain SAE 
specifications could be certified by design. That decision was 
appropriate for recreational vehicles, because we did not include 
provisions for component certification. Fuel line manufacturers will 
need to conduct testing anyway to qualify their fuel lines as meeting 
the various industry ratings for Small SI and marine applications so 
any testing burden to demonstrate compliance with EPA standards should 
be minimal. We will allow test data used to meet industry standards to 
be used to certify to the new standards provided that the data were 
collected in a manner consistent with this final rule and that the data 
are available to EPA upon request.
(a) Fuel Tank Permeation
    A metal fuel tank automatically meets the design criteria for a 
design-based certification as a low-permeation fuel tank, subject to 
the restrictions on fuel caps and seals described below.\112\ There is 
also a body of existing test data showing that co-extruded fuel tanks 
from automotive applications have permeation rates that are well below 
the new standard. We are allowing design-based certification for co-
extruded high-density polyethylene fuel tanks with a continuous 
ethylene vinyl alcohol (EVOH) barrier layer. The EVOH barrier layer is 
required to be at least 2 percent of the wall thickness of the fuel 
tank. In addition, the ethylene content of the

[[Page 59119]]

EVOH can be no higher than 40 mole percent.
---------------------------------------------------------------------------

    \112\ Manufacturers may also consider metal fuel tanks meeting 
the gasket- and cap-related specifications to be ``deemed 
certified,'' in which case no application for certification is 
necessary. Such a fuel tank is considered compliant independent of 
any test results from emission measurements. While this would be the 
most straightforward path, many prefer instead to go through the 
certification process for their tanks.
---------------------------------------------------------------------------

    To address the permeability of the gaskets and seals used on metal 
and co-extruded tanks, the design criteria include a specification that 
seals (such as gaskets and O-rings) not made of low-permeability 
materials must have a total exposed surface area less than 0.25 percent 
of the total inside surface area of the fuel tank. For example, 
consider a four-gallon fuel tank with an inside surface area of 0.40 
square meters. The total exposed surface area of seals on this fuel 
tank must be smaller than 1000 mm\2\ (= 0.25%/100 x 0.40m\2\ x 
1,000,000 mm\2\/m\2\). This is consistent with the proposed rule and 
the current requirements for recreational vehicles, but allows for 
larger seals for larger tanks. In addition, if a non-metal fuel cap not 
made of low-permeability material is directly mounted to the fuel tank, 
the surface area of the fuel cap (determined by the cross-sectional 
area of the fill opening) may not exceed 3.0 percent of the total 
inside surface area of the fuel tank.
    A metal or co-extruded fuel tank with a fuel cap and seals that 
meet these design criteria would be expected to reliably pass the 
standard. However, we believe it is not appropriate to assign an 
emission level to fuel tanks using design-based certification such that 
they can generate emission credits. Given the uncertainty of emission 
rates from the seals and gaskets, we will not consider these tanks to 
be any more effective than other fuel tanks meeting emission standards 
for purposes of emission credits.
    In the case where the fuel cap is directly mounted on the fuel 
tank, we consider the cap and associated seals to be part of the fuel 
tank. As discussed above, we allow fuel caps to be tested either 
mounted on the fuel tank, or individually. As an alternative to testing 
the fuel cap, the manufacturer may opt to use a default permeation rate 
of 30 g/m\2\/day (or 50 g/m\2\/day for testing at 40 [deg]C). To be 
eligible for this default rate, the seal on the fuel cap must be made 
of a low-permeability material, such as a fluoroelastomer. The surface 
area associated with this default value is the smallest inside cross-
sectional area of the opening on which the cap is mounted. If 
manufacturers use this default value, they would seal the fuel fill 
area with a non-permeable plug during the tank permeation test and the 
default permeation rate would be factored into the final result.
(b) Diurnal Emissions
    For portable marine fuel tanks, we are establishing a design 
standard based on automatically sealing the tank to prevent fuel 
venting while fuel temperatures are rising. The options described below 
for design-based certification therefore deal only with installed 
marine fuel tanks (including personal watercraft).
    A fuel system sealed to 1.0 psi will meet the criteria for design-
based certification relative to the new diurnal emission standards. 
Such sealed systems reliably ensure that total diurnal emissions over 
the specified test procedure will be below the new standard. This type 
of system will allow venting of fuel vapors only when pressures exceed 
1.0 psi or when the fuel cap is removed for refueling. Note that 
systems with anti-siphon valves will have to be designed to prevent 
fuel releases when the system is under pressure to meet U.S. Coast 
Guard requirements.
    Bladder fuel tanks and tanks with a volume-compensating air bag are 
specialized versions of tanks that may meet the specifications for 
systems that remain sealed up to positive pressures of 1.0 psi. In each 
of these designs, volume changes within a sealed system prevent 
pressure buildup.
    Fuel tanks equipped with a passively purged carbon canister may be 
certified by design, subject to several technical specifications. To 
ensure that there is enough carbon to collect a sufficient mass of 
hydrocarbon vapors, we specify a minimum butane working capacity of 9.0 
g/dL based on the test procedures specified in ASTM D5228. The carbon 
canister will need a minimum carbon volume of 0.040 liters per gallon 
of nominal fuel tank capacity. For fuel tanks certified to the optional 
standards for tanks in nontrailerable boats (>=26 ft. in length or >8.5 
ft. in width), we are requiring a minimum carbon volume of 0.016 liters 
per gallon of nominal fuel tank capacity.
    We are adopting three additional specifications for the quality of 
the carbon. We believe these specifications are necessary to ensure 
that the canister continues to function effectively over the full 
useful life. First, the carbon must meet a moisture adsorption capacity 
maximum of 0.5 grams of water per gram of carbon at 90 percent relative 
humidity and a temperature of 255 [deg]C. Second, the 
carbon must pass a dust attrition test similar to that in ASTM D3802. 
Third, the carbon granules must have a minimum mean diameter of 3.1 mm 
based on the procedures in ASTM D2862. These procedures are described 
in more detail in Chapter 5 of the Final RIA.
    We are also requiring that the carbon canister must be properly 
designed to ensure proper in-use diurnal emission control. The 
canisters will need to be designed using good engineering judgment to 
ensure structural integrity. They must include a volume compensator or 
other device to hold the carbon pellets in place under vibration and 
changing temperatures and the vapor flow will need to be directed so 
that it reaches the whole carbon bed rather than just passing through 
part of the carbon. We are also requiring that the geometry of the 
carbon canister must have a length-to-diameter ratio of at least 3.5.
(c) Additional Designs
    We may establish additional design-based certification options 
where we find that new test data demonstrate that the use of other 
technologies will ensure compliance with applicable emission standards. 
These designs will need to produce emission levels comfortably below 
the emission standards after considering variability in emission 
control performance. In addition, all aspects of these designs would 
need to be publicly available and quantifiable. For instance, we would 
not create a design-based certification for a material or process 
without full public disclosure of all the characteristics of that 
material or process relevant to its emission control characteristics. 
We would also not include products whose emission control performance 
is highly variable due to tolerances in materials or manufacturing 
processes. For instance, barrier treatments and post-processing 
coatings would generally not be eligible for design-based 
certification.
    Manufacturers wanting to use designs other than those discussed 
here will have to perform the applicable testing for certification. 
However, once an additional technology is proven to be inherently low-
emitting such that it will without question meet emission standards, we 
may consider approving its use under the regulations for design-based 
certification. For example, if several manufacturers were to pool 
resources to test a diurnal emission control strategy and submit the 
data to us, we could consider this particular technology, with any 
appropriate design specifications, as one that qualifies to be 
considered compliant under design-based certification. We intend to 
revise the regulations to include any additional technologies we decide 
are suitable for design-based certification, but we may also approve 
the use of additional design-based certification with these 
technologies before changing the regulations.

[[Page 59120]]

(9) Coordination With Coast Guard
    As part of its compliance assurance program for safety standards, 
the U.S. Coast Guard regularly visits boat builders to perform 
inspections on the production of new boats. The frequency of these 
inspections is such that each boat builder is visited approximately 
once every two years. The U.S. Coast Guard has indicated a willingness 
to consider environmental compliance assurance as part of these 
inspections. For example, the inspections could include checking for 
certification labels and proper installation of emission control 
components. We will continue to work with the U.S. Coast Guard to 
coordinate these efforts.

G. Small-Business Provisions

(1) Small Business Advocacy Review Panel
    On May 3, 2001, we convened a Small Business Advocacy Review Panel 
under section 609(b) of the Regulatory Flexibility Act (RFA) as amended 
by the Small Business Regulatory Enforcement Fairness Act of 1996. The 
purpose of the Panel was to collect the advice and recommendations of 
representatives of small entities that could be affected by the 
proposal and to report on those comments and the Panel's findings and 
recommendations as to issues related to the key elements of the Initial 
Regulatory Flexibility Analysis under section 603 of the Regulatory 
Flexibility Act. We re-convened the Panel on August 17, 2006 to update 
our findings for this final rule. The Panel report has been placed in 
the rulemaking record for this final rule. Section 609(b) of the 
Regulatory Flexibility Act directs the Panel to report on the comments 
of small entity representatives and make findings as to issues related 
to certain elements of an initial regulatory flexibility analysis 
(IRFA) under RFA section 603. Those elements of an IRFA are:
     A description of, and where feasible, an estimate of the 
number of small entities to which the rule will apply;
     A description of projected reporting, recordkeeping, and 
other compliance requirements of the rule, including an estimate of the 
classes of small entities that will be subject to the requirements and 
the type of professional skills necessary for preparation of the report 
or record;
     An identification, to the extent practicable, of all 
relevant Federal rules that may duplicate, overlap, or conflict with 
the rule; and
     A description of any significant alternative to the rule 
that accomplishes the stated objectives of applicable statutes and that 
minimizes any significant economic impact of the rule on small 
entities.
    In addition to the EPA's Small Business Advocacy Chairperson, the 
Panel consisted of the Director of the Assessment and Standards 
Division of the Office of Transportation and Air Quality, the 
Administrator of the Office of Information and Regulatory Affairs 
within the Office of Management and Budget, and the Chief Counsel for 
Advocacy of the Small Business Administration.
    EPA used the size standards provided by the Small Business 
Administration (SBA) at 13 CFR part 121 to identify small entities for 
the purposes of its regulatory flexibility analysis. Companies that 
manufacture internal-combustion engines and that employ fewer than 
1,000 people are considered small businesses for the purpose of the RFA 
analysis for this rule. Equipment manufacturers, boat builders, and 
fuel-system component manufacturers that employ fewer than 500 people 
are considered small businesses for the purpose of the RFA analysis for 
this rule. Based on this information, we asked 25 companies that met 
the SBA small business thresholds to serve as small entity 
representatives for the duration of the Panel process. These companies 
represented a cross-section of engine manufacturers, equipment 
manufacturers, and fuel-system component manufacturers.
    With input from small-entity representatives, the Panel drafted a 
report which provides findings and recommendations to us on how to 
reduce potential burdens on small businesses that may occur as a result 
of this final rule. The Panel Report is included in the rulemaking 
record for this final rule. We are adopting all the recommendations as 
presented in the Panel Report. The flexibility options recommended to 
us by the Panel, and any updated assessments, are described below.
(2) Burden Reduction Approaches for Small Businesses Subject to the 
Final Evaporative Emission Standards
    The SBAR Panel Report includes six general recommendations for 
regulatory flexibility for small businesses affected by the new 
evaporative emission standards. This section discusses the provisions 
being established based on each of these recommendations plus one 
additional provision for small-volume boat builders. In these industry 
sectors, we believe the burden reduction approaches presented in the 
Panel Report should be applied to all businesses with the exception of 
the general economic hardship provision and the marine diurnal 
allowances, both of which are described below and are designed 
specifically for small businesses. The majority of fuel tanks produced 
for the Small SI equipment and Marine SI vessel market are made by 
small businesses or by companies producing small volumes of these 
products. The purpose of these options is to reduce the potential 
burden on companies for which fixed costs cannot be distributed over a 
large product line. For this reason, we often also consider production 
volumes when making decisions regarding provisions to reduce compliance 
burden.
(a) Consideration of Appropriate Lead Time
    Small businesses commented that they would need to make significant 
changes to their plastic fuel tank designs and molding practices to 
meet the new fuel tank permeation standards. For blow-molded tank 
designs with a molded-in permeation barrier, new blow-molding machines 
would be needed that could produce multi-layer fuel tanks. One small 
business commented that, due to the lead time needed to install a new 
machine and to perform quality checks on the tanks, they would not be 
ready to sell multi-layer blow-molded fuel tanks until 2011 for the 
Small SI and Marine SI markets.
    Small businesses that make rotation-molded fuel tanks were divided 
in their opinion of when they would be ready to produce low-permeation 
fuel tanks. One manufacturer stated that it is already producing fuel 
tanks with a low-permeation inner layer that are used in Small SI 
applications. This company also sells marine fuel tanks, but not with 
low-permeation technology. However, they have successfully performed 
Coast Guard durability testing on a prototype 40-gallon marine tank 
using their low-permeation technology. Two other small businesses that 
make rotation-molded fuel tanks stated that they have not been able to 
identify and demonstrate a low-permeation technology that would meet 
their cost and performance needs. They commented that developing and 
demonstrating low-permeation technology is especially an issue for the 
marine industry because of the many different tank designs and Coast 
Guard durability requirements.
    Consistent with the Panel recommendations and in response to the 
above comments, we are adopting an implementation schedule that we 
believe provides sufficient lead time for blow-molded and marine 
rotation-molded fuel tanks. We are establishing

[[Page 59121]]

tank permeation implementation dates of 2011 for Class II equipment and 
2012 for Class I equipment. We are implementing the permeation 
standards in 2011 for portable marine fuel tanks and for personal 
watercraft and in 2012 for other installed fuel tanks, which are 
typically rotation-molded (see Sec.  1060.1).
    There was no disagreement on the technological feasibility of the 
Marine SI diurnal emission standard EPA is considering. The marine 
industry has expressed a commitment to developing consensus standards 
for the installation of carbon canisters in boats. However, they have 
noted that the development of these consensus standards will take time 
and that time would be needed for an orderly transition to installing 
the diurnal emission controls to their boat models. Therefore, as noted 
earlier, we are giving an additional 18 months of lead time, compared 
to the proposal, which means that the diurnal standard will apply 
starting on July 31, 2011. In addition, in response to concerns that 
there are many small boat builders that may need additional time to 
become familiar with carbon canister technology and learn how to 
install canisters in their boats, we are adopting interim allowances 
that will give additional time for a limited number of new boats. Small 
boat builders could choose between a percentage-based phase-in for one 
year or an allowance to produce up to 1,200 vessels without diurnal 
systems over the first two years. The options available to boat 
builders are described in more detail in Section VI.C.3 and Section 
VI.G.2.f.
    In developing the proposal, the majority of large nonhandheld 
equipment manufacturers indicated that they would be using low-
permeation fuel lines in the near term as part of their current product 
plans. In addition, the Panel expressed concern that small equipment 
manufacturers who do not sell products in California may not 
necessarily be planning on using low-permeation fuel lines in 2008. 
Therefore, we proposed that the fuel line permeation standards would 
take effect in 2008 for most nonhandheld equipment manufacturers and in 
2009 for small-volume equipment manufacturers. Given that we are not 
adopting the final rule until mid-2008, we have delayed the 
implementation of the low-permeation fuel line requirement until 
January 1, 2009 for nonhandheld equipment. We are keeping the 2009 
implementation date for low-permeation fuel line for small businesses 
producing Small SI nonhandheld equipment. We believe the 2009 date is 
feasible for all equipment manufacturers, given that fuel line meeting 
the low permeation standards is already widely available and 
manufacturers selling most types of nonhandheld equipment in California 
were required to use such fuel lines starting in 2007 or 2008.
(b) Fuel Tank ABT and Early-Incentive Program
    The Panel recommended that we propose ABT and early-allowance 
programs for fuel tank permeation. We are adopting these programs in 
this final rule. The provisions of the ABT and early-allowance programs 
are described above in Section VI.D.
(c) Broad Definition of Emission Family
    The Panel recommended that we propose broad emission families for 
fuel tank emission families similar to the existing provisions for 
recreational vehicles. As described earlier in Section VI.F.3, we are 
adopting provisions that allow fuel tank emission families to be based 
on type of material (including additives such as pigments, 
plasticizers, and UV inhibitors that are expected to affect control of 
emissions), emission control strategy, and production methods. This 
would allow fuel tanks of different sizes, shapes, and wall thicknesses 
to be grouped into the same emission family (see Sec.  1060.230). In 
addition, Small SI and Marine SI fuel tanks could be allowed in the 
same emission family if the tanks meet these criteria. Manufacturers 
therefore will be able to broadly group similar fuel tanks into the 
same emission family and then test only the configuration most likely 
to exceed the emission standard.
(d) Compliance Progress Review for Marine Fuel Tanks
    During the development of the proposed rule, we worked closely with 
the recreational marine fuel tank industry to understand their 
products, business practices, and production processes. Information 
gathered from these interactions was used to craft the proposed 
regulatory provisions related to controlling gasoline fuel tank 
permeation emissions. During these discussions, important issues were 
identified with respect to concerns regarding the technical feasibility 
of controlling permeation emissions from rotation-molded tanks made 
from cross-link polyethylene (XLPE).
    Manufacturers asserted that the availability of rotation-molded 
fuel tanks is critical to the marine industry. This type of fuel tank 
is installed in many recreational marine vessels powered by SD/I and 
outboard engines. The rotation-molding process, which has low capital 
costs relative to injection molding, facilitates the economical 
production of fuel tanks in the low production volumes required by boat 
builders. Furthermore, plastic fuel tanks offer advantages over metal 
fuel tanks, both in terms of cost and corrosion resistance. The 
advantages of XLPE over other plastics used in fuel tanks today, such 
as HDPE, are its compatibility with the rotation-molding process and 
the ability of XLPE fuel tanks to meet the U.S. Coast Guard safety 
tests, especially the flame-resistance test. Nearly all manufacturers 
of rotation-molded marine fuel tanks qualify as small businesses under 
this rule.
    We have concluded that the 2012 fuel permeation standards are 
technologically feasible for rotation-molded marine fuel tanks. This 
conclusion is supported by data presented in the Final RIA. As can be 
seen from the comments on the proposed rule and related information in 
the public docket, several rotation-molded tank manufacturers support 
EPA's proposed standards and implementation dates and have provided 
information to support their positions. We originally proposed tank 
permeation standards for these fuel tanks in 2002. Since that time, 
several manufacturers have shown progress in the development of low-
permeation, rotation-molded tanks. In addition, this rule provides 
about 36 months of lead time for these manufacturers to address 
remaining technology issues, certify their products, and prepare for 
production of certified fuel tanks.
    However, several other rotation-molded tank manufacturers are not 
as far along in their technological progress toward meeting the 
standards and are not certain about their ability to meet EPA 
requirements in 2012. To address this situation, these manufacturers 
have requested that EPA perform a technical review in 2010 to determine 
whether the compliance dates should be adjusted. However, for the 
reasons discussed above, we believe that the tank permeation standards 
have been demonstrated to be technologically feasible in the 2012 time 
frame and do not look favorably upon the request for a technology 
review of the permeation standard.
    Nevertheless, we are concerned about the potential long-term 
impacts on the small businesses that have not yet developed 
technologies that meet the new emission standards. Although marine fuel 
tanks must comply with Coast Guard safety regulations, marine fuel tank 
manufacturers have never been required to certify to permeation 
standards. The rotation-molded tank

[[Page 59122]]

manufacturers are generally small businesses with limited engineering 
staffs and are dependent on materials suppliers for their raw 
materials.
    During the next few years, EPA intends to hold periodic progress 
reviews with small businesses that make rotation-molded fuel tanks. The 
purpose of these progress reviews will be to monitor the progress of 
individual companies towards compliance with the tank permeation 
standards and to provide feedback as needed. Rather than conducting a 
broad program with the entire industry, we plan to conduct separate, 
voluntary reviews with each interested company. These sessions will be 
instrumental to EPA in following the progress for these companies and 
assessing their efforts and potential problems.
    To help address small business concerns, we are relying on the 
small-volume manufacturer hardship relief provisions in 40 CFR 
1068.250. These provisions are described below. In the event that a 
small business is unsuccessful in the 2012 model year and seeks 
hardship relief, the progress reviews described above would provide an 
important foundation in determining whether a manufacturer has taken 
all possible steps to comply with the permeation standards in a timely 
manner.
(e) Design-Based Certification
    For recreational vehicles, manufacturers using metal fuel tanks may 
certify by design to the tank permeation standards. Tanks using design-
based certification provisions are not included in the ABT program 
because they are assigned a certification emission level equal to the 
standard. The Panel recommended that we propose to allow design-based 
certification for metal tanks and plastic fuel tanks with a continuous 
EVOH barrier. The Panel also recommended that we propose design-based 
certification for carbon canisters. A detailed description of the new 
design-based certification options we are adopting is presented earlier 
in Section VI.F.8 of this document.
    The National Marine Manufacturers Association (NMMA), the American 
Boat and Yacht Council (ABYC), and the Society of Automotive Engineers 
(SAE) have industry-recommended practices for boat designs that must be 
met as a condition of NMMA membership. NMMA stated that they are 
working to update these recommended practices to include installation 
instructions for carbon canisters and design specifications for low-
permeation fuel lines. The Panel recommended that EPA accept data used 
for meeting the voluntary requirements as part of the EPA 
certification. We will allow this data to be used as part of EPA 
certification as long as it is collected consistent with the test 
procedures and other requirements described in this final rule.
(f) Marine Diurnal Allowances
    As described above, manufacturers expressed concern that many 
small-volume boat builders may need additional time to develop 
installation procedures and install carbon canisters in their boats. To 
address this, we are establishing an interim allowance program that 
will give additional time for these manufacturers for a certain number 
of boats. Under this program, each small-volume boat builder will be 
allowed to sell these boats without the diurnal emission controls that 
would otherwise be required. These allowances are intended to help 
small boat builders engage in an orderly transition to the new 
standards and will only be available for boats produced in the first 
two years of the program. This allowance program applies only to boats 
with installed fuel tanks that are expected to use carbon canisters to 
meet the diurnal emission standards. Therefore, it does not apply to 
portable fuel tanks, personal watercraft, or outboard engines with 
under-cowl fuel tanks. If a small-volume boat builder chooses to use 
this allowance provision, then the 50 percent phase-in for the first 
year, as described in Section VI.C.3, would not apply.
    Specifically, each small-volume boat builder will have a total of 
1,200 allowances that may be used, at the manufacturer's discretion, 
for boats produced from July 31, 2011 through July 31, 2013.\113\ For 
instance, a small boat builder could produce 800 boats in the first 
year and 400 in the second year without diurnal emission controls. For 
most small boat builders, we expect that this allowance program will 
result in an additional year, or even two years, of lead time for them 
to address potential installation issues related to carbon canisters.
---------------------------------------------------------------------------

    \113\ In this context, the date of production means the date on 
which the engine is installed in the vessel. In the case of boats 
using outboard engines, it is the date on which the fuel tank is 
installed.
---------------------------------------------------------------------------

    Under this diurnal allowance approach for small-volume boat 
builders, such boat builders will only need to place a label on the 
vessel with a statement acknowledging that an allowance is being used. 
In addition, the small-volume boat builder must notify EPA of its 
intent to use the allowances prior to producing any exempted vessels. 
The small-volume boat builder must also maintain records of the number 
of allowances used and submit a report to EPA showing the number of 
allowances used in each year. Note that boats exempted from diurnal 
requirements must still use fuel lines and fuel tanks that meet 
permeation standards.
(g) Hardship Provisions
    We are adopting two types of hardship provisions consistent with 
the Panel recommendations. EPA used the SBA size standards for purposes 
of defining ``small businesses'' for its regulatory flexibility 
analysis. The eligibility criteria for the hardship provisions 
described below reflect EPA's consideration of the Panel's 
recommendations and a reasonable application of existing hardship 
provisions. As has been our experience with similar provisions already 
adopted, we anticipate that hardship mechanisms will be used sparingly. 
First, under the unusual circumstances hardship provision, any 
manufacturer subject to the new standards may apply for hardship relief 
if circumstances outside its control cause the failure to comply and if 
failure to sell the subject engines or equipment or fuel system 
component would have a major impact on the company's solvency (see 
Sec.  1068.245). An example of an unusual circumstance outside a 
manufacturer's control may be an ``Act of God,'' a fire at the 
manufacturing plant, or the unforeseen shutdown of a supplier with no 
alternative available. The terms and time frame of the relief will 
depend on the specific circumstances of the company and the situation 
involved. As part of its application for hardship, a company will be 
required to provide a compliance plan detailing when and how it will 
achieve compliance with the standards. This hardship provision will be 
available to all manufacturers of engines, equipment, boats, and fuel 
system components subject to the new standards, regardless of business 
size.
    Second, an economic hardship provision allows small businesses 
subject to the new standards to petition EPA for limited additional 
lead time to comply with the standards (see Sec.  1068.250). A small 
business must make the case that it has taken all possible business, 
technical, and economic steps to comply, but the burden of compliance 
costs would have a significant impact on the company's solvency. 
Hardship relief could include requirements for interim emission 
reductions and/or the purchase and use of emission credits. The length 
of the

[[Page 59123]]

hardship relief decided during review of the hardship application will 
be up to one year, with the potential to extend the relief as needed. 
We anticipate that one to two years will normally be sufficient. As 
part of its application for hardship, a company will be required to 
provide a compliance plan detailing when and how it will achieve 
compliance with the standards.
    The criteria for determining which manufacturers are eligible for 
the economic hardship (as well as other small-volume manufacturer 
flexibilities described in this section) are presented in Sections 
III.F.2 and IV.G for Marine SI engine manufacturers; in Section V.F.2 
for nonhandheld engine manufacturers; and in Section V.F.3 for 
nonhandheld equipment manufacturers. For handheld equipment 
manufacturers, EPA is using the existing small-volume manufacturer 
criterion, which relies on a production cut-off of 25,000 pieces of 
handheld equipment per year. For boat builders and fuel-system 
component manufacturers, EPA is basing the determination of whether a 
company is a small business eligible for the hardship provision on the 
SBA size standards at 13 CFR 121. Under SBA size standards, a boat 
builder or fuel-system component manufacturer is a small business if it 
has 500 or fewer employees.
    The criteria for determining which manufacturers are eligible for 
the economic hardship (as well as other small-volume manufacturer 
flexibilities described in this section) are presented in Sections 
III.F.2 and IV.G for Marine SI engine manufacturers; in Section V.F.2 
for nonhandheld engine manufacturers; and in Section V.F.3 for 
nonhandheld equipment manufacturers. For handheld equipment 
manufacturers, EPA is using the existing small-volume manufacturer 
criterion, which relies on a production cut-off of 25,000 pieces of 
handheld equipment per year. For boat builders and fuel-system 
component manufacturers, EPA is basing the determination of whether a 
company is a small business on the SBA definition. Under SBA 
regulations, a boat builder or fuel-system component manufacturer is a 
small business if it has 500 or fewer employees.
    Because many boat builders, nonhandheld equipment manufacturers, 
and handheld equipment manufacturers will depend on fuel tank 
manufacturers and fuel line manufacturers to supply certified products 
in time to produce complying vessels and equipment, we are also 
establishing a hardship provision for all Marine SI vessel 
manufacturers and Small SI equipment manufacturers, regardless of size. 
The hardship provision allows the boat builder or equipment 
manufacturer to request more time if they are unable to obtain a 
certified fuel-system component and they are not at fault and would 
otherwise face serious economic hardship (see Sec.  1068.255).

H. Technological Feasibility

    We believe there are several strategies that manufacturers can use 
to meet the new evaporative emission standards. We have collected and 
will continue to collect emission test data on a wide range of 
technologies for controlling evaporative emissions. The design-based 
certification levels discussed above rely on this test data and we may 
amend the list of approved designs and emission levels as more data 
become available.
    In the following sections we briefly describe how we selected 
specific emission standards and implementation dates, followed by a 
more extensive discussion of the expected emission control 
technologies. A more detailed discussion of the feasibility of the new 
evaporative requirements, including all the underlying test data, is 
included in Chapter 5 of the Final RIA. See Table VI-1 for a summary of 
the new evaporative emission standards.
(1) Level of Standards
    The fuel line and fuel tank permeation standards for Small SI 
equipment and Marine SI vessels are based on the standards already 
adopted for recreational vehicles. These applications use similar 
technology in their fuel systems. In cases where the fuel systems 
differ we have identified technological approaches that could be used 
to meet these same emission levels. The control strategies are 
discussed below. For fuel lines used with cold-weather equipment, we 
are adopting a relaxed set of standards based on available permeation 
data. In addition, we have new higher numerical standards for fuel tank 
permeation for tests performed at higher temperature (40 [deg]C vs. 28 
[deg]C). These higher numerical standards are based on data described 
in Chapter 5 of the Final RIA.
    For fuel tanks installed in personal watercraft and for portable 
marine fuel tanks, we are adopting diurnal emission standards based on 
the current capabilities of these systems. We are basing the new 
standard for other installed marine fuel tanks on the capabilities of 
passive systems that store emitted vapors in a carbon canister. The 
Final RIA describes the test results on passively purged canisters and 
other technologies that led us to the level of the diurnal emission 
standard.
    We measured running loss emissions and found that some Small SI 
products have very high emission levels. The large variety of 
manufacturers and equipment types makes it impractical to design a 
measurement procedure, which means that we are unable to specify a 
performance standard. We are instead adopting a design standard for 
running losses from nonhandheld Small SI equipment by specifying that 
manufacturers may use any of a variety of specified design solutions, 
as described in Section VI.C.5. Several of these design options are 
already in common use today.
    We are requiring that equipment and vessel manufacturers use good 
engineering practices in their designs to minimize refueling spitback 
and spillage. In general, the regulation simply requires manufacturers 
to use system designs that are commonly used today. Several refueling 
spitback and spillage control strategies are discussed in Chapter 5 of 
the Final RIA.
(2) Implementation Dates
    Low-permeation fuel line is widely available today. Many Small SI 
equipment manufacturers certifying to permeation standards in 
California are selling products with low-permeation fuel line 
nationwide. In addition, many boat builders have begun using low-
permeation marine fuel lines to feed fuel from the fuel tank to the 
engine. For this reason, we are implementing the fuel line permeation 
standards in 2009 for nonhandheld Small SI equipment and for Marine SI 
vessels. The dates provide more than two years additional lead time 
beyond the California requirements for Small SI equipment. For handheld 
equipment, there are no fuel line permeation requirements in 
California. In addition, injection molded fuel lines are common in many 
applications rather than straight-run extruded fuel line. For this 
reason we are delaying implementation of fuel line permeation standards 
for handheld equipment until 2012 (or 2013 for small volume emission 
families). Primer bulbs and many of the fuel line segments used under 
the cowl of outboard marine engines are also injection molded. In 
addition, these fuel lines are not subject to standards in California. 
We are providing additional lead time for manufacturers to address 
emissions from these fuel lines as well. The permeation standard begins 
in 2011 for primer bulbs used with marine fuel lines; permeation 
standards for under-cowl fuel lines phase in between 2010 and 2015.
    Similar to fuel line technology, low-permeation fuel tank 
constructions are

[[Page 59124]]

used today in automotive and portable fuel tank applications. This 
technology has been developed for use in recreational vehicles and for 
Small SI equipment sold in California. The available technology options 
include surface treatment and multi-layer constructions, though 
rotation-molding presents some unique design challenges. Based on 
discussions with fuel tank manufacturers, and our own assessment of the 
lead time necessary to change current industry practices, we believe 
low-permeation fuel tank technology can be applied in the 2011-2012 
model years for Small SI and Marine SI fuel tanks. We are implementing 
the fuel tank permeation standards in 2011 for Class II equipment, 
portable marine fuel tanks and personal watercraft. For Class I 
equipment and other installed marine fuel tanks, the implementation 
date is 2012. We are phasing in the handheld fuel tank standards on the 
following schedule: 2009 for equipment models certifying in California, 
2011 for structurally integrated nylon tanks, 2013 for small-volume 
families, and 2010 for the remaining fuel tanks used with handheld 
equipment. We believe this will facilitate an orderly transition from 
current fuel tank designs to low-permeation fuel tanks.
    We are allowing until 2012 for large marine fuel tanks to meet 
permeation standards largely due to concerns raised over the 
application of low-permeation rotation-molded fuel tank technology in 
marine applications. The majority of these fuel tanks are typically 
rotation-molded by small businesses. Although low-permeation technology 
has emerged for these applications, we believe the allotted lead time 
will be necessary for all manufacturers to be ready to implement this 
technology. This will give these manufacturers time to make changes to 
their production processes to comply with the standards and to make any 
tooling changes that may be necessary. We are similarly implementing 
the fuel tank permeation standards for Class I fuel tanks installed in 
Small SI equipment in 2012, mostly to align with the implementation 
date for the Phase 3 exhaust emission standards. This is especially 
important for Class I engines where most of the engine manufacturers 
will also be responsible for meeting evaporative emission standards.
    We are implementing the running loss standards for nonhandheld 
Small SI equipment in the same year as the exhaust emission standards. 
We believe this is appropriate because the running loss vapor will in 
some cases be routed to the intake manifold for combustion in the 
engine. Manufacturers will need to account for the effect of the 
additional running loss vapor in their engine calibrations.
    We are implementing the new diurnal standards for portable marine 
fuel tanks on January 1, 2010 and for personal watercraft beginning 
with the 2010 model year. We believe these requirements will not result 
in a significant change from current practice so the dates will provide 
sufficient lead time for manufacturers to comply with standards. For 
other installed fuel tanks, however, we are adopting a later 
implementation date beginning in mid-2011. The development of canisters 
as an approach to control diurnal emissions without pressurizing the 
tanks has substantially reduced the expected level of effort to 
redesign and retool for making fuel tanks. However, canister technology 
has not yet been applied commercially to marine applications and the 
final rule includes added lead time for manufacturers to work out 
various technical parameters associated with the large variety of boat 
models and tanks.
(3) Technological Approaches
    We believe several emission control technologies can be used to 
reduce evaporative emissions from Small SI equipment and Marine SI 
vessels. These emission control strategies are discussed below. Chapter 
5 of the Final RIA presents more detail on these technologies and 
Chapter 6 provides information on the estimated costs.
(a) Fuel Line Permeation
    Fuel lines produced for use in Small SI equipment and Marine SI 
applications are generally extruded nitrile rubber with a cover for 
abrasion resistance. Fuel lines used in Small SI applications often 
meet SAE J30 R7 specifications, including a permeation limit of 550 g/
m2/day at 23 [deg]C on ASTM Fuel C. Fuel lines for personal 
watercraft are typically designed to meet SAE J2046, which includes a 
permeation limit of 300 g/m2/day at 23 [deg]C on ASTM Fuel 
C.\114\ Marine fuel lines subject to Coast Guard requirements under 33 
CFR part 183 are designated as either Type A or Type B and either Class 
1 or Class 2. SAE J1527 provides detail on these fuel line designs. 
Type A fuel lines pass the U.S. Coast Guard fire test while Type B 
designates fuel lines that have not passed this test. Class 1 fuel 
lines are intended for fuel-feed lines where the fuel line is normally 
in contact with liquid fuel and has a permeation limit of 100 g/
m2/day at 23 [deg]C. Class 2 fuel lines are intended for 
vent lines and fuel fill necks where liquid fuel is not continuously in 
contact with the fuel line; it has a permeation limit of 300 g/
m2/day at 23 [deg]C. Recently, SAE J1527 has been modified 
to include a ``-15'' designation for fuel lines meeting a permeation 
limit of 15 g/m2/day at 23 [deg]C on fuel CE10. In general 
practice, most boat builders use Class 1 fuel lines for both vent lines 
and fuel-feed lines to avoid carrying two types of fuel lines. Most 
fuel fill necks, which have a much larger diameter and are constructed 
differently, use materials meeting specifications for Class 2 fuel 
lines.
---------------------------------------------------------------------------

    \114\ Society of Automotive Engineers Surface Vehicle Standard, 
``Personal Watercraft Fuel Systems,'' SAE J2046, Issues 1993-01-19 
(Docket EPA-HQ-OAR-2004-0008-0179).
---------------------------------------------------------------------------

    Low-permeability fuel lines are in production today. One fuel line 
design, already used in some marine applications, uses a thermoplastic 
layer between two rubber layers to control permeation. This 
thermoplastic barrier may be either nylon or ethyl vinyl acetate. 
Barrier approaches in automotive applications include fuel lines with 
fluoroelastomers such as FKM and fluoroplastics such as Teflon and THV. 
In addition to presenting data on low-permeation fuel lines, Chapter 5 
of the Final RIA lists several fuel-system materials and their 
permeation rates. Molded rubber fuel line components, such as 
conventional primer bulbs and some handheld fuel lines, could meet the 
standard by using a fluoroelastomer such as FKM. The Final RIA also 
discusses low-permeation materials that retain their flexibility at low 
temperatures.
    Automotive fuel lines made of low-permeation plastic tubing are 
generally made from fluoroplastics. An added benefit of these low-
permeability fuel lines is that some fluoropolymers can be made to 
conduct electricity and therefore prevent the buildup of static 
charges. This type of fuel line can reduce permeation by more than an 
order of magnitude below the level associated with barrier-type fuel 
lines, but it is relatively inflexible and will need to be molded in 
specific shapes for each equipment or vessel design. Manufacturers have 
commented that they need flexible fuel lines to fit their many designs, 
resist vibration, prevent kinking, and simplify connections and 
fittings. An alternative to custom molding is to manufacture fuel lines 
with a corrugated profile (like a vacuum hose). Producing flexible 
fluoropolymer fuel lines is somewhat more expensive but the result is a 
product that meets emission standards without compromising in-use 
performance or ease of installation.

[[Page 59125]]

(b) Fuel Tank Permeation
    Blow-molding is widely used for the manufacture of Small SI, 
portable marine, and PWC fuel tanks. Typically, blow-molding is 
performed by creating a hollow tube, known as a parison, by pushing 
high-density polyethylene (HDPE) through an extruder with a screw. The 
parison is then pinched in a mold and inflated with an inert gas. In 
highway applications, low-permeation plastic fuel tanks are produced by 
blow molding a layer of ethylene vinyl alcohol (EVOH) or nylon between 
two layers of polyethylene. This process is called coextrusion and 
requires at least five layers: The barrier layer, adhesive layers on 
either side of the barrier layer, and two outside layers of HDPE that 
make up most of the thickness of the fuel tank walls. However, multi-
layer construction requires additional extruder screws, which 
significantly increases the cost of the blow-molding process. One 
manufacturer has developed a two-layer barrier approach using a 
polyarylamide inner liner. This technology is not in production yet but 
appears to be capable of permeation levels similar to the traditional 
EVOH barrier designs. This approach will enable blow-molding of low-
permeation fuel tanks with only one additional extruder screw.
    Multi-layer fuel tanks can also be formed using injection molding. 
In this method a low-viscosity polymer is forced into a thin mold to 
create the two sides of the fuel tank (e.g., top and bottom), which are 
then fused together. To add a barrier layer, a thin sheet of the 
barrier material is placed inside the mold before injecting the 
poleythylene. The polyethylene, which generally has a much lower 
melting point than the barrier material, bonds with the barrier 
material to create a shell with an inner liner.
    A less expensive alternative to coextrusion is to blend a low-
permeation resin with the HDPE and extrude it with a single screw to 
create barrier platelets. The trade name typically used for this 
permeation control strategy is Selar. The low-permeability resin, 
typically EVOH or nylon, creates noncontinuous platelets in the HDPE 
fuel tank to reduce permeation by creating long, tortuous pathways that 
the hydrocarbon molecules must navigate to escape through the fuel tank 
walls. Although the barrier is not continuous, this strategy can still 
achieve greater than a 90 percent reduction in permeation of gasoline. 
EVOH has much higher permeation resistance to alcohol than nylon so it 
will likely be the preferred material for meeting the new standard 
based on testing with a 10 percent ethanol fuel.
    Many fuel tanks for Small SI equipment are injection-molded out of 
either HDPE or nylon. Injection-molding can be used with lower 
production volumes than blow-molding due to lower tooling costs. In 
this method, a low-viscosity polymer is forced into a thin mold to 
create the two sides of the fuel tank; these are then fused together 
using vibration, hot plate or sonic welding. A strategy such as Selar 
has not been demonstrated to work with injection-molding due to high 
shear forces.
    An alternative to injection-molding is thermoforming, which is also 
cost-effective for lower production volumes. In this process, sheet 
material is heated and then drawn into two vacuum dies. The two halves 
are then fused while the plastic is still molten to form the fuel tank. 
Low-permeation fuel tanks can be constructed using this process by 
using multi-layer sheet material. This multi-layer sheet material can 
be extruded using materials similar to those used with multi-layer 
blow-molded fuel tank designs. A typical barrier construction includes 
a thin EVOH barrier, adhesion layers on both sides, a layer of HDPE 
regrind, and outside layers of pure virgin HDPE.
    Regardless of the molding process, another type of low-permeation 
technology for HDPE fuel tanks will be to treat the surfaces with a 
barrier layer. Two ways of achieving this are known as fluorination and 
sulfonation. The fluorination process causes a chemical reaction where 
exposed hydrogen atoms are replaced by larger fluorine atoms, which 
creates a barrier on the surface of the fuel tank. In this process, 
batches of fuel tanks are generally processed post-production by 
stacking them in a steel container. The container is then voided of air 
and flooded with fluorine gas. By pulling a vacuum in the container, 
the fluorine gas is forced into every crevice in the fuel tanks. 
Fluorinating with this process treats both the inside and outside 
surfaces of the fuel tank, thereby improving the reliability and 
durability of the permeation-resistance. As an alternative, blow-molded 
fuel tanks can be fluorinated during production by exposing the inside 
surface of the fuel tank to fluorine during the molding process. 
However, this method may not prove as effective as post-production 
fluorination.
    Sulfonation is another surface treatment technology where sulfur 
trioxide is used to create the barrier by reacting with the exposed 
polyethylene to form sulfonic acid groups on the surface. Current 
practices for sulfonation are to place fuel tanks on a small assembly 
line and expose the inner surfaces to sulfur trioxide, then rinse with 
a neutralizing agent. However, sulfonation can also be performed using 
a batch method. Either of these sulfonation processes can be used to 
reduce gasoline permeation by more than 95 percent.
    A fourth method for molding plastic fuel tanks is called rotation-
molding. Rotation-molding is a lower-cost alternative for smaller 
production volumes. In this method, a mold is filled with a powder form 
of polyethylene with a catalyst material. While the mold is rotated in 
an oven, the heat melts the plastic. When cross-link polyethylene 
(XLPE) is used, this heat activates a catalyst in the plastic, which 
causes a strong cross-link material structure to form. This method is 
often used for relatively large fuel tanks in Small SI equipment and 
for installed marine fuel tanks. The advantages of this method are low 
tooling costs, which allows for smaller production volumes, and 
increased strength and flame resistance. Flame resistance is especially 
important for installed marine fuel tanks subject to 33 CFR part 183. 
At this time, the barrier treatment approaches discussed above for HDPE 
have not been demonstrated to be effective for XLPE.
    We have evaluated two permeation control approaches for rotation-
molded fuel tanks. The first is to form an inner layer during the 
molding process. Historically, the primary approach for this is to use 
a drop box that opens after the XLPE tank begins to form. However, 
processes have been developed that eliminate the need for a drop box. 
With this construction a low-permeation inner liner can be molded into 
the fuel tank. Manufacturers are currently developing acetyl copolymer, 
nylon, and polybutylene terephthalate inner liners for this 
application. In fact, one fuel tank manufacturer is already selling 
tanks with a nylon inner liner into Class II Small SI equipment 
applications. Initial testing suggests that these barrier layers could 
be used to achieve the new standards.
    The second approach to creating a barrier layer on XLPE rotation-
molded fuel tanks is to use an epoxy barrier coating. One manufacturer 
has demonstrated that a low-permeation barrier coating can adhere to an 
XLPE fuel tank resulting in a permeation rate below the new standard. 
In this case, the manufacturer used a low level of fluorination to 
increase the surface energy of the XLPE so the epoxy will adhere 
properly.

[[Page 59126]]

    Marine fuel tanks are sometimes also fabricated out of either metal 
or fiberglass. Metal does not permeate so tanks that are constructed 
and installed properly to prevent corrosion should meet the new 
standards throughout their full service life. For fiberglass fuel 
tanks, one manufacturer has developed a composite that has been 
demonstrated to meet the new fuel tank permeation standard. Permeation 
control is achieved by incorporating fillers into a resin system and 
coating the assembled tank interior and exterior. This filler is made 
up of nanocomposites (very small particles of treated volcanic ash) 
which are dispersed into a carrier matrix. These particles act like the 
barrier platelets discussed above by creating a tortuous pathway for 
hydrocarbon migration through the walls of the fuel tank.
(c) Diurnal
    Portable marine fuel tanks are currently equipped with a valve that 
can be closed by the user when the tank is stored to contain vapor 
within the fuel tank. These fuel tanks are designed to hold the 
pressure that builds up when a sealed fuel tank undergoes normal daily 
warming. This valve must be opened when the engine is operating to 
prevent a vacuum from forming in the fuel tank as the fuel level in the 
tank decreases. A vacuum in the fuel tank could prevent fuel from being 
drawn into the engine. Because the valve is user-controlled, any 
emission control is dependent on user behavior. This can be corrected 
by replacing the user-controlled valve with a simple one-way valve in 
the fuel cap. For instance, a diaphragm valve that is common in many 
automotive applications seals when under positive pressure but opens at 
low-vacuum conditions.
    Personal watercraft currently use sealed systems with pressure-
relief valves that start venting vapors when pressures reach a 
threshold that ranges from 0.5 to 4.0 psi. We believe the new standard 
can be met through the use of a sealed fuel system with a 1.0 psi 
pressure-relief valve. Personal watercraft should therefore be able to 
meet the new standard with little or no change to current designs.
    For other vessels with installed fuel tanks, manufacturers have 
commented that even 1.0 psi of pressure would be too high for their 
applications.\115\ They expressed concern that their fuel tanks had 
large, flat surfaces that would deform or leak at pressures of 0.5 psi 
or higher. This concern led us to consider several technologies for 
controlling diurnal emissions without pressurizing the tank, including 
carbon canisters, volume-compensating air bags, and bladder fuel tanks.
---------------------------------------------------------------------------

    \115\ U.S. Coast Guard regulations in 33 CFR 183.586 require 
that marine fuel tanks must be designed to withstand 25,000 pressure 
cycles from 0-3 psi. Even though marine fuel tanks typically can 
withstand this pressure cycling without damage to the tank, the 
tanks tend to deform significantly when under pressure.
---------------------------------------------------------------------------

    The primary evaporative emission control device used in automotive 
applications is a carbon canister. With this technology, vapor 
generated in the tank is vented to a canister containing activated 
carbon. The fuel tank must be sealed such that the only venting that 
occurs is through the carbon canister. This prevents more than a 
minimal amount of positive or negative pressure in the tank. The 
activated carbon collects and stores the hydrocarbons. The activated 
carbon bed in automotive canisters is refreshed by drawing air over the 
carbon to purge the hydrocarbon vapors and route them to the engine's 
air intake where they are eventually burned as fuel for the engine.
    In a marine application, routing purged vapors to the engine's 
intake is not practical because of the potential complications with the 
engine and tank created by the variety of manufacturers and engine/tank 
configurations in the fleet each year. Therefore, canisters were not 
originally considered to be a practical technology for controlling 
diurnal vapor from boats. Since that time, however, we have collected 
information showing that the canister is purged sufficiently during 
cooling periods to substantially reduce diurnal emissions. When the 
fuel in the tank cools, fresh air is drawn back through the canister 
into the fuel tank. This fresh air partially purges the canister and 
returns hydrocarbons to the fuel tank. This creates open sites in the 
carbon so the canister can again collect vapor during the next heating 
event. Test data presented in Chapter 5 of the Final RIA show that a 
canister starting from empty is more than 90 percent effective until it 
reaches the point of saturation. Once it reaches saturation, a canister 
is still capable of reducing diurnal emissions by more than 60 percent 
due to the normal airflow across the canister bed during cooling 
periods. Adding active purging to route vapors to the engine's air 
intake during engine operation would improve the level of control 
somewhat, depending on how often the engine is operated.
    Manufacturers have raised the concern that it is common for fuel to 
pass out the vent line during refueling. If there were a canister in 
the vent line it would become saturated with fuel. While this would not 
likely cause permanent damage to the canister, we believe marine fuel 
systems should prevent liquid fuel from exiting the vent line for both 
environmental and safety reasons. A float valve or small orifice in the 
entrance to the vent line from the fuel tank would prevent liquid fuel 
from reaching the canister or escaping from the tank. Any pressure 
build-up from such a valve would cause fuel to back up the fill neck 
and shut off the fuel dispensing nozzle as it now does in automotive 
applications. In addition, a vapor space should be included to account 
for fuel expansion. Manufacturers have also expressed concerns for 
canister durability in marine applications due to vibration, shock, and 
humidity. However, there are now marine grades of activated carbon that 
are harder and more moisture-resistant than typical automotive carbon. 
Manufacturers installed canisters equipped with the marine grade carbon 
on 14 boats in a pilot program and encountered no problems. This is 
discussed in more detail in Chapter 5 of the Final RIA.
    Another concept for minimizing pressure in a sealed fuel tank is 
through the use of a volume-compensating air bag. The purpose of the 
bag is to fill up the vapor space above the liquid fuel. By minimizing 
the vapor space, the equilibrium concentration of fuel vapors occupies 
a smaller volume, resulting in a smaller mass of vapors. As the 
equilibrium vapor concentration increases with increasing temperature, 
the vapor space expands, which forces air out of the bag through the 
vent to atmosphere. Because the bag volume decreases to compensate for 
the expanding vapor space, total pressure inside the fuel tank stays 
very close to atmospheric pressure. Once the fuel tank cools in 
response to cooling ambient temperatures the resulting vacuum in the 
fuel tank would make the bag expand again by drawing air from the 
surrounding environment. Our test results show that pressure could be 
kept below 0.8 psi using a bag with a capacity equal to 25 percent of 
the fuel tank capacity. The use of a volume-compensating air bag, in 
conjunction with a pressure-relief valve, would be very effective in 
controlling diurnal emissions.
    Probably the most effective technology for reducing diurnal 
emissions from marine fuel tanks is through the use of a collapsible 
fuel bladder. In this concept, a low-permeation bladder is installed in 
the fuel tank to hold the fuel. As fuel is drawn from the bladder the 
vacuum created collapses the bladder. There is, therefore, no vapor 
space and no

[[Page 59127]]

pressure build-up from fuel heating. No vapors would be vented to the 
atmosphere since the bladder is sealed. This option could also 
eliminate running loss emissions and significantly reduce emissions 
during refueling that would normally result from dispensed fuel 
displacing vapor in the fuel tank. We have received comments that this 
would be cost-prohibitive because it could increase costs from 30 to 
100 percent, depending on tank size. However, bladder fuel tanks have 
safety advantages and they are already sold by at least one 
manufacturer to meet market demand in niche applications.
(d) Running Loss
    Running loss emissions can be controlled by sealing the fuel cap 
and routing vapors from the fuel tank to the engine intake. In doing 
so, vapors generated by heat from the engine will be burned in the 
engine's combustion chamber. It may be necessary to use a valve or 
limited-flow orifice in the purge line to prevent too much fuel vapor 
from reaching the engine and to prevent liquid fuel from entering the 
line if the equipment turns over. Depending on the configuration of the 
fuel system and purge line, a one-way valve in the fuel cap may be 
desired to prevent a vacuum in the fuel tank during engine operation. 
We anticipate that a system like this will eliminate running loss 
emissions. However, higher temperatures during operation and the 
additional length of vapor line will slightly increase permeation. 
Considering these effects, we still believe that the system described 
here will reduce running losses from Small SI equipment by more than 90 
percent.
    We are not adopting requirements to control running loss emissions 
from marine vessels. For portable marine fuel tanks and fuel tanks 
installed in vessels other than personal watercraft we expect the 
significant distance from the engine and the cooling effect of 
operating the vessel in water to prevent significant heating of the 
fuel tanks during engine operation. For personal watercraft, fuel tanks 
have a sealed system with pressure relief that should help contain 
running loss emissions. For other installed fuel tanks, we expect the 
system for controlling diurnal emissions will capture about half of any 
running losses that would occur.
(e) Diffusion
    A secondary benefit of the running loss control described above for 
Small SI equipment relates to diffusion emissions. In a system that 
vents running loss vapors to the engine, venting vapors will be routed 
through the vapor line to the engine intake, rather than through open 
vents in the fuel cap. This approach should therefore eliminate 
diffusion emissions.
    In the case of marine vessels, diffusion emissions are generally 
minimal due to long vent lines on the fuel tanks or the use of sealed 
fuel tanks. Further, the addition of diurnal emission controls will 
effectively control diffusion emissions.
(4) Regulatory Alternatives
    We considered both less and more stringent evaporative emission 
control alternatives for fuel systems used in Small SI equipment and 
Marine SI vessels. Chapter 11 of the Final RIA presents details on this 
analysis of regulatory alternatives. The results of this analysis are 
summarized below. We believe the new permeation standards are 
reflective of available technology and represent a step change in 
emission performance. Therefore, we consider the same permeation 
control scenario in the less stringent and more stringent regulatory 
alternatives.
    For Small SI equipment, we considered a less stringent alternative 
without running loss emission standards for Small SI engines. However, 
we believe controlling running loss emissions from nonhandheld 
equipment is feasible at a relatively low cost. Running loss emissions 
can be controlled by sealing the fuel cap and routing vapors from the 
fuel tank to the engine intake. Not requiring these controls is 
inconsistent with section 213 of the Clean Air Act. For a more 
stringent alternative, we considered applying a diurnal emission 
standard for all Small SI equipment. We believe passively purging 
carbon canisters could reduce diurnal emissions by 50 to 60 percent 
from Small SI equipment. However, we believe there would be significant 
costs to add carbon canisters to all Small SI equipment nationwide, 
especially when taking packaging and vibration into account. The cost 
sensitivity is especially noteworthy given the relatively low emissions 
levels (on a per-equipment basis) from such small fuel tanks.
    For marine vessels, we considered a less stringent alternative, 
where there would be no diurnal emission standard for vessels with 
installed fuel tanks. However, installed fuel tanks on marine vessels 
have much higher capacities than those used in Small SI applications. 
Our analysis indicates that carbon canisters are feasible for boats at 
relatively low cost. While packaging and vibration are also issues with 
marine applications, we believe these issues have been addressed. 
Manufacturers installed carbon canisters in fourteen boats in a pilot 
program. The results demonstrated the feasibility of this technology. 
The new standards are achievable through engineering design-based 
certification with canisters that are much smaller than the fuel tanks. 
In addition, sealed systems, with pressure-control strategies will be 
accepted under the provisions for design-based certification. For a 
more stringent scenario, we considered a standard that would require 
boat builders to use an actively purged carbon canister. This means 
that the engine would draw air through the canister during operation to 
purge the canister of stored hydrocarbons. However, we rejected this 
option because marine engines operate too infrequently to consistently 
purge the canister to allow for increased storage of further vapor 
loading from the fuel tank. The gain in overall efficiency would be 
quite small relative to the complexity of integrating engine purge 
strategies and hardware into a vessel-based control strategy. The 
additional benefit of an actively purged diurnal control system is 
small in comparison to its cost and complexity.
(5) Our Conclusions
    We believe the new evaporative emission standards reflect what 
manufacturers can achieve through the application of available 
technology. We believe the lead time is necessary and adequate for fuel 
tank manufacturers, fuel line manufacturers, engine manufacturers, 
equipment manufacturers, and boat builders to select, design, and 
produce evaporative emission control strategies that will work best for 
their product lines. We expect that meeting these requirements will 
pose a challenge, but one that is feasible when taking into 
consideration the availability and cost of technology, lead time, 
noise, energy, and safety. The role of these factors is presented in 
detail in Chapters 5 and 6 of the Final RIA. As discussed in Section 
VII, we do not believe the new standards will have negative effects on 
energy, noise, or safety and may lead to some positive effects.

VII. Energy, Noise, and Safety

    Section 213 of the Clean Air Act directs us to consider the 
potential impacts on safety, noise, and energy when establishing the 
feasibility of emission standards for nonroad engines. Furthermore, 
section 205 of EPA's 2006 Appropriations Act requires us to assess 
potential safety issues, including the risk of fire and burn to 
consumers in use, associated with the new emission

[[Page 59128]]

standards for nonroad spark-ignition engines below 50 horsepower.\116\ 
As detailed in the following sections, we expect that the new exhaust 
and evaporative emission standards will either have no adverse affect 
on safety, noise, and energy or will improve certain aspects of these 
important characteristics. A more in-depth discussion of these topics 
relative to the new exhaust and evaporative emission standards is 
contained in Chapters 4 and 5 of the Final RIA, respectively. Also, our 
conclusions relative to safety are fully documented in our 
comprehensive safety study which is discussed in the next section.
---------------------------------------------------------------------------

    \116\ Department of the Interior, Environment, and Related 
Agencies Appropriations Act, 2006, Pub. L. No. 109-54, Title II, 
sec. 205, 119 Stat. 499, 532 (August 2, 2005).
---------------------------------------------------------------------------

A. Safety

    We conducted a comprehensive, multi-year safety study of spark-
ignition engines that focused on the four areas where we are adopting 
new emission standards.\117\ These areas are:
---------------------------------------------------------------------------

    \117\ ``EPA Technical Study on the Safety of Emission Controls 
for Nonroad Spark-Ignition Engines < 50 Horsepower,'' Office of 
Transportation and Air Quality, U.S. Environmental Protection 
Agency, Washington, DC, EPA420-R-06-006, March 2006. This document 
is available in Docket EPA-HQ-OAR-2004-0008. This report was also 
subject to peer review, as described in a peer review report that is 
also available in the docket.
---------------------------------------------------------------------------

     New catalyst-based HC+NOX exhaust emission 
standards for Class I and Class II nonhandheld spark-ignition engines;
     New fuel evaporative emission standards for nonhandheld 
and handheld equipment;
     New HC+NOX exhaust emission standards for 
outboard and personal watercraft engines and vessels, and a new CO 
exhaust emission standard for nonhandheld engines used in marine 
auxiliary applications; and
     New fuel evaporative emission standards for outboard and 
personal watercraft engines and vessels.
    Each of these four areas is discussed in greater detail in the next 
sections.
(1) Exhaust Emission Standards for Small Spark-Ignition Engines
    The technology approaches that we assessed for achieving the new 
Small SI engine standards included exhaust catalyst aftertreatment and 
improvements to engine and fuel system designs. In addition to our own 
testing and development effort, we also met with engine and equipment 
manufacturers to better understand their designs and technology and to 
determine the state of technological progress beyond EPA's Phase 2 
emission standards.
    The scope of our safety study included Class I and Class II engine 
systems that are used in residential walk-behind and ride-on lawn mower 
applications, respectively. Residential lawn mower equipment was chosen 
for the following reasons.
     Lawn mowers and the closely-related category of lawn 
tractors overwhelmingly represent the largest categories of equipment 
using Class I and Class II engines.
     Consumer Product Safety Commission (CPSC) data indicate 
that more thermal burn injuries are associated with lawn mowers than 
occur with other nonhandheld equipment; lawn mowers therefore represent 
the largest thermal burn risk for these classes of engines.
     General findings regarding advanced emission control 
technologies for residential lawn and garden equipment carry over to 
commercial lawn and turf care equipment as well as to other nonhandheld 
equipment using Class I and Class II engines.
    We conducted the technical study of the incremental risk on several 
fronts. First, working with CPSC, we evaluated their reports and 
databases and other outside sources to identify those in-use situations 
which create fire and burn risk for consumers. The outside sources 
included meetings, workshops, and discussions with engine and equipment 
manufacturers. From this information, we identified ten scenarios for 
evaluation that covered a comprehensive variety of in-use conditions or 
circumstances which potentially could lead to an increased risk in 
burns or fires.
    Second, we conducted extensive laboratory and field testing of both 
current technology (Phase 2) and prototype catalyst-equipped advanced-
technology engines and equipment (Phase 3) to assess the emission 
control performance and thermal characteristics of the engines and 
equipment. This testing included a comparison of exhaust system, 
engine, and equipment surface temperatures using still and full motion 
video thermal imaging equipment.
    Third, we conducted a design and process Failure Mode and Effects 
Analyses (FMEA) comparing current Phase 2 and Phase 3 compliant engines 
and equipment to evaluate incremental changes in risk probability as a 
way of evaluating the incremental risk of upgrading Phase 2 engines to 
meet Phase 3 emission standards.\118\ This is an engineering analysis 
tool to help engineers and other professional staff to identify and 
manage risk. In an FMEA, potential failure modes, causes of failure, 
and failure effects are identified and a resulting risk probability is 
calculated from these results. This risk probability is used by the 
FMEA team to rank problems for potential action to reduce or eliminate 
the causal factors. Identifying these causal factors is important 
because they are the elements that a manufacturer can consider to 
reduce the adverse effects that might result from a particular failure 
mode.
---------------------------------------------------------------------------

    \118\ ``EPA Technical Study on the Safety of Emission Controls 
for Nonroad Spark-Ignition Engines < 50 Horsepower,'' Office of 
Transportation and Air Quality, U.S. Environmental Protection 
Agency, Washington, DC, EPA420-R-06-006, March 2006. This document 
is available in Docket EPA-HQ-OAR-2004-0008.
---------------------------------------------------------------------------

    Our technical work and subsequent analysis of all the data and 
information strongly indicate that effective catalyst-based standards 
can be implemented without an incremental increase in the risk of fire 
or burn to the consumer either during or after using the equipment. 
Similarly, we did not find any increase in the risk of fire during 
refueling or in storage near typical combustible materials. For 
example, our testing program demonstrated that properly designed 
catalyst-mufflers could, in some cases, actually result in systems that 
were significantly cooler than many current original equipment 
mufflers. A number of design elements appear useful to properly 
managing heat loads including: (1) The use of catalyst designs that 
minimize CO oxidation through careful selection of catalyst size, 
washcoat composition, and precious metal loading; (2) positioning the 
catalyst within the cooling air flow of the engine fan or redirecting 
some cooling air over the catalyst area with a steel shroud; (3) 
redirecting exhaust flow through multiple chambers or baffles within 
the catalyst-muffler; and (4) larger catalyst-muffler volumes than the 
original equipment muffler.
(2) Fuel Evaporative Emission Standards for Nonhandheld and Handheld 
Engines and Equipment
    We reviewed the fuel line and fuel tank characteristics for 
nonhandheld and handheld equipment and evaluated control technology 
which could be used to reduce evaporative emissions from these two 
subcategories. The available technology is capable of achieving 
reductions in fuel tank and fuel line permeation without an adverse 
incremental impact on safety. For fuel lines and fuel tanks, the 
applicable consensus safety standards, manufacturer specific test 
procedures and EPA requirements are sufficient to

[[Page 59129]]

ensure that there will be no increase in the types of fuel leaks that 
lead to fire and burn risk during in-use operation. Instead, these 
standards will reduce vapor emissions both during operation and in 
storage. That reduction, coupled with some expected equipment redesign, 
is expected to lead to reductions in the risk of fire or burn without 
affecting component durability.
    The Failure Mode and Effects Analyses, which was described in the 
previous section, also evaluated permeation and running loss controls 
on nonhandheld engines. We found that these controls will not increase 
the probability of fire and burn risk from those expected with current 
fuel systems, but could in fact lead to directionally improved systems 
from a safety perspective. Finally, the running loss control program 
being promulgated for nonhandheld equipment will lead to changes that 
are expected to reduce risk of fire during in-use operation. Moving 
fuel tanks away from heat sources, improving cap designs to limit 
leakage on tip over, and requiring a tethered cap will all help to 
eliminate conditions which lead to in-use problems related to fuel 
leaks and spillage. Therefore, we believe the application of emission 
control technology to reduce evaporative emissions from these fuel 
lines and fuel tanks will not lead to an increase in incremental risk 
of fires or burns and in some cases is likely to at least directionally 
reduce such risks.
(3) Exhaust Emission Standards for Outboard and Personal Watercraft 
Marine Engines and Vessels and Marine Auxiliary Engines
    Our analysis of exhaust emission standards for OB/PWC engines and 
marine auxiliary engines found that the U.S. Coast Guard (USCG) has 
comprehensive safety standards that apply to engines and fuel systems 
used in these vessels. Additionally, organizations such as the Society 
of Automotive Engineers, Underwriters Laboratories, and the American 
Boat and Yacht Council (ABYC) also have safety standards that apply in 
this area. We also found that the four-stroke and two-stroke direct 
injection engine technologies which are likely to be used to meet the 
exhaust emission standards contemplated for OB/PWC engines are in 
widespread use in the vessel fleet today. These more sophisticated 
engine technologies are replacing the traditional two-stroke carbureted 
engines. The four-stroke and two-stroke direct injection engines meet 
applicable USCG and ABYC safety standards and future products will do 
so as well. The new emission standards must be complementary to 
existing safety standards and our analysis indicates that this will be 
the case. There are no known safety issues with the advanced 
technologies compared with two-stroke carbureted engines. The newer-
technology engines arguably provide safety benefits due to improved 
engine reliability and range in-use. Based on the applicability of USCG 
and ABYC safety standards and the good in-use experience with advanced-
technology engines in the current vessel fleet, we believe new emission 
standards will not create an incremental increase in the risk of fire 
or burn to the consumer.
(4) Fuel Evaporative Emission Standards for Outboard and Personal 
Watercraft Engines and Vessels
    We reviewed the fuel line and fuel tank characteristics for marine 
vessels and evaluated control technology which could be used to reduce 
evaporative emissions from boats. With regard to fuel lines, fuel 
tanks, and diurnal controls, there are rigorous USCG, ABYC, United 
Laboratories, and Society of Automotive Engineers standards which 
manufacturers will continue to meet for fuel system components. All 
these standards are designed to address the in-use performance of fuel 
systems, with the goal of eliminating fuel leaks. The low-permeation 
fuel lines and tanks needed to meet the Phase 3 requirements will need 
to pass these standards and every indication is that they will 
pass.\119\
---------------------------------------------------------------------------

    \119\ ``EPA Technical Study on the Safety of Emission Controls 
for Nonroad Spark-Ignition Engines < 50 Horsepower,'' Office of 
Transportation and Air Quality, U.S. Environmental Protection 
Agency, Washington, DC, EPA420-R-06-006, March 2006. This document 
is available in Docket EPA-HQ-OAR-2004-0008.
---------------------------------------------------------------------------

    Furthermore, the EPA permeation certification requirements related 
to emissions durability will add an additional layer of assurance. Low-
permeation fuel lines are used safely today in many marine vessels. 
Low-permeation fuel tanks and diurnal emission controls have been 
demonstrated in various applications for many years without an increase 
in safety risk. Furthermore, a properly designed fuel system with fuel 
tank and fuel line permeation controls and diurnal emission controls 
will reduce the fuel vapor in the boat, thereby reducing the 
opportunities for fuel related fires. In addition, using improved low-
permeation materials coupled with designs meeting USCG and ABYC 
requirements should reduce the risk of fuel leaks into the vessel. We 
believe the application of emission control technologies on marine 
engines and vessels for meeting the new fuel evaporative emission 
standards will not lead to an increase in incremental risk of fires or 
burns, and in many cases may incrementally decrease safety risk in 
certain situations.

B. Noise

    As automotive technology demonstrates, achieving low emissions from 
spark-ignition engines can correspond with greatly reduced noise 
levels. Direct-injection two-stroke and four-stroke OB/PWC have been 
reported to be much quieter than traditional carbureted two-stroke 
engines. Catalysts in the exhaust act as mufflers which can reduce 
noise. Additionally, adding a properly designed catalyst to the 
existing muffler found on all Small SI engines can offer the 
opportunity to incrementally reduce noise.

C. Energy

(1) Exhaust Emission Standards
    Adopting new technologies for controlling fuel metering and air-
fuel mixing, particularly the conversion of some carbureted engines to 
advanced fuel injection technologies, will lead to improvements in fuel 
consumption. This is especially true for OB/PWC engines where we expect 
the new standards to result in the replacement of old technology 
carbureted two-stroke engines with more fuel-efficient technologies 
such as two-stroke direct injection or four-stroke engines. Carbureted 
crankcase-scavenged two-stroke engines are inefficient in that 25 
percent or more of the fuel entering the engine may leave the engine 
unburned. EPA estimates that conversion to more fuel efficient 
recreational marine engines will save 61 million gallons of gasoline 
per year in 2030. The conversion of some carbureted Small SI engines to 
fuel injection technologies is also expected to improve fuel economy. 
We estimate approximately 18 percent of the Class II engines will be 
converted to fuel injection and that this will result in a fuel savings 
of about 10 percent for each converted engine. This translates to a 
fuel savings of about 56 million gallons of gasoline in 2030 when all 
the Class II engines used in the U.S. will comply with the Phase 3 
standards. By contrast, the use of catalyst-based control systems on 
Small SI engines is not expected to change their fuel consumption 
characteristics.
(2) Fuel Evaporative Emission Standards
    We anticipate that the new fuel evaporative emission standards will 
have a positive impact on energy. By capturing or preventing the loss 
of fuel

[[Page 59130]]

due to evaporation, we estimate that the lifetime average fuel savings 
will be about 1.6 gallons for an average piece of Small SI equipment 
and 32 gallons for an average boat. This translates to a fuel savings 
of about 41 million gallons for Small SI equipment and 30 million 
gallons for Marine SI vessels in 2030 when most of the affected 
equipment used in the U.S. will be expected to have evaporative 
emission controls.

VIII. Requirements Affecting Other Engine and Vehicle Categories

    We are making several regulatory changes that will affect other 
engines, equipment, vehicles, and vessels in our nonroad and highway 
programs. These changes are described in the following subsections. As 
noted in these subsections, those changes that were not proposed are 
being made in response to the comments we received.

A. State Preemption

    Section 209(e) of the Clean Air Act prohibits states and their 
political subdivisions from adopting or enforcing standards and other 
requirements relating to the control of emissions from nonroad engines 
or vehicles. Section 209(e) authorizes EPA to waive this preemption for 
California for standards and other requirements for nonroad engines and 
vehicles, excluding new engines that are smaller than 175 horsepower 
used in farm or construction equipment or vehicles and new locomotives 
or new engines used in locomotives. States other than California may 
adopt and enforce standards identical to California standards 
authorized by EPA.
    EPA promulgated regulations implementing section 209(e) on July 20, 
1994 (59 FR 36987). EPA subsequently promulgated revised regulations 
implementing section 209(e) on December 30, 1997 (62 FR 67733). See 40 
CFR part 85, subpart Q. As proposed, we are creating a new part 1074 
that describes the federal preemption of state and local emission 
requirements. This is being done as part of EPA's ongoing effort to 
write its regulations in plain language format in subchapter U of title 
40 of the CFR. The final regulations are based directly on the existing 
regulations in 40 CFR part 85, subpart Q. With the exception of the 
specific changes described in this section, we are not changing the 
meaning of these regulations.
    Pursuant to section 428 of the 2004 Consolidated Appropriations 
Act, we are adding regulatory language to implement the legislative 
restriction on states other than California adopting, after September 
1, 2003, standards or other requirements applicable to spark-ignition 
engines smaller than 50 horsepower. We are also adding, pursuant to 
that legislation, criteria for EPA's consideration in authorizing 
California to adopt and enforce standards applicable to such 
engines.\120\
---------------------------------------------------------------------------

    \120\ See section 428 of the Appropriations Act for 2004.
---------------------------------------------------------------------------

    In addition, on July 12, 2002, the American Road and Transportation 
Builders Association (ARTBA) petitioned EPA to amend EPA's rules 
implementing section 209(e) of the Act.\121\ In particular, ARTBA 
petitioned EPA to amend its regulations and interpretive rule regarding 
preemption of state and local requirements ``that impose in-use and 
operational controls or fleet-wide purchase, sale or use standards on 
nonroad engines.'' \122\ ARTBA believes such controls should be 
preempted.
---------------------------------------------------------------------------

    \121\ ``Petition to Amend Rules Implementing Clean Air Act 
section 209(e),'' American Road and Transportation Builders 
Association (ARTBA), July 12, 2002. Also, EPA received an additional 
communication from ARTBA urging EPA to grant the petition after the 
decision of the U.S. Supreme Court in EMA v. SCAQMD, 541 U.S. 246 
(2004). See ``ARTBA Petition,'' L. Joseph, ARTBA, to D. Dickinson & 
R. Doyle, EPA, April 30, 2004. These documents are available in 
Docket EPA-HQ-OAR-2004-0008.
    \122\ In 1994, EPA promulgated an interpretive rule at Appendix 
A to subpart A of 40 CFR part 89. This interpretive rule was amended 
as part of the rule promulgated on December 30, 1997 (62 FR 67733). 
The appendix provides, among other things, that state restrictions 
on the use and operation of nonroad engines are not preempted under 
section 209.
---------------------------------------------------------------------------

    As we were already planning to revise the preemption provisions to 
a certain extent in this rule, we determined that it was appropriate to 
respond to ARTBA's petition in the context of this rule, and noticed 
our review in the proposal for this rule, giving the public the ability 
to respond to provide comments regarding ARTBA's petition. After 
reviewing ARTBA's petition and the comments received regarding the 
petition, EPA is not adopting the changes requested by ARTBA in its 
petition. While EPA is in agreement with ARTBA regarding some of the 
observations it makes in the petition regarding preemption of state 
standards, particularly state fleet average standards, we believe the 
current regulatory language is sufficient regarding preemption of such 
standards. In addition, we believe that it would be inappropriate to 
grant ARTBA's request that we amend the existing regulations to find 
that restrictions on the use and operation of nonroad engines are 
preempted under section 209(e) of the Act. For a full discussion and 
response to ARTBA's petition and the comments we received on the 
petition, please review ``Response to the Petition of American Road and 
Transportation Builders Association to Amend Regulations Regarding the 
Preemption of State Standards Regulating Emissions from Nonroad 
Engines,'' which has been placed in the docket for this rulemaking.

B. Certification Fees

    Under our current certification program, manufacturers pay a fee to 
cover the costs associated with various certification and other 
compliance activities associated with an EPA issued certificate of 
conformity. These fees are based on the actual and/or projected cost to 
EPA per emission family. We are establishing a new fees category for 
certification related to the new evaporative emission standards. 
Sections III and VI describe how the fees apply to sterndrive/inboard 
marine engines and equipment and vessels subject to evaporative 
emission standards since manufacturers are not currently required to 
pay certification fees for these products.
    In addition, as proposed, we are creating a new part 1027 in title 
40 that incorporates the new and existing fee requirements under a 
single part in the regulations. This is being done as part of EPA's 
ongoing effort to write its regulations in plain language format in 
subchapter U of title 40 of the CFR. The final regulations are based 
directly on the existing regulations in 40 CFR part 85, subpart Y. 
Aside from a variety of specific changes, moving this language to part 
1027 is not intended to affect the substance of the existing fee 
provisions. We are making the following adjustments and clarifications 
to the existing regulations:
     Establishing a new fees category for new evaporative 
emission standards.
     Eliminating one of the paths for applying for a reduced 
fee. The existing regulations specify that applications covering fewer 
than six vehicles or engines, each with an estimated retail sales price 
below $75,000, shall receive a certificate for five vehicles or 
engines. Holders of these certificates are required to submit an annual 
model year reduced fee payment report adjusting the fees paid. We are 
eliminating this pathway and the associated report, as they are complex 
and have been rarely used.
     Clarifying the obligation to make additional payment on a 
reduced fee certificate if the actual final sales price is more than 
the projected retail sales price for a reduced fee vehicle or engine. 
As before, the final fee payment must also reflect the actual number of 
vehicles.
     Applying the calculated fee changes for later years, which 
are based on the

[[Page 59131]]

Consumer Price Index and the total number of certificates, only after 
the change in the fee's value since the last reported change has 
reached $50. The fee change for the ``Other'' category for calendar 
year 2005 to 2006 changed from $826 to $839 and for non-road 
compression-ignition engines from $1822 to $1831. Under the final rule, 
the fee will not change until such time as the fee increase will be 
$50.00 or greater. This might not occur after one year, but after two 
or more years the calculated increase in a fee based on the change in 
the Consumer Price Index might be more than $50.00. The same applies if 
the price goes up or down. For example, if the fee published in EPA 
guidance for a category of engine was $1,000 in 2011 and the calculated 
fee for 2012 is $990 and in 2013 is $1040, the fee in 2013 will remain 
at $1,000 since the change from the 2011 fee is only $40. This will 
minimize confusion related to changing fees where the calculated fee is 
very close to that already established for the previous year. It will 
also lessen paperwork and administrative burdens for manufacturers and 
EPA in making adjustments for small fees changes for applications that 
are completed around the change in a calendar year. The number of 
certificates may go up or down in any given year, while the Consumer 
Price Index will generally increase annually. As a result, this change 
will be revenue-neutral or will perhaps slightly decrease overall 
revenues.
     Clarifying that all fee-related records need to be kept, 
not just those related to the ``final reduced fee calculation and 
adjustment.''
     Adding www.Pay.gov or other methods specified in guidance 
as acceptable alternative methods for payment and filing of fee forms.
     Establishing a single deadline for all types of refunds: 
Total, partial for reduced fees, and partial for corrections. In all 
cases, refund requests must be received within six months of the end of 
the model year. A common type of request is due to an error in the fee 
amount paid as a result of changed fees for a new calendar year. We 
frequently apply these overpayments to other pending certification 
applications. This is less burdensome than applying for a simple 
refund, both for EPA and for most manufacturers. Applications to apply 
such refunds to other certification applications must also be received 
within six months of the end of the model year of the original engine 
family or test group.
     Emphasizing with additional cross references that the same 
reduced fee provisions that apply to Independent Commercial Importers 
also apply to modification and test vehicle certificates under 40 CFR 
85.1509 and 89.609: The number of vehicles covered is listed on the 
certificate, a revision of the certificate must be applied for and 
additional reduced fee payments made if additional vehicles are to be 
covered, and the certificate must be revised to show the new total 
number of vehicles to be covered.
    We are making one additional change in the regulations based on 
comments regarding the limits on fees that apply for locomotive and 
marine diesel remanufacturing systems or kits. We are specifying that 
certified remanufacturing systems or kits under these programs are 
eligible for reduced fees based on the value of the remanufacturing 
system or kit rather than the value of the whole locomotive or vessel. 
This is analogous to existing provisions for fuel-conversion kits in 
which the regulation specifies that the basis for evaluating the one-
percent threshold is the value of the kit alone. We are therefore 
modifying the regulation to allow for reduced fees where the assessed 
fee is more than one percent of the value of the remanufacturing system 
or kit. This applies equally to locomotives and marine diesel engines, 
which are now also subject to remanufacturing certification provisions.

C. Amendments to General Compliance Provisions in 40 CFR Part 1068

    We have adopted final rules to apply the provisions of part 1068 
for locomotives regulated under part 1033, nonroad diesel engines 
regulated under 40 CFR part 1039, marine diesel engines regulated under 
40 CFR part 1042, Large SI engines regulated under 40 CFR part 1048, 
and recreational vehicles regulated under 40 CFR part 1051. In this 
final rule we are applying these provisions for Small SI and Marine SI 
engines, equipment, and vessels. Any changes we make to part 1068 will 
apply equally for these other types of engines and vehicles.
    The following paragraphs describe several amendments we are making 
to part 1068, including several changes and clarifications subsequent 
to the proposed rule. We summarize several of the most important 
changes since the proposal in Section X.
(3) Partially Complete Engines
    We proposed to revise our definition of ``engine'' to be clear that 
it includes those engines that are only partially complete. We received 
many comments regarding the impact of this clarification. The final 
approach described in this subsection includes revisions from the 
proposal to address these comments.
    We are aware that in some cases manufacturers produce nonroad 
engines by starting with a complete or partially complete engine from 
another manufacturer and modify it as needed for the particular 
application. This is especially common for Marine SI and Large SI 
engines and equipment, but it may also occur for other types of nonroad 
engines and equipment. We are aware that an interpretation of the 
prohibited acts in Sec.  1068.101 would disallow this practice because 
the original engine manufacturer is arguably selling an engine that is 
not covered by a certificate of conformity even though emission 
standards apply. We are also concerned that some manufacturers might 
choose to exploit this ambiguity by importing partially complete 
engines, contending that these are not subject to standards, where the 
company receiving the shipment would assemble the engines and sell them 
without going through the certification process. It would be very 
difficult to monitor or enforce requirements with this kind of business 
activity.
    We are addressing this first by defining ``engine'' for the 
purposes of the regulations (see Sec.  1068.30). To do this, we 
differentiate between complete engines and partially complete engines, 
both of which need to be covered by a valid certificate or an 
exemption. An engine block becomes an ``engine'' subject to standards 
when a crankshaft is installed. This represents a substantial step in 
the manufacturing process. Selecting a later point in the assembly 
process would only create the potential for loopholes for companies 
wanting to sell products that fall just short of what it would take to 
be subject to standards.
    Partially complete engines include any engine that has not been 
fully assembled or is not yet in its final configuration. This might 
include short blocks that are shipped to another location for final 
assembly. It might also include full assembled engines that will be 
installed in all-terrain vehicles (which are subject to equipment-based 
standards). Even though these engines are still subject to further 
assembly or modification, they are subject to standards and 
certification requirements and therefore may not be introduced into 
U.S. commerce without an exemption. We are adopting provisions to 
accommodate various assembly paths reflecting current business 
practices. For example, we are specifying that manufacturers may ship 
partially

[[Page 59132]]

complete engines between two of their facilities (see Sec.  1068.260). 
We would require manufacturers to notify us that this practice is 
occurring and get our approval, but they would not need to take any 
additional steps.
    We have greater concerns about ensuring that engines always reach 
their certified configuration when engines are shipped from one company 
to another, or anytime a company that is not a certificate holder is 
introducing partially complete engines into U.S. commerce. To address 
this, we are adopting detailed provisions in Sec.  1068.262. These 
provisions clarify and expand on the provisions adopted earlier in 
Sec.  1068.330 for imported engines. The original engine manufacturer 
needs a written request from a secondary engine manufacturer who 
already holds a valid certificate of conformity for the engine based on 
its final configuration and application. The request from the secondary 
engine manufacturer would also identify an engine family name. This 
engine family name could be any valid family name for that engine model 
and would not necessarily need to be the actual family name for that 
engine in its final configuration. For example, a secondary engine 
manufacturer might sell a single engine model into stationary, marine, 
and industrial applications, each of which might have a different 
engine family name. As long as there is a valid family name, the 
original engine manufacturer could be confident that the secondary 
engine manufacturer will be modifying the engine to be in a certified 
configuration. The original engine manufacturer would apply a removable 
label identifying their corporate name and stating that the engines are 
exempt under these provisions for partially complete engines. The label 
or the accompanying bill of lading would also name the secondary engine 
manufacturer as the certificate-holder and identify the destination for 
the engines being shipped. The labels may be applied to individual 
engines or they may be applied to the packaging for engines that are 
shipped together.
    We are accommodating the need to start assembling products while 
the application for certification is pending. We would treat these 
shipments the same as we would treat early production for a 
manufacturer building its own engine blocks, as described in Section 
VIII.C.2.
    There are also situations in which a secondary manufacturer would 
build engines that will continue to be exempt after the point of final 
assembly. For example, some engines may be intended only for export, 
for national security, or for developmental or testing purposes. In 
these cases where the secondary engine manufacturer is unable to 
identify a valid family name, they would simply inform the original 
manufacturer of the regulatory cite that allows them to produce 
exempted engines. Note that this process is generally permitted only in 
the case where the original engine manufacturer and the secondary 
engine manufacturer are certificate holders, which means that they have 
at least one certificate of conformity with EPA (even if that is for a 
different type of engine).
    The regulation includes language to clarify that the original 
manufacturer is liable for shipment of properly labeled engines to a 
manufacturer who has applied for or received a valid certificate of 
conformity or who has an exemption for the engines being shipped. The 
original engine manufacturer would be in violation if (1) the engines 
and their labels are separated before reaching the secondary engine 
manufacturer, (2) if the engines are shipped to the wrong destination, 
or (3) if the secondary engine manufacturer does not in fact have the 
certification or exemption in place as prescribed. We expect original 
engine manufacturers to have a clear relationship with their associated 
secondary engine manufacturers so they can readily verify the status of 
any particular certification or exemption; due diligence on the part of 
the original engine manufacturer should allow for a high degree of 
confidence that all the applicable conditions are met.
    Another situation involving partially complete engines involves the 
engine block as a replacement part where, for example, the original 
engine had major structural damage. In this case the engine 
manufacturer will typically sell an engine block with piston, 
crankshaft, and other internal components to allow the user to repower 
with many of the components from the original engine. Under the new 
definitions, these short blocks or three-quarter blocks are considered 
new engines subject to emission standards. We have addressed this 
situation in the regulations with the replacement engine provisions in 
Sec.  1068.240. This may involve one of two basic situations. In cases 
where the short block is no different than what is being produced for 
complete, certified engines in the current model year, there is no need 
for demonstrations or approval for an exemption from emission 
standards. We are adding clarifying language that these partially 
complete engines may be sold to repower failed engines without 
restriction. We do, however, require that these engines be labeled to 
prevent someone from circumventing the regulations by using these short 
blocks to build new noncompliant engines. These labels would serve as a 
preventive measure and make it easier for EPA inspectors to detect a 
violation. In cases where the short block is from a previous model year 
when less stringent emission standards apply, we would want to treat 
this under the same replacement-engine provisions that apply to 
complete engines. Section VIII.C.5 describes these provisions related 
to replacement engines in greater detail.
    We are also further clarifying the requirement for engine 
manufacturers to sell engines in their certified configuration (see 
Sec.  1068.260). The existing provisions in part 1068 describe how 
manufacturers may use delegated assembly to arrange for equipment 
manufacturers to separately source aftertreatment components for 
engines that depend on aftertreatment to meet emission standards. We 
are including language to clarify that we will consider an engine to be 
in its certified configuration in certain circumstances even if 
emission-related components are not assembled to the engine. This is 
intended to reflect common practice that has developed over the years. 
We are also clarifying that engines may be shipped without radiators or 
other components that are unrelated to emission controls, and that we 
may approve requests to ship engines without emission-related 
components in some circumstances. This will generally be limited to 
equipment-related components such as vehicle-speed sensors. We may 
specify conditions that we determine are needed to ensure that shipping 
the engine without such components will not result in the engine being 
operated outside of its certified configuration.
(4) Provisions Related to Model Year and Date of Manufacture
    We proposed definitions of ``model year'' and ``date of 
manufacture'' in conjunction with our proposed definition of 
``engine''. We received a number of comments regarding these 
definitions. As a result of these comments, we are finalizing the 
approach described below.
    Until now, the regulations have not specified the point in the 
assembly or procurement process that should serve as the basis for 
establishing an engine's date of manufacture for purposes of deciding 
which standards apply. For the large majority of engines, this is not 
an issue, since total assembly time from start to finish is measured in 
hours or

[[Page 59133]]

perhaps days. As a result, it is relatively uncommon for there to be 
any uncertainty regarding an engine's date of manufacture. 
Nevertheless, we have learned that there are widely diverging practices 
for establishing an engine's date of manufacture in several special 
situations, which means there is a different effective date of new 
emission standards for different manufacturers. This is especially of 
interest for larger engines, which are more likely to have longer 
assembly times and to be assembled in multiple stages at different 
facilities. We believe it is important to establish a clear requirement 
in this regard to avoid ambiguity and different interpretations. A 
consistent approach preserves a level playing field and may prevent 
some manufacturers from manipulating their build dates to circumvent 
the regulations.
    We expected that the proposed definition of ``date of 
manufacture,'' based on reaching a final, running configuration, was 
the most straightforward and logical interpretation. The comments 
received and the ensuing discussions made clear that this 
interpretation was not universally held. The diversity of views 
underscores the need for the regulations to establish a clear and 
uniform requirement.
    We recognize the concern that manufacturers need a high degree of 
certainty regarding applicable emission standards when they initiate 
assembly of an engine. Any number of variables in the production 
process could affect how long it takes to finish building an engine. We 
therefore believe it is most appropriate to match up the definitions 
for ``date of manufacture'' and ``engine'' by specifying that an 
engine's date of manufacture should be based on the date that the 
crankshaft is installed in the engine. This provides manufacturers with 
the control they need to determine which emission standards apply when 
they start to build the engine.
    We are aware that secondary engine manufacturers may have inventory 
and assembly procedures that are not tied to the actual date of 
crankshaft installation by the original engine manufacturer. We are 
therefore specifying for this situation that the date of manufacture is 
generally the date the secondary engine manufacturer receives shipment 
of the partially complete engine. Alternatively, where the manufacturer 
knows the date the crankshaft was actually installed in the engine and 
receives the engine within 30 days of that date, it may use the actual 
date of crankshaft installation as the date of manufacture. This puts 
the secondary engine manufacturer in a similar position relative to 
companies with sole responsibility for assembling complete engines, 
without placing unreasonable expectations on secondary engine 
manufacturers to know how engines were assembled by their supplier.
    Some manufacturers may want to name a date of manufacture that is 
later than we specify in the regulation. This may be for marketing 
purposes, managing inventories of engine components, or for other 
recordkeeping or product-development reasons. There is no risk of 
manufacturers gaining an advantage of being subject to less stringent 
standards by delaying the date of manufacture for an engine, so we 
would have no objection to that. However, we limit the selection of 
date of manufacture to a later point in the assembly process. Selecting 
a date of manufacture after the end of the assembly process for an 
engine would raise concerns about the risk for manipulating emission 
credits for a given model year and about ensuring that engine assembly 
and dates of manufacture are always within the production period 
established for a given engine family, as described in the certificate 
of conformity or the manufacturer's records. We see no legitimate 
reason to select a date of manufacture after completing assembly for an 
engine. Note that since the entire assembly process is complete within 
no more than a few days for most engines, we would expect this 
allowance to rarely affect the date of manufacture significantly.
    This approach to defining ``date of manufacture'' addresses 
manufacturers' concerns for knowing which standards apply to an engine, 
but we are also concerned that manufacturers could ramp up production 
of engine blocks with installed crankshafts as a method to delay 
compliance with new emission standards. EPA regulations have always 
included provisions describing limits on inventory and stockpiling 
practices for nonroad equipment manufacturers. The regulations until 
now do not clearly address issues related to stockpiling for engine 
manufacturers. We agree with the suggestion from commenters that anti-
stockpiling provisions that are specific to engine manufacturers would 
be appropriate. The Clean Air Act contemplates the need for such 
provisions in section 202(b)(3), where there is direction for EPA to 
consider establishing a definition of model year that prevents 
stockpiling. At the same time, we received other comments related to 
production periods and model year, leading us to adopt a collection of 
related provisions in Sec.  1068.103.
    The new text in Sec.  1068.103 includes three main provisions that 
are already in place for motor vehicles and heavy-duty highway engines 
in Sec. Sec.  85.2304 and 85.2305. First, we are clarifying that the 
scope of a certificate of conformity may be limited to established 
engine models, production periods, or production facilities. Any such 
limits would be included in the manufacturer's application for 
certification or in the certificate of conformity. Second, we are 
defining the limits on selecting production periods for purposes of 
establishing the model year. Third, we are clarifying that engine 
manufacturers may start producing engines after they submit an 
application for certification and before the certification is approved. 
This includes provisions to address the manufacturers' responsibility 
to ensure (1) that engines are not introduced into U.S. commerce until 
the certification is approved; (2) that all engines are assembled 
consistent with the certification, including any changes that may come 
from the certification review process; and (3) that manufacturers make 
these early-production engines available for production-line testing or 
selective enforcement audits, as appropriate.
    In addition, we are adding provisions to establish limits on 
stockpiling for engine manufacturers. We are doing this by stating that 
manufacturers must use their normal inventory and assembly processes 
for initiating assembly of their engines. We include a clarifying 
expectation that we would expect normal assembly processes to involve 
no more than one week to complete engine assembly once the crankshaft 
is installed. We understand that assembly processes in some special 
cases are more complicated, and that engine manufacturers may be unable 
to complete engine assembly in some cases based on delivery of certain 
components or other extenuating factors. To put some boundaries on 
these exceptional situations, the regulation specifies a presumption 
that the engine manufacturer has violated the stockpiling prohibition 
if engine assembly is complete more than 30 days after the end of the 
model. This presumption date is 60 days after the end of the model year 
for engines with per-cylinder displacement above 2.5 liters. This 
generally distinguishes engines that may have relatively high sales 
volumes (including heavy-duty highway engines) from bigger engines that 
are sold in much lower sales volumes.
    Note that the potential burden and disruption related to these 
provisions is limited in two important ways. First, the

[[Page 59134]]

restrictions related to date of manufacture and model year in Sec.  
1068.103(f) apply only when there is a change in emission standards for 
the coming model year. We would still expect manufacturers to take this 
approach in years when there is no change in emission standards, but 
these requirements would not strictly apply. We are also including 
hardship provisions to allow manufacturers to request approval to 
extend the final assembly deadline for their engines if circumstances 
outside their control prevent them from completing engine assembly in 
time. We would approve such a request only if the manufacturer could 
not have avoided the situation and took all possible steps to minimize 
the extent of the delay.
(5) Restrictions on Naming Model Years Relative to Calendar Year
    We proposed restrictions to naming model years for Small SI 
engines. In response to the comments we received, we are finalizing 
these restrictions for all engines subject to 40 CFR part 1068.
    Exhaust emission standards apply based on the date of engine 
assembly. We similarly require that equipment manufacturers use engines 
meeting emission standards in the same model year as equipment based on 
the equipment assembly date. For example, starting January 1, 2009, an 
equipment manufacturer must generally use a 2009 model year engine. 
However, we allow equipment manufacturers to deplete their normal 
inventories of engines from the previous model year as long as there is 
no stockpiling of those earlier engines. Note that this restriction 
does not apply if emission standards are unchanged for the current 
model year. We have found many instances where companies will import 
new engines usually installed in equipment and claim that the engine 
was built before emission standards took effect, even if the start date 
for emission standards was several years earlier. We believe many of 
these engines were in fact built later than the named model year, but 
it is difficult to prove the date of manufacture, which then makes it 
difficult to properly enforce these requirements. Now that emission 
standards have been in place for most engines for several years, we 
believe it is appropriate to implement a provision that prevents new 
engines manufactured several years previously to be imported when more 
recent emission standards have been adopted. This will prevent 
companies from importing noncompliant products by inappropriately 
declaring a manufacture date that precedes the point at which the 
current standards started to apply. This also puts a time limit on our 
existing provisions that allow for normal inventory management to use 
the supply of engines from previous model years when there has been a 
change in standards.
    We are specifying that engines and equipment will be treated as 
having a model year at most one year earlier than the calendar year in 
which the importation occurs when there is a change in emission 
standards (see Sec.  90.615 and Sec.  1068.360). This requirement will 
start January 1, 2009 for Small SI engines and it will start 
immediately when the final rule becomes effective for engines/equipment 
subject to part 1068. For example, for new standards starting in the 
2009 or earlier model years, beginning January 1, 2010, all imported 
new engines will be considered to have a model year of 2009 or later 
and will need to comply with new 2009 standards, regardless of the 
actual build date of the engines or equipment. (Engines or equipment 
will be considered new unless the importer demonstrates that the engine 
or equipment had already been placed into service, as described below.) 
This will allow a minimum of twelve months for manufactured engines to 
be shipped to equipment manufacturers, installed in equipment and 
imported into the United States. This time interval will be 
substantially longer for most engines because the engine manufacturer's 
model year typically ends well before the end of the calendar year. 
Also, engines produced earlier in the model year will have that much 
more time to be shipped, installed, and imported.
    Manufacturers have expressed concern that the one-year limitation 
on imported products may be too short since there are often delays 
related to shipping, inventory, and perhaps most significantly, 
unpredictable fluctuations in actual sales volumes. We do not believe 
it is appropriate to maintain long-term inventories of these products 
outside the United States for eventual importation when it is clear 
ahead of time that the new standards are scheduled to take effect. 
Companies may be able to import these products shortly after 
manufacturing and keep their inventories in a U.S. distribution network 
to avoid the situation of being unable to sell these products in the 
United States.
    In years where the standards do not change, this provision will 
have no practical effect because, for example, a 2004 model year engine 
meets the 2006 model year standards. We will treat such an engine as 
compliant based on its 2004 emission label, any emission credit 
calculations for the 2004 model year, and so on. These engines can 
therefore be imported anytime until the end of the calendar year in 
which new standards take effect.
    We do not intend for these provisions to delay the introduction of 
the new emission standards by one year. It is still a violation to 
produce an engine in the 2011 calendar year and call it a 2010 model 
year engine to avoid being subject to 2011 standards.
    Importation of equipment that is not new is handled differently. 
These products will not be required to be upgraded to meet new emission 
standards that started to apply after the engine and equipment were 
manufactured. However, to avoid the situation where companies simply 
declare that they are importing used equipment to avoid new standards, 
we are requiring that they provide clear and convincing evidence that 
such engines have been placed into service prior to importation. Such 
evidence will generally include documentary evidence of purchase and 
maintenance history and visible wear that is consistent with the 
reported manufacture date. Importing products for resale or importing 
more than one engine or piece of equipment at a time will generally 
call for closer evaluation to determine that this degree of evidence 
has been met. Note that the regulations generally treat engines 
converted to a different category as new engines, even if they have 
already been placed into service. For example, if a motor vehicle is 
modified such that it no longer fits under the definition of motor 
vehicle, its engine generally becomes a new nonroad engine and is 
subject to emission standards and other requirements based on its model 
year as specified in the regulation.
(6) Liability for Causing Violations
    In the last few years, there has been a surge in the number of 
illegal nonroad engines, vehicles and equipment, such as tractors, lawn 
mowers, generators and all-terrain vehicles, imported into the United 
States. A significant number of the imported nonroad engines, vehicles 
and equipment fail to meet EPA requirements and standards under the 
Clean Air Act. The manufacturers of these illegal goods often are out 
of the effective reach of United States jurisdiction and enforcement. 
In 2007, the recall of lead-contaminated toys and more than 5,300 
melamine-laced pet food products resulted in heightened interest in 
what the U.S. government is doing to safeguard the health of its

[[Page 59135]]

citizens with regard to imported consumer products.
    In July 2007, President Bush signed Executive Order 13439 
establishing an Interagency Working Group on Import Safety. This 
Working Group consists of over ten government agencies including EPA 
and the Departments of Health and Human Services, Homeland Security, 
State, Treasury, Justice, Agriculture, and Transportation. The wide 
range of agencies involved in this Working Group illustrates the 
breadth of import issues.
    One of the recommendations of the Interagency Working Group on 
Import Safety was to consider a strategic focus or initiative, using 
existing statutory and regulatory authorities, and, based upon Agency 
priorities, increase enforcement actions against foreign and domestic 
manufacturers, as well as importers, brokers, distributors, and 
retailers who introduce illegal goods into the stream of commerce. This 
rulemaking will help clarify for all regulated parties, including 
retailers, that liability for the importation of nonroad vehicles, 
engines and equipment in violation of the Clean Air Act and/or its 
implementing regulations extends beyond the manufacturer and direct 
importer of the product.
    We requested comments regarding revisions to Sec.  1068.101 to 
clarify the types of actions for which EPA may pursue enforcement 
proceedings. In this rule we are finalizing such clarifying provisions 
in Sec.  1068.101. Section 203 of the Act states that performing 
certain acts, ``and the causing thereof,'' constitutes a prohibited 
act. We are adding a new paragraph (c) in Sec.  1068.101 to 
specifically include this prohibition on the ``causing'' of any of the 
prohibited acts listed in the statute and the regulations. Adding this 
clarification will help people who are subject to the regulations to 
more fully understand what actions are prohibited and may potentially 
subject them to enforcement proceedings under the Act. The revisions 
themselves do not add new enforcement authorities beyond what is 
already specified in the statute.
    Since we consider it a violation to cause someone to commit a 
specified prohibited act, persons causing any such prohibited act would 
also be subject to the full administrative and judicial enforcement 
actions allowable under the Act and the regulations. The prohibition on 
``causing'' a prohibited act would apply to all persons and would not 
be limited to manufacturers or importers of regulated engines or 
equipment.
    EPA interprets the ``causation'' aspect of section 203 broadly. In 
assessing whether a person has caused a prohibited act, EPA will 
evaluate the totality of the circumstances. For example, in certain 
circumstances EPA believes that a retailer may be responsible for 
causing the importation of engines or equipment not covered by a valid 
certificate of conformity or otherwise in violation of our regulations, 
such as the emission labeling requirements. In addition to the 
prohibitions that apply to manufacturers and importers under section 
203, EPA will also consider many factors in assessing whether a 
manufacturer, importer, retailer, distributor or other person has 
caused a prohibited act. For example, contractual (or otherwise 
established) business relationships of those persons involved in 
producing and/or selling new engines and equipment could be evidence of 
the ability of the person to cause a violation. In addition, we would 
consider the particular efforts or influence of the alleged violator 
contributing to, leading to, or resulting in the prohibited act. On the 
other hand, we would also consider a person's efforts to prevent such a 
violation as evidence that they did not cause the violation.
    EPA will evaluate the entire circumstances in determining whether a 
person caused another person to commit a prohibited act such as 
importing engines or equipment in violation of our regulations.
    To assist importers, distributors, retailers, and the general 
public to determine whether the products they are buying or selling 
comply with EPA regulations, EPA is expanding its compliance assistance 
efforts. Imports compliance assistance information is available at 
http://www.epa.gov/otaq/imports/index.htm and http://www.bordercenter.org/chem/vehicles.htm. Additionally, general 
certification information may also be found at http://www.epa.gov/otaq/nonroad.
(7) Engine rebuilding and replacement engines
    We are finalizing the proposed changes to Sec.  1068.240. In 
addition, we are also making other changes to that section to address 
manufacturers' concerns for producing short blocks from previous-tier 
engines as replacement components for engines needing service in the 
field. (See Section VIII.C.1 for additional discussion.) The current 
provisions for the replacement-engine exemption in Sec.  1068.240 
require that manufacturers take possession of the old engine (or 
confirm that it has been destroyed) and take steps to confirm that the 
exemption is needed for each new replacement engine. We acknowledge 
that these requirements could limit the manufacturers' ability in some 
cases to respond quickly for operators that would depend on minimizing 
their downtime.
    The most significant change being made in response to the 
manufacturers comments is the allowance for limited use of partially 
complete engines as replacement components without the administrative 
requirements and oversight provisions that currently apply under Sec.  
1068.240. We have created a streamlined approach for manufacturers to 
produce and sell a certain number of replacement engines, including 
partially complete engines, based on production volumes from preceding 
years. We are adopting a threshold of 1.0 percent of annual production 
through 2013 and 0.5 percent for 2014 and later. To calculate the 
number of engines under this provision, manufacturers would first 
determine their U.S.-directed production volumes of certified engines 
each year. This information is generally submitted as part of the 
reporting for production-line testing or in separate annual reports. 
The manufacturer would consider the preceding three model years to 
select the highest total production volume of certified engines across 
all their models in a given year. Multiplying this production volume by 
0.01 (or 0.005 starting in 2014) would give the number of engines that 
the manufacturer could produce without triggering the administrative 
requirements currently specified in Sec.  1068.240. (We may approve the 
use of calculations based on earlier model years in unusual 
circumstances, such as the case where a manufacturer opts out of a 
broad category of engine production but continues to supply service 
parts for those models.) These threshold values should allow 
manufacturers the flexibility to meet the demand for partially complete 
replacement engines, but at production levels that clearly will not 
undermine the expected benefits of the emission standards that 
otherwise apply to new engines. For any number of noncompliant 
replacement engines exceeding the specified threshold, manufacturers 
would need to meet all the requirements that currently apply under 
Sec.  1068.240.
    The engine grouping includes fairly broad aggregation of products 
to keep similar engines together. For example, all outboard engines, 
all snowmobiles, and all handheld engines would be counted together as 
separate groups. Diesel engines are generally sold to distributors in a 
configuration that

[[Page 59136]]

could be adapted for use in nonroad applications, either land-based or 
marine, or in stationary applications. Engine manufacturers should 
therefore aggregate their sales of these engines without regard to 
their eventual deployment in any of these applications. However, we are 
aware that the very wide range in sizes and sales volumes makes it 
necessary to prevent aggregating large and small engines. Without this, 
the high sales volumes associated with small engines could allow for 
unlimited production of high-power replacement engines. Since it is not 
possible to establish a power rating for a partially complete engine, 
it is necessary instead to rely on engine displacement to differentiate 
these products. The selected per-cylinder cutpoints reflect existing 
regulatory requirements and production and marketing characteristics 
related to current engine offerings. The situation is similar for 
spark-ignition engines that may be used in stationary or nonroad 
applications (including marine), except that there is a much less 
pronounced range in engine sizes. The engine groupings for calculating 
allowable numbers of engines under this approach are shown in Table 
VIII.C-1.
    We are also applying the replacement-engine exemption provisions to 
heavy-duty highway engines. There have been no such exemption 
provisions in the past; however, we are expecting engine technologies 
to change significantly in the coming years such that vehicle owners 
may be unable to replace engines that fail prematurely without being 
able to access replacement engines that are specifically built to match 
the earlier configuration. We believe these engines can be accounted 
for separately from nonroad and stationary engines with respect to 
production volumes, but we are otherwise applying all the provisions of 
Sec.  1068.240 equally to heavy-duty highway engines.

   Table VIII.C-1--Aggregating Sets for Streamlined Replacement-Engine
                               Provisions
------------------------------------------------------------------------
                                   Standard-setting         Engine
         Engine category                 part            subcategories
------------------------------------------------------------------------
Highway CI......................  40 CFR part 86....   disp. < 0.6 L/cyl
                                                      0.6 <= disp. < 1.2
                                                       L/cyl
Nonroad CI, Stationary CI, and    40 CFR part 1039    disp. >= 1.2 L/cyl
 Marine CI.                        or 40 CFR part     disp. < 0.6 L/cyl
                                   1042.              0.6 <= disp. < 1.2
                                                       L/cyl
                                                      1.2 <= disp. < 2.5
                                                       L/cyl
                                                      2.5 <= disp. < 7.0
                                                       L/cyl
Marine SI.......................  40 CFR part 1045..  outboard personal
                                                       watercraft.
Large SI, Stationary SI, and      40 CFR part 1048    all engines
 Marine SI (sterndrive/inboard     or 40 CFR part
 only).                            1045.
Recreational vehicles...........  40 CFR part 1051..  off-highway
                                                       motorcycle, all-
                                                       terrain vehicle,
                                                       snowmobile.
Small SI and Stationary SI......  40 CFR part 1054..  handheld, Class I,
                                                       Class II.
------------------------------------------------------------------------

    There are two special situations to note. First, the replacement-
engine provisions do not apply to locomotives, which have already been 
established in previous rulemakings. Second, the provisions for a 
streamlined approach for replacement engines do not apply for engines 
with per-cylinder displacement over 7.0 liters. These are generally 
very large, custom-built engines with low production volumes, so we 
believe it is not necessary or appropriate for engine manufacturers to 
maintain an inventory of these engines (complete or partially complete) 
on the assumption that someone wanting a replacement engine could not 
install an engine certified to emission standards for the current model 
year.
    We are making an additional change to the replacement-engine 
exemption in Sec.  1068.240 to clarify what provisions apply for short 
blocks from a currently certified engine family. These are considered 
engines under the new regulatory definitions, so they need to be 
covered by a certificate of conformity or an exemption. We are 
specifying that short blocks from an engine model certified for the 
current model year are exempt under the replacement-engine exemption. 
These engines do not need an exemption based on their level of emission 
control since they are identical to certified engines meeting current 
standards. Rather, these engines need an exemption simply because they 
are shipped before they reach a certified configuration. Final assembly 
would typically be performed by the owner or a local service facility 
rather than an equipment manufacturer. We are therefore applying no 
conditions or restrictions on the sale of these replacement engines, 
other than the need for being part of a certified engine family and 
being labeled appropriately. The regulation specifies how to label the 
engine blocks to ensure that they can be clearly identified as 
replacement components. The regulation also clarifies that anyone 
completing the assembly of such an engine in violation of applicable 
requirements is a manufacturer who has committed a prohibited act. For 
example, installing such an engine in a new piece of equipment would 
violate the conditions of the replacement engine exemption and we may 
hold responsible any parties involved in assembling or installing the 
engine.
    Simplified labeling requirements apply to current-tier short blocks 
used as replacement engines and to previous-tier short blocks falling 
under the streamlined approach for replacement engines described above. 
The general expectation is that the final, assembled engines continue 
to have a label describing their certification status (unless they were 
built before emission standards started to apply). For engines in which 
the certification label is on the short block or another component that 
is part of the short-block assembly, we require that the short block 
includes a permanent label identifying the name of the manufacturer, 
the part number of the short-block assembly, and a short statement 
describing this as a replacement engine. For engines in which the 
certification label is mounted on the equipment or on a part of the 
engine that will likely be preserved as part of the final assembly, we 
require similar labeling except that the label does not need to be 
permanent.
    In addition, manufacturers have expressed a concern that the engine 
rebuilding provisions in Sec.  1068.120 and the replacement engine 
provisions in Sec.  1068.240 do not clearly address the situation in 
which rebuilt engines are used to repower equipment where the engine 
being replaced meets alternate emission standards (such as those 
produced under the Transition Program for Equipment Manufacturers). 
These

[[Page 59137]]

engines are not certified to the emission standards that otherwise 
apply for the given model year, so there may be some confusion 
regarding the appropriate way of applying these regulatory 
requirements. We are therefore adopting clarifying language to make 
sure the required statements on engine labels and the underlying 
regulatory requirements reflect this scenario.
(8) Delegated Assembly
    We understand that engine manufacturers have competing interests 
both to maintain the ability to arrange flexible assembly procedures 
and agreements, and to ensure that their engines are introduced into 
commerce only after being assembled in the certified configuration. We 
share those objectives and believe the regulations related to delegated 
assembly serve the purpose of creating a framework for balancing these 
different concerns. These regulatory provisions will help manufacturers 
by defining practices that prevent a situation where competitiveness 
concerns cause them to take steps to reduce costs at the risk of 
producing noncompliant products.
    We proposed special delegated assembly provisions for Small SI 
engines, rather than applying the delegated assembly provisions of part 
1068. In this final rule, however, we are consolidating the various 
approaches for different types of engines and integrating them into a 
single framework that will apply generally for heavy-duty highway 
engines and for nonroad engines. The main difference between these 
previously existing programs is the allowance for heavy-duty highway 
engines to rely either on pricing engines and aftertreatment components 
together or auditing vehicle manufacturers, but not necessarily both, 
to ensure that installed engines are in a certified configuration. 
While we are concerned about the incentive for vehicle and equipment 
manufacturers to gain a financial advantage if aftertreatment 
components are not priced together with the engine, we believe 
requiring engine manufacturers to perform audits of vehicle or 
equipment manufacturers is generally sufficient to provide the proper 
assurances that engines are being properly assembled and installed. 
Conversely, we believe that pricing aftertreatment and engines together 
is a strong enough assurance of proper assembly and installation 
procedures that audits are generally not necessary as an additional 
oversight measure. We note that these provisions spell out a minimum 
level of oversight for engine manufacturers. There may be instances, 
such as a new relationship with a vehicle or equipment manufacturer or 
some other reason to have less confidence in proper assembly 
procedures, where the engine manufacturer would want or need to take 
steps beyond what the regulations require to ensure that engines are 
assembled properly.
    We believe there is a strong advantage in implementing requirements 
uniformly across all the engine programs, both for EPA and for 
manufacturers. Aside from the pricing and auditing requirements 
described above, we are making the following provisions part of the 
final program, which were part of one or more of the programs adopted 
earlier in parts 85 and 1068, :
     Auditing rates are generally set at four equipment (or 
vehicle) manufacturers per year, or enough to rotate through all the 
equipment manufacturers over a four-year period, whichever is less. A 
reduced rate may apply after several years of successful implementation 
of these requirements.
     We are continuing the approach already adopted to provide 
for a streamlined demonstration for integrated manufacturers where the 
auditing would effectively be an internal practice.
     Engine manufacturers remain responsible for the in-use 
compliance of engines sold using the delegated-assembly provisions. 
This means, for example, that these engines would be subject to recall 
if we find that there are a substantial number of nonconforming 
engines.
    In addition, we are including the following provisions in the 
unified approach to delegated assembly that were initiated as part of 
the proposal for Small SI engines:
     Distributors may participate in delegated assembly, but 
only to the extent that they act as equipment manufacturers, adding 
aftertreatment devices before shipping the engines to vehicle or 
equipment manufacturers. Allowing distributors to further delegate 
engine assembly to another set of companies raises fundamental 
questions about the ability of engine manufacturers to adequately 
ensure proper final assembly of their engines. We are making a 
temporary allowance for this for Small SI engines to accommodate the 
transitional provisions allowing equipment manufacturers to gradually 
work toward making Phase 3 products. Starting in 2015, Small SI 
manufacturers may rely on distributors to act as their agents only with 
our approval. Note that this restriction on distributors does not apply 
in cases where the distributor has a financial or administrative role 
in facilitating a transaction between engine and equipment 
manufacturers where the engine and equipment manufacturers meet all the 
requirements that apply under Sec.  1068.261(d).
     If engine manufacturers design their air-intake systems 
such that they depend on specific parts (identifiable by part number) 
to achieve proper air flow through the engine, that raises concerns 
that are similar to aftertreatment devices. In fact, we are currently 
pursuing an enforcement case where an equipment manufacturer did not 
follow the engine manufacturer's directions to use a specific air 
filter. We are specifying that air filters identified by part number 
must be included in delegated assembly, though we require audits 
related to air filters only if audits are already occurring for exhaust 
systems. If manufacturers specify intake air systems by performance 
parameters such as maximum pressure drop across the air filter, the 
delegated-assembly provisions do not apply. This is similar to the way 
we have treated exhaust components for systems not requiring exhaust 
aftertreatment. See Sec.  1068.260(a).
     Vehicle or equipment manufacturers submitting annual 
affidavits must include a count of aftertreatment devices received to 
verify that there were enough of the right models of aftertreatment 
devices for the number of engines involved.
     Engines need to be labeled to identify their status as 
delegated-assembly engines, either with a removable label or with 
``Delegated Assembly'' noted on the engine's permanent label. This 
ensures that engines will not be introduced into commerce without an 
indication of their status relative to the certified configuration.
     Engine manufacturers must confirm that vehicle or 
equipment manufacturers have ordered aftertreatment devices 
corresponding to an engine order, but this confirmation is limited to 
the initial shipment of engines for a new certification and may occur 
up to 30 days after the engines have been ordered.
     For engines subject to requirements for production-line 
testing or selective enforcement audits, we specify that aftertreatment 
components must be randomly procured. We agree with the suggestion in 
the comments to broaden the allowance for randomly procuring 
components. As long as manufacturers use a method to randomly select 
components that are appropriate for the particular engine 
configuration, these

[[Page 59138]]

components may come from any point in the normal distribution chain.
    Manufacturers raised a concern regarding the possibility that they 
may inappropriately be paying Customs duties based on the value of 
aftertreatment devices that were priced with the engine even though 
they would be shipped separately. We have confirmed with the U.S. 
Customs and Border Protection that such an inappropriate payment of 
import duties can be avoided with documentation showing that the price 
of the engine includes a charge for components that are not included in 
that particular shipment. This also applies for importing 
aftertreatment devices alone where the import duty should not apply 
based on the value of the engine and aftertreatment together. This 
could most easily be accomplished by itemizing the invoice to identify 
the value of the missing components relative to the value of the rest 
of the engine. The regulations now include these specific instructions 
regarding invoicing with respect to import duties.
    We understand that there may be companies complying with the 
delegated assembly provisions in Sec.  85.1713 or Sec.  1068.260 today. 
The changes included in this final rule generally expand the 
flexibility of complying with regulatory requirements. These regulatory 
changes generally apply immediately with the effective date of the 
final rule. However, there may be some need to modify current practices 
to conform to the revised regulation. If a manufacturer needs 
additional time to comply, we would expect to use the provisions of 
Sec.  1068.40 to work out an arrangement under which the manufacturer 
would be able to make an orderly transition toward complying with the 
new requirements.
(9) Miscellaneous Changes
    The most noticeable change we are making to part 1068 is the 
proposed clarification to the language throughout to make necessary 
distinctions between engines, equipment, and fuel-system components--
and particularly between equipment using certified engines and 
equipment that has been certified to meet equipment-based standards. 
This becomes necessary because the evaporative emission standards apply 
in some cases to equipment manufacturers and boat builders, while the 
exhaust emission standards apply only to engine manufacturers. Some 
provisions in part 1068 apply to equipment manufacturers differently if 
they hold a certificate of conformity rather than merely installing 
certified engines (or certified fuel-system components). The changes in 
regulatory language are intended to help make those distinctions. See 
Sec.  1068.2 for a description of the new terminology that we intend to 
use throughout part 1068.
    We previously adopted a definition of ``nonroad engine'' that 
continues to apply today (see Sec.  1068.30). This definition 
distinguishes between portable or transportable engines that may be 
considered either nonroad or stationary, depending on the way they will 
be used. The distinction between nonroad and stationary engines is most 
often relevant for new engines in determining which emission standards 
apply. However, we have received numerous questions related to 
equipment whose usage has changed so that the original designation no 
longer applies. The text of that original definition did not clearly 
address these situations. We are therefore adopting the proposed 
provisions that apply when an engine previously used in a nonroad 
application is subsequently used in an application other than a nonroad 
application, or when an engine previously used in a stationary 
application is moved (see Sec.  1068.31). In response to comments, we 
are also including language in the final rule to clarify that switching 
between nonroad and stationary does not change the engine's model year 
for purposes of establishing applicable standards. The engine would 
need to meet applicable requirements for its new application (or 
status), but this would not involve certifying the engine as new for 
the current model year. Note that the purpose of these changes to 
regulatory language is to clarify existing provisions rather than 
change which requirements apply for specific situations.
    We are adopting the proposed changes to the thresholds for 
determining whether to investigate or report emission-related defects. 
These changes are intended to more carefully reflect the level of 
investigation and reporting that should apply for very high-volume 
engine families. In particular, we specify that manufacturers should 
investigate defects if potential (unscreened) emission-related defects 
exceed 4 percent for sales volumes between 50,000 and 550,000, with a 
threshold of 25,000 for all families with sales volumes above 550,000. 
Similarly, we specify that manufacturers should send a report if 
confirmed emission-related defects exceed 1 percent for sales volumes 
between 50,000 and 550,000, with a threshold of 6,000 for all families 
with sales volumes above 550,000.
    Several of the new provisions in part 1068 address fundamental 
issues for complying with emission standards. Defining ``engine'' and 
``date of manufacture,'' clarifying the timing of the transition to new 
model years, adding requirements for shipping partially complete 
engines to secondary engine manufacturers, and creating a new path for 
exempting replacement engines could lead manufacturers to make 
significant changes in the way they comply with the regulations. 
However, in many cases we would expect the new regulations to generally 
reflect current business practices. We are therefore amending the 
regulatory requirements to part 1068 without identifying a certain lead 
time before the requirements apply. Instead, to address those 
situations where manufacturers need time to make a transition toward 
complying with new requirements, we are adding a general provision 
allowing us to approve a manufacturer's request to delay implementation 
of the new requirements in part 1068 for up to 12 months from the 
effective date of the final rule (see Sec.  1068.40). The changes to 
part 1068 have a legal effective date of December 8, 2008. We will 
generally approve these requests if manufacturers can demonstrate that 
it would be impractical to comply with the new requirements in the 
given time frame. We may consider the potential for adverse 
environmental impacts in our decision.
    In addition, we proposed several amendments to part 1068 to clarify 
various items. These are being finalized, including:
     Sec.  1068.101(a)(1): Revising the prohibited act to 
specify that engines must be ``covered by'' a certificate rather than 
``having'' a certificate. The revised language is more descriptive and 
consistent with the Clean Air Act.
     Sec.  1068.101(a)(1)(i): Clarifying that engines or 
equipment are considered to be uncertified if they are not in a 
configuration that is included in the applicable certificate of 
conformity. This applies even if the product had an emission label 
stating that it complies with emission standards.
     Sec.  1068.101(a)(2): Clarifying the prohibition on 
recordkeeping to apply also to submission of records to the Agency.
     Sec.  1068.101(b)(1): Clarifying the prohibition against 
using engines in a way that renders emission controls inoperative to 
emphasize that it includes misfueling or failing to use additives that 
the manufacturer specifies as part of the engine's certified 
configuration. This is more likely to

[[Page 59139]]

apply for compression-ignition engines than spark-ignition engines.
     Sec.  1068.101(b)(7): Clarifying the prohibitions related 
to warranty to require the submission of specified information in the 
application for certification; adding language to identify obligations 
related to recall and installation and maintenance instructions; and 
preventing the manufacturer from communicating to users that warranty 
coverage is conditioned on using authorized parts or service 
facilities. These provisions are consistent with requirements that 
apply in other EPA programs.
     Sec.  1068.105(a): Revising the regulation to allow 
equipment manufacturers to use up normal inventories of previous model 
year engines only if it is a continuation of ongoing production with 
existing inventories. These provisions do not apply for an equipment 
manufacturer starting to produce a new equipment model.
     Sec.  1068.105: Eliminating paragraph (b) related to using 
highway certification for nonroad engines or equipment since these 
provisions are spelled out specifically for each nonroad program where 
appropriate.
     Sec.  1068.105(b): Clarifying the requirement to follow 
emission-related installation instructions to include installation 
instructions from manufacturers that certify components to evaporative 
emission standards.
     Sec.  1068.120: Clarifying that the rebuilding provisions 
apply to maintenance related to evaporative emissions.
     Sec.  1068.240: Clarifying that the scope of the exemption 
for new replacement engines is limited to certain engines.
     Sec.  1068.250: Revising the applicability of the small-
business hardship provisions to address a situation where the standard-
setting part does not define criteria for establishing which companies 
qualify as small-volume manufacturers; where we do not already specify 
such criteria, we will rely on the criteria established by the Small 
Business Administration.
     Sec.  1068.250: Clarifying the timing related to hardship 
approvals and the ability to get extensions under appropriate 
circumstances.
     Sec.  1068.305: Clarifying that that the requirement to 
submit importation forms applies to all engines, not just nonconforming 
engines; also adding a requirement to keep these records for five 
years. Both of these changes are consistent with the Customs 
regulations at 19 CFR 12.74.
     Part 1068, Appendix I: Defining emission-related 
components related to evaporative emission controls.

D. Amendments Related to Large SI Engines (40 CFR Part 1048)

    We are making a variety of technical amendments to the regulations 
in 40 CFR part 1048 for Large SI engines, as described in this section.
    As described in Section V.E.1, we are establishing a provision to 
allow for assigned deterioration factors for small-volume engine 
families for Small SI engines. We requested comment on applying this 
kind of provision to Large SI engines, for which manufacturers do more 
extensive testing to demonstrate compliance over a useful life of 5,000 
hours. We are therefore including in the final rule an allowance for 
manufacturers to use an assigned deterioration factor for engine 
families with U.S.-directed production volumes up to 300 units. This 
should provide significant relief in the testing burden for certifying 
very small engine families.
    We are adopting the proposed changes to the provisions related to 
competition engines to align with the final rule for Small SI engines. 
Any Small SI engine that is produced under the competition exemption 
will very likely exceed 19 kW. As a result, we believe it is 
appropriate to make these provisions identical to avoid confusion.
    Manufacturers have notified us that the transient test for 
constant-speed engines does not represent in-use operation in a way 
that significantly affects measured emission levels. This notification 
is required by Sec.  1065.10(c)(1). In particular, manufacturers have 
pointed out that the specified operation involves light engine loads 
such that combustion and exhaust temperatures do not rise enough to 
reach catalyst light-off temperatures. As a result, meeting the 
standard using the constant-speed transient test will require the use 
of significantly oversized catalysts, which will add significant costs 
without a commensurate improvement for in-use emission control. We 
faced a similar dilemma in the effort to adopt transient standards for 
nonroad diesel engines, concluding that the transient standards should 
not apply until we develop a suitable duty cycle that more 
appropriately reflects in-use operation. As proposed, we are taking 
this same approach for Large SI engines, waiving the requirement for 
constant-speed engines to meet the transient standards until we are 
able to develop a more appropriate duty cycle. We are clarifying that 
manufacturers certifying constant-speed engines should describe their 
approach to controlling emissions during transient operation in their 
application for certification. Manufacturers must continue to meet the 
standards for steady-state testing and the field-testing standards 
continue to apply. See Section 1.8 of the Summary and Analysis of 
Comments for a discussion of the methods for demonstrating compliance 
with the field-testing standards for certification.
    Manufacturers have also pointed out that a multiplicative 
deterioration factor is problematic for engines with very low emission 
levels. While the standard allows that HC+NOX emissions may 
be as high as 2.7 g/kW-hr, manufacturers are certifying some engine 
families with deteriorated emission levels below 0.1 g/kW-hr. These 
very low emission levels are so far below the standard that measurement 
variability and minor engine-to-engine variability can lead to small 
absolute differences in emission levels that become magnified by a 
deterioration factor that reflects the extremely small low-hour 
measurement. We are therefore finalizing the proposed specification 
that manufacturers may use an additive deterioration factor if their 
low-hour emission levels are below 0.3 g/kW-hr for HC+NOX or 
0.5 g/kW-hr for CO. This change accommodates the mathematical and 
analyzer effects of very low emission levels without changing the 
current practice for the majority of engines that are certified with 
emission levels closer to the standard (we increased the threshold from 
the proposed level of 0.3 g/kW-hr for CO to a level of 0.5 g/kW-hr to 
reflect the greater variability in CO emissions at this level of 
control). This change removes the incentive for manufacturers to 
increase their engine's emission levels to avoid an artificially large 
deterioration factor. The only exception is for cases in which good 
engineering judgment dictates that a multiplicative deterioration 
factor will nevertheless be appropriate for engines with very low 
emissions. This may be the case if an engine's deterioration can be 
attributed, even at very low emission levels, to proportionally 
decreased catalyst conversion of emissions from an aged engine. It is 
important to note that Large SI engine manufacturers are subject to in-
use testing to demonstrate that they meet emission standards throughout 
the useful life. Should such testing indicate that an additive 
deterioration factor does not appropriately reflect actual performance, 
we will require manufacturers to revise their deterioration factors 
appropriately, as required under the regulations. If such

[[Page 59140]]

discrepancies appear for multiple manufacturers, we will revise the 
regulation to again require multiplicative deterioration factors for 
all aftertreatment-based systems.
    Most Large SI engines are installed in equipment that has metal 
fuel tanks. This formed the basis of the regulatory approach to set 
evaporative emission standards and certification requirements. 
Manufacturers have raised questions about the appropriate steps to take 
for systems that rely on plastic fuel tanks. We have determined that 
the current emission standards and test procedures do not require 
manufacturers to account for permeation emissions from plastic fuel 
tanks. To address this concern, we are revising the regulations to 
reference the test procedures in part 1060, where preconditioning and 
measurement procedures clarify how to test plastic fuel tanks. We are 
also specifying that the design-based certification for plastic fuel 
tanks meeting the diurnal emission standards must incorporate the 
technologies specified in 40 CFR 1060.240. For other technologies, the 
certifying manufacturer must perform tests to demonstrate compliance 
with the diurnal emission standards. Since manufacturers will need some 
time to meet these requirements, we are implementing this change 
starting with the 2010 model year. As a related matter, we are also 
changing the regulation to allow for component certification of fuel 
tanks (see 40 CFR 1060.5). This will be necessary to accommodate the 
situation described above for plastic fuel tanks. This administrative 
adjustment does not affect the underlying requirement to design and 
certify products to meet applicable emission standards. We changed the 
final rule in response to comments, mainly to include more careful 
specification of canister preconditioning procedures for those systems 
that certify by testing rather than by design.
    In the proposal we requested comment on updating the reference 
standard for specifying low-permeation fuel lines. The current 
permeation standards for Large SI equipment references Category 1 fuel 
lines as defined in the version of SAE J2260 that was issued November 
1996. We are adopting by reference the updated version of SAE J2260, 
which was finalized in November 2004 by the Society of Automotive 
Engineers. The new procedures have two primary differences related to 
fuel line permeation. First, the test fuel was changed from CM15 to 
CE10.\123\ Second, the associated limits for the different categories 
of fuel line permeation were revised. Data presented in Chapter 5 of 
the Final RIA suggest that permeation rates from low-permeation fuel 
line materials can be less than half on CE10 than on CM15. The 
permeation specification for Category 1 fuel line was revised by SAE 
from 0-25 g/m\2\/day to 3-10 g/m\2\/day. (A new Category 0 was added at 
0-3 g/m\2\/day.) Directionally, the new Category 1 permeation limits 
seem to account for the change in the test fuel. In addition, ethanol 
fuel blends are common with in-use fuels while methanol fuel blends are 
much less common. We are revising the regulation to specify that fuel 
lines must meet the Category 1 specification in the 2004 version of SAE 
J2260.
---------------------------------------------------------------------------

    \123\ ``C'' refers to fuel C as specified in ASTM D 412, E10 
refers to 10 percent ethanol, and M15 refers to 15 percent methanol.
---------------------------------------------------------------------------

    We are making several additional technical amendments to part 1048. 
Many of these simply correct typographical errors or add references to 
the regulatory cites in part 1054 for Small SI engines. Several changes 
are intended merely to align regulatory language with that of other 
programs, including those that are subject to new standards under this 
final rule. In addition, we are making the changes described below. 
Note that the changes being made to the production-line and in-use 
testing requirements are being made in response to comments. As noted, 
a few others are also being made in response to comments. However, most 
of these changes are being finalized as proposed.
     Sec.  1048.5: Clarifying that locomotive propulsion 
engines are not subject to Large SI emission standards, even if they 
use spark-ignition engines. This is based on the separate provisions 
that apply to locomotives in Clean Air Act section 213 (including those 
that use spark-ignition engines).
     Sec.  1048.101: Clarifying manufacturer's responsibility 
to meet emission standards for different types of testing, especially 
to differentiate between field-testing standards and duty-cycle 
standards.
     Sec.  1048.105: Clarifying that only the permeation 
standards of SAE J2260 apply to fuel lines used with Large SI engines.
     Sec.  1048.105: Clarifying that the requirement to prevent 
fuel boiling is affected by the pressure in the fuel tank. The 
regulation currently characterizes the boiling point of fuel only at 
atmospheric pressure. Pressurizing the fuel tank increases the boiling 
point of the fuel. We are also adding clarifying language to describe 
how engine manufacturers may meet their requirements related to fuel 
boiling by describing appropriate steps or limitations in their 
installation instructions.
     Sec.  1048.105: Reorganizing the regulatory provisions to 
align with the new language in 40 CFR part 1060, and relying on those 
test procedures. This will help to provide uniformity across our 
nonroad programs.
     Sec.  1048.110: (1) Clarifying that ``malfunctions'' 
relate to engines failing to maintain emission control and not to 
diagnostic systems that fail to report signals. (2) Clarifying that the 
malfunction indicator light needs to stay illuminated for malfunctions 
or for system errors. (3) Limiting the scope of diagnostic requirement 
to engines with closed-loop controls and three-way catalysts. This 
limitation is consistent with the conclusion we have reached for Marine 
SI engines.
     Sec.  1048.120: Clarifying that the emission-related 
warranty covers only those components from 40 CFR part 1068, Appendix 
I, whose failure will increase emissions of regulated pollutants.
     Sec.  1048.125: Giving examples of noncritical emission-
related maintenance, such as changing spark plugs and re-seating 
valves.
     Sec.  1048.135: Revising the engine labeling requirements 
to allow omission of the manufacturing date only if the date is 
stamped, engraved or otherwise permanently applied on the engine, 
rather than allowing manufacturers to keep records of engine build 
dates. This is important for verifying that engines comply with 
standards based on their build date. This requirement takes effect 
starting with the 2010 model year. See Section 1.3 of the Summary and 
Analysis of Comments for further discussion of issues related to this 
requirement.
     Sec.  1048.205: Removing detailed specifications for 
describing auxiliary emission control devices in the application for 
certification. This responds to the concern expressed by manufacturers 
that the existing, very prescriptive approach requires much more 
information than is needed to adequately describe emission control 
systems. We are leaving in place a broad requirement to describe 
emission control systems and parameters in sufficient detail to allow 
EPA to confirm that no defeat devices are employed. Manufacturers 
should be motivated to include substantial information to make such 
determinations in the certification process, rather than being subject 
to this

[[Page 59141]]

type of investigation for emission control approaches that are found to 
be outside of the scope of the application for certification. We may 
require manufacturers to submit additional information if the 
description submitted with the application is not adequate for 
evaluating the appropriateness of the design.
     Sec.  1048.205: Adding a requirement to align projected 
production volumes with actual production from previous years. This 
does not imply additional reporting or recordkeeping requirements. It 
is intended simply to avoid situations where manufacturers 
intentionally mis-state their projected production volumes to gain some 
advantage under the regulations.
     Sec.  1048.205: Specifying that manufacturers must submit 
modal emission results rather than just submitting a weighted average. 
Since this information is already part of the demonstration related to 
the field-testing standards, this should already be common practice.
     Sec.  1048.220: Clarifying that if manufacturers change 
their maintenance instructions after starting production for an engine 
family, they may not disqualify engines for in-use testing or warranty 
claims based on the fact that operators did not follow the revised 
maintenance instructions.
     Sec.  1048.225: Clarifying the terminology to refer to 
``new or modified engine configurations'' rather than ``new or modified 
nonroad engines.'' This is necessary to avoid using the term ``new 
nonroad engine'' in a way that differs from the definition in Sec.  
1048.801.
     Sec.  1048.230: Clarifying that engine families relate 
fundamentally to emission certification and that we will expect 
manufacturers to suggest a tailored approach to specifying engine 
families under Sec.  1048.230(d) to occur only in unusual 
circumstances.
     Sec.  1048.250: Adding a requirement for manufacturers to 
report their production volumes for an engine family separate from 
reports for production-line testing. For example, by excluding small-
volume families from production-line testing, the reports of those 
production volumes would otherwise no longer be available to us. Also, 
we are clarifying that manufacturers must report total production 
volumes for an engine family for any production that occurs after 
submission of the final PLT report for the model year.
     Sec.  1048.301: Allowing small-volume emission families to 
be exempted from production-line testing requirements. This applies for 
engine families with sales volumes below 150 units. This level of 
production does not allow for adequate testing to use the statistical 
techniques before exceeding specified maximum testing rates.
     Sec.  1048.301: Specifying that manufacturers may use an 
alternate method for production-line testing by using field-grade 
analyzers (instead of lab-grade) without prior approval, as long as 
they double the specified minimum sampling rate.
     Sec.  1048.305: Clarifying that (1) tested engines should 
be built in a way that represents production engines and (2) the field-
testing standards apply for any testing conducted (this may involve 
simply comparing modal results to the field-testing standards). We are 
also revising the provision related to repeat testing after an 
invalidated test to specify that manufacturers do not need our approval 
before retesting, except that we may require this if we find that tests 
have been improperly invalidated.
     Sec.  1048.310: Clarifying the relationship between 
quarterly testing and compliance with the annual testing requirements.
     Sec.  1048.315: Correcting the equation for the CumSum 
statistic to prevent negative values.
     Sec.  1048.345: Changing the PLT reporting deadline from 
30 to 45 days after the end of each calendar quarter. This aligns with 
change we are making in other programs.
     Sec.  1048.350: Allowing manufacturers to keep electronic 
records related to production-line testing rather than paper records.
     Sec.  1048.405: Adding a provision allowing for an 
adjustment of in-use testing plans if unforeseen circumstances prevent 
completion of the testing effort. This aligns with the change described 
in Section IV for Marine SI engines.
     Sec.  1048.410: Clarifying that repeat tests with an in-
use test engine are acceptable, as long as the same number of repeat 
tests are performed for all engines.
     Sec.  1048.415: Clarifying that the provisions related to 
defect reporting in 40 CFR 1068.501 apply for in-use testing.
     Sec.  1048.501: Removing specified mapping procedures, 
since these are addressed in 40 CFR part 1065.
     Sec.  1048.501: Clarifying the evaporative testing 
procedures, mainly by describing preconditioning procedures for engines 
equipped with carbon canisters (loading with vapors, then operating the 
engine to purge the canister appropriately). These procedures are 
consistent with the requirements we specify for light-duty vehicles in 
part 86 and for nonroad equipment in part 1060.
     Sec.  1048.505: (1) Removing redundant text and removing 
sampling times specified in Table 1, since these are already addressed 
in Sec.  1048.505(a)(1); (2) correcting the mode sequence listed in the 
table for ramped-modal testing; (3) clarifying that cycle statistics 
for discrete-mode testing are defined in Sec.  1065.514. This involves 
treating the series of modes as if it were continuous operation; and 
(4) referring to Sec.  1065.510 for idle specifications. These idle 
specifications provide more detailed instructions; we do not intend to 
change the way manufacturers test at idle.
     Sec. Sec.  1048.605 and 1048.610: Requiring some 
demonstration that the sales restrictions that apply for these sections 
are met, and clarifying the provisions related to emission credits for 
vehicles that generate or use emission credits under 40 CFR part 86.
     Sec.  1048.801: (1) Revising several definitions to align 
with updated definitions adopted for other programs; (2) Expanding the 
definition of small-volume engine manufacturer to also include 
companies with annual U.S. production volumes of no more than 2,000 
Large SI engines. This aligns with the provisions already adopted by 
California ARB. (3) Revising (in response to comments) the provision 
for emission-data engines to specify that the low-hour test result 
should generally occur after no more than 125 hours of engine 
operation. The regulations separately specify that engines may be 
presumed stabilized after 50 hours, so this would allow at least 75 
hours to perform testing on various fuels and configurations before the 
engine is no longer eligible for testing low-hour results. (4) 
Clarifying that an imported motor vehicle (or motor vehicle engine) 
that has been converted for nonroad use retains its original model 
year, but only if it was originally certified under part 86. Converted 
vehicles and engines that were not certified under part 86 have an 
assigned model year based on the date of conversion for nonroad use and 
must therefore meet nonroad standards based on the new model year.

E. Amendments Related to Recreational Vehicles (40 CFR Part 1051)

    We are making a variety of technical amendments to the regulations 
in 40 CFR part 1051 for recreational vehicles, as described in this 
section.
    In the proposal we requested comment on revising the regulation to 
allow for manufacturers of fuel-system components to certify that their 
products meet emission standards. For

[[Page 59142]]

recreational vehicles we adopted a program in which the exhaust and 
evaporative emission standards apply to the vehicle so we did not set 
up a process for certifying fuel-system components. We continue to 
believe that evaporative emission standards should apply to the 
vehicle. However, we are revising the final rule to include a process 
by which manufacturers of fuel-system components can opt into this 
program by certifying their fuel tanks or fuel lines to the applicable 
standards. While this is a voluntary step, any manufacturer opting into 
the program in this way will be subject to all the requirements that 
apply to certificate holders. While manufacturers of recreational 
vehicles will continue to be responsible for meeting standards and 
certifying their vehicles, it may be appropriate to simplify their 
compliance effort by allowing them to rely on the certification of the 
fuel line manufacturer or fuel tank manufacturer.
    We are making several additional technical amendments to part 1051. 
Many of these simply correct typographical errors or add references to 
the regulatory cites in part 1054. Several changes are intended merely 
to align regulatory language with that of other programs, including 
those that are subject to the standards in this final rule. In 
addition, we are making the changes described below. Note that the 
changes being made to the production-line and other testing 
requirements are being made in response to comments. As noted, a few 
others are also being made in response to comments or as clarifications 
of existing text. However, most of these changes are being finalized as 
proposed.
     Sec.  1051.1: Revising the speed threshold for offroad 
utility vehicles to be subject to part 1051. Changing from ``25 miles 
per hour or higher'' to ``higher than 25 miles per hour'' aligns this 
provision with the similar threshold for qualifying as a motor vehicle 
in 40 CFR 85.1703.
     Sec.  1051.5: Clarifying the status of very small 
recreational vehicles to reflect the provisions in the current 
regulations in 40 CFR part 90 to treat such vehicles with a dry weight 
under 20 kilograms as Small SI engines.
     Sec.  1051.25: Clarifying that manufacturers of 
recreational vehicles that use engines certified to meet exhaust 
emission standards must still certify the vehicle with respect to the 
evaporative emission standards.
     Sec.  1051.120: Clarifying that the emission-related 
warranty covers only those components from 40 CFR part 1068, Appendix 
I, whose failure will increase emissions of regulated pollutants.
     Sec.  1051.125: Giving examples of noncritical emission-
related maintenance, such as changing spark plugs and re-seating 
valves.
     Sec.  1051.135: Revising the labeling requirements to 
allow omission of the manufacturing date only if the date is stamped, 
engraved, or otherwise permanently applied on the vehicle, rather than 
allowing manufacturers to keep records of vehicle build dates. This is 
important for verifying that vehicles comply with standards based on 
their build date. This requirement takes effect starting with the 2010 
model year. See Section 1.3 of the Summary and Analysis of Comments for 
further discussion of issues related to this requirement.
     Sec.  1051.135: Adding a requirement to label vehicles as 
described in part 1060 for evaporative emission controls. Since this 
change may involve some time for manufacturers to comply, we are 
applying this requirement starting with the 2010 model year.
     Sec.  1051.137: Clarifying how the labeling requirements 
apply with respect to the averaging program and selected family 
emission limits.
     Sec.  1051.140: Allowing (in response to comments) for 
identification of engine displacement to the nearest whole cubic 
centimeter (rather than the nearest 0.5 cubic centimeter). This level 
of precision is adequate for implementing regulatory provisions related 
to engine displacement.
     Sec.  1051.145: Allowing the continued use of part 91 test 
procedures (instead of part 1065 procedures) for snowmobiles subject to 
Phase 2 or Phase 2 standards. We will revisit this provision in the 
context of adopting revised Phase 3 standards.
     Sec.  1051.205: Removing detailed specifications for 
describing auxiliary emission control devices in the application for 
certification. This responds to the concern expressed by manufacturers 
that the existing, very prescriptive approach requires much more 
information that is needed to adequately describe emission control 
systems. We are leaving in place a broad requirement to describe 
emission control systems and parameters in sufficient detail to allow 
EPA to confirm that no defeat devices are employed. Manufacturers 
should be motivated to include substantial information to make such 
determinations in the certification process, rather than being subject 
to this type of investigation for emission control approaches that are 
found to be outside of the scope of the application for certification. 
We may require manufacturers to submit additional information if the 
description submitted with the application is not adequate for 
evaluating the appropriateness of the design.
     Sec.  1051.205: Requirements to align projected production 
volumes with actual production from previous years. This does not imply 
additional reporting or recordkeeping requirements. It is intended 
simply to avoid situations where manufacturers intentionally mis-state 
their projected production volumes to gain some advantage under the 
regulations.
     Sec.  1051.220: Clarifying that if manufacturers change 
their maintenance instructions after starting production for an engine 
family, they may not disqualify vehicles for warranty claims based on 
the fact that operators did not follow the revised maintenance 
instructions.
     Sec.  1051.225: Clarifying the terminology to refer to 
``new or modified vehicle configurations'' rather than ``new or 
modified vehicles.'' This is necessary to avoid confusion with the term 
``new vehicle'' as it relates to introduction into commerce.
     Sec.  1051.225: Clarifying the provisions related to 
changing an engine family's Family Emission Limit after the start of 
production.
     Sec.  1051.255: Adopting a different SAE standard for 
specifying low-permeability materials to allow for design-based 
certification of metal fuel tanks with gaskets made of polymer 
materials. The previous language does not adequately characterize the 
necessary testing and material specifications.
     Sec.  1051.230: Clarifying that engine families relate 
fundamentally to emission certification and that we will expect 
manufacturers to suggest a tailored approach to specifying engine 
families under Sec.  1051.230(e) to occur only in unusual 
circumstances.
     Sec.  1051.245: Revising the specification for fuel lines 
meeting the specifications of SAE J 2260 to include the 2004 version of 
this standard as described in Section VIII.D.
     Sec.  1051.250: Adding a requirement for manufacturers to 
report their production volumes for an engine family separate from 
reports for production-line testing. For example, by excluding small-
volume families from production-line testing, the reports of production 
volumes would otherwise no longer be available to us. Also, we are 
clarifying that manufacturers must report total production volumes for 
an engine family for any production that occurs after submission of the 
final PLT report for the model year.

[[Page 59143]]

     Sec.  1051.301: Allowing small-volume emission families to 
be exempted from production-line testing requirements. This applies for 
engine families with production volumes below 150 units. This level of 
production does not allow for adequate testing to use the statistical 
techniques before exceeding specified maximum testing rates.
     Sec.  1051.301: Specifying that manufacturers may use an 
alternate method for production-line testing by using field-grade 
analyzers (instead of lab-grade) without prior approval, as long as 
they double the specified minimum sampling rate.
     Sec.  1051.305: Clarifying that tested vehicles should be 
built in a way that represents production vehicles.
     Sec.  1051.305: Revising the provision related to repeat 
testing after an invalidated test to specify that manufacturers do not 
need our approval before retesting, except that we may require this if 
we find that tests have been improperly invalidated.
     Sec.  1051.310: Clarifying the relationship between 
quarterly testing and compliance with the annual testing requirements; 
and clarifying the testing provisions that apply for engine families 
where the production period is substantially less than a full year.
     Sec.  1051.315: Correcting the equation for the CumSum 
statistic to prevent negative values.
     Sec.  1051.325: Clarifying the basis on which we will 
approve retroactive changes to the Family Emission Limit for an engine 
family that has failed under production-line testing.
     Sec.  1051.345: Changing the PLT reporting deadline from 
30 to 45 days after the end of each calendar quarter. This aligns with 
change we are making in other programs.
     Sec.  1051.350: Allowing manufacturers to keep electronic 
records related to production-line testing rather than paper records.
     Sec.  1051.501: Adding a specified test fuel for diesel-
fueled recreational vehicles that certify under part 1051. This would 
generally involve either low-sulfur diesel fuel (< 500 ppm sulfur) or 
ultra low-sulfur diesel fuel (< 15 ppm sulfur).
     Sec.  1051.505: (1) Clarifying that cycle statistics for 
discrete-mode testing on an engine dynamometer are defined in Sec.  
1065.514. This involves treating the series of modes as if it involved 
continuous operation. (2) Specifying that manufacturers may choose 
between discrete-mode and ramped-modal measurements for production-line 
testing if the application for certification includes testing conducted 
with both types of testing. (3) Referring to Sec.  1065.510 for idle 
specifications. These idle specifications provide more detailed 
instructions; we do not intend to change the way manufacturers test at 
idle.
     Sec. Sec.  1051.605 and 1051.610: Requiring a 
demonstration that the sales restrictions that apply for these sections 
are met.
     Sec.  1051.650: Adding a requirement to certify vehicles 
that are converted to run on a different fuel. We expect this is a rare 
occurrence, but one that we should make subject to certification 
requirements.
     Sec.  1051.701: Clarifying that manufacturers using 
emission credits to meet emission standards must base their credit 
calculations on their full product line-up, rather than considering 
only those engine families with Family Emission Limits above or below 
the emission standard.
     Sec. Sec.  1051.710-1051.735: Making various minor 
revisions to align with regulatory specifications in other programs.
     Sec.  1051.735: Adding a requirement to keep records 
related to banked emission credits for as long as a manufacturer 
intends for those credits to be valid. This is necessary for us to 
verify the appropriateness of credits used for demonstrating compliance 
with emission standards in later model years.
     Sec.  1051.801: Revising several definitions to align with 
updated definitions adopted for other programs.
     Sec.  1051.801: Clarifying that an engine's ``maximum 
engine power'' does not change if it is installed in a vehicle or piece 
of equipment that limits the engine's operation. For example, adding a 
speed limiter to a vehicle does not affect the engine's ``maximum 
engine power'' as determined by the engine manufacturer for the engine 
as it would be tested using the specified procedures.
     Sec.  1051.801: Clarifying that an imported motor vehicle 
that has been converted for nonroad use retains its original model 
year, but only if it was originally certified under part 86. Converted 
vehicles that were not certified under part 86 have an assigned model 
year based on the date of conversion for nonroad use and must therefore 
meet nonroad standards based on the new model year.

F. Amendments Related to Heavy-Duty Highway Engines (40 CFR Part 85)

    We proposed to make several adjustments to the provisions related 
to delegated assembly specified in Sec.  85.1713. These proposed 
adjustments include:
     Removing the provision related to auditing outside the 
United States since equipment manufactured in other countries will not 
be subject to these provisions
     Clarifying that the exemption expires when the equipment 
manufacturer takes possession of the engine, but not before it reaches 
the point of final assembly
     Clarifying the prohibition related to following 
installation instructions to ensure that engines are in their certified 
configuration when installed in a piece of equipment.
    We are adopting these proposed provisions as part of a bigger 
effort to harmonize delegated-assembly across engine categories. See 
Section VIII.C.6 for further discussion of the changes in delegated 
assembly in the harmonized approach we are adopting in Sec.  1068.261. 
Note that the new labeling requirements we are adopting take effect for 
heavy-duty highway engines starting in the 2010 model year.
    Manufacturers also submitted comments describing technical and 
practical challenges related to the transition to using part 1065 test 
procedures for heavy-duty highway engines. We have agreed to delay the 
mandatory use of part 1065 procedures until July 2010. However, there 
are several areas where part 1065 specifies procedures or methods that 
are already well established, where those methods represent substantial 
improvements over the existing procedures specified in part 86. We are 
therefore not extending the deadline for these specific provisions. See 
Sec.  86.1305-2010 for additional information.
    We have revised the final rule to include new provisions allowing 
for a replacement-engine exemption for heavy-duty highway engines under 
Sec.  1068.240 as described in Section VIII.C.5.

G. Amendments Related to Stationary Spark-Ignition Engines (40 CFR part 
60)

    On January 18, 2008 we promulgated final emission standards for 
stationary spark-ignition engines (73 FR 3567). The final rule 
specified that stationary spark-ignition engines at or below 19 kW 
would be subject to all the same emission standards and certification 
requirements that apply to Small SI engines. Since we are promulgating 
new standards for Small SI engines in this rule, these requirements 
should apply automatically to those stationary engines. However, since 
the Phase 3 standards are in 40 CFR part 1054, as described in Section 
V, we are revising the regulatory language for stationary spark-
ignition engines in 40 CFR part

[[Page 59144]]

60, subpart JJJJ, to directly reference the Phase 3 standards in part 
1054, as proposed.

H. Amendments Related to Locomotive, Marine, and Other Nonroad 
Compression-Ignition Engines (40 CFR parts 89, 92, 94, 1033, 1039, and 
1042)

    In response to comments, we are making a variety of technical 
amendments to regulatory provisions for nonroad compression-ignition 
engines. Several of these changes are intended to align with the 
changes we are adopting in this rule for spark-ignition engines, either 
to be consistent with those standard-setting parts, or to fit with 
changes we are making to the general compliance provisions in part 
1068. There are also a variety of changes to correct paragraph 
references and other typographical errors. We are making the following 
additional adjustments and clarifications to the regulations:
     Modifying the labeling statement for replacement engines 
under part 89 to clarify what applies when manufacturer replace an 
engine that was originally exempted from emission standards.
     Correcting a typographical error to define the alternate 
emission standard for switch locomotives in Sec.  1033.101(b) to be the 
same as that for line-haul locomotives, as described in the preamble to 
that final rule.
     Revising the start date for the certification requirement 
for automatic engine stop/start in Sec.  1033.115 to provide sufficient 
lead time following publication of the final rule establishing part 
1033. Note that this revision addresses only administrative 
requirements and does not delay the introduction of the emission 
control technology.
     Clarifying provisions related to assigned deterioration 
factors for locomotive remanufacturers in Sec.  1033.150 to be 
consistent with the description in the preamble to the final rule 
establishing part 1033.
     Clarifying the need for prior approval of adjustments for 
automatic shutdown features to be consistent with the description in 
the preamble to the final rule establishing part 1033 (see Sec.  
1033.530).
     Clarifying the definition of ``new'' in Sec.  1033.801 for 
remanufactured engines that have been certified.
     Revising the definition of ``hobby engine'' in Sec.  
1039.5 and Sec.  1042.5 to rely on vehicle characteristics (reduced-
scale models that are not capable of transporting a person) rather than 
engine characteristics (less than 50 cc per cylinder). See Section 1.2 
of the Summary and Analysis of Comments for further information.
     Clarifying that compression-ignition engines used in 
recreational vehicles and certified under part 1051 are not required to 
certify under part 1039.
     Clarifying the labeling requirements that apply for 
engines meeting the alternate PM standard specified in Sec.  
1039.101(c) (see Sec.  1039.102 and Sec.  1039.135).
     Adding a provision allowing manufacturers to specify 
scheduled maintenance for crankcase vent filters. This is analogous to 
servicing PCV valves for engines that have closed crankcases (see Sec.  
1039.125).
     Revising the Transition Program for Equipment 
Manufacturers in Sec.  1039.625 and Sec.  1039.626 to (1) require 
manufacturers to send only a single report to EPA, (2) allow 
manufacturers to identify their contact information in their reports or 
on a publicly accessible Web site rather than on their equipment 
labels, (3) specify a notification deadline based on the start of using 
these provisions, rather than tying the deadline only to the start of 
the year, (4) allow manufacturers to omit the FEL from the engine label 
if the FEL is below the emission standard that would otherwise apply, 
(5) identify specific asset thresholds for avoiding bond payments for 
importing exempted products, (6) clarify the types of penalties and 
judgments that would be subject to payment from the posted bond, and 
(7) specify that manufacturers may identify an agent for service 
anywhere in the United States (rather than specifically in Washington, 
DC).
     Correcting an error for marine compression-ignition 
engines in Sec.  1042.101 by noting that the Tier 3 NOX+HC 
standards do not apply for engines between 2000 and 3700 kW that have a 
power density above 35 kW per liter. The footnote in Table 1 of this 
section denoting this distinction was inadvertently omitted for the 
high power-density engines.
     Revising the requirements related to evaporative emissions 
in Sec.  1042.105 to align with the new provisions that apply for 
Marine SI applications as described in Section VI.
     Removing Sec.  1042.601(g) since this provision is being 
codified in this rule at Sec.  1068.101(b)(1).

IX. Projected Impacts

A. Emissions from Small Nonroad and Marine Spark-Ignition Engines

    As discussed in previous sections, this final rule will reduce 
exhaust emissions from specific sizes of nonhandheld Small SI and 
Marine SI engines. It will also reduce evaporative emissions from the 
fuel systems used on nonhandheld and handheld Small SI equipment and 
Marine SI vessels (for simplicity we collectively include the 
evaporative emission requirements from equipment or vessels when 
referring to Small SI or Marine SI engines in the remainder of this 
section). The new exhaust and evaporative emission standards will 
directly affect volatile organic hydrocarbon compounds (VOC), oxides of 
nitrogen (NOX), and to a lesser extent carbon monoxide (CO). 
Also, we anticipate that the emission control technology which is 
likely to be used to meet the exhaust emission standards will affect 
directly emitted particulate matter, most importantly particles with 
diameters of 2.5 micrometers or less (PM2.5). It will also 
incrementally reduce air toxic emissions. A detailed analysis of the 
effects of this final rule on emissions and emission inventories can be 
found in Chapter 3 of the Final RIA.
    The contribution of exhaust and evaporative emissions from Small SI 
and Marine SI engines to total 50-state mobile-source emission 
inventories is significant and will remain so into the future. Table 
IX-1 presents the nationwide inventory for these engines for both 2002 
and 2030. (The inventories cover all Small SI and Marine SI engines 
including the portion of Small SI engines regulated by the California 
ARB.) Table IX-1 shows that for the primary pollutants affected by this 
final rule, these engines contribute about 25 to 35 percent of the 
nationwide VOC emissions from all mobile sources. The nationwide 
contribution to the total mobile source NOX inventory is 
about 5 percent or less. Finally, for PM2.5, the contribution is about 
10 percent.

[[Page 59145]]



  Table IX-1--Contribution of Small Nonroad and Marine SI Engines to National (50-State) Mobile Source Emission
                                                   Inventories
----------------------------------------------------------------------------------------------------------------
                                                               2002                            2030
                                                 ---------------------------------------------------------------
                                                     Small SI/                       Small SI/
                    Pollutant                        marine SI      Percent of       marine SI      Percent of
                                                    inventory,     mobile source    inventory,     mobile source
                                                       tons          inventory         tons          inventory
----------------------------------------------------------------------------------------------------------------
VOC.............................................       2,169,000              26       1,430,000              35
NOX.............................................         169,700               1         311,300               6
PM2.5...........................................          41,960               8          44,040              12
CO..............................................      19,607,000              23      15,605,000              30
----------------------------------------------------------------------------------------------------------------

(1) VOC
    Table IX-2 shows the VOC emissions and emission reductions we 
expect both with and without the new standards for engines, equipment, 
and vessels affected by the final rule. In 2002, Small SI and Marine SI 
emitted approximately 1,047,000 and 931,000 tons of VOC, respectively. 
Without the new standards, these emissions will decrease because of the 
effect of the existing emission control requirements to about 958,000 
and 484,000 tons by 2040, respectively. With the new controls, this 
pollutant will be further reduced by 34 percent for Small SI engines 
and 73 percent for Marine SI engines by 2040. The VOC emission 
inventory trends over time for both categories of engines that are 
subject to the final rule are shown in Figure IX-1.

    Table IX-2--National (50-State) VOC Emissions and Emission Reductions for Small SI and Marine SI Engines
----------------------------------------------------------------------------------------------------------------
                                                                                                       Percent
              Year                    Category        Without rule      With rule       Reduction     reduction
----------------------------------------------------------------------------------------------------------------
                                 Small Engine......       1,047,374       1,047,374  ..............  ...........
                                 Marine............         931,132         931,132  ..............  ...........
2002...........................  Both..............       1,978,506       1,978,506  ..............  ...........
                                 Small Engine......         675,131         488,517         186,614           28
                                 Marine............         505,981         384,108         121,873           24
2015...........................  Both..............       1,181,112         872,624         308,487           26
                                 Small Engine......         728,853         242,957         240,948           33
                                 Marine............         460,481         242,957         217,524           47
2020...........................  Both..............       1,189,334         730,862         458,472           39
                                 Small Engine......         842,970         558,094         284,876           34
                                 Marine............         458,656         139,083         319,573           70
2030...........................  Both..............       1,301,626         697,177         604,449           46
                                 Small Engine......         958,429         633,050         325,379           34
                                 Marine............         483,949         128,906         355,043           73
2040...........................  Both..............       1,442,377         761,956         680,422           47
----------------------------------------------------------------------------------------------------------------


[[Page 59146]]

[GRAPHIC] [TIFF OMITTED] TR08OC08.064

(2) NOX
    Table IX-3 shows the NOX emissions and emission 
reductions we expect both with and without the new standards for 
engines affected by the final rule. In 2002, Small SI and Marine SI 
emitted approximately 107,000 and 46,300 tons of NOX, 
respectively. Without the new standards, these emissions will increase 
to about 181,000, and 132,000 tons by 2040, respectively. With the new 
controls, this pollutant will be reduced by 49 percent for Small SI 
engines and 48 percent for Marine SI engines by 2040. The 
NOX emission inventory trends over time for both categories 
of engines that are subject to the final rule are shown in Figure IX-2.

    Table IX-3--National (50-State) NOX Emissions and Emission Reductions for Small SI and Marine SI Engines
----------------------------------------------------------------------------------------------------------------
                                                                                                       Percent
              Year                    Category        Without rule      With rule       Reduction     reduction
----------------------------------------------------------------------------------------------------------------
                                 Small Engine......         106,804         106,804  ..............  ...........
                                 Marine............          46,311          46,311  ..............  ...........
2002...........................  Both..............         153,115         153,115  ..............  ...........
                                 Small Engine......         126,395          76,412          49,983           40
                                 Marine............         101,703          85,334          16,369           16
2015...........................  Both..............         228,098         161,746          66,353           29
                                 Small Engine......         137,002          72,175          64,827           47
                                 Marine............         111,525          81,398          30,128           27
2020...........................  Both..............         248,527         153,572          94,954           38
                                 Small Engine......         158,840          81,977          76,863           48
                                 Marine............         123,335          68,639          54,696           44
2030...........................  Both..............         282,175         150,616         131,559           47
                                 Small Engine......         180,973          93,181          87,792           49
                                 Marine............         131,907          68,461          63,445           48
2040...........................  Both..............         312,880         161,643         151,237           48
----------------------------------------------------------------------------------------------------------------


[[Page 59147]]

[GRAPHIC] [TIFF OMITTED] TR08OC08.065

(3) PM2.5
    Table IX-4 shows the PM2.5 emissions and emission reductions we 
expect both with and without the new standards for engines affected by 
the final rule. In 2002, Small SI and Marine SI emitted 23,000 and 
15,000 tons of PM2.5, respectively. Without the new standards, the 
PM2.5 emissions from Small SI engines will increase to 
39,000 by 2040, while those from Marine SI will decrease to about 6,000 
tons in that year due to the effects of the existing emission control 
requirements for certain types of Marine SI engines, such as outboards. 
With the new controls, this pollutant will be reduced by 3 percent for 
Small SI engines and an additional 84 percent for Marine SI engines by 
2040.
    The PM2.5 emission inventory trends over time for both categories 
of engines that are subject to the final rule are shown in Figure IX-3.

   Table IX-4--National (50-State) PM2.5 Emissions and Emission Reductions for Small SI and Marine SI Engines
----------------------------------------------------------------------------------------------------------------
                                                                                                       Percent
              Year                    Category        Without rule      With rule       Reduction     reduction
----------------------------------------------------------------------------------------------------------------
                                 Small Engine......          23,382          23,382  ..............  ...........
                                 Marine............          15,092          15,092  ..............  ...........
2002...........................  Both..............          38,474          38,474  ..............  ...........
                                 Small Engine......          27,747          27,115             632            2
                                 Marine............           6,823           4,951           1,872           27
2015...........................  Both..............          34,570          32,066           2,504            7
                                 Small Engine......          30,009          29,189             820            3
                                 Marine............           5,908           2,640           3,269           55
2020...........................  Both..............          35,917          31,828           4,089           11
                                 Small Engine......          34,535          33,572             963            3
                                 Marine............           5,719           1,137           4,582           80
2030...........................  Both..............          40,255          34,710           5,545           14
                                 Small Engine......          39,079          37,979           1,100            3
                                 Marine............           6,016             989           5,027           84
2040...........................  Both..............          45,095          38,968           6,127           14
----------------------------------------------------------------------------------------------------------------


[[Page 59148]]

[GRAPHIC] [TIFF OMITTED] TR08OC08.066

(4) CO
    Table IX-5 shows the CO emissions and emission reductions we expect 
both with and without the new standards for engines affected by the 
final rule. In 2002, Small SI and Marine SI emitted 15,091,000 and 
2,472,000 tons of CO, respectively. Without the new standards, these 
emissions will decrease because of the effect of the existing emission 
control requirements to about 14,007,000 and 1,766,000 tons by 2040, 
respectively. With the new controls, this pollutant will be reduced by 
an additional 9 percent for Small SI engines and an additional 21 
percent for Marine SI engines by 2040. The CO emission inventory trends 
over time for both categories of engines that are subject to the final 
rule are shown in Figure IX-4.

     Table IX-5--National (50-State) CO Emissions and Emission Reductions for Small SI and Marine SI Engines
----------------------------------------------------------------------------------------------------------------
                                                                                                       Percent
              Year                    Category        Without rule      With rule       Reduction     reduction
----------------------------------------------------------------------------------------------------------------
                                 Small Engine......      15,091,835      15,091,835  ..............  ...........
                                 Marine............       2,472,251       2,472,251  ..............  ...........
2002...........................  Both..............      17,564,086      17,564,086  ..............  ...........
                                 Small Engine......       9,879,027       9,135,515         743,512            8
                                 Marine............       1,690,755       1,587,889         102,867            6
2015...........................  Both..............      11,569,782      10,723,404         846,379            7
                                 Small Engine......      10,645,870       9,679,462         966,407            9
                                 Marine............       1,638,114       1,452,196         185,917           11
2020...........................  Both..............      12,283,983      11,131,659       1,152,325            9
                                 Small Engine......      12,310,505      11,166,921       1,143,584            9
                                 Marine............       1,671,627       1,353,989         317,638           19
2030...........................  Both..............      13,982,132      12,520,910       1,461,222           10
                                 Small Engine......      14,007,335      12,701,792       1,305,543            9
                                 Marine............       1,765,651       1,399,715         365,936           21
2040...........................  Both..............      15,772,986      14,101,507       1,671,479           11
----------------------------------------------------------------------------------------------------------------


[[Page 59149]]

[GRAPHIC] [TIFF OMITTED] TR08OC08.067

B. Estimated Costs

    In assessing the economic impact of setting emission standards, we 
have made a best estimate of the costs associated with the technologies 
we anticipate manufacturers will use in meeting the standards. In 
making our estimates for the final rule, we have relied on our own 
technology assessment, which includes information developed by EPA's 
National Vehicle and Fuel Emissions Laboratory (NVFEL). Estimated costs 
include variable costs (e.g., hardware and assembly time) and fixed 
costs (e.g., research and development, retooling, engine certification 
and test cell upgrades to 40 CFR 1065 requirements). We projected that 
manufacturers will redirect existing research and development funds to 
invest in the fixed costs associated with changes needed to meet the 
rulemaking requirements. The analysis also considers total operating 
costs, including maintenance and fuel consumption. Cost estimates based 
on the projected technologies represent an expected change in the cost 
of engines as they begin to comply with new emission standards. All 
costs are presented in 2005 dollars. Full details of our cost analysis 
can be found in Chapter 6 of the Final RIA. Estimated costs related to 
exhaust emissions were also subject to peer review, as described in a 
set of peer review reports that are available in the docket for this 
rulemaking.
    Cost estimates based on the current projected costs for our 
estimated technology packages represent an expected incremental cost of 
equipment in the near term. For the longer term we have identified a 
factor that will cause cost impacts to decrease over time. We expect 
that manufacturers will undergo a learning process that will lead to 
lower variable costs. For instance, the analysis incorporates the 
expectation that Small SI engine manufacturers will optimize the 
catalyst muffler offerings available and thereby streamline their 
production and reduce costs. The cost analysis generally incorporates 
this learning effect by decreasing estimated variable costs by 20 
percent starting in the sixth year of production. The learning curve 
has not been applied to Small SI EFI systems due to the fact that the 
technologies are currently well established on similar sized engines in 
other applications.
    We project average costs to comply with the new exhaust emission 
standards for Small SI engines and equipment to range from $9-$11 per 
Class I equipment to meet the Phase 3 standards. We anticipate the 
manufacturers will meet the emission standard with several technologies 
including engine improvements and catalysts. For Class II equipment, we 
project average costs to range from $15-$26 per equipment to meet the 
new emission standards. We anticipate the manufacturers of Class II 
engines will meet the new exhaust emission standards by engine 
improvements and adding catalysts and/or electronic fuel injection to 
their engines. The use of electronic fuel injection is estimated to 
provide a fuel savings of 10% over the lifetime of a Class II engine. 
Using an average garden tractor estimated lifetime of 5.8 years, and 
the estimate that 6.6% of Class II engines will utilize electronic fuel 
injection, this calculates to be a lifetime savings of 273 gallons. 
This translates to a discounted lifetime savings of approximately $496 
per engine, at an average fuel price of $1.81 per gallon.
    For Small SI equipment, we have also estimated a per-unit cost for 
the new evaporative emission standards. The average short-term costs 
without fuel savings are projected to be $0.82 for handheld equipment, 
$3.05 for Class I equipment, and $6.73 for Class II equipment. These 
costs are based on fuel tank and fuel line permeation control, and for 
non-handheld equipment, running loss and diffusion control. Because 
evaporative emissions are composed of otherwise usable fuel that is 
lost to the atmosphere, measures that reduce evaporative emissions will 
result in fuel savings. We estimate that the average fuel savings, due 
to permeation control, be about 1.4 gallons over the 5 year average 
operating lifetime. This translates to a discounted lifetime savings of 
more than $2 at an average fuel price of $1.81 per gallon.
    For marine engines, we estimated per-engine costs for OB, PWC, and 
SD/I engines for meeting the new exhaust emission standards. The short-
term cost estimates without fuel savings are $290 for OB, $390 for PWC, 
and $360 for SD/

[[Page 59150]]

I engines. For OB/PWC engines, we anticipate that manufacturers will 
meet the standards through the expanded production of existing low-
emission technologies such as four-stroke and direct-injection two-
stroke engines. For most SD/I engines, we anticipate that manufacturers 
will use catalytic control to meet the new standards.
    For marine vessels, we have also estimated a per-unit cost for the 
new evaporative emission standards. The average short-term costs 
without fuel savings are projected to be $12 for boats with portable 
fuel tanks, $17 for PWC, and $74 for boats with installed fuel tanks. 
These costs are based on fuel tank and fuel line permeation control and 
diurnal emission control. For portable fuel tanks, diurnal emission 
control is based on an automatic sealing vent, for PWC we estimate that 
changes will not be necessary from current designs, and for other boats 
with installed fuel tanks, the estimated costs are based on the use of 
a passively-purged carbon canister. Because evaporative emissions are 
composed of otherwise usable fuel that is lost to the atmosphere, 
measures that reduce evaporative emissions will result in fuel savings. 
We estimate that the average fuel savings, due to permeation control, 
to be about 28 gallons over the 15 year average operating lifetime. 
This translates to a discounted lifetime savings of more than $30 at an 
average fuel price of $1.81 per gallon.

C. Cost per Ton

    We have calculated the cost per ton of the Phase 3 standards 
contained in this final rule by estimating costs and emission benefits 
for these engines. We made our best estimates of the combination of 
technologies that engine manufacturers might use to meet the new 
standards, best estimates of resultant changes to equipment design, 
engine manufacturer compliance program costs, and fuel savings in order 
to assess the expected economic impact of the Phase 3 emission 
standards for Small SI engines and Marine SI engines. Emission 
reduction benefits are taken from the results of the Inventory chapter 
of the RIA (Chapter 3).
    A summary of the annualized costs to Small SI and Marine SI engine 
manufacturers is presented in Table IX-6. These annualized costs are 
over a 30 year period and presented both with a 3 percent and a 7 
percent discount rate. The annualized fuel savings for Small SI engines 
are due to reduced fuel costs from the use of electronic fuel injection 
on Class II engines as well as fuel savings from evaporative measures 
on all Small SI engines. The annualized fuel savings for Marine SI 
engines are due to reduced fuel costs from the expected elimination of 
two-stroke outboard motors from the new engine fleet as well as fuel 
savings from evaporative emission controls on all vessels.

   Table IX-6--Estimated Annualized Cost to Manufacturers and Annualized Fuel Savings over 30 Years Due to the
                                 Phase 3 Small SI and Marine SI Engine Standards
                                     [2005$, 3 and 7 percent discount rates]
----------------------------------------------------------------------------------------------------------------
                                                                       Annualized cost to      Annualized fuel
                                                                          manufacturers      savings  (millions/
             Engine category                  Emissions category          (millions/yr)              yr)
                                                                     -------------------------------------------
                                                                          3%         7%         3%         7%
----------------------------------------------------------------------------------------------------------------
Small SI Engines........................  Exhaust...................       $190       $182        $27        $24
                                          Evaporative...............         68         65         59         53
                                          Aggregate.................        258        247         86         77
Marine SI Engines.......................  Exhaust...................        123        123         67         56
                                          Evaporative...............         23         22         27         22
                                          Aggregate.................        146        144         94         78
----------------------------------------------------------------------------------------------------------------

    We have estimated the Small SI and Marine SI engine cost per ton of 
the Phase 3 HC+NOX standards over the typical lifetime of 
the equipment that are covered by this final rule. We have examined the 
cost per ton by performing a nationwide cost per ton analysis in which 
the net present value of the cost of compliance per year is divided by 
the net present value of the HC+NOX benefits over 30 years. 
The resultant discounted cost per ton is presented in Table IX-7. The 
total (exhaust and evaporative) cost per ton, using a 7 percent 
discount rate, with fuel savings is $856 for Small SI equipment and 
$360 for marine vessels. For the final rule as a whole, the cost per 
ton of HC+NOX reduction is $623. Reduced operating costs 
offset a portion of the increased cost of producing the cleaner Small 
SI and Marine SI engines. Reduced fuel consumption also offsets the 
costs of permeation control. Chapter 7 of the RIA contains a more 
detailed discussion of the cost per ton analysis.

                       Table IX-7--Estimated Cost Per Ton of the HC+NOX Emission Standards
                                     [2005$, 3 and 7 percent discount rates]
----------------------------------------------------------------------------------------------------------------
                                                                                   Discounted cost per ton
                                                           Implementation  -------------------------------------
                        Category                               dates           Without fuel    With fuel savings
                                                                             savings  (3%/7%)        (3%/7%)
----------------------------------------------------------------------------------------------------------------
Small SI Exhaust.......................................          2011-2012      $1,152/$1,264        $986/$1,097
Small SI Evaporative...................................          2009-2013            690/740             90/140
Marine SI Exhaust......................................          2010-2013            700/830            320/450
Marine SI Evaporative..................................          2009-2012            500/590         (100)/(10)
Aggregate..............................................          2009-2013            868/974            519/623
----------------------------------------------------------------------------------------------------------------


[[Page 59151]]

    As is discussed above, we are also expecting some reduction in 
direct PM emissions and carbon monoxide. These reductions will come 
primarily as a product of the technology being used to meet HC and 
NOX standards and not directly as a result of the 
implementation of specific technology to achieve these gains. Thus, we 
have elected to focus our cost per ton analysis on HC+NOX.
    One useful purpose of cost per ton analysis is to compare this 
program to other programs designed to achieve similar air quality 
objectives. Toward that end, we made a comparison between the 
HC+NOX cost per ton values presented in Table C-2 and the 
HC+NOX cost per ton of other recent mobile source programs. 
Table IX-8 summarizes the HC+NOX cost per ton of several 
recent EPA actions for controlled emissions from mobile sources. While 
the analyses for each rule were not completely identical, it is clear 
that the Small SI and Marine SI values compare favorably with the other 
recent actions.

 Table IX-8--Cost Per Ton of Previously Implemented HC+NOX Mobile Source
                                Programs
              [2005$, 7 percent discount with fuel savings]
------------------------------------------------------------------------
                                                            Discounted
                         Program                           cost per ton
------------------------------------------------------------------------
2002 HH engines Phase 2.................................             840
2001 NHH engines Phase 2................................            neg*
1998 Marine SI engines..................................            1900
2004 Comm Marine CI.....................................             200
2007 Large SI exhaust...................................              80
2006 ATV exhaust........................................             300
2006 off-highway motorcycle.............................             290
2006 recreational marine CI.............................             700
2010 snowmobile.........................................            1430
2006 <50cc highway motorcycle...........................            1860
2010 Class 3 highway motorcycle.........................           1650
------------------------------------------------------------------------
* fuel savings outweigh engineering/hardware costs.

D. Air Quality Impact

    Information on the air quality impacts of this action can be found 
in Section II, which includes health effect information on ozone, PM, 
CO and air toxics. It also includes modeled projections of future ozone 
concentrations with and without the controls detailed in this final 
rule. The emission reductions will lead to reductions in ambient 
concentrations of ozone, PM, CO and air toxics.

E. Benefits

    This section presents our analysis of the health and environmental 
benefits that are estimated to occur as a result of the final Small SI 
and Marine SI engine standards throughout the period from initial 
implementation through 2030. Nationwide, the engines that are subject 
to the emission standards in this rule are a significant source of 
mobile source air pollution. The standards would reduce exposure to 
hydrocarbon, CO and NOX emissions and help avoid a range of 
adverse health effects associated with ambient ozone and 
PM2.5 levels. In addition, the proposed standards would help 
reduce exposure to CO, air toxics, and PM2.5 for persons who 
operate or who work with or are otherwise active in close proximity to 
these engines. As described below, the reductions in PM and ozone from 
the standards are expected to result in significant reductions in 
premature deaths and other serious human health effects, as well as 
other important public health and welfare effects.
    EPA typically quantifies and monetizes PM- and ozone-related 
impacts in its regulatory impact analyses (RIAs) when possible. The RIA 
for the proposal for this rulemaking only quantified benefits from PM; 
in the current RIA we quantify and monetize the ozone-related health 
and environmental impacts associated with the final rule. The science 
underlying the analysis is based on the current ozone criteria 
document.\124\ To estimate the incidence and monetary value of the 
health outcomes associated with this final rule, we used health impact 
functions based on published epidemiological studies, and valuation 
functions derived from the economics literature.\125\ Key health 
endpoints analyzed include premature mortality, hospital and emergency 
room visits, school absences, and minor restricted activity days. The 
analytic approach to characterizing uncertainty is consistent with the 
analysis used in the RIA for the proposed O3 NAAQS.
---------------------------------------------------------------------------

    \124\ U.S. Environmental Protection Agency (2006) Air quality 
criteria for ozone and related photochemical oxidants (second 
external review draft) Research Triangle Park, NC: National Center 
for Environmental Assessment; report no. EPA/600R-05/004aB-cB, 
3v.Available: http://cfpub.epa.gov/ncea/cfm/recordisplay.cfm?deid=137307[March 2006].
    \125\ Health impact functions measure the change in a health 
endpoint of interest, such as hospital admissions, for a given 
change in ambient ozone or PM concentration.
---------------------------------------------------------------------------

    The benefits modeling is based on peer-reviewed studies of air 
quality and health and welfare effects associated with improvements in 
air quality and peer-reviewed studies of the dollar values of those 
public health and welfare effects. These methods are consistent with 
benefits analyses performed for the recent analysis of the final Ozone 
NAAQS and the final PM NAAQS analysis.126 127 They are 
described in detail in the regulatory impact analyses prepared for 
those rules.
---------------------------------------------------------------------------

    \126\ U.S. Environmental Protection Agency. March 2008. Final 
Ozone NAAQS Regulatory Impact Analysis. Prepared by: Office of Air 
and Radiation, Office of Air Quality Planning and Standards.
    \127\ U.S. Environmental Protection Agency. October 2006. Final 
Regulatory Impact Analysis (RIA) for the Proposed National Ambient 
Air Quality Standards for Particulate Matter. Prepared by: Office of 
Air and Radiation. Available at HTTP://www.epa.gov/ttn/ecas/ria.html.
---------------------------------------------------------------------------

    The range of PM benefits associated with the final standards is 
estimated based on risk reductions estimated using several sources of 
PM-related mortality effect estimates. In order to provide an 
indication of the sensitivity of the benefits estimates to alternative 
assumptions about PM mortality risk reductions, in Chapter 8 of the RIA 
we present a variety of benefits estimates based on two epidemiological 
studies (including the ACS Study and the Six Cities Study) and the 
recent PM mortality expert elicitation.\128\ EPA intends to ask the 
Science Advisory Board to provide additional advice as to which 
scientific studies should be used in future RIAs to estimate the 
benefits of reductions in PM-related premature mortality.
---------------------------------------------------------------------------

    \128\ Industrial Economics, Incorporated (IEc). 2006. Expanded 
Expert Judgment Assessment of the Concentration-Response 
Relationship Between PM2.5 Exposure and Mortality. Peer 
Review Draft. Prepared for: Office of Air Quality Planning and 
Standards, U.S. Environmental Protection Agency, Research Triangle 
Park, NC. August.
---------------------------------------------------------------------------

    In a recent report on the estimation of ozone-related premature 
mortality published by the National Research Council (NRC),\129\ a 
panel of experts and reviewers concluded that ozone-related mortality 
should be included in estimates of the health benefits of reducing 
ozone exposure. The report also recommended that the estimation of 
ozone-related premature mortality be accompanied by broad uncertainty 
analyses while giving little or no weight to the assumption that there 
is no causal association between ozone exposure and premature 
mortality. Because EPA has yet to develop a coordinated response to the 
NRC report's findings and recommendations, however, we have retained 
the approach to estimating ozone-related premature mortality used in 
RIA for the final Ozone NAAQS. EPA will specifically address the 
report's findings and recommendations in future rulemakings.
---------------------------------------------------------------------------

    \129\ National Research Council (NRC). 2002. Estimating the 
Public Health Benefits of Proposed Air Pollution Regulations. The 
National Academies Press: Washington, DC.
---------------------------------------------------------------------------

    The range of ozone benefits associated with the final standards is 
based on risk

[[Page 59152]]

reductions estimated using several sources of ozone-related mortality 
effect estimates. This analysis presents four alternative estimates for 
the association based upon different functions reported in the 
scientific literature. One estimate is derived from the National 
Morbidity, Mortality, and Air Pollution Study (NMMAPS),\130\ which was 
used as the primary basis for the risk analysis in the ozone Staff 
Paper \131\ and reviewed by the Clean Air Science Advisory Committee 
(CASAC).\132\ We also use three studies that synthesize ozone mortality 
data across a large number of individual studies.133 134 135 
This approach is not inconsistent with recommendations provided by the 
NRC in their ozone mortality report (NRC, 2008), ``The committee 
recommends that the greatest emphasis be placed on estimates from new 
systematic multicity analyses that use national databases of air 
pollution and mortality, such as in the NMMAPS, without excluding 
consideration of meta-analyses of previously published studies.''
---------------------------------------------------------------------------

    \130\ Bell, M.L., et al. 2004. Ozone and short-term mortality in 
95 U.S. urban communities, 1987-2000. Jama, 2004. 292(19): p. 2372-
8.
    \131\ U.S. EPA (2007) Review of the National Ambient Air Quality 
Standards for Ozone, Policy Assessment of Scientific and Technical 
Information. OAQPS Staff Paper. EPA-452/R-07-003. This document is 
available in Docket EPA-HQ-OAR-2003-0190. This document is available 
electronically at: http:www.epa.gov/ttn/naaqs/standards/ozone/s_o3_cr_sp.html.
    \132\ CASAC (2007). Clean Air Scientific Advisory Committee's 
(CASAC) Review of the Agency's Final Ozone Staff Paper. EPA-CASAC-
07-002. March 26.
    \133\ Bell, M.L., F. Dominici, and J.M. Samet. A meta-analysis 
of time-series studies of ozone and mortality with comparison to the 
national morbidity, mortality, and air pollution study. 
Epidemiology, 2005. 16(4): p. 436-45.
    \134\ Ito, K., S.F. De Leon, and M. Lippmann. Associations 
between ozone and daily mortality: analysis and meta-analysis. 
Epidemiology, 2005. 16(4): p. 446-57.
    \135\ Levy, J.I., S.M. Chemerynski, and J.A. Sarnat. 2005. Ozone 
exposure and mortality: an empiric bayes metaregression analysis. 
Epidemiology, 2005. 16(4): p. 458-68.
---------------------------------------------------------------------------

    The range of total ozone- and PM-related benefits associated with 
the final standards is presented in Table IX.E-1. We present total 
benefits based on the PM- and ozone-related premature mortality 
function used. The benefits ranges therefore reflect the addition of 
each estimate of ozone-related premature mortality (each with its own 
row in Table IX.E-1) to estimates of PM-related premature mortality, 
derived from either the epidemiological literature or the expert 
elicitation. The estimates in Table IX.E-1, and all monetized benefits 
presented in this section, are in year 2005 dollars.

[[Page 59153]]

[GRAPHIC] [TIFF OMITTED] TR08OC08.068

(1) Quantified Human Health and Environmental Effects of the Final 
Standards
    In this section we discuss the ozone and PM2.5 health 
and environmental impacts of the final standards. We discuss how these 
impacts are monetized in the next section. It should be noted that the 
emission control scenarios used in the air quality and benefits 
modeling are slightly different than the final emission control 
program. The differences reflect further refinements of the regulatory 
program since we performed the air quality modeling for this rule. 
Emissions and air quality modeling decisions are made early in the 
analytical process. Chapter 3 of the RIA describes the changes in the 
inputs and resulting emission inventories between the preliminary 
assumptions used for the air quality modeling and the final emission 
control scenario.
Estimated Ozone and PM Impacts
    To model the ozone and PM air quality benefits of this rule we used 
the Community Multiscale Air Quality (CMAQ) model. CMAQ simulates the 
numerous physical and chemical processes involved in the formation, 
transport, and deposition of particulate matter. This model is commonly 
used in regional applications to estimate the ozone and PM reductions 
expected to occur from a given set of emissions controls. The 
meteorological data input into CMAQ are developed by a separate model, 
the Penn State University/National Center for Atmospheric Research 
Mesoscale Model, known as MM5. The modeling domain covers the entire 
48-State U.S., as modeled in final ozone NAAQS analysis.\136\ The grid 
resolution for the modeling domain was 12 x 12 km.
---------------------------------------------------------------------------

    \136\ U.S. Environmental Protection Agency. March 2008. Final 
Ozone NAAQS Regulatory Impact Analysis. Prepared by: Office of Air 
and Radiation, Office of Air Quality Planning and Standards.
---------------------------------------------------------------------------

    The modeled ambient air quality data serves as an input to the 
Environmental Benefits Mapping and Analysis Program (BenMAP).\137\ 
BenMAP is a computer program developed by EPA that integrates a number 
of the modeling elements used in previous Regulatory Impact Analyses 
(e.g., interpolation functions, population projections, health impact 
functions, valuation functions, analysis and pooling

[[Page 59154]]

methods) to translate modeled air concentration estimates into health 
effects incidence estimates and monetized benefits estimates.
---------------------------------------------------------------------------

    \137\ Information on BenMAP, including downloads of the 
software, can be found at http://www.epa.gov/air/benmap.
---------------------------------------------------------------------------

    Table IX.E-2 presents the estimates of ozone- and PM-related health 
impacts for the years 2020 and 2030, which are based on the modeled air 
quality changes between a baseline, pre-control scenario and a post-
control scenario reflecting the final emission control strategy.
    The use of two sources of PM mortality reflects two different 
sources of information about the impact of reductions in PM on 
reduction in the risk of premature death, including both the published 
epidemiology literature and an expert elicitation study conducted by 
EPA in 2006. In 2030, based on the estimate provided by the ACS study, 
we estimate that PM-related emission reductions related to the final 
rule will result in 230 fewer premature fatalities annually. The number 
of premature mortalities avoided increases to 510 when based on the Six 
Cities study. When the range of expert opinion is used, we estimate 
between 120 and 1,300 fewer premature mortalities in 2030. We also 
estimate 220 fewer cases of chronic bronchitis, 530 fewer nonfatal 
heart attacks, 190 fewer hospitalizations (for respiratory and 
cardiovascular disease combined), 140,000 fewer days of restricted 
activity due to respiratory illness and approximately 23,000 fewer 
work-loss days. This analysis projects substantial health improvements 
for children from reduced upper and lower respiratory illness, acute 
bronchitis, and asthma attacks. These results are based on an assumed 
cutpoint in the long-term mortality concentration-response functions at 
10 [mu]g/m\3\, and an assumed cutpoint in the short-term morbidity 
concentration-response functions at 10 [mu]g/m\3\. The impact using 
four alterative cutpoints (3 [mu]g/m\3\ 7.5 [mu]g/m\3\, 12 [mu]g/m\3\, 
and 14 [mu]g/m\3\) has on PM2.5-related mortality incidence 
estimation is presented in Chapter 8 of the RIA.
    For ozone, we estimate a range of between 77-350 fewer premature 
mortalities as a result of the final rule in 2030, assuming that there 
is a causal relationship between ozone exposure and mortality. We also 
estimate that by 2030, the final rule will result in over 1,300 avoided 
respiratory hospital admissions and emergency room visits, 450,000 
fewer days of restricted activity due to respiratory illness, and 
180,000 school loss days avoided.
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[[Page 59156]]


[GRAPHIC] [TIFF OMITTED] TR08OC08.070

(2) Monetized Benefits
    Table IX.E-3 presents the estimated monetary value of reductions in 
the incidence of health and welfare effects. Tables IX.E-4 and IX.E-5 
present the total annual PM- and ozone-related health benefits, which 
are estimated to be between $1.8 and $4.4 billion in 2030, assuming a 3 
percent discount rate, or between $1.6 and $4.3 billion, assuming a 7 
percent discount rate, using the ACS-derived estimate of PM-related 
premature mortality (Pope et al., 2002) and the range of ozone-related 
premature mortality studies derived from the epidemiological 
literature. The range of benefits expands to between $1.1 and $12 
billion, assuming a 3 percent discount rate, when the estimate includes 
the opinions of outside experts on PM and the risk of premature death, 
or between $1.0 and $11 billion, assuming a 7 percent discount rate. 
All monetized estimates are stated in 2005$. These estimates account 
for growth in real gross domestic product (GDP) per capita between the 
present and the years 2020 and 2030. As the tables indicate, total 
benefits are driven primarily by the reduction in premature fatalities 
each year.
---------------------------------------------------------------------------

    \138\ Industrial Economics, Incorporated (IEc). 2006. Expanded 
Expert Judgment Assessment of the Concentration-Response 
Relationship Between PM2.5 Exposure and Mortality. Peer 
Review Draft. Prepared for: Office of Air Quality Planning and 
Standards, U.S. Environmental Protection Agency, Research Triangle 
Park, NC. August.
---------------------------------------------------------------------------

    The estimates of monetized benefits include only one example of 
nonhealth-related benefits. Changes in the ambient level of 
PM2.5 are known to affect the level of visibility in much of 
the U.S. Individuals value visibility both in the places they live and 
work, in the places they travel to for recreational purposes, and at 
sites of unique public value, such as at National Parks. For the final 
standards, we present the recreational visibility benefits of 
improvements in visibility at 86 Class I areas located throughout 
California, the Southwest, and the Southeast. These estimated benefits 
are shown in Table IX.E-3.
    Tables IX.E-3, IX.E-4 and IX.E-5 do not include those additional 
health and environmental benefits of the rule that we were unable to 
quantify or monetize. These effects are additive to the estimate of 
total benefits, and are related to two primary sources. First, there 
are many human health and welfare effects associated with PM, ozone, 
and toxic air pollutant reductions that remain unquantified because of 
current limitations in the methods or available data. A full 
appreciation of the overall economic consequences of the final 
standards requires consideration of all benefits and costs projected to 
result from the new standards, not just those benefits and costs which 
could be expressed here in dollar terms. A list of the benefit 
categories that could not be quantified or monetized in our benefit 
estimates are provided in Table IX.E-6.
---------------------------------------------------------------------------

    \139\ Industrial Economics, Incorporated (IEc). 2006. Expanded 
Expert Judgment Assessment of the Concentration-Response 
Relationship Between PM2.5 Exposure and Mortality. Peer 
Review Draft. Prepared for: Office of Air Quality Planning and 
Standards, U.S. Environmental Protection Agency, Research Triangle 
Park, NC. August.

---------------------------------------------------------------------------

[[Page 59157]]

[GRAPHIC] [TIFF OMITTED] TR08OC08.071


[[Page 59158]]


[GRAPHIC] [TIFF OMITTED] TR08OC08.072

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[[Page 59159]]



    Table IX.E-4--Total Monetized Benefits of the Final Small SI and Marine SI Engine Rule--3% Discount Rate
----------------------------------------------------------------------------------------------------------------
                                                  Mean total    Ozone mortality                     Mean total
  Ozone mortality function       Reference         benefits         function        Reference        benefits
----------------------------------------------------------------------------------------------------------------
             Total Ozone and PM Benefits (billions, 2005$)--PM Mortality Derived from the ACS Study
----------------------------------------------------------------------------------------------------------------
2020:                                                           2030:
    NMMAPS..................  Bell et al.,               $1.5      NMMAPS......  Bell et al.,               $2.4
                               2004.                                              2004.
----------------------------------------------------------------------------------------------------------------
    Meta-analysis...........  Bell et al.,                2.3      Meta-         Bell et al.,                3.7
                               2005.                      2.7       analysis.     2005.                      4.4
                              Ito et al.,                                        Ito et al.,
                               2005.                                              2005.
                              Levy et al.,                2.7                    Levy et al.,                4.4
                               2005.                                              2005.
----------------------------------------------------------------------------------------------------------------
Assumption that association is not causal \a\             1.2   Assumption that association is               1.8
                                                                 not causal \a\
----------------------------------------------------------------------------------------------------------------
 Total Ozone and PM Benefits (billions, 2005$)--PM Mortality Derived from Expert Elicitation (Lowest and Highest
                                                    Estimate)
----------------------------------------------------------------------------------------------------------------
2020:                                                           2030:
    NMMAPS..................  Bell et al.,            1.1-6.1      NMMAPS......  Bell et al.,            1.7-9.7
                               2004.                                              2004.
----------------------------------------------------------------------------------------------------------------
    Meta-analysis...........  Bell et al.,            1.8-6.9       Meta-        Bell et al.,             3.0-11
                               2005.                  2.2-7.3       analysis.     2005.                   3.7-12
                              Ito et al.,                                        Ito et al.,
                               2005.                                              2005.
                              Levy et al.,            2.3-7.4                    Levy et al.,             3.7-12
                               2005.                                              2005.
----------------------------------------------------------------------------------------------------------------
Assumption that association is not causal \a\         0.7-5.8   Assumption that association is          1.1-9.1
                                                                 not causal \a\
----------------------------------------------------------------------------------------------------------------
\a\ A recent report published by the National Research Council (NRC, 2008) recommended that EPA ``give little or
  no weight to the assumption that there is no causal association between estimated reductions in premature
  mortality and reduced ozone exposure.''


    Table IX.E-5--Total Monetized Benefits of the Final Small SI and Marine SI Engine Rule--7% Discount Rate
----------------------------------------------------------------------------------------------------------------
                                                  Mean total    Ozone mortality                     Mean total
  Ozone mortality function       Reference         benefits         function        Reference        benefits
----------------------------------------------------------------------------------------------------------------
             Total Ozone and PM Benefits (billions, 2005$)--PM Mortality Derived from the ACS Study
----------------------------------------------------------------------------------------------------------------
2020:                                                           2030:
    NMMAPS..................  Bell et al.,               $1.4      NMMAPS......  Bell et al.,               $2.2
                               2004.                                              2004.
----------------------------------------------------------------------------------------------------------------
    Meta-analysis...........  Bell et al.,                2.2      Meta-         Bell et al.,                3.5
                               2005.                     2.67       analysis.     2005.                     4.24
                              Ito et al.,                                        Ito et al.,
                               2005.                                              2005.
                              Levy et al.,                2.6                    Levy et al.,                4.3
                               2005.                                              2005.
----------------------------------------------------------------------------------------------------------------
Assumption that association is not causal \a\             1.1   Assumption that association is             * 1.6
                                                                 not causal \a\
----------------------------------------------------------------------------------------------------------------
 Total Ozone and PM Benefits (billions, 2005$)--PM Mortality Derived from Expert Elicitation (Lowest and Highest
                                                    Estimate)
----------------------------------------------------------------------------------------------------------------
2020:                                                           2030:
    NMMAPS..................   Bell et al.,           1.0-5.6      NMMAPS......  Bell et al.,            1.6-8.8
                               2004.                                              2004.
----------------------------------------------------------------------------------------------------------------
    Meta-analysis...........  Bell et al.,            1.8-6.4      Meta-         Bell et al.,             2.9-10
                               2005.                  2.2-6.8       analysis.     2005.                   3.6-11
                              Ito et al.,                                        Ito et al.,
                               2005.                                              2005.
                              Levy et al.,            2.2-6.8                    Levy et al.,             3.7-11
                               2005.                                              2005.
----------------------------------------------------------------------------------------------------------------
Assumption that association is not causal \a\         0.7-5.2   Assumption that association is          1.0-8.2
                                                                 not causal \a\
----------------------------------------------------------------------------------------------------------------
\a\ A recent report published by the National Research Council (NRC, 2008) recommended that EPA ``give little or
  no weight to the assumption that there is no causal association between estimated reductions in premature
  mortality and reduced ozone exposure.''


  Table IX.E-6--Unquantified and Non-Monetized Potential Effects of the
              Final Small SI and Marine SI Engine Standards
------------------------------------------------------------------------
                                     Effects not included in analysis--
         Pollutant/effects                       changes in:
------------------------------------------------------------------------
Ozone Health \a\..................  Chronic respiratory damage \b\.
                                    Premature aging of the lungs \b\.
                                    Non-asthma respiratory emergency
                                     room visits.
                                    Exposure to UVb (+/-) \e\.
Ozone Welfare.....................  Yields for
                                     --commercial forests.
                                     --some fruits and vegetables.
                                     --non-commercial crops.
                                    Damage to urban ornamental plants.
                                    Impacts on recreational demand from
                                     damaged forest aesthetics.

[[Page 59160]]

 
                                    Ecosystem functions.
                                    Exposure to UVb (+/-) \e\.
PM Health \c\.....................  Premature mortality--short term
                                     exposures \d\.
                                    Low birth weight.
                                    Pulmonary function.
                                    Chronic respiratory diseases other
                                     than chronic bronchitis.
                                    Non-asthma respiratory emergency
                                     room visits.
                                    Exposure to UVb (+/-) \e\.
PM Welfare........................  Residential and recreational
                                     visibility in non-Class I areas.
                                    Soiling and materials damage.
                                    Damage to ecosystem functions.
                                    Exposure to UVb (+/-) \e\.
Nitrogen and Sulfate Deposition     Commercial forests due to acidic
 Welfare.                            sulfate and nitrate deposition.
                                    Commercial freshwater fishing due to
                                     acidic deposition.
                                    Recreation in terrestrial ecosystems
                                     due to acidic deposition.
                                    Existence values for currently
                                     healthy ecosystems.
                                    Commercial fishing, agriculture, and
                                     forests due to nitrogen deposition.
                                    Recreation in estuarine ecosystems
                                     due to nitrogen deposition.
                                    Ecosystem functions.
                                    Passive fertilization.
CO Health.........................  Behavioral effects.
HC/Toxics Health \f\..............  Cancer (benzene, 1,3-butadiene,
                                     formaldehyde, acetaldehyde).
                                    Anemia (benzene).
                                    Disruption of production of blood
                                     components (benzene).
                                    Reduction in the number of blood
                                     platelets (benzene).
                                    Excessive bone marrow formation
                                     (benzene).
                                    Depression of lymphocyte counts
                                     (benzene).
                                    Reproductive and developmental
                                     effects (1,3-butadiene).
                                    Irritation of eyes and mucus
                                     membranes (formaldehyde).
                                    Respiratory irritation
                                     (formaldehyde).
                                    Asthma attacks in asthmatics
                                     (formaldehyde).
                                    Asthma-like symptoms in non-
                                     asthmatics (formaldehyde).
                                    Irritation of the eyes, skin, and
                                     respiratory tract (acetaldehyde).
                                    Upper respiratory tract irritation
                                     and congestion (acrolein).
HC/Toxics Welfare.................  Direct toxic effects to animals.
                                    Bioaccumulation in the food chain.
                                    Damage to ecosystem function.
                                    Odor.
------------------------------------------------------------------------
 \a\ The public health impact of biological responses such as increased
  airway responsiveness to stimuli, inflammation in the lung, acute
  inflammation and respiratory cell damage, and increased susceptibility
  to respiratory infection are likely partially represented by our
  quantified endpoints.
 \b\ The public health impact of effects such as chronic respiratory
  damage and premature aging of the lungs may be partially represented
  by quantified endpoints such as hospital admissions or premature
  mortality, but a number of other related health impacts, such as
  doctor visits and decreased athletic performance, remain unquantified.
 
 \c\ In addition to primary economic endpoints, there are a number of
  biological responses that have been associated with PM health effects
  including morphological changes and altered host defense mechanisms.
  The public health impact of these biological responses may be partly
  represented by our quantified endpoints.
 \d\ While some of the effects of short-term exposures are likely to be
  captured in the estimates, there may be premature mortality due to
  short-term exposure to PM not captured in the cohort studies used in
  this analysis. However, the PM mortality results derived from the
  expert elicitation do take into account premature mortality effects of
  short term exposures.
 \e\ May result in benefits or disbenefits.
 \f\ Many of the key hydrocarbons related to this rule are also
  hazardous air pollutants listed in the Clean Air Act.

(3) What Are the Significant Limitations of the Benefit-Cost Analysis?
    Every benefit-cost analysis examining the potential effects of a 
change in environmental protection requirements is limited to some 
extent by data gaps, limitations in model capabilities (such as 
geographic coverage), and uncertainties in the underlying scientific 
and economic studies used to configure the benefit and cost models. 
Limitations of the scientific literature often result in the inability 
to estimate quantitative changes in health and environmental effects, 
such as potential increases in premature mortality associated with 
increased exposure to carbon monoxide. Deficiencies in the economics 
literature often result in the inability to assign economic values even 
to those health and environmental outcomes which can be quantified. 
These general uncertainties in the underlying scientific and economics 
literature, which can lead to valuations that are higher or lower, are 
discussed in detail in the RIA and its supporting references. Key 
uncertainties that have a bearing on the results of the benefit-cost 
analysis of the final standards include the following:
     The exclusion of potentially significant and unquantified 
benefit categories (such as health, odor, and ecological benefits of 
reduction in air toxics, ozone, and PM);
     Errors in measurement and projection for variables such as 
population growth;
     Uncertainties in the estimation of future year emissions 
inventories and air quality;
     Uncertainty in the estimated relationships of health and 
welfare

[[Page 59161]]

effects to changes in pollutant concentrations including the shape of 
the C-R function, the size of the effect estimates, and the relative 
toxicity of the many components of the PM mixture;
     Uncertainties in exposure estimation; and
     Uncertainties associated with the effect of potential 
future actions to limit emissions.
    As Table IX.E-3 indicates, total benefits are driven primarily by 
the reduction in premature mortalities each year. Some key assumptions 
underlying the premature mortality estimates include the following, 
which may also contribute to uncertainty:
     Inhalation of fine particles is causally associated with 
premature death at concentrations near those experienced by most 
Americans on a daily basis. Although biological mechanisms for this 
effect have not yet been completely established, the weight of the 
available epidemiological, toxicological, and experimental evidence 
supports an assumption of causality. The impacts of including a 
probabilistic representation of causality were explored in the expert 
elicitation-based results of the recently published PM NAAQS RIA. 
Consistent with that analysis, we discuss the implications of these 
results in the RIA for the final standards.
     All fine particles, regardless of their chemical 
composition, are equally potent in causing premature mortality. This is 
an important assumption, because PM produced via transported precursors 
emitted from Small SI and Marine SI engines may differ significantly 
from PM precursors released from electric generating units and other 
industrial sources. However, no clear scientific grounds exist for 
supporting differential effects estimates by particle type.
     The C-R function for fine particles is approximately 
linear within the range of ambient concentrations under consideration 
(above the assumed threshold of 10 [mu]g/m\3\). Thus, the estimates 
include health benefits from reducing fine particles in areas with 
varied concentrations of PM, including both regions that may be in 
attainment with PM2.5 standards and those that are at risk 
of not meeting the standards.
     In a recent report on the estimation of ozone-related 
premature mortality published by the National Research Council (NRC), a 
panel of experts and reviewers concluded that ozone-related mortality 
should be included in estimates of the health benefits of reducing 
ozone exposure. The report also recommended that the estimation of 
ozone-related premature mortality be accompanied by broad uncertainty 
analyses while giving little or no weight to the assumption that there 
is no causal association between ozone exposure and premature 
mortality. Because EPA has yet to develop a coordinated response to the 
NRC report's findings and recommendations, however, we have retained 
the approach to estimating ozone-related premature mortality used in 
RIA for the final Ozone NAAQS. EPA will specifically address the 
report's findings and recommendations in future rulemakings.
    Despite these uncertainties, we believe this benefit-cost analysis 
provides a conservative estimate of the estimated economic benefits of 
the final standards in future years because of the exclusion of 
potentially significant benefit categories. Acknowledging benefits 
omissions and uncertainties, we present a best estimate of the total 
benefits based on our interpretation of the best available scientific 
literature and methods supported by EPA's technical peer review panel, 
the Science Advisory Board's Health Effects Subcommittee (SAB-HES). The 
National Academies of Science (NRC, 2002) also reviewed EPA's 
methodology for analyzing the health benefits of measures taken to 
reduce air pollution. EPA addressed many of these comments in the 
analysis of the final PM NAAQS.140, 141 The analysis of the 
final standards incorporates this most recent work to the extent 
possible.
---------------------------------------------------------------------------

    \140\ National Research Council (NRC). 2002. Estimating the 
Public Health Benefits of Proposed Air Pollution Regulations. The 
National Academies Press: Washington, DC.
    \141\ U.S. Environmental Protection Agency. October 2006. Final 
Regulatory Impact Analysis (RIA) for the Proposed National Ambient 
Air Quality Standards for Particulate Matter. Prepared by: Office of 
Air and Radiation. Available at HTTP://www.epa.gov/ttn/ecas/ria.html.
---------------------------------------------------------------------------

(4) Benefit-Cost Analysis
    In estimating the net benefits of the final standards, the 
appropriate cost measure is ``social costs.'' Social costs represent 
the welfare costs of a rule to society. These costs do not consider 
transfer payments (such as taxes) that are simply redistributions of 
wealth. Table XII.E-7 contains the estimates of monetized benefits and 
estimated social welfare costs for the final rule and each of the final 
control programs. The annual social welfare costs of all provisions of 
this final rule are described more fully in Section IX.F.
    The results in Table IX.E-7 suggest that the 2020 monetized 
benefits of the final standards are greater than the expected social 
welfare costs. Specifically, the annual benefits of the total program 
will range between $1.2 to $4.0 billion annually in 2020 using a three 
percent discount rate, or between $1.1 to $3.8 billion assuming a 7 
percent discount rate, compared to estimated social costs of 
approximately $210 million in that same year. These benefits are 
expected to increase to between $1.8 and $6.4 billion annually in 2030 
using a three percent discount rate, or between $1.6 and $6.1 billion 
assuming a 7 percent discount rate, while the social costs are 
estimated to be approximately $190 million. Though there are a number 
of health and environmental effects associated with the final standards 
that we are unable to quantify or monetize (see Table IX.E-6), the 
benefits of the final standards outweigh the projected costs. When we 
examine the benefit-to-cost comparison for the rule standards 
separately, we also find that the benefits of the specific engine 
standards outweigh their projected costs.

  Table IX.E-7--Summary of Annual Benefits, Costs, and Net Benefits of the Final Small SI and Marine SI Engine
                                          Standards (Millions, 2005$)a
----------------------------------------------------------------------------------------------------------------
               Description                               2020                                2030
----------------------------------------------------------------------------------------------------------------
Estimated Social Costs:b
    Small SI............................  $163..............................  $185
    Marine SI...........................  $44...............................  0.8
                                         -----------------------------------------------------------------------
        Total Social Costs..............  $210..............................  190
----------------------------------------------------------------------------------------------------------------
Estimated Health Benefits of the Final
 Standards:c, d, e, f
    Small SI:

[[Page 59162]]

 
        3 percent discount rate.........  $860 to $2,600....................  $820 to $2,900
        7 percent discount rate.........  $790 to $2,500....................  $710 to $2,800
    Marine SI:
        3 percent discount rate.........  $340 to $1,400....................  $980 to $3,500
        7 percent discount rate.........  $310 to $1,300....................  $890 to $3,300
Total Benefits:
    3 percent discount rate.............  $1,200 to $4,000..................  $1,800 to $6,400
    7 percent discount rate.............  $1,100 to $3,800..................  $1,600 to $6,100
----------------------------------------------------------------------------------------------------------------
Annual Net Benefits (Total Benefits--
 Total Costs)
    3 percent discount rate.............  $990 to $3,800....................  $1,600 to $6,200
    7 percent discount rate.............  $890 to $3,600....................  $1,400 to $5,900
----------------------------------------------------------------------------------------------------------------
a All estimates represent annualized benefits and costs anticipated for the years 2020 and 2030. Totals may not
  sum due to rounding.
b The calculation of annual costs does not require amortization of costs over time. Therefore, the estimates of
  annual cost do not include a discount rate or rate of return assumption (see Chapter 9 of the RIA). In Chapter
  9, however, we use both a 3 percent and 7 percent social discount rate to calculate the net present value of
  total social costs consistent with EPA and OMB guidelines for preparing economic analyses (US EPA, 2000 and
  OMB, 2003).
c Total includes ozone and PM2.5 benefits. Range was developed by adding the estimate from the ozone premature
  mortality function, including an assumption that the association is not causal, to PM2.5-related premature
  mortality derived from the ACS (Pope et al., 2002) and Six Cities (Laden et al., 2006) studies.
d Annual benefits analysis results reflect the use of a 3 percent and 7 percent discount rate in the valuation
  of premature mortality and nonfatal myocardial infarctions, consistent with EPA and OMB guidelines for
  preparing economic analyses (US EPA, 2000 and OMB, 2003).\142\, \143\
e Valuation of premature mortality based on long-term PM exposure assumes discounting over the SAB recommended
  20-year segmented lag structure described in the Regulatory Impact Analysis for the Final Clean Air Interstate
  Rule (March, 2005).
f Not all possible benefits or disbenefits are quantified and monetized in this analysis. Potential benefit
  categories that have not been quantified and monetized are listed in Table IX.E-6.

     
---------------------------------------------------------------------------

    \142\ U.S. Environmental Protection Agency, 2000. Gidelines for 
Preparing Economic Analyses. www.yosemite1.epa.gov/ee/epa/eed/hsf/pages/Guideline.html.
    \143\ Office of Management and Budget, The Executive Office of 
the President, 2003. Circular A-4. http://www.whitehouse.gov/omb/circulars.
---------------------------------------------------------------------------

F. Economic Impact Analysis

    We prepared an Economic Impact Analysis (EIA) to estimate the 
economic impacts of the final emission control program on the Small SI 
and Marine SI engine and equipment markets. In this section we briefly 
describe the Economic Impact Model (EIM) we developed to estimate the 
market-level changes in price and outputs for affected markets, the 
social costs of the program, and the expected distribution of those 
costs across affected stakeholders. As defined in EPA's Guidelines for 
Preparing Economic Analyses, social costs are the value of the goods 
and services lost by society resulting from a) the use of resources to 
comply with and implement a regulation and b) reductions in 
output.\144\
---------------------------------------------------------------------------

    \144\ EPA Guidelines for Preparing Economic Analyses, EPA 240-R-
00-003, September 2000, p 113. A copy of this document can be found 
at http://yosemite.epa.gov/ee/epa/eed.nsf/webpages/Guidelines.html
---------------------------------------------------------------------------

    A quantitative Economic Impact Model (EIM) was developed to 
estimate price and quantity changes and total social costs associated 
with the emission control program. The EIM is a computer model 
comprised of a series of spreadsheet modules that simulate the supply 
and demand characteristics of each of the markets under consideration. 
The model methodology is firmly rooted in applied microeconomic theory 
and was developed following the methodology set out in OAQPS's Economic 
Analysis Resource Document.\145\ Chapter 9 of the RIA contains a 
detailed description of the EIM, including the economic theory behind 
the model and the data used to construct it, the baseline equilibrium 
market conditions, and the model's behavior parameters. The EIM and the 
estimated compliance costs presented above are used to estimate the 
economic impacts of the program. The results of this analysis are 
summarized below.
---------------------------------------------------------------------------

    \145\ U.S. Environmental Protection Agency, Office of Air 
Quality Planning and Standards, Innovative Strategies and Economics 
Group, OAQPS Economic Analysis Resource Document, April 1999. A copy 
of this document can be found at http://www.epa.gov/ttn/ecas/econdata/Rmanual2/.
---------------------------------------------------------------------------

(1) Market Analysis Results
    In the market analysis, we estimate how prices and quantities of 
goods and services affected by the emission control program can be 
expected to change once the program goes into effect.
    The compliance costs associated with the new Small SI and Marine SI 
engine and equipment standards are expected to lead to price and 
quantity changes in these markets. A summary of the market analysis 
results is presented in Table XII.F-1 for 2014, 2018, and 2030. These 
years were chosen because 2014 is the year with the highest compliance 
cost; 2018, the year in which the compliance costs are reduced due to 
the learning curve, and the market impacts reflect variable costs as 
well as growth in equipment population; and 2030 illustrates the long-
term impacts of the program. Results for all years can be found in 
Chapter 9 of the RIA.
    For all markets, the market impacts for the early years are driven 
by either the fixed cost or the combination of the fixed and variable 
costs associated with different standards. This leads to a small 
increase in estimated price impacts for the years 2008 through 2014, 
the period during which the costs change over time reflecting the 
phase-in of different costs (variable and fixed costs) for each 
standard or the phase-in of different standards. The increase is small 
because the annual per unit compliance costs from these new standards 
are relatively smaller than the engine or equipment per unit price.
    The Small SI exhaust standards begin in 2011 for Class II and 2012 
for Class I. The marine exhaust standards generally begin in 2010. The 
Small SI evaporative emission standards are staggered beginning in 
2008, with regulatory flexibility providing some small delays until 
2013. The marine evaporative emission standards are staggered beginning 
in 2009, with regulatory flexibility providing some small delays until 
2015.

[[Page 59163]]

    In the Marine SI market, the average price increase for Marine SI 
engines in 2014, the high cost year, is estimated to be about 2.4 
percent, or $266. In the long term (by 2030), the average price 
increase is expected to decline to about 1.9 percent, or $213. On the 
vessel side, the average price change reflects the direct equipment 
compliance costs plus the portion of the engine costs that are passed 
on to the equipment purchaser (via higher engine prices). The average 
price increase in 2014 is expected to be about 1.6 percent, or $285. By 
2030, this average price increase is expected to decline to about 1.3 
percent, or $231. These price increases are expected to vary across 
vessel categories. The category with the largest price increase is 
expected to be personal watercraft engines, with an estimated price 
increase of about 3.0 percent in 2014; this is expected to decrease to 
2.4 percent in 2030. The smallest expected change in 2014 is expected 
to be for sterndrive/inboards vessels, which are expected to see price 
increases of about 0.9 percent.
    In the Small SI market, the average price increase for Small SI 
engines in 2014, the high cost year, is estimated to be about 8.3 
percent, or $14. By 2030, this average price increase is expected to 
decline to about 7.4 percent, or $12. On the equipment side, the 
average price change reflects the direct equipment compliance costs 
plus the portion of the engine costs that are passed on to the 
equipment purchaser (via higher engine prices). The average price 
increase for all Small SI equipment in 2014 is expected to be about 2.6 
percent, or $10. By 2030, this average price increase is expected to 
decline to about 2.3 percent, or $8. The average price increase and 
quantity decrease differs by category of equipment. For Class I 
equipment, the price increase is estimated to be about 6.2 percent 
($17) in 2014, decreasing to 5.6 percent ($15) in 2030. For Class II 
equipment, a higher price increase is expected, about 2.6 percent ($24) 
in 2014, decreasing to 2.2 percent ($20) in 2030.
    For the handheld equipment market, prices are expected to increase 
about 0.2 percent or $0.3 for all years, and quantities are expected to 
decrease about 0.3 percent.
BILLING CODE 6560-50-P

[[Page 59164]]

[GRAPHIC] [TIFF OMITTED] TR08OC08.073

(2) Economic Welfare Analysis
    In the economic welfare analysis we look at the total social costs 
associated with the program and their distribution across key 
stakeholders.
    The total estimated social costs of the program are about $444 
million, $399 million, and 459 million for 2014, 2018 and 2030. These 
estimated social costs are a slight less than the total compliance 
costs for those years. The slight reduction in social costs when 
compared to compliance costs occurs because the total engineering costs 
do not reflect the decreased sales of the Small SI and Marine SI 
engines and equipment that are incorporated in the total social costs. 
Results for all years are presented in Chapter 9 of the RIA.
    Table XII.F-2 shows how total social costs are expected to be 
shared across stakeholders, for selected years.
    We estimate the total social costs of the program to be 
approximately $459 million in 2030. The Marine SI sector is expected to 
bear about 33.5 percent of the social costs of the programs in 2030, 
and the Small SI sector is expected to bear 66.5 percent. In each of 
these two sectors, these social costs are expected to be born primarily 
by end-users of Marine SI and Small SI equipment (about 86 percent). 
This will also be offset by the fuel savings. The remaining 14 percent 
is expected to be borne by Small SI or Marine SI engine and equipment 
manufacturers.

[[Page 59165]]



             Table XII.F-2--Summary of Estimated Social Costs for 2014, 2018, 2030 (2005$, $million)
----------------------------------------------------------------------------------------------------------------
                                                        2014                  2018                  2030
                                               -----------------------------------------------------------------
               Stakeholder group                 Surplus               Surplus               Surplus
                                                  change    Percent     change    Percent     change    Percent
----------------------------------------------------------------------------------------------------------------
Marine SI:
    Engine Manufacturers......................     -$10.5        2.4      -$8.7        2.2      -$9.4        2.1
    Equipment Manufacturers...................     -$29.7        6.7     -$25.0        6.3     -$27.1        5.9
    End User (Households).....................    -$130.0       29.3    -$108.2       27.1    -$117.2       25.6
        Subtotal..............................    -$170.2       38.4    -$142.0       35.6    -$153.7       33.5
Small SI:
    Engine Manufacturers......................      -$5.4        1.2      -$5.0        1.2      -$5.9        1.3
    Equipment Manufacturers...................     -$18.1        4.1     -$16.9        4.2     -$20.0        4.4
    End User (Households).....................    -$250.2       56.4    -$235.0       58.9    -$278.9       60.8
        Subtotal..............................    -$273.6       61.6    -$256.8       64.4    -$304.9       66.5
            Total.............................    -$443.8  .........    -$398.8  .........    -$458.6  .........
----------------------------------------------------------------------------------------------------------------

    Table XII.F-3 contains the distribution of the total surplus losses 
for the program from 2008 through 2037. This table shows that Small SI 
and Marine SI equipment manufacturers are expected to bear more of the 
burden of the program than engine manufacturers. The present value of 
net social costs of the final standards through 2037 at a 3 percent 
discount rate, shown in Table XII.F-3, is estimated to be $4.2 billion, 
taking the fuel savings into account. We also performed an analysis 
using a 7 percent social discount rate.\146\ Using that discount rate, 
the present value of the net social costs through 2037 is estimated to 
be $2.7 billion, including the fuel savings.
---------------------------------------------------------------------------

    \146\ EPA has historically presented the present value of cost 
and benefits estimates using both a 3 percent and a 7 percent social 
discount. The 3 percent rate represents a demand-side approach and 
reflects the time preference of consumption (the rate at which 
society is willing to trade current consumption for future 
consumption). The 7 percent rate is a cost-side approach and 
reflects the shadow price of capital.

             Table XII.F-3--Estimated Net Social Costs Through 2037 by Stakeholder (2005$, $million)
----------------------------------------------------------------------------------------------------------------
                                                                    Percent of                      Percent of
                Stakeholder group                 Surplus change   total surplus  Surplus change   total surplus
----------------------------------------------------------------------------------------------------------------
                                                              NPV 3%
                                                              NPV 7%
----------------------------------------------------------------------------------------------------------------
Marine SI:
    Engine Manufacturers........................         -$167.0             2.2         -$100.8             2.2
    Equipment Manufacturers.....................         -$474.5             6.2         -$285.2             6.3
    End User (Households).......................       -$2,079.0            27.3       -$1,257.1            27.9
                                                 ---------------------------------------------------------------
        Subtotal................................       -$2,720.5            35.7       -$1,643.2            36.5
Small SI:
    Engine Manufacturers........................          -$94.1             1.2          -$54.8             1.2
    Equipment Manufacturers.....................         -$329.9             7.4         -$195.4             7.5
    End User (Households).......................       -$4,472.1            58.7       -$2,612.8            58.0
                                                 ---------------------------------------------------------------
        Subtotal................................       -$4,896.1            64.3       -$2,863.0            63.5
                                                 ---------------------------------------------------------------
Total Social Costs..............................       -$7,616.6  ..............       -$4,506.2  ..............
Fuel Savings....................................        $3,374.6  ..............        $1,774.7  ..............
Net Social Costs................................       -$4,242.0  ..............       -$2,731.5  ..............
----------------------------------------------------------------------------------------------------------------

(3) What Are the Significant Limitations of the Economic Impact 
Analysis?
    Every economic impact analysis examining the market and social 
welfare impacts of a regulatory program is limited to some extent by 
limitations in model capabilities, deficiencies in the economic 
literatures with respect to estimated values of key variables necessary 
to configure the model, and data gaps. In this EIA, there are three 
potential sources of uncertainty: (1) Uncertainty resulting from the 
way the EIM is designed, particularly from the use of a partial 
equilibrium model; (2) uncertainty resulting from the values for key 
model parameters, particularly the price elasticity of supply and 
demand; and (3) uncertainty resulting from the values for key model 
inputs, particularly baseline equilibrium price and quantities.
    Uncertainty associated with the economic impact model structure 
arises from the use of a partial equilibrium approach, the use of the 
national level of analysis, and the assumption of competitive market 
structure. These features of the model mean it does not take into 
account impacts on secondary markets or the general economy, and it 
does not consider regional impacts. The results may also be biased to 
the extent that firms have some control over market prices, which would 
result in the modeling over-estimating the impacts on producers of 
affected goods and services.
    The values used for the price elasticities of supply and demand are 
critical parameters in the EIM. The values of these parameters have an 
impact on both the estimated change in price and quantity produced 
expected as a result of compliance with the final

[[Page 59166]]

standards and on how the burden of the social costs will be shared 
among producer and consumer groups. In selecting the values to use in 
the EIM it is important that they reflect the behavioral responses of 
the industries under analysis.
    Finally, uncertainty in measurement of data inputs can have an 
impact on the results of the analysis. This includes measurement of the 
baseline equilibrium prices and quantities and the estimation of future 
year sales. In addition, there may be uncertainty in how similar 
engines and equipment were combined into smaller groups to facilitate 
the analysis. There may also be uncertainty in the compliance cost 
estimations.
    While variations in the above model parameters may affect the 
distribution of social costs among stakeholders and the estimated 
market impacts, they will not affect the total social costs of the 
program. This is because the total social costs are directly related to 
the total compliance costs. To explore the effects of key sources of 
uncertainty, we performed a sensitivity analysis in which we examine 
the results of using alternative values for the price elasticity of 
supply and demand, and alternative baseline prices for certain 
equipment markets. The results of these analyses are contained in 
Appendix 9H of the RIA prepared for this rule.
    Despite these uncertainties, we believe this economic impact 
analysis provides a reasonable estimate of the expected market impacts 
and social welfare costs of the final standards in future. 
Acknowledging benefits omissions and uncertainties, we present a best 
estimate of the social costs based on our interpretation of the best 
available scientific literature and methods supported by EPA's 
Guidelines for Preparing Economic Analyses and the OAQPS Economic 
Analysis Resource Document.

X. Public Participation

    We published the proposed rule on May 18, 2007 (72 FR 28098) and 
held a public hearing on June 5, 2007 in Reston, Virginia. The public 
comment period continued until August 3, 2007. We received written 
comments from over 100 entities, including manufacturers, state and 
environmental groups, and individual citizens. The comments covered a 
wide range of issues, many of which were very specific recommendations 
related to test procedures and certification and compliance provisions. 
The comments and our responses are described in the Summary and 
Analysis of Comments document which has been placed in the docket for 
this rulemaking. Commenters also raised a variety of broader issues 
that we highlight in this section.
    Diffusion and running loss control for nonhandheld Small SI engines 
and equipment. We proposed diffusion and running loss standards for 
nonhandheld Small SI engines and equipment. The diffusion standard 
included a simple measurement procedure and a corresponding standard 
that could be met with basic technology to limit venting from fuel 
tanks. We proposed a variety of methods for controlling running losses. 
The most common approach expected is for equipment manufacturers to 
install a vent line to route running loss vapors to the engine's 
intake. We proposed an alternative approach that would allow equipment 
manufacturers to demonstrate that fuel temperatures would increase only 
a small amount during operation, which would minimize the source of 
running loss vapors. Manufacturers objected to the proposed measurement 
procedure and standard for diffusion emissions. They also commented 
that they thought the temperature-based option for controlling running 
losses was impractical based on the measurement procedures and other 
implementation provisions. We are therefore removing the temperature-
based option for running loss control. Manufacturers must generally 
either run a vapor line from the fuel tank to the engine's intake or 
find a way to use a sealed fuel tank. Under any remaining technology 
scenario for controlling running loss emissions, manufacturers would be 
designing and producing their fuel tanks with inherently low diffusion 
emissions. We therefore anticipate that diffusion emissions will be 
controlled even though we are not adopting standards or measurement 
requirements for diffusion.
    SHED testing for nonhandheld engines and equipment. We proposed to 
allow certification based on California ARB's SHED testing on an 
interim basis to ease the transition to EPA's Phase 3 standards. The 
SHED procedure is intended to measure all evaporative emissions from a 
piece of equipment rather than separately measuring emissions from fuel 
lines and fuel tanks. It is also intended to capture diurnal emissions. 
As described in the proposal, we chose not to apply diurnal emission 
standards. Manufacturers requested that we include a long-term 
allowance for SHED testing so they could choose to sell California-
certified products nationwide without repeating their certification 
efforts to comply with EPA's different standards and testing protocol. 
While there is some chance that manufacturers could concentrate their 
emission controls, for example, on diurnal and fuel tank permeation 
such that they would not need low-permeation fuel lines, we believe 
that on balance a SHED-certified product will invariably be at least as 
low-emitting as equipment that uses only certified low-permeation fuel 
lines and fuel tanks. As a result, we are including in the regulations 
a long-term allowance for manufacturers to meet EPA requirements based 
on an overall measurement of evaporative emissions from equipment with 
complete fuel systems.
    Bonding requirements for Small SI engines. We described in the 
proposal that we were considering bonding requirements for Small SI 
engines. We described our concerns that low-cost products were being 
sold without the necessary commitment to following through on any 
obligations that may arise over an engine's operating life, such as 
warranty, recall, or some other finding of noncompliance with the 
regulations. Several commenters strongly supported the bonding 
requirements. No commenters objected to the bonding requirements. We 
requested comment on defining a threshold for determining which 
companies had a sufficient presence in the United States and a good 
compliance history that would allow us to conclude that bonding 
requirements were not needed. Subsequent discussions with manufacturers 
led us to narrow our approach to focus on multiple thresholds tailored 
to specific types of companies. A baseline threshold of $10 million in 
long-term assets applies for engine manufacturers. A mid-level 
threshold of $6 million applies to secondary engine manufacturers. 
These are generally smaller companies with smaller sales volumes. We 
are also including a reduced threshold of $3 million for companies that 
have had U.S.-certified engines for at least ten years without any 
violations. We believe bonding requirements should still apply for 
companies with a long-term market presence, but a lower asset threshold 
for these companies is appropriate.
    A noteworthy change from the proposal is the inclusion of 
domestically produced engines. While the proposal focused on imported 
engines, we concluded that trade rules and good practice dictate that 
the bonding requirements should apply equally to companies producing 
product in the United States. Manufacturers of any substantial size 
would easily meet the asset threshold, so the only additional companies 
likely to be

[[Page 59167]]

affected by this change would be very small domestic manufacturers. We 
may conclude that these companies too should meet bonding requirements 
if we have reason to believe that they will be unable to meet their 
obligations related to in-use engines. On the other hand, we believe 
there will be cases where manufacturers can use something other than a 
posted bond to demonstrate that they will meet these obligations. We 
are therefore including provisions for a process by which small 
manufacturers would be able to request that a different asset threshold 
(or a different bond value) would apply. We would evaluate these 
requests on a case-by-case basis and approve changes to the specified 
approach only if it was clear that manufacturers would meet their in-
use obligations.
    Transition to exhaust emission standards for sterndrive/inboard 
engines. Manufacturers expressed concerns before the proposed rule that 
they were anticipating a change in engine models from General Motors, 
which supplies most companies with partially complete engines for 
making sterndrive/inboard engines. With the approaching obsolescence of 
two of these engine models, engine manufacturers did not want to put in 
the effort to redesign those engines for one or two years of production 
before they made the transition to the replacement engine models. We 
described several possible approaches for addressing this in the 
proposal. We are adopting a provision to specify directly in the 
regulation that we are approving a one-year hardship for the affected 
engine models, which allows the engine manufacturers to produce these 
engines in the 2010 model year without meeting emission standards. 
Starting in the 2011 model year, manufacturers would need to meet the 
new emission standards for their full product line.
    Phase-in for marine diurnal requirements. We proposed to apply the 
diurnal emission standards for marine vessels starting in 2010. 
Manufacturers recommended delaying this standard until 2011 to allow 
time for the industry to establish consensus standards related to 
installation parameters for carbon canisters and other elements of 
diurnal emission control systems. Manufacturers also pointed out that a 
one-year delay would be preferable to a phase-in, which would be 
problematic for boat builders. The U.S. Coast Guard agreed that an 
extra year would be helpful to ensure that manufacturers had enough 
time to design and build systems that would not have safety problems. 
We agreed that starting the diurnal emission standards in 2011 would be 
appropriate. Late in the rulemaking process, the marine manufacturers 
raised a concern that small boat builders might need additional time to 
learn about the regulatory requirements and make the necessary design 
changes for complying with standards. We agreed to consider a staged 
approach, similar to what we are adopting for Small SI equipment 
manufacturers under the Phase 3 standards, in which boat builders would 
be able to make a certain number of noncompliant boats over the first 
year or two. Manufacturers emphasized that the best approach was to 
phase in the diurnal standard (30 percent of boats the first year, 60 
percent the second year, 100 percent the third year), including large 
businesses. We believe a more limited transition will be sufficient to 
meet the need to modify vessels to comply with the new standards. We 
are adopting approach that would allow companies to make up to 50 
percent of their products between July 2011 and July 2012 that do not 
yet comply with diurnal emission standards. All boats would need to 
comply after July 2012. A separate provision for small-volume boat 
builders would allow for up to 1200 noncompliant boats over the first 
two years that the standards apply (July 2011 to July 2013).
    Definition of ``engine'' We proposed to define the point at which 
engines became subject to emission standards as the point at which any 
component was attached to an engine block. This was intended to clarify 
the relationship between primary and secondary engine manufacturers and 
to prevent circumvention of the regulations by allowing the importation 
or other sale of partially complete engines that needed neither 
certification nor an exemption. Manufacturers pointed out that there 
were several incidental components added to engines early in the 
process, many times by the company that cast and/or machined the engine 
block for shipment to the engine manufacturer. We objected to the idea 
that an engine should not be subject to emission standards until it 
reached a running configuration because this would make it difficult or 
impossible to enforce our requirements. We chose to identify the best 
point early in the assembly process for making engines subject to 
standards to be the point of crankshaft installation. This is generally 
the first major assembly procedure and it involves most of the engine's 
moving parts.
    Setting up the regulations to clearly prohibit the sale of 
partially complete engines without a certificate or an exemption led us 
to adopt provisions to accommodate the several legitimate business 
practices in which manufacturers ship engines before they have reached 
a certified configuration. First, we proposed a process by which 
original engine manufacturers could ship partially complete engines to 
secondary engine manufacturers, including requirements for labeling 
engines and for secondary engine manufacturers to first obtain a 
certificate for the engine in question. Commenters objected to the 
labeling requirements and pointed out that there would sometimes be a 
need for shipping engines before the secondary engine manufacturer had 
an approved certificate. We agreed to simplify the labeling requirement 
such that the primary engine manufacturer would be able to use a single 
label for all its engines, identifying only its company name and the 
basis for the exemption, and referring to the bill of lading, which 
would identify the secondary engine manufacturer. We are also adopting 
regulatory provisions to clarify that these shipments may occur during 
the time that we are reviewing an application for certification from 
the secondary engine manufacturer, subject to certain requirements that 
are similar to those that apply for traditional engine manufacturers in 
building up inventory before their certification is approved. We also 
allow shipment of these engines when the secondary engine manufacturer 
has a valid exemption; this may occur for example, if the secondary 
engine manufacturer is developing a new model or is assembling engines 
only for export.
    Second, we proposed and are finalizing a provision to allow 
manufacturers broad discretion to ship partially complete engines 
between two of their own facilities. Manufacturers would only need to 
get our approval by describing their plans for this type of shipment in 
their application for certification. We may set certain reasonable 
conditions to ensure that manufacturers do not use these provisions to 
circumvent the regulations, but we would generally not require any 
specific labeling or recordkeeping steps for this practice.
    Third, we proposed to include partially complete engines sold as 
replacement components under the replacement-engine exemption in Sec.  
1068.240. Manufacturers expressed a concern that these engines were 
needed as replacement components and should therefore not be subject to 
standards. We noted that the existing replacement-engine exemption does 
not fit well with partially complete engines that are identical to 
engines currently being

[[Page 59168]]

produced under a valid certificate of conformity (up to that stage of 
completion). As a result, we have included language in Sec.  1068.240 
describing a streamlined path for these engines. The more difficult 
question relates to partially complete engines specially produced for 
replacement or repower where the old engine is subject to a previous 
tier of emission standards. We are concerned, as described above, that 
manufacturers could exploit this as a loophole if we did not specify 
that these engines are subject to emission standards. We are modifying 
the replacement-engine exemption to allow for very limited use of 
replacement engines without the administrative requirements and 
oversight provisions that currently apply under Sec.  1068.240. Under 
this approach we specify that manufacturers may produce and sell a 
certain number of replacement engines, including partially complete 
engines, based on production volumes from preceding years without 
making a determination that a new engine meeting current standards is 
unavailable to repower the equipment. Manufacturers would also not need 
to take possession of the old engine block (or confirm that it has been 
destroyed). For any number of noncompliant replacement engines 
exceeding the specified threshold, manufacturers would need to meet all 
the requirements that currently apply under Sec.  1068.240. See Section 
VIII above and Chapter 1 of the Summary and Analysis of Comments for 
further information and discussion related to replacement engines.

XI. Statutory and Executive Order Reviews

A. Executive Order 12866: Regulatory Planning and Review

    Under section 3(f)(1) of Executive Order (EO) 12866 (58 FR 51735, 
October 4, 1993), this action is an ``economically significant 
regulatory action'' because it is likely to have an annual effect on 
the economy of $100 million or more. Accordingly, EPA submitted this 
action to the Office of Management and Budget (OMB) for review under EO 
12866 and any changes made in response to OMB recommendations have been 
documented in the docket for this rulemaking.
    In addition, EPA prepared an analysis of the potential costs and 
benefits associated with this action. This analysis is contained in the 
Final Regulatory Impact Analysis, which is available in the docket and 
is summarized in Section IX.

B. 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. The 
Information Collection Request (ICR) documents prepared by EPA have 
been assigned EPA ICR numbers 2251.02 and 1722.06.
    The Agency will collect information to ensure compliance with the 
provisions in this rule. This includes a variety of requirements, both 
for engine manufacturers, equipment manufacturers and manufacturers of 
fuel system components. Section 208(a) of the Clean Air Act requires 
that manufacturers provide information the Administrator may reasonably 
require to determine compliance with the regulations; submission of the 
information is therefore mandatory.
    As shown in Table XIV-1, the total annual burden associated with 
this final rule is about 131,000 hours and $17 million based on a 
projection of 1,031 respondents. The estimated burden for engine 
manufacturers is a total estimate for both new and existing reporting 
requirements. Most information collection is based on annual reporting. 
Burden means the total time, effort, or financial resources expended by 
persons to generate, maintain, retain, or 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; adjust the existing ways to 
comply with any previously applicable instructions and requirements; 
train personnel to be able to respond to a collection of information; 
search data sources; complete and review the collection of information; 
and transmit or otherwise disclose the information.

                                       Table XIV-1--Estimated Burden for Reporting and Recordkeeping Requirements
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                              Annual
                                                             Number of        Average      Annual burden    Annualized     Annual labor    operation and
                     Industry sector                        respondents     burden per         hours       capital costs       costs        maintenance
                                                                            respondent                                                         costs
--------------------------------------------------------------------------------------------------------------------------------------------------------
Small SI engine manufacturers...........................              58             885          51,301      $4,829,036      $2,065,643      $3,268,306
Small SI equipment (evaporative)........................             500              19           9,500               0         412,500         120,500
Tank and hose component mfr's. (evaporative)............              53              68           3,615               0          97,670          12,773
Marine SI engine manufacturers..........................              38           1,596          60,640               0       3,110,584       6,462,307
Marine SI equipment & fuel system component mfr.                     343              29          10,020               0         730,450         120,232
 (evaporative)..........................................
                                                         -----------------------------------------------------------------------------------------------
    TOTAL...............................................             992           2,597         135,076       5,829,036       6,416,847       9,984,118
 
--------------------------------------------------------------------------------------------------------------------------------------------------------

    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 in 40 CFR are listed in 40 CFR part 9.

C. Regulatory Flexibility Act

(1) Overview
    The Regulatory Flexibility Act (RFA) generally requires an agency 
to prepare a regulatory flexibility analysis of any rule subject to 
notice and comment rulemaking requirements under the Administrative 
Procedure Act or any other statute 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 organizations, and small governmental jurisdictions.
    For purposes of assessing the impacts of this action on small 
entities, small

[[Page 59169]]

entity is defined as: (1) A small business as defined by the Small 
Business Administration's (SBA) regulations at 13 CFR 121.201 (see 
Table XIV-2, below); (2) a small governmental jurisdiction that is a 
government of a city, county, town, school district or special district 
with a population of smaller than 50,000; and (3) a small organization 
that is any not-for-profit enterprise which is independently owned and 
operated and is not dominant in its field. The following table provides 
an overview of the primary SBA small business categories potentially 
affected by this regulation.

                   Table XIV-2--Small Business Definitions for Entities Affected by This Rule
----------------------------------------------------------------------------------------------------------------
                   Industry                     NAICS a Codes      Threshold Definitions for Small Business b
----------------------------------------------------------------------------------------------------------------
Small SI and Marine SI Engine Manufacturers..          333618  1,000 employees.
Equipment Manufacturers:
    Farm Machinery...........................          333111  500 employees.
    Lawn and Garden..........................          333112  500 employees.
    Construction.............................          333120  750 employees.
    Sawmill and Woodworking..................          333210  500 employees.
    Pumps....................................          333911  500 employees.
    Air and Gas Compressors..................          333912  500 employees.
    Generators...............................          335312  1,000 employees.
Boat Builders................................          336612  500 employees.
Fuel Tank Manufacturers:
    Other Plastic Products...................          326199  500 employees.
    Metal Stamping...........................          332116  500 employees.
    Metal Tank (Heavy Gauge).................          332420  500 employees.
Fuel Line Manufacturers:
    Rubber and Plastic Fuel Lines............          326220  500 employees.
----------------------------------------------------------------------------------------------------------------
a North American Industry Classification System.
b According to SBA's regulations (13 CFR 121), businesses with no more than the listed number of employees are
  considered ``small entities'' for RFA purposes.

    After considering the economic impacts of this final rule on small 
entities, I certify that this action will not have a significant 
economic impact on a substantial number of small entities. The small 
entities directly regulated by this final rule cover a wide range of 
small businesses including engine manufacturers, equipment 
manufacturers, boat manufacturers, fuel tank manufacturers, and fuel 
hose manufacturers. Small governmental jurisdictions and small 
organizations as described above will not be impacted. We have 
determined that the estimated effect of the rule is to impact 43 
companies with costs between one and three percent of revenues, and 18 
additional companies with costs over three percent of revenues. These 
61 companies represent less than 5 percent of the total number of small 
businesses impacted by the new regulations. All remaining companies 
(over 1,000 of them) would be impacted with costs by less than one 
percent of revenues. It should be noted that this estimate is based on 
the highest level of estimated cost in the first years of the program. 
We estimate substantially lower long-term costs as manufacturers learn 
to produce compliant products at a lower cost over time.
    Pursuant to section 603 of the RFA, EPA prepared an initial 
regulatory flexibility analysis (IRFA) for the May 18, 2007 proposed 
rule (72 FR 28098). Pursuant to section 609(b) of the RFA, EPA convened 
a Small Business Advocacy Review Panel to obtain advice and 
recommendations from representatives of small entities that would 
potentially be regulated by the rule. A detailed discussion of the 
Panel's advice and recommendations is found in the Panel Reports, which 
have been placed in the docket for this rule.\147\ A summary of the 
Panel's recommendations is presented in the May 2007 proposal (72 FR 
28245).
---------------------------------------------------------------------------

    \147\ ``Panel Report of the Small Business Advocacy Review Panel 
on EPA's Planned Proposed Rule, Control of Emissions from Nonroad 
Spark-Ignition Engines and Equipment,'' October 10, 2006, Docket 
EPA-HQ-OAR-2004-0008-0562.
---------------------------------------------------------------------------

    In the final rule, EPA has made some changes to the proposal that 
reduced the level of impact to small entities directly regulated by the 
rule. As described in Section III.C.1, EPA is adopting less stringent 
standards for SD/I high-performance engines than originally proposed, 
based in part on the comments from SD/I engine manufacturers, most of 
which are small businesses. This change has resulted in a reduction in 
the number of entities projected to be impacted by more than 1 percent.
    Despite the determination that this rule will not have a 
significant economic impact on a substantial number of small entities, 
EPA prepared a Small Business Flexibility Analysis that has all the 
components of a final regulatory flexibility analysis (FRFA). A FRFA 
examines the impact of the rule on small businesses along with 
regulatory alternatives that could reduce that impact. The Small 
Business Flexibility Analysis (which is presented in Chapter 10 of the 
Final RIA) is available for review in the docket, and is summarized 
below.
(2) Need for and Objective of the Rulemaking
    Air pollution is a serious threat to the health and well-being of 
millions of Americans and imposes a large burden on the U.S. economy. 
Ground-level ozone and carbon monoxide are linked to potentially 
serious respiratory health problems, especially respiratory effects and 
environmental degradation, including visibility impairment in and 
around our national parks. (Section II and Chapter 2 of the Final RIA 
for this rule describe these pollutants and their health effects.) Over 
the past quarter century, state and federal representatives have 
established emission control programs that significantly reduce 
emissions from individual sources. Many of these sources now pollute at 
only a small fraction of their pre-control rates.
    This final rule includes standards that will require manufacturers 
to substantially reduce exhaust emissions and evaporative emissions 
from Marine SI engines and vessels and from Small SI engines and 
equipment. We are promulgating the standards under

[[Page 59170]]

section 213(a)(3) of the Clean Air Act, which directs EPA to set 
emission standards that ``achieve the greatest degree of emission 
reduction achievable through the application of technology'' giving 
appropriate consideration to cost, noise, energy, safety, and lead 
time. In addition to the general authority to regulate nonroad engines 
under the Clean Air Act, section 428 of the 2004 Consolidated 
Appropriations Act requires EPA to propose and finalize regulations for 
new nonroad spark-ignition engines below 50 horsepower.
(3) Summary of Significant Public Comments
    In the proposal, EPA proposed provisions consistent with each of 
the Panel's recommendations and sought comments on all the small 
business provisions (see 72 FR 28245, May 18, 2007). We received a 
number of comments during the comment period after we issued the 
proposal. The following section summarizes the most significant 
comments received. A summary of all comments pertaining to the small 
business provisions can be found in our Summary and Analysis of 
Comments document contained in the public docket for this rulemaking.
    With regard to marine exhaust emission standards, NMMA and several 
SD/I engine manufacturers commented on EPA's proposed criteria for 
which SD/I engine manufacturers would be eligible for the small 
business flexibilities. They recommended that EPA should base the 
criteria on number of employees rather than engine production level. 
They recommended a 500 employee threshold for small businesses with the 
option to qualify as a small-volume manufacturer if the 5,000 unit 
level is not exceeded.
    With regard to marine evaporative emission standards, NMMA, which 
represents many vessel manufacturers, noted that EPA acknowledged the 
challenges faced by the small boat builders and even requested comment 
on a three-year phase-in (33-66-100 percent) for the diurnal emission 
standards over model years 2010-2012. Rather than a phase-in, NMMA 
supported an additional two years of lead time for compliance (i.e., 
until model year 2013) for small businesses to allow for sufficient 
time for these businesses to gain experience with carbon canisters.
(4) Type and Numbers of Small Entities Affected
    The standards being promulgated for Small SI engines and equipment 
will affect manufacturers of both handheld equipment and nonhandheld 
equipment. Based on EPA certification records, the Small SI nonhandheld 
engine industry is made up primarily of large manufacturers including 
Briggs and Stratton, Tecumseh, Honda, Kohler and Kawasaki. The Small SI 
handheld engine industry is also made up primarily of large 
manufacturers including Electrolux Home Products, MTD, Homelite, Stihl 
and Husqvarna. EPA has identified 10 Small SI engine manufacturers that 
qualify as a small business under SBA definitions. Half of these small 
manufacturers certify gasoline engines and the other half certify 
liquefied petroleum gas (LPG) engines.
    The Small SI equipment market is dominated by a few large 
businesses including Toro, John Deere, MTD, Briggs and Stratton, and 
Electrolux Home Products. While the Small SI equipment market may be 
dominated by just a handful of companies, there are many small 
businesses in the market; however these small businesses account for 
less than 10 percent of equipment sales. We have identified over three 
hundred equipment manufacturers that qualify as a small business under 
the SBA definitions. More than 90 percent of these small companies 
manufacture fewer than 5,000 pieces of equipment per year. The median 
employment level is 65 employees for nonhandheld equipment 
manufacturers and 200 employees for handheld equipment manufacturers. 
The median sales revenue is approximately $9 million for nonhandheld 
equipment manufacturers and $20 million for handheld equipment 
manufacturers.
    EPA has identified 25 manufacturers that produce fuel tanks for the 
Small SI equipment market that meet the SBA definition of a small 
business. Fuel tank manufacturers rely on three different processes for 
manufacturing plastic tanks--rotational molding, blow molding and 
injection molding. EPA has identified small business fuel tank 
manufacturers using the rotational molding and blow molding processes 
but has not identified any small business manufacturers using injection 
molding. In addition, EPA has identified two manufacturers that produce 
fuel lines for the Small SI equipment market that meet the SBA 
definition of a small business. The majority of fuel line in the Small 
SI market is made by large manufacturers including Avon Automotive and 
Dana Corporation.
    The standards being promulgated for Marine SI engines and vessels 
will affect manufacturers in the OB/PWC market and the SD/I market. 
Based on EPA certification records, the OB/PWC market is made up 
primarily of large manufacturers including, Brunswick (Mercury), 
Bombardier Recreational Products, Yamaha, Honda, Kawasaki, Polaris, 
Briggs & Stratton, and Nissan. Two companies qualify as a small 
business under the SBA definition. Tohatsu makes outboard engines. The 
other small business is Surfango which makes a small number of 
motorized surfboards and has certified their product as a PWC.
    The SD/I market is made up mostly of small businesses; however, 
these businesses account for less than 20 percent of engine sales. Two 
large manufacturers, Brunswick (Mercruiser) and Volvo Penta, dominate 
the market. We have identified 28 small entities manufacturing SD/I 
marine engines. The third largest company is Indmar, which has much 
fewer than the SBA threshold of 1,000 employees. Based on sales 
estimates, number of employees reported by Thomas Register, and typical 
engine prices, we estimate that the average revenue for the larger 
small SD/I manufacturers is about $50-60 million per year. However, the 
vast majority of the SD/I engine manufacturers produce low production 
volumes of engines and typically have fewer than 50 employees.
    The two largest boat building companies are Brunswick and Genmar. 
Brunswick owns approximately 25 boat companies and Genmar owns 
approximately 12 boat companies. Based on a manufacturer list 
maintained by the U.S. Coast Guard, there are over 1,600 boat builders 
in the United States. We estimate that, based on manufacturer 
identification codes, more than 1,000 of these companies produce boats 
using gasoline marine engines. According to the National Marine 
Manufacturers Association (NMMA), most of these boat builders are small 
businesses. These small businesses range from individuals building one 
boat per year to businesses near the SBA small business threshold of 
500 employees.
    We have identified 14 marine fuel tank manufacturers in the United 
States that qualify as small businesses under the SBA definition. These 
manufacturers include five rotational molders, two blow molders, six 
aluminum fuel tank manufacturers, and one specialty fuel tank 
manufacturer. The small rotational molders average fewer than 50 
employees while the small blow-molders average over 100 employees.
    We have only identified one small fuel line manufacturer that 
produces for the Marine SI market. Novaflex primarily distributes fuel 
lines made by other manufacturers but does produce

[[Page 59171]]

its own filler necks. Because we expect vessel manufacturers will 
design their fuel systems such that there will not be standing liquid 
fuel in the fill neck (and therefore the new low-permeation fuel line 
requirements will not apply to the fill neck), we have not included 
this manufacturer in our analysis. The majority of fuel line in the 
Marine SI market is made by large manufacturers including Goodyear and 
Parker-Hannifin.
    To gauge the impact of the new standards on small businesses, EPA 
employed a cost-to-sales ratio test to estimate the number of small 
businesses that will be impacted by less than one percent, between one 
and three percent, and above three percent. For this analysis, EPA 
assumed that the costs of complying with the final standards are 
completely absorbed by the regulated entity. Overall, EPA projects that 
43 small businesses will be impacted by one to three percent, 18 small 
businesses will be impacted by over three percent, and the remaining 
companies (over 1,000 small businesses) will be impacted by less than 
one percent. Table XIV-3 summarizes the impacts on small businesses 
from the new exhaust and evaporative emission standards for Small SI 
engines and equipment and Marine SI engines and vessels. A more 
detailed description of the inputs used for each affected industry 
sector and the methodology used to develop the estimated impact on 
small businesses in each industry sector is included in the Small 
Business Flexibility Analysis as presented in Chapter 10 of the Final 
RIA for this rulemaking.

           Table XIV-3--Summary of Impacts on Small Businesses
------------------------------------------------------------------------
                                                       1-3         >3
        Industry sector             0-1 percent      percent    percent
------------------------------------------------------------------------
Manufacturers of Marine OB/PWC   2................          0          0
 engines.
Manufacturers of Marine SD/I     4................          5          0
 engines < 373 kW.
Manufacturers of Marine SD/I     19...............          0          0
 engines >= 373 kW (high-
 performance).
Boat Builders..................  >1,000...........          0          0
Manufacturers of Fuel Lines and  14...............          0          0
 Fuel Tanks for Marine SI
 Vessels.
Small SI engines and equipment.  314..............         38         18
Manufacturers of Fuel Lines and  27...............          0          0
 Fuel Tanks for Small SI
 Applications.
                                ----------------------------------------
    Total......................  380 plus >1,000           43         18
                                  boat builders.
------------------------------------------------------------------------

(5) Reporting, Recordkeeping, and Compliance Requirements
    For any emission control program, EPA must have assurances that the 
regulated products will meet the standards. Historically, EPA's 
programs for Small SI engines and Marine SI engines have included 
provisions requiring that engine manufacturers be responsible for 
providing these assurances. The program that EPA is adopting for 
manufacturers subject to this final rule include testing, reporting, 
and recordkeeping requirements for manufacturers of engines, equipment, 
vessels, and fuel system components including fuel tanks, fuel lines, 
and fuel caps.
    For Small SI engine manufacturers and OB/PWC engine manufacturers, 
EPA is continuing the same reporting, recordkeeping, and compliance 
requirements prescribed in the current regulations. For SD/I engine 
manufacturers, which are not currently subject to EPA regulation, EPA 
is applying similar reporting, recordkeeping, and compliance 
requirements to those for OB/PWC engine manufacturers. Testing 
requirements for engine manufacturers will include certification 
emission (including deterioration factor) testing and production-line 
testing. Reporting requirements will include emission test data and 
technical data on the engines. Manufacturers will also need to keep 
records of this information.
    Because of the new evaporative emission requirements, there will be 
new reporting, recordkeeping and compliance requirements for Small SI 
equipment manufacturers. Small SI equipment manufacturers participating 
in the transition program will also be subject to reporting, 
recordkeeping and compliance requirements. There will also be new 
reporting, recordkeeping and compliance requirements for fuel tank 
manufacturers, fuel line manufacturers, fuel cap manufacturers and 
marine vessel manufacturers choosing to certify their products with 
EPA. Testing requirements for these manufacturers would include 
certification emission testing. Reporting requirements would include 
emission test data and technical data on the designs. Manufacturers 
will also need to keep records of this information.
    (6) Steps Taken To Minimize the Impact on Small Entities
    The Panel recommended that EPA consider and seek comment on a wide 
range of regulatory alternatives to mitigate the impacts of the 
rulemaking on small businesses, including those flexibility options 
described below. A copy of the Final Panel Report is included in the 
docket for this final rule. A summary of the Panel's recommendations 
for the various groups of small businesses affected by the rule is 
presented in the May 2007 proposal (72 FR 28245).
    In response to the Panel's recommendations, we proposed a range of 
small business flexibilities for the various groups of small businesses 
affected by the proposed standards. As noted earlier, we received a 
number of comments during the comment period after we issued the 
proposal. A complete summary of the comments pertaining to the small 
business provisions can be found in our Summary and Analysis of 
Comments document contained in the public docket for this rulemaking.
    EPA is adopting several small business flexibilities as part of 
this rule. A few changes have been made to some of the proposed 
flexibilities in response to the comments received on the proposal as 
well as other changes made in the rulemaking. The flexibilities 
available to small businesses affected by the new exhaust emission 
standards for SD/I engines are summarized in Section III.F. The 
flexibilities available to small businesses affected by the new exhaust 
emission standards for OB/PWC engines are summarized in Section IV.G. 
The flexibilities available to small businesses affected by the new 
exhaust emission standards for Small SI engines are summarized in 
Section V.F. Finally, the flexibilities available to small businesses 
affected by the new evaporative emission standards for both Marine SI 
engines and vessels and

[[Page 59172]]

Small SI engines and equipment are summarized in Section VI.G.

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 that EPA 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.
    This rule contains no federal mandates for state, local, or tribal 
governments as defined by the provisions of Title II of the UMRA. The 
rule imposes no enforceable duties on any of these governmental 
entities. Nothing in the rule will significantly or uniquely affect 
small governments.
    EPA has determined that this rule contains federal mandates that 
may result in expenditures of more than $100 million to the private 
sector in a single year. EPA believes that the final rule represents 
the least costly, most cost-effective approach to achieve the air 
quality goals of the rule. The costs and benefits associated with the 
final rule are discussed in Section IX and in the Final Regulatory 
Impact Analysis as required by the UMRA.

E. 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 section 6 of 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 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 regulation.
    Section 4 of the Executive Order contains additional requirements 
for rules that preempt State or local law, even if those rules do not 
have federalism implications (i.e., the rules 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). Those 
requirements include providing all affected State and local officials 
notice and an opportunity for appropriate participation in the 
development of the regulation. If the preemption is not based on 
express or implied statutory authority, EPA also must consult, to the 
extent practicable, with appropriate State and local officials 
regarding the conflict between State law and Federally protected 
interests within the agency's area of regulatory responsibility.
    This final rule has federalism implications because it preempts 
State law. It does not include any significant revisions from current 
statutory and regulatory requirements, but it codifies existing 
statutory requirements. Prior to the passage of Public Law 108-199, the 
various states could adopt and enforce nonroad emission control 
standards previously adopted by the state of California under section 
209(e) of the Clean Air Act, once California had received authorization 
from EPA to enforce such standards. As part of directing EPA to 
undertake this rulemaking, section 428 of Public Law 108-199 has taken 
away the authority of states' to adopt California standards for any 
nonroad spark-ignition engine under 50 horsepower that they had not 
already adopted by September 1, 2003. No state had done so by that 
date. No current state law is affected by the provisions of Public Law 
108-199 mentioned above. This rule codifies the statutory provision 
prohibiting other states from adopting California standards for nonroad 
spark-ignition engines under 50 horsepower. It does not affect the 
independent authority of California.
    EPA did consult with representatives of various State and local 
governments in developing this rule. EPA has also consulted 
representatives from the National Association of Clean Air Agencies 
(NACAA), which represents state and local air pollution officials. 
These officials participated in two EPA workshops regarding the Small 
SI safety study in which they expressed concern about the language of 
section 428 of Public Law 108-199 limiting the states' ability to adopt 
the California standards for nonroad spark-ignition engines under 50 
horsepower and urged EPA to move expeditiously in adopting new Federal 
emission standards for this category.
    As required by section 8(a) of Executive Order 13132, EPA included 
a certification from its Federalism Official stating that EPA had met 
the Executive Order's requirements in a meaningful and timely manner, 
when it sent the draft of this final rule to OMB for review pursuant to 
Executive Order 12866. A copy of this certification has been included 
in the public version of the official record for this final rule.

F. Executive Order 13175: Consultation and Coordination With Indian 
Tribal Governments

    Executive Order 13175, entitled ``Consultation and Coordination 
with Indian Tribal Governments'' (65 FR 67249, November 9, 2000), 
requires EPA to develop an accountable process to ensure ``meaningful 
and timely input by tribal officials in the development of regulatory 
policies that have tribal implications.''
    This final rule does not have tribal implications as specified in 
Executive Order 13175. This rule will be

[[Page 59173]]

implemented at the Federal level and impose compliance costs only on 
engine and equipment manufacturers. Tribal governments will be affected 
only to the extent they purchase and use equipment with regulated 
engines. Thus, Executive Order 13175 does not apply to this rule.

G. Executive Order 13045: Protection of Children From Environmental 
Health and Safety Risks

    Executive Order 13045, ``Protection of Children from Environmental 
Health Risks and Safety Risks'' (62 FR 19885, April 23, 1997) applies 
to any rule that (1) is determined to be ``economically significant'' 
as defined under Executive Order 12866, and (2) concerns an 
environmental health or safety risk that EPA has reason to believe may 
have a disproportionate effect on children. If the regulatory action 
meets both criteria, section 5-501 of the Order directs the Agency to 
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 the Executive Order because it 
does not involve decisions on environmental health or safety risks that 
may disproportionately affect children.
    The effects of ozone on children's health were addressed in detail 
in EPA's rulemaking to establish the NAAQS for these pollutants, and 
EPA is not revisiting those issues here. EPA believes, however, that 
the emission reductions from the strategies in this rulemaking will 
further reduce air toxic emissions and the related adverse impacts on 
children's health.

H. Executive Order 12898: Federal Actions To Address Environmental 
Justice in Minority Populations and Low-Income Populations

    Executive Order (EO) 12898 (59 FR 7629 (Feb. 16, 1994)) establishes 
federal executive policy on environmental justice. Its main provision 
directs federal agencies, to the greatest extent practicable and 
permitted by law, to make environmental justice part of their mission 
by identifying and addressing, as appropriate, disproportionately high 
and adverse human health or environmental effects of their programs, 
policies, and activities on minority populations and low-income 
populations in the United States.
    EPA has determined that this final rule will not have 
disproportionately high and adverse human health or environmental 
effects on minority or low-income populations because it increases the 
level of environmental protection for all affected populations without 
having any disproportionately high and adverse human health or 
environmental effects on any population, including any minority or low-
income population. This final rule will reduce air pollution from 
mobile sources in general and thus decrease the amount of such 
emissions to which all affected populations are exposed.

I. Executive Order 13211: Actions That Significantly Affect Energy 
Supply, Distribution, or Use

    This rule is not a ``significant energy action'' as defined in 
Executive Order 13211, ``Actions Concerning Regulations That 
Significantly Affect Energy Supply, Distribution, or Use'' (66 FR 
28355, May 22, 2001), because it is not likely to have a significant 
adverse effect on the supply, distribution, or use of energy. If 
promulgated, this final rule is expected to result in the use of 
emission control technologies that are estimated to reduce nationwide 
fuel consumption by around 100 million gallons per year by 2020.

J. National Technology Transfer 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 will 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.
    This final rulemaking involves technical standards. EPA will use 
the test procedures specified in 40 CFR part 1065. While the Agency 
identified the test procedures specified by the International 
Organization for Standardization (ISO 8178) as being potentially 
applicable, we are not adopting them in this final rulemaking. The use 
of this voluntary consensus standard will be impractical because we 
have been working with engine manufacturers and other interested 
parties in comprehensive improvements to test procedures for measuring 
engine emissions, as reflected by the provisions in part 1065. We 
expect these procedures to form the basis for internationally 
harmonized test procedures that will be adopted by ISO, other testing 
organizations, and other national governments.

K. Congressional Review Act

    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. A Major rule cannot 
take effect until 60 days after it is published in the Federal 
Register. This action is a ``major rule'' as defined by 5 U.S.C. 
804(2). This rule will be effective December 8, 2008.

List of Subjects

40 CFR Part 9

    Reporting and recordkeeping requirements.

40 CFR Part 60

    Administrative practice and procedure, Air pollution control, 
Incorporation by reference, Intergovernmental relations, Reporting and 
recordkeeping requirements.

40 CFR Part 80

    Environmental protection, Air pollution control, Fuel additives, 
Gasoline, Imports, Incorporation by reference, Labeling, Motor vehicle 
pollution, Penalties, Reporting and recordkeeping requirements.

40 CFR Part 85

    Confidential business information, Imports, Labeling, Motor vehicle 
pollution, Reporting and recordkeeping requirements, Research, 
Warranties.

40 CFR Part 86

    Environmental protection, Administrative practice and procedure, 
Air pollution control, Reporting and recordkeeping requirements, Motor 
vehicle.

40 CFR Part 89

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

[[Page 59174]]

40 CFR Part 90

    Environmental protection, Administrative practice and procedure, 
Confidential business information, Imports, Labeling, Reporting and 
recordkeeping requirements, Research, Warranty.

40 CFR Part 91

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

40 CFR Part 92

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

40 CFR Part 94

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

40 CFR Part 1027

    Environmental protection, Administrative practice and procedure, 
Air pollution control, Imports, Reporting and recordkeeping 
requirements.

40 CFR Parts 10333 and 1039

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

40 CFR Part 1042

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

40 CFR Parts 1045, 1048, 1051, 1054, and 1060

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

40 CFR Part 1065

    Environmental protection, Administrative practice and procedure, 
Incorporation by reference, Reporting and recordkeeping requirements, 
Research.

40 CFR Part 1068

    Environmental protection, Administrative practice and procedure, 
Confidential business information, Imports, Incorporation by reference, 
Motor vehicle pollution, Penalties, Reporting and recordkeeping 
requirements, Warranties.

40 CFR Part 1074

    Environmental protection, Administrative practice and procedure, 
Motor vehicle pollution.

    Dated: September 4, 2008.
Stephen L. Johnson,
Administrator.

0
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 9--OMB APPROVALS UNDER THE PAPERWORK REDUCTION ACT

0
1. The authority citation for part 9 continues to read as follows:

    Authority: 7 U.S.C. 135 et seq., 136-136y; 15 U.S.C. 2001, 2003, 
2005, 2006, 2601-2671; 21 U.S.C. 331j, 346a, 348; 31 U.S.C. 9701; 33 
U.S.C. 1251 et seq., 1311, 1313d, 1314, 1318 1321, 1326, 1330, 1342 
1344, 1345 (d) and (e), 1361; E.O. 11735, 38 FR 21243, 3 CFR, 1971-
1975 Comp. p. 973; 42 U.S.C. 241, 242b, 243, 246, 300f, 300g, 300g-
1, 300g-2, 300g-3, 300g-4, 300g-5, 300g-6, 300j-1, 300j-2, 300j-3, 
300j-4, 300j-9, 1857 et seq., 6901-6992k, 7401-7671q, 7542, 9601-
9657, 11023, 11048.

0
2. In Sec.  9.1 the table is amended as follows:
0
a. By adding a new center heading and entry in numerical order for 
``1027.140''.
0
b. By adding a new center heading and entry in numerical order for 
``1045.825''.
0
c. By removing ``1048.20'', ``1048.201-250'', ``1048.345'', 
``1048.350'', ``1048.420'', and ``1048.425'' and adding a new entry in 
numerical order under that center heading for ``1048.825''.
0
d. By removing ``1051.201-255'', ``1051.345'', ``1051.350'', 
``1051.725'', and ``1051.730'' and adding a new entry in numerical 
order under that center heading for ``1051.825''.
0
e. By adding a new center heading and entry in numerical order for 
``1054.825''.
0
f. By adding a new center heading and entry in numerical order for 
``1060.825''.


Sec.  9.1  OMB approvals under the Paperwork Reduction Act.

* * * * *

------------------------------------------------------------------------
            40 CFR citation                      OMB control No.
------------------------------------------------------------------------
 
                              * * * * * * *
------------------------------------------------------------------------
       Fees for Engine, Vehicle, and Equipment Compliance Programs
------------------------------------------------------------------------
1027.140...............................  2060-0104, 2060-0545
 
                              * * * * * * *
------------------------------------------------------------------------
   Control of Emissions from Spark-ignition Propulsion Marine Engines
------------------------------------------------------------------------
1045.825...............................  2060-0321
------------------------------------------------------------------------
   Control of Emissions from New, Large Nonroad Spark-ignition Engines
------------------------------------------------------------------------
1048.825...............................  2060-0338
------------------------------------------------------------------------

[[Page 59175]]

 
       Control of Emissions from Recreational Engines and Vehicles
------------------------------------------------------------------------
1051.825...............................  2060-0338
------------------------------------------------------------------------
 Control of Emissions from New, Small Nonroad Spark-ignition Engines and
                                Equipment
------------------------------------------------------------------------
1054.825...............................  2060-0338
------------------------------------------------------------------------
    Control of Evaporative Emissions from New and In-use Nonroad and
                          Stationary Equipment
------------------------------------------------------------------------
1060.825...............................  2060-0321, 2060-0338
------------------------------------------------------------------------
 
------------------------------------------------------------------------
                               * * * * * *
------------------------------------------------------------------------

* * * * *

PART 60--STANDARDS OF PERFORMANCE FOR NEW STATIONARY SOURCES

0
3. The authority citation for part 60 continues to read as follows:

    Authority: 42 U.S.C. 7401, et seq.

Subpart JJJJ--[Amended]

0
4. Section 60.4231 is amended as follows:
0
a. By revising the section heading.
0
b. By revising paragraph (a).
0
c. By revising paragraph (b).
0
d. By revising paragraph (c).
0
e. By revising paragraph (d).
0
f. By adding paragraph (f).


Sec.  60.4231  What emission standards must I meet if I am a 
manufacturer of stationary SI internal combustion engines or equipment 
containing such engines?

    (a) Stationary SI internal combustion engine manufacturers must 
certify their stationary SI ICE with a maximum engine power less than 
or equal to 19 KW (25 HP) manufactured on or after July 1, 2008 to the 
certification emission standards and other requirements for new nonroad 
SI engines in 40 CFR part 90 or 1054, as follows:

------------------------------------------------------------------------
                                                    the engine must meet
                                                     emission standards
If engine replacement is . .    and manufacturing       and  related
              .                  dates are . . .      requirements for
                                                     nonhandheld engines
                                                         under . . .
------------------------------------------------------------------------
(1) below 225 cc............  July 1, 2008 to       40 CFR part 90.
                               December 31, 2011.
(2) below 225 cc............  January 1, 2012 or    40 CFR part 1054.
                               later.
(3) at or above 225 cc......  July 1, 2008 to       40 CFR part 90.
                               December 31, 2010.
(4) at or above 225 cc......  January 1, 2011 or    40 CFR part 1054.
                               later.
------------------------------------------------------------------------

    (b) Stationary SI internal combustion engine manufacturers must 
certify their stationary SI ICE with a maximum engine power greater 
than 19 KW (25 HP) (except emergency stationary ICE with a maximum 
engine power greater than 25 HP and less than 130 HP) that use gasoline 
and that are manufactured on or after the applicable date in Sec.  
60.4230(a)(2), or manufactured on or after the applicable date in Sec.  
60.4230(a)(4) for emergency stationary ICE with a maximum engine power 
greater than or equal to 130 HP, to the certification emission 
standards and other requirements for new nonroad SI engines in 40 CFR 
part 1048. Stationary SI internal combustion engine manufacturers must 
certify their emergency stationary SI ICE with a maximum engine power 
greater than 25 HP and less than 130 HP that are manufactured on or 
after the applicable date in Sec.  60.4230(a)(4) to the Phase 1 
emission standards in 40 CFR 90.103, applicable to class II engines, 
and other requirements for new nonroad SI engines in 40 CFR part 90. 
Stationary SI internal combustion engine manufacturers may certify 
their stationary SI ICE with a maximum engine power less than or equal 
to 30 KW (40 HP) with a total displacement less than or equal to 1,000 
cubic centimeters (cc) to the certification emission standards and 
other requirements for new nonroad SI engines in 40 CFR part 90 or 
1054, as appropriate.
    (c) Stationary SI internal combustion engine manufacturers must 
certify their stationary SI ICE with a maximum engine power greater 
than 19 KW (25 HP) (except emergency stationary ICE with a maximum 
engine power greater than 25 HP and less than 130 HP) that are rich 
burn engines that use LPG and that are manufactured on or after the 
applicable date in Sec.  60.4230(a)(2), or manufactured on or after the 
applicable date in Sec.  60.4230(a)(4) for emergency stationary ICE 
with a maximum engine power greater than or equal to 130 HP, to the 
certification emission standards and other requirements for new nonroad 
SI engines in 40 CFR part 1048. Stationary SI internal combustion 
engine manufacturers must certify their emergency stationary SI ICE 
with a maximum engine power greater than 25 HP and less than 130 HP 
that are manufactured on or after the applicable date in Sec.  
60.4230(a)(4) to the Phase 1 emission standards in 40 CFR 90.103, 
applicable to class II engines, and other requirements for new nonroad 
SI engines in 40 CFR part 90. Stationary SI internal combustion engine 
manufacturers may certify their stationary SI ICE with a maximum engine 
power less than or equal to 30 KW (40 HP) with a total displacement 
less than or equal to 1,000 cc to the certification emission standards 
and other requirements for new nonroad SI engines in 40 CFR part 90 or 
1054, as appropriate.
    (d) Stationary SI internal combustion engine manufacturers who 
choose to certify their stationary SI ICE with a maximum engine power 
greater than 19 KW (25 HP) and less than 75 KW (100 HP) (except 
gasoline and rich burn engines that use LPG and emergency

[[Page 59176]]

stationary ICE with a maximum engine power greater than 25 HP and less 
than 130 HP) under the voluntary manufacturer certification program 
described in this subpart must certify those engines to the 
certification emission standards for new nonroad SI engines in 40 CFR 
part 1048. Stationary SI internal combustion engine manufacturers who 
choose to certify their emergency stationary SI ICE greater than 25 HP 
and less than 130 HP, must certify those engines to the Phase 1 
emission standards in 40 CFR 90.103, applicable to class II engines, 
for new nonroad SI engines in 40 CFR part 90. Stationary SI internal 
combustion engine manufacturers may certify their stationary SI ICE 
with a maximum engine power less than or equal to 30 KW (40 HP) with a 
total displacement less than or equal to 1,000 cc to the certification 
emission standards for new nonroad SI engines in 40 CFR part 90 or 
1054, as appropriate. For stationary SI ICE with a maximum engine power 
greater than 19 KW (25 HP) and less than 75 KW (100 HP) (except 
gasoline and rich burn engines that use LPG and emergency stationary 
ICE with a maximum engine power greater than 25 HP and less than 130 
HP) manufactured prior to January 1, 2011, manufacturers may choose to 
certify these engines to the standards in Table 1 to this subpart 
applicable to engines with a maximum engine power greater than or equal 
to 100 HP and less than 500 HP.
* * * * *
    (f) Manufacturers of equipment containing stationary SI internal 
combustion engines meeting the provisions of 40 CFR part 1054 must meet 
the provisions of 40 CFR part 1060, to the extent they apply to 
equipment manufacturers.

0
5. Section 60.4238 is revised to read as follows:


Sec.  60.4238  What are my compliance requirements if I am a 
manufacturer of stationary SI internal combustion engines <=19 KW (25 
HP) or a manufacturer of equipment containing such engines?

    Stationary SI internal combustion engine manufacturers who are 
subject to the emission standards specified in Sec.  60.4231(a) must 
certify their stationary SI ICE using the certification procedures 
required in 40 CFR part 90, subpart B, or 40 CFR part 1054, subpart C, 
as applicable, and must test their engines as specified in those parts. 
Manufacturers of equipment containing stationary SI internal combustion 
engines meeting the provisions of 40 CFR part 1054 must meet the 
provisions of 40 CFR part 1060, subpart C, to the extent they apply to 
equipment manufacturers.

0
6. Section 60.4239 is revised to read as follows:


Sec.  60.4239  What are my compliance requirements if I am a 
manufacturer of stationary SI internal combustion engines >19 KW (25 
HP) that use gasoline or a manufacturer of equipment containing such 
engines?

    Stationary SI internal combustion engine manufacturers who are 
subject to the emission standards specified in Sec.  60.4231(b) must 
certify their stationary SI ICE using the certification procedures 
required in 40 CFR part 1048, subpart C, and must test their engines as 
specified in that part. Stationary SI internal combustion engine 
manufacturers who certify their stationary SI ICE with a maximum engine 
power less than or equal to 30 KW (40 HP) with a total displacement 
less than or equal to 1,000 cc to the certification emission standards 
and other requirements for new nonroad SI engines in 40 CFR part 90 or 
40 CFR part 1054, and manufacturers of stationary SI emergency engines 
that are greater than 25 HP and less than 130 HP who meet the Phase 1 
emission standards in 40 CFR 90.103, applicable to class II engines, 
must certify their stationary SI ICE using the certification procedures 
required in 40 CFR part 90, subpart B, or 40 CFR part 1054, subpart C, 
as applicable, and must test their engines as specified in those parts. 
Manufacturers of equipment containing stationary SI internal combustion 
engines meeting the provisions of 40 CFR part 1054 must meet the 
provisions of 40 CFR part 1060, subpart C, to the extent they apply to 
equipment manufacturers.

0
7. Section 60.4240 is revised to read as follows:


Sec.  60.4240  What are my compliance requirements if I am a 
manufacturer of stationary SI internal combustion engines >19 KW (25 
HP) that are rich burn engines that use LPG or a manufacturer of 
equipment containing such engines?

    Stationary SI internal combustion engine manufacturers who are 
subject to the emission standards specified in Sec.  60.4231(c) must 
certify their stationary SI ICE using the certification procedures 
required in 40 CFR part 1048, subpart C, and must test their engines as 
specified in that part. Stationary SI internal combustion engine 
manufacturers who certify their stationary SI ICE with a maximum engine 
power less than or equal to 30 KW (40 HP) with a total displacement 
less than or equal to 1,000 cc to the certification emission standards 
and other requirements for new nonroad SI engines in 40 CFR part 90 or 
40 CFR part 1054, and manufacturers of stationary SI emergency engines 
that are greater than 25 HP and less than 130 HP who meet the Phase 1 
emission standards in 40 CFR 90.103, applicable to class II engines, 
must certify their stationary SI ICE using the certification procedures 
required in 40 CFR part 90, subpart B, or 40 CFR part 1054, subpart C, 
as applicable, and must test their engines as specified in those parts. 
Manufacturers of equipment containing stationary SI internal combustion 
engines meeting the provisions of 40 CFR part 1054 must meet the 
provisions of 40 CFR part 1060, subpart C, to the extent they apply to 
equipment manufacturers.

0
8. Section 60.4241 is amended by revising the section heading, 
paragraph (b) and adding paragraph (i) to read as follows:


Sec.  60.4241  What are my compliance requirements if I am a 
manufacturer of stationary SI internal combustion engines participating 
in the voluntary certification program or a manufacturer of equipment 
containing such engines?

* * * * *
    (b) Manufacturers of engines other than those certified to 
standards in 40 CFR part 90 or 40 CFR part 1054 must certify their 
stationary SI ICE using the certification procedures required in 40 CFR 
part 1048, subpart C, and must follow the same test procedures that 
apply to large SI nonroad engines under 40 CFR part 1048, but must use 
the D-1 cycle of International Organization of Standardization 8178-4: 
1996(E) (incorporated by reference, see 40 CFR 60.17) or the test cycle 
requirements specified in Table 5 to 40 CFR 1048.505, except that Table 
5 of 40 CFR 1048.505 applies to high load engines only. Stationary SI 
internal combustion engine manufacturers who certify their stationary 
SI ICE with a maximum engine power less than or equal to 30 KW (40 HP) 
with a total displacement less than or equal to 1,000 cc to the 
certification emission standards and other requirements for new nonroad 
SI engines in 40 CFR part 90 or 40 CFR part 1054, and manufacturers of 
emergency engines that are greater than 25 HP and less than 130 HP who 
meet the Phase 1 standards in 40 CFR 90.103, applicable to class II 
engines, must certify their stationary SI ICE using the certification 
procedures required in 40 CFR part 90, subpart B, or 40 CFR part 1054, 
subpart C, as applicable, and must test their engines as specified in 
those parts. Manufacturers of equipment containing stationary SI 
internal

[[Page 59177]]

combustion engines meeting the provisions of 40 CFR part 1054 must meet 
the provisions of 40 CFR part 1060, subpart C, to the extent they apply 
to equipment manufacturers.
* * * * *
    (i) For engines being certified to the voluntary certification 
standards in Table 1 of this subpart, the VOC measurement shall be made 
by following the procedures in 40 CFR 1065.260 and 1065.265 in order to 
determine the total NMHC emissions by using a flame-ionization detector 
and non-methane cutter. As an alternative to the nonmethane cutter, 
manufacturers may use a gas chromatograph as allowed under 40 CFR 
1065.267 and may measure ethane, as well as methane, for excluding such 
levels from the total VOC measurement.

0
9. Section 60.4242 is amended by revising the section heading, 
paragraphs (a) and (b) and adding paragraph (f) to read as follows:


Sec.  60.4242  What other requirements must I meet if I am a 
manufacturer of stationary SI internal combustion engines or equipment 
containing stationary SI internal combustion engines or a manufacturer 
of equipment containing such engines?

    (a) Stationary SI internal combustion engine manufacturers must 
meet the provisions of 40 CFR part 90, 40 CFR part 1048, or 40 CFR part 
1054, as applicable, as well as 40 CFR part 1068 for engines that are 
certified to the emission standards in 40 CFR part 1048 or 1054, except 
that engines certified pursuant to the voluntary certification 
procedures in Sec.  60.4241 are subject only to the provisions 
indicated in Sec.  60.4247 and are permitted to provide instructions to 
owners and operators allowing for deviations from certified 
configurations, if such deviations are consistent with the provisions 
of paragraphs Sec.  60.4241(c) through (f). Manufacturers of equipment 
containing stationary SI internal combustion engines meeting the 
provisions of 40 CFR part 1054 must meet the provisions of 40 CFR part 
1060, as applicable. Labels on engines certified to 40 CFR part 1048 
must refer to stationary engines, rather than or in addition to nonroad 
engines, as appropriate.
    (b) An engine manufacturer certifying an engine family or families 
to standards under this subpart that are identical to standards 
applicable under 40 CFR part 90, 40 CFR part 1048, or 40 CFR part 1054 
for that model year may certify any such family that contains both 
nonroad and stationary engines as a single engine family and/or may 
include any such family containing stationary engines in the averaging, 
banking and trading provisions applicable for such engines under those 
parts. This provision also applies to equipment or component 
manufacturers certifying to standards under 40 CFR part 1060.
* * * * *
    (f) For manufacturers of gaseous-fueled stationary engines required 
to meet the warranty provisions in 40 CFR 90.1103 or 1054.120, we may 
establish an hour-based warranty period equal to at least the certified 
emissions life of the engines (in engine operating hours) if we 
determine that these engines are likely to operate for a number of 
hours greater than the applicable useful life within 24 months. We will 
not approve an alternate warranty under this paragraph (f) for nonroad 
engines. An alternate warranty period approved under this paragraph (f) 
will be the specified number of engine operating hours or two years, 
whichever comes first. The engine manufacturer shall request this 
alternate warranty period in its application for certification or in an 
earlier submission. We may approve an alternate warranty period for an 
engine family subject to the following conditions:
    (1) The engines must be equipped with non-resettable hour meters.
    (2) The engines must be designed to operate for a number of hours 
substantially greater than the applicable certified emissions life.
    (3) The emission-related warranty for the engines may not be 
shorter than any published warranty offered by the manufacturer without 
charge for the engines. Similarly, the emission-related warranty for 
any component shall not be shorter than any published warranty offered 
by the manufacturer without charge for that component.
0
10. Section 60.4245 is amended by revising paragraph (a)(3) to read as 
follows:


Sec.  60.4245  What are my notification, reporting, and recordkeeping 
requirements if I am an owner or operator of a stationary SI internal 
combustion engine?

* * * * *
    (a) * * *
    (3) If the stationary SI internal combustion engine is a certified 
engine, documentation from the manufacturer that the engine is 
certified to meet the emission standards and information as required in 
40 CFR parts 90, 1048, 1054, and 1060, as applicable.
* * * * *
0
11. Section 60.4247 is amended by revising the section heading, 
paragraphs (a) and (b) to read as follows:


Sec.  60.4247  What parts of the mobile source provisions apply to me 
if I am a manufacturer of stationary SI internal combustion engines or 
a manufacturer of equipment containing such engines?

    (a) Manufacturers certifying to emission standards in 40 CFR part 
90, including manufacturers certifying emergency engines below 130 HP, 
must meet the provisions of 40 CFR part 90. Manufacturers certifying to 
emission standards in 40 CFR part 1054 must meet the provisions of 40 
CFR part 1054. Manufacturers of equipment containing stationary SI 
internal combustion engines meeting the provisions of 40 CFR part 1054 
must meet the provisions of 40 CFR part 1060 to the extent they apply 
to equipment manufacturers.
    (b) Manufacturers required to certify to emission standards in 40 
CFR part 1048 must meet the provisions of 40 CFR part 1048. 
Manufacturers certifying to emission standards in 40 CFR part 1048 
pursuant to the voluntary certification program must meet the 
requirements in Table 4 to this subpart as well as the standards in 40 
CFR 1048.101.
* * * * *

0
12. Section 60.4248 is amended by revising the definitions for 
``Certified emissions life'' and ``Certified stationary internal 
combustion engine'' to read as follows:


Sec.  60.4248  What definitions apply to this subpart?

* * * * *
    Certified emissions life means the period during which the engine 
is designed to properly function in terms of reliability and fuel 
consumption, without being remanufactured, specified as a number of 
hours of operation or calendar years, whichever comes first. The values 
for certified emissions life for stationary SI ICE with a maximum 
engine power less than or equal to 19 KW (25 HP) are given in 40 CFR 
90.105, 40 CFR 1054.107, and 40 CFR 1060.101, as appropriate. The 
values for certified emissions life for stationary SI ICE with a 
maximum engine power greater than 19 KW (25 HP) certified to 40 CFR 
part 1048 are given in 40 CFR 1048.101(g). The certified emissions life 
for stationary SI ICE with a maximum engine power greater than 75 KW 
(100 HP) certified under the voluntary manufacturer certification 
program of this subpart is 5,000 hours or 7 years, whichever comes 
first.
    Certified stationary internal combustion engine means an engine 
that belongs to an engine family that has a certificate of conformity 
that complies with the emission standards and

[[Page 59178]]

requirements in this part, or of 40 CFR part 90, 40 CFR part 1048, or 
40 CFR part 1054, as appropriate.
* * * * *

PART 80--REGULATION OF FUELS AND FUEL ADDITIVES

0
13. The authority citation for part 80 continues to read as follows:

    Authority: 42 U.S.C. 7414, 7521(1), 7545 and 7601(a).

Subpart B--[Amended]

0
14. Section 80.22 is amended by revising paragraph (f) and adding 
paragraph (g) to read as follows:


Sec.  80.22  Controls and prohibitions.

* * * * *
    (f) Every retailer and wholesale purchaser-consumer shall equip all 
gasoline pumps from which gasoline is dispensed into motor vehicles 
with a nozzle spout that meets all the following specifications:
    (1) The outside diameter of the terminal end shall not be greater 
than 0.840 inches (2.134 centimeters).
    (2) The terminal end shall have a straight section of at least 2.5 
inches (6.34 centimeters).
    (3) The retaining spring shall terminate at least 3.0 inches (7.6 
centimeters) from the terminal end.
    (g) The specifications in this paragraph (g) apply for any new 
nozzle installations used primarily for dispensing gasoline into marine 
vessels beginning January 1, 2009. (Note that nozzles meeting the 
specifications of this paragraph (g) also meet the specifications of 
paragraph (f) of this section. Note also that the additional 
specifications in this paragraph (g) do not apply for nozzles used 
primarily for dispensing gasoline into motor vehicles rather than 
marine vessels.) Every retailer and wholesale purchaser-consumer shall 
use nozzles meeting these specifications for any new construction or 
for nozzle replacements. This does not require replacement of existing 
nozzles for refueling marine vessels before they would be replaced for 
other reasons. The following specifications apply to spouts on new or 
replacement nozzles intended for dispensing gasoline into marine 
vessels:
    (1) The outside diameter of the terminal end shall have a diameter 
of 0.824  0.017 inches (2.093  0.043 
centimeters).
    (2) The spout shall include an aspirator hole for automatic shutoff 
positioned with a center that is 0.67  0.05 inches (1.70 
 0.13 centimeters) from the terminal end of the spout.
    (3) The terminal end shall have a straight section of at least 2.5 
inches (6.34 centimeters) with no holes or grooves other than the 
aspirator hole.
    (4) The retaining spring (if applicable) shall terminate at least 
3.0 inches (7.6 centimeters) from the terminal end.
* * * * *

PART 85--CONTROL OF AIR POLLUTION FROM MOBILE SOURCES

0
15. The authority citation for part 85 continues to read as follows:

    Authority: 42 U.S.C. 7401-7671q.

Subpart Q--[Removed and reserved]

0
16. Remove and reserve Subpart Q, consisting of Sec. Sec.  85.1601 
through 85.1606.

Subpart R--[Amended]


Sec.  85.1703  [Amended]

0
17. Section 85.1703 is amended by removing and reserving paragraph (b).

0
18. Section 85.1713 is revised to read as follows:


Sec.  85.1713  Delegated-assembly exemption.

    The provisions of 40 CFR 1068.261 related to shipping engines that 
are not yet in their certified configuration apply for manufacturers of 
heavy-duty highway engines starting in the 2010 model year, with the 
following exceptions and clarifications:
    (a) The relevant prohibitions are in Clean Air Act section 203 (42 
U.S.C. 7522), rather than 40 CFR 1068.101.
    (b) References to equipment should be understood as references to 
vehicles.
    (c) The provisions related to reduced auditing rates in 40 CFR 
1068.261(d)(3)(iii) apply starting with the 2014 model year.
    (d) The provisions related to supplemental labeling described in 40 
CFR 1068.261(c)(7)(i) and (ii) apply starting with the 2010 model year.
    (e) The engine's model year does not change based on the date the 
vehicle manufacturer adds the aftertreatment device.

0
19. A new Sec.  85.1714 is added to subpart R to read as follows:


Sec.  85.1714  Replacement-engine exemption.

    (a) Engine manufacturers may use the provisions of 40 CFR 1068.240 
to exempt new replacement heavy-duty highway engines as specified in 
this section.
    (b) The following provisions from 40 CFR part 1068 apply for all 
complete and partially complete engines produced by an engine 
manufacturer choosing to produce any exempt replacement engines under 
this section:
    (1) The definition of engine in 40 CFR 1068.30.
    (2) The provisions of 40 CFR 1068.260 and 1068.262.
    (c) Notify us in writing that you intend to use the provisions of 
this section prior to producing such engines. An authorized 
representative of your company must approve and sign the notification. 
Your notification is considered to be your agreement to comply with all 
the requirements of this section.
    (d) Engine manufacturers choosing to use the provisions of this 
section may opt out by sending us written notice that they will no 
longer introduce into U.S. commerce engines exempted under this 
section.

0
20. Subpart Y is revised to read as follows:

Subpart Y--Fees for the Motor Vehicle and Engine Compliance Program


Sec.  85.2401  Assessment of fees.

    See 40 CFR part 1027 for the applicable fees associated with 
certifying engines, vehicles, and equipment under this chapter.

PART 86--CONTROL OF EMISSIONS FROM NEW AND IN-USE HIGHWAY VEHICLES 
AND ENGINES

0
21. The authority citation for part 86 continues to read as follows:

    Authority: 42 U.S.C. 7401-7671q.

Subpart N--[Amended]

0
22. Section 86.1305-2010 is amended by adding paragraph (h) to read as 
follows:


Sec.  86.1305-2010  Introduction; structure of subpart.

* * * * *
    (h) This paragraph (h) describes how testing performed prior to 
July 1, 2010 may be conducted using the test procedures of this subpart 
N rather than the corresponding provisions of 40 CFR part 1065 
otherwise required by this section. You must use good engineering 
judgment when testing under this paragraph (h), and must comply with 
the following provisions of 40 CFR part 1065:
    (1) Generate a map of your engine according to 40 CFR 
1065.510(b)(5)(ii) and generate test cycles according to 40 CFR 
1065.610. Validate your cycle according to 40 CFR 1065.514.
    (2) Follow the provisions of 40 CFR 1065.342 to verify the 
performance of any sample dryers in your system. Correct your 
measurements according to 40 CFR 1065.659, except use the value

[[Page 59179]]

of Kw in Sec.  1342-90(i) as the value of (1 - 
xH2Oexh) in Equation 1065.659-1.
    (3) Verify your NO2-to-NO converter according to 40 CFR 
1065.378.
    (4) For diesel engine testing, correct NOX emissions for 
intake-air humidity according to 40 CFR 1065.670.
    (5) You must comply with the provisions related to analyzer range 
and drift in 40 CFR 1065.550. If drift correction is required, correct 
your measurements according to 40 CFR 1065.672, but use the emission 
calculations specified in this subpart N rather than those specified in 
40 CFR 1065.650.
    (6) You must comply with 40 CFR 1065.125, 1065.127, and 1065.130, 
except for references to 40 CFR 1065.530(a)(1)(i), 1065.640, and 
1065.655.
    (7) Follow the provisions of 40 CFR 1065.370 to verify the 
performance of your CLD analyzer with respect to CO2 and 
H2O quench. You are not required to follow 40 CFR 
1065.145(d)(2), 1065.248, or 1065.750, which are referenced in 40 CFR 
1065.370.

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

0
23. The authority citation for part 89 continues to read as follows:

    Authority: 42 U.S.C. 7401-7671q.

Subpart G--[Amended]


Sec.  89.614  [Removed]

0
24. Section 89.614 is removed.

Subpart K--[Amended]

0
25. Section 89.1003 is amended by revising paragraphs (b)(7)(iii), 
(b)(7)(iv), and (b)(7)(v) to read as follows:


Sec.  89.1003  Prohibited acts.

* * * * *
    (b) * * *
    (7) * * *
    (iii) If the engine being replaced was not subject to any emission 
standards under this part, the replacement engine must have a permanent 
label with your corporate name and trademark and the following 
language, or similar alternate language approved by the Administrator: 
THIS ENGINE DOES NOT COMPLY WITH FEDERAL NONROAD OR ON-HIGHWAY 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.
    (iv) If the engine being replaced was subject to emission standards 
less stringent than those in effect when you produce the replacement 
engine, the replacement engine must have a permanent label with your 
corporate name and trademark and the following language, or similar 
alternate language approved by the Administrator:
    THIS ENGINE COMPLIES WITH U.S. EPA NONROAD EMISSION REQUIREMENTS 
FOR [Identify the appropriate emission standards (by model year, tier, 
or emission levels) for the replaced engine] ENGINES UNDER 40 CFR 
89.1003(b)(7). SELLING OR INSTALLING THIS ENGINE FOR ANY PURPOSE OTHER 
THAN TO REPLACE A [Identify the appropriate emission standards (by 
model year, tier, or emission levels) for the replaced engine] ENGINE 
MAY BE A VIOLATION OF FEDERAL LAW SUBJECT TO CIVIL PENALTY.
    (v) If the old engine was subject to emission standards less 
stringent than those in effect when you produce the replacement engine, 
you must make the replacement engine in a configuration identical in 
all material respects to the old engine. You may alternatively make the 
replacement engine in a configuration identical in all material 
respects to another certified engine of the same or later model year, 
as long as the engine is not certified with a family emission limit 
higher than that of the engine being replaced.
* * * * *

PART 90--CONTROL OF EMISSIONS FROM NONROAD SPARK-IGNITION ENGINES 
AT OR BELOW 19 KILOWATTS

0
26. The authority citation for part 90 continues to read as follows:

    Authority: 42 U.S.C. 7401-7671q.

Subpart A--[Amended]

0
27. Section 90.1 is amended by revising paragraphs (d)(1) and (d)(5) 
and adding paragraph (d)(8) to read as follows:


Sec.  90.1  Applicability.

* * * * *
    (d) * * *
    (1) Engines that are certified to meet the requirements of 40 CFR 
part 1051 or are otherwise subject to 40 CFR part 1051 (for example, 
engines used in snowmobiles and all-terrain vehicles). This part 
nevertheless applies to engines used in recreational vehicles if the 
manufacturer uses the provisions of 40 CFR 1051.145(a)(3) to exempt 
them from the requirements of 40 CFR part 1051. Compliance with the 
provisions of this part is a required condition of that exemption.
* * * * *
    (5) Engines certified to meet the requirements of 40 CFR part 1048 
or are otherwise subject to 40 CFR part 1048, subject to the provisions 
of Sec.  90.913.
* * * * *
    (8) Engines that are subject to emission standards under 40 CFR 
part 1054. See 40 CFR 1054.1 to determine when part 1054 applies. Note 
that certain requirements and prohibitions apply to engines built on or 
after January 1, 2010 if they are installed in equipment that will be 
used solely for competition, as described in 40 CFR 1054.1 and 40 CFR 
1068.1; those provisions apply instead of the provisions of this part 
90.
* * * * *

0
28. Section 90.2 is amended by adding paragraphs (d) and (e) to read as 
follows:


Sec.  90.2  Effective dates.

* * * * *
    (d) Engines used in emergency and rescue equipment as described in 
Sec.  90.1(d)(7) are subject to the provisions of this part through 
December 31, 2009. Starting January 1, 2010 the provisions in 40 CFR 
1054.660 apply instead of those in Sec.  90.1(d)(7).
    (e) Engines imported for personal use are subject to the provisions 
of Sec.  90.611 through December 31, 2009. Starting January 1, 2010 the 
provisions in 40 CFR 1054.630 apply instead of those in Sec.  90.611.

0
29. Section 90.3 is amended by adding a definition for ``Fuel line'' in 
alphabetical order to read as follows:


Sec.  90.3  Definitions.

* * * * *
    Fuel line has the meaning given in 40 CFR 1054.801.
* * * * *

Subpart B--[Amended]

0
30. Section 90.101 is revised to read as follows:


Sec.  90.101  Applicability.

    (a) The requirements of this subpart B are applicable to all 
nonroad engines and vehicles subject to the provisions of subpart A of 
this part.
    (b) In a given model year, you may ask us to approve the use of 
procedures for certification, labeling, reporting and recordkeeping, or 
other administrative requirements specified in 40 CFR part 1054 or 1068 
instead of the comparable procedures specified in this part 90. We may 
approve the request as long as it does not prevent us from ensuring 
that

[[Page 59180]]

you fully comply with the intent of this part.

0
31. Section 90.107 is amended as follows:
0
a. By revising paragraph (d)(11)(ii).
0
b. By revising paragraph (d)(12).
0
c. By adding paragraphs (d)(13) and (d)(14) to read as follows:


Sec.  90.107  Application for certification.

* * * * *
    (d) * * *
    (11) * * *
    (ii) Provide the applicable useful life as determined under Sec.  
90.105;
    (12) A statement indicating whether you expect the engine family to 
contain only nonroad engines, only stationary engines, or both;
    (13) Identification of an agent for service located in the United 
States. Service on this agent constitutes service on you or any of your 
officers or employees for any action by EPA or otherwise by the United 
States related to the requirements of this part; and
    (14) For imported engines, identification of the following starting 
with the 2010 model year:
    (i) The port(s) at which the manufacturer has imported engines over 
the previous 12 months.
    (ii) The names and addresses of the agents authorized to import the 
engines.
    (iii) The location of test facilities in the United States where 
the manufacturer can test engines if EPA selects them for testing under 
a selective enforcement audit, as specified in subpart F of this part.
* * * * *

0
32. Section 90.114 is amended by revising paragraph (g) to read as 
follows:


Sec.  90.114  Requirement of certification--engine information label.

* * * * *
    (g) Manufacturers may add appropriate features to prevent 
counterfeit labels. For example, manufacturers may include the engine's 
unique identification number on the label.

0
33. Section 90.116 is amended by revising paragraph (d)(5) and removing 
and reserving paragraph (e)(1) to read as follows:


Sec.  90.116  Certification procedure--determining engine displacement, 
engine class, and engine families.

* * * * *
    (d) * * *
    (5) The engine class. Engines of different displacements that are 
within 15 percent of the largest displacement may be included within 
the same engine family as long as all the engines are in the same 
class;
* * * * *
    (e) * * *
    (1) [Reserved]
* * * * *

0
34. Section 90.120 is amended by adding paragraph (b)(3) to read as 
follows:


Sec.  90.120  Certification procedure--use of special test procedures.

* * * * *
    (b) * * *
    (3) A manufacturer may elect to use the test procedures in 40 CFR 
part 1065 as an alternate test procedure without getting advance 
approval by the Administrator or meeting the other conditions of 
paragraph (b)(1) of this section. The manufacturer must identify in its 
application for certification that the engines were tested using the 
procedures in 40 CFR part 1065. For any EPA testing with Phase 1 or 
Phase 2 engines, EPA will use the manufacturer's selected procedures 
for mapping engines, generating duty cycles, and applying cycle-
validation criteria. For any other parameters, EPA may conduct testing 
using either of the specified procedures.
* * * * *

0
35. A new Sec.  90.127 is added to subpart B to read as follows:


Sec.  90.127  Fuel line permeation from nonhandheld engines and 
equipment.

    The following permeation standards apply to new nonhandheld engines 
and equipment with respect to fuel lines:
    (a) Emission standards and related requirements. New nonhandheld 
engines and equipment with a date of manufacture of January 1, 2009 or 
later that run on a volatile liquid fuel (such as gasoline) must meet 
the emission standards specified in paragraph (a)(1) or (a)(2) of this 
section as follows:
    (1) New nonhandheld engines and equipment must use only fuel lines 
that meet a permeation emission standard of 15 g/m\2\/day when measured 
according to the test procedure described in 40 CFR 1060.515.
    (2) Alternatively, new nonhandheld engines and equipment must use 
only fuel lines that meet standards that apply for these engines and 
equipment in California for the same model year (see 40 CFR 1060.810). 
This may involve SHED-based measurements for equipment or testing with 
fuel lines alone. If this involves SHED-based measurements, all 
elements of the emission control system must remain in place for fully 
assembled engines and equipment.
    (3) The emission standards in this section apply with respect to 
discrete fuel line segments of any length. Compliance may also be 
demonstrated using aggregated systems that include multiple sections of 
fuel line with connectors, and fittings. The standard applies with 
respect to the total permeation emissions divided by the wetted 
internal surface area of the assembly. Where it is not practical to 
determine the wetted internal surface area of the assembly, the 
internal surface area per unit length of the assembly may be assumed to 
be equal to the ratio of internal surface area per unit length of the 
hose section of the assembly.
    (4) The emission standards in this section apply over a useful life 
of five years.
    (5) Starting with the 2010 model year, fuel lines must be labeled 
in a permanent and legible manner with one of the following approaches:
    (i) By meeting the labeling requirements that apply for these 
engines and equipment in California.
    (ii) By identifying the certificate holder's corporate name or 
trademark, or the fuel line manufacturer's corporate name or trademark, 
and the fuel line's permeation level. For example, the fuel line may 
identify the emission standard from this section, the applicable SAE 
classification, or the family number identifying compliance with 
California standards. A continuous stripe or other pattern may be added 
to help identify the particular type or grade of fuel line.
    (6) The requirements of this section do not apply to auxiliary 
marine engines.
    (b) Certification requirements. Fuel lines subject to the 
requirements in this section must be covered by a certificate of 
conformity. Fuel line manufacturers or equipment manufacturers may 
apply for certification. Certification under this section must be based 
on emission data using the appropriate procedures that demonstrate 
compliance with the standard, including any of the following:
    (1) Emission data demonstrating compliance with fuel line 
permeation requirements for model year 2008 equipment sold in 
California. You may satisfy this requirement by presenting an approved 
Executive Order from the California Air Resources Board showing that 
the fuel lines meet the applicable standards in California. This may 
include an Executive Order from the previous model year if a new 
certification is pending.
    (2) Emission data demonstrating a level of permeation control that 
meets any of the following industry standards:
    (i) R11A specifications in SAE J30 as described in 40 CFR 1060.810.

[[Page 59181]]

    (ii) R12 specifications in SAE J30 as described in 40 CFR 1060.810.
    (iii) Category 1 specifications in SAE J2260 as described in 40 CFR 
1060.810.
    (iv) Emission data demonstrating compliance with the fuel line 
permeation standards in 40 CFR 1051.110.
    (c) Prohibitions. (1) Except as specified in paragraph (c)(2) of 
this section, introducing engines or equipment into U.S. commerce 
without meeting all the requirements of this section violates Sec.  
90.1003(a)(1).
    (2) It is not a violation to introduce your engines into U.S. 
commerce if equipment manufacturers add fuel lines when installing your 
engines in their equipment. However, you must give equipment 
manufacturers any appropriate instructions so that fully assembled 
equipment will meet all the requirements in this section, as described 
in Sec.  90.128.

0
36. A new Sec.  90.128 is added to subpart B to read as follows:


Sec.  90.128  Installation instructions.

    (a) If you sell an engine for someone else to install in a piece of 
nonroad equipment, give the engine installer instructions for 
installing it consistent with the requirements of this part. Include 
all information necessary to ensure that an engine will be installed in 
its certified configuration. In particular, describe the steps needed 
to control evaporative emissions, as described in Sec.  90.127. This 
may include information related to the delayed requirements for small-
volume equipment manufacturers.
    (b) You do not need installation instructions for engines you 
install in your own equipment.
    (c) Provide instructions in writing or in an equivalent format. For 
example, you may post instructions on a publicly available Web site for 
downloading or printing. If you do not provide the instructions in 
writing, explain in your application for certification how you will 
ensure that each installer is informed of the installation 
requirements.
    (d) Equipment manufacturers failing to follow the engine 
manufacturer's emission-related installation instructions will be 
considered in violation of Sec.  90.1003.

0
37. A new Sec.  90.129 is added to subpart B to read as follows:


Sec.  90.129  Fuel tank permeation from handheld engines and equipment.

    The permeation standards of this section apply to certain new 
handheld engines and equipment with respect to fuel tanks. For the 
purposes of this section, fuel tanks do not include fuel caps.
    (a) Emission standards and related requirements. (1) New handheld 
engines and equipment with a date of manufacture of January 1, 2009 or 
later that run on a volatile liquid fuel (such as gasoline) and have 
been certified to meet applicable fuel tank permeation standards in 
California must meet one of the following emission standards:
    (i) Engines and equipment must use only fuel tanks that meet a 
permeation emission standard of 2.0 g/m2/day when measured according to 
the applicable test procedure specified by the California Air Resources 
Board.
    (ii) Engines and equipment must use only fuel tanks that meet the 
fuel tank permeation standards in 40 CFR 1060.103.
    (iii) Engines and equipment must use only fuel tanks that meet 
standards that apply for these engines in California for the same model 
year. This may involve SHED-based measurements for equipment or testing 
with fuel tanks alone. If this involves SHED-based measurements, all 
elements of the emission-control system must remain in place for fully 
assembled engines and equipment.
    (2) Engine and equipment manufacturers may generate or use emission 
credits to show compliance with the requirements of this section under 
the averaging program as described in 40 CFR part 1054, subpart H.
    (3) The emission standards in this section apply over a useful life 
of two years.
    (4) Equipment must be labeled in a permanent and legible manner 
with one of the following approaches:
    (i) By meeting the labeling requirements that apply for equipment 
in California.
    (ii) By identifying the certificate holder's corporate name or 
trademark, or the fuel tank manufacturer's corporate name or trademark. 
Also include the family number identifying compliance with California 
standards or state: ``THIS FUEL TANK COMPLIES WITH U.S. EPA 
STANDARDS.'' This label may be applied to the fuel tank or it may be 
combined with the emission control information label required in Sec.  
90.114. If the label information is not on the fuel tank, the label 
must include a part identification number that is also permanently 
applied to the fuel tank.
    (5) The requirements of this section do not apply to engines or 
equipment with structurally integrated nylon fuel tanks (as defined in 
40 CFR 1054.801).
    (b) Certification requirements. Fuel tanks subject to the 
requirements in this section must be covered by a certificate of 
conformity. Fuel tank manufacturers or equipment manufacturers may 
apply for certification. Certification under this section must be based 
on emission data using the appropriate procedures that demonstrate 
compliance with the standard. You may satisfy this requirement by 
presenting an approved Executive Order from the California Air 
Resources Board showing that the fuel tanks meet the applicable 
standards in California. This may include an Executive Order from the 
previous model year for cases where new certification based on 
carryover of emission data from the previous model year is pending.
    (c) Prohibitions. Introducing equipment into U.S. commerce without 
meeting all the requirements of this section violates Sec.  
90.1003(a)(1).

Subpart C--[Amended]

0
38. Section 90.201 is revised to read as follows:


Sec.  90.201  Applicability.

    (a) The requirements of this subpart C are applicable to all Phase 
2 spark-ignition engines subject to the provisions of subpart A of this 
part except as provided in Sec.  90.103(a). These provisions are not 
applicable to any Phase 1 engines. Participation in the averaging, 
banking and trading program is voluntary, but if a manufacturer elects 
to participate, it must do so in compliance with the regulations set 
forth in this subpart. The provisions of this subpart are applicable 
for HC+NOX (NMHC+NOX) emissions but not for CO 
emissions.
    (b) See 40 CFR 1054.740 for special provisions for using emission 
credits generated under this part 90 from Phase 2 engines to 
demonstrate compliance with engines certified under 40 CFR part 1054.
    (c) To the extent specified in 40 CFR part 60, subpart JJJJ, 
stationary engines certified under this part and subject to the 
standards of 40 CFR part 60, subpart JJJJ, may participate in the 
averaging, banking and trading program described in this subpart.

0
39. Section 90.210 is amended by adding paragraph (i) to read as 
follows:


Sec.  90.210  End-of-year and final reports.

* * * * *
    (i) For 2007 and later model years, include in your end-of-year and 
final reports an accounting to show a separate balance of emission 
credits for handheld and nonhandheld engines. Use your best judgment to 
differentiate your current balance of banked credits for

[[Page 59182]]

handheld and nonhandheld engines. You may exchange handheld and 
nonhandheld credits to demonstrate compliance with the requirements of 
this part 90. However, emission credits you generate for banking under 
this part 90 will be restricted for engines subject to the requirements 
of 40 CFR part 1054.

Subpart E--[Amended]

0
40. Section 90.426 is amended as follows:
0
a. By revising paragraph (b).
0
b. By revising paragraph (c)(1).
0
c. By revising paragraph (d).
0
d. By revising paragraph (i).
0
e. By adding paragraph (j).


Sec.  90.426  Dilute emission sampling calculations--gasoline fueled 
engines.

* * * * *
    (b) The mass flow rate, Wi in g/hr, of an emission for 
mode i is determined from the following equation:

[GRAPHIC] [TIFF OMITTED] TR08OC08.081

Where:

QI = Volumetric flow rate [m\3\/HR at stp].
Density = Density of a specific emission (DensityHC, DensityCO, 
DensityCO2, Density NOX) [g/m\3\].
DFi = Dilution factor of the dilute exhaust during mode 
i.
CDi = Concentration of the emission (HC, CO, 
NOX) in dilute exhaust extracted from the CVS during mode 
i [ppm].
CBi = Concentration of the emission (HC, CO, 
NOX) in the background sample during mode i [ppm].
STP = Standard temperature and pressure. All volumetric calculations 
made for the equations in this section are to be corrected to a 
standard temperature of 20 [deg]C and a standard pressure of 101.3 
kPa.

    (c) * * *
    (1) The value of DensityHC above is calculated based on 
the assumption that the fuel used has a hydrogen to carbon ratio of 
1:1.85. For other fuels DensityHC can be calculated from the 
following formula:
[GRAPHIC] [TIFF OMITTED] TR08OC08.082

Where:

MHC = The molecular weight of the hydrocarbon molecule 
divided by the number of carbon atoms in the molecule [g/mole].
RSTP = Ideal gas constant for a gas at STP = 0.024065 
[m\3\[middot]mole]
* * * * *
    (d) The dilution factor, DF, is teh ratio of the volumetric flow 
rate of the background air to that of the raw engine exhaust. The 
following formula is used to determine DF:
[GRAPHIC] [TIFF OMITTED] TR08OC08.083

Where:

CDHC = Concentration of HC in the dilute sample [ppm].
CDCO = Concentration of CO in the dilute sample [ppm].
CDCO2 = Concentration of CO2 in the dilute 
sample [ppm].
* * * * *
    (i) The mass of fuel consumed during the mode smpling period, 
MFUEL, can be calculated from the following equation:
[GRAPHIC] [TIFF OMITTED] TR08OC08.084

Where:

GS = Mass of carbon measured during the mode sampling 
period [g].
R2 = The fuel carbon weight fraction, which is the mass 
of carbon in fuel per mass of fuel [g/g].

    (j) The grams of carbon measured during the mode, GS, 
can be calculated from the following equation:
[GRAPHIC] [TIFF OMITTED] TR08OC08.085

Where:

HCmass = mass of hydrocarbon emissions for the mode 
sampling period [grams].
COmass mass of carbon monoxide emissions for the mode 
sample period [grams].
CO2mass = mass of carbon dioxide emissions for the mode 
sample period [grams].
[alpha] = The atomic hydrogen-to-carbon ratio of the fuel.

Subpart G--[Amended]

0
41. Section 90.601 is amended by adding paragraph (c) to read as 
follows:


Sec.  90.601  Applicability.

* * * * *
    (c) Importers must complete the appropirate EPA declaration form 
before importing an engine. These forms are available on the Internet 
at http://www.epa.gov/OTAQ/imports/ or by phone at 734-214-4100. 
Importers must keep the forms for five years and make them available 
promptly upon request.
0
42. Section 90.615 is revised to read as follows:


Sec.  90.615  Model year restrictions related to imported engines and 
equipment.

    The provisions of 40 CFR 1068.360 apply starting January 1, 2009. 
These provisions limit the importation of engines or equipment after 
new emission standards have started to apply if the engines or 
equipment were built before the emission standards took effect.

Subpart K--[Amended]

0
43. Section 90.1003 is amended by revising paragraph (b)(3) to read as 
follows:


Sec.  90.1003  Prohibited acts.

* * * * *
    (b) * * *
    (3) The followiong provisions apply for converting nonroad engines 
to use alternative fuels.
    (i) Until December 31, 2009, converting an engine to use a clean 
alternative fuel (as defined in Title II of the Act) is not considered 
a prohibited act under paragraph (a) of this section if the engine 
complies with the applicable standard when operating on the alternative 
fuel. Also, in the case of engines converted to dual fuel or flexible 
use, the action must result in the proper functioning of the nonroad 
engine when it operates on conventional fuel.
    (ii) The provisions of 40 CFR 1054.645 apply starting January 1, 
2010.
* * * * *

0
44. A new Sec.  90.1007 is added to subpart K to read as follows:


Sec.  90.1007  Bonding requirements related to compliance, enforcement, 
and warranty assurance.

    The bonding provisions of 40 CFR 1054.120(f)(4) and 1054.690 apply 
for all 2010 and later model year engines starting January 1, 2010. 
These provisions include measures to ensure that certifying 
manufacturers are able to cover any potential compliance or enforcement 
actions under the Clean Air Act and to meet their warranty obligations.

Subpart L--[Amended]

0
45. Section 90.1103 is amended by adding paragraph (e) to read as 
follows:


Sec.  90.1103  Emission warranty, warranty period.

* * * * *

[[Page 59183]]

    (e) Starting with the 2010 model year, you must meet the conditions 
specified in 40 CFR 1054.120(f) to ensure that owners will be able to 
promptly obtain warranty repairs.
    Describe in your application for certification how you will meet 
these conditions.

PART 91--CONTROL OF EMISSIONS FROM MARINE SPARK-IGNITION ENGINES

0
46. The authority citation for part 91 continues to read as follows:

    Authority: 42 U.S.C. 7401-7671q.

Subpart A--[Amended]

0
47. Section 91.1 is amended by adding paragraph (d) to read as follows:


Sec.  91.1  Applicability.

* * * * *
    (d) This part does not apply to engines that are subject to 
emission standards under 40 CFR part 1045. See 40 CFR 1045.1 to 
determine when that part 1045 applies. Note that certain requirements 
and prohibitions apply to engines built on or after January 1, 2010 if 
they are installed in equipment that will be used solely for 
competition, as described in 40 CFR 1045.1 and 40 CFR 1068.1; those 
provisions apply instead of the provisions of this part 91.

Subpart B--[Amended]

0
48. Section 91.101 is revised to read as follows:


Sec.  91.101  Applicability.

    (a) The requirements of this subpart B are applicable to all 
engines subject to the provisions of subpart A of this part.
    (b) In a given model year, you may ask us to approve the use of 
procedures for certification, labeling, reporting and recordkeeping, or 
other administrative requirements specified in 40 CFR part 1045 or 1068 
instead of the comparable procedures specified in this part 91. We may 
approve the request as long as it does not prevent us from ensuring 
that you fully comply with the intent of this part.

0
49. Section 91.107 is amended by adding paragraph (d)(12) to read as 
follows:


Sec.  91.107  Application for certification.

* * * * *
    (d) * * *
    (12) Identification of an agent for service located in the United 
States. Service on this agent constitutes service on you or any of your 
officers or employees for any action by EPA or otherwise by the United 
States related to the requirements of this part.
* * * * *
0
50. Section 91.119 is amended by adding paragraph (b)(3) to read as 
follows:


Sec.  91.119  Certification procedure--use of special test procedures.

* * * * *
    (b) * * *
    (3) A manufacturer may elect to use the test procedures in 40 CFR 
part 1065 as an alternate test procedure without getting advance 
approval by the Administrator or meeting the other conditions of 
paragraph (b)(1) of this section. The manufacturer must identify in its 
application for certification that the engines were tested using the 
procedures in 40 CFR part 1065. For any EPA testing with engines 
subject to standards under this part, EPA will use the manufacturer's 
selected procedures for mapping engines, generating duty cycles, and 
applying cycle-validation criteria. For any other parameters, EPA may 
conduct testing using either of the specified procedures.
* * * * *

Subpart H--[Amended]


Sec.  91.707  [Removed]

0
51. Section 91.707 is removed.

Subpart K--[Amended]

0
52. A new Sec.  91.1013 is added to subpart K to read as follows:


Sec.  91.1013  Exemption for certified Small SI engines.

    The provisions of 40 CFR 1045.605 and 1045.610 apply for engines 
subject to the standards of this part 91. This generally allows 
manufacturers to use marine engines that have been certified to 
emission standards for nonroad spark-ignition engines below 19 kW 
without recertifying those engines under this part 91.

Subpart L--[Amended]

0
53. Section 91.1103 is amended by revising paragraph (b)(3) to read as 
follows:


Sec.  91.1103  Prohibited acts.

* * * * *
    (b) * * *
    (3) The following provisions apply for converting marine SI engines 
to use alternative fuels:
    (i) Until December 31, 2009, converting an engine to use a clean 
alternative fuel (as defined in Title II of the Act) is not considered 
a prohibited act under paragraph (a) of this section if the engine 
complies with the applicable standard when operating on the alternative 
fuel. Also, in the case of engines converted to dual fuel or flexible 
use, the action must result in the proper functioning of the engine 
when it operates on conventional fuel.
    (ii) The provisions of 40 CFR 1045.645 apply starting January 1, 
2010.
* * * * *

PART 92--CONTROL OF AIR POLLUTION FROM LOCOMOTIVES AND LOCOMOTIVE 
ENGINES

0
54. The authority citation for part 92 continues to read as follows:

    Authority: 42 U.S.C. 7401-7671q.

Subpart A--[Amended]

0
55. Section 92.9 is amended by revising paragraph (b)(1)(ii) to read as 
follows:


Sec.  92.9  Compliance with emission standards.

* * * * *
    (b) * * *
    (1) * * *
    (ii) The emission values to compare with the standards shall be the 
emission values of a low mileage locomotive, or development engine, or 
low hour locomotive engine, adjusted by the deterioration factors 
developed in accordance with the provisions of paragraph (b)(2) of this 
section. 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.  92.5), to the same number of decimal places as 
contained in the applicable standard.
* * * * *

Subpart D--[Amended]

0
56. Section 92.304 is amended by revising paragraph (n)(1) to read as 
follows:


Sec.  92.304  Compliance requirements.

* * * * *
    (n) * * *
    (1) All locomotives that are certified to an FEL that is different 
from the emission standard that would otherwise apply to the locomotive 
or locomotive engine are required to comply with that FEL for the 
remainder of their service lives, except as allowed by Sec.  
92.8(a)(4)(iii) and this subpart.
* * * * *

Subpart I--[Amended]


Sec.  92.806  [Removed]

0
57. Section 92.806 is removed.

[[Page 59184]]

PART 94--CONTROL OF EMISSIONS FROM MARINE COMPRESSION-IGNITION 
ENGINES

0
58. The authority citation for part 94 continues to read as follows:

    Authority: 42 U.S.C. 7401-7671q.

Subpart C--[Amended]

0
59. Section 94.201 is revised to read as follows:


Sec.  94.201  Applicability.

    (a) The requirements of this subpart are applicable to 
manufacturers of engines subject to the standards of subpart A of this 
part.
    (b) In a given model year, you may ask us to approve the use of 
procedures for certification, labeling, reporting and recordkeeping, or 
other administrative requirements specified in 40 CFR part 1042 or 1068 
instead of the comparable procedures specified in this part 94. We may 
approve the request as long as it does not prevent us from ensuring 
that you fully comply with the intent of this part.

Subpart I--[Amended]


Sec.  94.806  [Removed]

0
60. Section 94.806 is removed.

0
61. A new part 1027 is added to subchapter U of chapter I to read as 
follows:

PART 1027--FEES FOR ENGINE, VEHICLE, AND EQUIPMENT COMPLIANCE 
PROGRAMS

Sec.
1027.101 To whom do these requirements apply?
1027.105 How much are the fees?
1027.110 What special provisions apply for certification related to 
motor vehicles?
1027.115 What special provisions apply for certification related to 
nonroad and stationary engines?
1027.120 Can I qualify for reduced fees?
1027.125 Can I get a refund?
1027.130 How do I make a fee payment?
1027.135 What provisions apply to a deficient filing?
1027.140 What reporting and recordkeeping requirements apply under 
this part?
1027.150 What definitions apply to this subpart?
1027.155 What abbreviations apply to this subpart?

    Authority: 42 U.S.C. 7401-7671q.


Sec.  1027.101  To whom do these requirements apply?

    (a) This part prescribes fees manufacturers must pay for activities 
related to EPA's engine, vehicle, and equipment compliance program 
(EVECP). This includes activities related to approving certificates of 
conformity and performing tests and taking other steps to verify 
compliance with emission standards. You must pay fees as described in 
this part if you are a manufacturer of any of the following products:
    (1) Motor vehicles and motor vehicle engines we regulate under 40 
CFR part 86. This includes light-duty vehicles, light-duty trucks, 
medium-duty passenger vehicles, highway motorcycles, and heavy-duty 
highway engines and vehicles.
    (2) The following nonroad engines and equipment:
    (i) Locomotives and locomotive engines we regulate under 40 CFR 
part 92 or 1033.
    (ii) Nonroad compression-ignition engines we regulate under 40 CFR 
part 89 or 1039.
    (iii) Marine compression-ignition engines we regulate under 40 CFR 
part 94 or 1042.
    (iv) Marine spark-ignition engines and vessels we regulate under 40 
CFR part 91, 1045, or 1060. We refer to these as Marine SI engines.
    (v) Nonroad spark-ignition engines above 19 kW we regulate under 40 
CFR part 1048. We refer to these as Large SI engines.
    (vi) Recreational vehicles we regulate under 40 CFR part 1051.
    (vii) Nonroad spark-ignition engines and equipment at or below 19 
kW we regulate under 40 CFR part 90, 1054, or 1060. We refer to these 
as Small SI engines.
    (3) The following stationary internal combustion engines:
    (i) Stationary compression-ignition engines we certify under 40 CFR 
part 60, subpart IIII.
    (ii) Stationary spark-ignition engines we certify under 40 CFR part 
60, subpart JJJJ.
    (b) This part applies to applications for certification that we 
receive on or after December 8, 2008. Earlier applications are subject 
to the provisions of 40 CFR part 85, subpart Y, as that provision read 
before December 8, 2008.
    (c) Nothing in this part limits our authority to conduct testing or 
to require you to conduct testing as provided in the Act, including our 
authority to require you to conduct in-use testing under section 208 of 
the Act (42 U.S.C. 7542).
    (d) Paragraph (a) of this section identifies the parts of the CFR 
that define emission standards and other requirements for particular 
types of engines and vehicles. This part 1027 refers to each of these 
other parts generically as the ``standard-setting part.'' For example, 
40 CFR part 1051 is always the standard-setting part for recreational 
vehicles. For some nonroad engines, we allow for certification related 
to evaporative emissions separate from exhaust emissions. In this case, 
40 CFR part 1060 is the standard-setting part for the equipment or fuel 
system components you produce.


Sec.  1027.105  How much are the fees?

    (a) Fees are determined based on the date we receive a complete 
application for certification. Each reference to a year in this subpart 
refers to the calendar year, unless otherwise specified. Paragraph (b) 
of this section specifies baseline fees, which applied for certificates 
received in 2005. For engine and vehicles not yet subject to standards 
in 2005, these values represent the fees that apply initially based on 
available information to characterize what the fees would have been in 
2005. See paragraph (c) of this section for provisions describing how 
we calculate fees for future years.
    (b) The following baseline fees for each application for 
certification:
    (1) Except as specified in paragraph (b)(2) of this section for 
Independent Commercial Importers, the following fees apply for motor 
vehicles and motor vehicle engines:

------------------------------------------------------------------------
             Category                 Certificate type          Fee
------------------------------------------------------------------------
(i) Light-duty vehicles and trucks  Federal.............         $33,883
(ii) Light-duty vehicles and        California-only.....          16,944
 trucks.
(iii) Medium-duty passenger         Federal.............          33,883
 vehicles.
(iv) Medium-duty passenger          California-only.....          16,944
 vehicles.
(v) Highway motorcycle............  All.................           2,414
(vi) Heavy-duty highway engine....  Federal.............          21,578
(vii) Heavy-duty highway engine...  California-only.....             826
(viii) Complete heavy-duty highway  Federal.............          33,883
 vehicles.
(ix) Complete heavy-duty highway    California-only.....          16,944
 vehicles.

[[Page 59185]]

 
(x) Heavy-duty vehicle............  Evap................             826
------------------------------------------------------------------------

    (2) A fee of $8,387 applies for Independent Commercial Importers 
with respect to the following motor vehicles:
    (i) Light-duty vehicles and light-duty trucks.
    (ii) Medium-duty passenger vehicles.
    (iii) Complete heavy-duty highway vehicles.
    (3) The following fees apply for nonroad and stationary engines, 
vehicles, equipment, and components:

------------------------------------------------------------------------
             Category                 Certificate type          Fee
------------------------------------------------------------------------
(i) Locomotives and locomotive      All.................            $826
 engines.
(ii) Marine compression-ignition    All, including Annex             826
 engines and stationary              VI.
 compression-ignition engines with
 per-cylinder displacement at or
 above 10 liters.
(iii) Other nonroad compression-    All.................           1,822
 ignition engines and stationary
 compression-ignition engines with
 per-cylinder displacement below
 10 liters.
(iv) Large SI engines.............  All.................             826
(v) Stationary spark-ignition       All.................             826
 engines above 19 kW.
(vi) Marine SI engines and Small    Exhaust only........             826
 SI engines.
(vii) Stationary spark-ignition     Exhaust only........             826
 engines at or below 19 kW.
(viii) Recreational vehicles......  Exhaust (or combined             826
                                     exhaust and evap).
(ix) Equipment and fuel system      Evap (where separate             241
 components associated with          certification is
 nonroad and stationary spark-       required).
 ignition engines.
------------------------------------------------------------------------

    (c) We will calculate adjusted fees for later years based on 
changes in the Consumer Price Index and the number of certificates. We 
will announce adjusted fees for a given year by January 31 of the 
preceding year.
    (1) We will adjust the values specified in paragraph (b) of this 
section for later years as follows:
    (i) Use the fee identified in Sec.  1027.105(b)(3) through 2014 for 
certification related to evaporative emissions from nonroad and 
stationary engines when a separate fee applies for certification to 
evaporative emission standards. Use the following equation starting 
with 2015:
[GRAPHIC] [TIFF OMITTED] TR08OC08.086

Where:

Certificate FeeCY = Fee per certificate for a given year.
Op = operating costs are all of EPA's nonlabor costs for each 
category's compliance program, including any fixed costs associated 
with EPA's testing laboratory, as described in paragraph (d)(1) of 
this section.
L = the labor costs, to be adjusted by the Consumer Price Index, as 
described in paragraph (d)(1) of this section.
CPICY-2 = the Consumer Price Index for the month of 
November two years before the applicable calendar year, as described 
in paragraph (d)(2) of this section.
CPI2006 = 201.8. This is based on the October 2006 value 
of the Consumer Price Index.
OH = 1.169. This is based on EPA overhead, which is applied to all 
costs.
certMY-2 = the total number of certificates 
issued for a fee category in the model year two years before the 
calendar year for the applicable fees as described in paragraph 
(d)(3) of this section.
certMY-3 = the total number of certificates 
issued for a fee category in the model year three years before the 
calendar year for the applicable fees as described in paragraph 
(d)(3) of this section.

    (ii) Use the following equation for all other certificates for 2006 
and later:
[GRAPHIC] [TIFF OMITTED] TR08OC08.087

Where:

CPI2002 = 180.9. This is based on the December 2002 value 
of the Consumer Price Index as described in paragraph (d)(2) of this 
section.

    (2) The fee for any year will remain at the previous year's amount 
until the value calculated in paragraph (c)(1) of this section differs 
by at least $50 from the amount specified for the previous year.
    (d) Except as specified in Sec.  1027.110(a) for motor vehicles and 
motor vehicle engines, we will use the following values to determine 
adjusted fees using the equation in paragraph (c) of this section:
    (1) The following values apply for operating costs and labor costs:

------------------------------------------------------------------------
       Engine or Vehicle Category               Op               L
------------------------------------------------------------------------
(i) Light-duty, medium-duty passenger,        $3,322,039      $2,548,110
 and complete heavy-duty highway vehicle
 certification..........................

[[Page 59186]]

 
(ii) Light-duty, medium-duty passenger,        2,858,223       2,184,331
 and complete heavy-duty highway vehicle
 in-use testing.........................
(iii) Independent Commercial Importers           344,824         264,980
 identified in Sec.   1027.105(b)(2)....
(iv) Highway motorcycles................         225,726         172,829
(v) Heavy-duty highway engines..........       1,106,224       1,625,680
(vi) Nonroad compression-ignition                486,401         545,160
 engines that are not locomotive or
 marine engines, and stationary
 compression-ignition engines with per-
 cylinder displacement below 10 liters..
(vii) Evaporative certificates related             5,039         236,670
 to nonroad and stationary engines......
(viii) All other........................         177,425         548,081
------------------------------------------------------------------------

    (2) The applicable Consumer Price Index is based on the values 
published by the Bureau of Labor Statistics for all U.S. cities using 
the ``U.S. city average'' area, ``all items,'' and ``not seasonally 
adjusted'' numbers (see ftp://ftp.bls.gov/pub/special.requests/cpi/cpiai.txt). For example, we calculated the 2006 fees using the Consumer 
Price Index for November 2004, which is 191.0.
    (3) Fee categories for counting the number of certificates issued 
are based on the grouping shown in paragraph (d)(1) of this section.
    (e) The following example for calculating the 2006 complete federal 
heavy duty highway vehicle fee illustrates the fee adjustment:

    Op = $1,106,224
    L = $1,625,680
    CPI2002 = 180.9
    CPI2004 = 191.0
    cert 2004 = 131
    cert2003 = 95
    Fee06 = [$1,106,224 + $1,625,680 . (191.0/180.9)] . 
1.169/[(131+95) . 0.5] = $29,200.88
    Assessed Fee = $29,201


Sec.  1027.110  What special provisions apply for certification related 
to motor vehicles?

    (a) We will adjust fees for 2006 and later years for light-duty, 
medium-duty passenger, and complete heavy-duty highway vehicles as 
follows:
    (1) California-only certificates. Calculate adjusted fees for 
California-only certificates by applying the light-duty, medium-duty 
passenger, and complete heavy-duty highway vehicle certification Op and 
L values to the equation in Sec.  1027.105(c). The total number of 
certificates issued will be the total number of California-only and 
federal light-duty, medium-duty passenger, and complete heavy-duty 
highway vehicle certificates issued during the appropriate model years.
    (2) Federal certificates. Calculate adjusted fees for federal 
certificates with the following three steps:
    (i) Apply the light-duty, medium-duty passenger, and complete 
heavy-duty highway vehicle certification Op and L values to the 
equation in Sec.  1027.105(c) to determine the certification portion of 
the light-duty fee. The total number of certificates issued will be the 
total number of California-only and federal light-duty, medium-duty 
passenger and complete heavy-duty highway vehicle certificates issued 
during the appropriate model years.
    (ii) Apply the light-duty, medium-duty passenger, and complete 
heavy-duty highway vehicle in-use testing Op and L values to the 
equation in Sec.  1027.105(c) to determine the in-use testing portion 
of the fee. The total number of certificates issued will be the total 
number of federal light-duty, medium-duty passenger, and complete 
heavy-duty highway vehicle certificates issued during the appropriate 
model years.
    (iii) Add the certification and in-use testing portions determined 
in paragraphs (a)(2)(i) and (ii) of this section to determine the total 
light-duty, medium-duty passenger, and complete heavy-duty highway 
vehicle fee for each federal certificate.
    (b) For light-duty vehicles, light-duty trucks, medium-duty 
passenger vehicles, highway motorcycles, and complete heavy-duty 
highway vehicles subject to exhaust emission standards, the number of 
certificates issued as specified in Sec.  1027.105(d)(3) is based only 
on engine families with respect to exhaust emissions. A separate fee 
applies for each evaporative family for heavy-duty engines.
    (c) If you manufacture a heavy-duty vehicle that another company 
has certified as an incomplete vehicle such that you exceed the maximum 
fuel tank size specified by the original manufacturer in the applicable 
certificate of conformity, you must submit a new application for 
certification and certification fee for the vehicle.


Sec.  1027.115  What special provisions apply for certification related 
to nonroad and stationary engines?

    (a) For spark-ignition engines above 19 kW that we regulate under 
40 CFR part 1048 and for all compression-ignition engines, the 
applicable fee is based only on engine families with respect to exhaust 
emissions.
    (b) For manufacturers certifying recreational vehicles with respect 
to both exhaust and evaporative emission standards, fees are determined 
using one of the following approaches:
    (1) If your engine family includes demonstration of compliance with 
both exhaust and evaporative emission standards, the applicable fee is 
based on certification related to the combined family. No separate fee 
applies for certification with respect to evaporative emission 
standards. These are all considered engine families complying with 
exhaust emissions for determining the number of certificates for 
calculating fees for later years.
    (2) If you have separate families for demonstrating compliance with 
exhaust and evaporative emission standards, a separate fee from the 
appropriate fee category applies for each unique family. Also, the 
number of certificates issued as specified in Sec.  1027.105(d)(3) is 
based on a separate count of emission families for exhaust and 
evaporative emissions for each respective fee category.
    (c) For manufacturers certifying other spark-ignition engines or 
equipment with respect to exhaust and evaporative emission standards, a 
separate fee from the appropriate fee category applies for each unique 
family. A single engine or piece of equipment may involve separate 
emission families and certification fees for exhaust and evaporative 
emissions. Also, the number of certificates issued as specified in 
Sec.  1027.105(d)(3) is based on a separate count of emission families 
for exhaust and evaporative emissions for each respective fee category.
    (d) For any certification related to evaporative emissions from 
engines, equipment, or components not covered by paragraph (a) through 
(c) of this section, the fee applies for each certified product 
independent of certification for exhaust emissions, as illustrated in 
the following examples:
    (1) A fuel tank certified to meet permeation and diurnal emission 
standards would count as a single family for assessing the 
certification fee and for calculating fee amounts for future years.
    (2) If an equipment manufacturer applies for certification to 
generate or use emission credits for fuel tanks and

[[Page 59187]]

fuel lines, each affected fuel-tank and fuel-line family would count as 
a single family for assessing the certification fee and for calculating 
fee amounts for future years. This fee applies whether or not the 
equipment manufacturer is applying for certification to demonstrate 
compliance with another emission standard, such as running losses.
    (e) If you certify fuel system components under 40 CFR part 1060, a 
single fee applies for each emission family even if those components 
are used with different types of nonroad or stationary engines.
    (f) If your application for certification relates to emission 
standards that apply only in California, you must pay the same fee 
identified for meeting EPA standards.
    (g) For marine compression-ignition engines, if you apply for a 
federal certificate and an Annex VI certificate for the same engine 
family, a single fee applies for the engine family (see 40 CFR parts 94 
and 1042).
    (h) If you produce engines for multiple categories in a single 
engine family, a single fee applies for the engine family. For example, 
40 CFR 60.4210 allows you to produce stationary and nonroad 
compression-ignition engines in a single engine family. If the 
certification fee for the different types of engines is different, the 
fee that applies for these engines is based on the emission standards 
to which you certify the engine family. For example, if you certify 
marine diesel engines to the standards that apply to land-based nonroad 
diesel engines under 40 CFR 94.912, the certification fee is based on 
the rate that applies for land-based nonroad diesel engines.


Sec.  1027.120  Can I qualify for reduced fees?

    (a) Eligibility requirements. Both of the following conditions must 
be met before you are eligible for a reduced fee:
    (1) The certificate is to be used for sale of vehicles or engines 
within the United States.
    (2) The full fee for an application for certification for a model 
year exceeds 1.0% of the aggregate projected retail sales price of all 
vehicles or engines covered by the certificate.
    (b) Initial reduced fee calculation. (1) If the conditions of 
paragraph (a) of this section are met, the initial fee paid must be 
$750 or 1.0% of the aggregate projected retail sales price of all the 
vehicles or engines to be covered by the certificate, whichever is 
greater.
    (2) For vehicles or engines that are converted to operate on an 
alternative fuel using as the basis for the conversion a vehicle or 
engine that is covered by an existing certificate of conformity, the 
cost basis used in this section must be the aggregate projected retail 
value-added to the vehicle or engine by the conversion rather than the 
full cost of the vehicle or engine. For this provision to apply, the 
existing certificate must cover the same sales area and model year as 
the requested certificate for the converted vehicle or engine.
    (3) For remanufacturing systems, the cost basis used in this 
section must be the aggregate projected retail cost of a complete 
remanufacture, including the cost of the replacement components, 
software, and assembly.
    (4) For ICI certification applications, the cost basis of this 
section must be the aggregate projected retail cost of the entire 
vehicle(s) or engine(s), not just the value added by the conversion. If 
the vehicles/engines covered by an ICI certificate are not being 
offered for sale, the manufacturer shall use the fair retail market 
value of the vehicles/engines as the retail sale price required in this 
section. For an ICI application for certification, the retail sales 
price (or fair retail market value) must be based on the applicable 
National Automobile Dealer's Association (NADA) appraisal guide and/or 
other evidence of the actual market value.
    (5) The aggregate cost used in this section must be based on the 
total projected sales of all vehicles and engines under a certificate, 
including vehicles and engines modified under the modification and test 
option in 40 CFR 85.1509 and 89.609. The projection of the number of 
vehicles or engines to be covered by the certificate and their 
projected retail selling price must be based on the latest information 
available at the time of the fee payment.
    (6) You may submit a reduced fee as described in this section if it 
is accompanied by a calculation of the fee based on the number of 
vehicles covered and the projected aggregate retail sales price as 
specified on the fee filing form. Your reduced fee calculation shall be 
deemed approved unless we determine that the criteria of this section 
have not been met. We may make such a determination either before or 
after issuing a certificate of conformity. If we determine that the 
requirements of this section have not been met, we may deny future 
reduced fee applications and require submission of the full fee payment 
until you demonstrate to our satisfaction that your reduced fee 
submissions are based on accurate data and that final fee payments are 
made within 45 days of the end of the model year.
    (7) If we deny your request for a reduced fee, you must send us the 
appropriate fee within 30 days after we notify you.
    (c) Revision of the number of vehicles or engines covered by the 
certificate. (1) You must take both of the following steps if the 
number of vehicles or engines to be produced or imported under the 
certificate exceeds the number indicated on the certificate (including 
a certificate under which modification and test vehicles are imported 
under 40 CFR 85.1509 and 89.609):
    (i) Request that we revise the certificate with a number that 
indicates the new projection of the vehicles or engines to be covered 
by the certificate. We must issue the revised certificate before the 
additional number of vehicles or engines may be sold or finally 
imported into the United States.
    (ii) Submit payment of 1.0% of the aggregate projected retail sales 
price of all the additional vehicles or engines.
    (2) You must receive a revised certificate before the sale or final 
importation of any vehicles or engines, including modification and test 
vehicles, that are not originally included in the certificate issued 
under paragraph (b) of this section, or as indicated in a revised 
certificate issued under paragraph (c)(1) of this section. Such 
vehicles that are sold or imported before we issue a revised 
certificate are deemed to be not covered by a certificate of 
conformity.
    (d) Final reduced fee calculation and adjustment. (1) If the 
initial fee payment is less than the final reduced fee, you must pay 
the difference between the initial reduced fee and the final reduced 
fee using the provisions of Sec.  1027.130. Calculate the final reduced 
fee using the procedures of paragraph (c) of this section but using 
actual production figures rather than projections and actual retail 
sales value rather than projected retail sales value.
    (2) You must pay the difference between the initial reduced fee and 
the final reduced fee within 45 days of the end of the model year. The 
total fees paid for a certificate may not exceed the applicable full 
fee specified in Sec.  1027.105. We may void the applicable certificate 
if you fail to make a complete payment within the specified period. We 
may also refuse to grant reduced fee requests submitted under paragraph 
(b)(5) of this section.
    (3) If the initial fee payment exceeds the final reduced fee, you 
may request a refund using the procedures of Sec.  1027.125.
    (e) Records retention. You are subject to the applicable 
requirements to maintain records under this chapter. If you fail to 
maintain required records or

[[Page 59188]]

provide them to us, we may void the certificate associated with such 
records. You must also record the basis you used to calculate the 
projected sales and fair retail market value and the actual sales and 
retail price for the vehicles and engines covered by each certificate 
issued under this section. You must keep this information for at least 
three years after we issue the certificate and provide it to us within 
30 days of our request.


Sec.  1027.125  Can I get a refund?

    (a) We will refund the total fee imposed under this part if you ask 
for a refund after failing to get a certificate for any reason.
    (b) If your actual sales or the actual retail prices in a given 
year are less than you projected for calculating a reduced fee under 
Sec.  1027.120, we will refund the appropriate portion of the fee. We 
will also refund a portion of the initial payment if it exceeds the 
final fee for the engines, vehicles, or equipment covered by the 
certificate application.
    (1) You are eligible for a partial refund related only to a 
certificate used for the sale of engines, vehicles, or equipment under 
that certificate in the United States.
    (2) Include all the following in your request for a partial refund 
of reduced fee payments:
    (i) State that you sold engines, vehicles, or equipment under the 
applicable certificate in the United States.
    (ii) Identify the number of engines, vehicles, or equipment you 
produced or imported under the certificate, and whether the engines, 
vehicles, or equipment have been sold.
    (iii) Identify the reduced fee that you paid under the applicable 
certificate.
    (iv) Identify the actual retail sales price for the engines, 
vehicles, or equipment produced or imported under the certificate.
    (v) Calculate the final value of the reduced fee using actual 
production figures and retail prices.
    (vi) Calculate the refund amount.
    (c) We will approve your request to correct errors in the amount of 
the fee.
    (d) All refunds must be applied for within six months after the end 
of the model year.
    (e) Send refund and correction requests to the Fee Program 
Specialist, U.S. Environmental Protection Agency, Vehicle Programs and 
Compliance Division, 2000 Traverwood Dr., Ann Arbor, MI 48105, online 
at www.Pay.gov, or as specified in guidance by the Administrator.
    (f) You may request to have refund amounts applied to the amount 
due on another application for certification.


Sec.  1027.130  How do I make a fee payment?

    (a) Pay fees to the order of the Environmental Protection Agency in 
U.S. dollars using any of the following methods: money order, bank 
draft, certified check, corporate check, electronic funds transfer, any 
method available for payment online at www.Pay.gov., or as specified in 
EPA guidance.
    (b) Send a completed fee filing form to the address designated on 
the form for each fee payment or electronically at www.Pay.gov., or as 
provided in EPA guidance. These forms are available on the Internet at 
http://www.epa.gov/otaq/guidance.htm.
    (c) You must pay the fee amount due before we will start to process 
an application for certification.
    (d) If we deny a reduced fee, you must pay the proper fee within 30 
days after we notify you of our decision.


Sec.  1027.135  What provisions apply to a deficient filing?

    (a) Any filing under this part is deficient if it is not 
accompanied by a completed fee filing form and full payment of the 
appropriate fee.
    (b) A deficient filing will be rejected unless the completed form 
and full payment are submitted within a time limit we specify. We will 
not process an application for certification if the associated filing 
is deficient.


Sec.  1027.140  What reporting and recordkeeping requirements apply 
under this part?

    Under the Paperwork Reduction Act (44 U.S.C. 3501 et seq.), the 
Office of Management and Budget approves the reporting and 
recordkeeping specified in the applicable regulations. The following 
items illustrate the kind of reporting and recordkeeping we require for 
engines, vehicles, and equipment regulated under this part:
    (a) Filling out fee filing forms under Sec.  1027.130.
    (b) Retaining fee records, including reduced fee documentation, 
under Sec.  1027.120.
    (c) Requesting refunds under Sec.  1027.125.


Sec.  1027.150  What definitions apply to this subpart?

    The definitions in this section apply to this part. As used in this 
part, all undefined terms have the meaning the Act or the standard-
setting part gives to them. The definitions follow:
    Annex VI means MARPOL Annex VI, which is an annex to the 
International Convention on the Prevention of Pollution from Ships, 
1973, as modified by the protocol of 1978 relating thereto. This is an 
international treaty regulating disposal of waste products from marine 
vessels.
    Application for Certification means a manufacturer's submission of 
an application for certification.
    California-only certificate is a certificate of conformity issued 
by EPA showing compliance with emission standards established by 
California.
    Federal certificate is a certificate of conformity issued by EPA 
showing compliance with EPA emission standards specified in one of the 
standard-setting parts specified in Sec.  1027.101(a).
    Light-duty means relating to light-duty vehicles and light-duty 
trucks.
    Manufacturer has the meaning given in section 216(1) of the Act. In 
general, this term includes any person who manufactures an engine, 
vehicle, vessel, or piece of equipment for sale in the United States or 
otherwise introduces a new engine, vehicle, vessel, or piece of 
equipment into commerce in the United States. This includes importers 
who import such products for resale, but not dealers.
    Total number of certificates issued means the number of 
certificates for which fees have been paid. This term is not intended 
to represent multiple certificates that are issued within a single 
family or test group.
    Void has the meaning given in 40 CFR 1068.30.
    We (us, our) means the Administrator of the Environmental 
Protection Agency and any authorized representatives.


Sec.  1027.155  What abbreviations apply to this subpart?

    The following symbols, acronyms, and abbreviations apply to this 
part:

CFR..............................  Code of Federal Regulations.
EPA..............................  U.S. Environmental Protection Agency.
Evap.............................  Evaporative Emissions.
EVECP............................  Engine, vehicle, and equipment
                                    compliance program.
ICI..............................  Independent Commercial Importer.
U.S..............................  United States.
 

PART 1033--CONTROL OF EMISSIONS FROM LOCOMOTIVES

0
62. The authority citation for part 1033 continues to read as follows:

    Authority: 42 U.S.C. 7401-7671q.

Subpart B--[Amended]

0
63. Section 1033.101 is amended by revising paragraph (b) to read as 
follows:


Sec.  1033.101  Exhaust emission standards.

* * * * *
    (b) Emission standards for switch locomotives. Exhaust emissions 
from

[[Page 59189]]

your new locomotives may not exceed the applicable emission standards 
in Table 2 to this section during the useful life of the locomotive. 
(Note: Sec.  1033.901 defines locomotives to be ``new'' when originally 
manufactured and when remanufactured.) Measure emissions using the 
applicable test procedures described in subpart F of this part.

                        Table 2 to Sec.   1033.101--Switch Locomotive Emission Standards
----------------------------------------------------------------------------------------------------------------
                                                                             Standards (g/bhp-hr)
    Year of original manufacture         Tier of standards   ---------------------------------------------------
                                                                  NOX           PM           HC           CO
----------------------------------------------------------------------------------------------------------------
1973-2001...........................  Tier 0................         11.8         0.26         2.10          8.0
2002-2004...........................  Tier 1 a..............         11.0         0.26         1.20          2.5
2005-2010...........................  Tier 2 a..............          8.1       b 0.13         0.60          2.4
2011-2014...........................  Tier 3................          5.0         0.10         0.60          2.4
2015 or later.......................  Tier 4................        c 1.3         0.03       c 0.14          2.4
----------------------------------------------------------------------------------------------------------------
\a\ Switch locomotives subject to the Tier 1 through Tier 2 emission standards must also meet line-haul
  standards of the same tier.
\b\ The PM standard for new Tier 2 switch locomotives is 0.24 g/bhp-hr until January 1, 2013.
\c\ Manufacturers may elect to meet a combined NOX+HC standard of 1.4 g/bhp-hr instead of the otherwise
  applicable Tier 4 NOX and HC standards, as described in paragraph (j) of this section.

* * * * *

0
64. Section 1033.115 is amended by adding and reserving paragraph 
(f)(2) and revising paragraph (g) to read as follows:


Sec.  1033.115  Other requirements.

* * * * *
    (f) * * *
    (2) [Reserved]
    (g) Idle controls. All new locomotives must be equipped with 
automatic engine stop/start as described in this paragraph (g). All new 
locomotives must be designed to allow the engine(s) to be restarted at 
least six times per day without causing engine damage that would affect 
the expected interval between remanufacturing. Note that it is a 
violation of 40 CFR 1068.101(b)(1) to circumvent the provisions of this 
paragraph (g).
    (1) Except as allowed by paragraph (g)(2) of this section, the 
stop/start systems must shut off the main locomotive engine(s) after 30 
minutes of idling (or less).
    (2) Stop/start systems may restart or continue idling for the 
following reasons:
    (i) To prevent engine damage such as to prevent the engine coolant 
from freezing.
    (ii) To maintain air pressure for brakes or starter system, or to 
recharge the locomotive battery.
    (iii) To perform necessary maintenance.
    (iv) To otherwise comply with federal regulations.
    (3) You may ask to use alternate stop/start systems that will 
achieve equivalent idle control.
    (4) See Sec.  1033.201 for provisions that allow you to obtain a 
separate certificate for idle controls.
    (5) It is not considered circumvention to allow a locomotive to 
idle to heat or cool the cab, provided such heating or cooling is 
necessary.
* * * * *

0
65. Section 1033.120 is amended by revising paragraph (b) to read as 
follows:


Sec.  1033.120  Emission-related warranty requirements.

* * * * *
    (b) Warranty period. Except as specified in this paragraph, the 
minimum warranty period is one-third of the useful life. Your emission-
related warranty must be valid for at least as long as the minimum 
warranty periods listed in this paragraph (b) in MW-hrs of operation 
(or miles for Tier 0 locomotives not equipped with MW-hr meters) and 
years, whichever comes first. You may offer an emission-related 
warranty more generous than we require. The emission-related warranty 
for the locomotive may not be shorter than any published warranty you 
offer without charge for the locomotive. Similarly, the emission-
related warranty for any component may not be shorter than any 
published warranty you offer without charge for that component. If you 
provide an extended warranty to individual owners for any components 
covered in paragraph (c) of this section for an additional charge, your 
emission-related warranty must cover those components for those owners 
to the same degree. If the locomotive does not record MW-hrs, we base 
the warranty periods in this paragraph (b) only on years. The warranty 
period begins when the locomotive is placed into service, or back into 
service after remanufacture.
* * * * *

0
66. Section 1033.135 is amended by revising paragraph (b)(2)(i) to read 
as follows:


Sec.  1033.135  Labeling.

* * * * *
    (b) * * *
    (2) * * *
    (i) The label must be permanent and legible and affixed to the 
locomotive in a position in which it will remain readily visible. 
Attach it to a locomotive chassis part necessary for normal operation 
and not normally requiring replacement during the service life of the 
locomotive. You may not attach this label to the engine or to any 
equipment that is easily detached from the locomotive. Attach the label 
so that it cannot be removed without destroying or defacing the label. 
For Tier 0 and Tier 1 locomotives, the label may be made up of more 
than one piece, as long as all pieces are permanently attached to the 
locomotive.
* * * * *

0
67. Section 1033.150 is amended by revising paragraph (b) and adding 
paragraph (m) to read as follows:


Sec.  1033.150  Interim provisions.

* * * * *
    (b) Idle controls. A locomotive equipped with an automatic engine 
stop/start system that was originally installed before January 1, 2009 
and that conforms to the requirements of Sec.  1033.115(g) is deemed to 
be covered by a certificate of conformity with respect to the 
requirements of Sec.  1033.115(g). Note that the provisions of subpart 
C of this part also allow you to apply for a conventional certificate 
of conformity for such systems.
* * * * *
    (m) Assigned deterioration factors. The provisions of this 
paragraph (m) apply for Tier 0 and Tier 1 locomotives to the standards 
of this part during model years 2008 or 2009. Remanufacturers 
certifying such locomotives to the standards of this part during these 
model years may use an assigned deterioration factor of 0.03 g/bhp-hr 
for PM and an assigned deterioration factor of zero for other

[[Page 59190]]

pollutants. For purposes of determining compliance other than for 
certification or production-line testing, calculate the applicable in-
use compliance limits for these locomotives by adjusting the applicable 
PM standards/FELs upward by 0.03 g/bhp-hr.

Subpart C--[Amended]


Sec.  1033.205  [Amended]

0
68. Section 1033.205 is amended by removing and reserving paragraph 
(b).

0
69. Section 1033.230 is amended by revising paragraph (f) to read as 
follows:


Sec.  1033.230  Grouping locomotives into engine families.

* * * * *
    (f) During the first six calendar years after a new tier of 
standards becomes applicable, remanufactured engines/locomotives may be 
included in the same engine family as freshly manufactured locomotives, 
provided the same engines and emission controls are used for locomotive 
models included in the engine family.

Subpart D--[Amended]

0
70. Section 1033.335 is amended by revising paragraph (g) introductory 
text to read as follows:


Sec.  1033.335  Remanufactured locomotives: installation audit 
requirements.

* * * * *
    (g) Within 45 calendar days of the end of each quarter, the 
remanufacturer must send the Designated Compliance Officer a report 
which includes the following information:
* * * * *

Subpart F--[Amended]

0
71. Section 1033.510 is amended by revising the introductory text to 
read as follows:


Sec.  1033.510  Auxiliary power units.

    If your locomotive is equipped with an auxiliary power unit (APU) 
that operates during an idle shutdown mode, you must account for the 
APU's emissions rates as specified in this section, unless the APU is 
part of an AESS system that was certified separately from the rest of 
the locomotive. This section does not apply for auxiliary engines that 
only provide hotel power.
* * * * *

0
72. Section 1033.515 is amended by revising paragraph (c)(5) and by 
redesignating paragraphs (f) and (g) as paragraphs (d) and (e), 
respectively, to read as follows.


Sec.  1033.515  Discrete-mode steady-state emission tests of 
locomotives and locomotive engines.

* * * * *
    (c) * * *
    (5) Begin proportional sampling of PM emissions at the beginning of 
each sampling period and terminate sampling within + 5 seconds of the 
specified time in each test mode. If the PM sample is sufficiently 
large, take one of the following actions consistent with good 
engineering judgment:
    (i) Extend the sampling period up to a maximum of 15 minutes.
    (ii) Use three different dilution ratios for the modes: one for 
both idle modes, one for dynamic brake through notch 5, and one for 
notches 6 through 8.
* * * * *

0
73. Section 1033.530 is amended by revising paragraph (e) to read as 
follows:


Sec.  1033.530  Duty cycles and calculations.

* * * * *
    (e) Automated Start-Stop. For locomotive equipped with features 
that shut the engine off after prolonged periods of idle, multiply the 
measured idle mass emission rate over the idle portion of the 
applicable test cycles by a factor equal to one minus the estimated 
fraction reduction in idling time that will result in use from the 
shutdown feature. Do not apply this factor to the weighted idle power. 
Application of this adjustment is subject to our approval if the 
fraction reduction in idling time that is estimated to result from the 
shutdown feature is greater than 25 percent. This paragraph (e) does 
not apply if the locomotive is (or will be) covered by a separate 
certificate for idle control.
* * * * *

Subpart G--[Amended]

0
74. Section 1033.601 is amended by revising paragraphs (c)(1) and 
(c)(3) to read as follows:


Sec.  1033.601  General compliance provisions.

* * * * *
    (c) * * *
    (1) The exemption provisions of 40 CFR 1068.240 (i.e., exemptions 
for replacement engines) do not apply for domestic or imported 
locomotives. (Note: You may introduce into commerce freshly 
manufactured replacement engines under this part, provided the 
locomotives into which they are installed are covered by a certificate 
of conformity.)
* * * * *
    (3) The exemption provisions of 40 CFR 1068.261 (i.e., exemptions 
for delegated assembly) do not apply for domestic or imported 
locomotives, except as specified in Sec.  1033.630.
* * * * *

0
75. Section 1033.630 is amended by revising paragraph (b) introductory 
text to read as follows:


Sec.  1033.630  Staged assembly and delegated assembly exemptions.

* * * * *
    (b) Delegated assembly. This paragraph (b) applies where the engine 
manufacturer/remanufacturer does not complete assembly of the 
locomotives and the engine is shipped after being manufactured or 
remanufactured (partially or completely). The provisions of this 
paragraph (b) apply differently depending on who holds the certificate 
of conformity and the state of the engine when it is shipped. You may 
request an exemption under this paragraph (b) in your application for 
certification, or in a separate submission. If you include your request 
in your application, your exemption is approved when we grant your 
certificate. A manufacturer/remanufacturer may request an exemption 
under 40 CFR 1068.261 instead of under this section.
* * * * *

0
76. Section 1033.640 is amended by revising paragraph (b) to read as 
follows:


Sec.  1033.640  Provisions for repowered and refurbished locomotives.

* * * * *
    (b) A single existing locomotive cannot be divided into parts and 
combined with new parts to create more than one remanufactured 
locomotive. However, any number of locomotives can be divided into 
parts and combined with new parts to create more than one 
remanufactured locomotive, provided the number of locomotives created 
(remanufactured and freshly manufactured) does not exceed the number of 
locomotives that were disassembled.
* * * * *
0
77. Section 1033.645 is amended by revising paragraph (a) to read as 
follows:


Sec.  1033.645  Non-OEM component certification program.

* * * * *
    (a) Applicability. This section applies only for components that 
are commonly replaced during remanufacturing. It does not apply for 
other types of components that are replaced during a locomotive's 
useful life, but not typically replaced during remanufacture. Certified 
components may be used for remanufacturing or other maintenance.
* * * * *

[[Page 59191]]

Subpart I--[Amended]

0
78. Section 1033.810 is amended by revising paragraph (c) introductory 
text to read as follows:


Sec.  1033.810  In-use testing program.

* * * * *
    (c) Test locomotive selection. Unless we specify a different 
option, select test locomotives as specified in paragraph (c)(1) of 
this section (Option 1). In no case may you exclude locomotives because 
of visible smoke, a history of durability problems, or other evidence 
of malmaintenance. You may test more locomotives than this section 
requires.
* * * * *

Subpart J--[Amended]

0
79. Section 1033.901 is amended by revising paragraph (2)(ii) of the 
definition for ``New'' to read as follows:


Sec.  1033.901  Definitions.

* * * * *
    New, * * *
    (2) * * *
    (ii) Locomotives that are owned and operated by a small railroad 
and that have never been certified (i.e., manufactured or 
remanufactured into a certified configuration) are not considered to 
become new when remanufactured. The provisions of paragraph (1) of this 
definition apply for locomotives that have previously been 
remanufactured into a certified configuration.
* * * * *

PART 1039--CONTROL OF EMISSIONS FROM NEW AND IN-USE NONROAD 
COMPRESSION-IGNITION ENGINES

0
80. The authority citation for part 1039 continues to read as follows:

    Authority: 42 U.S.C. 7401-7671q.

Subpart A--[Amended]

0
81. Section 1039.5 is amended by revising paragraph (d) and adding 
paragraph (e) to read as follows:


Sec.  1039.5  Which engines are excluded from this part's requirements?

* * * * *
    (d) Hobby engines. Engines installed in reduced-scale models of 
vehicles that are not capable of transporting a person are not subject 
to the provisions of this part 1039.
    (e) Engines used in recreational vehicles. Engines certified to 
meet the requirements of 40 CFR part 1051 or are otherwise subject to 
40 CFR part 1051 (for example, engines used in snowmobiles and all-
terrain vehicles) are not subject to the provisions of this part 1039.

Subpart B--[Amended]

0
82. Section 1039.102 is amended by revising paragraph (g)(4) to read as 
follows:


Sec.  1039.102  What exhaust emission standards and phase-in allowances 
apply for my engines in model year 2014 and earlier?

* * * * *
    (g) * * *
    (4) Special provisions for 37-56 kW engines. For engines at or 
above 37 kW and below 56 kW from model years 2008 through 2012, you 
must add information to the emission-related installation instructions 
to clarify the equipment manufacturer's obligations under Sec.  
1039.104(f).

0
83. Section 1039.125 is amended by revising paragraphs (a)(2)(i) and 
(a)(3)(i) to read as follows:


Sec.  1039.125  What maintenance instructions must I give to buyers?

* * * * *
    (a) * * *
    (2) * * *
    (i) For EGR-related filters and coolers, PCV valves, crankcase vent 
filters, and fuel injector tips (cleaning only), the minimum interval 
is 1,500 hours.
* * * * *
    (3) * * *
    (i) For EGR-related filters and coolers, PCV valves, crankcase vent 
filters, and fuel injector tips (cleaning only), the minimum interval 
is 1,500 hours.
* * * * *

0
84. Section 1039.135 is amended by revising paragraph (c)(4) to read as 
follows:


Sec.  1039.135  How must I label and identify the engines I produce?

* * * * *
    (c) * * *
    (4) State the power category or subcategory from Sec.  1039.101 or 
Sec.  1039.102 that determines the applicable emission standards for 
the engine family. For engines at or above 37 kW and below 56 kW from 
model years 2008 through 2012, and for engines less than 8 kW utilizing 
the provision at Sec.  1039.101(c), you must state the applicable PM 
standard for the engine family.
* * * * *

Subpart G--[Amended]

0
85. Section 1039.625 is amended as follows:
0
a. By revising paragraph (d)(1).
0
b. By revising paragraphs (e) introductory text, (e)(1), and (e)(3).
0
c. By revising paragraph (f)(4).
0
d. By revising paragraphs (g)(1) introductory text, (g)(1)(ii), and 
(g)(1)(iv).
0
e. By revising paragraph (g)(2).
0
f. By revising paragraph (j).
0
g. By revising paragraph (m)(2) introductory text.


Sec.  1039.625  What requirements apply under the program for 
equipment-manufacturer flexibility?

* * * * *
    (d) * * *
    (1) If you use the provisions of 40 CFR 1068.105(a) to use up your 
inventories of engines not certified to new emission standards, do not 
include these units in your count of equipment with exempted engines 
under paragraph (b) of this section. However, you may include these 
units in your count of total equipment you produce for the given year 
for the percentage calculation in paragraph (b)(1) of this section.
* * * * *
    (e) Standards. If you produce equipment with exempted engines under 
this section, the engines must meet emission standards specified in 
this paragraph (e). Note that we consider engines to be meeting 
emission standards even if they are certified with a family emission 
limit that is higher than the emission standard that would otherwise 
apply.
    (1) If you are using the provisions of paragraph (d)(4) of this 
section, engines must meet the applicable Tier 1 or Tier 2 emission 
standards described in Sec.  89.112.
* * * * *
    (3) In all other cases, engines at or above 56 kW and at or below 
560 kW must meet the appropriate Tier 3 standards described in 40 CFR 
89.112. Engines below 56 kW and engines above 560 kW must meet the 
appropriate Tier 2 standards described in 40 CFR 89.112.
    (f) * * *
    (4) An e-mail address and phone number to contact for further 
information, or a Web site that includes this contact information.
* * * * *
    (g) * * *
    (1) Before you use the provisions of this section, send the 
Designated Compliance Officer a written notice of your intent, 
including:
* * * * *
    (ii) The name, phone number and e-mail address of a person to 
contact for more information.
* * * * *
    (iv) The name and address of each company you expect to produce 
engines

[[Page 59192]]

for the equipment you manufacture under this section.
* * * * *
    (2) For each year that you use the provisions of this section, send 
the Designated Compliance Officer a written report by March 31 of the 
following year. Identify the following things in your report:
    (i) The total count of units you sold in the preceding year for 
each power category, based on actual U.S.-directed production 
information.
    (ii) The percentages of U.S.-directed production that correspond to 
the number of units in each power category and the cumulative numbers 
and percentages of units for all the units you have sold under this 
section for each power category. You may omit the percentage figures if 
you include in the report a statement that you will not be using the 
percent-of-production allowances in paragraph (b)(1) of this section.
    (iii) The manufacturer of the engine installed in the equipment you 
produce under this section if this is different than you specified 
under paragraph (g)(1)(iv) of this section.
* * * * *
    (j) Provisions for engine manufacturers. As an engine manufacturer, 
you may produce exempted engines as needed under this section. You do 
not have to request this exemption for your engines, but you must have 
written assurance from equipment manufacturers that they need a certain 
number of exempted engines under this section. Send us an annual report 
of the engines you produce under this section, as described in Sec.  
1039.250(a). For engines produced under the provisions of paragraph 
(a)(2) of this section, you must certify the engines under this part 
1039. For all other exempt engines, the engines must meet the emission 
standards in paragraph (e) of this section and you must meet all the 
requirements of 40 CFR 1068.265. If you show under 40 CFR 1068.265(c) 
that the engines are identical in all material respects to engines that 
you have previously certified to one or more FELs above the standards 
specified in paragraph (e) of this section, you must supply sufficient 
credits for these engines. Calculate these credits under subpart H of 
this part using the previously certified FELs and the alternate 
standards. You must meet the labeling requirements in 40 CFR 89.110 or 
Sec.  1039.135, as applicable, with the following exceptions:
    (1) Add the following statement instead of the compliance statement 
in 40 CFR 89.110(b)(10) or Sec.  1039.135(c)(12), as applicable:


THIS ENGINE MEETS U.S. EPA EMISSION STANDARDS UNDER 40 CFR 1039.625. 
SELLING OR INSTALLING THIS ENGINE FOR ANY PURPOSE OTHER THAN FOR THE 
EQUIPMENT FLEXIBILITY PROVISIONS OF 40 CFR 1039.625 MAY BE A VIOLATION 
OF FEDERAL LAW SUBJECT TO CIVIL PENALTY.

    (2) You may omit the family emission limits if they are below the 
emission standards.
* * * * *
    (m) * * *
    (2) To apply for exemptions under this paragraph (m), send the 
Designated Compliance Officer a written request as soon as possible 
before you are in violation. In your request, include the following 
information:
* * * * *

0
86. Section 1039.626 is amended as follows:
0
a. By revising paragraph (a)(2).
0
b. By revising paragraph (a)(9)(ii)(B).
0
c. By revising paragraph (a)(9)(iv).
0
d. By revising paragraph (b)(1) introductory text.
0
e. By revising paragraph (b)(2).


Sec.  1039.626  What special provisions apply to equipment imported 
under the equipment-manufacturer flexibility program?

* * * * *
    (a) * * *
    (2) Name an agent for service located in the United States. Service 
on this agent constitutes service on you or any of your officers or 
employees for any action by EPA or otherwise by the United States 
related to the requirements of this part.
* * * * *
    (9) * * *
    (ii) * * *
    (B) Get us to approve a waiver from the bonding requirement if you 
can show that you meet the asset thresholds described in 40 CFR 
1054.690.
* * * * *
    (iv) You will forfeit the proceeds of the bond posted under this 
section if you need to satisfy any U.S. administrative settlement 
agreement, administrative final order or judicial judgment against you 
arising from your violation of this chapter, or violation of 18 U.S.C. 
1001, 42 U.S.C. 7413(c)(2), or other applicable provisions of the Clean 
Air Act.
* * * * *
    (b) * * *
    (1) Before you use the provisions of this section, send the 
Designated Compliance Officer a written notice of your intent, 
including:
* * * * *
    (2) For each year that you use the provisions of this section, send 
the Designated Compliance Officer a written report by March 31 of the 
following year. Include in your report the total number of engines you 
imported under this section in the preceding calendar year, broken down 
by engine manufacturer and by equipment manufacturer.

Subpart I--[Amended]

0
87. Section 1039.801 is amended by revising the definition for 
``Designated Compliance Officer'' to read as follows:


Sec.  1039.801  What definitions apply to this part?

* * * * *
    Designated Compliance Officer means the Manager, Heavy-Duty and 
Nonroad Engine Group (6405-J), U.S. Environmental Protection Agency, 
1200 Pennsylvania Ave., NW., Washington, DC 20460.
* * * * *

PART 1042--CONTROL OF EMISSIONS FROM NEW AND IN-USE MARINE 
COMPRESSION-IGNITION ENGINES AND VESSELS

0
88. The authority citation for part 1042 continues to read as follows:

    Authority: 42 U.S.C. 7401-7671q.

Subpart A--[Amended]

0
89. Section 1042.5 is amended by revising paragraph (b) to read as 
follows:


Sec.  1042.5  Exclusions.

* * * * *
    (b) Hobby engines. Engines installed in reduced-scale models of 
vessels that are not capable of transporting a person are not subject 
to the provisions of this part 1042.

Subpart B--[Amended]

0
90. Section 1042.101 is amended by revising Table 1 in paragraph (a)(3) 
to read as follows:


Sec.  1042.101  Exhaust emission standards.

    (a) * * *
    (3) * * *

[[Page 59193]]

[GRAPHIC] [TIFF OMITTED] TR08OC08.074

* * * * *

0
91. Section 1042.107 is revised to read as follows:


Sec.  1042.107  Evaporative emission standards.

    (a) There are no evaporative emission standards for diesel-fueled 
engines, or engines using other nonvolatile or nonliquid fuels (for 
example, natural gas).
    (b) If an engine uses a volatile liquid fuel, such as methanol, the 
engine's fuel system and the vessel in which the engine is installed 
must meet the evaporative emission requirements of 40 CFR part 1045 
that apply with respect to spark-ignition engines. Manufacturers 
subject to evaporative emission standards must meet the requirements of 
40 CFR 1045.112 as described in 40 CFR part 1060 and do all the 
following things in the application for certification:
    (1) Describe how evaporative emissions are controlled.
    (2) Present test data to show that fuel systems and vessels meet 
the evaporative emission standards we specify in this section if you do 
not use design-based certification under 40 CFR 1060.240. Show these 
figures before and after applying deterioration factors, where 
applicable.

0
92. Section 1042.115 is amended by revising paragraph (f)(1) to read as 
follows:


Sec.  1042.115  Other requirements.

* * * * *
    (f) * * *
    (1) The conditions of concern were substantially included in the 
applicable

[[Page 59194]]

duty-cycle test procedures described in subpart F of this part (the 
portion during which emissions are measured).
* * * * *

0
93. Section 1042.145 is amended by revising Table 2 in paragraph (f) to 
read as follows:


Sec.  1042.145  Interim provisions.

* * * * *
    (f) * * *

  Table 2 to Sec.   1042.145--Optional In-Use Adjustments for the First
                Three Model Years of the Tier 4 Standards
------------------------------------------------------------------------
                                           In-use adjustments (g/kW-hr)
                                         -------------------------------
                                          For model year  For model year
  Fraction of useful life already used       2017 and        2017 and
                                          earlier Tier 4  earlier Tier 4
                                           NOX standards   PM standards
------------------------------------------------------------------------
0 < hours <= 50% of useful life.........             0.3            0.05
50 < hours <= 75% of useful life........             0.4            0.05
hours > 75% of useful life..............             0.5            0.05
------------------------------------------------------------------------

* * * * *

Subpart G--[Amended]


Sec.  1042.601  [Amended]

0
94. Section 1042.601 is amended by removing paragraph (g).

0
95. Section 1042.615 is amended by revising paragraph (a) introductory 
text to read as follows:


Sec.  1042.615  Replacement engine exemption.

* * * * *
    (a) This paragraph (a) applies instead of the provisions of 40 CFR 
1068.240(b)(3). The prohibitions in 40 CFR 1068.101(a)(1) do not apply 
to a new replacement engine if all the following conditions are met:
* * * * *

Subpart I--[Amended]

0
96. Section 1042.801 is amended by revising paragraph (f) to read as 
follows:


Sec.  1042.801  General provisions.

* * * * *
    (f) Remanufacturing systems that require a fuel change or use of a 
fuel additive may be certified under this part. However, they are not 
considered to be ``available'' with respect to triggering the 
requirement for an engine to be covered by a certificate of conformity 
under Sec.  1042.815. The following provisions apply:
    (1) Only fuels and additives registered under 40 CFR part 79 may be 
used under this paragraph (f).
    (2) You must demonstrate in your application that the fuel or 
additive will actually be used by operators, including a description of 
how the vessels and dispensing tanks will be labeled. We may require 
you to provide the labels to the operators.
    (3) You must also describe analytical methods that can be used by 
EPA or others to verify that fuel meets your specifications.
    (4) You must provide clear instructions to the operators specifying 
that they may only use the specified fuel/additive, label their vessels 
and fuel dispensing tanks, and keep records of their use of the fuel/
additive in order for their engine to be covered by your certificate. 
Use of the incorrect fuel (or fuel without the specified additive) or 
any other failure to comply with the requirements of this paragraph is 
a violation of 40 CFR 1068.101(b)(1).
* * * * *

0
97. Section 1042.836 is amended by revising paragraph (a) introductory 
text to read as follows:


Sec.  1042.836  Marine certification of locomotive remanufacturing 
systems.

* * * * *
    (a) Include the following with your application for certification 
under 40 CFR part 92 or 1033 (or as an amendment to your application):
* * * * *

0
98. A new part 1045 is added to subchapter U of chapter I to read as 
follows:

PART 1045--CONTROL OF EMISSIONS FROM SPARK-IGNITION PROPULSION 
MARINE ENGINES AND VESSELS

Subpart A--Overview and Applicability
Sec.
1045.1 Does this part apply for my products?
1045.2 Who is responsible for compliance?
1045.5 Which engines are excluded from this part's requirements?
1045.10 How is this part organized?
1045.15 Do any other CFR parts apply to me?
1045.20 What requirements apply to my vessels?
1045.25 How do the requirements related to evaporative emissions 
apply to engines and their fuel systems?
1045.30 Submission of information.
Subpart B--Emission Standards and Related Requirements
1045.101 What exhaust emission standards and requirements must my 
engines meet?
1045.103 What exhaust emission standards must my outboard and 
personal watercraft engines meet?
1045.105 What exhaust emission standards must my sterndrive/inboard 
engines meet?
1045.107 What are the not-to-exceed emission standards?
1045.110 How must my engines diagnose malfunctions?
1045.112 What are the standards for evaporative emissions?
1045.115 What other requirements apply?
1045.120 What emission-related warranty requirements apply to me?
1045.125 What maintenance instructions must I give to buyers?
1045.130 What installation instructions must I give to vessel 
manufacturers?
1045.135 How must I label and identify the engines I produce?
1045.140 What is my engine's maximum engine power?
1045.145 Are there interim provisions that apply only for a limited 
time?
Subpart C--Certifying Engine Families
1045.201 What are the general requirements for obtaining a 
certificate of conformity?
1045.205 What must I include in my application?
1045.210 May I get preliminary approval before I complete my 
application?
1045.220 How do I amend the maintenance instructions in my 
application?
1045.225 How do I amend my application for certification to include 
new or modified engines or change an FEL?
1045.230 How do I select engine families?
1045.235 What emission testing must I perform for my application for 
a certificate of conformity?
1045.240 How do I demonstrate that my engine family complies with 
exhaust emission standards?
1045.245 How do I determine deterioration factors from exhaust 
durability testing?

[[Page 59195]]

1045.250 What records must I keep and what reports must I send to 
EPA?
1045.255 What decisions may EPA make regarding my certificate of 
conformity?
Subpart D--Testing Production-Line Engines
1045.301 When must I test my production-line engines?
1045.305 How must I prepare and test my production-line engines?
1045.310 How must I select engines for production-line testing?
1045.315 How do I know when my engine family fails the production-
line testing requirements?
1045.320 What happens if one of my production-line engines fails to 
meet emission standards?
1045.325 What happens if an engine family fails the production-line 
testing requirements?
1045.330 May I sell engines from an engine family with a suspended 
certificate of conformity?
1045.335 How do I ask EPA to reinstate my suspended certificate?
1045.340 When may EPA revoke my certificate under this subpart and 
how may I sell these engines again?
1045.345 What production-line testing records must I send to EPA?
1045.350 What records must I keep?
Subpart E--In-Use Testing
1045.401 What testing requirements apply to my engines that have 
gone into service?
1045.405 How does this program work?
1045.410 How must I select, prepare, and test my in-use engines?
1045.415 What happens if in-use engines do not meet requirements?
1045.420 What in-use testing information must I report to EPA?
1045.425 What records must I keep?
Subpart F--Test Procedures
1045.501 How do I run a valid emission test?
1045.505 How do I test engines using discrete-mode or ramped-modal 
duty cycles?
1045.515 What are the test procedures related to not-to-exceed 
standards?
1045.520 What testing must I perform to establish deterioration 
factors?
Subpart G--Special Compliance Provisions
1045.601 What compliance provisions apply to these engines?
1045.605 What provisions apply to engines already certified under 
the motor vehicle or Large SI programs?
1045.610 What provisions apply to using engines already certified to 
Small SI emission standards?
1045.620 What are the provisions for exempting engines used solely 
for competition?
1045.625 What requirements apply under the Diurnal Transition 
Program?
1045.630 What is the personal-use exemption.
1045.635 What special provisions apply for small-volume engine 
manufacturers?
1045.640 What special provisions apply to branded engines?
1045.645 What special provisions apply for converting an engine to 
use an alternate fuel?
1045.650 Do delegated-assembly provisions apply for marine engines?
1045.655 What special provisions apply for installing and removing 
altitude kits?
1045.660 How do I certify outboard or personal watercraft engines 
for use in jet boats?
Subpart H--Averaging, Banking, and Trading for Certification
1045.701 General provisions.
1045.705 How do I generate and calculate exhaust emission credits?
1045.706 How do I generate and calculate evaporative emission 
credits?
1045.710 How do I average emission credits?
1045.715 How do I bank emission credits?
1045.720 How do I trade emission credits?
1045.725 What must I include in my application for certification?
1045.730 What ABT reports must I send to EPA?
1045.735 What records must I keep?
1045.745 What can happen if I do not comply with the provisions of 
this subpart?
Subpart I--Definitions and Other Reference Information
1045.801 What definitions apply to this part?
1045.805 What symbols, acronyms, and abbreviations does this part 
use?
1045.810 What materials does this part reference?
1045.815 What provisions apply to confidential information?
1045.820 How do I request a hearing?
1045.825 What reporting and recordkeeping requirements apply under 
this part?

Appendix I to Part 1045--Summary of Previous Emission Standards

Appendix II to Part 1045--Duty Cycles for Propulsion Marine Engines

    Authority: 42 U.S.C. 7401-7671q.

Subpart A--Overview and Applicability


Sec.  1045.1  Does this part apply for my products?

    (a) Except as provided in Sec.  1045.5, the regulations in this 
part 1045 apply as follows:
    (1) The requirements of this part related to exhaust emissions 
apply to new, spark-ignition propulsion marine engines beginning with 
the 2010 model year.
    (2) The requirements of this part related to evaporative emissions 
apply to fuel lines and fuel tanks used with marine engines that use a 
volatile liquid fuel (such as gasoline) as specified in 40 CFR part 
1045.112. This includes fuel lines and fuel tanks used with auxiliary 
marine engines. This also includes portable marine fuel tanks and 
associated fuel lines.
    (b) We specify optional standards for certifying sterndrive/inboard 
engines before the 2010 model year in Sec.  1045.145(a). Engines 
certified to these standards are subject to all the requirements of 
this part as if these optional standards were mandatory.
    (c) See 40 CFR part 91 for requirements that apply to outboard and 
personal watercraft engines not yet subject to the requirements of this 
part 1045.
    (d) The provisions of Sec. Sec.  1045.620 and 1045.801 apply for 
new engines used solely for competition beginning January 1, 2010.


Sec.  1045.2  Who is responsible for compliance?

    The requirements and prohibitions of this part apply to 
manufacturers of engines and fuel-system components as described in 
Sec.  1045.1. The requirements of this part are generally addressed to 
manufacturers subject to this part's requirements. The term ``you'' 
generally means the certifying manufacturer. For provisions related to 
exhaust emissions, this generally means the engine manufacturer, 
especially for issues related to certification (including production-
line testing, reporting, etc.). For provisions related to certification 
with respect to evaporative emissions, this generally means the vessel 
manufacturer. Vessel manufacturers must meet applicable requirements as 
described in Sec.  1045.20. Engine manufacturers must meet requirements 
related to evaporative emissions as described in Sec.  1045.25.


Sec.  1045.5  Which engines are excluded from this part's requirements?

    (a) Auxiliary engines. The exhaust emission standards of this part 
do not apply to auxiliary marine engines. See 40 CFR part 90, 1048, or 
1054 for the exhaust emission standards that apply. Evaporative 
emission standards apply as specified in Sec.  1045.112.
    (b) Hobby engines and vessels. This part does not apply with 
respect to reduced-scale models of vessels that are not capable of 
transporting a person.
    (c) Large natural gas engines. Propulsion marine engines powered by 
natural gas with maximum engine power at or above 250 kW are deemed to 
be compression-ignition engines. These engines are therefore subject to 
all the requirements of 40 CFR part 1042 instead of this part even if 
they would otherwise meet the definition of ``spark-ignition'' in Sec.  
1045.801.

[[Page 59196]]

Sec.  1045.10  How is this part organized?

    This part 1045 is divided into the following subparts:
    (a) Subpart A of this part defines the applicability of this part 
1045 and gives an overview of regulatory requirements.
    (b) Subpart B of this part describes the emission standards and 
other requirements that must be met to certify engines under this part 
1045. Note that Sec.  1045.145 discusses certain interim requirements 
and compliance provisions that apply only for a limited time.
    (c) Subpart C of this part describes how to apply for a certificate 
of conformity.
    (d) Subpart D of this part describes general provisions for testing 
production-line engines.
    (e) Subpart E of this part describes general provisions for testing 
in-use engines.
    (f) Subpart F of this part describes how to test your engines 
(including references to other parts of the Code of Federal 
Regulations).
    (g) Subpart G of this part and 40 CFR part 1068 describe 
requirements, prohibitions, and other provisions that apply to engine 
manufacturers, vessel manufacturers, owners, operators, rebuilders, and 
all others.
    (h) Subpart H of this part describes how you may generate and use 
exhaust and evaporative emission credits to certify your engines and 
vessels.
    (i) Subpart I of this part contains definitions and other reference 
information.


Sec.  1045.15  Do any other CFR parts apply to me?

    (a) Part 1060 of this chapter describes standards and procedures 
that apply for controlling evaporative emissions from engines fueled by 
gasoline or other volatile liquid fuels and the associated fuel 
systems. See Sec.  1045.112 for information about how that part 
applies.
    (b) Part 1065 of this chapter describes procedures and equipment 
specifications for testing engines to measure exhaust emissions. 
Subpart F of this part 1045 describes how to apply the provisions of 
part 1065 of this chapter to determine whether engines meet the exhaust 
emission standards in this part.
    (c) The requirements and prohibitions of part 1068 of this chapter 
apply to everyone, including anyone who manufactures, imports, 
installs, owns, operates, or rebuilds any of the engines subject to 
this part 1045, or vessels powered by these engines. Part 1068 of this 
chapter describes general provisions, including these seven areas:
    (1) Prohibited acts and penalties for engine manufacturers, vessel 
manufacturers, and others.
    (2) Rebuilding and other aftermarket changes.
    (3) Exclusions and exemptions for certain engines.
    (4) Importing engines.
    (5) Selective enforcement audits of your production.
    (6) Defect reporting and recall.
    (7) Procedures for hearings.
    (d) Other parts of this chapter apply if referenced in this part 
1045.


Sec.  1045.20  What requirements apply to my vessels?

    (a) If you manufacture vessels with engines certified to the 
exhaust emission standards in this part, your vessels must meet all 
emission standards with the engine and fuel system installed.
    (b) You may need to certify your vessels or fuel systems as 
described in 40 CFR 1060.1 and 1060.601. If you produce vessels subject 
to this part without obtaining a certificate, you must still meet the 
requirements of 40 CFR 1060.101(e) and (f) and keep records as 
described in 40 CFR 1060.210.
    (c) You must identify and label vessels you produce under this 
section consistent with the requirements of Sec.  1045.135 and 40 CFR 
part 1060.
    (d) You must follow all emission-related installation instructions 
from the certifying manufacturers as described in Sec.  1045.130 and 40 
CFR 1068.105. If you do not follow the installation instructions, we 
may consider your vessel to be not covered by the certificates of 
conformity. Introduction of such vessels into U.S. commerce violates 40 
CFR 1068.101.


Sec.  1045.25  How do the requirements related to evaporative emissions 
apply to engines and their fuel systems?

    (a) Engine manufacturers must provide the installation instructions 
required by Sec.  1045.130 to the ultimate purchasers of the engine. 
These instructions may be combined with the maintenance instructions 
required by Sec.  1045.125.
    (b) Engines sold with attached fuel lines or installed fuel tanks 
must be covered by the appropriate certificates of conformity issued 
under 40 CFR part 1060.
    (c) Fuel lines intended to be used with new engines and new 
portable marine fuel tanks must be certified to the applicable 
requirements of 40 CFR part 1060. Similarly, fuel tanks intended to be 
used with new enignes must be certified to the applicable requirements 
of 40 CFR part 1060.
    (d) All persons installing engines certified under this part 1045 
must follow the certifying manufacturer's emission-related installation 
instructions (see Sec.  1045.130 and 40 CFR 1068.105).


Sec.  1045.30  Submission of information.

    (a) This part includes various requirements to record data or other 
information. Refer to Sec.  1045.825 and 40 CFR 1068.25 regarding 
recordkeeping requirements. If recordkeeping requirements are not 
specified, store these records in any format and on any media and keep 
them readily available for one year after you send an associated 
application for certification, or one year after you generate the data 
if they do not support an application for certification. You must 
promptly send us organized, written records in English if we ask for 
them. We may review them at any time.
    (b) The regulations in Sec.  1045.255 and 40 CFR 1068.101 describe 
your obligation to report truthful and complete information and the 
consequences of failing to meet this obligation. This includes 
information not related to certification.
    (c) Send all reports and requests for approval to the Designated 
Compliance Officer (see Sec.  1045.801).
    (d) Any written information we require you to send to or receive 
from another company is deemed to be a required record under this 
section. Such records are also deemed to be submissions to EPA. We may 
require you to send us these records whether or not you are a 
certificate holder.

Subpart B--Emission Standards and Related Requirements


Sec.  1045.101  What exhaust emission standards and requirements must 
my engines meet?

    (a) You must show that your engines meet the following 
requirements:
    (1) Outboard and personal watercraft engines must meet the exhaust 
emission standards specified in Sec.  1045.103.
    (2) Sterndrive/inboard engines must meet the exhaust emission 
standards specified in Sec.  1045.105. You may optionally meet these 
standards earlier than we require, as specified in Sec.  1045.145(b).
    (3) Sterndrive/inboard engines must meet the engine-diagnostic 
requirements in Sec.  1045.110.
    (4) All engines must meet the requirements in Sec.  1045.115.
    (b) It is important that you read Sec.  1045.145 to determine if 
there are other interim requirements or interim compliance provisions 
that apply for a limited time.

[[Page 59197]]

Sec.  1045.103  What exhaust emission standards must my outboard and 
personal watercraft engines meet?

    (a) Duty-cycle emission standards. Starting in the 2010 model year, 
exhaust emissions from your outboard and personal watercraft engines 
may not exceed emission standards as follows:
    (1) Measure emissions using the applicable steady-state test 
procedures described in subpart F of this part.
    (2) The exhaust emission standards from the following table apply:

      Table 1 to Sec.   1045.103--Emission Standards for Outboard and Personal Watercraft Engines (g/kW-hr)
----------------------------------------------------------------------------------------------------------------
              Pollutant                       Power \1\                         Emission standard
----------------------------------------------------------------------------------------------------------------
HC + NOX.............................  P <= 4.3 kW............  30.0
                                       P > 4.3 kW.............   2.1 + 0.09 x (151 + 557/P\0.9\)
CO...................................  P <= 40 kW.............  500 - 5.0 x P
                                       P > 40 kW..............  300
----------------------------------------------------------------------------------------------------------------
\1\ Power (P) = maximum engine power for the engine family, in kilowatts (kW).

    (3) For engines whose standard depends on maximum engine power, 
round the calculated HC+NOX emission standard to the nearest 
0.1 g/kW-hr; round the calculated CO emission standard to the nearest 
g/kW-hr. Determine maximum engine power for the engine family as 
described in Sec.  1045.140.
    (b) Averaging, banking, and trading. You may generate or use 
emission credits under the averaging, banking, and trading (ABT) 
program described in subpart H of this part for demonstrating 
compliance with HC+NOX emission standards. For CO emissions, 
you may generate or use emission credits for averaging as described in 
subpart H of this part, but not for banking or trading. To generate or 
use emission credits, you must specify a family emission limit for each 
pollutant you include in the ABT program for each engine family. These 
family emission limits serve as the emission standards for the engine 
family with respect to all required testing instead of the standards 
specified in this section. An engine family meets emission standards 
even if its family emission limit is higher than the standard, as long 
as you show that the whole averaging set of applicable engine families 
meets the emission standards using emission credits and the engines 
within the family meet the family emission limit. The following FEL 
caps apply:
    (1) For engines with maximum engine power at or below 4.3 kW, the 
maximum value of the family emission limit for HC+NOX is 
81.0 g/kW-hr. For all other engines, the maximum value of the family 
emission limit for HC+NOX is defined by the following 
formula, with results rounded to the nearest 0.1 g/kW-hr:
[GRAPHIC] [TIFF OMITTED] TR08OC08.088

    (2) For engines with maximum engine power above 40 kW, the maximum 
value of the family emission limit for CO is 450 g/kW-hr. For all other 
engines, the maximum value is defined by the following formula, with 
results rounded to the nearest g/kW-hr:

FELmax,CO = 650 - 5.0 x P
    (c) Not-to-exceed emission standards. Exhaust emissions may not 
exceed the not-to-exceed standards specified in Sec.  1045.107.
    (d) Fuel types. The exhaust emission standards in this section 
apply for engines using the fuel type on which the engines in the 
engine family are designed to operate. You must meet the numerical 
emission standards for hydrocarbons in this section based on the 
following types of hydrocarbon emissions for engines powered by the 
following fuels:
    (1) Alcohol-fueled engines: THCE emissions.
    (2) Natural gas-fueled engines: NMHC emissions.
    (3) Other engines: THC emissions.
    (e) Useful life. Your engines must meet the exhaust emission 
standards in paragraphs (a) through (c) of this section over the full 
useful life as follows:
    (1) For outboard engines, the minimum useful life is 350 hours of 
engine operation or 10 years, whichever comes first.
    (2) For personal watercraft engines, the minimum useful life is 350 
hours of engine operation or 5 years, whichever comes first.
    (3) You must specify a longer useful life in terms of hours for the 
engine family if the average service life of your vehicles is longer 
than the minimum value, as follows:
    (i) Except as allowed by paragraph (e)(3)(ii) of this section, your 
useful life (in hours) may not be less than either of the following:
    (A) Your projected operating life from advertisements or other 
marketing materials for any engines in the engine family.
    (B) Your basic mechanical warranty for any engines in the engine 
family.
    (ii) Your useful life may be based on the average service life of 
vehicles in the engine family if you show that the average service life 
is less than the useful life required by paragraph (e)(3)(i) of this 
section, but more than the minimum useful life (350 hours of engine 
operation). In determining the actual average service life of vehicles 
in an engine family, we will consider all available information and 
analyses. Survey data is allowed but not required to make this showing.
    (f) Applicability for testing. The duty-cycle emission standards in 
this subpart apply to all testing performed according to the procedures 
in Sec.  1045.505, including certification, production-line, and in-use 
testing. The not-to-exceed standards apply for all testing performed 
according to the procedures of subpart F of this part.


Sec.  1045.105  What exhaust emission standards must my sterndrive/
inboard engines meet?

    (a) Duty-cycle emission standards. Starting in the 2010 model year, 
exhaust emissions from your sterndrive/inboard engines may not exceed 
emission standards as follows:
    (1) Measure emissions using the applicable steady-state test 
procedures described in subpart F of this part.
    (2) For conventional sterndrive/inboard engines, the 
HC+NOX emission standard is 5.0 g/kW-hr and the CO emission 
standard is 75.0 g/kW-hr.
    (3) The exhaust emission standards from the following table apply 
for high-performance engines:

   Table 1 to Sec.   1045.105--Emission Standards for High-Performance
                            Engines (g/kW-hr)
------------------------------------------------------------------------
           Model year                 Power \1\       HC+NOX       CO
------------------------------------------------------------------------
2010............................  P<= 485 kW......       20.0        350
                                  P> 485 kW.......       25.0        350

[[Page 59198]]

 
2011+...........................  P<= 485 kW......       16.0        350
                                  P> 485 kW.......       22.0       350
------------------------------------------------------------------------
\1\ Power (P) = maximum engine power in kilowatts (kW).

    (b) Averaging, banking, and trading. You may not generate or use 
emission credits for high-performance engines. You may generate or use 
emission credits under the averaging, banking, and trading (ABT) 
program described in subpart H of this part for demonstrating 
compliance with HC+NOX and CO emission standards for 
conventional sterndrive-inboard engines. To generate or use emission 
credits, you must specify a family emission limit for each pollutant 
you include in the ABT program for each engine family. These family 
emission limits serve as the emission standards for the engine family 
with respect to all required testing instead of the standards specified 
in this section. An engine family meets emission standards even if its 
family emission limit is higher than the standard, as long as you show 
that the whole averaging set of applicable engine families meets the 
emission standards using emission credits and the engines within the 
family meet the family emission limit. Family emission limits for 
conventional sterndrive/inboard engines may not be higher than 16.0 g/
kW-hr for HC+NOX and 150 g/kW-hr for CO except as specified 
in Sec.  1045.145(c).
    (c) Not-to-exceed emission standards. Exhaust emissions may not 
exceed the not-to-exceed standards specified in Sec.  1045.107 for 
conventional sterndrive/inboard engines. These standards do not apply 
for high-performance engines.
    (d) Fuel types. The exhaust emission standards in this section 
apply for engines using the fuel type on which the engines in the 
engine family are designed to operate. You must meet the numerical 
emission standards for hydrocarbons in this section based on the 
following types of hydrocarbon emissions for engines powered by the 
following fuels:
    (1) Alcohol-fueled engines: THCE emissions.
    (2) Natural gas-fueled engines: NMHC emissions.
    (3) Other engines: THC emissions.
    (e) Useful life. Your engines must meet the exhaust emission 
standards in paragraphs (a) through (c) of this section over their full 
useful life, as follows:
    (1) For high-performance engines with maximum engine power above 
485 kW, the useful life is 50 hours of operation or 1 year, whichever 
comes first. For high-performance engines with maximum engine power at 
or below 485 kW, the useful life is 150 hours of operation or 3 years, 
whichever comes first.
    (2) For conventional sterndrive/inboard engines, the minimum useful 
life is 480 hours of operation or ten years, whichever comes first. 
However, you may request in your application for certification that we 
approve a shorter useful life for an engine family. We may approve a 
shorter useful life, in hours of engine operation but not in years, if 
we determine that these engines will rarely operate longer than the 
shorter useful life. If engines identical to those in the engine family 
have already been produced and are in use, your demonstration must 
include documentation from such in-use engines. In other cases, your 
demonstration must include an engineering analysis of information 
equivalent to such in-use data, such as data from research engines or 
similar engine models that are already in production. Your 
demonstration must also include any overhaul interval that you 
recommend, any mechanical warranty that you offer for the engine or its 
components, and any relevant customer design specifications. Your 
demonstration may include any other relevant information. The useful 
life value may not be shorter than any of the following:
    (i) 150 hours of operation.
    (ii) Your recommended overhaul interval.
    (iii) Your mechanical warranty for the engine.
    (3) You must specify a longer useful life for conventional 
sterndrive/inboard engines in terms of hours if the average service 
life of engines from the engine family is longer than the minimum 
useful life value, as follows:
    (i) Except as allowed by paragraph (e)(3)(ii) of this section, your 
useful life (in hours) may not be less than either of the following:
    (A) Your projected operating life from advertisements or other 
marketing materials for any engines in the engine family.
    (B) Your basic mechanical warranty for any engines in the engine 
family.
    (ii) Your useful life may be based on the average service life of 
engines in the engine family if you show that the average service life 
is less than the useful life required by paragraph (e)(3)(i) of this 
section, but more than the minimum useful life (480 hours of engine 
operation). In determining the actual average service life of engines 
in an engine family, we will consider all available information and 
analyses. Survey data is allowed but not required to make this showing.
    (f) Applicability for testing. The duty-cycle emission standards in 
this section apply to all testing performed according to the procedures 
in Sec.  1045.505, including certification, production-line, and in-use 
testing. The not-to-exceed standards apply for all testing performed 
according to the procedures of subpart F of this part.


Sec.  1045.107  What are the not-to-exceed emission standards?

    Not-to-exceed emission standards apply as follows:
    (a) Measure emissions using the not-to-exceed procedures in subpart 
F of this part:
    (b) Determine the not-to-exceed standard, rounded to the same 
number of decimal places as the emission standard in Table 1 to this 
section from the following equation:
Not-to-exceed standard = (STD) x (M)

Where:

STD = The standard specified in paragraph (a) of this section if you 
certify without using ABT for that pollutant; or the FEL for that 
pollutant if you certify using ABT.
M = The NTE multiplier for that pollutant, as defined in paragraphs 
(c) through (e) of this section.

    (c) For engines equipped with a catalyst, use NTE multipliers from 
the following table across the applicable zone specified in Sec.  
1045.515:

    Table 1 to Sec.   1045.107--NTE Multipliers for Catalyst-Equipped
                                 Engines
------------------------------------------------------------------------
                    Pollutant                      Subzone 1   Subzone 2
------------------------------------------------------------------------
HC+NOX..........................................        1.50        1.00
CO..............................................         N/A        1.00
------------------------------------------------------------------------

    (d) For two-stroke engines not equipped with a catalyst, use an NTE 
multiplier of 1.2 for HC+NOX and CO. Compare the weighted 
value specified in Sec.  1045.515(c)(5) to the NTE standards specified 
in paragraph (b) of this section.
    (e) For engines not covered by paragraphs (c) and (d) of this 
section, use the NTE multipliers from the following table across the 
applicable zone specified in Sec.  1045.515:

[[Page 59199]]



   Table 2 to Sec.   1045.107--NTE Multipliers for Four-Stroke Engines
                            without Catalysts
------------------------------------------------------------------------
                    Pollutant                      Subzone 1   Subzone 2
------------------------------------------------------------------------
HC+NOX..........................................        1.40        1.60
CO..............................................        1.50        1.50
------------------------------------------------------------------------

Sec.  1045.110  How must my engines diagnose malfunctions?

    The following engine-diagnostic requirements apply for engines 
equipped with three-way catalysts and closed-loop control of air-fuel 
ratios:
    (a) Equip your engines with a diagnostic system. Equip each engine 
with a diagnostic system that will detect significant malfunctions in 
its emission control system using one of the following protocols:
    (1) If your emission control strategy depends on maintaining air-
fuel ratios at stoichiometry, an acceptable diagnostic design would 
identify a malfunction whenever the air-fuel ratio does not cross 
stoichiometry for one minute of intended closed-loop operation. You may 
use other diagnostic strategies if we approve them in advance.
    (2) If the protocol described in paragraph (a)(1) of this section 
does not apply to your engine, you must use an alternative approach 
that we approve in advance. Your alternative approach must generally 
detect when the emission control system is not functioning properly.
    (3) Diagnostic systems approved by the California Air Resources 
Board for use with sterndrive/inboard engines fully satisfy the 
requirements of this section.
    (b) Use a malfunction indicator. The malfunction indicator must be 
designed such that the operator can readily see or hear it; visible 
signals may be any color except red. Visible malfunction indicators 
must display ``Check Engine,'' ``Service Engine Soon,'' or a similar 
message that we approve. The malfunction indicator must go on under 
each of the following circumstances:
    (1) When a malfunction occurs, as described in paragraph (a) of 
this section.
    (2) When the diagnostic system cannot send signals to meet the 
requirement of paragraph (b)(1) of this section.
    (3) When the engine's ignition is in the ``key-on'' position before 
starting or cranking. The malfunction indicator should turn off after 
engine starting if the system detects no malfunction.
    (c) Control when the malfunction can turn off. If the malfunction 
indicator goes on to show a malfunction, it must remain on during all 
later engine operation until servicing corrects the malfunction. If the 
engine is not serviced, but the malfunction does not recur for three 
consecutive engine starts during which the malfunctioning system is 
evaluated and found to be working properly, the malfunction indicator 
may stay off during later engine operation.
    (d) Store trouble codes in computer memory. Record and store in 
computer memory any diagnostic trouble codes showing a malfunction that 
should activate the malfunction indicator. The stored codes must 
identify the malfunctioning system or component as uniquely as 
possible. Make these codes available through the data link connector as 
described in paragraph (g) of this section. You may store codes for 
conditions that do not activate the malfunction indicator. The system 
must store a separate code to show when the diagnostic system is 
disabled (from malfunction or tampering).
    (e) Make data, access codes, and devices accessible. Make all 
required data accessible to us without any access codes or devices that 
only you can supply. Ensure that anyone servicing your engine can read 
and understand the diagnostic trouble codes stored in the onboard 
computer with generic tools and information.
    (f) Consider exceptions for certain conditions. Your diagnostic 
systems may disregard trouble codes for the first three minutes after 
engine starting. You may ask us to approve diagnostic-system designs 
that disregard trouble codes under other conditions that would produce 
an unreliable reading, damage systems or components, or cause other 
safety risks.
    (g) Follow standard references for formats, codes, and connections. 
Follow conventions defined in SAE J1939-05 (incorporated by reference 
in Sec.  1045.810) or ask us to approve using updated versions of (or 
variations from) this standard.


Sec.  1045.112  What are the standards for evaporative emissions?

    Fuel systems must meet the evaporative emission requirements of 40 
CFR part 1060 as specified in this section. These standards apply over 
a useful life period of five years for personal watercraft and ten 
years for all other vessels and for portable marine fuel tanks.
    (a) Fuel line permeation. Nonmetal fuel lines must meet the 
permeation requirements specified in 40 CFR 1060.102 for EPA NRFL fuel 
lines as described in this paragraph (a).
    (1) Except as specified in paragraphs (a)(2) and (3) of this 
section, the emission standard for fuel lines starts for vessels or 
portable marine fuel tanks with a date of manufacture on or after 
January 1, 2009.
    (2) The emission standard for primer bulbs applies starting January 
1, 2011.
    (3) The emission standard for under-cowl fuel lines used with 
outboard engines apply over a phase-in period as specified in this 
paragraph (a)(3).
    (i) Except as specified in paragraph (a)(3)(ii) of this section, 
the phase-in period is based on total length of fuel lines as specified 
in Table 1 to this section. For example, at least 30 percent of the 
length of under-cowl fuel lines used on your full lineup of 2010 model 
year outboard engines must meet the specified permeation standards. See 
Sec.  1045.145(k) for administrative requirements related to this 
phase-in.

 Table 1 to Sec.   1045.112--phase-in Schedule for Under-Cowl Fuel Lines
                           on Outboard Engines
------------------------------------------------------------------------
                                                              Percentage
                         Model year                            phase-in
------------------------------------------------------------------------
2010.......................................................           30
2011.......................................................           60
2012-2014..................................................           90
2015+......................................................          100
------------------------------------------------------------------------

    (ii) You may instead meet the permeation standards of this 
paragraph (a) by complying with the specified standards with 100 
percent of your under-cowl fuel lines across your full lineup of 2011 
model year outboard engines. In this case, the requirements of this 
part would not apply to under-cowl fuel lines before the 2011 model 
year. To use this option, you must notify the Designated Compliance 
Officer before December 31, 2009 of your intent to meet permeation 
standards on all your under-cowl fuel lines in the 2011 model year.
    (b) Tank permeation. Fuel tanks must meet the permeation 
requirements specified in 40 CFR 1060.103. Portable marine fuel tanks 
must meet permeation standards starting January 1, 2011. Fuel tanks for 
personal watercraft must meet permeation standards starting in the 2011 
model year. Other installed fuel tanks must meet permeation standards 
starting in the 2012 model year. Vessel manufacturers may generate or 
use emission credits to show compliance with the requirements of this 
paragraph under the averaging, banking, and trading (ABT) program, as 
described in subpart H of this part. Starting in the 2014 model year 
for personal watercraft and in the 2015 model year for other

[[Page 59200]]

installed fuel tanks, family emission limits may not exceed 5.0 g/m\2\/
day if testing occurs at a nominal temperature of 28 [deg]C, or 8.3 g/
m\2\/day if testing occurs at a nominal temperature of 40 [deg]C. These 
FEL caps do not apply to fuel caps that are certified separately to 
meet permeation standards. Portable marine fuel tank manufacturers may 
not generate or use emission credits under subpart H of this part.
    (c) Running loss. The running loss requirements specified in 40 CFR 
part 1060 do not apply.
    (d) Diurnal emissions. Installed fuel tanks must meet the diurnal 
emission requirements specified in 40 CFR 1060.105. Fuel tanks for 
personal watercraft must meet diurnal emission standards starting in 
the 2010 model year. Other installed fuel tanks must meet diurnal 
emission standards for vessels produced on or after July 31, 2011, 
except as allowed by Sec.  1045.625. Fuel tanks meeting the definition 
of portable marine fuel tank in Sec.  1045.801 must comply with the 
diurnal requirements specified in 40 CFR part 1060 starting January 1, 
2010.
    (e) Other requirements. The requirements of 40 CFR 1060.101(e) and 
(f) apply to vessel manufacturers even if they do not obtain a 
certificate.
    (f) Engine manufacturers. To the extent that engine manufacturers 
produce engines with fuel lines or fuel tanks, those fuel-system 
components must meet the requirements specified in this section. The 
timing of new standards is based on the date of manufacture of the 
engine.


Sec.  1045.115  What other requirements apply?

    The following requirements apply with respect to engines that are 
required to meet the emission standards of this part:
    (a) Crankcase emissions. Crankcase emissions may not be discharged 
directly into the ambient atmosphere from any engine throughout its 
useful life.
    (b) Torque broadcasting. Starting in the 2013 model year, 
electronically controlled engines must broadcast their speed and output 
shaft torque (in newton-meters). Engines may alternatively broadcast a 
surrogate value for determining torque. Engines must broadcast engine 
parameters such that they can be read with a remote device, or 
broadcast them directly to their controller area networks. Your 
broadcasting protocol must allow for valid measurements using the 
field-testing procedures in 40 CFR part 1065, subpart J.
    (c) EPA access to broadcast information. If we request it, you must 
provide us any hardware or tools we would need to readily read, 
interpret, and record all information broadcast by an engine's on-board 
computers and electronic control modules. If you broadcast a surrogate 
parameter for torque values, you must provide us what we need to 
convert these into torque units. We will not ask for hardware or tools 
if they are readily available commercially.
    (d) Altitude adjustments. Engines must meet applicable emission 
standards for valid tests conducted under the ambient conditions 
specified in 40 CFR 1065.520. Engines must meet applicable emission 
standards at all specified atmospheric pressures, except that for 
atmospheric pressures below 94.0 kPa you may rely on an altitude kit 
for all testing if you meet the requirements specified in Sec.  
1054.205(s). If your rely on an altitude kit for certification, you 
must identify in the owners manual the altitude range for which you 
expect proper engine performance and emission control with and without 
the altitude kit; you must also state in the owners manual that 
operating the engine with the wrong engine configuration at a given 
altitude may increase its emissions and decrease fuel efficiency and 
performance.
    (e) Adjustable parameters. Engines that have adjustable parameters 
must meet all the requirements of this part for any adjustment in the 
physically adjustable range. An operating parameter is not considered 
adjustable if you permanently seal it or if it is not normally 
accessible using ordinary tools. We may require that you set adjustable 
parameters to any specification within the adjustable range during any 
testing, including certification testing, production-line testing, or 
in-use testing.
    (f) Prohibited controls. You may not design your engines with 
emission-control devices, systems, or elements of design that cause or 
contribute to an unreasonable risk to public health, welfare, or safety 
while operating. For example, this would apply if the engine emits a 
noxious or toxic substance it would otherwise not emit that contributes 
to such an unreasonable risk.
    (g) Defeat devices. You may not equip your engines with a defeat 
device. A defeat device is an auxiliary emission control device that 
reduces the effectiveness of emission controls under conditions that 
the engine may reasonably be expected to encounter during normal 
operation and use. This does not apply for altitude kits installed or 
removed consistent with Sec.  1045.655. This also does not apply to 
auxiliary emission control devices you identify in your application for 
certification if any of the following is true:
    (1) The conditions of concern were substantially included in the 
applicable duty-cycle test procedures described in subpart F of this 
part.
    (2) You show your design is necessary to prevent engine (or vessel) 
damage or accidents. For example, you may design your engine to include 
emergency operating modes (sometimes known as limp-home operation) that 
would allow a vessel to return to land in the event of a malfunction 
even if such operating modes result in higher emissions.
    (3) The reduced effectiveness applies only to starting the engine.


Sec.  1045.120  What emission-related warranty requirements apply to 
me?

    (a) General requirements. You must warrant to the ultimate 
purchaser and each subsequent purchaser that the new engine, including 
all parts of its emission control system, meets two conditions:
    (1) It is designed, built, and equipped so it conforms at the time 
of sale to the ultimate purchaser with the requirements of this part.
    (2) It is free from defects in materials and workmanship that may 
keep it from meeting these requirements.
    (b) Warranty period. Your emission-related warranty must be valid 
during the periods specified in this paragraph (b). You may offer an 
emission-related warranty more generous than we require. The emission-
related warranty for an engine may not be shorter than any published 
warranty you offer without charge for that engine. Similarly, the 
emission-related warranty for any component may not be shorter than any 
published warranty you offer without charge for that component. If an 
engine has no hour meter, we base the warranty periods in this 
paragraph (b) only on the engine's age (in years). The warranty period 
begins when the engine is placed into service.
    (1) The minimum warranty period for outboard engines is 175 hours 
of engine operation or 5 years, whichever comes first. The minimum 
warranty period for personal watercraft engines is 175 hours of engine 
operation or 30 months, whichever comes first.
    (2) The minimum warranty period for sterndrive/inboard engines is 
shown in the following table:

[[Page 59201]]



  Table 1 to Sec.   1045.120 --Warranty Periods for Sterndrive/Inboard
                               Engines \1\
------------------------------------------------------------------------
                                  Electronic
         Engine type              components     Mechanical  components
------------------------------------------------------------------------
Conventional.................  3 years/480      3 years/480 hours.
                                hours.
High-performance with maximum  3 years/480      3 years/150 hours.
 engine power at or below 485   hours.
 kW.
High-performance with maximum  3 years/480      1 year/50 hours.
 engine power above 485 kW.     hours.
------------------------------------------------------------------------
\1\ The warranty period expires after the specified time period or
  number of operating hours, whichever comes first.

    (c) Components covered. The emission-related warranty covers all 
components whose failure would increase an engine's emissions of any 
regulated pollutant, including components listed in 40 CFR part 1068, 
Appendix I, and components from any other system you develop to control 
emissions. The emission-related warranty covers these components even 
if another company produces the component. Your emission-related 
warranty does not cover components whose failure would not increase an 
engine's emissions of any regulated pollutant.
    (d) Limited applicability. You may deny warranty claims under this 
section if the operator caused the problem through improper maintenance 
or use, as described in 40 CFR 1068.115.
    (e) Owners manual. Describe in the owners manual the emission-
related warranty provisions from this section that apply to the engine.


Sec.  1045.125  What maintenance instructions must I give to buyers?

    Give the ultimate purchaser of each new engine written instructions 
for properly maintaining and using the engine, including the emission 
control system as described in this section. The maintenance 
instructions also apply to service accumulation on your emission-data 
engines as described in Sec.  1045.245 and in 40 CFR part 1065.
    (a) Critical emission-related maintenance. Critical emission-
related maintenance includes any adjustment, cleaning, repair, or 
replacement of critical emission-related components. This may also 
include additional emission-related maintenance that you determine is 
critical if we approve it in advance. You may schedule critical 
emission-related maintenance on these components if you meet the 
following conditions:
    (1) You demonstrate that the maintenance is reasonably likely to be 
done at the recommended intervals on in-use engines. We will accept 
scheduled maintenance as reasonably likely to occur if you satisfy any 
of the following conditions:
    (i) You present data showing that any lack of maintenance that 
increases emissions also unacceptably degrades the engine's 
performance.
    (ii) You present survey data showing that at least 80 percent of 
engines in the field get the maintenance you specify at the recommended 
intervals.
    (iii) You provide the maintenance free of charge and clearly say so 
in your maintenance instructions.
    (iv) You otherwise show us that the maintenance is reasonably 
likely to be done at the recommended intervals.
    (2) You may not schedule critical emission-related maintenance 
within the useful life period for aftertreatment devices, pulse-air 
valves, fuel injectors, oxygen sensors, electronic control units, 
superchargers, or turbochargers, except as specified in paragraph (b) 
or (c) of this section.
    (b) Recommended additional maintenance. You may recommend any 
additional amount of maintenance on the components listed in paragraph 
(a) of this section, as long as you state clearly that these 
maintenance steps are not necessary to keep the emission-related 
warranty valid. If operators do the maintenance specified in paragraph 
(a) of this section, but not the recommended additional maintenance, 
this does not allow you to disqualify those engines from in-use testing 
or deny a warranty claim. Do not take these maintenance steps during 
service accumulation on your emission-data engines.
    (c) Special maintenance. You may specify more frequent maintenance 
to address problems related to special situations, such as atypical 
engine operation. You must clearly state that this additional 
maintenance is associated with the special situation you are 
addressing.
    (d) Noncritical emission-related maintenance. Subject to the 
provisions of this paragraph (d), you may schedule any amount of 
emission-related inspection or maintenance that is not covered by 
paragraph (a) of this section (i.e., maintenance that is neither 
explicitly identified as critical emission-related maintenance, nor 
that we approve as critical emission-related maintenance). Noncritical 
emission-related maintenance generally includes changing spark plugs, 
re-seating valves, or any other emission-related maintenance on the 
components we specify in 40 CFR part 1068, Appendix I that is not 
covered in paragraph (a) of this section. You must state in the owners 
manual that these steps are not necessary to keep the emission-related 
warranty valid. If operators fail to do this maintenance, this does not 
allow you to disqualify those engines from in-use testing or deny a 
warranty claim. Do not take these inspection or maintenance steps 
during service accumulation on your emission-data engines.
    (e) Maintenance that is not emission-related. For maintenance 
unrelated to emission controls, you may schedule any amount of 
inspection or maintenance. You may also take these inspection or 
maintenance steps during service accumulation on your emission-data 
engines, as long as they are reasonable and technologically necessary. 
This might include adding engine oil, changing air, fuel, or oil 
filters, servicing engine-cooling systems, and adjusting idle speed, 
governor, engine bolt torque, valve lash, or injector lash. You may 
perform this nonemission-related maintenance on emission-data engines 
at the least frequent intervals that you recommend to the ultimate 
purchaser (but not the intervals recommended for severe service).
    (f) Source of parts and repairs. State clearly on the first page of 
your written maintenance instructions that a repair shop or person of 
the owner's choosing may maintain, replace, or repair emission control 
devices and systems. Your instructions may not require components or 
service identified by brand, trade, or corporate name. Also, do not 
directly or indirectly condition your warranty on a requirement that 
the engine be serviced by your franchised dealers or any other service 
establishments with which you have a commercial relationship. You may 
disregard the requirements in this paragraph (f) if you do one of two 
things:
    (1) Provide a component or service without charge under the 
purchase agreement.

[[Page 59202]]

    (2) Get us to waive this prohibition in the public's interest by 
convincing us the engine will work properly only with the identified 
component or service.
    (g) Payment for scheduled maintenance. Owners are responsible for 
properly maintaining their engines. This generally includes paying for 
scheduled maintenance. However, manufacturers must pay for scheduled 
maintenance during the useful life if it meets all the following 
criteria:
    (1) Each affected component was not in general use on similar 
engines before the applicable dates shown in paragraph (5) of the 
definition of new propulsion marine engine in Sec.  1045.801.
    (2) The primary function of each affected component is to reduce 
emissions.
    (3) The cost of the scheduled maintenance is more than 2 percent of 
the price of the engine.
    (4) Failure to perform the maintenance would not cause clear 
problems that would significantly degrade the engine's performance.
    (h) Owners manual. Explain the owner's responsibility for proper 
maintenance in the owners manual.


Sec.  1045.130  What installation instructions must I give to vessel 
manufacturers?

    (a) If you sell an engine for someone else to install in a vessel, 
give the engine installer instructions for installing it consistent 
with the requirements of this part. Include all information necessary 
to ensure that an engine will be installed in its certified 
configuration.
    (b) Make sure the instructions have the following information:
    (1) Include the heading: ``Emission-related installation 
instructions''.
    (2) State: ``Failing to follow these instructions when installing a 
certified engine in a vessel violates federal law (40 CFR 1068.105(b)), 
subject to fines or other penalties as described in the Clean Air 
Act.''
    (3) Describe the instructions needed to properly install the 
exhaust system and any other components. Include instructions 
consistent with the requirements of Sec.  1045.205(u) related to in-use 
measurement and the requirements of Sec.  1045.655 related to altitude 
kits.
    (4) Describe the steps needed to control evaporative emissions as 
described in Sec.  1045.112. This will generally require notification 
that the installer and/or vessel manufacturer must meet the 
requirements of Sec.  1045.112 and 40 CFR part 1060.
    (5) Describe any necessary steps for installing the diagnostic 
system described in Sec.  1045.110.
    (6) Describe any limits on the range of applications needed to 
ensure that the engine operates consistently with your application for 
certification. For example, if your engines are certified only for 
personal watercraft, tell vessel manufacturers not to install the 
engines in vessels longer than 4.0 meters.
    (7) Describe any other instructions to make sure the installed 
engine will operate according to design specifications in your 
application for certification. For example, this may include specified 
limits for catalyst systems, such as exhaust backpressure, catalyst 
location, and temperature profiles during engine operation.
    (8) State: ``If you install the engine in a way that makes the 
engine's emission control information label hard to read during normal 
engine maintenance, you must place a duplicate label on the vessel, as 
described in 40 CFR 1068.105.''
    (c) You do not need installation instructions for engines you 
install in your own vessels.
    (d) Provide instructions in writing or in an equivalent format. For 
example, you may post instructions on a publicly available Web site for 
downloading or printing. If you do not provide the instructions in 
writing, explain in your application for certification how you will 
ensure that each installer is informed of the installation 
requirements.


Sec.  1045.135  How must I label and identify the engines I produce?

    The provisions of this section apply to engine manufacturers.
    (a) Assign each engine a unique identification number and 
permanently affix, engrave, or stamp it on the engine in a legible way.
    (b) At the time of manufacture, affix a permanent and legible label 
identifying each engine. The label must be--
    (1) Attached in one piece so it is not removable without being 
destroyed or defaced.
    (2) Secured to a part of the engine needed for normal operation and 
not normally requiring replacement.
    (3) Durable and readable for the engine's entire life.
    (4) Written in English.
    (c) The label must--
    (1) Include the heading ``EMISSION CONTROL INFORMATION''.
    (2) Include your full corporate name and trademark. You may 
identify another company and use its trademark instead of yours if you 
comply with the provisions of Sec.  1045.640.
    (3) Include EPA's standardized designation for the engine family 
(and subfamily, where applicable).
    (4) State the engine's displacement (in liters) and maximum engine 
power (in kW); however, you may omit the displacement from the label if 
all the engines in the engine family have the same per-cylinder 
displacement and total displacement.
    (5) State the date of manufacture [DAY (optional), MONTH, and 
YEAR]; however, you may omit this from the label if you stamp, engrave, 
or otherwise permanently identify it elsewhere on the engine, in which 
case you must also describe in your application for certification where 
you will identify the date on the engine.
    (6) State the FELs to which the engines are certified (in g/kW-hr) 
if certification depends on the ABT provisions of subpart H of this 
part.
    (7) Identify the emission control system. Use terms and 
abbreviations as described in 40 CFR 1068.45. You may omit this 
information from the label if there is not enough room for it and you 
put it in the owners manual instead.
    (8) List specifications and adjustments for engine tuneups; 
however, you may omit this information from the label if there is not 
enough room for it and you put it in the owners manual instead.
    (9) Identify the fuel type and any requirements for fuel and 
lubricants; however, you may omit this information from the label if 
there is not enough room for it and you put it in the owners manual 
instead.
    (10) State: ``THIS MARINE ENGINE COMPLIES WITH U.S. EPA EXHAUST 
REGULATIONS FOR [MODEL YEAR].''
    (11) If your durability demonstration for sterndrive/inboard 
engines is limited to fresh water, state: ``THIS ENGINE IS NOT INTENDED 
FOR USE IN SALTWATER.''
    (d) You may add information to the emission control information 
label as follows:
    (1) You may identify other emission standards that the engine meets 
or does not meet (such as California standards). You may include this 
information by adding it to the statement we specify or by including a 
separate statement.
    (2) You may add other information to ensure that the engine will be 
properly maintained and used.
    (3) You may add appropriate features to prevent counterfeit labels. 
For example, you may include the engine's unique identification number 
on the label.
    (e) You may ask us to approve modified labeling requirements in 
this part 1045 if you show that it is necessary or appropriate. We will 
approve your request if your alternate label is consistent with the 
requirements of this part.
    (f) If you obscure the engine label while installing the engine in 
the vessel

[[Page 59203]]

such that the label cannot be read during normal maintenance, you must 
place a duplicate label on the vessel. If others install your engine in 
their vessels in a way that obscures the engine label, we require them 
to add a duplicate label on the vessel (see 40 CFR 1068.105); in that 
case, give them the number of duplicate labels they request and keep 
the following records for at least five years:
    (1) Written documentation of the request from the vessel 
manufacturer.
    (2) The number of duplicate labels you send for each engine family 
and the date you sent them.


Sec.  1045.140  What is my engine's maximum engine power?

    (a) An engine configuration's maximum engine power is the maximum 
brake power point on the nominal power curve for the engine 
configuration, as defined in this section. Round the power value to the 
nearest whole kilowatt.
    (b) The nominal power curve of an engine configuration is the 
relationship between maximum available engine brake power and engine 
speed for an engine, using the mapping procedures of 40 CFR part 1065, 
based on the manufacturer's design and production specifications for 
the engine. This information may also be expressed by a torque curve 
that relates maximum available engine torque with engine speed.
    (c) The nominal power curve must be within the range of the actual 
power curves of production engines considering normal production 
variability. If after production begins it is determined that your 
nominal power curve does not represent production engines, we may 
require you to amend your application for certification under Sec.  
1045.225.
    (d) Maximum engine power for an engine family is generally the 
weighted average value of maximum engine power of each engine 
configuration within the engine family based on your total U.S.-
directed production volume of engines you produce from the engine 
family. However, alternative approaches for defining an engine family's 
maximum engine power apply in the following circumstances:
    (1) For outboard or personal watercraft engines for which you 
neither generate nor use emission credits, you may identify the 
greatest value for maximum engine power from all the different 
configurations within the engine family to determine the appropriate 
emission standard under Sec.  1045.103.
    (2) For high-performance engines, you must use the smallest value 
for maximum engine power from all the different configurations within 
the engine family to determine the standards and other requirements 
that apply under this subpart B.


Sec.  1045.145  Are there interim provisions that apply only for a 
limited time?

    The provisions in this section apply instead of other provisions in 
this part. This section describes how and when these interim provisions 
apply.
    (a) Small-volume engine manufacturers. Special provisions apply to 
you for sterndrive/inboard engines if you are a small-volume engine 
manufacturer subject to the requirements of this part. Contact us 
before January 1, 2010 if you intend to use the provisions of this 
paragraph (a). You may delay complying with emission standards and 
other requirements that would otherwise apply until the 2011 model year 
for conventional sterndrive/inboard engines and until the 2013 model 
year for high-performance engines. Add a permanent label to a readily 
visible part of each engine exempted under this paragraph (a). This 
label must include at least the following items:
    (1) The label heading ``EMISSION CONTROL INFORMATION''.
    (2) Your corporate name and trademark.
    (3) Engine displacement (in liters), rated power, and model year of 
the engine or whom to contact for further information.
    (4) The following statement: ``THIS ENGINE IS EXEMPT UNDER 40 CFR 
1045.145(a) FROM EMISSION STANDARDS AND RELATED REQUIREMENTS.''
    (b) Early banking. You may generate exhaust emission credits for 
conventional sterndrive/inboard engines before the 2010 model year (or 
before the 2011 model year for small-volume engine manufacturers) as 
follows:
    (1) You must begin actual production of early-compliant engines by 
September 1, 2009 (or before September 1, 2010 for small-volume engine 
manufacturers).
    (2) You may not generate emission credits under this paragraph (b) 
with engines you produce after December 31, 2009 (or December 31, 2010 
for small-volume engine manufacturers).
    (3) Early-compliant engines must be certified to the standards and 
requirements for conventional sterndrive/inboard engines under this 
part 1045, with all family emission limits at or below the specified 
emission standards.
    (4) Calculate emission credits by setting STD equal to 16 g/kW-hr 
for HC+NOX and 150 g/kW-hr for CO (see Sec.  1045.705).
    (5) Small-volume engine manufacturers may calculate emission 
credits using a multiplier based on the number of model years before 
the 2011 model year. The multipliers are 1.25 for one year early, 1.5 
for two years early, and 2.0 for three years early. For example, 
multiply your calculated emission credits generated from compliant 2009 
model year engines by 1.5.
    (6) You may not use the provisions of this paragraph (b) to 
generate emission credits for engines whose point of first retail sale 
is in California.
    (7) HC+NOX or CO credits you generate under this 
paragraph (b) may not be used after the 2012 model year (or the 2013 
model year for small-volume engine manufacturers).
    (c) Assigned emission factors. Through the 2013 model year, small-
volume engine manufacturers may establish emission levels for 
certification without testing for conventional four-stroke sterndrive/
inboard engines by selecting a family emission limit of 22.0 g/kW-hr 
for HC+NOX emissions and 150 g/kW-hr for CO emissions. Note 
that you must use emission credits under the provisions of subpart H of 
this part to show that you meet applicable requirements if you use 
these family emission limits. Also, if you use these family emission 
limits, you must use them for both HC+NOX and CO emissions.
    (d) Early compliance with evaporative emission standards. You may 
sell or install fuel tanks that do not meet the specified permeation 
standards without violating the prohibition in 40 CFR 1068.101(a)(1) if 
you earn evaporative emission allowances, as follows:
    (1) You may earn an evaporative emission allowance from one fuel 
tank certified to EPA's evaporative emission standards by producing it 
before EPA's evaporative emission standards start to apply. You may use 
this evaporative emission allowance by selling one fuel tank that does 
not meet the specified permeation emission standards. For example, you 
can earn an evaporative emission allowance by selling a low-permeation 
fuel tank for personal watercraft before the 2011 model year, in which 
case you could sell a high-permeation fuel tank for a personal 
watercraft in 2011. You must meet all the other requirements related to 
evaporative emissions that apply for fuel tanks covered by an EPA 
certificate of conformity.

[[Page 59204]]

    (2) You must add a label to exempted fuel tanks you produce under 
this paragraph (d) with the following statement: ``EXEMPT FROM EMISSION 
STANDARDS UNDER 40 CFR 1045.145(d)''.
    (3) Evaporative emission allowances you earn under this paragraph 
(d) from portable marine fuel tanks may be used only for other portable 
marine fuel tanks. Similarly, evaporative emission allowances from 
personal watercraft fuel tanks may be used only for personal watercraft 
fuel tanks and evaporative emission allowances from other installed 
fuel tanks may be used only for other installed fuel tanks.
    (4) You may not use the allowances you generate under this 
paragraph (d) for portable marine fuel tanks and personal watercraft 
fuel tanks in 2014 or later model years. Similarly, you may not use the 
allowances you generate under this paragraph (d) for other installed 
fuel tanks in 2015 or later model years.
    (5) Send the Designated Compliance Officer the following 
information for each year in which you use the provisions of this 
paragraph (d):
    (i) Send us a report within 45 days after the end of the model year 
describing how many pieces of equipment you produced in the preceding 
model year that generate allowances. You may combine this with the 
reports specified in Sec.  1045.250(a) if applicable.
    (ii) Describe the number of equipment using allowances under this 
paragraph (d) in your end-of-year reports and final reports after the 
end of the model year as described in Sec.  1045.730(a). If you do not 
participate in averaging, banking, and trading program, send this 
information separately within 90 days after the end of the model year.
    (e) Useful life for evaporative emission standards. A useful life 
period of two years applies for fuel tanks certified to meet the 
permeation emission standards in Sec.  1045.112(b) in 2013 and earlier 
model years. However, for fuel tanks with a family emission limit above 
or below the specified emission standard, calculate emission credits 
under Sec.  1045.706 based on the useful life values specified in Sec.  
1045.112.
    (f) Delayed FEL caps for stand-up personal watercraft. The FEL caps 
specified in Sec.  1045.103(b) do not apply in the 2010 and 2011 model 
years for personal watercraft that are designed for operation from a 
standing position.
    (g) Delayed compliance with not-to-exceed emission standards. The 
not-to-exceed standards specified in Sec.  1045.107 do not apply in the 
2010 through 2012 model years for engine families that are certified 
based on carryover emission data from the 2009 model year. This 
includes models that were certified only in California, as long as no 
new testing is otherwise required to get a new certificate.
    (h) Carryover of California ARB emission data. The provisions of 40 
CFR 1065.10(c)(5) allow for the use of emission data generated for the 
California Air Resources Board as the basis for EPA certification. For 
sterndrive/inboard engines certified in California before the 2010 
model year, you may use such emission data as the basis for meeting the 
standards of Sec.  1045.105, as long as you meet the conditions 
specified in Sec.  1045.235(d).
    (i) Hardship for obsolete engines. We have made the determination 
under 40 CFR 1068.255 that secondary engine manufacturers may use the 
hardship exemption to sell uncertified 4.3-liter and 8.1-liter engines 
from General Motors in the 2010 model year. These engines are exempt 
without request. You must label the engines as specified in 40 CFR 
1068.255(b).
    (j) Adjusted NTE subzones for noncatalyzed four-stroke engines. For 
supercharged four-stroke outboard engines above 150 kW without 
catalysts, you may divide the NTE zone specified in Sec.  
1045.515(c)(6) based on a speed cutpoint of 70 percent of maximum test 
speed instead of 50 percent of maximum test speed through the 2014 
model year.
    (k) Averaging for under-cowl fuel lines. Section 1045.112 specifies 
phased-in standards for under-cowl fuel lines for 2010 through 2014 
model years, subject to the following provisions:
    (1) You must comply with these requirements based on total lengths 
of compliant and noncompliant fuel lines. For each model year, 
calculate the percentage of compliant under-cowl fuel line by adding up 
the length of under-cowl fuel line certified to meet the applicable 
permeation standards and dividing this sum by the total length of 
under-cowl fuel line from all your outboard engines. You may count a 
fuel line as compliant only if you certify that its emission levels 
will be at or below the specified standard throughout the useful life.
    (2) In your application for certification for each outboard engine 
family, identify the part numbers, descriptions, and locations of all 
the compliant fuel lines. You must include a drawing of any fuel lines 
in addition to the description if that is necessary for us to find 
which fuel lines you intend to be certified. Your descriptions must 
include the lengths of compliant and noncompliant fuel lines for each 
engine, including aggregated lengths for the whole set of fuel lines 
used on an engine. If the engine family includes noncompliant fuel 
lines, you must also include a statement that you will have enough 
compliant fuel lines to meet the phase-in requirements and provide 
detailed calculations to support your statement.
    (3) Send the Designated Compliance Officer end-of-year reports and 
final reports after the end of each model year that you use 
noncompliant fuel lines as described in Sec.  1045.730(a). Include the 
production volumes with a point of retail sale in the United States, as 
described in Sec. Sec.  1045.701(j). State your production volumes in 
terms of total engine sales by model and in terms of total lengths of 
compliant and noncompliant fuel lines. If a single engine family 
includes configurations with different lengths of compliant or 
noncompliant fuel lines, count each configuration separately. If you 
changed your designs during the model year in a way that affects these 
compliance calculations, identify the actual production volumes 
associated with each unique design.
    (4) Keep a copy of the reports we require in this paragraph (k) 
until December 31, 2022 as described in Sec.  1045.735(b). We may 
require you to keep additional records or to send us relevant 
information not required by this paragraph (k), as allowed under the 
Clean Air Act.
    (5) Label your compliant low-permeation fuel lines as specified in 
Sec.  1060.137. Any fuel line observed without a complete 
identification as specified in Sec.  1060.137 will be considered 
noncompliant. In addition, for each model year in which you use 
noncompliant fuel lines, you must include one of the following 
statements on the engine label described in Sec.  1045.135:
    (i) ``LOW-PERM/HIGH-PERM = [x/y]'', where x is the percentage of 
low-permeation under-cowl fuel line and y is the percentage of high-
permeation under-cowl fuel line (x and y must sum to 100).
    (ii) ``LOW-PERM = [x mm]; HIGH-PERM = [y mm]'', where x is the 
length of low-permeation under-cowl fuel line and y is the length of 
high-permeation under-cowl fuel line, in mm.
    (l) [Reserved]
    (m) Delayed labeling for fuel lines. You may omit fuel-line 
labeling requirements specified in 40 CFR part 1060 in the 2009 model 
year.
    (n) Continued use of 40 CFR part 91 test procedures. You may 
continue to use the test procedures in 40 CFR part

[[Page 59205]]

91 instead of those in subpart F of this part for 2010 through 2012 
model year outboard and personal watercraft engines. This applies for 
certification, production-line, and in-use testing. You may continue to 
use test data based on the test procedures in 40 CFR part 91 for engine 
families in 2013 and later model years, provided that we allow you to 
use carryover emission data under 40 CFR 1045.235(d) for your engine 
family. You may also use the test procedures in 40 CFR part 91 for 
production-line testing with any engine family whose certification is 
based on testing with those procedures.

Subpart C--Certifying Engine Families


Sec.  1045.201  What are the general requirements for obtaining a 
certificate of conformity?

    Engine manufacturers must certify their engines with respect to the 
exhaust emission standards in this part. Manufacturers of engines, 
equipment, or fuel-system components may need to certify their products 
with respect to evaporative emission standards as described in 40 CFR 
1060.1 and 1060.601. The following general requirements apply for 
obtaining a certificate of conformity:
    (a) You must send us a separate application for a certificate of 
conformity for each engine family. A certificate of conformity is valid 
starting with the indicated effective date but it is not valid for any 
production after December 31 of the model year for which it is issued. 
No certificate will be issued after December 31 of the model year.
    (b) The application must contain all the information required by 
this part and must not include false or incomplete statements or 
information (see Sec.  1045.255).
    (c) We may ask you to include less information than we specify in 
this subpart as long as you maintain all the information required by 
Sec.  1045.250.
    (d) You must use good engineering judgment for all decisions 
related to your application (see 40 CFR 1068.5).
    (e) An authorized representative of your company must approve and 
sign the application.
    (f) See Sec.  1045.255 for provisions describing how we will 
process your application.
    (g) We may require you to deliver your test engines to a facility 
we designate for our testing (see Sec.  1045.235(c)).


Sec.  1045.205  What must I include in my application?

    This section specifies the information that must be in your 
application, unless we ask you to include less information under Sec.  
1045.201(c). We may require you to provide additional information to 
evaluate your application.
    (a) Describe the engine family's specifications and other basic 
parameters of the engine's design and emission controls. List the fuel 
type on which your engines are designed to operate (for example, all-
season gasoline). List each distinguishable engine configuration in the 
engine family. For each engine configuration, list the maximum engine 
power and the range of values for maximum engine power resulting from 
production tolerances, as described in Sec.  1045.140. Describe why 
your engines qualify as high-performance engines, if applicable.
    (b) Explain how the emission control systems operate. Describe in 
detail all system components for controlling exhaust emissions, 
including all auxiliary emission control devices (AECDs) and all fuel-
system components you will install on any production or test engine. 
Identify the part number of each component you describe. For this 
paragraph (b), treat as separate AECDs any devices that modulate or 
activate differently from each other. Include sufficient detail to 
allow us to evaluate whether the AECDs are consistent with the defeat 
device prohibition of Sec.  1045.115.
    (c) Explain how the engine diagnostic system works, if applicable, 
describing especially the engine conditions (with the corresponding 
diagnostic trouble codes) that cause the malfunction indicator to go 
on. Propose the conditions under which the diagnostic system should 
disregard trouble codes, as described in Sec.  1045.110(f).
    (d) Describe the engines you selected for testing and the reasons 
for selecting them.
    (e) Describe the test equipment and procedures that you used, 
including any special or alternate test procedures you used.
    (f) Describe how you operated the emission-data engine before 
testing, including the duty cycle and the number of engine operating 
hours used to stabilize emission levels. Explain why you selected the 
method of service accumulation. Describe any scheduled maintenance you 
did.
    (g) List the specifications of the test fuel to show that it falls 
within the required ranges we specify in 40 CFR part 1065.
    (h) Identify the engine family's useful life.
    (i) Include the maintenance and warranty instructions you will give 
to the ultimate purchaser of each new engine (see Sec. Sec.  1045.120 
and 1045.125).
    (j) Include the emission-related installation instructions you will 
provide if someone else installs your engines in a vessel (see Sec.  
1045.130).
    (k) Describe your emission control information label (see Sec.  
1045.135).
    (l) Identify the emission standards or FELs to which you are 
certifying engines in the engine family.
    (m) Identify the engine family's deterioration factors and describe 
how you developed them (see Sec.  1045.245). Present any emission test 
data you used for this.
    (n) State that you operated your emission-data engines as described 
in the application (including the test procedures, test parameters, and 
test fuels) to show you meet the requirements of this part.
    (o) Present emission data to show that you meet emission standards, 
as follows:
    (1) Present emission data by mode for hydrocarbons (such as THC or 
THCE, as applicable), NOX, and CO on an emission-data engine 
to show your engines meet the duty-cycle emission standards we specify 
in Sec. Sec.  1045.103(a) and 1045.105(a). Show weighted emission 
figures before and after applying deterioration factors for each 
engine. If we specify more than one grade of any fuel type (for 
example, low-temperature and all-season gasoline), you need to submit 
test data only for one grade, unless the regulations of this part 
specify otherwise for your engine.
    (2) Note that Sec. Sec.  1045.235 and 1045.245 allow you to submit 
an application in certain cases without new emission data.
    (p) State that all the engines in the engine family comply with the 
not-to-exceed emission standards we specify in subpart B of this part 
for all normal operation and use when tested as specified in Sec.  
1045.515, if applicable. Describe any relevant testing, engineering 
analysis, or other information in sufficient detail to support your 
statement.
    (q) Report all test results, including those from invalid tests, 
whether or not they were conducted according to the test procedures of 
subpart F of this part. If you measure CO2, report those emission 
levels (in g/kW-hr). We may ask you to send other information to 
confirm that your tests were valid under the requirements of this part 
and 40 CFR parts 1060 and 1065.
    (r) Describe all adjustable operating parameters (see Sec.  
1045.115(e)), including production tolerances. Include the following in 
your description of each parameter:
    (1) The nominal or recommended setting.

[[Page 59206]]

    (2) The intended physically adjustable range.
    (3) The limits or stops used to establish adjustable ranges.
    (4) Information showing why the limits, stops, or other means of 
inhibiting adjustment are effective in preventing adjustment of 
parameters on in-use engines to settings outside your intended 
physically adjustable ranges.
    (s) Describe how your engines comply with emission standards at 
varying atmospheric pressures. Include a description of altitude kits 
you design to comply with the requirements of Sec.  1045.115(d). 
Identify the part number of each component you describe. Identify the 
altitude range for which you expect proper engine performance and 
emission control with and without the altitude kit. State that your 
engines will comply with applicable emission standards throughout the 
useful life with the altitude kit installed according to your 
instructions. Describe any relevant testing, engineering analysis, or 
other information in sufficient detail to support your statement. In 
addition, describe your plan for making information and parts available 
such that you would reasonably expect that altitude kits would be 
widely used in the high-altitude counties specified in 40 CFR part 
1068, Appendix III. For example, engine owners should have ready access 
to information describing when an altitude kit is needed and how to 
obtain this service. Similarly, parts and service information should be 
available to qualified service facilities in addition to authorized 
service centers if that is needed for owners to have such altitude kits 
installed locally.
    (t) Provide the information needed to read, record, and interpret 
all the information broadcast by an engine's onboard computers and 
electronic control units. State that, upon request, you will give us 
any hardware, software, or tools we would need to do this. If you 
broadcast a surrogate parameter for torque values, you must provide us 
what we need to convert these into torque units. You may reference any 
appropriate publicly released standards that define conventions for 
these messages and parameters. Format your information consistent with 
publicly released standards.
    (u) Confirm that your emission-related installation instructions 
specify how to ensure that sampling of exhaust emissions will be 
possible after engines are installed in vessels and placed in service. 
Show how to sample exhaust emissions in a way that prevents diluting 
the exhaust sample with ambient air.
    (v) Unconditionally certify that all the engines in the engine 
family comply with the requirements of this part, other referenced 
parts of the CFR, and the Clean Air Act.
    (w) Include good-faith estimates of U.S.-directed production 
volumes. Include a justification for the estimated production volumes 
if they are substantially different than actual production volumes in 
earlier years for similar models.
    (x) Include the information required by other subparts of this 
part. For example, include the information required by Sec.  1045.725 
if you participate in the ABT program.
    (y) Include other applicable information, such as information 
specified in this part or 40 CFR part 1068 related to requests for 
exemptions.
    (z) Name an agent for service located in the United States. Service 
on this agent constitutes service on you or any of your officers or 
employees for any action by EPA or otherwise by the United States 
related to the requirements of this part.
    (aa) For imported engines, identify the following:
    (1) The port(s) at which you have imported engines over the 
previous 12 months.
    (2) The names and addresses of the agents you have authorized to 
import your engines.
    (3) The location of a test facility in the United States where you 
can test your engines if we select them for testing under a selective 
enforcement audit, as specified in 40 CFR part 1068, subpart E.


Sec.  1045.210  May I get preliminary approval before I complete my 
application?

    If you send us information before you finish the application, we 
will review it and make any appropriate determinations, especially for 
questions related to engine family definitions, auxiliary emission 
control devices, deterioration factors, testing for service 
accumulation, maintenance, and compliance with not-to-exceed standards. 
Decisions made under this section are considered to be preliminary 
approval, subject to final review and approval. We will generally not 
reverse a decision where we have given you preliminary approval, unless 
we find new information supporting a different decision. If you request 
preliminary approval related to the upcoming model year or the model 
year after that, we will make the appropriate determinations as soon as 
practicable. We will generally not provide preliminary approval related 
to a future model year more than two years ahead of time.


Sec.  1045.220  How do I amend the maintenance instructions in my 
application?

    You may amend your emission-related maintenance instructions after 
you submit your application for certification as long as the amended 
instructions remain consistent with the provisions of Sec.  1045.125. 
You must send the Designated Compliance Officer a written request to 
amend your application for certification for an engine family if you 
want to change the emission-related maintenance instructions in a way 
that could affect emissions. In your request, describe the proposed 
changes to the maintenance instructions. If operators follow the 
original maintenance instructions rather than the newly specified 
maintenance, this does not allow you to disqualify those engines from 
in-use testing or deny a warranty claim.
    (a) If you are decreasing, replacing, or eliminating any specified 
maintenance, you may distribute the new maintenance instructions to 
your customers 30 days after we receive your request, unless we 
disapprove your request. This would generally include replacing one 
maintenance step with another. We may approve a shorter time or waive 
this requirement.
    (b) If your requested change would not decrease the specified 
maintenance, you may distribute the new maintenance instructions 
anytime after you send your request.
    (c) You need not request approval if you are making only minor 
corrections (such as correcting typographical mistakes), clarifying 
your maintenance instructions, or changing instructions for maintenance 
unrelated to emission control. We may ask you to send us copies of 
maintenance instructions revised under this paragraph (c).


Sec.  1045.225  How do I amend my application for certification to 
include new or modified engines or change an FEL?

    Before we issue you a certificate of conformity, you may amend your 
application to include new or modified engine configurations, subject 
to the provisions of this section. After we have issued your 
certificate of conformity, you may send us an amended application 
requesting that we include new or modified engine configurations within 
the scope of the certificate, subject to the provisions of this 
section. You must amend your application if any changes occur with 
respect to any information included in your application.
    (a) You must amend your application before you take any of the 
following actions:

[[Page 59207]]

    (1) Add an engine configuration to an engine family. In this case, 
the engine configuration added must be consistent with other engine 
configurations in the engine family with respect to the criteria listed 
in Sec.  1045.230.
    (2) Change an engine configuration already included in an engine 
family in a way that may affect emissions, or change any of the 
components you described in your application for certification. This 
includes production and design changes that may affect emissions any 
time during the engine's lifetime.
    (3) Modify an FEL for an engine family as described in paragraph 
(f) of this section.
    (b) To amend your application for certification, send the 
Designated Compliance Officer the following information:
    (1) Describe in detail the addition or change in the engine model 
or configuration you intend to make.
    (2) Include engineering evaluations or data showing that the 
amended engine family complies with all applicable requirements. You 
may do this by showing that the original emission-data engine is still 
appropriate for showing that the amended family complies with all 
applicable requirements.
    (3) If the original emission-data engine for the engine family is 
not appropriate to show compliance for the new or modified engine 
configuration, include new test data showing that the new or modified 
engine configuration meets the requirements of this part.
    (c) We may ask for more test data or engineering evaluations. You 
must give us these within 30 days after we request them.
    (d) For engine families already covered by a certificate of 
conformity, we will determine whether the existing certificate of 
conformity covers your newly added or modified engine. You may ask for 
a hearing if we deny your request (see Sec.  1045.820).
    (e) For engine families already covered by a certificate of 
conformity, you may start producing the new or modified engine 
configuration anytime after you send us your amended application and 
before we make a decision under paragraph (d) of this section. However, 
if we determine that the affected engines do not meet applicable 
requirements, we will notify you to cease production of the engines and 
may require you to recall the engines at no expense to the owner. 
Choosing to produce engines under this paragraph (e) is deemed to be 
consent to recall all engines that we determine do not meet applicable 
emission standards or other requirements and to remedy the 
nonconformity at no expense to the owner. If you do not provide 
information required under paragraph (c) of this section within 30 days 
after we request it, you must stop producing the new or modified 
engines.
    (f) You may ask us to approve a change to your FEL in certain cases 
after the start of production. The changed FEL may not apply to engines 
you have already introduced into U.S. commerce, except as described in 
this paragraph (f). If we approve a changed FEL after the start of 
production, you must include the new FEL on the emission control 
information label for all engines produced after the change. You may 
ask us to approve a change to your FEL in the following cases:
    (1) You may ask to raise your FEL for your engine family at any 
time. In your request, you must show that you will still be able to 
meet the emission standards as specified in subparts B and H of this 
part. If you amend your application by submitting new test data to 
include a newly added or modified engine, as described in paragraph 
(b)(3) of this section, use the appropriate FELs with corresponding 
production volumes to calculate emission credits for the model year, as 
described in subpart H of this part. In all other circumstances, you 
must use the higher FEL for the entire family to calculate emission 
credits under subpart H of this part.
    (2) You may ask to lower the FEL for your engine family only if you 
have test data from production engines showing that emissions are below 
the proposed lower FEL. The lower FEL applies only to engines you 
produce after we approve the new FEL. Use the appropriate FELs with 
corresponding production volumes to calculate emission credits for the 
model year, as described in subpart H of this part.


Sec.  1045.230  How do I select engine families?

    (a) For purposes of certification, divide your product line into 
families of engines that are expected to have similar emission 
characteristics throughout their useful life as described in this 
section. Your engine family is limited to a single model year.
    (b) Group engines into the same engine family if they are the same 
in all the following aspects:
    (1) The combustion cycle and fuel. See paragraph (e) of this 
section for special provisions that apply for dual-fuel engines.
    (2) Method of air aspiration (for example, turbocharged vs. 
naturally aspirated).
    (3) The number, location, volume, and composition of catalytic 
converters.
    (4) The number, arrangement, and approximate bore diameter of 
cylinders.
    (5) Method of control for engine operation, other than governing 
(i.e., mechanical or electronic).
    (6) The numerical level of the applicable emission standards. For 
example, an engine family may not include engines certified to 
different family emission limits, though you may change family emission 
limits without recertifying as specified in Sec.  1045.225.
    (c) You may subdivide a group of engines that is identical under 
paragraph (b) of this section into different engine families if you 
show the expected emission characteristics are different during the 
useful life.
    (d) You may group engines that are not identical with respect to 
the things listed in paragraph (b) of this section into the same engine 
family, as follows:
    (1) In unusual circumstances, you may group such engines into the 
same engine family if you show that their emission characteristics 
during the useful life will be similar.
    (2) If you are a small-volume engine manufacturer, you may group 
all your high-performance engines into a single engine family.
    (3) The provisions of this paragraph (e) do not exempt any engines 
from meeting all the emission standards and requirements in subpart B 
of this part.
    (e) You may certify dual-fuel or flexible-fuel engines in a single 
engine family. You may include dedicated-fuel versions of this same 
engine model in the same engine family, as long as they are identical 
to the engine configuration with respect to that fuel type for the 
dual-fuel or flexible-fuel version of the engine. For example, if you 
produce an engine that can alternately run on gasoline and natural gas, 
you can include the gasoline-only and natural gas-only versions of the 
engine in the same engine family as the dual-fuel engine if engine 
operation on each fuel type is identical with or without installation 
of components for operating on the other fuel.


Sec.  1045.235  What emission testing must I perform for my application 
for a certificate of conformity?

    This section describes the emission testing you must perform to 
show compliance with the emission standards in Sec. Sec.  1045.103 and 
1045.105. See Sec.  1045.205(p) regarding emission testing related to 
the not-to-exceed standards. See Sec. Sec.  1045.240 and 1045.245 and 
40 CFR part 1065, subpart E, regarding service accumulation before 
emission testing.
    (a) Select an emission-data engine from each engine family for 
testing as

[[Page 59208]]

described in 40 CFR 1065.401. Select the engine with a configuration 
that is most likely to exceed the exhaust emission standards, using 
good engineering judgment. Consider the emission levels of all exhaust 
constituents over the full useful life of the engine when operated in a 
vessel.
    (b) Test your emission-data engines using the procedures and 
equipment specified in subpart F of this part. In the case of dual-fuel 
engines, measure emissions when operating with each type of fuel for 
which you intend to certify the engine. In the case of flexible-fuel 
engines, measure emissions when operating with the fuel mixture that is 
most likely to cause the engine to exceed the applicable 
HC+NOX emission standard, though you may ask us to exclude 
fuel mixtures that you can show are not likely to occur in use.
    (c) We may measure emissions from any of your emission-data engines 
or other engines from the engine family, as follows:
    (1) We may decide to do the testing at your plant or any other 
facility. If we do this, you must deliver the engine to a test facility 
we designate. The engine you provide must include appropriate 
manifolds, aftertreatment devices, electronic control units, and other 
emission-related components not normally attached directly to the 
engine block. If we do the testing at your plant, you must schedule it 
as soon as possible and make available the instruments, personnel, and 
equipment we need.
    (2) If we measure emissions on one of your engines, the results of 
that testing become the official emission results for the engine. 
Unless we later invalidate these data, we may decide not to consider 
your data in determining if your engine family meets applicable 
requirements.
    (3) We may set the adjustable parameters of your engine to any 
point within the physically adjustable ranges (see Sec.  1045.115(e)).
    (4) We may calibrate your engine within normal production 
tolerances for anything we do not consider an adjustable parameter. For 
example, this would apply where we determine that an engine parameter 
is not an adjustable parameter (as defined in Sec.  1045.801) but that 
it is subject to production variability.
    (d) You may ask to use carryover emission data from a previous 
model year instead of doing new tests, but only if all the following 
are true:
    (1) The engine family from the previous model year differs from the 
current engine family only with respect to model year or other 
characteristics unrelated to emissions.
    (2) The emission-data engine from the previous model year remains 
the appropriate emission-data engine under paragraph (b) of this 
section.
    (3) The data show that the emission-data engine would meet all the 
requirements that apply to the engine family covered by the application 
for certification. For engines originally tested under the provisions 
of 40 CFR part 91, you may consider those test procedures to be 
equivalent to the procedures we specify in subpart F of this part.
    (e) We may require you to test another engine of the same or 
different configuration in addition to the engine(s) tested under 
paragraph (b) of this section.
    (f) If you use an alternate test procedure under 40 CFR 1065.10 and 
later testing shows that such testing does not produce results that are 
equivalent to the procedures specified in subpart F of this part, we 
may reject data you generated using the alternate procedure.


Sec.  1045.240  How do I demonstrate that my engine family complies 
with exhaust emission standards?

    (a) For purposes of certification, your engine family is considered 
in compliance with the duty-cycle emission standards in Sec.  1045.103 
or Sec.  1045.105 if all emission-data engines representing that family 
have test results showing deteriorated emission levels at or below 
these standards. This includes all test points over the course of the 
durability demonstration. Note that your FELs are considered to be the 
applicable emission standards with which you must comply if you 
participate in the ABT program in subpart H of this part.
    (b) Your engine family is deemed not to comply if any emission-data 
engine representing that family has test results showing a deteriorated 
emission level for any pollutant that is above an applicable emission 
standard. Similarly, your engine family is deemed not to comply if any 
emission-data engine representing that family has test results showing 
any emission level above the applicable not-to-exceed emission standard 
for any pollutant. The provisions of this paragraph (b) apply for all 
test points over the course of the durability demonstration.
    (c) Determine a deterioration factor to compare emission levels 
from the emission-data engine with the applicable emission standards. 
Section 1045.245 specifies how to test engines to develop deterioration 
factors that represent the expected deterioration in emissions over 
your engines' full useful life. Your deterioration factors must take 
into account any available data from in-use testing with similar 
engines. You may ask us to give you an assigned deterioration factor 
for your high-performance engines. Small-volume engine manufacturers 
may use assigned deterioration factors that we establish for any engine 
families certified under this part. Apply deterioration factors as 
follows:
    (1) Additive deterioration factor for exhaust emissions. For 
engines that do not use aftertreatment technology, use an additive 
deterioration factor for exhaust emissions. An additive deterioration 
factor is the difference between exhaust emissions at the end of useful 
life and exhaust emissions at the low-hour test point. Adjust the 
official emission results for each tested engine at the selected test 
point by adding the factor to the measured emissions. If the 
deterioration factor is less than zero, use zero. Additive 
deterioration factors must be specified to one more decimal place than 
the emission standard.
    (2) Multiplicative deterioration factor for exhaust emissions. For 
engines that use aftertreatment technology, such as catalytic 
converters, use a multiplicative deterioration factor for exhaust 
emissions. A multiplicative deterioration factor is the ratio of 
exhaust emissions at the end of useful life to exhaust emissions at the 
low-hour test point. Adjust the official emission results for each 
tested engine at the selected test point by multiplying the measured 
emissions by the deterioration factor. If the deterioration factor is 
less than one, use one. Multiplicative deterioration factors must be 
specified to one more significant figure than the emission standard.
    (d) Collect emission data using measurements to one more decimal 
place than the applicable standard. Apply the deterioration factor to 
the official emission result, as described in paragraph (c) of this 
section, then round the adjusted figure to the same number of decimal 
places as the emission standard. Compare the rounded emission levels to 
the emission standard for each emission-data engine. In the case of 
HC+NOX standards, add the official emission results and 
apply the deterioration factor to the sum of the pollutants before 
rounding. However, if your deterioration factors are based on emission 
measurements that do not cover the vehicle's full useful life, apply 
the deterioration factor to each pollutant and then add the results 
before rounding.

[[Page 59209]]

Sec.  1045.245  How do I determine deterioration factors from exhaust 
durability testing?

    This section describes how to determine deterioration factors, 
either with pre-existing test data or with new emission measurements.
    (a) You may ask us to approve deterioration factors for an engine 
family based on emission measurements from similar engines if you have 
already given us these data for certifying the other engines in the 
same or earlier model years. Use good engineering judgment to decide 
whether the two engines are similar.
    (b) If you are unable to determine deterioration factors for an 
engine family under paragraph (a) of this section, select engines, 
subsystems, or components for testing. Determine deterioration factors 
based on service accumulation and related testing. Include 
consideration of wear and other causes of deterioration expected under 
typical consumer use, including exposure to saltwater if applicable. 
Determine deterioration factors as follows:
    (1) You must measure emissions from the emission-data engine at a 
low-hour test point and the end of the useful life. You may also test 
at evenly spaced intermediate points. Collect emission data using 
measurements to one more decimal place than the emission standard.
    (2) Operate the engine over a representative duty cycle for a 
period at least as long as the useful life (in hours). You may operate 
the engine continuously. You may also use an engine installed in a 
vessel to accumulate service hours instead of running the engine only 
in the laboratory.
    (3) In the case of dual-fuel or flexible-fuel engines, you may 
accumulate service hours on a single emission-data engine using the 
type or mixture of fuel expected to have the highest combustion and 
exhaust temperatures. For dual-fuel engines, you must measure emissions 
on each fuel type at each test point.
    (4) You may perform maintenance on emission-data engines as 
described in Sec.  1045.125 and 40 CFR part 1065, subpart E.
    (5) If you measure emissions at only two points to calculate your 
deterioration factor, base your calculations on a linear relationship 
connecting these two data points for each pollutant. If you measure 
emissions at three or more points, use a linear least-squares fit of 
your test data for each pollutant to calculate your deterioration 
factor.
    (6) If you test more than one engine to establish deterioration 
factors, calculate the deterioration factor for each engine and average 
the deterioration factors from all the engines before rounding.
    (7) Use good engineering judgment for all aspects of the effort to 
establish deterioration factors under this paragraph (b).
    (8) You may use other testing methods to determine deterioration 
factors, consistent with good engineering judgment, as long as we 
approve those methods in advance.
    (c) Include the following information in your application for 
certification:
    (1) If you determine your deterioration factors based on test data 
from a different engine family, explain why this is appropriate and 
include all the emission measurements on which you base the 
deterioration factor.
    (2) If you do testing to determine deterioration factors, describe 
the form and extent of service accumulation, including the method you 
use to accumulate hours.


Sec.  1045.250  What records must I keep and what reports must I send 
to EPA?

    (a) Send the Designated Compliance Officer information related to 
your U.S.-directed production volumes as described in Sec.  1045.345. 
In addition, within 45 days after the end of the model year, you must 
send us a report describing information about engines you produced 
during the model year as follows:
    (1) State the total production volume for each engine family that 
is not subject to reporting under Sec.  1045.345.
    (2) State the total production volume for any engine family for 
which you produce engines after completing the reports required in 
Sec.  1045.345.
    (3) For production volumes you report under this paragraph (a), 
identify whether or not the figures include California sales. Include a 
separate count of production volumes for California sales if those 
figures are available.
    (b) Organize and maintain the following records:
    (1) A copy of all applications and any summary information you send 
us.
    (2) Any of the information we specify in Sec.  1045.205 that you 
were not required to include in your application.
    (3) A detailed history of each emission-data engine. For each 
engine, describe all of the following:
    (i) The emission-data engine's construction, including its origin 
and buildup, steps you took to ensure that it represents production 
engines, any components you built specially for it, and all the 
components you include in your application for certification.
    (ii) How you accumulated engine operating hours (service 
accumulation), including the dates and the number of hours accumulated.
    (iii) All maintenance, including modifications, parts changes, and 
other service, and the dates and reasons for the maintenance.
    (iv) All your emission tests, including documentation on routine 
and standard tests, as specified in part 40 CFR part 1065, and the date 
and purpose of each test.
    (v) All tests to diagnose engine or emission control performance, 
giving the date and time of each and the reasons for the test.
    (vi) Any other significant events.
    (4) Production figures for each engine family divided by assembly 
plant.
    (5) Keep a list of engine identification numbers for all the 
engines you produce under each certificate of conformity.
    (c) Keep data from routine emission tests (such as test cell 
temperatures and relative humidity readings) for one year after we 
issue the associated certificate of conformity. Keep all other 
information specified in this section for eight years after we issue 
your certificate.
    (d) Store these records in any format and on any media as long as 
you can promptly send us organized, written records in English if we 
ask for them. You must keep these records readily available. We may 
review them at any time.


Sec.  1045.255  What decisions may EPA make regarding my certificate of 
conformity?

    (a) If we determine your application is complete and shows that the 
engine family meets all the requirements of this part and the Clean Air 
Act, we will issue a certificate of conformity for your engine family 
for that model year. We may make the approval subject to additional 
conditions.
    (b) We may deny your application for certification if we determine 
that your engine family fails to comply with emission standards or 
other requirements of this part or the Clean Air Act. We will base our 
decision on all available information. If we deny your application, we 
will explain why in writing.
    (c) In addition, we may deny your application or suspend or revoke 
your certificate if you do any of the following:
    (1) Refuse to comply with any testing or reporting requirements.
    (2) Submit false or incomplete information (paragraph (e) of this 
section applies if this is fraudulent).

[[Page 59210]]

    (3) Render inaccurate any test data.
    (4) Deny us from completing authorized activities (see 40 CFR 
1068.20). This includes a failure to provide reasonable assistance.
    (5) Produce engines for importation into the United States at a 
location where local law prohibits us from carrying out authorized 
activities.
    (6) Fail to supply requested information or amend your application 
to include all engines being produced.
    (7) Take any action that otherwise circumvents the intent of the 
Clean Air Act or this part.
    (d) We may void your certificate if you do not keep the records we 
require or do not give us information as required under this part or 
the Clean Air Act.
    (e) We may void your certificate if we find that you intentionally 
submitted false or incomplete information.
    (f) If we deny your application or suspend, revoke, or void your 
certificate, you may ask for a hearing (see Sec.  1045.820).

Subpart D--Testing Production-line Engines


Sec.  1045.301  When must I test my production-line engines?

    (a) If you produce engines that are subject to the requirements of 
this part, you must test them as described in this subpart, except as 
follows:
    (1) Small-volume engine manufacturers may omit testing under this 
subpart.
    (2) We may exempt engine families with a projected U.S.-directed 
production volume below 150 units from routine testing under this 
subpart. Request this exemption in your application for certification 
and include your basis for projecting a production volume below 150 
units. We will approve your request if we agree that you have made 
good-faith estimates of your production volumes. Your exemption is 
approved when we grant your certificate. You must promptly notify us if 
your actual production exceeds 150 units during the model year. If you 
exceed the production limit or if there is evidence of a nonconformity, 
we may require you to test production-line engines under this subpart, 
or under 40 CFR part 1068, subpart E, even if we have approved an 
exemption under this paragraph (a)(2).
    (3) The requirements of this subpart do not apply to sterndrive/
inboard engines.
    (b) We may suspend or revoke your certificate of conformity for 
certain engine families if your production-line engines do not meet the 
requirements of this part or you do not fulfill your obligations under 
this subpart (see Sec. Sec.  1045.325 and 1045.340).
    (c) Other regulatory provisions authorize us to suspend, revoke, or 
void your certificate of conformity, or order recalls for engine 
families, without regard to whether they have passed these production-
line testing requirements. The requirements of this subpart do not 
affect our ability to do selective enforcement audits, as described in 
40 CFR part 1068. Individual engines in families that pass these 
production-line testing requirements must also conform to all 
applicable regulations of this part and 40 CFR part 1068.
    (d) You may use alternate programs for testing production-line 
engines in the following circumstances:
    (1) You may use analyzers and sampling systems that meet the field-
testing requirements of 40 CFR part 1065, subpart J, but not the 
otherwise applicable requirements in 40 CFR part 1065 for laboratory 
testing, to demonstrate compliance with duty-cycle emission standards 
if you double the minimum sampling rate specified in Sec.  1045.310(b). 
Use measured test results to determine whether engines comply with 
applicable standards without applying a measurement allowance. This 
alternate program does not require prior approval but we may disallow 
use of this option where we determine that use of field-grade equipment 
would prevent you from being able to demonstrate that your engines are 
being produced to conform to the specifications in your application for 
certification.
    (2) You may ask to use another alternate program for testing 
production-line engines. In your request, you must show us that the 
alternate program gives equal assurance that your products meet the 
requirements of this part. We may waive some or all of this subpart's 
requirements if we approve your alternate approach. For example, in 
certain circumstances you may be able to give us equal assurance that 
your products meet the requirements of this part by using less rigorous 
measurement methods if you offset that by increasing the number of test 
engines.
    (e) If you certify an engine family with carryover emission data, 
as described in Sec.  1045.235(d), and these equivalent engine families 
consistently pass the production-line testing requirements over the 
preceding two-year period, you may ask for a reduced testing rate for 
further production-line testing for that family. The minimum testing 
rate is one engine per engine family. If we reduce your testing rate, 
we may limit our approval to any number of model years. In determining 
whether to approve your request, we may consider the number of engines 
that have failed the emission tests.
    (f) We may ask you to make a reasonable number of production-line 
engines available for a reasonable time so we can test or inspect them 
for compliance with the requirements of this part.


Sec.  1045.305  How must I prepare and test my production-line engines?

    This section describes how to prepare and test production-line 
engines. You must assemble the test engine in a way that represents the 
assembly procedures for other engines in the engine family. You must 
ask us to approve any deviations from your normal assembly procedures 
for other production engines in the engine family.
    (a) Test procedures. Test your production-line engines using the 
applicable testing procedures in subpart F of this part to show you 
meet the duty-cycle emission standards in subpart B of this part. The 
not-to-exceed standards apply for this testing, but you need not do 
additional testing to show that production-line engines meet the not-
to-exceed standards.
    (b) Modifying a test engine. Once an engine is selected for testing 
(see Sec.  1045.310), you may adjust, repair, prepare, or modify it or 
check its emissions only if one of the following is true:
    (1) You document the need for doing so in your procedures for 
assembling and inspecting all your production engines and make the 
action routine for all the engines in the engine family.
    (2) This subpart otherwise specifically allows your action.
    (3) We approve your action in advance.
    (c) Engine malfunction. If an engine malfunction prevents further 
emission testing, ask us to approve your decision to either repair the 
engine or delete it from the test sequence.
    (d) Setting adjustable parameters. Before any test, we may require 
you to adjust any adjustable parameter to any setting within its 
physically adjustable range.
    (1) We may require you to adjust idle speed outside the physically 
adjustable range as needed, but only until the engine has stabilized 
emission levels (see paragraph (e) of this section). We may ask you for 
information needed to establish an alternate minimum idle speed.
    (2) We may specify adjustments within the physically adjustable 
range

[[Page 59211]]

by considering their effect on emission levels. We may also consider 
how likely it is that someone will make such an adjustment with in-use 
engines.
    (e) Stabilizing emission levels. You may operate the engine to 
stabilize the emission levels before you test production-line engines. 
Using good engineering judgment, operate your engines in a way that 
represents the way production engines will be used. You may operate 
each engine for no more than the greater of two periods:
    (1) 12 hours.
    (2) The number of hours you operated your emission-data engine for 
certifying the engine family (see 40 CFR part 1065, subpart E, or the 
applicable regulations governing how you should prepare your test 
engine).
    (f) Damage during shipment. If shipping an engine to a remote 
facility for production-line testing makes necessary an adjustment or 
repair, you must wait until after the initial emission test to do this 
work. We may waive this requirement if the test would be impossible or 
unsafe or if it would permanently damage the engine. Report to us in 
your written report under Sec.  1045.345 all adjustments or repairs you 
make on test engines before each test.
    (g) Retesting after invalid tests. You may retest an engine if you 
determine an emission test is invalid under subpart F of this part. 
Explain in your written report reasons for invalidating any test and 
the emission results from all tests. If we determine that you 
improperly invalidated a test, we may require you to ask for our 
approval for future testing before substituting results of the new 
tests for invalid ones.


Sec.  1045.310  How must I select engines for production-line testing?

    (a) Test engines from each engine family as described in this 
section based on test periods, as follows:
    (1) For engine families with projected U.S.-directed production 
volume of at least 1,600, the test periods are consecutive quarters (3 
months). However, if your annual production period is less than 12 
months long, you may take the following alternative approach to define 
quarterly test periods:
    (i) If your annual production period is 120 days or less, the whole 
model year constitutes a single test period.
    (ii) If your annual production period is 121 to 210 days, divide 
the annual production period evenly into two test periods.
    (iii) If your annual production period is 211 to 300 days, divide 
the annual production period evenly into three test periods.
    (iv) If your annual production period is 301 days or longer, divide 
the annual production period evenly into four test periods.
    (2) For engine families with projected U.S.-directed production 
volume below 1,600, the whole model year constitutes a single test 
period.
    (b) Early in each test period, randomly select and test an engine 
from the end of the assembly line for each engine family.
    (1) In the first test period for newly certified engines, randomly 
select and test one more engine. Then, calculate the required sample 
size for the model year as described in paragraph (c) of this section.
    (2) In later test periods of the same model year, combine the new 
test result with all previous testing in the model year. Then, 
calculate the required sample size for the model year as described in 
paragraph (c) of this section.
    (3) In the first test period for engine families relying on 
previously submitted test data, combine the new test result with the 
last test result from the previous model year. Then, calculate the 
required sample size for the model year as described in paragraph (c) 
of this section. Use the last test result from the previous model year 
only for this first calculation. For all subsequent calculations, use 
only results from the current model year.
    (c) Calculate the required sample size for each engine family. 
Separately calculate this figure for HC+NOX and CO. The 
required sample size is the greater of these calculated values. Use the 
following equation:
[GRAPHIC] [TIFF OMITTED] TR08OC08.089

Where:

N = Required sample size for the model year.
t95 = 95% confidence coefficient, which depends on the 
number of tests completed, n, as specified in the table in paragraph 
(c)(1) of this section. It defines 95% confidence intervals for a 
one-tail distribution.
[sigma] = Test sample standard deviation (see paragraph (c)(2) of 
this section).
x = Mean of emission test results of the sample.
STD = Emission standard (or family emission limit, if applicable).

    (1) Determine the 95% confidence coefficient, t95, from 
the following table:

------------------------------------------------------------------------
     n           t95           n          t95          n          t95
------------------------------------------------------------------------
        2         6.31          12        1.80          22        1.72
        3         2.92          13        1.78          23        1.72
        4         2.35          14        1.77          24        1.71
        5         2.13          15        1.76          25        1.71
        6         2.02          16        1.75          26        1.71
        7         1.94          17        1.75          27        1.71
        8         1.90          18        1.74          28        1.70
        9         1.86          19        1.73          29        1.70
       10         1.83          20        1.73         30+        1.70
       11         1.81          21        1.72    ..........  ..........
------------------------------------------------------------------------

    (2) Calculate the standard deviation, [sigma], for the test sample 
using the following formula:
[GRAPHIC] [TIFF OMITTED] TR08OC08.090

Where:

Xi = Emission test result for an individual engine.
n = The number of tests completed in an engine family.

    (d) Use final deteriorated test results to calculate the variables 
in the equations in paragraph (c) of this section (see Sec.  
1045.315(a)(2)).
    (e) After each new test, recalculate the required sample size using 
the updated mean values, standard deviations, and the appropriate 95-
percent confidence coefficient.
    (f) Distribute the remaining engine tests evenly throughout the 
rest of the year. You may need to adjust your schedule for selecting 
engines if the required sample size changes. If your scheduled 
quarterly testing for the remainder of the model year is sufficient

[[Page 59212]]

to meet the calculated sample size, you may wait until the next quarter 
to do additional testing. Continue to randomly select engines from each 
engine family.
    (g) Continue testing until one of the following things happens:
    (1) After completing the minimum number of tests required in 
paragraph (b) of this section, the number of tests completed in an 
engine family, n, is greater than the required sample size, N, and the 
sample mean, x, is less than or equal to the emission standard. For 
example, if N = 5.1 after the fifth test, the sample-size calculation 
does not allow you to stop testing.
    (2) The engine family does not comply according to Sec.  1045.315.
    (3) You test 30 engines from the engine family.
    (4) You test one percent of your projected annual U.S.-directed 
production volume for the engine family, rounded to the nearest whole 
number. Do not count an engine under this paragraph (g)(4) if it fails 
to meet an applicable emission standard.
    (5) You choose to declare that the engine family does not comply 
with the requirements of this subpart.
    (h) If the sample-size calculation allows you to stop testing for 
one pollutant but not another, you must continue measuring emission 
levels of all pollutants for any additional tests required under this 
section. However, you need not continue making the calculations 
specified in this subpart for the pollutant for which testing is not 
required. This paragraph (h) does not affect the number of tests 
required under this section, the required calculations in Sec.  
1045.315, or the remedial steps required under Sec.  1045.320.
    (i) You may elect to test more randomly chosen engines than we 
require under this section. Include these engines in the sample-size 
calculations.


Sec.  1045.315  How do I know when my engine family fails the 
production-line testing requirements?

    This section describes the pass-fail criteria for the production-
line testing requirements. We apply these criteria on an engine-family 
basis. See Sec.  1045.320 for the requirements that apply to individual 
engines that fail a production-line test.
    (a) Calculate your test results as follows:
    (1) Initial and final test results. Calculate and round the test 
results for each engine. If you do several tests on an engine, 
calculate the initial results for each test, then add all the test 
results together and divide by the number of tests. Round this final 
calculated value for the final test results on that engine.
    (2) Final deteriorated test results. Apply the deterioration factor 
for the engine family to the final test results (see Sec.  
1045.240(c)).
    (3) Round deteriorated test results. Round the results to the 
number of decimal places in the emission standard expressed to one more 
decimal place.
    (b) Construct the following CumSum Equation for each engine family 
for HC+NOX and CO emissions:


Ci = Max [0 or Ci-1 + Xi- (STD + 0.25 
x [sigma])]

Where:

Ci = The current CumSum statistic.
Ci-1 = The previous CumSum statistic. For the first test, 
the CumSum statistic is 0 (i.e., C1 = 0).
Xi = The current emission test result for an individual 
engine.
STD = Emission standard (or family emission limit, if applicable).

    (c) Use final deteriorated test results to calculate the variables 
in the equation in paragraph (b) of this section (see Sec.  
1045.315(a)).
    (d) After each new test, recalculate the CumSum statistic.
    (e) If you test more than the required number of engines, include 
the results from these additional tests in the CumSum Equation.
    (f) After each test, compare the current CumSum statistic, Ci, to 
the recalculated Action Limit, H, defined as H = 5.0 x [sigma].
    (g) If the CumSum statistic exceeds the Action Limit in two 
consecutive tests, the engine family fails the production-line testing 
requirements of this subpart. Tell us within ten working days if this 
happens. You may request to amend the application for certification to 
raise the FEL of the entire engine family as described in Sec.  
1045.225(f).
    (h) If you amend the application for certification for an engine 
family under Sec.  1045.225, do not change any previous calculations of 
sample size or CumSum statistics for the model year.


Sec.  1045.320  What happens if one of my production-line engines fails 
to meet emission standards?

    (a) If you have a production-line engine with final deteriorated 
test results exceeding one or more emission standards (see Sec.  
1045.315(a)), the certificate of conformity is automatically suspended 
for that failing engine. You must take the following actions before 
your certificate of conformity can cover that engine:
    (1) Correct the problem and retest the engine to show it complies 
with all emission standards.
    (2) Include the test results and describe the remedy for each 
engine in the written report required under Sec.  1045.345.
    (b) You may request to amend the application for certification to 
raise the FEL of the entire engine family at this point (see Sec.  
1045.225).


Sec.  1045.325  What happens if an engine family fails the production-
line testing requirements?

    (a) We may suspend your certificate of conformity for an engine 
family if it fails under Sec.  1045.315. The suspension may apply to 
all facilities producing engines from an engine family even if you find 
noncompliant engines only at one facility.
    (b) We will tell you in writing if we suspend your certificate in 
whole or in part. We will not suspend a certificate until at least 15 
days after the engine family fails. The suspension is effective when 
you receive our notice.
    (c) Up to 15 days after we suspend the certificate for an engine 
family, you may ask for a hearing (see Sec.  1045.820). If we agree 
before a hearing occurs that we used erroneous information in deciding 
to suspend the certificate, we will reinstate the certificate.
    (d) Section 1045.335 specifies steps you must take to remedy the 
cause of the engine family's production-line failure. All the engines 
you have produced since the end of the last test period are presumed 
noncompliant and should be addressed in your proposed remedy. We may 
require you to apply the remedy to engines produced earlier if we 
determine that the cause of the failure is likely to have affected the 
earlier engines.
    (e) You may request to amend the application for certification to 
raise the FEL of the engine family before or after we suspend your 
certificate as described in Sec.  1045.225(f). We will approve your 
request if the failure is not caused by a defect and it is clear that 
you used good engineering judgment in establishing the original FEL.


Sec.  1045.330  May I sell engines from an engine family with a 
suspended certificate of conformity?

    You may sell engines that you produce after we suspend the engine 
family's certificate of conformity under Sec.  1045.315 only if one of 
the following occurs:
    (a) You test each engine you produce and show it complies with 
emission standards that apply.
    (b) We conditionally reinstate the certificate for the engine 
family. We may do so if you agree to recall all the affected engines 
and remedy any

[[Page 59213]]

noncompliance at no expense to the owner if later testing shows that 
the engine family still does not comply.


Sec.  1045.335  How do I ask EPA to reinstate my suspended certificate?

    (a) Send us a written report asking us to reinstate your suspended 
certificate. In your report, identify the reason for noncompliance, 
propose a remedy for the engine family, and commit to a date for 
carrying it out. In your proposed remedy include any quality control 
measures you propose to keep the problem from happening again.
    (b) Give us data from production-line testing that shows the 
remedied engine family complies with all the emission standards that 
apply.


Sec.  1045.340  When may EPA revoke my certificate under this subpart 
and how may I sell these engines again?

    (a) We may revoke your certificate for an engine family in the 
following cases:
    (1) You do not meet the reporting requirements.
    (2) Your engine family fails to comply with the requirements of 
this subpart and your proposed remedy to address a suspended 
certificate under Sec.  1045.335 is inadequate to solve the problem or 
requires you to change the engine's design or emission control system.
    (b) To sell engines from an engine family with a revoked 
certificate of conformity, you must modify the engine family and then 
show it complies with the requirements of this part.
    (1) If we determine your proposed design change may not control 
emissions for the engine's full useful life, we will tell you within 
five working days after receiving your report. In this case we will 
decide whether production-line testing will be enough for us to 
evaluate the change or whether you need to do more testing.
    (2) Unless we require more testing, you may show compliance by 
testing production-line engines as described in this subpart.
    (3) We will issue a new or updated certificate of conformity when 
you have met these requirements.


Sec.  1045.345  What production-line testing records must I send to 
EPA?

    (a) Within 45 days of the end of each test period, send us a report 
with the following information:
    (1) Describe any facility used to test production-line engines and 
state its location.
    (2) State the total U.S.-directed production volume and number of 
tests for each engine family.
    (3) Describe how you randomly selected engines.
    (4) Describe each test engine, including the engine family's 
identification and the engine's model year, build date, model number, 
identification number, and number of hours of operation before testing.
    (5) Identify how you accumulated hours of operation on the engines 
and describe the procedure and schedule you used.
    (6) Provide the test number; the date, time and duration of 
testing; test procedure; all initial test results; final test results; 
and final deteriorated test results for all tests. Provide the emission 
results for all measured pollutants. Include information for both valid 
and invalid tests and the reason for any invalidation.
    (7) Describe completely and justify any nonroutine adjustment, 
modification, repair, preparation, maintenance, or test for the test 
engine if you did not report it separately under this subpart. Include 
the results of any emission measurements, regardless of the procedure 
or type of engine.
    (8) Provide the CumSum analysis required in Sec.  1045.315 and the 
sample-size calculation required in Sec.  1045.310 for each engine 
family.
    (9) Report on each failed engine as described in Sec.  1045.320.
    (10) State the date the test period ended for each engine family.
    (b) We may ask you to add information to your written report so we 
can determine whether your new engines conform with the requirements of 
this subpart. We may also ask you to send less information.
    (c) An authorized representative of your company must sign the 
following statement:
    We submit this report under sections 208 and 213 of the Clean Air 
Act. Our production-line testing conformed completely with the 
requirements of 40 CFR part 1045. We have not changed production 
processes or quality-control procedures for test engines in a way that 
might affect emission controls. All the information in this report is 
true and accurate to the best of my knowledge. I know of the penalties 
for violating the Clean Air Act and the regulations. (Authorized 
Company Representative).
    (d) Send electronic reports of production-line testing to the 
Designated Compliance Officer using an approved information format. If 
you want to use a different format, send us a written request with 
justification for a waiver.
    (e) We will send copies of your reports to anyone from the public 
who asks for them. Section 1045.815 describes how we treat information 
you consider confidential.


Sec.  1045.350  What records must I keep?

    (a) Organize and maintain your records as described in this 
section. We may review your records at any time.
    (b) Keep paper or electronic records of your production-line 
testing for eight years after you complete all the testing required for 
an engine family in a model year.
    (c) Keep a copy of the written reports described in Sec.  1045.345.
    (d) Keep the following additional records:
    (1) A description of all test equipment for each test cell that you 
can use to test production-line engines.
    (2) The names of supervisors involved in each test.
    (3) The name of anyone who authorizes adjusting, repairing, 
preparing, or modifying a test engine and the names of all supervisors 
who oversee this work.
    (4) If you shipped the engine for testing, the date you shipped it, 
the associated storage or port facility, and the date the engine 
arrived at the testing facility.
    (5) Any records related to your production-line tests that are not 
in the written report.
    (6) A brief description of any significant events during testing 
not otherwise described in the written report or in this section.
    (7) Any information specified in Sec.  1045.345 that you do not 
include in your written reports.
    (e) If we ask, you must give us a more detailed description of 
projected or actual production figures for an engine family. We may ask 
you to divide your production figures by maximum engine power, 
displacement, fuel type, or assembly plant (if you produce engines at 
more than one plant).
    (f) Keep records of the engine identification number for each 
engine you produce under each certificate of conformity. You may 
identify these numbers as a range. Give us these records within 30 days 
if we ask for them.
    (g) We may ask you to keep or send other information necessary to 
implement this subpart.

Subpart E--In-Use Testing


Sec.  1045.401  What testing requirements apply to my engines that have 
gone into service?

    (a) We may perform in-use testing of any engines subject to the 
standards of this part. If you produce outboard or personal watercraft 
engines that are subject to the requirements of this part, you must 
test them as described in this subpart. The testing requirements

[[Page 59214]]

described in this subpart do not apply to sterndrive/inboard engines. 
This generally involves testing engines in the field or removing them 
for measurement in a laboratory.
    (b) We may approve an alternate plan for showing that in-use 
engines comply with the requirements of this part if one of the 
following is true:
    (1) You produce 200 or fewer engines per year in the selected 
engine family.
    (2) You identify a unique aspect of your engine applications that 
keeps you from doing the required in-use testing.
    (c) We may void your certificate of conformity for an engine family 
if you do not meet your obligations under this part.
    (d) Independent of your responsibility to test in-use engines, we 
may choose at any time to do our own testing of your in-use engines.
    (e) If in-use testing shows that engines fail to meet emission 
standards or other requirements of this part, we may pursue a recall or 
other remedy as allowed by the Clean Air Act (see Sec.  1045.415).


Sec.  1045.405  How does this program work?

    (a) You must test in-use engines for exhaust emissions from the 
families we select. We may select up to 25 percent of your engine 
families in any model year--or one engine family if you have three or 
fewer families. When we select an engine family for testing, we may 
specify that you preferentially test engines based on the type of 
vessel. In addition, we may identify specific modes of operation or 
sampling times. You may choose to test additional engine families that 
we do not select.
    (b) The provisions of this paragraph (b) describe how test families 
are selected, depending on when we receive the application for 
certification.
    (1) If we receive the application by December 31 of a given 
calendar year for the following model year (for example, by December 
31, 2009 for model year 2010), we would expect to select engine 
families for testing by February 28 of the model year. If we have not 
completed the selection of engine families by February 28, you may 
select your own engine families for in-use testing. In this case, you 
must make your selections and notify us which engine families you have 
selected by March 31. You should consider the following factors in 
selecting engine families, in priority order:
    (i) Select an engine family that has not recently been tested in an 
in-use testing regimen (and passed) under the provisions of this 
subpart. This should generally involve engine families that have not 
been selected in the previous two model years. If design changes have 
required new testing for certification, we would consider that this 
engine family has not been selected for in-use testing.
    (ii) Select an engine family if we have approved an alternative 
approach to establishing a deterioration factor under Sec.  
1045.245(b)(8).
    (iii) Select the engine family with the highest projected U.S.-
directed production volume.
    (2) If we receive an application for a given model year after 
December 31 of the previous calendar year, you must conduct in-use 
testing with that engine family without regard to the limitations 
specified in paragraph (a) of this section, unless we waive this 
requirement. We will generally waive testing under this paragraph 
(b)(2) only for small-volume engine manufacturers or in the case where 
similar testing was recently completed for a related engine family.
    (c) Send us an in-use testing plan for engine families selected for 
testing. Complete the testing within 24 calendar months after we 
approve your plan. Send us the in-use testing plan according to the 
following deadlines:
    (1) Within 12 calendar months after we direct you to test a 
particular engine family.
    (2) By February 28 of the following year if you select engine 
families for testing under paragraph (b)(1) of this section.
    (3) Within 12 calendar months after we approve certification for 
engine families subject to the requirements of paragraph (b)(2) of this 
section.
    (d) You may need to test engines from more than one model year at a 
given time.
    (e) In appropriate extreme and unusual circumstances that are 
clearly outside your control and could not have been avoided by the 
exercise of prudence, diligence, and due care, we may waive the in-use 
testing requirement for an engine family. For example, if your test 
fleet is destroyed by severe weather during service accumulation and we 
agree that completion of testing is not possible, we would generally 
waive testing requirements for that engine family.


Sec.  1045.410  How must I select, prepare, and test my in-use engines?

    (a) You may make arrangements to select representative test engines 
from your own fleet or from other independent sources.
    (b) For the selected engine families, select engines that you or 
your customers have--
    (1) Operated for at least 50 percent of the engine family's useful 
life (see Sec.  1045.103(e));
    (2) Not maintained or used in an abnormal way; and
    (3) Documented in terms of total hours of operation, maintenance, 
operating conditions, and storage.
    (c) Use the following methods to determine the number of engines 
you must test in each engine family:
    (1) Test at least two engines if you produce 2,000 or fewer engines 
in the model year from all engine families, or if you produce 500 or 
fewer engines from the selected engine family. Otherwise, test at least 
four engines.
    (2) If you successfully complete an in-use test program on an 
engine family and later certify an equivalent engine family with 
carryover emission data, as described in Sec.  1045.235(d)(1), then 
test at least one engine instead of the testing rates in paragraph 
(c)(1) of this section.
    (3) If you test the minimum required number of engines and all 
comply fully with emission standards, you may stop testing.
    (4) For each engine that fails any applicable emission standard, 
test two more. Regardless of measured emission levels, you do not have 
to test more than ten engines in an engine family. You may do more 
tests than we require.
    (5) You may concede that the engine family does not comply before 
testing a total of ten engines.
    (6) In appropriate extreme and unusual circumstances that could not 
have been avoided by the exercise of prudence, diligence, and due care, 
we may waive the in-use testing requirement for an engine family.
    (d) You may do minimal maintenance to set components of a test 
engine to specifications for anything we do not consider an adjustable 
parameter (see Sec.  1045.205(r)). Limit maintenance to what is in the 
owner's instructions for engines with that amount of service and age. 
Document all maintenance and adjustments.
    (e) You may do repeat measurements with a test engine; however, you 
must conduct the same number of tests on each engine.
    (f) For a test program on an engine family, choose one of the 
following methods to test your engines:
    (1) Remove the selected engines for testing in a laboratory. Use 
the applicable procedures in subpart F of this part to show compliance 
with the duty-cycle standards in Sec.  1045.103(a) or Sec.  
1045.105(a). We may direct you to measure emissions on the dynamometer 
using the test procedures in Sec.  1045.515 to show compliance with the 
not-to-exceed standards in Sec.  1045.107.

[[Page 59215]]

    (2) Test the selected engines while they remain installed in the 
vessel. Use the procedures in Sec.  1045.515. Measure emissions during 
normal operation of the vessel to show compliance with the not-to-
exceed standards in Sec.  1045.107. We may direct you to include 
specific areas of normal operation.
    (g) You may ask us to waive parts of the prescribed test procedures 
if they are not necessary to determine in-use compliance.
    (h) Calculate the average emission levels for an engine family from 
the results for the set of tested engines. Round them to the number of 
decimal places in the emission standards expressed to one more decimal 
place.


Sec.  1045.415  What happens if in-use engines do not meet 
requirements?

    (a) Determine the reason each in-use engine exceeds the emission 
standards.
    (b) If the average emission levels calculated in Sec.  1045.410(h) 
exceed any of the emission standards that apply, notify us within 
fifteen days of completing testing on this family. Otherwise follow the 
reporting instructions in Sec.  1045.420.
    (c) We will consider failure rates, average emission levels, and 
any defects--among other things--to decide on taking remedial action 
under this subpart (see 40 CFR 1068.505). We may consider the results 
from any voluntary additional testing you perform. We may also consider 
information related to testing from other engine families showing that 
you designed them to exceed the minimum requirements for controlling 
emissions. We may order a recall before or after you complete testing 
of an engine family if we determine a substantial number of engines do 
not conform to section 213 of the Clean Air Act or to this part. The 
scope of the recall may include other engine families in the same or 
different model years if the cause of the problem identified in 
paragraph (a) of this section applies more broadly than the tested 
engine family, as allowed by the Clean Air Act.
    (d) If in-use testing reveals a design or manufacturing defect that 
prevents engines from meeting the requirements of this part, you must 
correct the defect as soon as possible for any future production for 
engines in every family affected by the defect. See 40 CFR 1068.501 for 
additional requirements related to defect reporting.
    (e) You may voluntarily recall an engine family for emission 
failures, as described in 40 CFR 1068.535, unless we have ordered a 
recall for that family under 40 CFR 1068.505.
    (f) You have the right to a hearing before we order you to recall 
your engines or implement an alternative remedy (see Sec.  1045.820).


Sec.  1045.420  What in-use testing information must I report to EPA?

    (a) In a report to us within three months after you finish testing 
an engine family, do all the following:
    (1) Identify the engine family, model, serial number, and date of 
manufacture.
    (2) [Reserved]
    (3) Describe the specific reasons for disqualifying any engines for 
not being properly maintained or used.
    (4) For each engine selected for testing, include the following 
information:
    (i) Estimate the hours each engine was used before testing.
    (ii) Describe all maintenance, adjustments, modifications, and 
repairs to each test engine.
    (5) State the date and time of each test attempt.
    (6) Include the results of all emission testing, including 
incomplete or invalidated tests, if any.
    (b) Send electronic reports of in-use testing to the Designated 
Compliance Officer using an approved information format. If you want to 
use a different format, send us a written request with justification 
for a waiver.
    (c) We will send copies of your reports to anyone from the public 
who asks for them. See Sec.  1045.815 for information on how we treat 
information you consider confidential.
    (d) We may ask for more information.


Sec.  1045.425  What records must I keep?

    (a) Organize and maintain your records as described in this 
section. We may review your records at any time, so it is important to 
keep required information readily available.
    (b) Keep paper records of your in-use testing for one full year 
after you complete all the testing required for an engine family in a 
model year. You may use any additional storage formats or media if you 
like.
    (c) Keep a copy of the written reports described in Sec.  1045.420.
    (d) Keep any additional records related to the procurement process.

Subpart F--Test Procedures


Sec.  1045.501  How do I run a valid emission test?

    (a) Applicability. This subpart is addressed to you as a 
manufacturer but it applies equally to anyone who does testing for you, 
and to us when we perform testing to determine if your engines meet 
emission standards.
    (b) General requirements. Use the equipment and procedures for 
spark-ignition engines in 40 CFR part 1065 to determine whether engines 
meet the duty-cycle emission standards in Sec. Sec.  1045.103 and 
1045.105. Measure the emissions of all regulated pollutants as 
specified in 40 CFR part 1065. Use the applicable duty cycles specified 
in Sec.  1045.505. Section 1045.515 describes the supplemental 
procedures for evaluating whether engines meet the not-to-exceed 
emission standards in Sec.  1045.107.
    (c) Fuels. Use the fuels and lubricants specified in 40 CFR part 
1065, subpart H, for all the testing we require in this part, except as 
specified in Sec.  1045.515. Use gasoline meeting the specifications 
described in 40 CFR 1065.710 for general testing. For service 
accumulation, use the test fuel or any commercially available fuel that 
is representative of the fuel that in-use engines will use. You may 
alternatively use gasoline blended with ethanol as follows:
    (1) You may use the ethanol-blended fuel for certifying engines 
under this part without our advance approval. If you use the blended 
fuel for certifying a given engine family, you may also use it for 
production-line testing or any other testing you perform for that 
engine family under this part. If you use the blended fuel for 
certifying a given engine family, we may use the blended fuel or the 
specified gasoline test fuel with that engine family.
    (2) The blended fuel must consist of a mix of gasoline meeting the 
specifications described in 40 CFR 1065.710 for general testing and 
fuel-grade ethanol meeting the specifications described in 40 CFR 
1060.501(c) such that the blended fuel has 10.0+1.0 percent ethanol by 
volume. You may also use ethanol with a higher or lower purity if you 
show us that it will not affect your ability to demonstrate compliance 
with the applicable emission standards. You do not need to measure the 
ethanol concentration of such blended fuels and may instead calculate 
the blended composition by assuming that the ethanol is pure and mixes 
perfectly with the base fuel.
    (d) Laboratory conditions. Ambient conditions for duty-cycle 
testing must be within ranges specified in 40 CFR 1065.520, subject to 
the provisions of Sec.  1045.115(d). Emissions may not be corrected for 
the effects of test temperature or pressure. Humidity levels must 
represent actual in-use humidity levels; however, you may correct 
emissions for humidity as specified in 40 CFR 1065.670.
    (e) Engine stabilization. Instead of the provisions of 40 CFR 
1065.405, you may consider emission levels stable without

[[Page 59216]]

measurement after 12 hours of engine operation.
    (f) Maximum test speed. Instead of the provisions of 40 CFR 
1065.510(f), you may declare a value of maximum test speed for 
laboratory testing that is within 500 rpm of the corresponding measured 
value for maximum test speed.
    (g) Special and alternate procedures. If you are unable to run the 
duty cycle specified in this part for your engine (such as with 
constant-speed engines), use an alternate test cycle that will result 
in a cycle-weighted emission measurement equivalent to the expected 
average in-use emissions. This cycle must be approved under 40 CFR 
1065.10. You may use other special or alternate procedures to the 
extent we allow them under 40 CFR 1065.10.
    (h) Laboratory testing with portable analyzers. You may use field-
grade equipment for any laboratory testing with high-performance 
engines, as specified in 40 CFR 1065.901(b), without requesting 
approval.


Sec.  1045.505  How do I test engines using discrete-mode or ramped-
modal duty cycles?

    (a) This section describes how to test engines under steady-state 
conditions. We allow you to perform tests with either discrete-mode or 
ramped-modal sampling. You must use the modal testing method for 
certification and all other testing you perform for an engine family. 
If we test your engines to confirm that they meet emission standards, 
we will use the modal testing method you select for your own testing. 
If you submit certification test data collected with both discrete-mode 
and ramped-modal testing (either in your original application or in an 
amendment to your application), either method may be used for 
subsequent testing. We may also perform other testing as allowed by the 
Clean Air Act. Conduct duty-cycle testing as follows:
    (1) For discrete-mode testing, sample emissions separately for each 
mode, then calculate an average emission level for the whole cycle 
using the weighting factors specified for each mode. In each mode, 
operate the engine for at least 5 minutes, then sample emissions for at 
least 1 minute. Calculate cycle statistics and compare with the 
established criteria as specified in 40 CFR 1065.514 to confirm that 
the test is valid.
    (2) For ramped-modal testing, start sampling at the beginning of 
the first mode and continue sampling until the end of the last mode. 
Calculate emissions and cycle statistics the same as for transient 
testing as specified in 40 CFR part 1065.
    (b) Measure emissions by testing the engine on a dynamometer to 
determine whether it meets the emission standards in Sec. Sec.  
1045.103(a) and 1045.105(a). Use the 5-mode duty cycle or the 
corresponding ramped-modal cycle described in Appendix I of this part.
    (c) During idle mode, operate the engine at its warm idle speed as 
described in 40 CFR 1065.510; this may involve a nonzero torque setting 
if that represents in-use operation.
    (d) For full-load operating modes, operate the engine at wide-open 
throttle.
    (e) See 40 CFR part 1065 for detailed specifications of tolerances 
and calculations.


Sec.  1045.515  What are the test procedures related to not-to-exceed 
standards?

    (a) This section describes the procedures to determine whether your 
engines meet the not-to-exceed emission standards in Sec.  1045.107. 
These procedures may include any normal engine operation and ambient 
conditions that the engines may experience in use. Paragraphs (b) and 
(c) of this section define the limits of what we will consider normal 
engine operation and ambient conditions. Use the test procedures we 
specify in Sec.  1045.501, except for the provisions we specify in this 
section. Measure emissions with one of the following procedures:
    (1) Remove the selected engines for testing in a laboratory. You 
may use an engine dynamometer to simulate normal operation, as 
described in this section.
    (2) Test the selected engines while they remain installed on a 
vessel. In 40 CFR part 1065, subpart J, we describe the equipment and 
sampling methods for testing engines in the field. Use fuel meeting the 
specifications of 40 CFR part 1065, subpart H, or a fuel typical of 
what you would expect the engine to use in service.
    (b) Engine testing may occur under a range of ambient conditions as 
follows:
    (1) Engine testing may occur under the following ranges of ambient 
conditions without correcting measured emission levels:
    (i) Barometric pressure must be between 94.0 and 103.325 kPa.
    (ii) Ambient air temperature must be between 13 and 35 [deg]C.
    (iii) Ambient water temperature must be between 5 and 27 [deg]C.
    (iv) Any ambient humidity level.
    (2) Engine testing may occur outside the conditions described in 
paragraph (b)(1) of this section, as long as measured values are 
corrected to be equivalent to the nearest end of the specified range 
using good engineering practice.
    (c) An engine's emissions may not exceed the NTE standards in Sec.  
1045.107 under the following ranges of engine operation:
    (1) The sampling period may not begin until the engine has reached 
stable operating temperatures. For example, this would exclude engine 
operation after starting until the thermostat starts modulating coolant 
temperature. The sampling period may also not include engine starting. 
For testing under paragraphs (c)(4) and (6) of this section, the NTE 
standards apply for any continuous sampling period of at least 30 
seconds.
    (2) Engine operation during the emission sampling period may 
include any nominally steady-state combination of speeds and loads 
within the applicable zone defined by segments on an engine's power vs. 
speed map specified in paragraphs (c)(3) through (6) of this section, 
except as follows:
    (i) You may request that we specify a narrower zone, as long as the 
modified zone includes all points where your engines are expected to 
normally operate in use, but not including any points at which engine 
speed is below 40 percent of maximum test speed or engine load is below 
25.3 percent of maximum torque at maximum test speed. However, we may 
perform valid tests at any speeds and loads within the zones specified 
in paragraphs (c)(3) through (6) of this section that we observe with 
in-use engines. The engine must comply with emission standards at all 
such speeds and loads unless we determine that one of following 
criteria are true:
    (A) Such speeds and loads occur very infrequently. This 
determination may consider whether the operation would be expected to 
result in damage to the engine or vessel or be inherently unsafe.
    (B) Such speeds and loads result from the engine being installed in 
a manner that is not consistent with your emission-related installation 
instructions.
    (ii) You must notify us if you design your engines for normal in-
use operation outside the specified zone. If we learn that normal in-
use operation for your engines includes other speeds and loads, we may 
specify a broader zone, as long as the modified zone is limited to 
normal in-use operation for speeds greater than 40 percent of maximum 
test speed and loads greater than 25.3 percent of maximum torque at 
maximum test speed.
    (3) The NTE zone for testing engines under this section is defined 
by the following segments on an engine's torque vs. speed map, as 
illustrated in Figures 1 through 3 of this section:

[[Page 59217]]

    (i) Speed at or above 40 percent of maximum test speed.
    (ii) Speeds and torques below the line defined by the following 
equation:

Normalized torque = 1.5 x normalized speed-0.16

    (iii) Speeds and torques at or below the engine's mapped torque 
values.
    (iv) Speeds at or below 100 percent of maximum test speed, except 
as specified in paragraph (c)(5) of this section.
    (v) Speeds and torques above the line defined by the following 
equation:
    Normalized torque = (normalized speed)\1.5\-0.08
    (vi) Torques at or above 25.3 percent of maximum torque at maximum 
test speed, except as specified in paragraph (c)(5) of this section.
    (4) For engines equipped with a catalyst, the NTE zone described in 
paragraph (c)(3) of this section is divided into the following subzones 
for determining the applicable NTE standards, as illustrated in Figure 
1 of this section:
    (i) Subzone 1 includes all operation in the NTE zone characterized 
by speeds and torques above the line represented by the following 
equation:

(percent torque) = 1.2-0.5 x (percent speed)

    (ii) Subzone 2 includes all operation in the NTE zone not included 
in Subzone 1.
[GRAPHIC] [TIFF OMITTED] TR08OC08.075

    (5) For two-stroke engines not equipped with a catalyst, the NTE 
zone described in paragraph (c)(3) of this section is divided into 
subzones for testing to determine compliance with the applicable NTE 
standards. Measure emissions to get an NTE result by collecting 
emissions at five points as described in this paragraph (c)(5). 
Calculate a weighted test result for these emission measurements using 
the weighting factors from Appendix I of this part for the 
corresponding modal result (similar to discrete-mode testing for 
certification). Test engines over the following modes corresponding to 
the certification duty cycle:
    (i) Mode 1: Operate the engine at wide open throttle. For 
laboratory testing, this may involve any torque value between the 
boundaries specified in paragraph (c)(3) of this section.
    (ii) Mode 2: Operate the engine at a nominal speed that is 80 
percent of maximum test speed at any torque value between the 
boundaries specified in paragraph (c)(3) of this section.
    (iii) Mode 3: Operate the engine at a nominal speed that is 60 
percent of maximum test speed at any torque value between the 
boundaries specified in paragraph (c)(3) of this section.
    (iv) Mode 4: Operate the engine at a nominal speed that is 40 
percent of maximum test speed at any torque value between the 
boundaries specified in paragraphs (c)(3)(ii) and (v) of this section.
    (v) Mode 5: Operate the engine at idle.

[[Page 59218]]

[GRAPHIC] [TIFF OMITTED] TR08OC08.076

    (6) For any engines not covered by paragraphs (c)(4) and (5) of 
this section, the NTE zone described in paragraph (c)(3) of this 
section is divided into the following subzones for determining the 
applicable NTE standards, as illustrated in Figure 2 of this section:
    (i) Subzone 1 includes all operation in the NTE zone at speeds 
above 50 percent of maximum test speed.
    (ii) Subzone 2 includes all operation in the NTE zone not included 
in Subzone 1.

[[Page 59219]]

[GRAPHIC] [TIFF OMITTED] TR08OC08.077

Sec.  1045.520  What testing must I perform to establish deterioration 
factors?

    Sections 1045.240 and 1045.245 describe the required methods for 
testing to establish deterioration factors for an engine family.

Subpart G--Special Compliance Provisions


Sec.  1045.601  What compliance provisions apply to these engines?

    Engine and vessel manufacturers, as well as owners, operators, and 
rebuilders of engines subject to the requirements of this part, and all 
other persons, must observe the provisions of this part, the 
requirements and prohibitions in 40 CFR part 1068, and the provisions 
of the Clean Air Act.


Sec.  1045.605  What provisions apply to engines already certified 
under the motor vehicle or Large SI programs?

    (a) General provisions. If you are an engine manufacturer, this 
section allows you to introduce new propulsion marine engines into U.S. 
commerce if they are already certified to the requirements that apply 
to spark-ignition engines under 40 CFR parts 85 and 86 or part 1048 for 
the appropriate model year. If you comply with all the provisions of 
this section, we consider the certificate issued under 40 CFR part 86 
or 1048 for each engine to also be a valid certificate of conformity 
under this part 1045 for its model year, without a separate application 
for certification under the requirements of this part 1045.
    (b) Vessel-manufacturer provisions. If you are not an engine 
manufacturer, you may produce vessels using motor vehicle engines or 
nonroad spark-ignition engines under this section as long as you meet 
all the requirements and conditions specified in paragraph (d) of this 
section. If you modify the engine in any of the ways described in 
paragraph (d)(2) of this section, we will consider you a manufacturer 
of a new propulsion marine engine. Such engine modifications prevent 
you from using the provisions of this section.
    (c) Liability. Engines for which you meet the requirements of this 
section are exempt from all the requirements and prohibitions of this 
part, except for those specified in this section. Engines exempted 
under this section must meet all the applicable requirements from 40 
CFR parts 85 and 86, or part 1048. This applies to engine 
manufacturers, vessel manufacturers who use these engines, and all 
other persons as if these engines were used in applications other than 
for installation as propulsion marine engines. The prohibited acts of 
40 CFR 1068.101(a)(1) apply to these new engines and vessels; however, 
we consider the certificate issued under 40 CFR part 86 or 1048 for 
each engine to also be a valid certificate of conformity under this 
part 1045 for its model year. If we make a determination that these 
engines do not conform to the regulations during their useful life, we 
may require you to recall them under 40 CFR part 86 or 1068.
    (d) Specific requirements. If you are an engine or vessel 
manufacturer and meet all the following criteria and requirements 
regarding your new propulsion marine engine, the engine is eligible for 
an exemption under this section:
    (1) Your engine must be covered by a valid certificate of 
conformity issued under 40 CFR part 86 or 1048.
    (2) You must not make any changes to the certified engine that 
could reasonably be expected to increase its exhaust emissions for any 
pollutant, or its evaporative emissions. For example, if you make any 
of the following

[[Page 59220]]

changes to one of these engines, you do not qualify for this exemption:
    (i) Change any fuel-system or evaporative-system parameters from 
the certified configuration (this does not apply to refueling 
controls).
    (ii) Change, remove, or fail to properly install any other 
component, element of design, or calibration specified in the engine 
manufacturer's application for certification. This includes 
aftertreatment devices and all related components.
    (iii) Modify or design the marine engine cooling system so that 
temperatures or heat rejection rates are outside the original engine 
manufacturer's specified ranges.
    (3) You must show that fewer than 10 percent of the engine family's 
total sales in the United States are used in marine applications. This 
includes engines used in any application without regard to which 
company manufactures the vessel or equipment. Show this as follows:
    (i) If you are the original manufacturer of the engine, base this 
showing on your sales information.
    (ii) In all other cases, you must get the original manufacturer of 
the engine to confirm this based on its sales information.
    (4) You must ensure that the engine has the label we require under 
40 CFR part 86 or 1048.
    (5) You must add a permanent supplemental label to the engine in a 
position where it will remain clearly visible after installation in the 
vessel. In the supplemental label, do the following:
    (i) Include the heading: ``MARINE ENGINE EMISSION CONTROL 
INFORMATION''.
    (ii) Include your full corporate name and trademark. You may 
instead include the full corporate name and trademark of another 
company you choose to designate.
    (iii) State: ``THIS ENGINE WAS ADAPTED FOR MARINE USE WITHOUT 
AFFECTING ITS EMISSION CONTROLS.''
    (iv) If the modified engine is certified as a motor vehicle engine, 
also state: ``THE EMISSION CONTROL SYSTEM DEPENDS ON THE USE OF FUEL 
MEETING SPECIFICATIONS THAT APPLY FOR MOTOR VEHICLE APPLICATIONS. 
OPERATING THE ENGINE ON OTHER FUELS MAY BE A VIOLATION OF FEDERAL 
LAW.''
    (v) State the date you finished modifying the engine (month and 
year), if applicable.
    (6) The original and supplemental labels must be readily visible 
after the engine is installed in the vessel or, if the vessel obscures 
the engine's emission control information label, the vessel 
manufacturer must attach duplicate labels, as described in 40 CFR 
1068.105.
    (7) Send the Designated Compliance Officer a signed letter 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 or vessel models you expect to produce under 
this exemption in the coming year and describe your basis for meeting 
the sales restrictions of paragraph (d)(3) of this section.
    (iii) State: ``We produce each listed [engine or vessel] model 
without making any changes that could increase its certified emission 
levels, as described in 40 CFR 1045.605.''
    (e) Failure to comply. If your engines do not meet the criteria 
listed in paragraph (d) of this section, they will be subject to the 
standards, requirements, and prohibitions of this part 1045 and the 
certificate issued under 40 CFR part 86 or 1048 will not be deemed to 
also be a certificate issued under this part 1045. Introducing these 
engines into U.S. commerce without a valid exemption or certificate of 
conformity under this part violates the prohibitions in 40 CFR 
1068.101(a)(1).
    (f) Data submission. We may require you to send us emission test 
data on one of the duty cycles specified in subpart F of this part.
    (g) Participation in averaging, banking and trading. Engines 
adapted for marine use under this section may not generate or use 
emission credits under this part 1045. These engines may generate 
credits under the ABT provisions in 40 CFR part 86. These engines must 
use emission credits under 40 CFR part 86 if they are certified to an 
FEL above a standard that applies under 40 CFR part 86.


Sec.  1045.610  What provisions apply to using engines already 
certified to Small SI emission standards?

    This section applies to marine engines that are identical to land-
based engines certified under 40 CFR part 90 or 1054. See Sec.  
1045.605 for provisions that apply to marine engines that are certified 
under other programs.
    (a) If an engine meets all the following criteria, it is exempt 
from the requirements of this part:
    (1) The engine must be in an engine family that has a valid 
certificate of conformity showing that it meets emission standards for 
nonhandheld engines under 40 CFR part 90 or 1054 for the appropriate 
model year.
    (2) You must show that fewer than 5 percent of the engine family's 
total sales in the United States are used in marine applications. This 
includes engines used in any application without regard to which 
company manufactures the vessel or equipment.
    Show this as follows:
    (i) If you are the original manufacturer of the engine, base this 
showing on your sales information.
    (ii) In all other cases, you must get the original manufacturer of 
the engine to confirm this based on its sales information.
    (b) The only requirements or prohibitions from this part that apply 
to an engine that meets the criteria in paragraph (a) of this section 
are in this section.
    (c) Engines exempted under this section are subject to all the 
requirements affecting engines under 40 CFR part 90 or 1054. The 
requirements and restrictions of 40 CFR part 90 or 1054 apply to anyone 
manufacturing these engines, anyone manufacturing equipment that uses 
these engines, and all other persons in the same manner as if these 
engines were not used as propulsion marine engines.
    (d) You may use the provisions of Sec.  1045.605 in addition to the 
provisions of this section for engines certified under 40 CFR part 
1054. Where Sec.  1045.605 references 40 CFR parts 85, 86, and/or 1048, 
apply the applicable provisions of 40 CFR part 1054 instead. Include 
the engines you sell under this section in your demonstration that you 
meet the sales limit in Sec.  1045.605(d)(3).


Sec.  1045.620  What are the provisions for exempting engines used 
solely for competition?

    The provisions of this section apply for new engines and vessels 
built on or after January 1, 2010.
    (a) We may grant you an exemption from the standards and 
requirements of this part for a new engine on the grounds that it is to 
be used solely for competition. The requirements of this part, other 
than those in this section, do not apply to engines that we exempt for 
use solely for competition.
    (b) We will exempt engines that we determine will be used solely 
for competition. The basis of our determination is described in 
paragraphs (c) and (d) of this section. Exemptions granted under this 
section are good for only one model year and you must request renewal 
for each subsequent model year. We will not approve your renewal 
request if we determine the engine will not be used solely for 
competition.
    (c) Engines meeting all the following criteria are considered to be 
used solely for competition:

[[Page 59221]]

    (1) Neither the engine nor any vessels containing the engine may be 
displayed for sale in any public dealership or otherwise offered for 
sale to the general public. Note that this does not preclude display of 
these engines as long as they are not available for sale to the general 
public.
    (2) Sale of the vessel in which the engine is installed must be 
limited to professional racing teams, professional racers, or other 
qualified racers. For replacement engines, the sale of the engine 
itself must be limited to professional racing teams, professional 
racers, other qualified racers, or to the original vessel manufacturer.
    (3) The engine and the vessel in which it is installed must have 
performance characteristics that are substantially superior to 
noncompetitive models.
    (4) The engines are intended for use only as specified in paragraph 
(e) of this section.
    (d) You may ask us to approve an exemption for engines not meeting 
the criteria listed in paragraph (c) of this section as long as you 
have clear and convincing evidence that the engines will be used solely 
for competition.
    (e) Engines are considered to be used solely for competition only 
if their use is limited to competition events sanctioned by the U.S. 
Coast Guard or another public organization with authorizing permits for 
participating competitors. Operation of such engines may include only 
racing events, trials to qualify for racing events, and practice 
associated with racing events. Authorized attempts to set speed records 
are also considered racing events. Engines will not be considered to be 
used solely for competition if they are ever used for any recreational 
or other noncompetitive purpose. Use of exempt engines in any 
recreational events, such as poker runs and lobsterboat races, is a 
violation of 40 CFR 1068.101(b)(4).
    (f) You must permanently label engines exempted under this section 
to clearly indicate that they are to be used only for competition. 
Failure to properly label an engine will void the exemption for that 
engine.
    (g) If we request it, you must provide us any information we need 
to determine whether the engines are used solely for competition. This 
would include documentation regarding the number of engines and the 
ultimate purchaser of each engine as well as any documentation showing 
a vessel manufacturer's request for an exempted engine. Keep these 
records for five years.


Sec.  1045.625  What requirements apply under the Diurnal Transition 
Program?

    The provisions of this section allow vessel manufacturers to 
produce a certain number of vessels with installed fuel tanks that do 
not meet the diurnal emission standards specified in Sec.  1045.112(d) 
and 40 CFR 1060.105. The provisions of this section do not apply for 
portable marine fuel tanks, personal watercraft, or outboard engines 
with under-cowl fuel tanks. Vessels you produce under this section are 
exempt from the prohibitions in 40 CFR 1068.101(a)(1) with respect to 
diurnal emissions, subject to the provisions of this section.
    (a) General. If you are a vessel manufacturer, you may introduce 
into U.S. commerce limited numbers of exempted vessels under this 
section. You may use the exemptions in this section only if you have 
primary responsibility for designing and manufacturing vessels and your 
manufacturing procedures include installing some engines in these 
vessels. Consider all U.S.-directed vessel sales in showing that you 
meet the requirements of this section, including those from any parent 
or subsidiary companies and those from any other companies you license 
to produce vessels for you. These provisions are available for vessels 
you produce during the periods specified in paragraph (b) of this 
section.
    (b) Allowances. You may choose one of the following options to 
produce exempted vessels under this section:
    (1) Percent-of-production allowances. You may produce up to 50 
percent of your vessels from July 31, 2011 through July 31, 2012 that 
are exempt from the diurnal emission standards. Calculate this 
percentage based on your total U.S.-directed production volume.
    (2) Small-volume allowances. Small-volume vessel manufacturers may 
produce up to 1200 vessels from July 31, 2011 through July 31, 2013 
that are exempt from the diurnal emission standards.
    (c) Vessel labeling. You must add a permanent label, written 
legibly in English, to a readily visible part of each exempted vessel 
you produce under this section. You may combine this with the label 
required under 40 CFR 1060.135. This label must include at least the 
following items:
    (1) The label heading ``EMISSION CONTROL INFORMATION''.
    (2) Your corporate name and trademark.
    (3) The vessel's date of manufacture.
    (4) The following statement: ``THIS VESSEL IS EXEMPT FROM DIURNAL 
STANDARDS UNDER 40 CFR 1045.625.''
    (d) Notification and reporting. You must notify us of your intent 
to use the provisions of this section and send us an annual report to 
verify that you are not exceeding the allowances, as follows:
    (1) Before you produce vessels that are exempt under this section, 
send the Designated Compliance Officer a written notice of your intent 
with the following information:
    (i) Identify your company's name and address, and your parent 
company's name and address, if applicable.
    (ii) Identify the name, e-mail address, and phone number of a 
person to contact for further information.
    (iii) Identify the name and address of the company you expect to 
produce the fuel tanks you will be using for the vessels exempted under 
this section.
    (iv) If you qualify as a small-volume vessel manufacturer, state 
whether you will comply under paragraph (b)(1) or (b)(2) of this 
section.
    (v) Include your production figures for the period from July 31, 
2009 through July 31, 2010, including figures broken down by model.
    (2) Send the Designated Compliance Officer a written report by 
December 31, 2012. If you are a small-volume manufacturer using the 
provisions of paragraph (b)(2) of this section to produce exempted 
vessels after July 31, 2012, send us a second report by December 31, 
2013. These reports must include the total number of vessels and the 
number of exempted vessels you sold in the preceding year for each 
model, based on actual U.S.-directed production information. You may 
omit the count of compliant vessels if you include in the report a 
statement that you are not using the percent-of-production allowances 
in paragraph (b)(1) of this section. If you initially comply using the 
percent-of-production allowances in paragraph (b)(1) of this section, 
you may not use the small-volume allowances in paragraph (b)(2) of this 
section for later production.
    (3) If you send your initial notification under paragraph (d)(1) of 
this section after the specified deadline, we may approve your use of 
allowances under this section. In your request, describe why you were 
unable to meet the deadline. We will not approve your request if the 
delay could have been avoided with reasonable care and discretion.
    (e) Recordkeeping. Keep the following records of all exempted 
vessels you produce under this section:

[[Page 59222]]

    (1) The model number, serial number, and the date of manufacture 
for each vessel.
    (2) The total number or percentage of exempted vessels as described 
in paragraph (b) of this section and all documentation supporting your 
calculation.
    (3) The notifications and reports we require under paragraph (d) of 
this section.
    (f) Provisions for fuel tank manufacturers. As a fuel tank 
manufacturer, you may produce fuel tanks as needed for vessel 
manufacturers under this section without our prior approval. These fuel 
tanks are exempt from the diurnal emission standards. Note that this 
diurnal exemption does not affect the requirements related to 
permeation emissions specified in Sec.  1045.112. You must have written 
assurance from vessel manufacturers that they need a certain number of 
exempted fuel tanks under this section. You must keep records of the 
number of exempted fuel tanks you sell to each vessel manufacturer.
    (g) Enforcement. Producing more exempted vessels than we allow 
under this section violates the prohibitions in 40 CFR 1068.101(a)(1). 
Vessel manufacturers and fuel tank manufacturers must keep the records 
we require under this section until at least December 31, 2017 and give 
them to us if we ask for them (see 40 CFR 1068.101(a)(2)).


Sec.  1045.630  What is the personal-use exemption.

    This section applies to individuals who manufacture recreational 
vessels for personal use with used engines. If you and your vessel meet 
all the conditions of this section, the vessel and its engine are 
considered to be exempt from the standards and requirements of this 
part that apply to new engines, including standards and requirements 
related to evaporative emissions. For example, you are not required to 
use certified fuel system components or otherwise obtain certificates 
of conformity showing that the vessel meets evaporative emission 
standards, and you do not need to install a certified engine.
    (a) The vessel may not be manufactured from a previously certified 
vessel, nor may it be manufactured from a partially complete vessel 
that is equivalent to a certified vessel. The vessel must be 
manufactured primarily from unassembled components, but may incorporate 
some preassembled components. For example, fully preassembled steering 
assemblies may be used. You may also power the vessel with an engine 
that was previously used in a highway or land-based nonroad 
application.
    (b) The vessel may not be sold within five years after the date of 
final assembly.
    (c) No individual may manufacture more than one vessel in any five-
year period under this exemption.
    (d) You may not use the vessel in any revenue-generating service or 
for any other commercial purpose. For example, this exemption does not 
apply for vessels used in commercial fishing or charter service.
    (e) This exemption may not be used to circumvent the requirements 
of this part or the requirements of the Clean Air Act. For example, 
this exemption would not cover a case in which a person sells an almost 
completely assembled vessel to another person, who would then complete 
the assembly. This would be considered equivalent to the sale of the 
complete new vessel. This section also does not allow engine 
manufacturers to produce new engines that are exempt from emission 
standards and it does not provide an exemption from the prohibition 
against tampering with certified engines.


Sec.  1045.635  What special provisions apply for small-volume engine 
manufacturers?

    This section describes how we apply the special provisions in this 
part for small-volume engine manufacturers.
    (a) Special provisions apply for certain small-volume engine 
manufacturers, as illustrated by the following examples:
    (1) Additional lead time and other provisions related to the 
transition to new emission standards. See Sec.  1045.145.
    (2) More flexible arrangements for creating engine families for 
high-performance engines. See Sec.  1045.230.
    (3) Assigned deterioration factors. See Sec.  1045.240.
    (4) Waived requirements for production-line testing. See Sec.  
1045.301.
    (5) Additional special provisions apply for small-volume engine and 
vessel manufacturers. For example, see Sec.  1045.625 and 40 CFR 
1068.250.
    (b) If you use any of the provisions of this part that apply 
specifically to small-volume engine manufacturers and we find that you 
do not qualify to use these provisions, we may consider you to be in 
violation of the requirements that apply for companies that are not 
small-volume engine manufacturers. If your number of employees grows to 
the point that you no longer qualify as a small-volume engine 
manufacturer, we will work with you to determine a reasonable schedule 
for complying with additional requirements that apply. For example, if 
you no longer qualify as a small-volume engine manufacturer shortly 
before you certify your engines for the next model year, we might allow 
you to use assigned deterioration factors for one more model year.


Sec.  1045.640  What special provisions apply to branded engines?

    The following provisions apply if you identify the name and 
trademark of another company instead of your own on your emission 
control information label, as provided by Sec.  1045.135(c)(2):
    (a) You must have a contractual agreement with the other company 
that obligates that company to take the following steps:
    (1) Meet the emission warranty requirements that apply under Sec.  
1045.120. This may involve a separate agreement involving reimbursement 
of warranty-related expenses.
    (2) Report all warranty-related information to the certificate 
holder.
    (b) In your application for certification, identify the company 
whose trademark you will use.
    (c) You remain responsible for meeting all the requirements of this 
chapter, including warranty and defect-reporting provisions.


Sec.  1045.645  What special provisions apply for converting an engine 
to use an alternate fuel?

    A certificate of conformity is no longer valid for an engine if the 
engine is modified such that it is not in a configuration covered by 
the certificate. This section applies if such modifications are done to 
convert the engine to run on a different fuel type. Such engines may 
need to be recertified as specified in this section if the certificate 
is no longer valid for that engine.
    (a) Converting a certified new engine to run on a different fuel 
type violates 40 CFR 1068.101(a)(1) if the modified engine is not 
covered by a certificate of conformity.
    (b) Converting a certified engine that is not new to run on a 
different fuel type violates 40 CFR 1068.101(b)(1) if the modified 
engine is not covered by a certificate of conformity. We may specify 
alternate certification provisions consistent with the requirements of 
this part. For example, you may certify the modified engine for a 
partial useful life. For example, if the engine is modified halfway 
through its original useful life period, you may generally certify the 
engine based on completing the original useful life period; or if the 
engine is modified after the original useful life period is past, you 
may generally certify

[[Page 59223]]

the engine based on testing that does not involve further durability 
demonstration.
    (c) Engines may be certified using the certification procedures for 
new engines as specified in this part or using the certification 
procedures for aftermarket parts as specified in 40 CFR part 85, 
subpart V. Unless the original engine manufacturer continues to be 
responsible for the engine as specified in paragraph (d) of this 
section, you must remove the original engine manufacturer's emission 
control information label if you recertify the engine.
    (d) The original manufacturer is not responsible for operation of 
modified engines in configurations resulting from modifications 
performed by others. In cases where the modification allows an engine 
to be operated in either its original configuration or a modified 
configuration, the original manufacturer remains responsible for 
operation of the modified engine in its original configuration.
    (e) Entities producing conversion kits may obtain certificates of 
conformity for the converted engines. Such entities are engine 
manufacturers for purposes of this part.


Sec.  1045.650  Do delegated-assembly provisions apply for marine 
engines?

    The provisions of 40 CFR 1068.261 related to delegated final 
assembly do not apply for marine spark-ignition engines certified under 
this part 1045. This means that for engines requiring exhaust 
aftertreatment (such as catalysts), the engine manufacturers must 
either install the aftertreatment on the engine before introducing it 
into U.S. commerce or ship the aftertreatment along with the engine.


Sec.  1045.655  What special provisions apply for installing and 
removing altitude kits?

    An action for the purpose of installing or modifying altitude kits 
and performing other changes to compensate for changing altitude is not 
considered a prohibited act under 40 CFR 1068.101(b) as long as as it 
is done consistent with the manufacturer's instructions.


Sec.  1045.660  How do I certify outboard or personal watercraft 
engines for use in jet boats?

    (a) This section describes how to certify outboard or personal 
watercraft engines for use in jet boats. To be certified under this 
section, the jet boat engines must be identical in all physical 
respects to the corresponding outboard or personal watercraft engines, 
but may differ slightly with respect to engine calibrations.
    (b) The outboard or personal watercraft engines must meet all the 
applicable requirements for outboard or personal watercraft engines. 
Jet boat engines certified under this section must meet all the 
applicable requirements for sterndrive/inboard engines.
    (c) The jet boat engines must be in an engine family separate from 
the corresponding outboard or personal watercraft engines.
    (d) Jet boat engine families may use emission credits from outboard 
or personal watercraft engine families, as described in Sec.  
1045.701(d).
    (e) Jet-boat engines certified under the provisions of this section 
must meet emission standards over the same useful-life period that 
applies to the corresponding outboard or personal watercraft engine 
family, as described in Sec.  1045.103(e).

Subpart H--Averaging, Banking, and Trading for Certification


Sec.  1045.701  General provisions.

    (a) You may average, bank, and trade (ABT) emission credits for 
purposes of certification as described in this subpart to show 
compliance with the standards of this part. This applies for engines 
with respect to exhaust emissions and for vessels with respect to 
evaporative emissions. Participation in this program is voluntary.
    (b) The definitions of subpart I of this part apply to this 
subpart. The following definitions also apply:
    (1) Actual emission credits means emission credits you have 
generated that we have verified by reviewing your final report.
    (2) Averaging set means a set of engines (or vessels) in which 
emission credits may be exchanged only with other engines (or vessels) 
in the same averaging set.
    (3) Broker means any entity that facilitates a trade of emission 
credits between a buyer and seller.
    (4) Buyer means the entity that receives emission credits as a 
result of a trade.
    (5) Family means engine family for exhaust credits or emission 
family for evaporative credits.
    (6) Reserved emission credits means emission credits you have 
generated that we have not yet verified by reviewing your final report.
    (7) Seller means the entity that provides emission credits during a 
trade.
    (8) Standard means the emission standard that applies under subpart 
B of this part for engines or fuel-system components not participating 
in the ABT program of this subpart.
    (9) Trade means to exchange emission credits, either as a buyer or 
seller.
    (c) You may not average or exchange banked or traded exhaust 
credits with evaporative credits, or vice versa. Evaporative credits 
generated by any vessels under this part may be used by any vessels 
under this part. Exhaust credits may be exchanged only within an 
averaging set. Except as specified in paragraph (d) of this section, 
the following criteria define the applicable exhaust averaging sets:
    (1) Sterndrive/inboard engines.
    (2) Outboard and personal watercraft engines.
    (d) Sterndrive/inboard engines certified under Sec.  1045.660 for 
jet boats may use HC+NOX and CO exhaust credits generated 
from outboard and personal watercraft engines, as long as the credit-
using engine is the same model as an engine model from an outboard or 
personal watercraft family. These emission credits may be used for 
averaging, but not for banking or trading. The FEL caps for such jet 
boat families are the HC+NOX and CO standard for outboard 
and personal watercraft engines. U.S.-directed sales from jet boat 
engines using the provisions of this paragraph (d) may not be greater 
than the U.S.-directed sales of the same engine model for outboard or 
personal watercraft engines.
    (e) You may not generate evaporative credits based on permeation 
measurements from metal fuel tanks or portable marine fuel tanks.
    (f) You may not use emission credits generated under this subpart 
to offset any emissions that exceed an FEL or standard. This applies 
for all testing, including certification testing, in-use testing, 
selective enforcement audits, and other production-line testing. 
However, if exhaust emissions from an engine exceed an exhaust FEL or 
standard (for example, during a selective enforcement audit), you may 
use emission credits to recertify the family with a higher FEL that 
applies only to future production.
    (g) Emission credits may be used in the model year they are 
generated (averaging) and in future model years (banking), except that 
CO emission credits for outboard and personal watercraft engines may 
not be banked or traded.
    (h) You may increase or decrease an exhaust FEL during the model 
year by amending your application for certification under Sec.  
1045.225.
    (i) Engine and vessel manufacturers certifying with respect to 
evaporative emissions may use emission credits to demonstrate 
compliance under this subpart. Component manufacturers may

[[Page 59224]]

establish FELs for their certified products, but they may not generate 
or use emission credits under this subpart.
    (j) In your application for certification, base your showing of 
compliance on projected production volumes for engines or vessels 
intended for sale in the United States. As described in Sec.  1045.730, 
compliance with the requirements of this subpart is determined at the 
end of the model year based on actual production volumes for engines or 
vessels intended for sale in the United States. Do not include any of 
the following engines or vessels to calculate emission credits:
    (1) Engines or vessels exempted under subpart G of this part or 
under 40 CFR part 1068.
    (2) Engines or vessels intended for export.
    (3) Engines or vessels that are subject to state emission standards 
for that model year. However, this restriction does not apply if we 
determine that the state standards and requirements are equivalent to 
those of this part and that products sold in such a state will not 
generate credits under the state program. For example, you may not 
include engines or vessels certified for California if California has 
more stringent emission standards for these products or if your 
products generate or use emission credits under the California program.
    (4) Engines or vessels not subject to the requirements of this 
part, such as those excluded under Sec.  1054.5.
    (5) Any other engines or vessels where we indicate elsewhere in 
this part 1054 that they are not to be included in the calculations of 
this subpart.


Sec.  1045.705  How do I generate and calculate exhaust emission 
credits?

    The provisions of this section apply for calculating exhaust 
emission credits for HC+NOX or CO. You may generate exhaust 
emission credits only if you are a certifying engine manufacturer.
    (a) For each participating family, calculate positive or negative 
emission credits relative to the otherwise applicable emission 
standard. Calculate positive emission credits for a family that has an 
FEL below the standard. Calculate negative emission credits for a 
family that has an FEL above the standard. Sum your positive and 
negative credits for the model year before rounding. Round the sum of 
emission credits to the nearest kilogram (kg) using consistent units 
throughout the following equation:

Emission credits (kg) = (STD-FEL) x (Volume) x (Power) x (UL) x (LF) x 
(10-3)
Where:

STD = the emission standard, in g/kW-hr.
FEL = the family emission limit for the family, in g/kW-hr.
Volume = the number of engines eligible to participate in the 
averaging, banking, and trading program within the given family 
during the model year, as described in Sec.  1045.701(j).
Power = maximum engine power for the family, in kilowatts (see Sec.  
1045.140).
UL = The useful life for the given family.
LF = load factor. Use 0.207. We may specify a different load factor 
if we approve the use of special test procedures for an family under 
40 CFR 1065.10(c)(2), consistent with good engineering judgment.

    (b) [Reserved]


Sec.  1045.706  How do I generate and calculate evaporative emission 
credits?

    The provisions of this section apply for calculating evaporative 
emission credits. This applies only for fuel tank permeation. You may 
generate credits only if you are a certifying vessel manufacturer. This 
may include outboard engine manufacturers if they install under-cowl 
fuel tanks.
    (a) For each participating vessel, calculate positive or negative 
emission credits relative to the otherwise applicable emission 
standard. Calculate positive emission credits for a family that has an 
FEL below the standard. Calculate negative emission credits for a 
family that has an FEL above the standard. Sum your positive and 
negative credits for the model year before rounding. Round the sum of 
emission credits to the nearest kilogram (kg) using consistent units 
throughout the following equation:

Emission credits (kg) = (STD-FEL) x (Total Area) x (UL) x (AF) x (365) 
x (10-3)
Where:

STD = the emission standard, in g/m2/day.
FEL = the family emission limit for the family, in g/m2/
day, as described in paragraph (b) of this section.
Total Area = The combined internal surface area of all fuel tanks in 
the family, in m2.
UL = 5 years, which represents the useful life for the given family.
AF = adjustment factor. Use 1.0 for fuel tank testing performed at 
28 [deg]C and 0.60 for testing performed at 40 [deg]C.

    (b) For calculating credits under paragraph (a) of this section, 
the emission standard and FEL must both be based on test measurements 
at the same temperature (28 [deg] or 40 [deg]C). Determine the FEL for 
calculating emission credits (relative to testing at 28 [deg]C) as 
follows:
    (1) To use an FEL below 5.0 g/m2/day, it must be based 
on emission measurements.
    (2) The provisions of this paragraph (b)(2) apply for all emission 
families with FELs at or above 5.0 g/m2/day. To calculate 
emission credits for such emission families, you must choose from one 
of the following options and apply it to all your emission families 
with FELs at or above 5.0 g/m2/day:
    (i) Option 1: Establish all your FELs based on emission 
measurements. This may include measurements from a certifying fuel tank 
manufacturer.
    (ii) Option 2: Use an assigned FEL of 10.4 g/m2/day. 
This would apply without regard to whether any of these emission 
families have measured emission levels below 10.4 g/m2/day. 
If any of your fuel tanks were otherwise certified (by you or the fuel 
tank manufacturer) with an FEL between 5.0 and 10.4 g/m2/
day, the assigned FEL of 10.4 g/m2/day applies only for 
emission credit calculations.


Sec.  1045.710  How do I average emission credits?

    (a) Averaging is the exchange of emission credits among your 
families. You may average emission credits only within the same 
averaging set.
    (b) You may certify one or more families to an FEL above the 
emission standard, subject to the FEL caps and other provisions in 
subpart B of this part, if you show in your application for 
certification that your projected balance of all emission-credit 
transactions in that model year is greater than or equal to zero.
    (c) If you certify a family to an FEL that exceeds the otherwise 
applicable standard, you must obtain enough emission credits to offset 
the family's deficit by the due date for the final report required in 
Sec.  1045.730. The emission credits used to address the deficit may 
come from your other families that generate emission credits in the 
same model year, from emission credits you have banked, or from 
emission credits you obtain through trading.


Sec.  1045.715  How do I bank emission credits?

    (a) Banking is the retention of emission credits by the 
manufacturer generating the emission credits for use in future model 
years for averaging or trading. You may use banked emission credits 
only within the averaging set in which they were generated, except as 
described in this subpart.
    (b) You may designate any emission credits you plan to bank in the 
reports you submit under Sec.  1045.730. During the model year and 
before the due date for the final report, you may designate your 
reserved emission credits for averaging or trading.
    (c) Reserved credits become actual emission credits when you submit 
your

[[Page 59225]]

final report. However, we may revoke these emission credits if we are 
unable to verify them after reviewing your reports or auditing your 
records.


Sec.  1045.720  How do I trade emission credits?

    (a) Trading is the exchange of emission credits between 
manufacturers. You may use traded emission credits for averaging, 
banking, or further trading transactions. Traded emission credits may 
be used only within the averaging set in which they were generated, 
except as described in this subpart.
    (b) You may trade actual emission credits as described in this 
subpart. You may also trade reserved emission credits, but we may 
revoke these emission credits based on our review of your records or 
reports or those of the company with which you traded emission credits. 
You may trade banked credits within an averaging set to any certifying 
engine or vessel manufacturer.
    (c) If a negative emission credit balance results from a 
transaction, both the buyer and seller are liable, except in cases we 
deem to involve fraud. See Sec.  1045.255(e) for cases involving fraud. 
We may void the certificates of all families participating in a trade 
that results in a manufacturer having a negative balance of emission 
credits. See Sec.  1045.745.


Sec.  1045.725  What must I include in my application for 
certification?

    (a) You must declare in your application for certification your 
intent to use the provisions of this subpart for each family that will 
be certified using the ABT program. You must also declare the FELs you 
select for the family for each pollutant for which you are using the 
ABT program. Your FELs must comply with the specifications of subpart B 
of this part, including the FEL caps. FELs must be expressed to the 
same number of decimal places as the emission standard.
    (b) Include the following in your application for certification:
    (1) A statement that, to the best of your belief, you will not have 
a negative balance of emission credits for any averaging set when all 
emission credits are calculated at the end of the year.
    (2) Detailed calculations of projected emission credits (positive 
or negative) based on projected production volumes. We may require you 
to include similar calculations from your other engine families to 
demonstrate that you will be able to avoid a negative credit balance 
for the model year. If you project negative emission credits for a 
family, state the source of positive emission credits you expect to use 
to offset the negative emission credits.


Sec.  1045.730  What ABT reports must I send to EPA?

    (a) If any of your families are certified using the ABT provisions 
of this subpart, you must send an end-of-year report within 90 days 
after the end of the model year and a final report within 270 days 
after the end of the model year. We may waive the requirement to send 
the end-of year report as long as you send the final report on time.
    (b) Your end-of-year and final reports must include the following 
information for each family participating in the ABT program:
    (1) Family designation.
    (2) The emission standards that would otherwise apply to the 
family.
    (3) The FEL for each pollutant. If you change the FEL after the 
start of production, identify the date that you started using the new 
FEL and/or give the engine identification number for the first engine 
covered by the new FEL. In this case, identify each applicable FEL and 
calculate the positive or negative emission credits under each FEL.
    (4) The projected and actual production volumes for the model year 
with a point of retail sale in the United States, as described in Sec.  
1045.701(j). For fuel tanks, state the production volume in terms of 
total surface area and production volume for each tank configuration 
and state the total surface area for the emission family. If you 
changed an FEL during the model year, identify the actual production 
volume associated with each FEL.
    (5) Maximum engine power for each engine configuration, and your 
declared value of maximum engine power for the engine family (see Sec.  
1045.140).
    (6) Useful life.
    (7) Calculated positive or negative emission credits for the whole 
family. Identify any emission credits that you traded, as described in 
paragraph (d)(1) of this section.
    (c) Your end-of-year and final reports must include the following 
additional information:
    (1) Show that your net balance of emission credits from all your 
participating families in each averaging set in the applicable model 
year is not negative.
    (2) State whether you will retain any emission credits for banking.
    (3) State that the report's contents are accurate.
    (d) If you trade emission credits, you must send us a report within 
90 days after the transaction, as follows:
    (1) As the seller, you must include the following information in 
your report:
    (i) The corporate names of the buyer and any brokers.
    (ii) A copy of any contracts related to the trade.
    (iii) The families that generated emission credits for the trade, 
including the number of emission credits from each family.
    (2) As the buyer, you must include the following information in 
your report:
    (i) The corporate names of the seller and any brokers.
    (ii) A copy of any contracts related to the trade.
    (iii) How you intend to use the emission credits, including the 
number of emission credits you intend to apply to each family (if 
known).
    (e) Send your reports electronically to the Designated Compliance 
Officer using an approved information format. If you want to use a 
different format, send us a written request with justification for a 
waiver.
    (f) Correct errors in your end-of-year report or final report as 
follows:
    (1) You may correct any errors in your end-of-year report when you 
prepare the final report as long as you send us the final report by the 
time it is due.
    (2) If you or we determine within 270 days after the end of the 
model year that errors mistakenly decreased your balance of emission 
credits, you may correct the errors and recalculate the balance of 
emission credits. You may not make these corrections for errors that 
are determined more than 270 days after the end of the model year. If 
you report a negative balance of emission credits, we may disallow 
corrections under this paragraph (f)(2).
    (3) If you or we determine anytime that errors mistakenly increased 
your balance of emission credits, you must correct the errors and 
recalculate the balance of emission credits.


Sec.  1045.735  What records must I keep?

    (a) You must organize and maintain your records as described in 
this section. We may review your records at any time.
    (b) Keep the records required by this section for at least eight 
years after the due date for the end-of-year report. You may not use 
emission credits for any engines or vessel if you do not keep all the 
records required under this section. You must therefore keep these 
records to continue to bank valid credits. Store these records in any 
format and on any media as long as you can promptly send us organized, 
written records in English if we ask for them. You must keep these 
records readily available. We may review them at any time.
    (c) Keep a copy of the reports we require in Sec. Sec.  1045.725 
and 1045.730.

[[Page 59226]]

    (d) Keep records of the engine identification number for each 
engine or vessel you produce that generates or uses emission credits 
under the ABT program. You may identify these numbers as a range.
    (e) We may require you to keep additional records or to send us 
relevant information not required by this section in accordance with 
the Clean Air Act.


Sec.  1045.745  What can happen if I do not comply with the provisions 
of this subpart?

    (a) For each family participating in the ABT program, the 
certificate of conformity is conditional upon full compliance with the 
provisions of this subpart during and after the model year. You are 
responsible to establish to our satisfaction that you fully comply with 
applicable requirements. We may void the certificate of conformity for 
a family if you fail to comply with any provisions of this subpart.
    (b) You may certify your family to an FEL above an emission 
standard based on a projection that you will have enough emission 
credits to offset the deficit for the family. However, we may void the 
certificate of conformity if you cannot show in your final report that 
you have enough actual emission credits to offset a deficit for any 
pollutant in a family.
    (c) We may void the certificate of conformity for a family if you 
fail to keep records, send reports, or give us information we request.
    (d) You may ask for a hearing if we void your certificate under 
this section (see Sec.  1045.820).

Subpart I--Definitions and Other Reference Information


Sec.  1045.801  What definitions apply to this part?

    The following definitions apply to this part. The definitions apply 
to all subparts unless we note otherwise. All undefined terms have the 
meaning the Clean Air Act gives to them. The definitions follow:
    Adjustable parameter means any device, system, or element of design 
that someone can adjust (including those which are difficult to access) 
and that, if adjusted, may affect emissions or engine performance 
during emission testing or normal in-use operation. This includes, but 
is not limited to, parameters related to injection timing and fueling 
rate. You may ask us to exclude a parameter that is difficult to access 
if it cannot be adjusted to affect emissions without significantly 
degrading engine performance, or if you otherwise show us that it will 
not be adjusted in a way that affects emissions during in-use 
operation.
    Aftertreatment means relating to a catalytic converter, particulate 
filter, or any other system, component, or technology mounted 
downstream of the exhaust valve (or exhaust port) whose design function 
is to decrease emissions in the engine exhaust before it is exhausted 
to the environment. Exhaust-gas recirculation (EGR), turbochargers, and 
oxygen sensors are not aftertreatment.
    Alcohol-fueled engine means an engine that is designed to run using 
an alcohol fuel. For purposes of this definition, alcohol fuels do not 
include fuels with a nominal alcohol content below 25 percent by 
volume.
    Amphibious vehicle means a vehicle with wheels or tracks that is 
designed primarily for operation on land and secondarily for operation 
in water.
    Applicable emission standard or applicable standard means an 
emission standard to which an engine (or vessel) is subject. 
Additionally, if an engine (or vessel) has been or is being certified 
to another standard or FEL, applicable emission standard means the FEL 
or other standard to which the engine (or vessel) has been or is being 
certified. This definition does not apply to subpart H of this part.
    Auxiliary emission control device means any element of design that 
senses temperature, motive speed, engine RPM, transmission gear, or any 
other parameter for the purpose of activating, modulating, delaying, or 
deactivating the operation of any part of the emission control system.
    Brake power means the usable power output of the engine, not 
including power required to fuel, lubricate, or heat the engine, 
circulate coolant to the engine, or to operate aftertreatment devices.
    Calibration means the set of specifications and tolerances specific 
to a particular design, version, or application of a component or 
assembly capable of functionally describing its operation over its 
working range.
    Carryover means relating to certification based on emission data 
generated from an earlier model year, as described in Sec.  
1045.235(d).
    Certification means relating to the process of obtaining a 
certificate of conformity for an engine family that complies with the 
emission standards and requirements in this part.
    Certified emission level means the highest deteriorated emission 
level in an engine family for a given pollutant from either transient 
or steady-state testing.
    Clean Air Act means the Clean Air Act, as amended, 42 U.S.C. 7401-
7671q.
    Conventional sterndrive/inboard engine means a sterndrive/inboard 
engine that is not a high-performance engine.
    Crankcase emissions means airborne substances emitted to the 
atmosphere from any part of the engine crankcase's ventilation or 
lubrication systems. The crankcase is the housing for the crankshaft 
and other related internal parts.
    Critical emission-related component means any of the following 
components:
    (1) Electronic control units, aftertreatment devices, fuel-metering 
components, EGR-system components, crankcase-ventilation valves, all 
components related to charge-air compression and cooling, and all 
sensors and actuators associated with any of these components.
    (2) Any other component whose primary purpose is to reduce 
emissions.
    Date of manufacture has the meaning given in 40 CFR 1068.30.
    Days means calendar days unless otherwise specified. For example, 
when we specify working days we mean calendar days, excluding weekends 
and U.S. national holidays.
    Designated Compliance Officer means the Manager, Heavy-Duty and 
Nonroad Engine Group (6405-J), U.S. Environmental Protection Agency, 
1200 Pennsylvania Ave., NW., Washington, DC 20460.
    Designated Enforcement Officer means the Director, Air Enforcement 
Division (2242A), U.S. Environmental Protection Agency, 1200 
Pennsylvania Ave., NW.,Washington, DC 20460.
    Deteriorated emission level means the emission level that results 
from applying the appropriate deterioration factor to the official 
emission result of the emission-data engine.
    Deterioration factor means the relationship between emissions at 
the end of useful life and emissions at the low-hour test point (see 
Sec. Sec.  1045.240 and 1045.245), expressed in one of the following 
ways:
    (1) For multiplicative deterioration factors, the ratio of 
emissions at the end of useful life to emissions at the low-hour test 
point.
    (2) For additive deterioration factors, the difference between 
emissions at the end of useful life and emissions at the low-hour test 
point.
    Discrete-mode means relating to the discrete-mode type of steady-
state test described in Sec.  1045.505.
    Dual fuel means relating to an engine designed for operation on two 
different fuels but not on a continuous mixture of those fuels.
    Emission control system means any device, system, or element of 
design that controls or reduces the emissions of regulated pollutants 
from an engine.

[[Page 59227]]

    Emission-data engine means an engine that is tested for 
certification. This includes engines tested to establish deterioration 
factors.
    Emission-related maintenance means maintenance that substantially 
affects emissions or is likely to substantially affect emission 
deterioration.
    Engine has the meaning given in 40 CFR 1068.30. This includes 
complete and partially complete engines.
    Engine configuration means a unique combination of engine hardware 
and calibration within an engine family. Engines within a single engine 
configuration differ only with respect to normal production 
variability.
    Engine family has the meaning given in Sec.  1045.230.
    Engine manufacturer means the manufacturer of the engine. See the 
definition of ``manufacturer'' in this section.
    Evaporative means relating to fuel emissions controlled by 40 CFR 
part 1060. This generally includes emissions that result from 
permeation of fuel through the fuel-system materials or from 
ventilation of the fuel system.
    Excluded means relating to an engine that either:
    (1) Has been determined not to be a nonroad engine, as specified in 
40 CFR 1068.30; or
    (2) Is a nonroad engine that, according to Sec.  1045.5, is not 
subject to this part 1045.
    Exempted has the meaning given in 40 CFR 1068.30.
    Exhaust-gas recirculation (EGR) means a technology that reduces 
emissions by routing exhaust gases that had been exhausted from the 
combustion chamber(s) back into the engine to be mixed with incoming 
air before 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 before or during combustion is not considered 
exhaust-gas recirculation for the purposes of this part.
    Family emission limit (FEL) means an emission level declared by the 
manufacturer to serve in place of the emission standards specified in 
subpart B of this part under the ABT program in subpart H of this part. 
The family emission limit must be expressed to the same number of 
decimal places as the emission standard it replaces. The family 
emission limit serves as the emission standard for the engine family 
(exhaust) or emission family (evaporative) with respect to all required 
testing.
    Flexible-fuel means relating to an engine designed for operation on 
any mixture of two or more different fuels.
    Fuel line means hose, tubing, and primer bulbs containing or 
exposed to liquid fuel, including hose or tubing that delivers fuel to 
or from the engine, as follows:
    (1) This includes flexible molded sections for transporting liquid 
fuel to or from the engine, but does not include inflexible components 
for connecting hose or tubing.
    (2) This includes hose or tubing for the vent line or filler neck 
if fuel systems are designed such that any portion of the vent-line or 
filler-neck material continues to be exposed to liquid fuel after 
completion of a refueling event in which an operator fills the fuel 
tank using typical methods. For example, we would not consider a filler 
neck to be a fuel line if an operator stops refueling after an initial 
automatic shutoff that signals the fuel tank is full, where any liquid 
fuel in the filler neck during the refueling procedure drains into the 
fuel tank.
    (3) This does not include primer bulbs that contain liquid fuel 
only for priming the engine before starting.
    Fuel system means all components involved in transporting, 
metering, and mixing the fuel from the fuel tank to the combustion 
chamber(s), including the fuel tank, fuel tank cap, fuel pump, fuel 
filters, fuel lines, carburetor or fuel-injection components, and all 
fuel-system vents.
    Fuel type means a general category of fuels such as gasoline or 
natural gas. There can be multiple grades within a single fuel type, 
such as low-temperature or all-season gasoline.
    Good engineering judgment has the meaning given in 40 CFR 1068.30. 
See 40 CFR 1068.5 for the administrative process we use to evaluate 
good engineering judgment.
    High-performance means relating to a sterndrive/inboard engine with 
maximum engine power above 373 kW that has design features to enhance 
power output such that the expected operating time until rebuild is 
substantially shorter than 480 hours.
    Hydrocarbon (HC) means the hydrocarbon group on which the emission 
standards are based for each fuel type, as described in subpart B of 
this part.
    Identification number means a unique specification (for example, a 
model number/serial number combination) that allows someone to 
distinguish a particular engine from other similar engines.
    Jet boat means a vessel that uses an installed internal combustion 
engine powering a water jet pump as its primary source of propulsion 
and is designed with open area for carrying passengers. Jet boat 
engines qualify as sterndrive/inboard engines.
    Low-hour means relating to an engine that has stabilized emissions 
and represents the undeteriorated emission level. This would generally 
involve less than 30 hours of operation.
    Manufacture means the physical and engineering process of 
designing, constructing, and assembling an engine or vessel.
    Manufacturer has the meaning given in section 216(1) of the Clean 
Air Act (42 U.S.C. 7550(1)). In general, this term includes any person 
who manufactures an engine, or vessel for sale in the United States or 
otherwise introduces a new marine engine into U.S. commerce. This 
includes importers who import engines or vessels for resale, but not 
dealers. All manufacturing entities under the control of the same 
person are considered to be a single manufacturer.
    Marine engine means a nonroad engine that is installed or intended 
to be installed on a vessel. This includes a portable auxiliary marine 
engine only if its fueling, cooling, or exhaust system is an integral 
part of the vessel. There are two kinds of marine engines:
    (1) Propulsion marine engine means a marine engine that moves a 
vessel through the water or directs the vessel's movement.
    (2) Auxiliary marine engine means a marine engine not used for 
propulsion.
    Marine vessel has the meaning given in 1 U.S.C. 3, except that it 
does not include amphibious vehicles. The definition in 1 U.S.C. 3 very 
broadly includes every craft capable of being used as a means of 
transportation on water.
    Maximum engine power has the meaning given in Sec.  1045.140.
    Maximum test speed has one of the following meanings:
    (1) For all testing with two-stroke engines and for testing four-
stroke engines on an engine dynamometer, maximum test speed has the 
meaning given in 40 CFR 1065.1001 and Sec.  1045.501.
    (2) For testing a four-stroke engine that remains installed in a 
vessel, maximum test speed means the engine speed during sustained 
operation with maximum operator demand.
    Model year means one of the following things:
    (1) For freshly manufactured vessels and engines (see definition of 
``new propulsion marine engine,'' paragraph (1)), model year means one 
of the following:
    (i) Calendar year.
    (ii) Your annual new model production period if it is different 
than the calendar year. This must include

[[Page 59228]]

January 1 of the calendar year for which the model year is named. It 
may not begin before January 2 of the previous calendar year and it 
must end by December 31 of the named calendar year. For seasonal 
production periods not including January 1, model year means the 
calendar year in which the production occurs, unless you choose to 
certify the applicable engine family with the following model year. For 
example, if your production period is June 1, 2010 through November 30, 
2010, your model year would be 2010 unless you choose to certify the 
engine family for model year 2011.
    (2) For an engine that is converted to a propulsion marine engine 
after being certified and placed into service as a motor vehicle 
engine, a nonroad engine that is not a propulsion marine engine, or a 
stationary engine, model year means the model year in which the engine 
was originally produced. For an engine that is converted to a nonroad 
engine after being placed into service as a motor vehicle engine, a 
nonroad engine that is not a propulsion marine engine, or a stationary 
engine without having been certified, model year means the calendar 
year in which the engine becomes a new nonroad engine. (See definition 
of ``new propulsion marine engine,'' paragraph (2).)
    (3) [Reserved]
    (4) For engines that are not freshly manufactured but are installed 
in new vessels, model year means the calendar year in which the engine 
is installed in the new vessel (see definition of ``new propulsion 
marine engine,'' paragraph (4)).
    (5) For imported engines:
    (i) For imported engines described in paragraph (5)(i) of the 
definition of ``new propulsion marine engine,'' model year has the 
meaning given in paragraphs (1) through (4) of this definition.
    (ii) For imported engines described in paragraph (5)(ii) of the 
definition of ``new propulsion marine engine,'' model year means the 
calendar year in which the engine is modified.
    (iii) For imported engines described in paragraph (5)(iii) of the 
definition of ``new nonroad engine,'' model year means the calendar 
year in which the engine is assembled in its imported configuration, 
unless specified otherwise in this part or in 40 CFR part 1068.
    New portable marine fuel tanks and fuel lines means portable marine 
fuel tanks and fuel lines that have not yet been placed into service, 
or which are otherwise offered for sales as new products.
    New propulsion marine engine or new engine means any of the 
following things:
    (1) A freshly manufactured propulsion marine engine for which the 
ultimate purchaser has never received the equitable or legal title. 
This kind of engine might commonly be thought of as ``brand new.'' In 
the case of this paragraph (1), the engine is new from the time it is 
produced until the ultimate purchaser receives the title or the product 
is placed into service, whichever comes first.
    (2) An engine originally manufactured as a motor vehicle engine, a 
nonroad engine that is not a propulsion marine engine, or a stationary 
engine that is later used or intended to be used as a propulsion marine 
engine. In this case, the engine is no longer a motor vehicle, 
nonpropulsion, or stationary engine and becomes a ``new propulsion 
marine engine.'' The engine is no longer new when it is placed into 
service as a marine propulsion engine. This paragraph (2) applies for 
engines we exclude under Sec.  1045.5, where that engine is later 
installed as a propulsion engine in a vessel that is covered by this 
part 1045.
    (3) [Reserved]
    (4) An engine not covered by paragraphs (1) through (3) of this 
definition that is intended to be installed in a new vessel. This 
generally includes installation of used engines in new vessels. The 
engine is no longer new when the ultimate purchaser receives a title 
for the vessel or the product is placed into service, whichever comes 
first.
    (5) An imported marine engine, subject to the following provisions:
    (i) An imported marine engine covered by a certificate of 
conformity issued under this part that meets the criteria of one or 
more of paragraphs (1) through (4) of this definition, where the 
original engine manufacturer holds the certificate, is new as defined 
by those applicable paragraphs.
    (ii) An imported engine that will be covered by a certificate of 
conformity issued under this part, where someone other than the 
original engine manufacturer holds the certificate (such as when the 
engine is modified after its initial assembly), is a new propulsion 
marine engine when it is imported. It is no longer new when the 
ultimate purchaser receives a title for the engine or it is placed into 
service, whichever comes first.
    (iii) An imported propulsion marine engine that is not covered by a 
certificate of conformity issued under this part at the time of 
importation is new. This addresses uncertified engines and vessels 
initially placed into service that someone seeks to import into the 
United States. Importation of this kind of engine (or vessel containing 
such an engine) is generally prohibited by 40 CFR part 1068. However, 
the importation of such an engine is not prohibited if the engine has 
an earlier model year than that identified in the following table, 
since it is not subject to standards:

    Applicability of Emission Standards for Propulsion Marine Engines
------------------------------------------------------------------------
                                                          Initial model
                                                             year of
                      Engine type                            emission
                                                            standards
------------------------------------------------------------------------
Outboard...............................................             1998
Personal watercraft....................................             1999
Sterndrive/inboard.....................................             2010
------------------------------------------------------------------------

    New vessel means either of the following things:
    (1) A vessel for which the ultimate purchaser has never received 
the equitable or legal title. The product is no longer new when the 
ultimate purchaser receives this title or it is placed into service, 
whichever comes first.
    (2) An imported vessel that has already been placed into service, 
where it has an engine not covered by a certificate of conformity 
issued under this part at the time of importation that was manufactured 
after the requirements of this part start to apply (see Sec.  1045.1).
    Noncompliant engine means an engine that was originally covered by 
a certificate of conformity but is not in the certified configuration 
or otherwise does not comply with the conditions of the certificate.
    Nonconforming engine means an engine not covered by a certificate 
of conformity that would otherwise be subject to emission standards.
    Nonmethane hydrocarbon has the meaning given in 40 CFR 1065.1001. 
This generally means the difference between the emitted mass of total 
hydrocarbons and the emitted mass of methane.
    Nonroad means relating to nonroad engines, or vessels, or equipment 
that include nonroad engines.
    Nonroad engine has the meaning given in 40 CFR 1068.30. In general, 
this means all internal-combustion engines except motor vehicle 
engines, stationary engines, engines used solely for competition, or 
engines used in aircraft.
    Official emission result means the measured emission rate for an 
emission-data engine on a given duty cycle before

[[Page 59229]]

the application of any deterioration factor.
    Outboard engine means an assembly of a spark-ignition engine and 
drive unit used to propel a vessel from a properly mounted position 
external to the hull of the vessel. An outboard drive unit is partially 
submerged during operation and can be tilted out of the water when not 
in use.
    Owners manual means a document or collection of documents prepared 
by the engine manufacturer for the owner or operator to describe 
appropriate engine maintenance, applicable warranties, and any other 
information related to operating or keeping the engine. The owners 
manual is typically provided to the ultimate purchaser at the time of 
sale. The owners manual may be in paper or electronic format.
    Oxides of nitrogen has the meaning given in 40 CFR part 1065.1001.
    Personal watercraft means a vessel less than 4.0 meters (13 feet) 
in length that uses an installed spark-ignition engine powering a water 
jet pump as its primary source of propulsion and is designed with no 
open load carrying area that would retain water. The vessel is designed 
to be operated by a person or persons positioned on, rather than within 
the confines of the hull. A vessel using an outboard engine as its 
primary source of propulsion is not a personal watercraft.
    Personal watercraft engine means a spark-ignition engine used to 
propel a personal watercraft.
    Placed into service means put into initial use for its intended 
purpose.
    Point of first retail sale means the location at which the initial 
retail sale occurs. This generally means an equipment dealership, but 
may also include an engine seller or distributor in cases where loose 
engines are sold to the general public for uses such as replacement 
engines.
    Portable marine fuel tank has the meaning given in 40 CFR 1060.801.
    Ramped-modal means relating to the ramped-modal type of steady-
state test described in Sec.  1045.505.
    Revoke has the meaning given in 40 CFR 1068.30. In general this 
means to terminate the certificate or an exemption for an engine 
family.
    Round has the meaning given in 40 CFR 1065.1001.
    Scheduled maintenance means adjusting, repairing, removing, 
disassembling, cleaning, or replacing components or systems 
periodically to keep a part or system from failing, malfunctioning, or 
wearing prematurely. It also may mean actions you expect are necessary 
to correct an overt indication of failure or malfunction for which 
periodic maintenance is not appropriate.
    Small-volume engine manufacturer means an engine manufacturer with 
250 or fewer employees. This includes any employees working for a 
parent company and all its subsidiaries.
    Small-volume vessel manufacturer means a vessel manufacturer with 
500 or fewer employees. This includes any employees working for a 
parent company and all its subsidiaries.
    Spark-ignition means relating to a gasoline-fueled engine or any 
other type of engine with a spark plug (or other sparking device) and 
with operating characteristics significantly similar to the theoretical 
Otto combustion cycle. Spark-ignition engines usually use a throttle to 
regulate intake air flow to control power during normal operation.
    Steady-state means relating to emission tests in which engine speed 
and load are held at a finite set of essentially constant values. 
Steady-state tests are either discrete-mode tests or ramped-modal 
tests.
    Sterndrive/inboard engine means a spark-ignition engine that is 
used to propel a vessel, but is not an outboard engine or a personal 
watercraft engine. A sterndrive/inboard engine may be either a 
conventional sterndrive/inboard engine or a high-performance engine. 
Engines on propeller-driven vessels, jet boats, air boats, and 
hovercraft are all sterndrive/inboard engines.
    Stoichiometric means relating to the particular ratio of air and 
fuel such that if the fuel were fully oxidized, there would be no 
remaining fuel or oxygen. For example, stoichiometric combustion in a 
gasoline-fueled engine typically occurs at an air-to-fuel mass ratio of 
about 14.7:1.
    Suspend has the meaning given in 40 CFR 1068.30. In general this 
means to temporarily discontinue the certificate or an exemption for an 
engine family.
    Test engine means an engine in a test sample.
    Test sample means the collection of engines selected from the 
population of an engine family for emission testing. This may include 
testing for certification, production-line testing, or in-use testing.
    Total hydrocarbon has the meaning given in 40 CFR 1065.1001. This 
generally means the combined mass of organic compounds measured by the 
specified procedure for measuring total hydrocarbon, expressed as a 
hydrocarbon with a hydrogen-to-carbon mass ratio of 1.85:1.
    Total hydrocarbon equivalent has the meaning given in 40 CFR 
1065.1001. This generally 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 exhaust hydrocarbon from petroleum-fueled 
engines. The hydrogen-to-carbon ratio of the equivalent hydrocarbon is 
1.85:1.
    Ultimate purchaser means, with respect to any new vessel or new 
marine propulsion engine, the first person who in good faith purchases 
such new vessel or new engine for purposes other than resale.
    Under-cowl fuel line means a fuel line that is entirely contained 
within the cowl of an outboard engine. This does not include a fuel 
line that crosses through the cowl housing.
    United States has the meaning given in 40 CFR 1068.30.
    Upcoming model year for an engine family means the model year after 
the one currently in production.
    U.S.-directed production volume means the number of engine units, 
subject to the requirements of this part, produced by a manufacturer 
for which the manufacturer has a reasonable assurance that sale was or 
will be made to ultimate purchasers in the United States.
    Useful life means the period during which a vehicle is required to 
comply with all applicable emission standards, specified as a given 
number of hours of operation or calendar years, whichever comes first. 
It is the period during which an engine is required to comply with all 
applicable emission standards. See Sec. Sec.  1045.103(e), 1045.105(e), 
and 1045.112. If an engine has no hour meter, the specified number of 
hours does not limit the period during which an in-use engine is 
required to comply with emission standards unless the degree of service 
accumulation can be verified separately.
    Variable-speed engine means an engine that is not a constant-speed 
engine.
    Vessel means marine vessel.
    Void has the meaning given in 40 CFR 1068.30. In general this means 
to invalidate a certificate or an exemption both retroactively and 
prospectively.
    Volatile liquid fuel means any fuel other than diesel or biodiesel 
that is a liquid at atmospheric pressure and has a Reid Vapor Pressure 
higher than 2.0 pounds per square inch.
    We (us, our) means the Administrator of the Environmental 
Protection Agency and any authorized representatives.
    Wide-open throttle means maximum throttle opening. Unless this is 
specified at a given speed, it refers to maximum throttle opening at 
maximum speed. For electronically controlled or other

[[Page 59230]]

engines with multiple possible fueling rates, wide-open throttle also 
means the maximum fueling rate at maximum throttle opening under test 
conditions.


Sec.  1045.805  What symbols, acronyms, and abbreviations does this 
part use?

    The following symbols, acronyms, and abbreviations apply to this 
part:
ABT Averaging, banking, and trading.
AECD Auxiliary emission control device.
CFR Code of Federal Regulations.
CH4 methane.
CO carbon monoxide.
CO2 carbon dioxide.
EPA Environmental Protection Agency.
FEL Family Emission Limit.
g gram.
HC hydrocarbon.
hr hour.
kPa kilopascals.
kW kilowatt.
m meter.
N2O nitrous oxide.
NARA National Archives and Records Administration.
NMHC nonmethane hydrocarbons.
NOX oxides of nitrogen (NO and NO2).
NTE not-to-exceed
psig pounds per square inch of gauge pressure.
RPM revolutions per minute.
SAE Society of Automotive Engineers.
THC total hydrocarbon.
THCE total hydrocarbon equivalent.
U.S.C. United States Code.


Sec.  1045.810  What materials does this part reference?

    Documents listed in this section have been incorporated by 
reference into this part. The Director of the Federal Register approved 
the incorporation by reference as prescribed in 5 U.S.C. 552(a) and 1 
CFR part 51. Anyone may inspect copies at the U.S. EPA, Air and 
Radiation Docket and Information Center, 1301 Constitution Ave., NW., 
Room B102, EPA West Building, Washington, DC 20460 or at the National 
Archives and Records Administration (NARA). For information on the 
availability of this material at NARA, call 202-741-6030, or go to: 
http://www.archives.gov/federal_register/code_of_federal_regulations/ibr_locations.html.
    (a) SAE material. Table 1 to this section lists material from the 
Society of Automotive Engineers that we have incorporated by reference. 
The first column lists the number and name of the material. The second 
column lists the sections of this part where we reference it. Anyone 
may purchase copies of these materials from the Society of Automotive 
Engineers, 400 Commonwealth Drive, Warrendale, PA 15096 or http://www.sae.org. Table 1 follows:

                Table 1 to Sec.   1045.810--SAE Materials
------------------------------------------------------------------------
                                                              Part 1045
                  Document number and name                    reference
------------------------------------------------------------------------
SAE J1939-05, Marine Stern Drive and Inboard Spark-Ignition     1045.110
 Engine On-Board Diagnostics Implementation Guide, February
 2008......................................................
------------------------------------------------------------------------

    (b) [Reserved]


Sec.  1045.815  What provisions apply to confidential information?

    (a) Clearly show what you consider confidential by marking, 
circling, bracketing, stamping, or some other method.
    (b) We will store your confidential information as described in 40 
CFR part 2. Also, we will disclose it only as specified in 40 CFR part 
2. This applies both to any information you send us and to any 
information we collect from inspections, audits, or other site visits.
    (c) If you send us a second copy without the confidential 
information, we will assume it contains nothing confidential whenever 
we need to release information from it.
    (d) If you send us information without claiming it is confidential, 
we may make it available to the public without further notice to you, 
as described in 40 CFR 2.204.


Sec.  1045.820  How do I request a hearing?

    (a) You may request a hearing under certain circumstances as 
described elsewhere in this part. To do this, you must file a written 
request, including a description of your objection and any supporting 
data, within 30 days after we make a decision.
    (b) For a hearing you request under the provisions of this part, we 
will approve your request if we find that your request raises a 
substantial factual issue.
    (c) If we agree to hold a hearing, we will use the procedures 
specified in 40 CFR part 1068, subpart G.


Sec.  1045.825  What reporting and recordkeeping requirements apply 
under this part?

    Under the Paperwork Reduction Act (44 U.S.C. 3501 et seq.), the 
Office of Management and Budget approves the reporting and 
recordkeeping specified in the applicable regulations. The following 
items illustrate the kind of reporting and recordkeeping we require for 
engines and vessels regulated under this part:
    (a) We specify the following requirements related to engine and 
vessel certification in this part 1045:
    (1) In Sec.  1045.20 we require vessel manufacturers to label their 
vessels if they are relying on component certification.
    (2) In Sec.  1045.135 we require engine manufacturers to keep 
certain records related to duplicate labels sent to vessel 
manufacturers.
    (3) In Sec.  1045.145 we include various reporting and 
recordkeeping requirements related to interim provisions.
    (4) In subpart C of this part we identify a wide range of 
information required to certify engines.
    (5) In Sec. Sec.  1045.345 and 1045.350 we specify certain records 
related to production-line testing.
    (6) In Sec. Sec.  1045.420 and 1045.425 we specify certain records 
related to in-use testing.
    (7) In subpart G of this part we identify several reporting and 
recordkeeping items for making demonstrations and getting approval 
related to various special compliance provisions.
    (8) In Sec. Sec.  1045.725, 1045.730, and 1045.735 we specify 
certain records related to averaging, banking, and trading.
    (b) We specify the following requirements related to vessel or 
component certification in 40 CFR part 1060:
    (1) In 40 CFR 1060.20 we give an overview of principles for 
reporting information.
    (2) In 40 CFR part 1060, subpart C, we identify a wide range of 
information required to certify products.
    (3) In 40 CFR 1060.301 we require manufacturers to make engines or 
vessels available for our testing if we make such a request.
    (4) In 40 CFR 1060.505 we specify information needs for 
establishing various changes to published test procedures.
    (c) We specify the following requirements related to testing in 40 
CFR part 1065:
    (1) In 40 CFR 1065.2 we give an overview of principles for 
reporting information.
    (2) In 40 CFR 1065.10 and 1065.12 we specify information needs for 
establishing various changes to published test procedures.
    (3) In 40 CFR 1065.25 we establish basic guidelines for storing 
test information.
    (4) In 40 CFR 1065.695 we identify data that may be appropriate for 
collecting during testing of in-use engines using portable analyzers.

[[Page 59231]]

    (d) We specify the following requirements related to the general 
compliance provisions in 40 CFR part 1068:
    (1) In 40 CFR 1068.5 we establish a process for evaluating good 
engineering judgment related to testing and certification.
    (2) In 40 CFR 1068.25 we describe general provisions related to 
sending and keeping information.
    (3) In 40 CFR 1068.27 we require manufacturers to make engines 
available for our testing or inspection if we make such a request.
    (4) In 40 CFR 1068.105 we require vessel manufacturers to keep 
certain records related to duplicate labels from engine manufacturers.
    (5) In 40 CFR 1068.120 we specify recordkeeping related to 
rebuilding engines.
    (6) In 40 CFR part 1068, subpart C, we identify several reporting 
and recordkeeping items for making demonstrations and getting approval 
related to various exemptions.
    (7) In 40 CFR part 1068, subpart D, we identify several reporting 
and recordkeeping items for making demonstrations and getting approval 
related to importing engines.
    (8) In 40 CFR 1068.450 and 1068.455 we specify certain records 
related to testing production-line engines in a selective enforcement 
audit.
    (9) In 40 CFR 1068.501 we specify certain records related to 
investigating and reporting emission-related defects.
    (10) In 40 CFR 1068.525 and 1068.530 we specify certain records 
related to recalling nonconforming engines.

Appendix I to Part 1045--Summary of Previous Emission Standards

    (a) The following standards apply to outboard and personal 
watercraft engines produced before the model years specified in 
Sec.  1045.1 (since the end of the phase-in period specified in 40 
CFR 91.104):
    (1) For engines at or below 4.3 kW, the HC+NOX 
standard is 81.00 g/kW-hr.
    (2) For engines above 4.3 kW, the following HC+NOX 
standard applies:

STD = 6.00 + 0.250 [middot] (151 + 557/P\0.9\)

Where:

STD = The HC+NOX emission standard, in g/kW-hr.
P = The average power of an engine family, in kW.

    (b) See 40 CFR 91.104 for standards that applied to outboard and 
personal watercraft engines during the phase-in period.

Appendix II to Part 1045--Duty Cycles for Propulsion Marine Engines

    (a) The following duty cycle applies for discrete-mode testing:

----------------------------------------------------------------------------------------------------------------
                                                                                      Torque         Weighting
                 E4 Mode No.                            Engine speed\1\           (percent) \2\       factors
----------------------------------------------------------------------------------------------------------------
1............................................  Maximum test speed..............            100              0.06
2............................................  80%.............................             71.6            0.14
3............................................  60%.............................             46.5            0.15
4............................................  40%.............................             25.3            0.25
5............................................  Warm idle.......................              0              0.40
----------------------------------------------------------------------------------------------------------------
\1\ Speed terms are defined in 40 CFR part 1065. Percent speed values are relative to maximum test speed.
\2\ Except as noted in Sec.   1045.505, the percent torque is relative to maximum torque at maximum test speed.

    (b) The following duty cycle applies for ramped-modal testing:

----------------------------------------------------------------------------------------------------------------
                                        Time in mode
               RMC Mode                   (seconds)       Engine speed \1,2\         Torque (percent) \2,3\
----------------------------------------------------------------------------------------------------------------
1a Steady-state......................             225  Idle...................  0
1b Transition........................              20  Linear transition......  Linear transition
2a Steady-state......................              63  Maximum test speed.....  100
2b Transition........................              20  Linear transition......  Linear transition
*3a Steady-state.....................             271  40%....................  25.3%
3b Transition........................              20  Linear transition......  Linear transition
4a Steady-state......................             151  80%....................  71.6%
4b Transition........................              20  Linear transition......  Linear transition
5a Steady-state......................             161  60%....................  46.5%
5b Transition........................              20  Linear transition......  Linear transition
6 Steady-state.......................             229  Warm idle..............  0
----------------------------------------------------------------------------------------------------------------
\1\ Speed terms are defined in 40 CFR part 1065. Percent speed values are relative to maximum test speed.
\2\ Advance from one mode to the next within a 20-second transition phase. During the transition phase, command
  linear progressions of speed and torque from the speed setting and torque setting of the current mode to the
  speed setting and torque setting of the next mode.
\3\ Except as noted in Sec.   1045.505, the percent torque is relative to maximum torque at maximum test speed.

PART 1048--CONTROL OF EMISSIONS FROM NEW, LARGE NONROAD SPARK-
IGNITION ENGINES

0
99. The authority citation for part 1048 continues to read as follows:

    Authority: 42 U.S.C. 7401-7671q.

Subpart A--[Amended]

0
100. Section 1048.1 is amended by revising paragraph (d) to read as 
follows:


Sec.  1048.1  Does this part apply to me?

* * * * *
    (d) In certain cases, the regulations in this part 1048 apply to 
engines with maximum engine power at or below 19 kW that would 
otherwise be covered by 40 CFR part 90 or 1054. See 40 CFR 90.913 or 
1054.615 for provisions related to this allowance.

0
101. A new Sec.  1048.2 is added to read as follows:


Sec.  1048.2  Who is responsible for compliance?

    The regulations in this part 1048 contain provisions that affect 
both engine manufacturers and others. However, the requirements of this 
part

[[Page 59232]]

are generally addressed to the engine manufacturer. The term ``you'' 
generally means the engine manufacturer, as defined in Sec.  1048.801, 
especially for issues related to certification (including production-
line testing, reporting, etc.).

0
102. Section 1048.5 is amended by revising paragraph (b) and adding 
paragraph (c) to read as follows:


Sec.  1048.5  Which engines are excluded from this part's requirements?

* * * * *
    (b) Propulsion marine engines. See 40 CFR parts 91 and 1045. This 
part applies with respect to auxiliary marine engines.
    (c) Engines that are certified to meet the requirements of 40 CFR 
parts 92 or 1033 (locomotive engines), or are otherwise subject to 40 
CFR parts 92 or 1033.

0
103. Section 1048.10 is amended by revising the introductory text to 
read as follows:


Sec.  1048.10  How is this part organized?

    This part 1048 is divided into the following subparts:
* * * * *

0
104. Section 1048.15 is amended as follows:
0
a. By revising the section heading.
0
b. By redesignating paragraphs (a) through (c) as paragraphs (b) 
through (d), respectively.
0
c. By adding a new paragraph (a).


Sec.  1048.15  Do any other regulation parts apply to me?

    (a) Part 1060 of this chapter describes standards and procedures 
for controlling evaporative emissions from engines fueled by gasoline 
or other volatile liquid fuels and the associated fuel systems. These 
requirements apply to engine manufacturers as specified in this part 
1048. Part 1060 applies optionally for equipment manufacturers and 
fuel-tank manufacturers for certifying their products.
* * * * *

Subpart B--[Amended]

0
105. Section 1048.101 is amended to read as follows:
0
a. By adding paragraph (a)(2)(iv).
0
b. By removing paragraph (a)(4).
0
c. By revising paragraphs (e)(1), (e)(2), and (e)(3).
0
d. By revising paragraphs (f) and (h) to read as follows:


Sec.  1048.101  What exhaust emission standards must my engines meet?

* * * * *
    (a) * * *
    (2) * * *
    (iv) Constant-speed engines and severe-duty engines.
* * * * *
    (e) * * *
    (1) Natural gas-fueled engines: NMHC emissions.
    (2) Alcohol-fueled engines: THCE emissions.
    (3) Other engines: THC emissions.
    (f) Small engines. Certain engines with total displacement at or 
below 1000 cc may comply with the requirements of 40 CFR part 90 or 
1054 instead of complying with the requirements of this part, as 
described in Sec.  1048.615.
* * * * *
    (h) Applicability for testing. The duty-cycle emission standards in 
this subpart apply to all testing performed according to the procedures 
in Sec. Sec.  1048.505 and 1048.510, including certification, 
production-line, and in-use testing. The field-testing standards apply 
for all testing performed according to the procedures of subpart F of 
this part.

0
106. Section 1048.105 is revised to read as follows:


Sec.  1048.105  What evaporative emission standards and requirements 
apply?

    Starting in the 2007 model year, new engines that run on a volatile 
liquid fuel (such as gasoline) must meet the emission standards of this 
section over a useful life of five years, except as specified in 
paragraph (f) of this section. Note that Sec.  1048.245 allows you to 
use design-based certification instead of generating new emission data.
    (a) Fuel line permeation. For nonmetallic fuel lines, you must 
specify and use products that meet the Category 1 specifications for 
permeation in SAE J2260 (incorporated by reference in Sec.  1048.810).
    (b) [Reserved]
    (c) Diurnal emissions. Evaporative hydrocarbon emissions may not 
exceed 0.2 grams per gallon of fuel tank capacity when measured using 
the test procedures specified in Sec.  1048.501. Diurnal emission 
controls must continue to function during engine operation.
    (d) Running loss. Liquid fuel in the fuel tank may not reach 
boiling during continuous engine operation in the final installation at 
an ambient temperature of 30 [deg]C. Note that gasoline with a Reid 
vapor pressure of 62 kPa (9 psi) begins to boil at about 53 [deg]C at 
atmospheric pressure, and at about 60 [deg]C for fuel tanks that hold 
pressure as described in Sec.  1048.245(e)(1)(i).
    (e) Installation. If other companies install your engines in their 
equipment, you may introduce your engines into U.S. commerce without 
meeting all the requirements in this section. However, you must give 
equipment manufacturers any appropriate instructions so that fully 
assembled equipment will meet all the requirements in this section, as 
described in Sec.  1048.130. Your instructions may specify that 
equipment manufacturers may alternatively use other fuel-system 
components that have been certified under 40 CFR part 1060. Introducing 
equipment into U.S. commerce without meeting all the requirements of 
this section violates 40 CFR 1068.101(a)(1).
    (f) Motor vehicles and marine vessels. Motor vehicles and marine 
vessels may contain engines subject to the exhaust emission standards 
in this part 1048. Evaporative emission standards apply to these 
products as follows:
    (1) Marine vessels using spark-ignition engines are subject to the 
requirements of 40 CFR part 1045. The vessels are not required to 
comply with the evaporative emission standards and related requirements 
of this part 1048.
    (2) Motor vehicles are subject to the requirements of 40 CFR part 
86. They are not required to comply with the evaporative emission 
standards and related requirements of this part 1048.

0
107. Section 1048.110 is amended by adding introductory text and 
revising paragraphs (b) introductory text, (c), (d), and (g) 
introductory text to read as follows:


Sec.  1048.110  How must my engines diagnose malfunctions?

    The following engine-diagnostic requirements apply for engines 
equipped with three-way catalysts and closed-loop control of air-fuel 
ratios:
* * * * *
    (b) Use a malfunction-indicator light (MIL). The MIL must be 
readily visible to the operator; it may be any color except red. When 
the MIL goes on, it must display ``Check Engine,'' ``Service Engine 
Soon,'' or a similar message that we approve. You may use sound in 
addition to the light signal. The MIL must go on under each of the 
following circumstances:
* * * * *
    (c) Control when the MIL can go out. If the MIL goes on to show a 
malfunction or system error, it must remain on during all later engine 
operation until servicing corrects the malfunction. If the engine is 
not serviced, but the malfunction or system error does not recur for 
three consecutive engine starts during which the malfunctioning system 
is evaluated and found to be working properly, the MIL may stay off 
during later engine operation.

[[Page 59233]]

    (d) Store trouble codes in computer memory. Record and store in 
computer memory any diagnostic trouble codes showing a malfunction that 
should illuminate the MIL. The stored codes must identify the 
malfunctioning system or component as uniquely as possible. Make these 
codes available through the data link connector as described in 
paragraph (g) of this section. You may store codes for conditions that 
do not turn on the MIL. The system must store a separate code to show 
when the diagnostic system is disabled.
* * * * *
    (g) Follow standard references for formats, codes, and connections. 
Follow conventions defined in 40 CFR 1045.110 or in the following 
documents (incorporated by reference in Sec.  1048.810) or ask us to 
approve using updated versions of (or variations from) these documents:
* * * * *

0
108. Section 1048.115 is amended by revising the section heading, 
introductory text, and paragraph (e) to read as follows:


Sec.  1048.115  What other requirements apply?

    Engines that are required to meet the emission standards of this 
part must meet the following requirements:
* * * * *
    (e) Adjustable parameters. Engines that have adjustable parameters 
must meet all the requirements of this part for any adjustment in the 
physically adjustable range. An operating parameter is not considered 
adjustable if you permanently seal it or if it is not normally 
accessible using ordinary tools. We may require that you set adjustable 
parameters to any specification within the adjustable range during any 
testing, including certification testing, production-line testing, or 
in-use testing.
* * * * *

0
109. Section 1048.120 is amended by revising paragraph (c) to read as 
follows:


Sec.  1048.120  What emission-related warranty requirements apply to 
me?

* * * * *
    (c) Components covered. The emission-related warranty covers all 
your components whose failure would increase an engine's emissions of 
any regulated pollutant, including components listed in 40 CFR part 
1068, Appendix I, and components from any other system you develop to 
control emissions. The emission-related warranty covers these 
components even if another company produces the component for you. Your 
emission-related warranty does not cover components whose failure would 
not increase an engine's emissions of any regulated pollutant.
* * * * *

0
110. Section 1048.125 is amended by revising paragraphs (a)(1)(iii) and 
(d) to read as follows:


Sec.  1048.125  What maintenance instructions must I give to buyers?

* * * * *
    (a) * * *
    (1) * * *
    (iii) You provide the maintenance free of charge and clearly say so 
in your maintenance instructions.
* * * * *
    (d) Noncritical emission-related maintenance. Subject to the 
provisions of this paragraph (d), you may schedule any amount of 
emission-related inspection or maintenance that is not covered by 
paragraph (a) of this section (i.e., maintenance that is neither 
explicitly identified as critical emission-related maintenance, nor 
that we approve as critical emission-related maintenance). Noncritical 
emission-related maintenance generally includes changing spark plugs, 
re-seating valves, or any other emission-related maintenance on the 
components we specify in 40 CFR part 1068, Appendix I that is not 
covered in paragraph (a) of this section. You must state in the owners 
manual that these steps are not necessary to keep the emission-related 
warranty valid. If operators fail to do this maintenance, this does not 
allow you to disqualify those engines from in-use testing or deny a 
warranty claim. Do not take these inspection or maintenance steps 
during service accumulation on your emission-data engines.
* * * * *

0
111. Section 1048.135 is amended by revising paragraphs (c) and (f) to 
read as follows:


Sec.  1048.135  How must I label and identify the engines I produce?

* * * * *
    (c) The label must--
    (1) Include the heading ``EMISSION CONTROL INFORMATION''.
    (2) Include your full corporate name and trademark. You may 
identify another company and use its trademark instead of yours if you 
comply with the provisions of Sec.  1048.635.
    (3) Include EPA's standardized designation for the engine family 
(and subfamily, where applicable).
    (4) State the engine's displacement (in liters); however, you may 
omit this from the label if all the engines in the engine family have 
the same per-cylinder displacement and total displacement.
    (5) State the date of manufacture [DAY (optional), MONTH, and 
YEAR]; however, you may omit this from the label if you stamp, engrave, 
or otherwise permanently identify it elsewhere on the engine, in which 
case you must also describe in your application for certification where 
you will identify the date on the engine.
    (6) Identify the emission control system. Use terms and 
abbreviations as described in 40 CFR 1068.45. You may omit this 
information from the label if there is not enough room for it and you 
put it in the owners manual instead.
    (7) State: ``THIS ENGINE IS CERTIFIED TO OPERATE ON [specify 
operating fuel or fuels].''
    (8) Identify any requirements for fuel and lubricants. You may omit 
this information from the label if there is not enough room for it and 
you put it in the owners manual instead.
    (9) List specifications and adjustments for engine tuneups; show 
the proper position for the transmission during tuneup and state which 
accessories should be operating. You may omit this information from the 
label if there is not enough room for it and you put it in the owners 
manual instead.
    (10) State the useful life for your engine family if it has a 
longer useful life under Sec.  1048.101(g)(1) or a shortened useful 
life under Sec.  1048.101(g)(2).
    (11) Identify the emission standards to which you have certified 
the engine (in g/kW-hr).
    (12) Include one of the following compliance statements:
    (i) For engines that may be used in nonroad or stationary 
equipment, state: ``THIS ENGINE COMPLIES WITH U.S. EPA REGULATIONS FOR 
[MODEL YEAR] NONROAD AND STATIONARY ENGINES.''
    (ii) For engines that will be used only in nonroad equipment, 
state: ``THIS ENGINE COMPLIES WITH U.S. EPA REGULATIONS FOR [MODEL 
YEAR] NONROAD ENGINES.''
    (iii) For engines that will be used only in stationary equipment, 
state: ``THIS ENGINE COMPLIES WITH U.S. EPA REGULATIONS FOR [MODEL 
YEAR] STATIONARY ENGINES.''
    (13) Include any of the following additional statements for special 
situations if they apply to your engines:
    (i) If your engines are certified only for constant-speed 
operation, state: ``USE IN CONSTANT-SPEED APPLICATIONS ONLY.''
    (ii) If your engines are certified only for variable-speed 
operation, state: ``USE

[[Page 59234]]

IN VARIABLE-SPEED APPLICATIONS ONLY.''
    (iii) If your engines are certified only for high-load engines, 
state: ``THIS ENGINE IS NOT INTENDED FOR OPERATION AT LESS THAN 75 
PERCENT OF FULL LOAD.''
    (iv) If you certify your engines under Sec.  1048.101(d), and show 
in your application for certification that in-use engines will 
experience infrequent high-load operation, state: ``THIS ENGINE IS NOT 
INTENDED FOR OPERATION AT MORE THAN PERCENT OF FULL LOAD.'' Specify the 
appropriate percentage of full load based on the nature of the engine 
protection. You may add other statements to discourage operation in 
engine-protection modes.
    (v) If your engines are certified to the voluntary standards in 
Sec.  1048.140, state: ``BLUE SKY SERIES'' and identify the standard to 
which you certify the engines.
* * * * *
    (f) If you obscure the engine label while installing the engine in 
the equipment such that the label cannot be read during normal 
maintenance, you must place a duplicate label on the equipment. If 
others install your engine in their equipment in a way that obscures 
the engine label, we require them to add a duplicate label on the 
equipment (see 40 CFR 1068.105); in that case, give them the number of 
duplicate labels they request and keep the following records for at 
least five years:
    (1) Written documentation of the request from the equipment 
manufacturer.
    (2) The number of duplicate labels you send for each engine family 
and the date you sent them.

0
112. Section 1048.140 is revised to read as follows:


Sec.  1048.140  What are the provisions for certifying Blue Sky Series 
engines?

    This section defines voluntary standards for a recognized level of 
superior emission control for engines designated as ``Blue Sky Series'' 
engines. If you certify an engine family under this section, it is 
subject to all the requirements of this part as if these voluntary 
standards were mandatory. To receive a certificate of conformity as 
``Blue Sky Series,'' you must certify to one of the sets of exhaust 
emission standards in the following table:

Table 1 of Sec.   1048.140--Standards for Blue Sky Series Engines (g/kW-
                                   hr)
------------------------------------------------------------------------
   Standards for steady-state and         Standards for field-testing
     transient test  procedures                   procedures
------------------------------------------------------------------------
      HC+NOX               CO              HC+NOX              CO
------------------------------------------------------------------------
       0.80               4.4                1.10               6.6
       0.60               4.4                0.84               6.6
       0.40               4.4                0.56               6.6
       0.20               4.4                0.28               6.6
       0.10               4.4                0.14               6.6
------------------------------------------------------------------------


0
113. Section 1048.145 is amended by adding paragraphs (j) and (k) to 
read as follows:


Sec.  1048.145  What provisions apply only for a limited time?

* * * * *
    (j) Delayed compliance with labeling requirements. Before the 2010 
model year, you may omit the dates of manufacture from the emission 
control information label as specified in Sec.  1048.135(c)(5) if you 
keep those records and provide them to us upon request.
    (k) Delayed compliance with fuel tank permeation requirements. 
Before the 2010 model year, you may omit the permeation-related 
requirements related to plastic fuel tanks in Sec.  1048.245(e)(1)(i) 
and Sec.  1048.501(e).

Subpart C--[Amended]

0
114. Section 1048.201 is amended by revising paragraph (a) to read as 
follows:


Sec.  1048.201  What are the general requirements for obtaining a 
certificate of conformity?

    (a) You must send us a separate application for a certificate of 
conformity for each engine family. A certificate of conformity is valid 
starting with the indicated effective date, but it is not valid for any 
production after December 31 of the model year for which it is issued. 
No certificate will be issued after December 31 of the model year.
* * * * *

0
115. Section 1048.205 is amended as follows:
0
a. By revising paragraph (p)(1).
0
b. By revising paragraph (q).
0
c. By revising paragraph (r) introductory text.
0
d. By revising paragraph (s).
0
e. By revising paragraph (y).
0
f. By revising paragraph (aa).


Sec.  1048.205  What must I include in my application?

* * * * *
    (p) * * *
    (1) Present exhaust emission data for HC, NOX, and CO on 
an emission-data engine to show your engines meet the applicable duty-
cycle emission standards we specify in Sec.  1048.101. Show emission 
figures before and after applying deterioration factors for each 
engine. Include emission results for each mode if you do discrete-mode 
testing under Sec.  1048.505. Include test data for each type of fuel 
from 40 CFR part 1065, subpart H, on which you intend for engines in 
the engine family to operate (for example, gasoline, liquefied 
petroleum gas, methanol, or natural gas). If we specify more than one 
grade of any fuel type (for example, a summer grade and winter grade of 
gasoline), you need to submit test data only for one grade unless the 
regulations of this part specify otherwise for your engine. Note that 
Sec.  1048.235 allows you to submit an application in certain cases 
without new emission data.
* * * * *
    (q) State that all the engines in the engine family comply with the 
field-testing emission standards we specify in Sec.  1048.101(c) for 
all normal operation and use when tested as specified in Sec.  
1048.515. Describe any relevant testing, engineering analysis, or other 
information in sufficient detail to support your statement.
    (r) For engines not subject to transient testing requirements in 
Sec.  148.101(a), include information showing how your emission 
controls will function during normal in-use transient operation. For 
example, this might include the following:
* * * * *
    (s) Report all test results, including those from invalid tests or 
from any other tests, whether or not they were conducted according to 
the test procedures of subpart F of this part. If you measure 
CO2, report those emission levels (in g/kW-hr). We may ask 
you to send other information to confirm that your tests were valid 
under the requirements of this part and 40 CFR part 1065.
* * * * *
    (y) Include good-faith estimates of U.S.-directed production 
volumes. Include a justification for the estimated production volumes 
if they are substantially different than actual production volumes in 
earlier years for similar models.
* * * * *
    (aa) Name an agent for service located in the United States. 
Service on this agent constitutes service on you or any of your 
officers or employees for any action by EPA or otherwise by the

[[Page 59235]]

United States related to the requirements of this part.

0
116. Section 1048.220 is amended by revising the introductory text and 
paragraph (a) to read as follows:


Sec.  1048.220  How do I amend the maintenance instructions in my 
application?

    You may amend your emission-related maintenance instructions after 
you submit your application for certification as long as the amended 
instructions remain consistent with the provisions of Sec.  1048.125. 
You must send the Designated Compliance Officer a written request to 
amend your application for certification for an engine family if you 
want to change the emission-related maintenance instructions in a way 
that could affect emissions. In your request, describe the proposed 
changes to the maintenance instructions. If operators follow the 
original maintenance instructions rather than the newly specified 
maintenance, this does not allow you to disqualify those engines from 
in-use testing or deny a warranty claim.
    (a) If you are decreasing, replacing, or eliminating any specified 
maintenance, you may distribute the new maintenance instructions to 
your customers 30 days after we receive your request, unless we 
disapprove your request. This would generally include replacing one 
maintenance step with another. We may approve a shorter time or waive 
this requirement.
* * * * *

0
117. Section 1048.225 is revised to read as follows:


Sec.  1048.225  How do I amend my application for certification to 
include new or modified engine configurations?

    Before we issue you a certificate of conformity, you may amend your 
application to include new or modified engine configurations, subject 
to the provisions of this section. After we have issued your 
certificate of conformity, you may send us an amended application 
requesting that we include new or modified engine configurations within 
the scope of the certificate, subject to the provisions of this 
section. You must amend your application if any changes occur with 
respect to any information included in your application.
    (a) You must amend your application before you take any of the 
following actions:
    (1) Add an engine configuration to an engine family. In this case, 
the engine configuration added must be consistent with other engine 
configurations in the engine family with respect to the criteria listed 
in Sec.  1048.230.
    (2) Change an engine configuration already included in an engine 
family in a way that may affect emissions, or change any of the 
components you described in your application for certification. This 
includes production and design changes that may affect emissions any 
time during the engine's lifetime.
    (b) To amend your application for certification, send the 
Designated Compliance Officer the following information:
    (1) Describe in detail the addition or change in the engine model 
or configuration you intend to make.
    (2) Include engineering evaluations or data showing that the 
amended engine family complies with all applicable requirements. You 
may do this by showing that the original emission-data engine is still 
appropriate for showing that the amended family complies with all 
applicable requirements.
    (3) If the original emission-data engine for the engine family is 
not appropriate to show compliance for the new or modified engine 
configuration, include new test data showing that the new or modified 
engine configuration meets the requirements of this part.
    (c) We may ask for more test data or engineering evaluations. You 
must give us these within 30 days after we request them.
    (d) For engine families already covered by a certificate of 
conformity, we will determine whether the existing certificate of 
conformity covers your newly added or modified engine. You may ask for 
a hearing if we deny your request (see Sec.  1048.820).
    (e) For engine families already covered by a certificate of 
conformity, you may start producing the new or modified engine 
configuration anytime after you send us your amended application and 
before we make a decision under paragraph (d) of this section. However, 
if we determine that the affected engines do not meet applicable 
requirements, we will notify you to cease production of the engines and 
may require you to recall the engines at no expense to the owner. 
Choosing to produce engines under this paragraph (e) is deemed to be 
consent to recall all engines that we determine do not meet applicable 
emission standards or other requirements and to remedy the 
nonconformity at no expense to the owner. If you do not provide 
information required under paragraph (c) of this section within 30 days 
after we request it, you must stop producing the new or modified 
engines.

0
118. Section 1048.230 is amended by revising paragraphs (a), (b)(3), 
and (d) and removing paragraph (b)(7) to read as follows:


Sec.  1048.230  How do I select engine families?

    (a) For purposes of certification, divide your product line into 
families of engines that are expected to have similar emission 
characteristics throughout the useful life as described in this 
section. Your engine family is limited to a single model year.
    (b) * * *
    (3) Configuration of the fuel system (for example, fuel-injected 
vs. carbureted gasoline engines).
* * * * *
    (d) In unusual circumstances, you may group engines that are not 
identical with respect to the things listed in paragraph (b) of this 
section in the same engine family if you show that their emission 
characteristics during the useful life will be similar.
* * * * *

0
119. Section 1048.235 is amended by revising paragraphs (a), (c)(4), 
(d) introductory text, (d)(1), and (e) to read as follows:


Sec.  1048.235  What emission testing must I perform for my application 
for a certificate of conformity?

* * * * *
    (a) Test your emission-data engines using the procedures and 
equipment specified in subpart F of this part.
* * * * *
    (c) * * *
    (4) Before we test one of your engines, we may calibrate it within 
normal production tolerances for anything we do not consider an 
adjustable parameter. For example, this would apply where we determine 
that an engine parameter is not an adjustable parameter (as defined in 
Sec.  1048.801) but that it is subject to production variability.
    (d) You may ask to use carryover emission data from a previous 
model year instead of doing new tests, but only if all the following 
are true:
    (1) The engine family from the previous model year differs from the 
current engine family only with respect to model year or other 
characteristics unrelated to emissions. You may also ask to add a 
configuration subject to Sec.  1048.225.
* * * * *
    (e) We may require you to test another engine of the same or 
different configuration in addition to the engine tested under 
paragraph (b) of this section.
* * * * *

[[Page 59236]]


0
120. Section 1048.240 is amended by revising paragraphs (a), (b), and 
(c) to read as follows:


Sec.  1048.240  How do I demonstrate that my engine family complies 
with exhaust emission standards?

    (a) For purposes of certification, your engine family is considered 
in compliance with the applicable numerical emission standards in Sec.  
1048.101(a) and (b) if all emission-data engines representing that 
family have test results showing deteriorated emission levels at or 
below these standards. This includes all test points over the course of 
the durability demonstration.
    (b) Your engine family is deemed not to comply if any emission-data 
engine representing that family has test results showing a deteriorated 
emission level for any pollutant that is above an applicable emission 
standard from Sec.  1048.101. This includes all test points over the 
course of the durability demonstration.
    (c) To compare emission levels from the emission-data engine with 
the applicable emission standards, apply deterioration factors to the 
measured emission levels for each pollutant. Specify the deterioration 
factors based on emission measurements using four significant figures, 
consistent with good engineering judgment. For example, your 
deterioration factors must take into account any available data from 
in-use testing with similar engines (see subpart E of this part). 
Small-volume engine manufacturers may use assigned deterioration 
factors that we establish. In addition, anyone may use assigned 
deterioration factors for engine families with a projected U.S.-
directed production volume at or below 300 engines. Apply deterioration 
factors as follows:
    (1) Multiplicative deterioration factor. Except as specified in 
paragraph (c)(2) of this section, use a multiplicative deterioration 
factor for exhaust emissions. A multiplicative deterioration factor is 
the ratio of exhaust emissions at the end of useful life to exhaust 
emissions at the low-hour test point. Adjust the official emission 
results for each tested engine at the selected test point by 
multiplying the measured emissions by the deterioration factor. If the 
factor is less than one, use one.
    (2) Additive deterioration factor. Use an additive deterioration 
factor for exhaust emissions if engines do not use aftertreatment 
technology. Also, you may use an additive deterioration factor for 
exhaust emissions for a particular pollutant if all the emission-data 
engines in the engine family have low-hour emission levels at or below 
0.3 g/kW-hr for HC+NOX or 0.5 g/kW-hr for CO, unless a 
multiplicative deterioration factor is more appropriate. For example, 
you should use a multiplicative deterioration factor if emission 
increases are best represented by the ratio of exhaust emissions at the 
end of the useful life to exhaust emissions at the low-hour test point. 
An additive deterioration factor is the difference between exhaust 
emissions at the end of useful life and exhaust emissions at the low-
hour test point. Adjust the official emission results for each tested 
engine at the selected test point by adding the factor to the measured 
emissions. If the factor is less than zero, use zero.
* * * * *
0
121. Section 1048.245 is amended by revising paragraphs (c) and (e) to 
read as follows:


Sec.  1048.245  How do I demonstrate that my engine family complies 
with evaporative emission standards?

* * * * *
    (c) Use good engineering judgment to develop a test plan to 
establish deterioration factors to show how much emissions increase at 
the end of the useful life.
* * * * *
    (e) You may demonstrate that your engine family complies with the 
evaporative emission standards by demonstrating that you use the 
following control technologies:
    (1) For certification to the standards specified in Sec.  
1048.105(a)(1), with the following technologies:
    (i) Use a tethered or self-closing gas cap on a fuel tank that 
stays sealed up to a positive pressure of 24.5 kPa (3.5 psig); however, 
they may contain air inlets that open when there is a vacuum pressure 
inside the tank. Nonmetal fuel tanks must also use one of the 
qualifying designs for controlling permeation emissions specified in 40 
CFR 1060.240.
    (ii) [Reserved]
    (2) For certification to the standards specified in Sec.  
1048.105(a)(3), demonstrating that you use design features to prevent 
fuel boiling under all normal operation. If you install engines in 
equipment, you may do this using fuel temperature data measured during 
normal operation. Otherwise, you may do this by including appropriate 
information in your emission-related installation instructions.
    (3) We may establish additional options for design-based 
certification where we find that new test data demonstrate that a 
technology will ensure compliance with the emission standards in this 
section
0
122. Section 1048.250 is amended as follows:
0
a. By removing paragraph (d).
0
b. By redesignating paragraphs (a) through (c) as paragraphs (b) 
through (d), respectively.
0
c. By adding a new paragraph (a).
0
d. By revising the newly redesignated paragraph (c).


Sec.  1048.250  What records must I keep and make available to EPA?

    (a) Send the Designated Compliance Officer information related to 
your U.S.-directed production volumes as described in Sec.  1048.345. 
In addition, within 45 days after the end of the model year, you must 
send us a report describing information about engines you produced 
during the model year as follows:
    (1) State the total production volume for each engine family that 
is not subject to reporting under Sec.  1048.345.
    (2) State the total production volume for any engine family for 
which you produce engines after completing the reports required in 
Sec.  1048.345.
    (3) For production volumes you report under this paragraph (a), 
identify whether or not the figures include California sales. Include a 
separate count of production volumes for California sales if those 
figures are available.
* * * * *
    (c) Keep data from routine emission tests (such as test cell 
temperatures and relative humidity readings) for one year after we 
issue the associated certificate of conformity. Keep all other 
information specified in this section for eight years after we issue 
your certificate.
* * * * *

0
123. Section 1048.255 is amended by revising the section heading and 
paragraph (d) to read as follows:


Sec.  1048.255  What decisions may EPA make regarding my certificate of 
conformity?

* * * * *
    (d) We may void your certificate if you do not keep the records we 
require or do not give us information as required under this part or 
the Act.
* * * * *

Subpart D--[Amended]

0
124. Section 1048.301 is revised to read as follows:


Sec.  1048.301  When must I test my production-line engines?

    (a) If you produce engines that are subject to the requirements of 
this part,

[[Page 59237]]

you must test them as described in this subpart, except as follows:
    (1) [Reserved]
    (2) We may exempt engine families with a projected U.S.-directed 
production volume below 150 units from routine testing under this 
subpart. Request this exemption in your application for certification 
and include your basis for projecting a production volume below 150 
units. We will approve your request if we agree that you have made 
good-faith estimates of your production volumes. Your exemption is 
approved when we grant your certificate. You must promptly notify us if 
your actual production exceeds 150 units during the model year. If you 
exceed the production limit or if there is evidence of a nonconformity, 
we may require you to test production-line engines under this subpart, 
or under 40 CFR part 1068, subpart E, even if we have approved an 
exemption under this paragraph (a)(2).
    (b) We may suspend or revoke your certificate of conformity for 
certain engine families if your production-line engines do not meet the 
requirements of this part or you do not fulfill your obligations under 
this subpart (see Sec. Sec.  1048.325 and 1048.340).
    (c) Other regulatory provisions authorize us to suspend, revoke, or 
void your certificate of conformity, or order recalls for engine 
families, without regard to whether they have passed these production-
line testing requirements. The requirements of this subpart do not 
affect our ability to do selective enforcement audits, as described in 
part 1068 of this chapter. Individual engines in families that pass 
these production-line testing requirements must also conform to all 
applicable regulations of this part and part 1068 of this chapter.
    (d) You may use alternate programs for testing production-line 
engines in the following circumstances:
    (1) You may use analyzers and sampling systems that meet the field-
testing requirements of 40 CFR part 1065, subpart J, but not the 
otherwise applicable requirements in 40 CFR part 1065 for laboratory 
testing, to demonstrate compliance with duty-cycle emission standards 
if you double the minimum sampling rate specified in Sec.  1048.310(b). 
Use measured test results to determine whether engines comply with 
applicable standards without applying a measurement allowance. This 
alternate program does not require prior approval but we may disallow 
use of this option where we determine that use of field-grade equipment 
would prevent you from being able to demonstrate that your engines are 
being produced to conform to the specifications in your application for 
certification.
    (2) You may ask to use another alternate program for testing 
production-line engines. In your request, you must show us that the 
alternate program gives equal assurance that your products meet the 
requirements of this part. We may waive some or all of this subpart's 
requirements if we approve your alternate approach. For example, in 
certain circumstances you may be able to give us equal assurance that 
your products meet the requirements of this part by using less rigorous 
measurement methods if you offset that by increasing the number of test 
engines.
    (e) If you certify an engine family with carryover emission data, 
as described in Sec.  1048.235(d), and these equivalent engine families 
consistently pass the production-line testing requirements over the 
preceding two-year period, you may ask for a reduced testing rate for 
further production-line testing for that family. The minimum testing 
rate is one engine per engine family. If we reduce your testing rate, 
we may limit our approval to any number of model years. In determining 
whether to approve your request, we may consider the number of engines 
that have failed the emission tests.
    (f) We may ask you to make a reasonable number of production-line 
engines available for a reasonable time so we can test or inspect them 
for compliance with the requirements of this part.

0
125. Section 1048.305 is amended by adding introductory text and 
revising paragraphs (a), (d), and (g) to read as follows:


Sec.  1048.305  How must I prepare and test my production-line engines?

    This section describes how to prepare and test production-line 
engines. You must assemble the test engine in a way that represents the 
assembly procedures for other engines in the engine family. You must 
ask us to approve any deviations from your normal assembly procedures 
for other production engines in the engine family.
    (a) Test procedures. Test your production-line engines using either 
the steady-state or transient testing procedures specified in subpart F 
of this part to show you meet the duty-cycle emission standards in 
subpart B of this part. The field-testing standards apply for this 
testing, but you need not do additional testing to show that 
production-line engines meet the field-testing standards.
* * * * *
    (d) Setting adjustable parameters. Before any test, we may require 
you to adjust any adjustable parameter to any setting within its 
physically adjustable range.
    (1) We may require you to adjust idle speed outside the physically 
adjustable range as needed, but only until the engine has stabilized 
emission levels (see paragraph (e) of this section). We may ask you for 
information needed to establish an alternate minimum idle speed.
    (2) We may specify adjustments within the physically adjustable 
range by considering their effect on emission levels. We may also 
consider how likely it is that someone will make such an adjustment 
with in-use equipment.
* * * * *
    (g) Retesting after invalid tests. You may retest an engine if you 
determine an emission test is invalid under subpart F of this part. 
Explain in your written report reasons for invalidating any test and 
the emission results from all tests. If we determine that you 
improperly invalidated a test, we may require you to ask for our 
approval for future testing before substituting results of the new 
tests for invalid ones.

0
126. Section 1048.310 is amended as follows:
0
a. By revising paragraph (a).
0
b. By revising paragraph (c) introductory text.
0
c. By revising paragraph (c)(2).
0
d. By revising paragraph (f).
0
e. By revising paragraph (g).
0
f. By revising paragraph (h).


Sec.  1048.310  How must I select engines for production-line testing?

    (a) Use test results from two engines each quarter to calculate the 
required sample size for the model year for each engine family.
* * * * *
    (c) Calculate the required sample size for each engine family. 
Separately calculate this figure for HC+NOX and CO. The 
required sample size is the greater of these calculated values. Use the 
following equation:
[GRAPHIC] [TIFF OMITTED] TR08OC08.091

Where:

N = Required sample size for the model year.
t95 = 95% confidence coefficient, which depends on the 
number of tests completed, n, as specified in the table in paragraph 
(c)(1) of this section. It defines 95% confidence intervals for a 
one-tail distribution.
[sigma] = Test sample standard deviation (see paragraph (c)(2) of 
this section).

[[Page 59238]]

x = Mean of emission test results of the sample.
STD = Emission standard.
* * * * *
    (2) Calculate the standard deviation, [sigma], for the test sample 
using the following formula:


Where:
[GRAPHIC] [TIFF OMITTED] TR08OC08.092


Xi = Emission test result for an individual engine.
n = The number of tests completed in an engine family.

* * * * *
    (f) Distribute the remaining tests evenly throughout the rest of 
the year. You may need to adjust your schedule for selecting engines if 
the required sample size changes. If your scheduled quarterly testing 
for the remainder of the model year is sufficient to meet the 
calculated sample size, you may wait until the next quarter to do 
additional testing. Continue to randomly select engines from each 
engine family.
    (g) Continue testing until one of the following things happens:
    (1) After completing the minimum number of tests required in 
paragraph (b) of this section, the number of tests completed in an 
engine family, n, is greater than the required sample size, N, and the 
sample mean, x, is less than or equal to the emission standard. For 
example, if N = 5.1 after the fifth test, the sample-size calculation 
does not allow you to stop testing.
    (2) The engine family does not comply according to Sec.  1048.315.
    (3) You test 30 engines from the engine family.
    (4) You test one percent of your projected annual U.S.-directed 
production volume for the engine family, rounded to the nearest whole 
number. Do not count an engine under this paragraph (g)(4) if it fails 
to meet an applicable emission standard. You may stop testing after you 
test one percent of your production volume even if you have not tested 
the number of engines specified in paragraph (b) of this section. For 
example, if projected volume is 475 engines, test two engines in each 
of the first two quarters and one engine in the third quarter to 
fulfill your testing requirements under this section for that engine 
family.
    (5) You choose to declare that the engine family does not comply 
with the requirements of this subpart.
    (h) If the sample-size calculation allows you to stop testing for 
one pollutant but not another, you must continue measuring emission 
levels of all pollutants for any additional tests required under this 
section. However, you need not continue making the calculations 
specified in this subpart for the pollutant for which testing is not 
required. This paragraph (h) does not affect the number of tests 
required under this section, the required calculations in Sec.  
1048.315, or the remedial steps required under Sec.  1048.320.
* * * * *

0
127. Section 1048.315 is amended by revising paragraphs (a) and (b) to 
read as follows:


Sec.  1048.315  How do I know when my engine family fails the 
production-line testing requirements?

* * * * *
    (a) Calculate your test results as follows:
    (1) Initial and final test results. Calculate and round the test 
results for each engine. If you do several tests on an engine, 
calculate the initial results for each test, then add all the test 
results together and divide by the number of tests. Round this final 
calculated value for the final test results on that engine.
    (2) Final deteriorated test results. Apply the deterioration factor 
for the engine family to the final test results (see Sec.  
1048.240(c)).
    (3) Round deteriorated test results. Round the results to the 
number of decimal places in the emission standard expressed to one more 
decimal place.
    (b) Construct the following CumSum Equation for each engine family 
for HC+NOX and CO emissions:

Ci = Max [0 or Ci-1 + Xi - (STD + 0.25 
x [sigma])]

Where:

Ci = The current CumSum statistic.
Ci-1 = The previous CumSum statistic. For the first test, 
the CumSum statistic is 0 (i.e., C1 = 0).
Xi = The current emission test result for an individual 
engine.
STD = Emission standard.
* * * * *

0
128. Section 1048.320 is amended by revising paragraph (b) to read as 
follows:


Sec.  1048.320  What happens if one of my production-line engines fails 
to meet emission standards?

* * * * *
    (b) Include the test results and describe the remedy for each 
engine in the written report required under Sec.  1048.345.

0
129. Section 1048.325 is amended by revising the section heading and 
paragraph (c) to read as follows:


Sec.  1048.325  What happens if an engine family fails the production-
line testing requirements?

* * * * *
    (c) Up to 15 days after we suspend the certificate for an engine 
family, you may ask for a hearing (see Sec.  1048.820). If we agree 
before a hearing occurs that we used erroneous information in deciding 
to suspend the certificate, we will reinstate the certificate.
* * * * *

0
130. Section 1048.345 is amended as follows:
0
a. By removing the introductory text.
0
b. By revising paragraphs (a)(4), (a)(5), (a)(6), and (a)(8).
0
c. By revising paragraphs (b) and (c).


Sec.  1048.345  What production-line testing records must I send to 
EPA?

    (a) * * *
    (4) Describe each test engine, including the engine family's 
identification and the engine's model year, build date, model number, 
identification number, and number of hours of operation before testing.
    (5) Identify how you accumulated hours of operation on the engines 
and describe the procedure and schedule you used.
    (6) Provide the test number; the date, time and duration of 
testing; test procedure; all initial test results; final test results; 
and final deteriorated test results for all tests. Provide the emission 
results for all measured pollutants. Include information for both valid 
and invalid tests and the reason for any invalidation.
* * * * *
    (8) Provide the CumSum analysis required in Sec.  1048.315 and the 
sample-size calculation required in Sec.  1048.310 for each engine 
family.
* * * * *
    (b) We may ask you to add information to your written report, so we 
can determine whether your new engines conform with the requirements of 
this subpart. We may also ask you to send less information.
    (c) An authorized representative of your company must sign the 
following statement:
    We submit this report under Sections 208 and 213 of the Clean Air 
Act. Our production-line testing conformed completely with the 
requirements of 40 CFR part 1048. We have not changed production 
processes or quality-control procedures for test engines in a way that 
might affect emission controls. All the information in this report is 
true and accurate, to the best of my knowledge. I know of the penalties 
for violating the

[[Page 59239]]

Clean Air Act and the regulations. (Authorized Company Representative)
* * * * *

0
131. Section 1048.350 is amended by revising paragraphs (b), (e), and 
(f) to read as follows:


Sec.  1048.350  What records must I keep?

* * * * *
    (b) Keep paper or electronic records of your production-line 
testing for eight years after you complete all the testing required for 
an engine family in a model year.
* * * * *
    (e) If we ask, you must give us projected or actual production 
figures for an engine family. We may ask you to divide your production 
figures by maximum engine power, displacement, fuel type, or assembly 
plant (if you produce engines at more than one plant).
    (f) Keep records of the engine identification number for each 
engine you produce under each certificate of conformity. You may 
identify these numbers as a range. Give us these records within 30 days 
if we ask for them.
* * * * *

Subpart E--[Amended]

0
132. Section 1048.405 is amended by adding paragraph (d) to read as 
follows:


Sec.  1048.405  How does this program work?

* * * * *
    (d) In appropriate extreme and unusual circumstances that are 
clearly outside your control and could not have been avoided by the 
exercise of prudence, diligence, and due care, we may waive the in-use 
testing requirement for an engine family. For example, if your test 
fleet is destroyed by severe weather during service accumulation and we 
agree that completion of testing is not possible, we would generally 
waive testing requirements for that engine family.

0
133. Section 1048.410 is amended by revising paragraph (e) to read as 
follows:


Sec.  1048.410  How must I select, prepare, and test my in-use engines?

* * * * *
    (e) You may do repeat measurements with a test engine; however, you 
must conduct the same number of tests on each engine.
* * * * *

0
134. Section 1048.415 is amended by revising paragraphs (c) and (d) to 
read as follows:


Sec.  1048.415  What happens if in-use engines do not meet 
requirements?

* * * * *
    (c) We will consider failure rates, average emission levels, and 
any defects--among other things--to decide on taking remedial action 
under this subpart (see 40 CFR 1068.505). We may consider the results 
from any voluntary additional testing you perform. We may also consider 
information related to testing from other engine families showing that 
you designed them to exceed the minimum requirements for controlling 
emissions. We may order a recall before or after you complete testing 
of an engine family if we determine a substantial number of engines do 
not conform to section 213 of the Act or to this part. The scope of the 
recall may include other engine families in the same or different model 
years if the cause of the problem identified in paragraph (a) of this 
section applies more broadly than the tested engine family, as allowed 
by the Act.
    (d) If in-use testing reveals a design or manufacturing defect that 
prevents engines from meeting the requirements of this part, you must 
correct the defect as soon as possible for any future production for 
engines in every family affected by the defect. See 40 CFR 1068.501 for 
additional requirements related to defect reporting.
* * * * *

Subpart F--[Amended]

0
135. Section 1048.501 is amended by revising paragraphs (c) and (e) and 
removing paragraph (h) to read as follows:


Sec.  1048.501  How do I run a valid emission test?

* * * * *
    (c) Use the fuels and lubricants specified in 40 CFR part 1065, 
subpart H, to perform valid tests for all the testing we require in 
this part, except as noted in Sec.  1048.515. For service accumulation, 
use the test fuel or any commercially available fuel that is 
representative of the fuel that in-use engines will use.
* * * * *
    (e) To test engines for evaporative emissions, use the equipment 
and procedures specified for testing diurnal emissions as described in 
40 CFR 1060.525, subject to the following provisions:
    (1) Precondition nonmetal fuel tanks as specified in 40 CFR 
1060.520(a) and (b).
    (2) For engines equipped with carbon canisters that store fuel 
vapors that will be purged for combustion in the engine, precondition 
the canister as specified in 40 CFR 86.132-96(h) and then operate the 
engine for 60 minutes over repeat runs of the duty cycle specified in 
Appendix I of this part.
    (3) Start the diurnal emission test after the engine is stabilized 
at room temperatures, but within 36 hours after the engine operation 
specified in paragraph (e)(2) of this section.
    (4) You may not separately measure permeation emissions from 
nonmetal fuel tanks for subtracting from the diurnal emission 
measurement.
    (5) Note that you may omit testing for evaporative emissions during 
certification if you certify by design, as specified in Sec.  1048.245.
* * * * *

0
136. Section 1048.505 is revised to read as follows:


Sec.  1048.505  What transient duty cycles apply for laboratory 
testing?

    This section describes how to test engines under steady-state 
conditions. In some cases, we allow you to choose the appropriate 
steady-state duty cycle for an engine. In these cases, you must use the 
duty cycle you select in your application for certification for all 
testing you perform for that engine family. If we test your engines to 
confirm that they meet emission standards, we will use the duty cycles 
you select for your own testing. We may also perform other testing as 
allowed by the Clean Air Act.
    (a) You may perform steady-state testing with either discrete-mode 
or ramped-modal cycles, as follows:
    (1) For discrete-mode testing, sample emissions separately for each 
mode, then calculate an average emission level for the whole cycle 
using the weighting factors specified for each mode. Calculate cycle 
statistics and compare with the established criteria as specified in 40 
CFR 1065.514 to confirm that the test is valid. Operate the engine and 
sampling system as follows:
    (i) Engines with lean NOX aftertreatment. For lean-burn engines 
that depend on aftertreatment to meet the NOX emission 
standard, operate the engine for 5-6 minutes, then sample emissions for 
1-3 minutes in each mode.
    (ii) Engines without lean NOX aftertreatment. For other engines, 
operate the engine for at least 5 minutes, then sample emissions for at 
least 1 minute in each mode.
    (2) For ramped-modal testing, start sampling at the beginning of 
the first mode and continue sampling until the end of the last mode. 
Calculate emissions and cycle statistics the same

[[Page 59240]]

as for transient testing as specified in 40 CFR part 1065, subpart G.
    (b) Measure emissions by testing the engine on a dynamometer with 
one or more of the following sets of duty cycles to determine whether 
it meets the steady-state emission standards in Sec.  1048.101(b):
    (1) For engines from an engine family that will be used only in 
variable-speed applications, use one of the following duty cycles:
    (i) The following duty cycle applies for discrete-mode testing:

                                           Table 1 of Sec.   1048.505
----------------------------------------------------------------------------------------------------------------
                                                                                      Torque         Weighting
                  C2 mode No.                           Engine speed \1\           (percent) \2\      factors
----------------------------------------------------------------------------------------------------------------
1.............................................  Maximum test speed..............              25            0.06
2.............................................  Intermediate test...............             100            0.02
3.............................................  Intermediate test...............              75            0.05
4.............................................  Intermediate test...............              50            0.32
5.............................................  Intermediate test...............              25            0.30
6.............................................  Intermediate test...............              10            0.10
7.............................................  Warm idle.......................               0            0.15
----------------------------------------------------------------------------------------------------------------
\1\ Speed terms are defined in 40 CFR part 1065.
\2\ The percent torque is relative to the maximum torque at the given engine speed.

    (ii) The following duty cycle applies for ramped-modal testing:

                                           Table 2 of Sec.   1048.505
----------------------------------------------------------------------------------------------------------------
                                      Time in mode
              RMC mode                  (seconds)      Engine speed \1,2\           Torque (percent) \2,3\
----------------------------------------------------------------------------------------------------------------
1a Steady-state....................             119  Warm idle.............  0
1b Transition......................              20  Linear transition.....  Linear transition.
2a Steady-state....................              29  Intermediate speed....  100
2b Transition......................              20  Intermediate speed....  Linear transition.
3a Steady-state....................             150  Intermediate speed....  10
3b Transition......................              20  Intermediate speed....  Linear transition.
4a Steady-state....................              80  Intermediate speed....  75
4b Transition......................              20  Intermediate speed....  Linear transition.
5a Steady-state....................             513  Intermediate speed....  25
5b Transition......................              20  Intermediate speed....  Linear transition.
6a Steady-state....................             549  Intermediate speed....  50
6b Transition......................              20  Linear transition.....  Linear transition.
7a Steady-state....................              96  Maximum test speed....  25
7b Transition......................              20  Linear transition.....  Linear transition.
8 Steady-state.....................             124  Warm idle.............  0
----------------------------------------------------------------------------------------------------------------
\1\ Speed terms are defined in 40 CFR part 1065.
\2\ Advance from one mode to the next within a 20-second transition phase. During the transition phase, command
  a linear progression from the torque setting of the current mode to the torque setting of the next mode.
\3\ The percent torque is relative to maximum torque at the commanded engine speed.

    (2) For engines from an engine family that will be used only at a 
single, rated speed, use the 5-mode duty cycle or the corresponding 
ramped-modal cycle described in 40 CFR part 1039, Appendix II, 
paragraph (a).
    (3) Use a duty cycle from both paragraphs (b)(1) and (b)(2) of this 
section if you will not restrict an engine family to constant-speed or 
variable-speed applications.
    (4) Use a duty cycle specified in paragraph (b)(2) of this section 
for all severe-duty engines.
    (5) For high-load engines, use one of the following duty cycles:
    (i) The following duty cycle applies for discrete-mode testing:

                                           Table 3 of Sec.   1048.505
----------------------------------------------------------------------------------------------------------------
                                                                                   Minimum time
              D1 mode No.                     Engine speed            Torque          in mode        Weighting
                                                                   (percent) \1\     (minutes)        factors
----------------------------------------------------------------------------------------------------------------
1.....................................  Maximum test............             100             3.0            0.50
2.....................................  Maximum test............              75             3.0            0.50
----------------------------------------------------------------------------------------------------------------
\1\ The percent torque is relative to the maximum torque at maximum test speed.

    (ii) The following duty cycle applies for discrete-mode testing:

[[Page 59241]]



                                           Table 4 of Sec.   1048.505
----------------------------------------------------------------------------------------------------------------
                                      Time in mode
             RMC modes                  (seconds)    Engine speed (percent)       Torque (percent) \1,\ \2\
----------------------------------------------------------------------------------------------------------------
1a Steady-state....................             290  Engine governed.......  100
1b Transition......................              20  Engine governed.......  Linear transition.
2 Steady-state.....................             290  Engine governed.......  75
----------------------------------------------------------------------------------------------------------------
\1\ The percent torque is relative to maximum test torque.
\2\ Advance from one mode to the next within a 20-second transition phase. During the transition phase, command
  a linear progression from the torque setting of the current mode to the torque setting of the next mode.

    (c) If we test an engine to confirm that it meets the duty-cycle 
emission standards, we will use the steady-state duty cycles that apply 
for that engine family.
    (d) During idle mode, operate the engine at its warm idle speed as 
described in 40 CFR 1065.510.
    (e) For full-load operating modes, operate the engine at wide-open 
throttle.
    (f) See 40 CFR part 1065 for detailed specifications of tolerances 
and calculations.
    (g) For those cases where steady-state testing does not directly 
follow a transient test, perform the steady-state test according to 
this section after an appropriate warm-up period, consistent with 40 
CFR part 1065, subpart F.

0
137. Section 1048.510 is amended to read as follows:
0
a. By revising the section heading.
0
b. By revising paragraph (a).
0
c. By removing and reserving paragraph (b).
0
d. By revising paragraph (c) introductory text and (c)(1).


Sec.  1048.510  What transient duty cycles apply for laboratory 
testing?

    (a) Starting with the 2007 model year, measure emissions by testing 
the engine on a dynamometer with the duty cycle described in Appendix 
II to determine whether it meets the transient emission standards in 
Sec.  1048.101(a).
    (b) [Reserved]
    (c) Warm up the test engine as follows before running a transient 
test:
    (1) Operate the engine for the first 180 seconds of the appropriate 
duty cycle, then allow it to idle without load for 30 seconds. At the 
end of the 30-second idling period, start measuring emissions as the 
engine operates over the prescribed duty cycle. For severe-duty 
engines, this engine warm-up procedure may include up to 15 minutes of 
operation over the appropriate duty cycle.
* * * * *

0
138. Section 1048.515 is amended by revising paragraph (b)(1)(i) to 
read as follows:


Sec.  1048.515  What are the field-testing procedures?

* * * * *
    (b) * * *
    (1) * * *
    (i) Average power must be at least 5 percent of maximum brake 
power.
* * * * *

Subpart G--[Amended]

0
139. Section 1048.601 is revised to read as follows:


Sec.  1048.601  What compliance provisions apply to these engines?

    (a) Engine and equipment manufacturers, as well as owners, 
operators, and rebuilders of engines subject to the requirements of 
this part, and all other persons, must observe the provisions of this 
part, the requirements and prohibitions in 40 CFR part 1068, and the 
provisions of the Act.
    (b) This paragraph (b) describes how the replacement-engine 
provisions of 40 CFR 1068.240 apply for engines subject to the 
requirements of this part in conjunction with the secondary engine 
manufacturer provisions in 40 CFR 1068.262. For cases in which the 
secondary engine manufacturer completes assembly of the engine, these 
provisions apply as written. If the secondary engine manufacturer 
arranges for a third party to complete engine assembly, the following 
additional provisions apply:
    (1) The ultimate purchaser must purchase (or otherwise order) the 
replacement engine from the secondary engine manufacturer. The 
secondary engine manufacturer must provide assembly instructions to the 
engine assembler (unless the engine being replaced was not subject to 
emission standards). The secondary engine manufacturer may arrange for 
the original engine manufacturer to ship the engine directly to the 
engine assembler. However, if the secondary engine manufacturer does 
not take possession of the engine, it must supply the engine label 
specified in 40 CFR 1068.240 to the engine assembler and the engine 
assembler must apply the label before shipping the engine.
    (2) The secondary engine manufacturer and engine assembler are both 
responsible if the engine is installed in new equipment or otherwise 
violates the circumvention provisions of 40 CFR 1068.240.
    (3) Consider the following example. A secondary engine manufacturer 
receiving a valid request for a replacement engine for which it does 
not already have an engine available in inventory may order a partially 
complete engine from an original engine manufacturer and have it 
shipped directly to an independent engine assembler. In this case, the 
secondary engine manufacturer must state in its order that the 
partially complete engine should be labeled as being exempt under 40 
CFR 1068.240 and identify the engine assembler's address; the secondary 
engine manufacture must also provide instructions to the engine 
assembler. The original engine manufacturer would label the engine as 
described in 40 CFR 1068.262, identifying the replacement-engine 
exemption as the basis for shipping an uncertified engine, and ship the 
engine directly to the assembler. The engine assembler would complete 
the assembly by applying the label and otherwise following the 
instructions provided by the secondary engine manufacturer.

0
140. Section 1048.605 is amended by revising the section heading and 
paragraph (d)(7)(ii) to read as follows:


Sec.  1048.605  What provisions apply to engines certified under the 
motor vehicle program?

* * * * *
    (d) * * *
    (7) * * *
    (ii) List the engine or equipment models you expect to produce 
under this exemption in the coming year and describe your basis for 
meeting the sales restrictions of paragraph (d)(3) of this section.
* * * * *

0
141. Section 1048.610 is amended by revising the section heading and 
paragraphs (d)(7)(ii) and (g) to read as follows:

[[Page 59242]]

Sec.  1048.610  What provisions apply to vehicles certified under the 
motor vehicle program?

* * * * *
    (d) * * *
    (7) * * *
    (ii) List the equipment models you expect to produce under this 
exemption in the coming year and describe your basis for meeting the 
sales restrictions of paragraph (d)(3) of this section.
* * * * *
    (g) Participation in averaging, banking and trading. Vehicles 
adapted for nonroad use under this section may generate credits under 
the ABT provisions in 40 CFR part 86. These vehicles must be included 
in the calculation of the applicable fleet average in 40 CFR part 86.

0
142. A new Sec.  1048.612 is added to subpart G to read as follows:


Sec.  1048.612  What is the exemption for delegated final assembly?

    The provisions of 40 CFR 1068.261 related to delegated final 
assembly apply for engines certified under this part 1048, with the 
following exceptions and clarifications:
    (a) The provisions related to reduced auditing rates in 40 CFR 
1068.261(d)(3)(iii) apply starting with the 2014 model year.
    (b) [Reserved]

0
143. Section 1048.615 is revised to read as follows:


Sec.  1048.615  What are the provisions for exempting engines designed 
for lawn and garden applications?

    This section is intended for engines designed for lawn and garden 
applications, but it applies to any engines meeting the criteria in 
paragraph (a) of this section.
    (a) If an engine meets all the following criteria, it is exempt 
from the requirements of this part:
    (1) The engine must have a nominal displacement of 1000 cc or less.
    (2) The engine must have a maximum engine power at or below 30 kW.
    (3) The engine must be in an engine family that has a valid 
certificate of conformity showing that it meets emission standards for 
Class II engines under 40 CFR part 90 or 1054 for the appropriate model 
year.
    (b) The only requirements or prohibitions from this part that apply 
to an engine that meets the criteria in paragraph (a) of this section 
are in this section.
    (c) If your engines do not meet the criteria listed in paragraph 
(a) of this section, they will be subject to the provisions of this 
part. Introducing these engines into commerce without a valid exemption 
or certificate of conformity violates the prohibitions in 40 CFR 
1068.101.
    (d) Engines exempted under this section are subject to all the 
requirements affecting engines under 40 CFR part 90 or 1054. The 
requirements and restrictions of 40 CFR part 90 or 1054 apply to anyone 
manufacturing these engines, anyone manufacturing equipment that uses 
these engines, and all other persons in the same manner as if these 
engines had a total maximum engine power at or below 19 kW.

0
144. Section 1048.620 is amended by revising the section heading to 
read as follows:


Sec.  1048.620  What are the provisions for exempting large engines 
fueled by natural gas or liquefied petroleum gas?

* * * * *

0
145. Section 1048.630 is revised to read as follows:


Sec.  1048.630  What are the provisions for exempting engines used 
solely for competition?

    We may grant you an exemption from the standards and requirements 
of this part for a new engine on the grounds that it is to be used 
solely for competition under the provisions of 40 CFR 1054.620. The 
requirements of this part do not apply to engines that we exempt for 
use solely for competition.

0
146. Section 1048.635 is amended by revising paragraph (b) to read as 
follows:


Sec.  1048.635  What special provisions apply to branded engines?

* * * * *
    (b) In your application for certification, identify the company 
whose trademark you will use.
* * * * *

0
147. A new Sec.  1048.640 is added to subpart G to read as follows:


Sec.  1048.640  What special provisions apply for small-volume engine 
manufacturers?

    This section describes how we apply the special provisions in this 
part for small-volume engine manufacturers.
    (a) Special provisions apply for small-volume engine manufacturers, 
as illustrated by the following examples:
    (1) Waived requirements related to torque broadcasting. See Sec.  
1048.115.
    (2) Assigned deterioration factors to reduce testing burden. See 
Sec.  1048.240.
    (3) Additional special provisions apply for small-volume engine and 
equipment manufacturers under 40 CFR part 1068. For example, see 40 CFR 
1068.250.
    (b) If you use any of the provisions of this part that apply 
specifically to small-volume engine manufacturers and we find that you 
do not qualify to use these provisions, we may consider you to be in 
violation of the requirements that apply for companies that are not 
small-volume engine manufacturers. If you no longer qualify as a small-
volume engine manufacturer (based on increased production volumes or 
other factors), we will work with you to determine a reasonable 
schedule for complying with additional requirements that apply. For 
example, if you no longer qualify as a small-volume engine manufacturer 
shortly before you certify your engines for the next model year, we 
might allow you to use assigned deterioration factors for one more 
model year.

Subpart I--[Amended]

0
148. Section 1048.801 is amended as follows:
0
a. By revising the definitions for ``Aftertreatment'', ``Constant-speed 
operation'', ``Designated Compliance Officer'', ``Emission-control 
system'', ``Engine configuration'', ``Low-hour'' ``Maximum engine 
power'', ``Model year'', ``New nonroad engine'', ``Noncommercial 
fuel'', ``Nonmethane hydrocarbon'', ``Official emission result'', 
``Owners manual'', ``Oxides of nitrogen'',``Small-volume engine 
manufacturer'', ``Steady-state'', ``Total hydrocarbon'', ``Total 
hydrocarbon equivalent'', and ``Useful life''.
0
b. By adding definitions for ``Alcohol-fueled engine'', ``Days'', 
``Engine'', and ``Sealed'' in alphabetical order.


Sec.  1048.801  What definitions apply to this part?

* * * * *
    Aftertreatment means relating to a catalytic converter, particulate 
filter, or any other system, component, or technology mounted 
downstream of the exhaust valve (or exhaust port) whose design function 
is to decrease emissions in the engine exhaust before it is exhausted 
to the environment. Exhaust-gas recirculation (EGR), turbochargers, and 
oxygen sensors are not aftertreatment.
* * * * *
    Alcohol-fueled engine means an engine that is designed to run using 
an alcohol fuel. For purposes of this definition, alcohol fuels do not 
include fuels with a nominal alcohol content below 25 percent by 
volume.
* * * * *
    Constant-speed operation has the meaning given in 40 CFR 1065.1001.
* * * * *
    Days means calendar days unless otherwise specified. For example, 
where we specify working days, we mean

[[Page 59243]]

calendar days excluding weekends and U.S. national holidays.
    Designated Compliance Officer means the Manager, Heavy-Duty and 
Nonroad Engine Group (6405-J), U.S. Environmental Protection Agency, 
1200 Pennsylvania Ave., NW., Washington, DC 20460.
* * * * *
    Emission-control system means any device, system, or element of 
design that controls or reduces the emissions of regulated pollutants 
from an engine.
* * * * *
    Engine has the meaning given in 40 CFR 1068.30. This includes 
complete and partially complete engines.
    Engine configuration means a unique combination of engine hardware 
and calibration within an engine family. Engines within a single engine 
configuration differ only with respect to normal production variability 
or factors unrelated to emissions.
* * * * *
    Low-hour means relating to an engine with stabilized emissions and 
represents the undeteriorated emission level. This would generally 
involve less than 125 hours of operation.
* * * * *
    Maximum engine power has one of the following meanings:
    (1) For engines at or below 100 kW, maximum engine power has the 
meaning given in 40 CFR 90.3 for 2010 and earlier model years and in 40 
CFR 1054.140 for 2011 and later model years.
    (2) For engines above 100 kW, maximum engine power has the meaning 
given in 40 CFR 1039.140.
* * * * *
    Model year means one of the following things:
    (1) For freshly manufactured equipment and engines (see definition 
of ``new nonroad engine,'' paragraph (1)), model year means one of the 
following:
    (i) Calendar year.
    (ii) Your annual new model production period if it is different 
than the calendar year.
    This must include January 1 of the calendar year for which the 
model year is named. It may not begin before January 2 of the previous 
calendar year and it must end by December 31 of the named calendar 
year.
    (2) For an engine that is converted to a nonroad engine after being 
placed into service as a stationary engine, or being certified and 
placed into service as a motor vehicle engine, model year means the 
calendar year in which the engine was originally produced. For a motor 
vehicle engine that is converted to be a nonroad engine without having 
been certified, model year means the calendar year in which the engine 
becomes a new nonroad engine. (See definition of ``new nonroad 
engine,'' paragraph (2)).
    (3) For a nonroad engine excluded under Sec.  1048.5 that is later 
converted to operate in an application that is not excluded, model year 
means the calendar year in which the engine was originally produced 
(see definition of ``new nonroad engine,'' paragraph (3)).
    (4) For engines that are not freshly manufactured but are installed 
in new nonroad equipment, model year means the calendar year in which 
the engine is installed in the new nonroad equipment (see definition of 
``new nonroad engine,'' paragraph (4)).
    (5) For imported engines:
    (i) For imported engines described in paragraph (5)(i) of the 
definition of ``new nonroad engine,'' model year has the meaning given 
in paragraphs (1) through (4) of this definition.
    (ii) For imported engines described in paragraph (5)(ii) of the 
definition of ``new nonroad engine,'' model year means the calendar 
year in which the engine is modified.
    (iii) For imported engines described in paragraph (5)(iii) of the 
definition of ``new nonroad engine,'' model year means the calendar 
year in which the engine is assembled in its imported configuration, 
unless specified otherwise in this part or in 40 CFR part 1068.
* * * * *
    New nonroad engine means any of the following things:
    (1) A freshly manufactured nonroad engine for which the ultimate 
purchaser has never received the equitable or legal title. This kind of 
engine might commonly be thought of as ``brand new.'' In the case of 
this paragraph (1), the engine is new from the time it is produced 
until the ultimate purchaser receives the title or the product is 
placed into service, whichever comes first.
    (2) An engine originally manufactured as a motor vehicle engine or 
a stationary engine that is later used or intended to be used in a 
piece of nonroad equipment. In this case, the engine is no longer a 
motor vehicle or stationary engine and becomes a ``new nonroad 
engine.'' The engine is no longer new when it is placed into nonroad 
service. This paragraph (2) applies if a motor vehicle engine or a 
stationary engine is installed in nonroad equipment, or if a motor 
vehicle or a piece of stationary equipment is modified (or moved) to 
become nonroad equipment.
    (3) A nonroad engine that has been previously placed into service 
in an application we exclude under Sec.  1048.5, when that engine is 
installed in a piece of equipment that is covered by this part 1048. 
The engine is no longer new when it is placed into nonroad service 
covered by this part 1048. For example, this would apply to a marine-
propulsion engine that is no longer used in a marine vessel but is 
instead installed in a piece of nonroad equipment subject to the 
provisions of this part.
    (4) An engine not covered by paragraphs (1) through (3) of this 
definition that is intended to be installed in new nonroad equipment. 
This generally includes installation of used engines in new equipment. 
The engine is no longer new when the ultimate purchaser receives a 
title for the equipment or the product is placed into service, 
whichever comes first.
    (5) An imported nonroad engine, subject to the following 
provisions:
    (i) An imported nonroad engine covered by a certificate of 
conformity issued under this part that meets the criteria of one or 
more of paragraphs (1) through (4) of this definition, where the 
original engine manufacturer holds the certificate, is new as defined 
by those applicable paragraphs.
    (ii) An imported engine covered by a certificate of conformity 
issued under this part, where someone other than the original engine 
manufacturer holds the certificate (such as when the engine is modified 
after its initial assembly), is a new nonroad engine when it is 
imported. It is no longer new when the ultimate purchaser receives a 
title for the engine or it is placed into service, whichever comes 
first.
    (iii) An imported nonroad engine that is not covered by a 
certificate of conformity issued under this part at the time of 
importation is new. This addresses uncertified engines and equipment 
initially placed into service that someone seeks to import into the 
United States. Importation of this kind of engine (or equipment 
containing such an engine) is generally prohibited by 40 CFR part 1068. 
However, the importation of such an engine is not prohibited if the 
engine has a model year before 2004, since it is not subject to 
standards.
* * * * *
    Noncommercial fuel means a combustible product that is not marketed 
as a commercial fuel, but is used as a fuel for nonroad engines. For 
example, this includes methane that is produced and released from 
landfills or oil wells, or similar unprocessed fuels that are not 
intended to meet any otherwise applicable fuel specifications. See 
Sec.  1048.625 for provisions related to

[[Page 59244]]

engines designed to burn noncommercial fuels.
* * * * *
    Nonmethane hydrocarbon has the meaning given in 40 CFR 1065.1001.
* * * * *
    Official emission result means the measured emission rate for an 
emission-data engine on a given duty cycle before the application of 
any deterioration factor.
    Owners manual means a document or collection of documents prepared 
by the engine manufacturer for the owner or operator to describe 
appropriate engine maintenance, applicable warranties, and any other 
information related to operating or keeping the engine. The owners 
manual is typically provided to the ultimate purchaser at the time of 
sale. The owners manual may be in paper or electronic format.
    Oxides of nitrogen has the meaning given in 40 CFR 1065.1001.
* * * * *
    Sealed has the meaning given in 40 CFR 1060.801.
* * * * *
    Small-volume engine manufacturer means a company meeting either of 
the following characteristics:
    (1) An engine manufacturer with U.S.-directed production volumes of 
engines subject to the requirements of this part totaling no more than 
2,000 units in any year. This includes engines produced by parent or 
subsidiary companies.
    (2) An engine manufacturer with fewer than 200 employees. This 
includes any employees working for parent or subsidiary companies.
* * * * *
    Steady-state has the meaning given in 40 CFR 1065.1001.
* * * * *
    Total hydrocarbon has the meaning given in 40 CFR 1065.1001. This 
generally means the combined mass of organic compounds measured by the 
specified procedure for measuring total hydrocarbon, expressed as a 
hydrocarbon with a hydrogen-to-carbon mass ratio of 1.85:1.
    Total hydrocarbon equivalent has the meaning given in 40 CFR 
1065.1001.
* * * * *
    Useful life means the period during which the engine is designed to 
properly function in terms of reliability and fuel consumption, without 
being remanufactured, specified as a number of hours of operation or 
calendar years, whichever comes first. It is the period during which a 
nonroad engine is required to comply with all applicable emission 
standards. See Sec.  1048.101(g). If an engine has no hour meter, the 
specified number of hours does not limit the period during which an in-
use engine is required to comply with emission standards unless the 
degree of service accumulation can be verified separately.
* * * * *

0
149. Section 1048.810 is revised to read as follows:


Sec.  1048.810  What materials does this part reference?

    Documents listed in this section have been incorporated by 
reference into this part. The Director of the Federal Register approved 
the incorporation by reference as prescribed in 5 U.S.C. 552(a) and 1 
CFR part 51. Anyone may inspect copies at the U.S. EPA, Air and 
Radiation Docket and Information Center, 1301 Constitution Ave., NW., 
Room B102, EPA West Building, Washington, DC 20460 or at the National 
Archives and Records Administration (NARA). For information on the 
availability of this material at NARA, call 202-741-6030, or go to: 
http://www.archives.gov/federal_register/code_of_federal_regulations/ibr_locations.html.
    (a) SAE material. Table 1 of this section lists material from the 
Society of Automotive Engineers that we have incorporated by reference. 
The first column lists the number and name of the material. The second 
column lists the sections of this part where we reference it. Anyone 
may purchase copies of these materials from the Society of Automotive 
Engineers, 400 Commonwealth Drive, Warrendale, PA 15096 or http://www.sae.org. Table 1 follows:

                Table 1 of Sec.   1048.810--SAE Materials
 
------------------------------------------------------------------------
                                                             Part 1048
                Document number and name                     reference
------------------------------------------------------------------------
SAE J2260, Nonmetallic Fuel System Tubing with One or           1048.105
 More Layers, November 2004.............................
------------------------------------------------------------------------

    (b) ISO material. Table 2 of this section lists material from the 
International Organization for Standardization that we have 
incorporated by reference. The first column lists the number and name 
of the material. The second column lists the section of this part where 
we reference it. Anyone may purchase copies of these materials from the 
International Organization for Standardization, Case Postale 56, CH-
1211 Geneva 20, Switzerland or http://www.iso.org. Table 2 follows:

                Table 2 of Sec.   1048.810--ISO Materials
 
------------------------------------------------------------------------
                                                             Part 1048
                Document number and name                     reference
------------------------------------------------------------------------
ISO 9141-2 Road vehicles--Diagnostic systems--Part 2:           1048.110
 CARB requirements for interchange of digital
 information, February 1994.............................
ISO 14230-4 Road vehicles--Diagnostic systems--Keyword          1048.110
 Protocol 2000--Part 4: Requirements for emission-
 related systems, June 2000.............................
------------------------------------------------------------------------


[[Page 59245]]


0
150. A new Sec.  1048.825 is added to read as follows:


Sec.  1048.825  What reporting and recordkeeping requirements apply 
under this part?

    Under the Paperwork Reduction Act (44 U.S.C. 3501 et seq.), the 
Office of Management and Budget approves the reporting and 
recordkeeping specified in the applicable regulations. The following 
items illustrate the kind of reporting and recordkeeping we require for 
engines and equipment regulated under this part:
    (a) We specify the following requirements related to engine 
certification in this part 1048:
    (1) In Sec.  1048.20 we require manufacturers of stationary engines 
to label their engines in certain cases.
    (2) In Sec.  1048.135 we require engine manufacturers to keep 
certain records related to duplicate labels sent to equipment 
manufacturers.
    (3) In Sec.  1048.145 we include various reporting and 
recordkeeping requirements related to interim provisions.
    (4) In subpart C of this part we identify a wide range of 
information required to certify engines.
    (5) In Sec. Sec.  1048.345 and 1048.350 we specify certain records 
related to production-line testing.
    (6) In Sec. Sec.  1048.420 and 1048.425 we specify certain records 
related to in-use testing.
    (7) In subpart G of this part we identify several reporting and 
recordkeeping items for making demonstrations and getting approval 
related to various special compliance provisions.
    (b) [Reserved]
    (c) We specify the following requirements related to testing in 40 
CFR part 1065:
    (1) In 40 CFR 1065.2 we give an overview of principles for 
reporting information.
    (2) In 40 CFR 1065.10 and 1065.12 we specify information needs for 
establishing various changes to published test procedures.
    (3) In 40 CFR 1065.25 we establish basic guidelines for storing 
test information.
    (4) In 40 CFR 1065.695 we identify data that may be appropriate for 
collecting during testing of in-use engines using portable analyzers.
    (d) We specify the following requirements related to the general 
compliance provisions in 40 CFR part 1068:
    (1) In 40 CFR 1068.5 we establish a process for evaluating good 
engineering judgment related to testing and certification.
    (2) In 40 CFR 1068.25 we describe general provisions related to 
sending and keeping information.
    (3) In 40 CFR 1068.27 we require manufacturers to make engines 
available for our testing or inspection if we make such a request.
    (4) In 40 CFR 1068.105 we require equipment manufacturers to keep 
certain records related to duplicate labels from engine manufacturers.
    (5) In 40 CFR 1068.120 we specify recordkeeping related to 
rebuilding engines.
    (6) In 40 CFR part 1068, subpart C, we identify several reporting 
and recordkeeping items for making demonstrations and getting approval 
related to various exemptions.
    (7) In 40 CFR part 1068, subpart D, we identify several reporting 
and recordkeeping items for making demonstrations and getting approval 
related to importing engines.
    (8) In 40 CFR 1068.450 and 1068.455 we specify certain records 
related to testing production-line engines in a selective enforcement 
audit.
    (9) In 40 CFR 1068.501 we specify certain records related to 
investigating and reporting emission-related defects.
    (10) In 40 CFR 1068.525 and 1068.530 we specify certain records 
related to recalling nonconforming engines.

Appendix I--[Reserved]

0
151. Appendix I to part 1048 is removed and reserved.

PART 1051--CONTROL OF EMISSIONS FROM RECREATIONAL ENGINES AND 
VEHICLES

0
152. The authority citation for part 1051 continues to read as follows:

    Authority: 42 U.S.C. 7401-7671q.

Subpart A--[Amended]

0
153. Section 1051.1 is amended by revising paragraph (a)(4) to read as 
follows:


Sec.  1051.1  Does this part apply for my vehicles or engines?

    (a) * * *
    (4) Offroad utility vehicles with engines with displacement less 
than or equal to 1000 cc, maximum engine power less than or equal to 30 
kW, and maximum vehicle speed higher than 25 miles per hour. Offroad 
utility vehicles that are subject to this part are subject to the same 
requirements as ATVs. This means that any requirement that applies to 
ATVs also applies to these offroad utility vehicles, without regard to 
whether the regulatory language mentions offroad utility vehicles.
* * * * *

0
154. A new Sec.  1051.2 is added to read as follows:


Sec.  1051.2  Who is responsible for compliance?

    The regulations in this part 1051 contain provisions that affect 
both vehicle manufacturers and others. However, the requirements of 
this part are generally addressed to the vehicle manufacturer. The term 
``you'' generally means the vehicle manufacturer, as defined in Sec.  
1051.801, especially for issues related to certification (including 
production-line testing, reporting, etc.).

0
155. Section 1051.5 is amended by revising paragraph (a) to read as 
follows:


Sec.  1051.5  Which engines are excluded from this part's requirements?

    (a)(1) You may exclude vehicles with compression-ignition engines. 
See 40 CFR parts 89 and 1039 for regulations that cover these engines.
    (2) Vehicles with a combined total vehicle dry weight under 20.0 
kilograms are excluded from this part. Spark-ignition engines in these 
vehicles must instead meet emission standards specified in 40 CFR parts 
90 and 1054. See 40 CFR 90.103(a) and the definition of handheld in 40 
CFR 1054.801.
* * * * *

0
156. Section 1051.10 is amended by revising the introductory text to 
read as follows:


Sec.  1051.10  How is this part organized?

    This part 1051 is divided into the following subparts:
* * * * *

0
157. Section 1051.15 is amended by redesignating paragraphs (b) and (c) 
as paragraphs (c) and (d) and adding a new paragraph (b) to read as 
follows:


Sec.  1051.15  Do any other regulation parts apply to me?

* * * * *
    (b) Part 1060 of this chapter describes standards and procedures 
that optionally apply for controlling evaporative emissions from 
engines fueled by gasoline or other volatile liquid fuels and the 
associated fuel systems.
* * * * *

0
158. Section 1051.25 is amended by revising paragraphs (a) and (c) to 
read as follows:


Sec.  1051.25  What requirements apply when installing certified 
engines in recreational vehicles?

    (a) If you manufacture recreational vehicles with engines certified 
under Sec.  1051.20, you must certify your vehicle with respect to the 
evaporative emission standards in Sec.  1051.110, but you need

[[Page 59246]]

not certify the vehicle with respect to exhaust emissions under this 
part. The vehicle must nevertheless meet all emission standards with 
the engine installed. You must also label fuel tanks and fuel lines as 
specified in Sec.  1051.135(d).
* * * * *
    (c) If you obscure the engine label while installing the engine in 
the vehicle such that the label cannot be read during normal 
maintenance, you must place a duplicate label on the vehicle as 
described in 40 CFR 1068.105.

Subpart B--[Amended]

0
159. Section 1051.103 is amended by revising paragraphs (b)(1), (b)(2), 
and (b)(3) to read as follows:


Sec.  1051.103  What are the exhaust emission standards for 
snowmobiles?

* * * * *
    (b) * * *
    (1) Natural gas-fueled snowmobiles: NMHC emissions.
    (2) Alcohol-fueled snowmobiles: THCE emissions.
    (3) Other snowmobiles: THC emissions.
* * * * *

0
160. Section 1051.105 is amended by revising paragraphs (b)(1), (b)(2), 
and (b)(3) to read as follows:


Sec.  1051.105  What are the exhaust emission standards for off-highway 
motorcycles?

* * * * *
    (b) * * *
    (1) Natural gas-fueled off-highway motorcycles: NMHC emissions.
    (2) Alcohol-fueled off-highway motorcycles: THCE emissions.
    (3) Other off-highway motorcycles: THC emissions.
* * * * *
0
161. Section 1051.107 is amended by revising paragraphs (b)(1), (b)(2), 
and (b)(3) to read as follows:


Sec.  1051.107  What are the exhaust emission standards for all-terrain 
vehicles (ATVs) and offroad utility vehicles?

* * * * *
    (b) * * *
    (1) Natural gas-fueled ATVs: NMHC emissions.
    (2) Alcohol-fueled ATVs: THCE emissions.
    (3) Other ATVs: THC emissions.
* * * * *

0
162. Section 1051.110 is amended by revising the introductory text and 
adding paragraph (c) to read as follows:


Sec.  1051.110  What evaporative emission standards must my vehicles 
meet?

    Your new vehicles that run on a volatile liquid fuel (such as 
gasoline) must meet the emission standards of this section over their 
full useful life. Note that Sec.  1051.245 allows you to use design-
based certification instead of generating new emission data.
* * * * *
    (c) You may certify your fuel tanks and fuel lines under the 
provisions of 40 CFR part 1060. You may also specify in your 
application for certification that you are using components that have 
been certified by the component manufacturer.

0
163. Section 1051.115 is amended by revising the section heading and 
introductory text to read as follows:


Sec.  1051.115  What other requirements apply?

    Vehicles that are required to meet the emission standards of this 
part must meet the following requirements:
* * * * *

0
164. Section 1051.120 is amended by revising paragraph (c) to read as 
follows:


Sec.  1051.120  What emission-related warranty requirements apply to 
me?

* * * * *
    (c) Components covered. The emission-related warranty covers all 
components whose failure would increase an engine's emissions of any 
regulated pollutant, including components listed in 40 CFR part 1068, 
Appendix I, and components from any other system you develop to control 
emissions. The emission-related warranty covers these components even 
if another company produces the component. Your emission-related 
warranty does not cover components whose failure would not increase an 
engine's emissions of any regulated pollutant.
* * * * *

0
165. Section 1051.125 is amended by revising paragraphs (a)(1)(iii) and 
(d) to read as follows:


Sec.  1051.125  What maintenance instructions must I give to buyers?

* * * * *
    (a) * * *
    (1) * * *
    (iii) You provide the maintenance free of charge and clearly say so 
in your maintenance instructions.
* * * * *
    (d) Noncritical emission-related maintenance. Subject to the 
provisions of this paragraph (d), you may schedule any amount of 
emission-related inspection or maintenance that is not covered by 
paragraph (a) of this section (i.e., maintenance that is neither 
explicitly identified as critical emission-related maintenance, nor 
that we approve as critical emission-related maintenance). Noncritical 
emission-related maintenance generally includes changing spark plugs, 
re-seating valves, or any other emission-related maintenance on the 
components we specify in 40 CFR part 1068, Appendix I that is not 
covered in paragraph (a) of this section. You must state in the owner's 
manual that these steps are not necessary to keep the emission-related 
warranty valid. If operators fail to do this maintenance, this does not 
allow you to disqualify those vehicles from in-use testing or deny a 
warranty claim. Do not take these inspection or maintenance steps 
during service accumulation on your emission-data vehicles.
* * * * *

0
166. Section 1051.135 is amended to read as follows:
0
a. By revising paragraphs (c)(6), (c)(7), and (c)(8).
0
b. By adding a new paragraph (c)(13).
0
d. By removing and reserving paragraph (f).


Sec.  1051.135  How must I label and identify the vehicles I produce?

* * * * *
    (c) * * *
    (6) State the date of manufacture [DAY (optional), MONTH, and 
YEAR]; however, you may omit this from the label if you stamp, engrave, 
or otherwise permanently identify it elsewhere on the vehicle or 
engine, in which case you must also describe in your application for 
certification where you will identify the date on the vehicle or 
engine.
    (7) State the exhaust emission standards or FELs to which the 
vehicles are certified (in g/km or g/kW-hr). Also, state the FEL that 
applies for the fuel tank if it is different than the otherwise 
applicable standard.
    (8) Identify the emission-control system. Use terms and 
abbreviations as described in 40 CFR 1068.45. You may omit this 
information from the label if there is not enough room for it and you 
put it in the owner's manual instead.
* * * * *
    (13) Identify evaporative emission controls as specified in 40 CFR 
1060.135.
* * * * *

0
167. Section 1051.137 is amended by revising the introductory text to 
read as follows:

[[Page 59247]]

Sec.  1051.137  What are the consumer labeling requirements?

    Label every vehicle certified under this part with a removable 
hang-tag showing its emission characteristics relative to other models. 
The label should be attached securely to the vehicle before it is 
offered for sale in such a manner that it would not be accidentally 
removed prior to sale. Use the applicable equations of this section to 
determine the normalized emission rate (NER) from the FEL for your 
vehicle. If the vehicle is certified without a family emission limit 
that is different than the otherwise applicable standard, use the final 
deteriorated emission level. Round the resulting normalized emission 
rate for your vehicle to one decimal place. If the calculated NER value 
is less than zero, consider NER to be zero for that vehicle. We may 
specify a standardized format for labels. At a minimum, the tag should 
include: the manufacturer's name, vehicle model name, engine 
description (500 cc two-stroke with DFI), the NER, and a brief 
explanation of the scale (for example, note that 0 is the cleanest and 
10 is the least clean).
* * * * *

0
168. A new Sec.  1051.140 is added to read as follows:


Sec.  1051.140  What is my vehicle's maximum engine power and 
displacement?

    This section describes how to quantify your vehicle's maximum 
engine power and displacement for the purposes of this part.
    (a) An engine configuration's maximum engine power is the maximum 
brake power point on the nominal power curve for the engine 
configuration, as defined in this section. Round the power value to the 
nearest 0.5 kilowatts. The nominal power curve of an engine 
configuration is the relationship between maximum available engine 
brake power and engine speed for an engine, using the mapping 
procedures of 40 CFR part 1065, based on the manufacturer's design and 
production specifications for the engine. This information may also be 
expressed by a torque curve that relates maximum available engine 
torque with engine speed.
    (b) An engine configuration's displacement is the intended swept 
volume of the engine rounded to the nearest cubic centimeter. The swept 
volume of the engine is the product of the internal cross-section area 
of the cylinders, the stroke length, and the number of cylinders. For 
example, for a one-cylinder engine with a circular cylinder having an 
internal diameter of 6.00 cm and a 6.25 cm stroke length, the rounded 
displacement would be: (1)x(6.00/2) 2 x ([pi]) x (6.25) = 
177 cc. Calculate the engine's intended swept volume from the design 
specifications for the cylinders using enough significant figures to 
allow determination of the displacement to the nearest 0.1 cc.
    (c) The nominal power curve and intended swept volume must be 
within the range of the actual power curves and swept volumes of 
production engines considering normal production variability. If after 
production begins it is determined that either your nominal power curve 
or your intended swept volume does not represent production engines, we 
may require you to amend your application for certification under Sec.  
1051.225.

0
169. Section 1051.145 is amended by revising paragraphs (b) and (e)(1) 
and adding paragraph (i) to read as follows:


Sec.  1051.145  What provisions apply only for a limited time?

* * * * *
    (b) Optional emission standards for ATVs. To meet ATV standards for 
model years before 2014, you may apply the exhaust emission standards 
by model year in paragraph (b)(1) of this section while measuring 
emissions using the engine-based test procedures in 40 CFR part 1065 
instead of the chassis-based test procedures in 40 CFR part 86. In 
model year 2014 you may apply this provision for exhaust emission 
engine families representing up to 50 percent of your U.S.-directed 
production volume. This provision is not available in the 2015 or 
later-model years. If you certify only one ATV exhaust emission engine 
family in the 2014 model year this provision is available for that 
family in the 2014 model year.
    (1) Follow Table 1 of this section for exhaust emission standards, 
while meeting all the other requirements of Sec.  1051.107. You may use 
emission credits to show compliance with these standards (see subpart H 
of this part). You may not exchange emission credits with engine 
families meeting the standards in Sec.  1051.107(a). You may also not 
exchange credits between engine families certified to the standards for 
engines above 225 cc and engine families certified to the standards for 
engines below 225 cc. The phase-in percentages in the table specify the 
percentage of your total U.S.-directed production that must comply with 
the emission standards for those model years (i.e., the percentage 
requirement does not apply separately for engine families above and 
below 225 cc). Table 1 follows:

               Table 1 of Sec.   1051.145--Optional Exhaust Emission Standards for ATVs (g/kW-hr)
----------------------------------------------------------------------------------------------------------------
                                                                        Emission standards            Maximum
                                                                 --------------------------------    allowable
                                                                                                      family
      Engine displacement          Model year        Phase-in                                        emission
                                                                      HC+NOX            CO            limits
                                                                                                 ---------------
                                                                                                      HC+NOX
----------------------------------------------------------------------------------------------------------------
<225 cc.......................  2006............             50%            16.1             400            32.2
                                2007 and later..             100            16.1             400            32.2
>=225 cc......................  2006............              50            13.4             400            26.8
                                2007 and later..             100            13.4             400            26.8
----------------------------------------------------------------------------------------------------------------

    (2) Measure emissions by testing the engine on a dynamometer with 
the steady-state duty cycle described in Table 2 of this section.
    (i) During idle mode, hold the speed within your specifications, 
keep the throttle fully closed, and keep engine torque under 5 percent 
of the peak torque value at maximum test speed.
    (ii) For the full-load operating mode, operate the engine at its 
maximum fueling rate.
    (iii) See part 1065 of this chapter for detailed specifications of 
tolerances and calculations.
    (iv) Table 2 follows:

[[Page 59248]]



                     Table 2 of Sec.   1051.145--6-Mode Duty Cycle for Recreational Engines
----------------------------------------------------------------------------------------------------------------
                                                                      Torque
                                        Engine speed (percent of    (percent of    Minimum time      Weighting
               Mode No.                    maximum test speed)    maximum torque      in mode         factors
                                                                  at test speed)     (minutes)
----------------------------------------------------------------------------------------------------------------
1.....................................  85......................             100             5.0            0.09
2.....................................  85......................              75             5.0            0.20
3.....................................  85......................              50             5.0            0.29
4.....................................  85......................              25             5.0            0.30
5.....................................  85......................              10             5.0            0.07
6.....................................  Idle....................               0             5.0            0.05
----------------------------------------------------------------------------------------------------------------

    (3) For ATVs certified to the standards in this paragraph (b), use 
the following equations to determine the normalized emission rate 
required by Sec.  1051.137:

    (i) For engines at or above 225 cc, use the following equation:

NER = 9.898 x log (HC+NOX) -4.898

Where:

HC + NOX is the sum of the cycle-weighted emission rates 
for hydrocarbons and oxides of nitrogen in g/kW-hr.

    (ii) For engines below 225 cc, use the following equation:

NER = 9.898 x log [(HC+NOX) x 0.83] -4.898

Where:

HC + NOX is the sum of the cycle-weighted emission rates 
for hydrocarbons and oxides of nitrogen in g/kW-hr.
* * * * *
    (e) * * *
    (1) Snowmobile. You may use the raw sampling procedures described 
in 40 CFR part 90 or 91 for snowmobiles subject to Phase 1 or Phase 2 
standards.
* * * * *
    (i) Delayed compliance with labeling requirements. Before the 2010 
model year, you may omit the date of manufacture from the emission 
control information label if you keep those records and provide them to 
us upon request. Before the 2010 model year, you may also omit the 
label information specified for evaporative emission controls.

Subpart C--[Amended]

0
170. Section 1051.201 is amended by revising paragraph (a) to read as 
follows:


Sec.  1051.201  What are the general requirements for obtaining a 
certificate of conformity?

    (a) You must send us a separate application for a certificate of 
conformity for each engine family. A certificate of conformity is valid 
starting with the indicated effective date, but it is not valid for any 
production after December 31 of the model year for which it is issued. 
No certificate will be issued after December 31 of the model year.
* * * * *

0
171. Section 1051.205 is amended by revising paragraphs (b), (o)(1), 
(p), (t), and (w) to read as follows:


Sec.  1051.205  What must I include in my application?

* * * * *
    (b) Explain how the emission control systems operate. Describe the 
evaporative emission controls. Also describe in detail all system 
components for controlling exhaust emissions, including all auxiliary 
emission control devices (AECDs) and all fuel-system components you 
will install on any production or test vehicle or engine. Identify the 
part number of each component you describe. For this paragraph (b), 
treat as separate AECDs any devices that modulate or activate 
differently from each other. Include sufficient detail to allow us to 
evaluate whether the AECDs are consistent with the defeat device 
prohibition of Sec.  1051.115.
* * * * *
    (o) * * *
    (1) Present exhaust emission data for hydrocarbons (such as NMHC or 
THCE, as applicable), NOX, and CO on an emission-data 
vehicle to show your vehicles meet the exhaust emission standards as 
specified in subpart B of this part. Show emission figures before and 
after applying deterioration factors for each vehicle or engine. If we 
specify more than one grade of any fuel type (for example, a summer 
grade and winter grade of gasoline), you need to submit test data only 
for one grade unless the regulations of this part specify otherwise for 
your engine.
* * * * *
    (p) Report all test results, including those from invalid tests or 
from any other tests, whether or not they were conducted according to 
the test procedures of subpart F of this part. If you measure 
CO2, report those emission levels (in g/kW-hr or g/km, as 
appropriate). We may ask you to send other information to confirm that 
your tests were valid under the requirements of this part and 40 CFR 
part 1065.
* * * * *
    (t) Include good-faith estimates of U.S.-directed production 
volumes. Include a justification for the estimated production volumes 
if they are substantially different than actual production volumes in 
earlier years for similar models.
* * * * *
    (w) Name an agent for service located in the United States. Service 
on this agent constitutes service on you or any of your officers or 
employees for any action by EPA or otherwise by the United States 
related to the requirements of this part.

0
172. Section 1051.220 is amended by revising the introductory text and 
paragraph (a) to read as follows:


Sec.  1051.220  How do I amend the maintenance instructions in my 
application?

    You may amend your emission-related maintenance instructions after 
you submit your application for certification as long as the amended 
instructions remain consistent with the provisions of Sec.  1051.125. 
You must send the Designated Compliance Officer a request to amend your 
application for certification for an engine family if you want to 
change the emission-related maintenance instructions in a way that 
could affect emissions. In your request, describe the proposed changes 
to the maintenance instructions. If operators follow the original 
maintenance instructions rather than the newly specified maintenance, 
this does not allow you to disqualify those engines from in-use testing 
or deny a warranty claim.
    (a) If you are decreasing, replacing, or eliminating any specified 
maintenance, you may distribute the new maintenance instructions to 
your customers 30 days after we receive your request, unless we 
disapprove your request. This would generally include

[[Page 59249]]

replacing one maintenance step with another. We may approve a shorter 
time or waive this requirement.
* * * * *

0
173. Section 1051.225 is revised to read as follows:


Sec.  1051.225  How do I amend my application for certification to 
include new or modified vehicle configurations or to change an FEL?

    Before we issue you a certificate of conformity, you may amend your 
application to include new or modified vehicle configurations, subject 
to the provisions of this section. After we have issued your 
certificate of conformity, you may send us an amended application 
requesting that we include new or modified vehicle configurations 
within the scope of the certificate, subject to the provisions of this 
section. You must amend your application if any changes occur with 
respect to any information included in your application.
    (a) You must amend your application before you take any of the 
following actions:
    (1) Add a vehicle configuration to an engine family. In this case, 
the vehicle configuration added must be consistent with other vehicle 
configurations in the engine family with respect to the criteria listed 
in Sec.  1051.230.
    (2) Change a vehicle configuration already included in an engine 
family in a way that may affect emissions, or change any of the 
components you described in your application for certification. This 
includes production and design changes that may affect emissions any 
time during the engine's lifetime.
    (3) Modify an FEL for an engine family, as described in paragraph 
(f) of this section.
    (b) To amend your application for certification, send the 
Designated Compliance Officer the following information:
    (1) Describe in detail the addition or change in the vehicle model 
or configuration you intend to make.
    (2) Include engineering evaluations or data showing that the 
amended engine family complies with all applicable requirements. You 
may do this by showing that the original emission-data vehicle is still 
appropriate for showing that the amended family complies with all 
applicable requirements.
    (3) If the original emission-data vehicle for the engine family is 
not appropriate to show compliance for the new or modified vehicle 
configuration, include new test data showing that the new or modified 
vehicle configuration meets the requirements of this part.
    (c) We may ask for more test data or engineering evaluations. You 
must give us these within 30 days after we request them.
    (d) For engine families already covered by a certificate of 
conformity, we will determine whether the existing certificate of 
conformity covers your new or modified vehicle configuration. You may 
ask for a hearing if we deny your request (see Sec.  1051.820).
    (e) For engine families already covered by a certificate of 
conformity, you may start producing the new or modified vehicle 
configuration anytime after you send us your amended application, 
before we make a decision under paragraph (d) of this section. However, 
if we determine that the affected vehicles do not meet applicable 
requirements, we will notify you to cease production of the vehicles 
and may require you to recall the vehicles at no expense to the owner. 
Choosing to produce vehicles under this paragraph (e) is deemed to be 
consent to recall all vehicles that we determine do not meet applicable 
emission standards or other requirements and to remedy the 
nonconformity at no expense to the owner. If you do not provide 
information required under paragraph (c) of this section within 30 days 
after we request it, you must stop producing the new or modified 
vehicle configuration.
    (f) You may ask us to approve a change to your FEL in certain cases 
after the start of production. The changed FEL may not apply to 
vehicles you have already introduced into commerce, except as described 
in this paragraph (f). If we approve a changed FEL after the start of 
production, you must include the new FEL on the emission control 
information label for all vehicles produced after the change. You may 
ask us to approve a change to your FEL in the following cases:
    (1) You may ask to raise your FEL for your engine family at any 
time. In your request, you must show that you will still be able to 
meet the emission standards as specified in subparts B and H of this 
part. If you amend your application by submitting new test data to 
include a newly added or modified vehicle, as described in paragraph 
(b)(3) of this section, use the appropriate FELs with corresponding 
production volumes to calculate your average emission level for the 
model year, as described in subpart H of this part. In all other 
circumstances, you must use the higher FEL for the entire family to 
calculate your average emission level under subpart H of this part.
    (2) You may ask to lower the FEL for your engine family only if you 
have test data from production engines showing that the engines have 
emissions below the proposed lower FEL. The lower FEL applies only to 
engines you produce after we approve the new FEL. Use the appropriate 
FELs with corresponding production volumes to calculate your average 
emission level for the model year, as described in subpart H of this 
part.

0
174. Section 1051.230 is amended by revising the paragraphs (a), 
(b)(8), and (e)(1) to read as follows:


Sec.  1051.230  How do I select engine families?

    (a) For purposes of certification, divide your product line into 
families of vehicles as described in this section. Except as specified 
in paragraph (f) of this section, you must have separate engine 
families for meeting exhaust and evaporative emissions. Your engine 
family is limited to a single model year.
    (b) * * *
    (8) Numerical level of the emission standards that apply to the 
vehicle. For example, an engine family may not include vehicles 
certified to different family emission limits, though you may change 
family emission limits without recertifying as specified in Sec.  
1051.225.
* * * * *
    (e) * * *
    (1) In unusual circumstances, you may group such vehicles in the 
same engine family if you show that their emission characteristics 
during the useful life will be similar.
* * * * *

0
175. Section 1051.235 is amended by revising paragraphs (c)(4), (d)(1) 
introductory text, and (d)(1)(i) to read as follows:


Sec.  1051.235  What emission testing must I perform for my application 
for a certificate of conformity?

* * * * *
    (c) * * *
    (4) Before we test one of your vehicles or engines, we may 
calibrate it within normal production tolerances for anything we do not 
consider an adjustable parameter. For example, this would apply where 
we determine that an engine parameter is not an adjustable parameter 
(as defined in Sec.  1051.801) but that it is subject to production 
variability.
    (d) * * *
    (1) You may ask to use carryover emission data from a previous 
model year instead of doing new tests, but only if all the following 
are true:
    (i) The engine family from the previous model year differs from the 
current engine family only with respect to model year or other 
characteristics

[[Page 59250]]

unrelated to emissions. You may also ask to add a configuration subject 
to Sec.  1051.225.
* * * * *

0
176. Section 1051.240 is amended by revising paragraphs (a), (b), and 
(c)(1) to read as follows:


Sec.  1051.240  How do I demonstrate that my engine family complies 
with exhaust emission standards?

    (a) For purposes of certification, your engine family is considered 
in compliance with the applicable numerical exhaust emission standards 
in subpart B of this part if all emission-data vehicles representing 
that family have test results showing deteriorated emission levels at 
or below these standards. This includes all test points over the course 
of the durability demonstration. (Note: if you participate in the ABT 
program in subpart H of this part, your FELs are considered to be the 
applicable emission standards with which you must comply.)
    (b) Your engine family is deemed not to comply if any emission-data 
vehicle representing that family has test results showing a 
deteriorated emission level for any pollutant that is above an 
applicable FEL or emission standard. This includes all test points over 
the course of the durability demonstration.
    (c) * * *
    (1) For vehicles that use aftertreatment technology, such as 
catalytic converters, use a multiplicative deterioration factor for 
exhaust emissions. A multiplicative deterioration factor is the ratio 
of exhaust emissions at the end of the useful life and exhaust 
emissions at the low-hour test point. In these cases, adjust the 
official emission results for each tested vehicle or engine at the 
selected test point by multiplying the measured emissions by the 
deterioration factor. If the factor is less than one, use one. 
Multiplicative deterioration factors must be specified to three 
significant figures.
* * * * *

0
177. Section 1051.243 is amended by revising the introductory text and 
paragraphs (b)(6) and (c)(1) to read as follows:


Sec.  1051.243  How do I determine deterioration factors from exhaust 
durability testing?

    This section describes how to determine deterioration factors, 
either with pre-existing test data or with new emission measurements.
* * * * *
    (b) * * *
    (6) You may use other testing methods to determine deterioration 
factors, consistent with good engineering judgment, as long as we 
approve those methods in advance.
    (c) * * *
    (1) If you determine your deterioration factors based on test data 
from a different engine family, explain why this is appropriate and 
include all the emission measurements on which you base the 
deterioration factor.
* * * * *

0
178. Section 1051.245 is amended by revising paragraph (e) to read as 
follows:


Sec.  1051.245  How do I demonstrate that my engine family complies 
with evaporative emission standards?

* * * * *
    (e) You may demonstrate for certification that your engine family 
complies with the evaporative emission standards by demonstrating that 
you use the following control technologies:
    (1) For certification to the standards specified in Sec.  
1051.110(a) with the control technologies shown in the following table:

    Table 1 of Sec.   1051.245--Design-certification Technologies for
                       Controlling Tank Permeation
------------------------------------------------------------------------
                                             Then you may design-certify
     If the tank permeability control        with a tank emission level
            technology is . . .                       of . . .
------------------------------------------------------------------------
(i) A metal fuel tank with no non-metal     1.5 g/m2/day.
 gaskets or with gaskets made from a low-
 permeability material.
(ii) A metal fuel tank with non-metal       1.5 g/m2/day.
 gaskets with an exposed surface area of
 1000 mm2 or less.
------------------------------------------------------------------------

    (2) For certification to the standards specified in Sec.  
1051.110(b) with the control technologies shown in the following table:

    Table 2 of Sec.   1051.245--Design-certification Technologies for
                    Controlling Fuel-line Permeation
------------------------------------------------------------------------
                                             Then you may design-certify
   If the fuel-line permeability control     with a fuel line permeation
            technology is . . .                emission level of . . .
------------------------------------------------------------------------
(i) Hose meeting the specifications for     15 g/m2/day.
 Low Emission Fuel Lines as described in
 40 CFR 1048.105.
(ii) Hose meeting the R11-A or R12          15 g/m2/day.
 permeation specifications in SAE J30 as
 described in 40 CFR 1060.810.
------------------------------------------------------------------------


0
179. Section 1051.250 is amended as follows:
0
a. By removing paragraph (d).
0
b. By redesignating paragraphs (a) through (c) as paragraphs (b) 
through (d), respectively.
0
c. By adding a new paragraph (a).
0
d. By revising the newly redesignated paragraph (c).


Sec.  1051.250  What records must I keep and make available to EPA?

    (a) Send the Designated Compliance Officer information related to 
your U.S.-directed production volumes as described in Sec.  1051.345. 
In addition, within 45 days after the end of the model year, you must 
send us a report describing information about vehicles you produced 
during the model year as follows:
    (1) State the total production volume for each engine family that 
is not subject to reporting under Sec.  1051.345.
    (2) State the total production volume for any engine family for 
which you produce vehicles after completing the reports required in 
Sec.  1051.345.
    (3) For production volumes you report under this paragraph (a), 
identify whether or not the figures include California sales. Include a 
separate count of production volumes for California sales if those 
figures are available.
* * * * *
    (c) Keep data from routine emission tests (such as test cell 
temperatures and relative humidity readings) for one year after we 
issue the associated certificate of conformity. Keep all other 
information specified in this section for eight years after we issue 
your certificate.
* * * * *

Subpart D--[Amended]

0
180. Section 1051.301 is amended by revising paragraphs (a), (c), (d), 
(e), and (h) introductory text to read as follows:

[[Page 59251]]

Sec.  1051.301  When must I test my production-line vehicles or 
engines?

    (a) If you produce vehicles that are subject to the requirements of 
this part, you must test them as described in this subpart, except as 
follows:
    (1) Small-volume manufacturers may omit testing under this subpart.
    (2) We may exempt engine families with a projected U.S.-directed 
production volume below 150 units from routine testing under this 
subpart. Request this exemption in your application for certification 
and include your basis for projecting a production volume below 150 
units. We will approve your request if we agree that you have made 
good-faith estimates of your production volumes. Your exemption is 
approved when we grant your certificate. You must promptly notify us if 
your actual production exceeds 150 units during the model year. If you 
exceed the production limit or if there is evidence of a nonconformity, 
we may require you to test production-line engines under this subpart, 
or under 40 CFR part 1068, subpart E, even if we have approved an 
exemption under this paragraph (a)(2).
* * * * *
    (c) Other regulatory provisions authorize us to suspend, revoke, or 
void your certificate of conformity, or order recalls for engine 
families, without regard to whether they have passed these production-
line testing requirements. The requirements of this subpart do not 
affect our ability to do selective enforcement audits, as described in 
part 1068 of this chapter. Individual vehicles and engines in families 
that pass these production-line testing requirements must also conform 
to all applicable regulations of this part and part 1068 of this 
chapter.
    (d) You may use alternate programs for testing production-line 
vehicles or engines in the following circumstances:
    (1) You may use analyzers and sampling systems that meet the field-
testing requirements of 40 CFR part 1065, subpart J, but not the 
otherwise applicable requirements in 40 CFR part 1065 for laboratory 
testing, to demonstrate compliance with emission standards if you 
double the minimum sampling rate specified in Sec.  1054.310(b). Use 
measured test results to determine whether vehicles or engines comply 
with applicable standards without applying a measurement allowance. 
This alternate program does not require prior approval but we may 
disallow use of this option where we determine that use of field-grade 
equipment would prevent you from being able to demonstrate that your 
vehicles or engines are being produced to conform to the specifications 
in your application for certification.
    (2) You may ask to use another alternate program for testing 
production-line vehicles or engines. In your request, you must show us 
that the alternate program gives equal assurance that your products 
meet the requirements of this part. We may waive some or all of this 
subpart's requirements if we approve your alternate approach. For 
example, in certain circumstances you may be able to give us equal 
assurance that your products meet the requirements of this part by 
using less rigorous measurement methods if you offset that by 
increasing the number of test vehicles or engines.
    (e) If you certify an engine family with carryover emission data, 
as described in Sec.  1051.235(d), and these equivalent engine families 
consistently pass the production-line testing requirements over the 
preceding two-year period, you may ask for a reduced testing rate for 
further production-line testing for that family. The minimum testing 
rate is one vehicle or engine per engine family. If we reduce your 
testing rate, we may limit our approval to any number of model years. 
In determining whether to approve your request, we may consider the 
number of vehicles or engines that have failed the emission tests.
* * * * *
    (h) Vehicles certified to the following standards are exempt from 
the production-line testing requirements of this subpart if no engine 
families in the averaging set have family emission limits that are 
different than the otherwise applicable standard:
* * * * *

0
181. Section 1051.305 is amended by adding introductory text and 
revising paragraphs (d) and (g) to read as follows:


Sec.  1051.305  How must I prepare and test my production-line vehicles 
or engines?

    This section describes how to prepare and test production-line 
vehicles or engines. Test the engine if your vehicle is certified to g/
kW-hr standards; otherwise test the vehicle. You must assemble the test 
vehicle or engine in a way that represents the assembly procedures for 
other vehicles or engines in the engine family. You must ask us to 
approve any deviations from your normal assembly procedures for other 
production vehicles or engines in the engine family.
* * * * *
    (d) Setting adjustable parameters. Before any test, we may require 
you to adjust any adjustable parameter to any setting within its 
physically adjustable range.
    (1) We may require you to adjust idle speed outside the physically 
adjustable range as needed, but only until the vehicle or engine has 
stabilized emission levels (see paragraph (e) of this section). We may 
ask you for information needed to establish an alternate minimum idle 
speed.
    (2) We may specify adjustments within the physically adjustable 
range by considering their effect on emission levels. We may also 
consider how likely it is that someone will make such an adjustment 
with in-use vehicles.
    (3) We may specify an air-fuel ratio within the adjustable range 
specified in Sec.  1051.115(d).
* * * * *
    (g) Retesting after invalid tests. You may retest a vehicle or 
engine if you determine an emission test is invalid under subpart F of 
this part. Explain in your written report reasons for invalidating any 
test and the emission results from all tests. If we determine that you 
improperly invalidated a test, we may require you to ask for our 
approval for future testing before substituting results of the new 
tests for invalid ones.

0
182. Section 1051.310 is amended by revising paragraphs (a), (b), (c) 
introductory text, (c)(2), (f), (g), and (h) to read as follows:


Sec.  1051.310  How must I select vehicles or engines for production-
line testing?

    (a) Test engines from each engine family as described in this 
section based on test periods, as follows:
    (1) For engine families with projected U.S.-directed production 
volume of at least 1,600, the test periods are consecutive quarters (3 
months). However, if your annual production period is less than 12 
months long, you may take the following alternative approach to define 
quarterly test periods:
    (i) If your annual production period is 120 days or less, the whole 
model year constitutes a single test period.
    (ii) If your annual production period is 121 to 210 days, divide 
the annual production period evenly into two test periods.
    (iii) If your annual production period is 211 to 300 days, divide 
the annual production period evenly into three test periods.
    (iv) If your annual production period is 301 days or longer, divide 
the annual production period evenly into four test periods.
    (2) For engine families with projected U.S.-directed production 
volume below

[[Page 59252]]

1,600, the whole model year constitutes a single test period.
    (b) Early in each test period, randomly select and test an engine 
from the end of the assembly line for each engine family.
    (1) In the first test period for newly certified engines, randomly 
select and test one more engine. Then, calculate the required sample 
size for the model year as described in paragraph (c) of this section.
    (2) In later test periods of the same model year, combine the new 
test result with all previous testing in the model year. Then, 
calculate the required sample size for the model year as described in 
paragraph (c) of this section.
    (3) In the first test period for engine families relying on 
previously submitted test data, combine the new test result with the 
last test result from the previous model year. Then, calculate the 
required sample size for the model year as described in paragraph (c) 
of this section. Use the last test result from the previous model year 
only for this first calculation. For all subsequent calculations, use 
only results from the current model year.
    (c) Calculate the required sample size for each engine family. 
Separately calculate this figure for HC, NOX (or HC + 
NOX), and CO. The required sample size is the greater of 
these calculated values. Use the following equation:
[GRAPHIC] [TIFF OMITTED] TR08OC08.093

Where:

N = Required sample size for the model year.
t95 = 95% confidence coefficient, which depends on the 
number of tests completed, n, as specified in the table in paragraph 
(c)(1) of this section. It defines 95% confidence intervals for a 
one-tail distribution.
[sigma] = Test sample standard deviation (see paragraph (c)(2) of 
this section).
x = Mean of emission test results of the sample.
STD = Emission standard (or family emission limit, if applicable).
* * * * *

    (2) Calculate the standard deviation, [sigma], for the test sample 
using the following formula:
[GRAPHIC] [TIFF OMITTED] TR08OC08.094

Where:

Xi = Emission test result for an individual vehicle or 
engine.
n = The number of tests completed in an engine family.
* * * * *
    (f) Distribute the remaining tests evenly throughout the rest of 
the year. You may need to adjust your schedule for selecting vehicles 
or engines if the required sample size changes. If your scheduled 
quarterly testing for the remainder of the model year is sufficient to 
meet the calculated sample size, you may wait until the next quarter to 
do additional testing. Continue to randomly select vehicles or engines 
from each engine family.
    (g) Continue testing until one of the following things happens:
    (1) After completing the minimum number of tests required in 
paragraph (b) of this section, the number of tests completed in an 
engine family, n, is greater than the required sample size, N, and the 
sample mean, x, is less than or equal to the emission standard. For 
example, if N = 5.1 after the fifth test, the sample-size calculation 
does not allow you to stop testing.
    (2) The engine family does not comply according to Sec.  1051.315.
    (3) You test 30 vehicles or engines from the engine family.
    (4) You test one percent of your projected annual U.S.-directed 
production volume for the engine family, rounded to the nearest whole 
number. Do not count a vehicle or engine under this paragraph (g)(4) if 
it fails to meet an applicable emission standard.
    (5) You choose to declare that the engine family does not comply 
with the requirements of this subpart.
    (h) If the sample-size calculation allows you to stop testing for 
one pollutant but not another, you must continue measuring emission 
levels of all pollutants for any additional tests required under this 
section. However, you need not continue making the calculations 
specified in this subpart for the pollutant for which testing is not 
required. This paragraph (h) does not affect the number of tests 
required under this section, the required calculations in Sec.  
1051.315, or the remedial steps required under Sec.  1051.320.
* * * * *

0
183. Section 1051.315 is amended by revising paragraphs (a), (b), and 
(g) to read as follows:


Sec.  1051.315  How do I know when my engine family fails the 
production-line testing requirements?

* * * * *
    (a) Calculate your test results as follows:
    (1) Initial and final test results. Calculate and round the test 
results for each vehicle or engine. If you do several tests on a 
vehicle or engine, calculate the initial results for each test, then 
add all the test results together and divide by the number of tests. 
Round this final calculated value for the final test results on that 
vehicle or engine.
    (2) Final deteriorated test results. Apply the deterioration factor 
for the engine family to the final test results (see Sec.  
1051.240(c)).
    (3) Round deteriorated test results. Round the results to the 
number of decimal places in the emission standard expressed to one more 
decimal place.
    (b) Construct the following CumSum Equation for each engine family 
for HC, NOX (HC + NOX), and CO emissions:

Ci = Max [0 or Ci-1 + Xi-(STD + 0.25 x 
[sigma])]

Where:

Ci = The current CumSum statistic.
Ci-1 = The previous CumSum statistic. For the first test, 
the CumSum statistic is 0 (i.e., C1 = 0).
Xi = The current emission test result for an individual 
vehicle or engine.
STD = Emission standard (or family emission limit, if applicable).
* * * * *
    (g) If the CumSum statistic exceeds the Action Limit in two 
consecutive tests, the engine family fails the production-line testing 
requirements of this subpart. Tell us within ten working days if this 
happens. You may request to amend the application for certification to 
raise the FEL of the engine family as described in Sec.  1051.225(f).
* * * * *

0
184. Section 1051.320 is amended by revising paragraph (a)(2) to read 
as follows:


Sec.  1051.320  What happens if one of my production-line vehicles or 
engines fails to meet emission standards?

    (a) * * *
    (2) Include the test results and describe the remedy for each 
engine in the written report required under Sec.  1051.345.
* * * * *

0
185. Section 1051.325 is amended by revising the section heading and 
paragraphs (c) and (e) to read as follows:


Sec.  1051.325  What happens if an engine family fails the production-
line testing requirements?

* * * * *
    (c) Up to 15 days after we suspend the certificate for an engine 
family, you may ask for a hearing (see Sec.  1051.820). If we agree 
before a hearing occurs that we used erroneous information in deciding

[[Page 59253]]

to suspend the certificate, we will reinstate the certificate.
* * * * *
    (e) You may request to amend the application for certification to 
raise the FEL of the engine family before or after we suspend your 
certificate as described in Sec.  1051.225(f). We will approve your 
request if it is clear that you used good engineering judgment in 
establishing the original FEL.

0
186. Section 1051.345 is amended as follows:
0
a. By removing the introductory text.
0
b. By revising paragraphs (a)(4), (a)(6), and (a)(8).
0
c. By revising paragraphs (b) and (c).


Sec.  1051.345  What production-line testing records must I send to 
EPA?

    (a) * * *
    (4) Describe each test vehicle or engine, including the engine 
family's identification and the vehicle's model year, build date, model 
number, identification number, and number of hours of operation before 
testing.
* * * * *
    (6) Provide the test number; the date, time and duration of 
testing; test procedure; all initial test results; final test results; 
and final deteriorated test results for all tests. Provide the emission 
results for all measured pollutants. Include information for both valid 
and invalid tests and the reason for any invalidation.
* * * * *
    (8) Provide the CumSum analysis required in Sec.  1051.315 and the 
sample-size calculation required in Sec.  1051.310 for each engine 
family.
* * * * *
    (b) We may ask you to add information to your written report, so we 
can determine whether your new vehicles conform with the requirements 
of this subpart. We may also ask you to send less information.
    (c) An authorized representative of your company must sign the 
following statement: We submit this report under Sections 208 and 213 
of the Clean Air Act. Our production-line testing conformed completely 
with the requirements of 40 CFR part 1051. We have not changed 
production processes or quality-control procedures for test engines (or 
vehicles) in a way that might affect emission controls. All the 
information in this report is true and accurate, to the best of my 
knowledge. I know of the penalties for violating the Clean Air Act and 
the regulations. (Authorized Company Representative)
* * * * *

0
187. Section 1051.350 is amended by revising paragraphs (b), (e), and 
(f) to read as follows:


Sec.  1051.350  What records must I keep?

* * * * *
    (b) Keep paper or electronic records of your production-line 
testing for eight years after you complete all the testing required for 
an engine family in a model year.
* * * * *
    (e) If we ask, you must give us projected or actual production 
figures for an engine family. We may ask you to divide your production 
figures by maximum engine power, displacement, fuel type, or assembly 
plant (if you produce vehicles or engines at more than one plant).
    (f) Keep records of the vehicle or engine identification number for 
each vehicle or engine you produce under each certificate of 
conformity. You may identify these numbers as a range. Give us these 
records within 30 days if we ask for them.
* * * * *

Subpart F--[Amended]

0
188. Section 1051.501 is amended as follows:
0
a. By revising paragraphs (c)(2) and (d).
0
b. By redesignating paragraphs (e) and (f) as paragraphs (g) and (h).
0
c. By adding a new paragraph (e).
0
d. By reserving paragraph (f).


Sec.  1051.501  What procedures must I use to test my vehicles or 
engines?

* * * * *
    (c) * * *
    (2) Prior to permeation testing of fuel hose, the hose must be 
preconditioned by filling the hose with the fuel specified in paragraph 
(d)(3) of this section, sealing the openings, and soaking the hose for 
4 weeks at 23  5 [deg]C. To measure fuel-line permeation 
emissions, use the equipment and procedures specified in SAE J30 as 
described in 40 CFR 1060.810. The measurements must be performed at 23 
 2 [deg]C using the fuel specified in paragraph (d)(3) of 
this section.
    (d) Fuels. Use the fuels meeting the following specifications:
    (1) Exhaust. Use the fuels and lubricants specified in 40 CFR part 
1065, subpart H, for all the exhaust testing we require in this part. 
For service accumulation, use the test fuel or any commercially 
available fuel that is representative of the fuel that in-use engines 
will use. The following provisions apply for using specific fuel types:
    (i) For gasoline-fueled engines, use the grade of gasoline 
specified for general testing.
    (ii) For diesel-fueled engines, use either low-sulfur diesel fuel 
or ultra low-sulfur diesel fuel meeting the specifications in 40 CFR 
1065.703. If you use sulfur-sensitive technology as defined in 40 CFR 
1039.801 and you measure emissions using ultra low-sulfur diesel fuel, 
you must add a permanent label near the fuel inlet with the following 
statement: ``ULTRA LOW SULFUR FUEL ONLY''.
    (2) Fuel Tank Permeation. (i) For the preconditioning soak 
described in Sec.  1051.515(a)(1) and fuel slosh durability test 
described in Sec.  1051.515(d)(3), use the fuel specified in Table 1 of 
40 CFR 1065.710 blended with 10 percent ethanol by volume. As an 
alternative, you may use Fuel CE10, which is Fuel C as specified in 
ASTM D 471-98 (see 40 CFR 1060.810) blended with 10 percent ethanol by 
volume.
    (ii) For the permeation measurement test in Sec.  1051.515(b), use 
the fuel specified in Table 1 of 40 CFR 1065.710. As an alternative, 
you may use the fuel specified in paragraph (d)(2)(i) of this section.
    (3) Fuel Hose Permeation. Use the fuel specified in Table 1 of 40 
CFR 1065.710 blended with 10 percent ethanol by volume for permeation 
testing of fuel lines. As an alternative, you may use Fuel CE10, which 
is Fuel C as specified in ASTM D 471-98 (see 40 CFR 1060.810) blended 
with 10 percent ethanol by volume.
    (e) Engine stabilization. Instead of the provisions of 40 CFR 
1065.405, you may consider emission levels stable without measurement 
after 12 hours of engine operation.
    (f) [Reserved]
* * * * *

0
189. Section 1051.505 is amended by revising paragraphs (a) and (b) to 
read as follows:


Sec.  1051.505  What special provisions apply for testing snowmobiles?

* * * * *
    (a) You may perform steady-state testing with either discrete-mode 
or ramped-modal cycles. You must use the type of testing you select in 
your application for certification for all testing you perform for that 
engine family. If we test your engines to confirm that they meet 
emission standards, we will do testing the same way. If you submit 
certification test data collected with both discrete-mode and ramped-
modal testing (either in your original application or in an amendment 
to your application), either method may

[[Page 59254]]

be used for subsequent testing. We may also perform other testing as 
allowed by the Clean Air Act. Measure steady-state emissions as 
follows:
    (1) For discrete-mode testing, sample emissions separately for each 
mode, then calculate an average emission level for the whole cycle 
using the weighting factors specified for each mode. In each mode, 
operate the engine for at least 5 minutes, then sample emissions for at 
least 1 minute. Calculate cycle statistics and compare with the 
established criteria as specified in 40 CFR 1065.514 to confirm that 
the test is valid.
    (2) For ramped-modal testing, start sampling at the beginning of 
the first mode and continue sampling until the end of the last mode. 
Calculate emissions and cycle statistics the same as for transient 
testing as specified in 40 CFR part 1065, subpart G.
    (3) Measure emissions by testing the engine on a dynamometer with 
one or more of the following sets of duty cycles to determine whether 
it meets the steady-state emission standards in Sec.  1051.103:
    (i) The following duty cycle applies for discrete-mode testing:

                          Table 1 of Sec.   1051.505--5-Mode Duty Cycle for Snowmobiles
----------------------------------------------------------------------------------------------------------------
                                                                                          Minimum
                                                                 Speed        Torque      time in     Weighting
                          Mode No.                             (percent)    (percent)       mode       factors
                                                                  \1\          \2\       (minutes)
----------------------------------------------------------------------------------------------------------------
1...........................................................          100          100          3.0         0.12
2...........................................................           85           51          3.0         0.27
3...........................................................           75           33          3.0         0.25
4...........................................................           65           19          3.0         0.31
5...........................................................         Idle            0          3.0        0.05
----------------------------------------------------------------------------------------------------------------
\1\ Percent speed is percent of maximum test speed.
\2\ Percent torque is percent of maximum torque at maximum test speed.

    (ii) The following duty cycle applies for ramped-modal testing:

                     Table 2 of Sec.   1051.505--Ramped-modal Cycle for Testing Snowmobiles
----------------------------------------------------------------------------------------------------------------
                                             Time in
                 RMC mode                      mode         Speed (percent) \1\       Torque (percent) \2,\ \3\
----------------------------------------------------------------------------------------------------------------
1a Steady-state..........................           27  Warm Idle..................  0
1b Transition............................           20  Linear Transition..........  Linear Transition
2a Steady-state..........................          121  100........................  100
2b Transition............................           20  Linear Transition..........  Linear Transition
3a Steady-state..........................          347  65.........................  19
3b Transition............................           20  Linear Transition..........  Linear Transition
4a Steady-state..........................          305  85.........................  51
4b Transition............................           20  Linear Transition..........  Linear Transition
5a Steady-state..........................          272  75.........................  33
5b Transition............................           20  Linear Transition..........  Linear Transition
6 Steady-state...........................           28  Warm Idle..................  0
----------------------------------------------------------------------------------------------------------------
\1\ Percent speed is percent of maximum test speed.
\2\ Advance from one mode to the next within a 20-second transition phase. During the transition phase, command
  a linear progression from the torque setting of the current mode to the torque setting of the next mode.
\3\ Percent torque is percent of maximum torque at maximum test speed.

    (b) During idle mode, operate the engine at its warm idle speed as 
described in 40 CFR 1065.510.
* * * * *

Subpart G--[Amended]

0
190. Section 1051.605 is amended by revising the section heading and 
paragraph (d)(7)(ii) to read as follows:


Sec.  1051.605  What provisions apply to engines already certified 
under the motor vehicle program or the Large Spark-ignition program?

* * * * *
    (d) * * *
    (7) * * *
    (ii) List the engine or vehicle models you expect to produce under 
this exemption in the coming year and describe your basis for meeting 
the sales restrictions of paragraph (d)(3) of this section.
* * * * *

0
191. Section 1051.610 is amended by revising the section heading and 
paragraphs (d)(7)(ii) and (g) to read as follows:


Sec.  1051.610  What provisions apply to vehicles already certified 
under the motor vehicle program?

* * * * *
    (d) * * *
    (7) * * *
    (ii) List the vehicle models you expect to produce under this 
exemption in the coming year and describe your basis for meeting the 
sales restrictions of paragraph (d)(3) of this section.
* * * * *
    (g) Participation in averaging, banking and trading. Vehicles 
adapted for recreational use under this section may not generate or use 
emission credits under this part 1051. These vehicles may generate 
credits under the ABT provisions in 40 CFR part 86. These vehicles must 
use emission credits under 40 CFR part 86 if they are certified to an 
FEL that exceeds an emission standard that applies.

0
192. Section 1051.615 is amended by revising paragraphs (d) 
introductory text, (d)(3), and (d)(4) to read as follows:

[[Page 59255]]

Sec.  1051.615  What are the special provisions for certifying small 
recreational engines?

* * * * *
    (d) Measure steady-state emissions by testing the engine on an 
engine dynamometer using the equipment and procedures of 40 CFR part 
1065 with either discrete-mode or ramped-modal cycles. You must use the 
type of testing you select in your application for certification for 
all testing you perform for that engine family. If we test your engines 
to confirm that they meet emission standards, we will do testing the 
same way. If you submit certification test data collected with both 
discrete-mode and ramped-modal testing (either in your original 
application or in an amendment to your application), either method may 
be used for subsequent testing. We may also perform other testing as 
allowed by the Clean Air Act. Measure steady-state emissions as 
follows:
* * * * *
    (3) Measure emissions by testing the engine on a dynamometer with 
one or more of the following sets of duty cycles to determine whether 
it meets applicable emission standards:
    (i) The following duty cycle applies for discrete-mode testing:

                     Table 1 of Sec.   1051.615--6-Mode Duty Cycle for Recreational Engines
----------------------------------------------------------------------------------------------------------------
                                                                 Engine                   Minimum
                                                                 speed        Torque      time in     Weighting
                          Mode No.                             (percent)    (percent)       mode       factors
                                                                  \1\          \2\       (minutes)
----------------------------------------------------------------------------------------------------------------
1...........................................................           85          100          5.0         0.09
2...........................................................           85           75          5.0         0.20
3...........................................................           85           50          5.0         0.29
4...........................................................           85           25          5.0         0.30
5...........................................................           85           10          5.0         0.07
6...........................................................         Idle            0          5.0         0.05
----------------------------------------------------------------------------------------------------------------
\1\ Percent speed is percent of maximum test speed.
\2\ Percent torque is percent of maximum torque at the commanded test speed.

    (ii) The following duty cycle applies for ramped-modal testing:

                 Table 2 of Sec.   1051.615--Ramped-modal Cycle for Testing Recreational Engines
----------------------------------------------------------------------------------------------------------------
                 RMC mode                      Time       Speed (percent) \1,\ \2\    Torque (percent) \2,\ \3\
----------------------------------------------------------------------------------------------------------------
1a Steady-state..........................           41  Warm Idle..................  0.
1b Transition............................           20  Linear Transition..........  Linear Transition.
2a Steady-state..........................          135  85.........................  100.
2b Transition............................           20  85.........................  Linear Transition.
3a Steady-state..........................          112  85.........................  10.
3b Transition............................           20  85.........................  Linear Transition.
4a Steady-state..........................          337  85.........................  75.
4b Transition............................           20  85.........................  Linear Transition.
5a Steady-state..........................          518  85.........................  25.
5b Transition............................           20  85.........................  Linear Transition.
6a Steady-state..........................          494  85.........................  50.
6b Transition............................           20  Linear Transition..........  Linear Transition.
7 Steady-state...........................           43  Warm Idle..................  0.
----------------------------------------------------------------------------------------------------------------
\1\ Percent speed is percent of maximum test speed.
\2\ Advance from one mode to the next within a 20-second transition phase. During the transition phase, command
  a linear progression from the torque setting of the current mode to the torque setting of the next mode.
\3\ Percent torque is percent of maximum torque at the commanded test speed.

    (4) During idle mode, operate the engine at its warm idle speed as 
described in 40 CFR 1065.510.
* * * * *

0
193. Section 1051.635 is amended by revising paragraph (a) to read as 
follows:


Sec.  1051.635  What provisions apply to new manufacturers that are 
small businesses?

    (a) If you are a small business (as defined by the Small Business 
Administration at 13 CFR 121.201) that manufactures recreational 
vehicles, but does not otherwise qualify for the small-volume 
manufacturer provisions of this part, you may ask us to designate you 
to be a small-volume manufacturer. You may do this whether you began 
manufacturing recreational vehicles before, during, or after 2002.
* * * * *

0
194. Section 1051.645 is amended by revising paragraph (b) to read as 
follows:


Sec.  1051.645  What special provisions apply to branded engines?

* * * * *
    (b) In your application for certification, identify the company 
whose trademark you will use.
* * * * *

0
195. A new Sec.  1051.650 is added to subpart G to read as follows:


Sec.  1051.650  What special provisions apply for converting a vehicle 
to use an alternate fuel?

    A certificate of conformity is no longer valid for a vehicle if the 
vehicle is modified such that it is not in a configuration covered by 
the certificate. This section applies if such modifications are done to 
convert the vehicle to run on a different fuel type. Such vehicles may 
be recertified as specified in this section if the original

[[Page 59256]]

certificate is no longer valid for that vehicle.
    (a) Converting a certified new vehicle to run on a different fuel 
type violates 40 CFR 1068.101(a)(1) if the modified vehicle is not 
covered by a certificate of conformity.
    (b) Converting a certified vehicle that is not new to run on a 
different fuel type violates 40 CFR 1068.101(b)(1) if the modified 
vehicle is not covered by a certificate of conformity. We may specify 
alternate certification provisions consistent with the requirements of 
this part. For example, you may certify the modified vehicle for a 
partial useful life. For example, if the vehicle is modified halfway 
through its original useful life period, you may generally certify the 
vehicle based on completing the original useful life period; or if the 
vehicle is modified after the original useful life period is past, you 
may generally certify the vehicle based on testing that does not 
involve further durability demonstration.
    (c) Vehicles (or engines) may be certified using the certification 
procedures for new vehicles (or engines) as specified in this part or 
using the certification procedures for aftermarket parts as specified 
in 40 CFR part 85, subpart V. Unless the original vehicle manufacturer 
continues to be responsible for the vehicle as specified in paragraph 
(d) of this section, you must remove the original manufacturer's 
emission control information label if you recertify the vehicle.
    (d) The original vehicle manufacturer is not responsible for 
operation of modified vehicles in configurations resulting from 
modifications performed by others. In cases where the modification 
allows a vehicle to be operated in either its original configuration or 
a modified configuration, the original vehicle manufacturer remains 
responsible for operation of the modified vehicle in its original 
configuration.
    (e) Entities producing conversion kits may obtain certificates of 
conformity for the converted vehicles. Such entities are vehicle 
manufacturers for purposes of this part.

Subpart H--[Amended]

0
196. Section 1051.701 is amended by revising paragraph (a) to read as 
follows:


Sec.  1051.701  General provisions.

    (a) You may average, bank, and trade emission credits for purposes 
of certification as described in this subpart to show compliance with 
the standards of this part. To do this you must certify your engines to 
Family Emission Limits (FELs) and show that your average emission 
levels for all your engine families together are below the emission 
standards in subpart B of this part, or that you have sufficient 
credits to offset a credit deficit for the model year (as calculated in 
Sec.  1051.720).
* * * * *

0
197. Section 1051.710 is amended by revising paragraphs (d) and (e) and 
removing paragraph (f) to read as follows:


Sec.  1051.710  How do I generate and bank emission credits?

* * * * *
    (d) You may designate any emission credits you plan to bank in the 
reports you submit under Sec.  1051.730. During the model year and 
before the due date for the final report, you may designate your 
reserved emission credits for averaging or trading.
    (e) Reserved credits become actual emission credits when you submit 
your final report. However, we may revoke these emission credits if we 
are unable to verify them after reviewing your reports or auditing your 
records.

0
198. Section 1051.715 is amended by revising paragraph (b) and removing 
and reserving paragraph (c) to read as follows:


Sec.  1051.715  How do I trade emission credits?

* * * * *
    (b) You may trade actual emission credits as described in this 
subpart. You may also trade reserved emission credits, but we may 
revoke these emission credits based on our review of your records or 
reports or those of the company with which you traded emission credits. 
You may trade banked credits within an averaging set to any certifying 
manufacturer.
    (c) [Reserved]
* * * * *

0
199. Section 1051.720 is amended by revising paragraph (a)(2) to read 
as follows:


Sec.  1051.720  How do I calculate my average emission level or 
emission credits?

    (a) * * *
    (2) For vehicles that have standards expressed as g/kW-hr and a 
useful life in kilometers, convert the useful life to kW-hr based on 
the maximum engine power and an assumed vehicle speed of 30 km/hr as 
follows: UL (kW-hr) = UL (km) x Maximum Engine Power (kW) / 30 km/hr. 
(Note: It is not necessary to include a load factor, since credit 
exchange is not allowed between vehicles certified to g/kW-hr standards 
and vehicles certified to g/km standards.)
* * * * *

0
200. Section 1051.725 is amended by revising paragraph (b)(2) to read 
as follows:


Sec.  1051.725  What must I include in my applications for 
certification?

* * * * *
    (b) * * *
    (2) Detailed calculations of projected emission credits (positive 
or negative) based on projected production volumes. We may require you 
to include similar calculations from your other engine families to 
demonstrate that you will be able to avoid a negative credit balance 
for the model year. If you project negative emission credits for an 
engine family, state the source of positive emission credits you expect 
to use to offset the negative emission credits.

0
201. Section 1051.730 is amended by revising paragraphs (b)(3), (b)(4), 
(b)(5), (c)(2), and (f) to read as follows:


Sec.  1051.730  What ABT reports must I send to EPA?

* * * * *
    (b) * * *
    (3) The FEL for each pollutant. If you change the FEL after the 
start of production, identify the date that you started using the new 
FEL and/or give the vehicle identification number for the first vehicle 
covered by the new FEL. In this case, identify each applicable FEL and 
calculate the positive or negative emission credits under each FEL.
    (4) The projected and actual production volumes for the model year 
with a point of retail sale in the United States, as described in Sec.  
1051.701(d). For fuel tanks, state the production volume in terms of 
surface area and production volume for each tank configuration and 
state the total surface area for the emission family. If you changed an 
FEL during the model year, identify the actual production volume 
associated with each FEL.
    (5) For vehicles that have standards expressed as g/kW-hr, maximum 
engine power for each vehicle configuration, and the average engine 
power weighted by U.S.-directed production volumes for the engine 
family.
* * * * *
    (c) * * *
    (2) State whether you will retain any emission credits for banking.
* * * * *
    (f) Correct errors in your end-of-year report or final report as 
follows:
    (1) You may correct any errors in your end-of-year report when you 
prepare the final report as long as you send us the final report by the 
time it is due.

[[Page 59257]]

    (2) If you or we determine within 270 days after the end of the 
model year that errors mistakenly decreased your balance of emission 
credits, you may correct the errors and recalculate the balance of 
emission credits. You may not make these corrections for errors that 
are determined more than 270 days after the end of the model year. If 
you report a negative balance of emission credits, we may disallow 
corrections under this paragraph (f)(2).
    (3) If you or we determine anytime that errors mistakenly increased 
your balance of emission credits, you must correct the errors and 
recalculate the balance of emission credits.

0
202. Section 1051.735 is amended by revising paragraphs (b), (d), and 
(e) to read as follows:


Sec.  1051.735  What records must I keep?

* * * * *
    (b) Keep the records required by this section for at least eight 
years after the due date for the end-of-year report. You may not use 
emission credits on any engines if you do not keep all the records 
required under this section. You must therefore keep these records to 
continue to bank valid credits. Store these records in any format and 
on any media as long as you can promptly send us organized, written 
records in English if we ask for them. You must keep these records 
readily available. We may review them at any time.
* * * * *
    (d) Keep records of the identification number for each vehicle or 
engine or piece of equipment you produce that generates or uses 
emission credits under the ABT program. You may identify these numbers 
as a range.
    (e) We may require you to keep additional records or to send us 
relevant information not required by this section in accordance with 
the Clean Air Act.

0
203. Section 1051.740 is amended by revising paragraph (b)(4)(ii) to 
read as follows:


Sec.  1051.740  Are there special averaging provisions for snowmobiles?

* * * * *
    (b) * * *
    (4) * * *
    (ii) HC and CO credits for Phase 3 are calculated relative to 75 g/
kW-hr and 200 g/kW-hr values, respectively.
* * * * *

Subpart I--[Amended]

0
204. Section 1051.801 is amended as follows:
0
a. By removing the definitions for ``Maximum test power'' and ``Maximum 
test torque''.
0
b. By revising the definitions for ``Aftertreatment'', ``Designated 
Compliance Officer'', ``Emission-control system'', ``Engine 
configuration'', ``Maximum engine power'', ``Model year'', ``New'', 
``Nonmethane hydrocarbon'', ``Official emission result'', ``Owners 
manual'', ``Recreational'', ``Total hydrocarbon'', and ``Total 
hydrocarbon equivalent''.
0
c. By adding definitions for ``Alcohol-fueled'', ``Days'', ``Low-
permeability material'', and ``Volatile liquid fuel'' in alphabetical 
order.


Sec.  1051.801  What definitions apply to this part?

* * * * *
    Aftertreatment means relating to a catalytic converter, particulate 
filter, or any other system, component, or technology mounted 
downstream of the exhaust valve (or exhaust port) whose design function 
is to decrease emissions in the engine exhaust before it is exhausted 
to the environment. Exhaust-gas recirculation (EGR), turbochargers, and 
oxygen sensors are not aftertreatment.
    Alcohol-fueled means relating to a vehicle with an engine that is 
designed to run using an alcohol fuel. For purposes of this definition, 
alcohol fuels do not include fuels with a nominal alcohol content below 
25 percent by volume.
* * * * *
    Days means calendar days unless otherwise specified. For example, 
where we specify working days, we mean calendar days excluding weekends 
and U.S. national holidays.
    Designated Compliance Officer means the Manager, Light-Duty Engine 
Group, U.S. Environmental Protection Agency, 2000 Traverwood Drive, Ann 
Arbor, MI 48105.
* * * * *
    Emission-control system means any device, system, or element of 
design that controls or reduces the emissions of regulated pollutants 
from an engine.
* * * * *
    Engine configuration means a unique combination of engine hardware 
and calibration within an engine family. Engines within a single engine 
configuration differ only with respect to normal production variability 
or factors unrelated to emissions.
* * * * *
    Low-permeability material has the meaning given in 40 CFR 1060.801.
* * * * *
    Maximum engine power has the meaning given in 40 CFR 90.3 for 2010 
and earlier model years and in Sec.  1051.140 for 2011 and later model 
years. Note that maximum engine power is based on the engine alone, 
without regard to any governing or other restrictions from the vehicle 
installation.
* * * * *
    Model year means one of the following things:
    (1) For freshly manufactured vehicles (see definition of ``new,'' 
paragraph (1)), model year means one of the following:
    (i) Calendar year.
    (ii) Your annual new model production period if it is different 
than the calendar year. This must include January 1 of the calendar 
year for which the model year is named. It may not begin before January 
2 of the previous calendar year and it must end by December 31 of the 
named calendar year. For seasonal production periods not including 
January 1, model year means the calendar year in which the production 
occurs, unless you choose to certify the applicable emission family 
with the following model year. For example, if your production period 
is June 1, 2010, through November 30, 2010, your model year would be 
2010 unless you choose to certify the emission family for model year 
2011.
    (2) For an engine originally certified and manufactured as a motor 
vehicle engine or a stationary engine that is later used or intended to 
be used in a vehicle subject to the standards and requirements of this 
part 1051, model year means the calendar year in which the engine was 
originally produced. For an engine originally manufactured as a motor 
vehicle engine or a stationary engine without having been certified 
that is later used or intended to be used in a vehicle subject to the 
standards and requirements of this part 1051, model year means the 
calendar year in which the engine becomes subject to this part 1051. 
(See definition of ``new,'' paragraph (2)).
    (3) For a nonroad engine that has been previously placed into 
service in an application covered by 40 CFR part 90, 91, 1048, or 1054, 
where that engine is installed in a piece of equipment that is covered 
by this part 1051, model year means the calendar year in which the 
engine was originally produced (see definition of ``new,'' paragraph 
(3)).
    (4) For engines that are not freshly manufactured but are installed 
in new recreational vehicles, model year means the calendar year in 
which the engine is installed in the recreational vehicle (see 
definition of ``new,'' paragraph (4)).
    (5) For imported engines:
    (i) For imported engines described in paragraph (5)(i) of the 
definition of ``new,'' model year has the meaning

[[Page 59258]]

given in paragraphs (1) through (4) of this definition.
    (ii) For imported engines described in paragraph (5)(ii) of the 
definition of ``new,'' model year means the calendar year in which the 
vehicle is modified.
    (iii) For imported engines described in paragraph (5)(iii) of the 
definition of ``new'' model year means the calendar year in which the 
engine is assembled in its imported configuration, unless specified 
otherwise in this part or in 40 CFR part 1068.
* * * * *
    New means relating to any of the following things:
    (1) A freshly manufactured vehicle for which the ultimate purchaser 
has never received the equitable or legal title. This kind of vehicle 
might commonly be thought of as ``brand new.''
    In the case of this paragraph (1), the vehicle is new from the time 
it is produced until the ultimate purchaser receives the title or the 
product is placed into service, whichever comes first.
    (2) An engine originally manufactured as a motor vehicle engine or 
a stationary engine that is later used or intended to be used in a 
vehicle subject to the standards and requirements of this part 1051. In 
this case, the engine is no longer a motor vehicle or stationary engine 
and becomes new. The engine is no longer new when it is placed into 
service as a recreational vehicle covered by this part 1051.
    (3) A nonroad engine that has been previously placed into service 
in an application covered by 40 CFR part 90, 91, 1048, or 1054, when 
that engine is installed in a piece of equipment that is covered by 
this part 1051. The engine is no longer new when it is placed into 
service in a recreational vehicle covered by this part 1051. For 
example, this would apply to a marine propulsion engine that is no 
longer used in a marine vessel.
    (4) An engine not covered by paragraphs (1) through (3) of this 
definition that is intended to be installed in a new vehicle covered by 
this part 1051. This generally includes installation of used engines in 
new recreational vehicles. The engine is no longer new when the 
ultimate purchaser receives a title for the vehicle or it is placed 
into service, whichever comes first.
    (5) An imported vehicle or engine, subject to the following 
provisions:
    (i) An imported recreational vehicle or recreational-vehicle engine 
covered by a certificate of conformity issued under this part that 
meets the criteria of one or more of paragraphs (1) through (4) of this 
definition, where the original manufacturer holds the certificate, is 
new as defined by those applicable paragraphs.
    (ii) An imported vehicle or engine covered by a certificate of 
conformity issued under this part, where someone other than the 
original manufacturer holds the certificate (such as when the engine is 
modified after its initial assembly), is new when it is imported. It is 
no longer new when the ultimate purchaser receives a title for the 
vehicle or engine or it is placed into service, whichever comes first.
    (iii) An imported recreational vehicle or recreational-vehicle 
engine that is not covered by a certificate of conformity issued under 
this part at the time of importation is new. This addresses uncertified 
vehicles and engines initially placed into service that someone seeks 
to import into the United States. Importation of this kind of vehicle 
or engine is generally prohibited by 40 CFR part 1068. However, the 
importation of such a vehicle or engine is not prohibited if it has a 
model year before 2006, since it is not subject to standards.
* * * * *
    Nonmethane hydrocarbon has the meaning given in 40 CFR 1065.1001.
* * * * *
    Official emission result means the measured emission rate for an 
emission-data vehicle on a given duty cycle before the application of 
any deterioration factor.
* * * * *
    Owners manual means a document or collection of documents prepared 
by the engine manufacturer for the owner or operator to describe 
appropriate engine maintenance, applicable warranties, and any other 
information related to operating or keeping the engine. The owners 
manual is typically provided to the ultimate purchaser at the time of 
sale. The owners manual may be in paper or electronic format.
* * * * *
    Recreational means, for purposes of this part, relating to 
snowmobiles, all-terrain vehicles, off-highway motorcycles, and other 
vehicles that we regulate under this part. Note that 40 CFR parts 90 
and 1054 apply to engines used in other recreational vehicles.
* * * * *
    Total hydrocarbon has the meaning given in 40 CFR 1065.1001. This 
generally means the combined mass of organic compounds measured by the 
specified procedure for measuring total hydrocarbon, expressed as a 
hydrocarbon with a hydrogen-to-carbon mass ratio of 1.85:1.
    Total hydrocarbon equivalent has the meaning given in 40 CFR 
1065.1001.
* * * * *
    Volatile liquid fuel means any fuel other than diesel or biodiesel 
that is a liquid at atmospheric pressure and has a Reid Vapor Pressure 
higher than 2.0 pounds per square inch.
* * * * *


Sec.  1051.810  [Removed]

0
205. Section 1051.810 is removed.

0
206. A new Sec.  1051.825 is added to subpart I to read as follows:


Sec.  1051.825  What reporting and recordkeeping requirements apply 
under this part?

    Under the Paperwork Reduction Act (44 U.S.C. 3501 et seq.), the 
Office of Management and Budget approves the reporting and 
recordkeeping specified in the applicable regulations. The following 
items illustrate the kind of reporting and recordkeeping we require for 
vehicles regulated under this part:
    (a) We specify the following requirements related to certification 
in this part 1051:
    (1) In Sec. Sec.  1051.20 and 1051.25 we describe special 
provisions for manufacturers to certify recreational engines instead of 
vehicles.
    (2) [Reserved]
    (3) In Sec.  1051.145 we include various reporting and 
recordkeeping requirements related to interim provisions.
    (4) In subpart C of this part we identify a wide range of 
information required to certify vehicles.
    (5) In Sec. Sec.  1051.345 and 1051.350 we specify certain records 
related to production-line testing.
    (6) [Reserved]
    (7) In Sec.  1051.501 we specify information needs for establishing 
various changes to published vehicle-based test procedures.
    (8) In subpart G of this part we identify several reporting and 
recordkeeping items for making demonstrations and getting approval 
related to various special compliance provisions.
    (9) In Sec. Sec.  1051.725, 1051.730, and 1051.735 we specify 
certain records related to averaging, banking, and trading.
    (b) [Reserved]
    (c) We specify the following requirements related to testing in 40 
CFR part 1065:
    (1) In 40 CFR 1065.2 we give an overview of principles for 
reporting information.
    (2) In 40 CFR 1065.10 and 1065.12 we specify information needs for

[[Page 59259]]

establishing various changes to published engine-based test procedures.
    (3) In 40 CFR 1065.25 we establish basic guidelines for storing 
test information.
    (4) In 40 CFR 1065.695 we identify data that may be appropriate for 
collecting during testing of in-use engines or vehicles using portable 
analyzers.
    (d) We specify the following requirements related to the general 
compliance provisions in 40 CFR part 1068:
    (1) In 40 CFR 1068.5 we establish a process for evaluating good 
engineering judgment related to testing and certification.
    (2) In 40 CFR 1068.25 we describe general provisions related to 
sending and keeping information
    (3) In 40 CFR 1068.27 we require manufacturers to make engines or 
vehicles available for our testing or inspection if we make such a 
request.
    (4) In 40 CFR 1068.105 we require manufacturers to keep certain 
records related to duplicate labels from engine manufacturers.
    (5) In 40 CFR 1068.120 we specify recordkeeping related to 
rebuilding engines.
    (6) In 40 CFR part 1068, subpart C, we identify several reporting 
and recordkeeping items for making demonstrations and getting approval 
related to various exemptions.
    (7) In 40 CFR part 1068, subpart D, we identify several reporting 
and recordkeeping items for making demonstrations and getting approval 
related to importing engines or vehicles.
    (8) In 40 CFR 1068.450 and 1068.455 we specify certain records 
related to testing production-line engines in a selective enforcement 
audit.
    (9) In 40 CFR 1068.501 we specify certain records related to 
investigating and reporting emission-related defects.
    (10) In 40 CFR 1068.525 and 1068.530 we specify certain records 
related to recalling nonconforming vehicles.

0
207 A new part 1054 is added to subchapter U of chapter I to read as 
follows:

PART 1054--CONTROL OF EMISSIONS FROM NEW, SMALL NONROAD SPARK-
IGNITION ENGINES AND EQUIPMENT

Subpart A--Overview and Applicability
Sec.
1054.1 Does this part apply for my engines and equipment?
1054.2 Who is responsible for compliance?
1054.5 Which nonroad engines are excluded from this part's 
requirements?
1054.10 How is this part organized?
1054.15 Do any other CFR parts apply to me?
1054.20 What requirements apply to my equipment?
1054.30 Submission of information.
Subpart B--Emission Standards and Related Requirements
1054.101 What emission standards and requirements must my engines 
meet?
1054.103 What exhaust emission standards must my handheld engines 
meet?
1054.105 What exhaust emission standards must my nonhandheld engines 
meet?
1054.107 What is the useful life period for meeting exhaust emission 
standards?
1054.110 What evaporative emission standards must my handheld 
equipment meet?
1054.112 What evaporative emission standards must my nonhandheld 
equipment meet?
1054.115 What other requirements apply?
1054.120 What emission-related warranty requirements apply to me?
1054.125 What maintenance instructions must I give to buyers?
1054.130 What installation instructions must I give to equipment 
manufacturers?
1054.135 How must I label and identify the engines I produce?
1054.140 What is my engine's maximum engine power and displacement?
1054.145 Are there interim provisions that apply only for a limited 
time?
Subpart C--Certifying Emission Families
1054.201 What are the general requirements for obtaining a 
certificate of conformity?
1054.205 What must I include in my application?
1054.210 May I get preliminary approval before I complete my 
application?
1054.220 How do I amend the maintenance instructions in my 
application?
1054.225 How do I amend my application for certification to include 
new or modified engines or fuel systems or change an FEL?
1054.230 How do I select emission families?
1054.235 What exhaust emission testing must I perform for my 
application for a certificate of conformity?
1054.240 How do I demonstrate that my emission family complies with 
exhaust emission standards?
1054.245 How do I determine deterioration factors from exhaust 
durability testing?
1054.250 What records must I keep and what reports must I send to 
EPA?
1054.255 What decisions may EPA make regarding my certificate of 
conformity?
Subpart D--Production-line Testing
1054.300 Applicability.
1054.301 When must I test my production-line engines?
1054.305 How must I prepare and test my production-line engines?
1054.310 How must I select engines for production-line testing?
1054.315 How do I know when my engine family fails the production-
line testing requirements?
1054.320 What happens if one of my production-line engines fails to 
meet emission standards?
1054.325 What happens if an engine family fails the production-line 
testing requirements?
1054.330 May I sell engines from an engine family with a suspended 
certificate of conformity?
1054.335 How do I ask EPA to reinstate my suspended certificate?
1054.340 When may EPA revoke my certificate under this subpart and 
how may I sell these engines again?
1054.345 What production-line testing records must I send to EPA?
1054.350 What records must I keep?
Subpart E--In-use Testing
1054.401 General provisions.
Subpart F--Test Procedures
1054.501 How do I run a valid emission test?
1054.505 How do I test engines?
1054.520 What testing must I perform to establish deterioration 
factors?
Subpart G--Special Compliance Provisions
1054.601 What compliance provisions apply to these engines?
1054.610 What is the exemption for delegated final assembly?
1054.612 What special provisions apply for equipment manufacturers 
modifying certified nonhandheld engines?
1054.615 What is the exemption for engines certified to standards 
for Large SI engines?
1054.620 What are the provisions for exempting engines used solely 
for competition?
1054.625 What requirements apply under the Transition Program for 
Equipment Manufacturers?
1054.626 What special provisions apply to equipment imported under 
the Transition Program for Equipment Manufacturers?
1054.630 What provisions apply for importation of individual items 
for personal use?
1054.635 What special provisions apply for small-volume engine and 
equipment manufacturers?
1054.640 What special provisions apply to branded engines?
1054.645 What special provisions apply for converting an engine to 
use an alternate fuel?
1054.650 What special provisions apply for adding or changing 
governors?
1054.655 What special provisions apply for installing and removing 
altitude kits?
1054.660 What are the provisions for exempting emergency rescue 
equipment?
1054.690 What bond requirements apply for certified engines?
Subpart H--Averaging, Banking, and Trading for Certification
1054.701 General provisions.
1054.705 How do I generate and calculate exhaust emission credits?
1054.706 How do I generate and calculate evaporative emission 
credits?

[[Page 59260]]

1054.710 How do I average emission credits?
1054.715 How do I bank emission credits?
1054.720 How do I trade emission credits?
1054.725 What must I include in my application for certification?
1054.730 What ABT reports must I send to EPA?
1054.735 What records must I keep?
1054.740 What special provisions apply for generating and using 
emission credits?
1054.745 What can happen if I do not comply with the provisions of 
this subpart?
Subpart I--Definitions and Other Reference Information
1054.801 What definitions apply to this part?
1054.805 What symbols, acronyms, and abbreviations does this part 
use?
1054.815 What provisions apply to confidential information?
1054.820 How do I request a hearing?
1054.825 What reporting and recordkeeping requirements apply under 
this part?

Appendix I to Part 1054--Summary of Previous Emission Standards

Appendix II to Part 1054--Duty Cycles for Laboratory Testing

    Authority: 42 U.S.C. 7401-7671q.

Subpart A--Overview and Applicability


Sec.  1054.1  Does this part apply for my engines and equipment?

    (a) Except as provided in Sec.  1054.5, the regulations in this 
part 1054 apply as follows:
    (1) The requirements of this part related to exhaust emissions 
apply to new, spark-ignition engines with maximum engine power at or 
below 19 kW. This includes auxiliary marine spark-ignition engines.
    (2) The requirements of this part related to evaporative emissions 
apply as specified in Sec. Sec.  1054.110 and 1054.112 to fuel systems 
used with engines subject to exhaust emission standards in this part if 
the engines use a volatile liquid fuel (such as gasoline).
    (3) This part 1054 applies starting with the model years noted in 
the following table:

     Table 1 to Sec.   1054.1--Part 1054 Applicability by Model Year
 
------------------------------------------------------------------------
            Engine type               Engine  displacement    Model year
------------------------------------------------------------------------
 Handheld..........................  all...................         2010
Nonhandheld........................  displacement < 225 cc.         2012
Nonhandheld........................  displacement >= 225 cc         2011
------------------------------------------------------------------------

    (4) This part 1054 applies for other spark-ignition engines as 
follows:
    (i) The provisions of Sec. Sec.  1054.620 and 1054.801 apply for 
engines used solely for competition beginning January 1, 2010.
    (ii) The provisions of Sec. Sec.  1054.660 and 1054.801 apply for 
engines used in emergency rescue equipment beginning January 1, 2010.
    (5) We specify provisions in Sec.  1054.145(e) and (f) and in Sec.  
1054.740 that allow for meeting the requirements of this part before 
the dates shown in Table 1 to this section. Engines, fuel-system 
components, or equipment certified to these standards are subject to 
all the requirements of this part as if these optional standards were 
mandatory.
    (b) Although the definition of nonroad engine in 40 CFR 1068.30 
excludes certain engines used in stationary applications, stationary 
engines are required under 40 CFR part 60, subpart JJJJ, to comply with 
this part starting with the model years shown in Table 1 to this 
section.
    (c) See 40 CFR part 90 for requirements that apply to engines not 
yet subject to the requirements of this part 1054.
    (d) In certain cases, the regulations in this part 1054 apply to 
engines with maximum engine power above 19 kW that would otherwise be 
covered by 40 CFR part 1048 or 1051. See 40 CFR 1048.615 and 
1051.145(a)(3) for provisions related to these allowances.
    (e) In certain cases, the regulations in this part 1054 apply to 
propulsion marine engines that would otherwise be covered by 40 CFR 
part 1045. See 40 CFR 1045.610 for provisions related to these 
allowances.


Sec.  1054.2  Who is responsible for compliance?

    The requirements and prohibitions of this part apply to 
manufacturers of engines and equipment, as described in Sec.  1054.1. 
The requirements of this part are generally addressed to manufacturers 
subject to this part's requirements. The term ``you'' generally means 
the certifying manufacturer. For provisions related to exhaust 
emissions, this generally means the engine manufacturer, especially for 
issues related to certification (including production-line testing, 
reporting, etc.). For provisions related to certification with respect 
to evaporative emissions, this generally means the equipment 
manufacturer. Equipment manufacturers must meet applicable requirements 
as described in Sec.  1054.20. Engine manufacturers that assemble an 
engine's complete fuel system are considered to be the equipment 
manufacturer with respect to evaporative emissions (see 40 CFR 1060.5). 
Note that certification requirements for component manufacturers are 
described in 40 CFR part 1060.


Sec.  1054.5  Which nonroad engines are excluded from this part's 
requirements?

    This part does not apply to the following nonroad engines:
    (a) Engines that are certified to meet the requirements of 40 CFR 
part 1051 (for example, engines used in snowmobiles and all-terrain 
vehicles). Engines that are otherwise subject to 40 CFR part 1051 but 
not required to be certified (such as engines exempted under 40 CFR 
part 1051) are also excluded from this part 1054, unless the 
regulations in 40 CFR part 1051 specifically require them to comply 
with the requirements of this part 1054.
    (b) Engines that are certified to meet the requirements of 40 CFR 
part 1048, subject to the provisions of Sec.  1054.615.
    (c) Propulsion marine engines. See 40 CFR parts 91 and 1045. Note 
that the evaporative emission standards of this part also do not apply 
with respect to auxiliary marine engines as described in Sec.  1054.20.
    (d) Engines used in reduced-scale models of vehicles that are not 
capable of transporting a person.


Sec.  1054.10  How is this part organized?

    This part 1054 is divided into the following subparts:
    (a) Subpart A of this part defines the applicability of this part 
1054 and gives an overview of regulatory requirements.
    (b) Subpart B of this part describes the emission standards and 
other requirements that must be met to certify engines under this part. 
Note that Sec.  1054.145 discusses certain interim requirements and 
compliance provisions that apply only for a limited time.
    (c) Subpart C of this part describes how to apply for a certificate 
of conformity.
    (d) Subpart D of this part describes general provisions for testing 
production-line engines.
    (e) Subpart E of this part describes general provisions for testing 
in-use engines.
    (f) Subpart F of this part describes how to test your engines 
(including references to other parts of the Code of Federal 
Regulations).
    (g) Subpart G of this part and 40 CFR part 1068 describe 
requirements, prohibitions, and other provisions that apply to engine 
manufacturers, equipment manufacturers, owners, operators, rebuilders, 
and all others.
    (h) Subpart H of this part describes how you may generate and use 
exhaust

[[Page 59261]]

and evaporative emission credits to certify your engines and equipment.
    (i) Subpart I of this part contains definitions and other reference 
information.


Sec.  1054.15  Do any other CFR parts apply to me?

    (a) Part 1060 of this chapter describes standards and procedures 
that apply for controlling evaporative emissions from engines fueled by 
gasoline or other volatile liquid fuels and the associated fuel 
systems. See Sec. Sec.  1054.110 and 1054.112 for information about how 
that part applies.
    (b) Part 1065 of this chapter describes procedures and equipment 
specifications for testing engines to measure exhaust emissions. 
Subpart F of this part 1054 describes how to apply the provisions of 
part 1065 of this chapter to determine whether engines meet the exhaust 
emission standards in this part.
    (c) The requirements and prohibitions of part 1068 of this chapter 
apply to everyone, including anyone who manufactures, imports, 
installs, owns, operates, or rebuilds any of the engines subject to 
this part 1054, or equipment containing these engines. Part 1068 of 
this chapter describes general provisions, including these seven areas:
    (1) Prohibited acts and penalties for engine manufacturers, 
equipment manufacturers, and others.
    (2) Rebuilding and other aftermarket changes.
    (3) Exclusions and exemptions for certain engines.
    (4) Importing engines.
    (5) Selective enforcement audits of your production.
    (6) Defect reporting and recall.
    (7) Procedures for hearings.
    (d) Other parts of this chapter apply if referenced in this part.


Sec.  1054.20  What requirements apply to my equipment?

    (a) If you manufacture equipment using engines certified under this 
part, your equipment must meet all applicable emission standards with 
the engine and fuel system installed.
    (b) Except as specified in paragraph (f) of this section, all 
equipment subject to the exhaust standards of this part must meet the 
evaporative emission standards of 40 CFR part 1060, as described in 
Sec. Sec.  1054.110 and 1054.112.
    (c) Except as specified in paragraph (f) of this section, you must 
identify and label equipment you produce under this section consistent 
with the requirements of 40 CFR 1060.135.
    (d) You may need to certify your equipment or fuel systems as 
described in 40 CFR 1060.1 and 1060.601.
    (e) You must follow all emission-related installation instructions 
from the certifying manufacturers as described in Sec.  1054.130, 40 
CFR 1060.130, and 40 CFR 1068.105. Failure to follow these instructions 
subjects you to civil penalties as described in 40 CFR part 1068, 
subpart B.
    (f) Motor vehicles and marine vessels may contain engines subject 
to the exhaust emission standards in this part 1054. Evaporative 
emission standards apply to these products as follows:
    (1) Marine vessels using spark-ignition engines are subject to the 
requirements of 40 CFR part 1045. The vessels are not required to 
comply with the evaporative emission standards and related requirements 
of this part 1054.
    (2) Motor vehicles are subject to the requirements of 40 CFR part 
86. They are not required to comply with the evaporative emission 
standards and related requirements of this part 1054.


Sec.  1054.30  Submission of information.

    (a) This part includes various requirements to record data or other 
information. Refer to Sec.  1054.825 and 40 CFR 1068.25 regarding 
recordkeeping requirements. If recordkeeping requirements are not 
specified, store these records in any format and on any media and keep 
them readily available for one year after you send an associated 
application for certification, or one year after you generate the data 
if they do not support an application for certification. You must 
promptly send us organized, written records in English if we ask for 
them. We may review them at any time.
    (b) The regulations in Sec.  1054.255 and 40 CFR 1068.101 describe 
your obligation to report truthful and complete information and the 
consequences of failing to meet this obligation. This includes 
information not related to certification.
    (c) Send all reports and requests for approval to the Designated 
Compliance Officer (see Sec.  1054.801).
    (d) Any written information we require you to send to or receive 
from another company is deemed to be a required record under this 
section. Such records are also deemed to be submissions to EPA. We may 
require you to send us these records whether or not you are a 
certificate holder.

Subpart B--Emission Standards and Related Requirements


Sec.  1054.101  What emission standards and requirements must my 
engines meet?

    (a) Exhaust emissions. You must show that your engines meet the 
following exhaust emission standards, except as specified in paragraphs 
(b) through (d) of this section:
    (1) Handheld engines must meet the exhaust emission standards in 
Sec.  1054.103.
    (2) Nonhandheld engines must meet the exhaust emission standards in 
Sec.  1054.105.
    (3) All engines must meet the requirements in Sec.  1054.115.
    (b) Evaporative emissions. Except as specified in Sec.  1054.20, 
new equipment using engines that run on a volatile liquid fuel (such as 
gasoline) must meet the evaporative emission requirements of 40 CFR 
part 1060. The requirements of 40 CFR part 1060 that apply are 
considered also to be requirements of this part 1054. Marine vessels 
using auxiliary marine engines subject to this part must meet the 
evaporative emission requirements in 40 CFR 1045.112 instead of the 
evaporative emission requirements in this part. We specify evaporative 
emission requirements for handheld and nonhandheld equipment separately 
in Sec. Sec.  1054.110 and 1054.112.
    (c) Wintertime engines. Emission standards regulating HC and 
NOX exhaust emissions are optional for wintertime engines. 
However, if you certify an emission family to such standards, those 
engines are subject to all the requirements of this part as if these 
optional standards were mandatory.
    (d) Two-stroke snowthrower engines. Two-stroke snowthrower engines 
may meet exhaust emission standards that apply to handheld engines with 
the same engine displacement instead of the nonhandheld standards that 
would otherwise apply.
    (e) Relationship between handheld and nonhandheld engines. Any 
engines certified to the nonhandheld emission standards in Sec.  
1054.105 may be used in either handheld or nonhandheld equipment. 
Engines above 80 cc certified to the handheld emission standards in 
Sec.  1054.103 may not be used in nonhandheld equipment. For purposes 
of the requirements of this part, engines at or below 80 cc are 
considered handheld engines, but may be installed in either handheld or 
nonhandheld equipment. These engines are subject to handheld exhaust 
emission standards; the equipment in which they are installed are 
subject to handheld evaporative emission standards starting with the 
model years specified in this part 1054. See Sec.  1054.701(c) for 
special provisions related to emission credits for engine families with 
displacement at or below 80 cc where those engines are installed in 
nonhandheld equipment.
    (f) Interim provisions. It is important that you read Sec.  
1054.145 to determine if there are other interim requirements or

[[Page 59262]]

interim compliance provisions that apply for a limited time.


Sec.  1054.103  What exhaust emission standards must my handheld 
engines meet?

    (a) Emission standards. Exhaust emissions from your handheld 
engines may not exceed the emission standards in Table 1 to this 
section. Measure emissions using the applicable steady-state test 
procedures described in subpart F of this part.

   Table 1 to Sec.   1054.103--Phase 3 Emission Standards for Handheld
                            Engines (g/kW-hr)
------------------------------------------------------------------------
               Engine displacement class                 HC+NOX     CO
------------------------------------------------------------------------
Class III.............................................       50      805
Class IV..............................................       50      805
Class V...............................................       72      603
------------------------------------------------------------------------

    (b) Averaging, banking, and trading. You may generate or use 
emission credits under the averaging, banking, and trading (ABT) 
program for HC+NOX emissions as described in subpart H of 
this part. You may not generate or use emission credits for CO 
emissions. To generate or use emission credits, you must specify a 
family emission limit for each engine family you include in the ABT 
program. These family emission limits serve as the emission standards 
for the engine family with respect to all required testing instead of 
the standards specified in this section. An engine family meets 
emission standards even if its family emission limit is higher than the 
standard, as long as you show that the whole averaging set of 
applicable engine families meets the emission standards using emission 
credits and the engines within the family meet the family emission 
limit. The following FEL caps are the maximum values you may specify 
for family emission limits:
    (1) 336 g/kW-hr for Class III engines.
    (2) 275 g/kW-hr for Class IV engines.
    (3) 186 g/kW-hr for Class V engines.
    (c) Fuel types. The exhaust emission standards in this section 
apply for engines using the fuel type on which the engines in the 
emission family are designed to operate. You must meet the numerical 
emission standards for hydrocarbons in this section based on the 
following types of hydrocarbon emissions for engines powered by the 
following fuels:
    (1) Alcohol-fueled engines: THCE emissions.
    (2) Natural gas-fueled engines: NMHC emissions.
    (3) Other engines: THC emissions.
    (d) Useful life. Your engines must meet the exhaust emission 
standards in paragraph (a) of this section over their full useful life 
as described in Sec.  1054.107.
    (e) Applicability for testing. The emission standards in this 
subpart apply to all testing, including certification, production-line, 
and in-use testing.


Sec.  1054.105  What exhaust emission standards must my nonhandheld 
engines meet?

    (a) Emission standards. Exhaust emissions from your engines may not 
exceed the emission standards in Table 1 to this section. Measure 
emissions using the applicable steady-state test procedures described 
in subpart F of this part.

 Table 1 to Sec.   1054.105--Phase 3 Emission Standards for Nonhandheld
                            Engines (g/kW-hr)
------------------------------------------------------------------------
                                                                  CO
                                                               standard
    Engine displacement class         HC+NOX     Primary CO   for marine
                                                  standard    generator
                                                               engines
------------------------------------------------------------------------
Class I..........................         10.0          610          5.0
Class II.........................          8.0          610          5.0
------------------------------------------------------------------------

    (b) Averaging, banking, and trading. You may generate or use 
emission credits under the averaging, banking, and trading (ABT) 
program for HC+NOX emissions as described in subpart H of 
this part. You may not generate or use emission credits for CO 
emissions. To generate or use emission credits, you must specify a 
family emission limit for each engine family you include in the ABT 
program. These family emission limits serve as the emission standards 
for the engine family with respect to all required testing instead of 
the standards specified in this section. An engine family meets 
emission standards even if its family emission limit is higher than the 
standard, as long as you show that the whole averaging set of 
applicable engine families meets the emission standards using emission 
credits, and the engines within the family meet the family emission 
limit. The following FEL caps are the maximum values you may specify 
for family emission limits:
    (1) 40.0 g/kW-hr for Class I engines with displacement below 100 
cc.
    (2) 16.1 g/kW-hr for Class I engines with displacement at or above 
100 cc.
    (3) 12.1 for Class II engines.
    (c) Fuel types. The exhaust emission standards in this section 
apply for engines using the fuel type on which the engines in the 
emission family are designed to operate. You must meet the numerical 
emission standards for hydrocarbons in this section based on the 
following types of hydrocarbon emissions for engines powered by the 
following fuels:
    (1) Alcohol-fueled engines: THCE emissions.
    (2) Natural gas-fueled engines: NMHC emissions.
    (3) Other engines: THC emissions.
    (d) Useful life. Your engines must meet the exhaust emission 
standards in paragraph (a) of this section over their full useful life 
as described in Sec.  1054.107.
    (e) Applicability for testing. The emission standards in this 
subpart apply to all testing, including certification, production-line, 
and in-use testing.


Sec.  1054.107  What is the useful life period for meeting exhaust 
emission standards?

    This section describes an engine family's useful life, which is the 
period during which engines are required to comply with all emission 
standards that apply. The useful life period is five years or a number 
of hours of operation, whichever comes first, as described in this 
section.
    (a) Determine the useful life period for exhaust requirements as 
follows:
    (1) Except as specified in paragraphs (a)(2) and (3) of this 
section, the useful life period for exhaust requirements is the number 
of engine operating hours from Table 1 to this section that most 
closely matches the expected median in-use life of your engines. The 
median in-use life of your engine is the shorter of the following 
values:
    (i) The median in-use life of equipment into which the engine is 
expected to be installed.
    (ii) The median in-use life of the engine without being scrapped or 
rebuilt.

[[Page 59263]]



                             Table 1 to Sec.   1054.107--Nominal Useful Life Periods
----------------------------------------------------------------------------------------------------------------
                                                   Nonhandheld
-----------------------------------------------------------------------------------------------------------------
                                                                                   Extended life
                                                                    Residential     residential     Commercial
                                                                                        \1\
----------------------------------------------------------------------------------------------------------------
Class I.........................................................             125             250             500
Class II........................................................             250             500           1,000
----------------------------------------------------------------------------------------------------------------


 
                                                    Handheld
-----------------------------------------------------------------------------------------------------------------
                                                                     Light use      Medium use       Heavy use
----------------------------------------------------------------------------------------------------------------
Class III--V....................................................              50             125             300
----------------------------------------------------------------------------------------------------------------
\1\ Or ``General Purpose.''

    (2) You may select a longer useful life for nonhandheld engines 
than that specified in paragraph (a)(1) of this section in 100-hour 
increments not to exceed 3,000 hours for Class I engines or 5,000 hours 
for Class II engines. For engine families generating emission credits, 
you may do this only with our approval. These are considered ``Heavy 
Commercial'' engines.
    (3) The minimum useful life period for engines with maximum engine 
power above 19 kW is 1,000 hours (see Sec.  1054.1(d)).
    (b) Keep any available information to support your selection and 
make it available to us if we ask for it. We may require you to certify 
to a different useful life value from the table if we determine that 
the selected useful life value is not justified by the data. We may 
consider any relevant information, including your product warranty 
statements and marketing materials regarding engine life, in making 
this determination. We may void your certificate if we determine that 
you intentionally selected an incorrect value. Support your selection 
based on any of the following information:
    (1) Surveys of the life spans of the equipment in which the subject 
engines are installed.
    (2) Engineering evaluations of field aged engines to ascertain when 
engine performance deteriorates to the point where usefulness and/or 
reliability is impacted to a degree sufficient to necessitate overhaul 
or replacement.
    (3) Failure reports from engine customers.
    (4) Engineering evaluations of the durability, in hours, of 
specific engine technologies, engine materials, or engine designs.


Sec.  1054.110  What evaporative emission standards must my handheld 
equipment meet?

    The following evaporative emission requirements apply for handheld 
equipment over a useful life of five years:
    (a) Fuel line permeation. Nonmetal fuel lines must meet the 
permeation requirements for EPA Nonroad Fuel Lines or EPA Cold-Weather 
Fuel Lines as specified in 40 CFR 1060.102. These requirements apply 
starting in the 2012 model year, except that they apply starting in the 
2013 model year for emission families involving small-volume emission 
families that are not used in cold-weather equipment. For fuel lines 
used in cold-weather equipment, you may generate or use emission 
credits to show compliance with these permeation standards through 2015 
as described in Sec.  1054.145(h).
    (b) Tank permeation. Fuel tanks must meet the permeation 
requirements specified in 40 CFR 1060.103. These requirements apply for 
handheld equipment starting in the 2010 model year, except that they 
apply starting in the 2011 model year for structurally integrated nylon 
fuel tanks, in the 2012 model year for handheld equipment using 
nonhandheld engines, and in the 2013 model year for all small-volume 
emission families. For nonhandheld equipment using engines at or below 
80 cc, the requirements of this paragraph (b) apply starting in the 
2012 model year. (Note: 40 CFR 90.129 specifies emission standards for 
certain 2009 model year engines and equipment.) You may generate or use 
emission credits to show compliance with the requirements of this 
paragraph (b) under the averaging, banking, and trading program as 
described in subpart H of this part. FEL caps apply as specified in 
Sec.  1054.112(b)(1) through (3) starting in the 2015 model year.
    (c) Running loss. The running loss requirements specified in 40 CFR 
part 1060 do not apply for handheld equipment.
    (d) Other requirements. The provisions of 40 CFR 1060.101(e) and 
(f) include general requirements that apply to all nonroad equipment 
subject to evaporative emission standards.
    (e) Engine manufacturers. To the extent that engine manufacturers 
produce engines with fuel lines or fuel tanks, those fuel-system 
components must meet the requirements specified in this section. The 
timing of new standards is based on the date of manufacture of the 
engine.


Sec.  1054.112  What evaporative emission standards must my nonhandheld 
equipment meet?

    The evaporative emission requirements of this section apply 
starting in the 2011 model year for equipment using Class II engines 
and in the 2012 model year for equipment using Class I engines over a 
useful life of five years. See Sec.  1054.110 for requirements that 
apply for nonhandheld equipment using engines at or below 80 cc.
    (a) Fuel line permeation. Nonmetal fuel lines must meet the 
permeation requirements for EPA Nonroad Fuel Lines as specified in 40 
CFR 1060.102.
    (b) Tank permeation. Fuel tanks must meet the permeation 
requirements specified in 40 CFR 1060.103. Equipment manufacturers may 
generate or use emission credits to show compliance with the 
requirements of this paragraph (b) under the averaging, banking, and 
trading program as described in subpart H of this part. Starting in the 
2014 model year for Class II equipment and in the 2015 model year for 
Class I equipment, the following FEL caps represent the maximum values 
for family emission limits that you may use for your fuel tanks:
    (1) Except as specified in paragraphs (b)(2) of this section, you 
may not use fuel tanks with a family emission limit that exceeds 5.0 g/
m2/day for testing at a nominal temperature of 28 [deg]C, or 
8.3 g/m2/day for testing at a nominal temperature of 40 
[deg]C.
    (2) For small-volume emission families, you may not use fuel tanks 
with a family emission limit that exceeds 8.0 g/m2/day for 
testing at a nominal temperature of 28 [deg]C, or 13.3 g/

[[Page 59264]]

m2/day for testing at a nominal temperature of 40 [deg]C.
    (3) FEL caps do not apply to fuel caps that are certified 
separately to meet permeation standards.
    (c) Running loss. Running loss requirements apply as specified in 
40 CFR 1060.104.
    (d) Diurnal emissions. Nonhandheld equipment may optionally be 
certified to the diurnal emission standards specified in 40 CFR 
1060.105, in which case the permeation standards specified in 
paragraphs (a) and (b) of this section do not apply.
    (e) Other requirements. The provisions of 40 CFR 1060.101(e) and 
(f) include general requirements that apply to all nonroad equipment 
subject to evaporative emission standards.
    (f) Engine manufacturers. To the extent that engine manufacturers 
produce engines with fuel lines or fuel tanks, those fuel-system 
components must meet the requirements specified in this section. The 
timing of new standards is based on the date of manufacture of the 
engine.


Sec.  1054.115  What other requirements apply?

    The following requirements apply with respect to engines that are 
required to meet the emission standards of this part:
    (a) Crankcase emissions. Crankcase emissions may not be discharged 
directly into the ambient atmosphere from any engine throughout its 
useful life, except as follows:
    (1) Snowthrower engines may discharge crankcase emissions to the 
ambient atmosphere if the emissions are added to the exhaust emissions 
(either physically or mathematically) during all emission testing. If 
you take advantage of this exception, you must do the following things:
    (i) Manufacture the engines so that all crankcase emissions can be 
routed into the applicable sampling systems specified in 40 CFR part 
1065.
    (ii) Account for deterioration in crankcase emissions when 
determining exhaust deterioration factors.
    (2) For purposes of this paragraph (a), crankcase emissions that 
are routed to the exhaust upstream of exhaust aftertreatment during all 
operation are not considered to be discharged directly into the ambient 
atmosphere.
    (b) Adjustable parameters. Engines that have adjustable parameters 
must meet all the requirements of this part for any adjustment in the 
physically adjustable range. An operating parameter is not considered 
adjustable if you permanently seal it or if it is not normally 
accessible using ordinary tools. We may require that you set adjustable 
parameters to any specification within the adjustable range during any 
testing, including certification testing, production-line testing, or 
in-use testing. You may ask us to limit idle-speed or carburetor 
adjustments to a smaller range than the physically adjustable range if 
you show us that the engine will not be adjusted outside of this 
smaller range during in-use operation without significantly degrading 
engine performance.
    (c) Altitude adjustments. Engines must meet applicable emission 
standards for valid tests conducted under the ambient conditions 
specified in 40 CFR 1065.520. Except as specified in Sec.  1054.145(c), 
engines must meet applicable emission standards at all specified 
atmospheric pressures, except that for atmospheric pressures below 94.0 
kPa you may rely on an altitude kit for all testing if you meet the 
requirements specified in Sec.  1054.205(r). If you rely on an altitude 
kit for certification, you must identify in the owners manual the 
altitude range for which you expect proper engine performance and 
emission control with and without the altitude kit; you must also state 
in the owners manual that operating the engine with the wrong engine 
configuration at a given altitude may increase its emissions and 
decrease fuel efficiency and performance. See Sec.  1054.145(c) for 
special provisions that apply for handheld engines.
    (d) Prohibited controls. You may not design your engines with 
emission-control devices, systems, or elements of design that cause or 
contribute to an unreasonable risk to public health, welfare, or safety 
while operating. For example, this would apply if the engine emits a 
noxious or toxic substance it would otherwise not emit that contributes 
to such an unreasonable risk.
    (e) Defeat devices. You may not equip your engines with a defeat 
device. A defeat device is an auxiliary emission control device that 
reduces the effectiveness of emission controls under conditions that 
the engine may reasonably be expected to encounter during normal 
operation and use. This does not apply for altitude kits installed or 
removed consistent with Sec.  1054.655. This also does not apply to 
auxiliary emission control devices you identify in your application for 
certification if any of the following is true:
    (1) The conditions of concern were substantially included in the 
applicable duty-cycle test procedures described in subpart F of this 
part.
    (2) You show your design is necessary to prevent engine (or 
equipment) damage or accidents.
    (3) The reduced effectiveness applies only to starting the engine.


Sec.  1054.120  What emission-related warranty requirements apply to 
me?

    The requirements of this section apply to the manufacturer 
certifying with respect to exhaust emissions. See 40 CFR part 1060 for 
the warranty requirements related to evaporative emissions.
    (a) General requirements. You must warrant to the ultimate 
purchaser and each subsequent purchaser that the new engine, including 
all parts of its emission control system, meets two conditions:
    (1) It is designed, built, and equipped so it conforms at the time 
of sale to the ultimate purchaser with the requirements of this part.
    (2) It is free from defects in materials and workmanship that may 
keep it from meeting these requirements.
    (b) Warranty period. Your emission-related warranty must be valid 
during the periods specified in this paragraph (b). You may offer an 
emission-related warranty more generous than we require. The emission-
related warranty for the engine may not be shorter than any published 
warranty you offer without charge for the engine. Similarly, the 
emission-related warranty for any component may not be shorter than any 
published warranty you offer without charge for that component. If an 
engine has no hour meter, we base the warranty periods in this 
paragraph (b) only on the engine's age (in years). The warranty period 
begins on the date of sale to the ultimate purchaser. The minimum 
warranty periods are as follows:
    (1) The minimum warranty period is two years except as allowed 
under paragraph (b)(2) or (3) of this section.
    (2) We may establish a shorter warranty period for handheld engines 
subject to severe service in seasonal equipment if we determine that 
these engines are likely to operate for a number of hours greater than 
the applicable useful life within 24 months. You must request this 
shorter warranty period in your application for certification or in an 
earlier submission.
    (3) For engines equipped with hour meters, you may deny warranty 
claims for engines that have accumulated a number of hours greater than 
50 percent of the applicable useful life.
    (c) Components covered. The emission-related warranty covers all 
components whose failure would increase an engine's emissions of any 
regulated pollutant, including

[[Page 59265]]

components listed in 40 CFR part 1068, Appendix I, and components from 
any other system you develop to control emissions. The emission-related 
warranty covers these components even if another company produces the 
component. Your emission-related warranty does not cover components 
whose failure would not increase an engine's emissions of any regulated 
pollutant.
    (d) Limited applicability. You may deny warranty claims under this 
section if the operator caused the problem through improper maintenance 
or use, as described in 40 CFR 1068.115.
    (e) Owners manual. Describe in the owners manual the emission-
related warranty provisions from this section that apply to the engine. 
Include instructions for obtaining warranty service consistent with the 
requirements of paragraph (f) of this section.
    (f) Requirements related to warranty claims. You are required at a 
minimum to meet the following conditions to ensure that owners will be 
able to promptly obtain warranty repairs:
    (1) You must provide and monitor a toll-free telephone number and 
an e-mail address for owners to receive information about how to make a 
warranty claim, and how to make arrangements for authorized repairs.
    (2) You must provide a source of replacement parts within the 
United States. For parts that you import, this requires you to have at 
least one distributor within the United States.
    (3) You must use one of the following methods to show that you will 
generally be able to honor warranty claims:
    (i) If you have authorized service centers in all U.S. population 
centers with a population of 100,000 or more based on the 2000 census, 
you may limit warranty repairs to these service providers.
    (ii) You may limit warranty repairs to authorized service centers 
for owners located within 100 miles of an authorized service center. 
For owners located more than 100 miles from an authorized service 
center, you must state in your warranty that you will either pay for 
shipping costs to and from an authorized service center, provide for a 
service technician to come to the owner to make the warranty repair, or 
pay for the repair to be made at a local nonauthorized service center. 
The provisions of this paragraph (f)(3)(ii) apply only for the 
contiguous states, excluding the states with high-altitude areas 
identified in 40 CFR part 1068, Appendix III.
    (iii) You may use the approach described in paragraphs (f)(3)(i) of 
this section for some states and the approach described in paragraph 
(f)(3)(ii) of this section for other states. However, you must have at 
least one authorized service center in each state unless the whole 
state is within 100 miles of authorized service centers in other 
states.
    (4) If your plan for meeting the requirements of this paragraph (f) 
does not include at least 100 authorized repair facilities in the 
United States or at least one such facility for each 5,000 engines you 
sell in the United States, you must also post a bond as described in 
Sec.  1054.690 to ensure that you will fulfill your warranty-repair 
responsibilities even if you are not obligated to post a bond under 
that section. Note that you may post a single bond to meet the 
requirements of this section and Sec.  1054.690.


Sec.  1054.125  What maintenance instructions must I give to buyers?

    Give the ultimate purchaser of each new engine written instructions 
for properly maintaining and using the engine, including the emission 
control system as described in this section. The maintenance 
instructions also apply to service accumulation on your emission-data 
engines as described in Sec.  1054.245 and in 40 CFR part 1065. Note 
that for handheld engines subject to Phase 3 standards you may perform 
maintenance on emission-data engines during service accumulation as 
described in 40 CFR part 90.
    (a) Critical emission-related maintenance. Critical emission-
related maintenance includes any adjustment, cleaning, repair, or 
replacement of critical emission-related components. This may also 
include additional emission-related maintenance that you determine is 
critical if we approve it in advance. You may schedule critical 
emission-related maintenance on these components if you meet the 
following conditions:
    (1) You demonstrate that the maintenance is reasonably likely to be 
done at the recommended intervals on in-use engines. We will accept 
scheduled maintenance as reasonably likely to occur if you satisfy any 
of the following conditions:
    (i) You present data showing that any lack of maintenance that 
increases emissions also unacceptably degrades the engine's 
performance.
    (ii) You present survey data showing that at least 80 percent of 
engines in the field get the maintenance you specify at the recommended 
intervals. If the survey data show that 60 to 80 percent of engines in 
the field get the maintenance you specify at the recommended intervals, 
you may ask us to consider additional factors such as the effect on 
performance and emissions. For example, we may allow you to schedule 
fuel-injector replacement as critical emission-related maintenance if 
you have survey data showing this is done at the recommended interval 
for 65 percent of engines and you demonstrate that performance 
degradation is roughly proportional to the degradation in emission 
control for engines that do not have their fuel injectors replaced.
    (iii) You provide the maintenance free of charge and clearly say so 
in your maintenance instructions.
    (iv) You otherwise show us that the maintenance is reasonably 
likely to be done at the recommended intervals.
    (2) You may schedule cleaning or changing air filters or changing 
spark plugs at the least frequent interval described in the owners 
manual. See Sec.  1054.245 for testing requirements related to these 
maintenance steps.
    (3) You may not schedule critical emission-related maintenance 
within the useful life period for aftertreatment devices, pulse-air 
valves, fuel injectors, oxygen sensors, electronic control units, 
superchargers, or turbochargers, except as specified in paragraph (b) 
or (c) of this section.
    (b) Recommended additional maintenance. You may recommend any 
additional amount of maintenance on the components listed in paragraph 
(a) of this section, as long as you state clearly that these 
maintenance steps are not necessary to keep the emission-related 
warranty valid. If operators do the maintenance specified in paragraph 
(a) of this section, but not the recommended additional maintenance, 
this does not allow you to disqualify those engines from in-use testing 
or deny a warranty claim. Do not take these maintenance steps during 
service accumulation on your emission-data engines.
    (c) Special maintenance. You may specify more frequent maintenance 
to address problems related to special situations, such as atypical 
engine operation. You must clearly state that this additional 
maintenance is associated with the special situation you are 
addressing.
    (d) Noncritical emission-related maintenance. Subject to the 
provisions of this paragraph (d), you may schedule any amount of 
emission-related inspection or maintenance that is not covered by 
paragraph (a) of this section (i.e., maintenance that is neither 
explicitly identified as critical emission-related maintenance, nor 
that we approve as critical emission-related maintenance). Noncritical 
emission-

[[Page 59266]]

related maintenance generally includes re-seating valves, removing 
combustion chamber deposits, or any other emission-related maintenance 
on the components we specify in 40 CFR part 1068, Appendix I that is 
not covered in paragraph (a) of this section. You must state in the 
owners manual that these steps are not necessary to keep the emission-
related warranty valid. If operators fail to do this maintenance, this 
does not allow you to disqualify those engines from in-use testing or 
deny a warranty claim. Do not take these inspection or maintenance 
steps during service accumulation on your emission-data engines.
    (e) Maintenance that is not emission-related. For maintenance 
unrelated to emission controls, you may schedule any amount of 
inspection or maintenance. You may also take these inspection or 
maintenance steps during service accumulation on your emission-data 
engines, as long as they are reasonable and technologically necessary. 
This might include adding engine oil, changing fuel or oil filters, 
servicing engine-cooling systems, and adjusting idle speed, governor, 
engine bolt torque, valve lash, or injector lash. You may perform this 
nonemission-related maintenance on emission-data engines at the least 
frequent intervals that you recommend to the ultimate purchaser (but 
not the intervals recommended for severe service).
    (f) Source of parts and repairs. State clearly on the first page of 
your written maintenance instructions that a repair shop or person of 
the owner's choosing may maintain, replace, or repair emission control 
devices and systems. Your instructions may not require components or 
service identified by brand, trade, or corporate name. Also, do not 
directly or indirectly condition your warranty on a requirement that 
the engine be serviced by your franchised dealers or any other service 
establishments with which you have a commercial relationship. You may 
disregard the requirements in this paragraph (f) if you do one of two 
things:
    (1) Provide a component or service without charge under the 
purchase agreement.
    (2) Get us to waive this prohibition in the public's interest by 
convincing us the engine will work properly only with the identified 
component or service.
    (g) Payment for scheduled maintenance. Owners are responsible for 
properly maintaining their engines. This generally includes paying for 
scheduled maintenance. However, manufacturers must pay for scheduled 
maintenance during the useful life if it meets all the following 
criteria:
    (1) Each affected component was not in general use on similar 
engines before 1997.
    (2) The primary function of each affected component is to reduce 
emissions.
    (3) Failure to perform the maintenance would not cause clear 
problems that would significantly degrade the engine's performance.
    (h) Owners manual. Explain the owner's responsibility for proper 
maintenance in the owners manual.


Sec.  1054.130  What installation instructions must I give to equipment 
manufacturers?

    (a) If you sell an engine for someone else to install in a piece of 
equipment, give the engine installer instructions for installing it 
consistent with the requirements of this part. Include all information 
necessary to ensure that an engine will be installed in its certified 
configuration.
    (b) Make sure the instructions have the following information:
    (1) Include the heading: ``Emission-related installation 
instructions''.
    (2) State: ``Failing to follow these instructions when installing a 
certified engine in nonroad equipment violates federal law (40 CFR 
1068.105(b)), subject to fines or other penalties as described in the 
Clean Air Act.''
    (3) Describe the instructions needed to properly install the 
exhaust system and any other components. Include instructions 
consistent with the requirements of Sec.  1054.655 related to altitude 
kits.
    (4) Describe the steps needed to control evaporative emissions in 
accordance with certificates of conformity that you hold. Include 
instructions for connecting fuel lines as needed to prevent running 
loss emissions, if applicable. Such instructions must include 
sufficient detail to ensure that running loss control will not cause 
the engine to exceed exhaust emission standards. For example, you may 
specify a maximum vapor flow rate under normal operating conditions. 
Also include notification that the installer must meet the requirements 
of Sec.  1054.112 and 40 CFR part 1060.
    (5) Describe any limits on the range of applications needed to 
ensure that the engine remains in its certified configuration after 
installation. For example, if you certify engines only for rated-speed 
applications tell equipment manufacturers that the engine must not be 
installed in equipment involving intermediate-speed operation. Also, if 
your wintertime engines are not certified to the otherwise applicable 
HC+NOX standards, tell equipment manufacturers that the 
engines must be installed in equipment that is used only in wintertime.
    (6) Describe any other instructions to make sure the installed 
engine will operate according to design specifications in your 
application for certification. For example, this may include specified 
limits for catalyst systems, such as exhaust backpressure, catalyst 
location, and temperature profiles during engine operation.
    (7) State: ``If you install the engine in a way that makes the 
engine's emission control information label hard to read during normal 
engine maintenance, you must place a duplicate label on the equipment, 
as described in 40 CFR 1068.105.''
    (c) You do not need installation instructions for engines you 
install in your own equipment.
    (d) Provide instructions in writing or in an equivalent format. For 
example, you may post instructions on a publicly available Web site for 
downloading or printing. If you do not provide the instructions in 
writing, explain in your application for certification how you will 
ensure that each installer is informed of the installation 
requirements.


Sec.  1054.135  How must I label and identify the engines I produce?

    The provisions of this section apply to engine manufacturers.
    (a) Assign each engine a unique identification number and 
permanently affix, engrave, or stamp it on the engine in a legible way.
    (b) At the time of manufacture, affix a permanent and legible label 
identifying each engine. The label must be--
    (1) Attached in one piece so it is not removable without being 
destroyed or defaced.
    (2) Secured to a part of the engine needed for normal operation and 
not normally requiring replacement.
    (3) Durable and readable for the engine's entire life.
    (4) Written in English.
    (c) The label must conform to the following specifications without 
exception:
    (1) Include the heading ``EMISSION CONTROL INFORMATION''.
    (2) Include your full corporate name and trademark. You may 
identify another company and use its trademark instead of yours if you 
comply with the provisions of Sec.  1054.640.
    (3) Include EPA's standardized designation for the emission family 
(and subfamily, where applicable).

[[Page 59267]]

    (4) State the following based on the useful life requirements in 
Sec.  1054.107: ``EMISSION COMPLIANCE PERIOD = [identify applicable 
useful life period] HOURS''. In addition to specifying the hours, you 
may optionally add the descriptive terms specified in Sec.  1054.107(a) 
to characterize the useful life. You may use the term Heavy Commercial 
for nonhandheld engines if you establish a longer useful life under 
Sec.  1054.107(a)(2).
    (5) State the engine's displacement (in cubic centimeters); 
however, you may omit this from the label if all the engines in the 
emission family have the same per-cylinder displacement and total 
displacement.
    (6) State the date of manufacture [DAY (optional), MONTH, and 
YEAR]; however, you may omit this from the label if you stamp, engrave, 
or otherwise permanently identify it elsewhere on the engine, in which 
case you must also describe in your application for certification where 
you will identify the date on the engine.
    (7) Identify the emission control system. Use terms and 
abbreviations as described in 40 CFR 1068.45. You may omit this 
information from the label if there is not enough room for it and you 
put it in the owners manual instead.
    (8) Include one of the following statements:
    (i) If you certify the engine only with respect to exhaust 
emissions, state--


``THIS ENGINE MEETS U.S. EPA EXH REGS FOR [MODEL YEAR].''

    (ii) If you certify the engine with respect to exhaust emissions 
and the equipment with respect to evaporative emissions, state--


``THIS ENGINE MEETS U.S. EPA EXH/EVP REGS FOR [MODEL YEAR].''

    (d) The following information may be included on the label or in 
the owners manual:
    (1) List specifications and adjustments for engine tuneups.
    (2) Identify the altitude at which an altitude kit should be 
installed if you specify an altitude kit under Sec.  1054.115(c).
    (3) Identify the fuel type and any requirements for fuel and 
lubricants.
    (4) If your nonhandheld engines are certified for use only at rated 
speed or only at intermediate speed, add the statement: ``CERTIFIED FOR 
[rated-speed or intermediate-speed] APPLICATIONS ONLY'' or ``CERTIFIED 
FOR [identify nominal engine speed or range of speeds for testing] 
OPERATION ONLY''.
    (e) You may add information to the emission control information 
label as follows:
    (1) You may identify other emission standards that the engine meets 
or does not meet (such as California standards). You may include this 
information by adding it to the statement we specify or by including a 
separate statement.
    (2) You may add other information to ensure that the engine will be 
properly maintained and used.
    (3) You may add appropriate features to prevent counterfeit labels. 
For example, you may include the engine's unique identification number 
on the label.
    (f) Except for the labeling requirements specified in paragraph (c) 
of this section, you may ask us to approve modified labeling 
requirements in this part 1054 if you show that it is necessary or 
appropriate. We will approve your request if your alternate label is 
consistent with the requirements of this part.
    (g) If others install your engine in their equipment in a way that 
obscures the engine label such that the label cannot be read during 
normal maintenance, we require them to add a duplicate label on the 
equipment (see 40 CFR 1068.105). If equipment manufacturers request it, 
send them labels that include all the information from the original 
label and that are clearly identified as duplicate labels. You may omit 
the date of manufacture from the duplicate label. Keep a written record 
of each request for five years after it is no longer needed for ongoing 
production.
    (h) Integrated equipment manufacturers certifying their engines and 
equipment with respect to both exhaust and evaporative emission 
standards may meet labeling requirements with a single label that has 
all the required information specified in this section and in 40 CFR 
1060.135.


Sec.  1054.140  What is my engine's maximum engine power and 
displacement?

    This section describes how to quantify your engine's maximum engine 
power and displacement for the purposes of this part.
    (a) An engine configuration's maximum engine power is the maximum 
brake power point on the nominal power curve for the engine 
configuration, as defined in this section. Round the power value to the 
nearest 0.1 kilowatts for nonhandheld engines and to the nearest 0.01 
kilowatts for handheld engines. The nominal power curve of an engine 
configuration is the relationship between maximum available engine 
brake power and engine speed for an engine, using the mapping 
procedures of 40 CFR part 1065, based on the manufacturer's design and 
production specifications for the engine. For handheld engines, we may 
allow manufacturers to base the nominal power curve on other mapping 
procedures, consistent with good engineering judgment. This information 
may also be expressed by a torque curve that relates maximum available 
engine torque with engine speed. Note that maximum engine power is 
based on engines and installed engine governors; equipment designs that 
further limit engine operation do not change maximum engine power.
    (b) An engine configuration's displacement is the intended swept 
volume of all the engine's cylinders. The swept volume of the engine is 
the product of the internal cross-section area of the cylinders, the 
stroke length, and the number of cylinders. Calculate the engine's 
intended swept volume from the design specifications for the cylinders 
using enough significant figures to allow determination of the 
displacement to the nearest 0.1 cc. Determine the final value by 
rounding to the nearest cubic centimeter. For example, for a one-
cylinder engine with circular cylinders having an internal diameter of 
6.00 cm and a 6.25 cm stroke length, the rounded displacement would be: 
(1) x (6.00/2) 2 x ([pi]) x (6.25) = 177 cc.
    (c) The nominal power curve and intended swept volume must be 
within the range of the actual power curves and swept volumes of 
production engines considering normal production variability. If after 
production begins it is determined that either your nominal power curve 
or your intended swept volume does not represent production engines, we 
may require you to amend your application for certification under Sec.  
1054.225.


Sec.  1054.145  Are there interim provisions that apply only for a 
limited time?

    The provisions in this section apply instead of other provisions in 
this part. This section describes how and when these interim provisions 
apply.
    (a) Delayed Phase 3 implementation for engine manufacturers. Small-
volume engine manufacturers may delay complying with the Phase 3 
exhaust emission standards and requirements that would otherwise apply, 
subject to the following conditions:
    (1) You may delay meeting the Phase 3 exhaust emission standards 
until 2013 for Class II engines and until 2014 for Class I engines. The 
running loss standards in Sec.  1054.112 also do not apply to engines 
exempted under this paragraph (a), or to equipment using these engines.

[[Page 59268]]

    (2) You must certify your engines exempted under this section to 
the Phase 2 standards and requirements specified in 40 CFR 90.103 and 
summarized in Appendix I of this part. You must meet the labeling 
requirements in 40 CFR 90.114, but use the following compliance 
statement instead of the compliance statement in 40 CFR 90.114(c)(7): 
``THIS ENGINE COMPLIES WITH U.S. EPA REGULATIONS FOR [CURRENT MODEL 
YEAR] NONROAD ENGINES UNDER 40 CFR 1054.145(a).''
    (3) After the delays indicated in paragraph (a)(1) of this section, 
you must comply with the same standards and requirements as all other 
manufacturers except as noted elsewhere in this section.
    (4) The provisions of this paragraph (a) may not be used to 
circumvent the requirements of this part.
    (5) You may continue to generate early credits during this two-year 
period as described under Sec.  1054.740 as if the Phase 3 emission 
standards applied starting in the 2013 model year for Class II engines 
and in the 2014 model year for Class I engines.
    (b) Delayed Phase 3 implementation for equipment manufacturers. The 
provisions of Sec.  1054.625 describe how manufacturers may produce 
certain numbers of equipment using Class II engines that meet Phase 2 
standards during the first four years that the Phase 3 standards apply.
    (c) Special provisions for handheld engines. The following 
provisions apply for handheld engines:
    (1) You may use the provisions in 40 CFR 90.104(g) to rely on 
assigned deterioration factors for small-volume engine manufacturers 
and for small-volume engine families.
    (2) You may perform maintenance on emission-data engines during 
service accumulation as described in 40 CFR part 90. If your scheduled 
emission-related maintenance falls within 10 hours of a test point, 
delay the maintenance until the engine reaches the test point. Measure 
emissions before and after peforming the maintenance. Use the average 
values from these two measurements to calculate deterioration factors. 
The emission-data engine must meet applicable emission standards before 
and after maintenance to be considered in compliance, as described in 
Sec.  1054.240(a) and (b).
    (3) Engines subject to Phase 3 emission standards must meet the 
standards at or above barometric pressures of 96.0 kPa in the standard 
configuration and are not required to meet emission standards at lower 
barometric pressures. This is intended to allow testing under most 
weather conditions at all altitudes up to 1,100 feet above sea level. 
In your application for certification, identify the altitude above 
which you rely on an altitude kit to meet emission standards and 
describe your plan for making information and parts available such that 
you would reasonably expect that altitude kits would be widely used at 
all such altitudes.
    (d) Alignment of model years for exhaust and evaporative standards. 
Evaporative emission standards generally apply based on the model year 
of the equipment, which is determined by the equipment's date of final 
assembly. However, in the first year of new emission standards, 
equipment manufacturers may apply evaporative emission standards based 
on the model year of the engine as shown on the engine's emission 
control information label. For example, for the fuel line permeation 
standards starting in 2012, equipment manufacturers may order a batch 
of 2011 model year engines for installation in 2012 model year 
equipment, subject to the anti-stockpiling provisions of 40 CFR 
1068.105(a). The equipment with the 2011 model year engines would not 
need to meet fuel line permeation standards, as long as the equipment 
is fully assembled by December 31, 2012.
    (e) Early compliance with evaporative emission standards--
nonhandheld equipment manufacturers. You may produce nonhandheld 
equipment that does not meet the otherwise applicable evaporative 
emission standards without violating the prohibition in 40 CFR 
1068.101(a)(1) if you earn evaporative emission allowances, as follows:
    (1) You may earn an evaporative emission allowance from each piece 
of equipment certified to California's evaporative emission standards 
by producing it before the requirements of this part start to apply and 
selling it outside of California. You may use an evaporative emission 
allowance by selling one piece of equipment that does not meet any EPA 
evaporative emission standards even though it is subject to the EPA 
standards. The early-compliant equipment must be covered by an EPA 
certificate of conformity (see 40 CFR 1060.105(e)).
    (2) You may earn an evaporative emission allowance with respect to 
fuel tank permeation from each piece of equipment certified to EPA's 
evaporative emission standards by selling it outside of California or 
in an application that is preempted from California's standards before 
EPA's fuel tank permeation standards start to apply. The early-
compliant fuel tanks must be covered by an EPA certificate of 
conformity, though you may demonstrate compliance based on the 
specifications and procedures adopted by the California Air Resources 
Board. You may use an evaporative emission allowance by selling one 
piece of equipment with a fuel tank that does not meet the EPA emission 
standards that would otherwise apply. For example, you can earn an 
evaporative emission allowance by selling a low-permeation fuel tank 
for Class II equipment before the 2011 model year, in which case you 
could sell a piece of Class II equipment in 2011 with a high-permeation 
fuel tank. You may not generate allowances under this paragraph (e)(2) 
based on your sales of metal fuel tanks.
    (3) Evaporative emission allowances you earn under this paragraph 
(e) from equipment with Class I engines may be used only for other 
equipment with Class I engines. Similarly, evaporative emission 
allowances you earn under this paragraph (e) from equipment with Class 
II engines may be used only for other equipment with Class II engines.
    (4) You must label any equipment using allowances under this 
paragraph (e) with the following statement: ``EXEMPT FROM EVAPORATIVE 
STANDARDS UNDER 40 CFR 1054.145(e)''.
    (5) You may not use the allowances you generate under this 
paragraph (e) for 2014 and later model year equipment with Class II 
engines or for 2015 and later model year equipment with Class I 
engines.
    (6) Send the Designated Compliance Officer the following 
information for each year in which you use the provisions of this 
paragraph (e):
    (i) Send us a report within 45 days after the end of the model year 
describing how many pieces of equipment you produced in the preceding 
model year that generate allowances. You may combine this with the 
reports specified in Sec.  1054.250(a) if applicable.
    (ii) Describe the number of equipment using allowances under this 
paragraph (e) in your end-of-year reports and final reports after the 
end of the model year as described in Sec.  1054.730(a). If you do not 
participate in the averaging, banking, and trading program, send this 
information separately within 90 days after the end of the model year.
    (f) Early banking for evaporative emission standards--handheld 
equipment manufacturers. You may earn emission credits for handheld 
equipment you produce before the evaporative emission standards of 
Sec.  1054.110 apply. To do this, your equipment must use fuel tanks 
with a

[[Page 59269]]

family emission limit below 1.5 g/m2/day (or 2.5 g/
m2/day for testing at 40 [deg]C). Calculate your credits as 
described in Sec.  1054.706 based on the difference between the family 
emission limit and 1.5 g/m2/day (or 2.5 g/m2/day 
for testing at 40 [deg]C).
    (g) Useful life for evaporative emission standards. (1) A useful 
life period of two years applies for fuel tanks or fuel caps certified 
to meet permeation emission standards in 2013 and earlier model years. 
However, for fuel tanks with a family emission limit above or below the 
specified emission standard, calculate emission credits under Sec.  
1054.706 based on a useful life of five years.
    (2) A useful life period of two years applies for cold-weather fuel 
lines certified to meet permeation emission standards in 2012 and 2013. 
However, for fuel lines with a family emission limit above or below the 
specified emission standard, calculate emission credits under Sec.  
1054.706 based on a useful life of five years.
    (h) Emission credit program for cold-weather fuel lines. In the 
2012 through 2015 model years, certifying equipment manufacturers may 
generate or use emission credits for averaging to show compliance with 
the permeation standards for cold-weather fuel lines, but not for 
banking or trading, as follows:
    (1) To generate or use emission credits, apply the provisions of 
subpart H of this part as they apply for fuel tanks except as specified 
in this paragraph (h). For example, calculate emission credits based on 
the internal surface area of the fuel lines and a five-year useful 
life, even if the standards apply temporarily over a shorter useful 
life.
    (2) Establish an FEL for each emission family based on emission 
measurements as specified in 40 CFR 1060.515. The FEL may not exceed 
400 g/m2/day for any emission family.
    (3) Use an adjustment factor (AF) of 1.0 for calculating credits.
    (4) Cold-weather fuel lines are in a separate averaging set, which 
means you may not exchange emission credits between fuel tanks and fuel 
lines.
    (i) Use of California data for handheld fuel tank permeation. If 
you certified handheld fuel tanks to the permeation standards in 40 CFR 
90.129 based on emission measurements for demonstrating compliance with 
emission standards for California, you may continue to comply with the 
provisions of 40 CFR 90.129 instead of the provisions of Sec.  
1054.110(b) for the 2010 and 2011 model years, provided that we allow 
you to use carryover emission data under 40 CFR 1060.235(e) for your 
emission family.
    (j) Continued use of 40 CFR part 90 test procedures. You may use 
the test procedures for measuring exhaust emissions in 40 CFR part 90 
instead of those in subpart F of this part for 2010 through 2012 model 
years. This applies for certification, production-line, and in-use 
testing. You may continue to use data based on the test procedures in 
40 CFR part 90 for engine families in 2013 and later model years, 
provided that we allow you to use carryover emission data under 40 CFR 
1054.235(d) for your emission family. You may also use the test 
procedures for measuring exhaust emissions in 40 CFR part 90 for 
production-line testing with any engine family whose certification is 
based on testing with those procedures.
    (k) Carryover of exhaust emission data from Californa ARB 
procedures. You may certify your engines through the 2012 model year 
based on exhaust emission data you previously submitted to California 
ARB. This applies for certification and production-line testing. This 
paragraph (k) no longer applies starting with the 2013 model year. Note 
that other regulatory provisions may allow you to use data from 
California ARB for EPA certification in certain circumstances.
    (l) [Reserved]
    (m) Delayed compliance for rotation-molded fuel tanks. (1) You may 
produce limited numbers of 2011 and 2012 model year equipment with 
rotation-molded fuel tanks that do not meet permeation emission 
standards specified in Sec.  1054.112(b) and 40 CFR 1060.103, subject 
to the following provisions:
    (i) You may use allowances under this paragraph (m) only for Class 
II equipment models using identical fuel tanks such that the production 
volumes of the fuel tank design used in such equipment is no more than 
5,000 units in the 2011 and 2012 model years, with a total corporate 
allowance of 10,000 units in 2012. If production volumes are greater 
than 5,000 for a given fuel tank design (or greater than 10,000 
corporate-wide in the 2012 model year), all those tanks must comply 
with emission standards. Tanks are generally considered identical if 
they are produced under a single part number to conform to a single 
design or blueprint. Tanks should be considered identical if they 
differ only with respect to production variability, post-production 
changes (such as different fittings or grommets), supplier, color, or 
other extraneous design variables. The limit of 5,000 units for a given 
fuel tank design applies together for the total production from any 
parent or subsidiary companies.
    (ii) Include the following statement on the emission label 
specified in 40 CFR 1060.135: ``EXEMPT FROM TANK PERMEATION STANDARDS 
UNDER 40 CFR 1054.145''.
    (iii) You must keep records to demonstrate that you do not exceed 
the specified production volumes. Identify the number of exempted 
equipment you produced from each model and from each production 
facility.
    (iv) You may not apply the provisions of this paragraph (m) for 
fuel tanks that are not rotation-molded or for equipment that is not 
powered by a Class II engine.
    (2) Fuel tank manufacturers may produce exempted fuel tanks as 
needed for equipment manufacturers under this paragraph (m) without our 
prior approval. Fuel tank manufacturers must keep records of the number 
of exempted fuel tanks sold to each equipment manufacturer.
    (3) Equipment you produce under this paragraph (m) are exempt from 
the prohibitions in 40 CFR 1068.101(a)(1) with respect to fuel tank 
permeation emissions, subject to the provisions of this paragraph (m). 
However, producing more exempted equipment than we allow under this 
paragraph (m) violates the prohibitions in 40 CFR 1068.101(a)(1). 
Equipment manufacturers and fuel tank manufacturers must keep the 
records we require under this paragraph (m) until at least December 31, 
2016 and give them to us if we ask for them (see 40 CFR 
1068.101(a)(2)).
    (n) Ethanol-blended test fuel for nonhandheld engines. During the 
first two years of the Phase 3 standards, if you use an ethanol-blended 
test fuel for certifying a given engine family as described in Sec.  
1054.501(b)(2), we will also use the blended fuel for testing engines 
from that engine family, whether or not you use the blended fuel for 
certifying all your Class I (or Class II) engine families in that model 
year.

Subpart C--Certifying Emission Families


Sec.  1054.201  What are the general requirements for obtaining a 
certificate of conformity?

    Engine manufacturers must certify their engines with respect to the 
exhaust emission standards in this part. Manufacturers of engines, 
equipment, or fuel-system components may need to certify their products 
with respect to evaporative emission standards as described in 40 CFR 
1060.1 and 1060.601. The following general

[[Page 59270]]

requirements apply for obtaining a certificate of conformity:
    (a) You must send us a separate application for a certificate of 
conformity for each engine family. A certificate of conformity is valid 
starting with the indicated effective date but it is not valid for any 
production after December 31 of the model year for which it is issued. 
No certificate will be issued after December 31 of the model year. If 
you certify with respect to both exhaust and evaporative emissions, you 
must submit separate applications.
    (b) The application must contain all the information required by 
this part and must not include false or incomplete statements or 
information (see Sec.  1054.255).
    (c) We may ask you to include less information than we specify in 
this subpart as long as you maintain all the information required by 
Sec.  1054.250.
    (d) You must use good engineering judgment for all decisions 
related to your application (see 40 CFR 1068.5).
    (e) An authorized representative of your company must approve and 
sign the application.
    (f) See Sec.  1054.255 for provisions describing how we will 
process your application.
    (g) We may require you to deliver your test engines to a facility 
we designate for our testing (see Sec.  1054.235(c)).


Sec.  1054.205  What must I include in my application?

    This section specifies the information that must be in your 
application, unless we ask you to include less information under Sec.  
1054.201(c). We may require you to provide additional information to 
evaluate your application. The provisions of this section apply to 
integrated equipment manufacturers and engine manufacturers selling 
loose engines. Nonintegrated equipment manufacturers must follow the 
requirements of 40 CFR part 1060.
    (a) Describe the emission family's specifications and other basic 
parameters of the engine's design and emission controls. List the fuel 
type on which your engines are designed to operate (for example, all-
season gasoline). List each distinguishable engine configuration in the 
emission family. For each engine configuration in which the maximum 
modal power of the emission-data engine is at or above 25 kW (or power 
at or above 15 kW if displacement is above 1000 cc), list the maximum 
engine power and the range of values for maximum engine power resulting 
from production tolerances, as described in Sec.  1054.140.
    (b) Explain how the emission control systems operate. Describe the 
evaporative emission controls and show how your design will prevent 
running loss emissions, if applicable. Also describe in detail all 
system components for controlling exhaust emissions, including all 
auxiliary emission control devices (AECDs) and all fuel-system 
components you will install on any production or test engine. Identify 
the part number of each component you describe (or the alphanumeric 
designation for catalysts described in Sec.  1054.610, if applicable). 
For this paragraph (b), treat as separate AECDs any devices that 
modulate or activate differently from each other. Include sufficient 
detail to allow us to evaluate whether the AECDs are consistent with 
the defeat device prohibition of Sec.  1054.115. For example, if your 
engines will routinely experience in-use operation that differs from 
the specified duty cycle for certification, describe how the fuel-
metering system responds to varying speeds and loads not represented by 
the duty cycle. If you test an emission-data engine by disabling the 
governor for full-load operation such that the engine operates at an 
air-fuel ratio significantly different than under full-load operation 
with an installed governor, explain why these differences are necessary 
or appropriate. For conventional carbureted engines without electronic 
fuel controls, it is sufficient to state that there is no significant 
difference in air-fuel ratios.
    (c) [Reserved]
    (d) Describe the engines, equipment, and fuel system components you 
selected for testing and the reasons for selecting them.
    (e) Describe the test equipment and procedures that you used, 
including any special or alternate test procedures you used. For 
handheld engines, describe how you selected the value for rated speed.
    (f) Describe how you operated the emission-data engine before 
testing, including the duty cycle and the number of engine operating 
hours used to stabilize emission levels. Explain why you selected the 
method of service accumulation. Describe any scheduled maintenance you 
did.
    (g) List the specifications of the test fuel to show that it falls 
within the required ranges we specify in 40 CFR part 1065.
    (h) Identify the emission family's useful life. Describe the basis 
for selecting useful life values with respect to exhaust emissions (see 
Sec.  1054.107).
    (i) Include the maintenance and warranty instructions you will give 
to the ultimate purchaser of each new engine (see Sec. Sec.  1054.120 
and 1054.125). Describe your basis for meeting the warranty-assurance 
provisions in Sec.  1054.120(f). Describe your recall repair network if 
it is different than your warranty repair network. State that you will 
post a bond as specified in Sec.  1054.120(f) and 1054.690 or describe 
why those requirements do not apply.
    (j) Include the emission-related installation instructions you will 
provide if someone else installs your engines in nonroad equipment (see 
Sec.  1054.130).
    (k) Describe your emission control information label (see Sec.  
1054.135).
    (l) Identify the emission standards or FELs for the emission 
family.
    (m) Identify the emission family's deterioration factors and 
describe how you developed them (see Sec.  1054.245). Present any 
emission test data you used for this.
    (n) State that you operated your emission-data engines as described 
in the application (including the test procedures, test parameters, and 
test fuels) to show you meet the requirements of this part.
    (o) Present emission data to show that you meet exhaust emission 
standards, as follows:
    (1) Present emission data for hydrocarbons (such as THC, THCE, or 
NMHC, as applicable), NOX, and CO on an emission-data engine 
to show your engines meet the applicable exhaust emission standards as 
specified in Sec.  1054.101. Show emission figures before and after 
applying deterioration factors for each engine. Include test data from 
each applicable duty cycle specified in Sec.  1054.505(b). If we 
specify more than one grade of any fuel type (for example, low-
temperature and all-season gasoline), you need to submit test data only 
for one grade, unless the regulations of this part specify otherwise 
for your engine.
    (2) Note that Sec. Sec.  1054.235 and 1054.245 allow you to submit 
an application in certain cases without new emission data.
    (p) Report all test results, including those from invalid tests, 
whether or not they were conducted according to the test procedures of 
subpart F of this part. If you measure CO2, report those 
emission levels (in g/kW-hr). We may ask you to send other information 
to confirm that your tests were valid under the requirements of this 
part and 40 CFR parts 1060 and 1065.
    (q) Describe all adjustable operating parameters (see Sec.  
1054.115(b)), including production tolerances. Include the following in 
your description of each parameter:

[[Page 59271]]

    (1) The nominal or recommended setting.
    (2) The intended physically adjustable range.
    (3) The limits or stops used to establish adjustable ranges.
    (4) Information showing why the limits, stops, or other means of 
inhibiting adjustment are effective in preventing adjustment of 
parameters on in-use engines to settings outside your intended 
physically adjustable ranges.
    (r) Describe how your nonhandheld engines comply with emission 
standards at varying atmospheric pressures. Include a description of 
altitude kits you design to comply with the requirements of Sec.  
1054.115(c). Identify the part number of each component you describe. 
Identify the altitude range for which you expect proper engine 
performance and emission control with and without the altitude kit. 
State that your engines will comply with applicable emission standards 
throughout the useful life with the altitude kit installed according to 
your instructions. Describe any relevant testing, engineering analysis, 
or other information in sufficient detail to support your statement. In 
addition, describe your plan for making information and parts available 
such that you would reasonably expect that altitude kits would be 
widely used in the high-altitude counties specified in 40 CFR part 
1068, Appendix III. For example, engine owners should have ready access 
to information describing when an altitude kit is needed and how to 
obtain this service. Similarly, parts and service information should be 
available to qualified service facilities in addition to authorized 
service centers if that is needed for owners to have such altitude kits 
installed locally.
    (s) If your engines are subject to handheld emission standards on 
the basis of meeting weight limitations described in the definition of 
``handheld'' in Sec.  1054.801, describe your analysis showing that you 
meet the applicable weight-related restrictions.
    (t) State whether your certification is limited for certain 
engines. If this is the case, describe how you will prevent use of 
these engines in applications for which they are not certified. This 
applies for engines such as the following:
    (1) Wintertime engines not certified to the specified 
HC+NOX standard.
    (2) Two-stroke snowthrower engines using the provisions of Sec.  
1054.101(d).
    (u) Unconditionally certify that all the engines in the emission 
family comply with the requirements of this part, other referenced 
parts of the CFR, and the Clean Air Act.
    (v) Include good-faith estimates of U.S.-directed production 
volumes. Include a justification for the estimated production volumes 
if they are substantially different than actual production volumes in 
earlier years for similar models. Also indicate whether you expect the 
engine family to contain only nonroad engines, only stationary engines, 
or both.
    (w) State that you will post a bond as specified in Sec.  1054.690 
or describe why those requirements do not apply.
    (x) Include the information required by other subparts of this 
part. For example, include the information required by Sec.  1054.725 
if you participate in the ABT program.
    (y) Include other applicable information, such as information 
specified in this part or 40 CFR part 1068 related to requests for 
exemptions.
    (z) Name an agent for service located in the United States. Service 
on this agent constitutes service on you or any of your officers or 
employees for any action by EPA or otherwise by the United States 
related to the requirements of this part.
    (aa) For imported engines or equipment, identify the following:
    (1) The port(s) at which you have imported your engines (or 
equipment containing your engines) over the previous 12 months.
    (2) The names and addresses of the agents you have authorized to 
import your engines or equipment.
    (3) The location of a test facility in the United States where you 
can test your engines if we select them for testing under a selective 
enforcement audit, as specified in 40 CFR part 1068, subpart E.


Sec.  1054.210  May I get preliminary approval before I complete my 
application?

    If you send us information before you finish the application, we 
will review it and make any appropriate determinations, especially for 
questions related to emission family definitions, auxiliary emission 
control devices, deterioration factors, useful life, testing for 
service accumulation, maintenance, and delegated final assembly. 
Decisions made under this section are considered to be preliminary 
approval, subject to final review and approval. We will generally not 
reverse a decision where we have given you preliminary approval, unless 
we find new information supporting a different decision. If you request 
preliminary approval related to the upcoming model year or the model 
year after that, we will make the appropriate determinations as soon as 
practicable. We will generally not provide preliminary approval related 
to a future model year more than two years ahead of time.


Sec.  1054.220  How do I amend the maintenance instructions in my 
application?

    You may amend your emission-related maintenance instructions after 
you submit your application for certification as long as the amended 
instructions remain consistent with the provisions of Sec.  1054.125. 
You must send the Designated Compliance Officer a written request to 
amend your application for certification for an engine family if you 
want to change the emission-related maintenance instructions in a way 
that could affect emissions. In your request, describe the proposed 
changes to the maintenance instructions. If operators follow the 
original maintenance instructions rather than the newly specified 
maintenance, this does not allow you to disqualify those engines from 
in-use testing or deny a warranty claim.
    (a) If you are decreasing, replacing, or eliminating any specified 
maintenance, you may distribute the new maintenance instructions to 
your customers 30 days after we receive your request, unless we 
disapprove your request. This would generally include replacing one 
maintenance step with another. We may approve a shorter time or waive 
this requirement.
    (b) If your requested change would not decrease the specified 
maintenance, you may distribute the new maintenance instructions 
anytime after you send your request. For example, this paragraph (b) 
would cover adding instructions to increase the frequency of filter 
changes for engines in severe-duty applications.
    (c) You need not request approval if you are making only minor 
corrections (such as correcting typographical mistakes), clarifying 
your maintenance instructions, or changing instructions for maintenance 
unrelated to emission control. We may ask you to send us copies of 
maintenance instructions revised under this paragraph (c).


Sec.  1054.225  How do I amend my application for certification to 
include new or modified engines or fuel systems or change an FEL?

    Before we issue you a certificate of conformity, you may amend your 
application to include new or modified engine or fuel-system 
configurations, subject to the provisions of this section. After we 
have issued your certificate of conformity, you may send us an amended 
application requesting that we include new or modified configurations 
within the scope of the certificate, subject to the provisions of this 
section.

[[Page 59272]]

You must amend your application if any changes occur with respect to 
any information included in your application.
    (a) You must amend your application before you take any of the 
following actions:
    (1) Add an engine or fuel-system configuration to an emission 
family. In this case, the configuration added must be consistent with 
other configurations in the emission family with respect to the 
criteria listed in Sec.  1054.230.
    (2) Change a configuration already included in an emission family 
in a way that may affect emissions, or change any of the components you 
described in your application for certification. This includes 
production and design changes that may affect emissions any time during 
the engine's lifetime.
    (3) Modify an FEL for an emission family with respect to exhaust 
emissions as described in paragraph (f) of this section.
    (b) To amend your application for certification, send the 
Designated Compliance Officer the following information:
    (1) Describe in detail the addition or change in the model or 
configuration you intend to make.
    (2) Include engineering evaluations or data showing that the 
amended emission family complies with all applicable requirements. You 
may do this by showing that the original emission-data engine or 
emission-data equipment is still appropriate for showing that the 
amended family complies with all applicable requirements.
    (3) If the original emission-data engine for the engine family is 
not appropriate to show compliance for the new or modified engine 
configuration, include new test data showing that the new or modified 
engine configuration meets the requirements of this part.
    (c) We may ask for more test data or engineering evaluations. You 
must give us these within 30 days after we request them.
    (d) For emission families already covered by a certificate of 
conformity, we will determine whether the existing certificate of 
conformity covers your new or modified configuration. You may ask for a 
hearing if we deny your request (see Sec.  1054.820).
    (e) For emission families already covered by a certificate of 
conformity, you may start producing the new or modified configuration 
anytime after you send us your amended application and before we make a 
decision under paragraph (d) of this section. However, if we determine 
that the affected configurations do not meet applicable requirements, 
we will notify you to cease production of the configurations and may 
require you to recall the engine or equipment at no expense to the 
owner. Choosing to produce engines under this paragraph (e) is deemed 
to be consent to recall all engines or equipment that we determine do 
not meet applicable emission standards or other requirements and to 
remedy the nonconformity at no expense to the owner. If you do not 
provide information required under paragraph (c) of this section within 
30 days after we request it, you must stop producing the new or 
modified engine or equipment.
    (f) You may ask us to approve a change to your FEL with respect to 
exhaust emissions in certain cases after the start of production. The 
changed FEL may not apply to engines you have already introduced into 
U.S. commerce, except as described in this paragraph (f). If we approve 
a changed FEL after the start of production, you must identify the date 
or serial number for applying the new FEL. If you identify this by 
month and year, we will consider that a lowered FEL applies on the last 
day of the month and a raised FEL applies on the first day of the 
month. You may ask us to approve a change to your FEL in the following 
cases:
    (1) You may ask to raise your FEL for your emission family at any 
time. In your request, you must show that you will still be able to 
meet the emission standards as specified in subparts B and H of this 
part. If you amend your application by submitting new test data to 
include a newly added or modified engine, as described in paragraph 
(b)(3) of this section, use the appropriate FELs with corresponding 
production volumes to calculate emission credits for the model year, as 
described in subpart H of this part. In all other circumstances, you 
must use the higher FEL for the entire family to calculate emission 
credits under subpart H of this part.
    (2) You may ask to lower the FEL for your emission family only if 
you have test data from production engines showing that emissions are 
below the proposed lower FEL. The lower FEL does not apply to engines 
you produce before the new FEL starts to apply, as specified in this 
paragraph (f). Use the appropriate FELs with corresponding production 
volumes to calculate emission credits for the model year, as described 
in subpart H of this part.


Sec.  1054.230  How do I select emission families?

    (a) For purposes of certification, divide your product line into 
families of engines that are expected to have similar emission 
characteristics throughout their useful life as described in this 
section. Your emission family is limited to a single model year. For 
evaporative emissions, group engines into emission families as 
described in 40 CFR 1060.230.
    (b) Group engines into the same emission family for exhaust 
emissions if they are the same in all the following aspects:
    (1) The combustion cycle and fuel. See paragraph (g) of this 
section for special provisions that apply for dual-fuel engines.
    (2) The cooling system (liquid-cooled vs. air-cooled).
    (3) Valve configuration (for example, side-valve vs. overhead 
valve).
    (4) Method of air aspiration (for example, turbocharged vs. 
naturally aspirated).
    (5) The number, location, volume, and composition of catalytic 
converters.
    (6) The number and arrangement of cylinders and approximate total 
displacement.
    (7) Engine class, as defined in Sec.  1054.801.
    (8) Method of control for engine operation, other than governing 
(mechanical or electronic).
    (9) The numerical level of the applicable emission standards. For 
example, an engine family may not include engines certified to 
different family emission limits, though you may change family emission 
limits without recertifying as specified in Sec.  1054.225.
    (10) Useful life.
    (c) You may subdivide a group that is identical under paragraph (b) 
of this section into different emission families if you show the 
expected emission characteristics are different during the useful life.
    (d) You may group engines that are not identical with respect to 
the things listed in paragraph (b) of this section into the same 
emission family, as follows:
    (1) In unusual circumstances, you may group such engines into the 
same emission family if you show that their emission characteristics 
during the useful life will be similar.
    (2) If you are a small-volume engine manufacturer, you may group 
any nonhandheld engines with the same useful life that are subject to 
the same emission standards into a single emission family.
    (3) The provisions of this paragraph (d) do not exempt any engines 
from meeting all the applicable standards and requirements in subpart B 
of this part.
    (e) Select test engines from the emission family as described in 40 
CFR 1065.401.

[[Page 59273]]

    (f) You may combine engines from different classes into a single 
emission family under paragraph (d)(1) of this section if you certify 
the emission family to the more stringent set of standards from the two 
classes in that model year.
    (g) You may certify dual-fuel or flexible-fuel engines in a single 
engine family. You may include dedicated-fuel versions of this same 
engine model in the same engine family, as long as they are identical 
to the engine configuration with respect to that fuel type for the 
dual-fuel or flexible-fuel version of the engine. For example, if you 
produce an engine that can alternately run on gasoline and natural gas, 
you can include the gasoline-only and natural gas-only versions of the 
engine in the same engine family as the dual-fuel engine if engine 
operation on each fuel type is identical with or without installation 
of components for operating on the other fuel.


Sec.  1054.235  What exhaust emission testing must I perform for my 
application for a certificate of conformity?

    This section describes the exhaust emission testing you must 
perform to show compliance with the emission standards in Sec. Sec.  
1054.103 and 1054.105. See Sec. Sec.  1054.240 and 1054.245 and 40 CFR 
part 1065, subpart E, regarding service accumulation before emission 
testing.
    (a) Select an emission-data engine from each engine family for 
testing as described in 40 CFR 1065.401. Select a configuration that is 
most likely to exceed the HC+NOX standard, using good 
engineering judgment. Configurations must be tested as they will be 
produced, including installed governors, if applicable.
    (b) Test your emission-data engines using the procedures and 
equipment specified in subpart F of this part. In the case of dual-fuel 
engines, measure emissions when operating with each type of fuel for 
which you intend to certify the engine. In the case of flexible-fuel 
engines, measure emissions when operating with the fuel mixture that is 
most likely to cause the engine to exceed the applicable 
HC+NOX emission standard, though you may ask us to exclude 
fuel mixtures that you can show are not likely to occur in use.
    (c) We may measure emissions from any of your emission-data engines 
or other engines from the emission family, as follows:
    (1) We may decide to do the testing at your plant or any other 
facility. If we do this, you must deliver the engine to a test facility 
we designate. The engine you provide must include appropriate 
manifolds, aftertreatment devices, electronic control units, and other 
emission-related components not normally attached directly to the 
engine block. If we do the testing at your plant, you must schedule it 
as soon as possible and make available the instruments, personnel, and 
equipment we need.
    (2) If we measure emissions on one of your engines, the results of 
that testing become the official emission results for the engine.
    (3) We may set the adjustable parameters of your engine to any 
point within the physically adjustable ranges (see Sec.  1054.115(b)).
    (4) We may calibrate your engine within normal production 
tolerances for anything we do not consider an adjustable parameter. For 
example, this would apply where we determine that an engine parameter 
is not an adjustable parameter (as defined in Sec.  1054.801) but that 
it is subject to production variability.
    (d) You may ask to use carryover emission data from a previous 
model year instead of doing new tests, but only if all the following 
are true:
    (1) The emission family from the previous model year differs from 
the current emission family only with respect to model year or other 
characteristics unrelated to emissions. You may also ask to add a 
configuration subject to Sec.  1054.225.
    (2) The emission-data engine from the previous model year remains 
the appropriate emission-data engine under paragraph (b) of this 
section.
    (3) The data show that the emission-data engine would meet all the 
requirements that apply to the emission family covered by the 
application for certification. For engines originally tested under the 
provisions of 40 CFR part 90, you may consider those test procedures to 
be equivalent to the procedures we specify in subpart F of this part.
    (e) We may require you to test another engine of the same or 
different configuration in addition to the engine(s) tested under 
paragraph (b) of this section.
    (f) If you use an alternate test procedure under 40 CFR 1065.10 and 
later testing shows that such testing does not produce results that are 
equivalent to the procedures specified in subpart F of this part, we 
may reject data you generated using the alternate procedure.


Sec.  1054.240  How do I demonstrate that my emission family complies 
with exhaust emission standards?

    (a) For purposes of certification, your emission family is 
considered in compliance with the emission standards in Sec.  
1054.101(a) if all emission-data engines representing that family have 
test results showing deteriorated emission levels at or below these 
standards. This includes all test points over the course of the 
durability demonstration. Note that your FELs are considered to be the 
applicable emission standards with which you must comply if you 
participate in the ABT program in subpart H of this part.
    (b) Your engine family is deemed not to comply if any emission-data 
engine representing that family has test results showing a deteriorated 
emission level for any pollutant that is above an applicable emission 
standard. This includes all test points over the course of the 
durability demonstration.
    (c) Determine a deterioration factor to compare emission levels 
from the emission-data engine with the applicable emission standards. 
Section 1054.245 specifies how to test engines to develop deterioration 
factors that represent the expected deterioration in emissions over 
your engines' full useful life. Calculate a multiplicative 
deterioration factor as described in Sec.  1054.245(b). If the 
deterioration factor is less than one, use one. Specify the 
deterioration factor to one more significant figure than the emission 
standard. You may use assigned deterioration factors that we establish 
for up to 10,000 nonhandheld engines from small-volume emission 
families in each model year, except that small-volume engine 
manufacturers may use assigned deterioration factors for any or all of 
their engine families.
    (d) Adjust the official emission results for each tested engine at 
the low-hour test point by multiplying the measured emissions by the 
deterioration factor, then rounding the adjusted figure to the same 
number of decimal places as the emission standard. Compare the rounded 
emission levels to the emission standard for each emission-data engine. 
In the case of HC+NOX standards, add the official emission 
results and apply the deterioration factor to the sum of the pollutants 
before rounding. However, if your deterioration factors are based on 
emission measurements that do not cover the engine's full useful life, 
apply deterioration factors to each pollutant and then add the results 
before rounding.
    (e) The provisions of this paragraph (e) apply only for engine 
families with a useful life at or below 300 hours. To apply the 
deterioration factor to engines other than the original emission-data 
engine, they must be operated for the same number of hours before 
starting emission measurements that you used

[[Page 59274]]

for the original emission-data engine, within one hour. For example, if 
the original emission-data engine operated for 8 hours before the low-
hour emission test, operate the other test engines for 7 to 9 hours 
before starting emission measurements.


Sec.  1054.245  How do I determine deterioration factors from exhaust 
durability testing?

    This section describes how to determine deterioration factors, 
either with pre-existing test data or with new emission measurements.
    (a) You may ask us to approve deterioration factors for an emission 
family based on emission measurements from similar engines if you have 
already given us these data for certifying other engines in the same or 
earlier model years. Use good engineering judgment to decide whether 
the two engines are similar.
    (b) If you are unable to determine deterioration factors for an 
emission family under paragraph (a) of this section, select engines, 
subsystems, or components for testing. Determine deterioration factors 
based on service accumulation and related testing. Include 
consideration of wear and other causes of deterioration expected under 
typical consumer use. Determine deterioration factors as follows:
    (1) Measure emissions from the emission-data engine at a low-hour 
test point, at the midpoint of the useful life, and at the end of the 
useful life, except as specifically allowed by this paragraph (b). You 
may test at additional evenly spaced intermediate points. Collect 
emission data using measurements to one more decimal place than the 
emission standard.
    (2) Operate the engine over a representative duty cycle for a 
period at least as long as the useful life (in hours). You may operate 
the engine continuously. You may also use an engine installed in 
nonroad equipment to accumulate service hours instead of running the 
engine only in the laboratory.
    (3) In the case of dual-fuel or flexible-fuel engines, you may 
accumulate service hours on a single emission-data engine using the 
type or mixture of fuel expected to have the highest combustion and 
exhaust temperatures. For dual-fuel engines, you must measure emissions 
on each fuel type at each test point.
    (4) You may perform maintenance on emission-data engines as 
described in Sec.  1054.125 and 40 CFR part 1065, subpart E. If you 
change one or more spark plugs on an emission-data engine as allowed 
under Sec.  1054.125, you must measure emissions before and after this 
maintenance. If you clean or change an air filter on an emission-data 
engine as allowed under Sec.  1054.125, you must measure emissions 
before and after every second time you perform this maintenance. Use 
the average values from these two measurements to calculate 
deterioration factors. The emission-data engine must meet applicable 
emission standards before and after maintenance to be considered in 
compliance, as described in Sec.  1054.240(a) and (b).
    (5) Calculate your deterioration factor using a linear least-
squares fit of your test data, but treat the low-hour test point as 
occurring at hour zero. Your deterioration factor is the ratio of the 
calculated emission level at the point representing the full useful 
life to the calculated emission level at zero hours.
    (6) If you test more than one engine to establish deterioration 
factors, average the deterioration factors from all the engines before 
rounding.
    (7) If your durability engine fails between 80 percent and 100 
percent of useful life, you may use the last emission measurement as 
the test point representing the full useful life, provided it occurred 
after at least 80 percent of the useful life.
    (8) If your useful life is 1,000 hours or longer, and your 
durability engine fails between 50 percent and 100 percent of useful 
life, you may extrapolate your emission results to determine the 
emission level representing the full useful life, provided emissions 
were measured at least once after 50 percent of the useful life.
    (9) Use good engineering judgment for all aspects of the effort to 
establish deterioration factors under this paragraph (b).
    (10) You may use other testing methods to determine deterioration 
factors, consistent with good engineering judgment, as long as we 
approve those methods in advance.
    (c) Include the following information in your application for 
certification:
    (1) If you determine your deterioration factors based on test data 
from a different emission family, explain why this is appropriate and 
include all the emission measurements on which you base the 
deterioration factor.
    (2) If you do testing to determine deterioration factors, describe 
the form and extent of service accumulation, including the method you 
use to accumulate hours.


Sec.  1054.250  What records must I keep and what reports must I send 
to EPA?

    (a) Send the Designated Compliance Officer information related to 
your U.S.-directed production volumes as described in Sec.  1054.345. 
In addition, within 45 days after the end of the model year, you must 
send us a report describing information about engines you produced 
during the model year as follows:
    (1) State the total production volume for each engine family that 
is not subject to reporting under Sec.  1054.345.
    (2) State the total production volume for any engine family for 
which you produce engines after completing the reports required in 
Sec.  1054.345.
    (3) If you produced exempted engines under the provisions of Sec.  
1054.625(j)(1), report the number of exempted engines you produced for 
each engine model and identify the buyer or shipping destination for 
each exempted engine.
    (4) For production volumes you report under this paragraph (a), 
identify whether or not the figures include California sales. Include a 
separate count of production volumes for California sales if those 
figures are available.
    (b) Organize and maintain the following records:
    (1) A copy of all applications and any summary information you send 
us.
    (2) Any of the information we specify in Sec.  1054.205 that you 
were not required to include in your application.
    (3) A detailed history of all emission-data engines. For each 
engine, describe all of the following:
    (i) The emission-data engine's construction, including its origin 
and buildup, steps you took to ensure that it represents production 
engines, any components you built specially for it, and all the 
components you include in your application for certification.
    (ii) How you accumulated engine operating hours (service 
accumulation), including the dates and the number of hours accumulated.
    (iii) All maintenance, including modifications, parts changes, and 
other service, and the dates and reasons for the maintenance.
    (iv) All your emission tests, including documentation on routine 
and standard tests, as specified in part 40 CFR part 1065, and the date 
and purpose of each test.
    (v) All tests to diagnose engine or emission control performance, 
giving the date and time of each and the reasons for the test.
    (vi) Any other significant events.
    (4) Production figures for each emission family divided by assembly 
plant.

[[Page 59275]]

    (5) Keep a list of engine identification numbers for all the 
engines you produce under each certificate of conformity.
    (c) Keep data from routine emission tests (such as test cell 
temperatures and relative humidity readings) for one year after we 
issue the associated certificate of conformity. Keep all other 
information specified in this section for eight years after we issue 
your certificate.
    (d) Store these records in any format and on any media as long as 
you can promptly send us organized, written records in English if we 
ask for them. You must keep these records readily available. We may 
review them at any time.


Sec.  1054.255  What decisions may EPA make regarding my certificate of 
conformity?

    (a) If we determine your application is complete and shows that the 
emission family meets all the requirements of this part and the Clean 
Air Act, we will issue a certificate of conformity for your emission 
family for that model year. We may make the approval subject to 
additional conditions.
    (b) We may deny your application for certification if we determine 
that your emission family fails to comply with emission standards or 
other requirements of this part or the Clean Air Act. We will base our 
decision on all available information. If we deny your application, we 
will explain why in writing.
    (c) In addition, we may deny your application or suspend or revoke 
your certificate if you do any of the following:
    (1) Refuse to comply with any testing, reporting, or bonding 
requirements.
    (2) Submit false or incomplete information (paragraph (e) of this 
section applies if this is fraudulent).
    (3) Render inaccurate any test data.
    (4) Deny us from completing authorized activities (see 40 CFR 
1068.20). This includes a failure to provide reasonable assistance.
    (5) Produce engines or equipment for importation into the United 
States at a location where local law prohibits us from carrying out 
authorized activities.
    (6) Fail to supply requested information or amend your application 
to include all engines or equipment being produced.
    (7) Take any action that otherwise circumvents the intent of the 
Clean Air Act or this part.
    (d) We may void your certificate if you do not keep the records we 
require or do not give us information as required under this part or 
the Clean Air Act.
    (e) We may void your certificate if we find that you intentionally 
submitted false or incomplete information.
    (f) If we deny your application or suspend, revoke, or void your 
certificate, you may ask for a hearing (see Sec.  1054.820).

Subpart D--Production-line Testing


Sec.  1054.300  Applicability.

    This subpart specifies requirements for engine manufacturers to 
test their production engines for exhaust emissions to ensure that the 
engines are being produced as described in the application for 
certification. The production-line verification described in 40 CFR 
part 1060, subpart D, applies for equipment and components for 
evaporative emissions.


Sec.  1054.301  When must I test my production-line engines?

    (a) If you produce engines that are subject to the requirements of 
this part, you must test them as described in this subpart, except as 
follows:
    (1) Small-volume engine manufacturers may omit testing under this 
subpart.
    (2) We may exempt small-volume emission families from routine 
testing under this subpart. Request this exemption in your application 
for certification and include your basis for projecting a production 
volume below 5,000 units. We will approve your request if we agree that 
you have made good-faith estimates of your production volumes. Your 
exemption is approved when we grant your certificate. You must promptly 
notify us if your actual production exceeds 5,000 units during the 
model year. If you exceed the production limit or if there is evidence 
of a nonconformity, we may require you to test production-line engines 
under this subpart, or under 40 CFR part 1068, subpart E, even if we 
have approved an exemption under this paragraph (a)(2).
    (b) We may suspend or revoke your certificate of conformity for 
certain engine families if your production-line engines do not meet the 
requirements of this part or you do not fulfill your obligations under 
this subpart (see Sec. Sec.  1054.325 and 1054.340).
    (c) Other regulatory provisions authorize us to suspend, revoke, or 
void your certificate of conformity, or order recalls for engine 
families, without regard to whether they have passed these production-
line testing requirements. The requirements of this subpart do not 
affect our ability to do selective enforcement audits, as described in 
40 CFR part 1068. Individual engines in families that pass these 
production-line testing requirements must also conform to all 
applicable regulations of this part and 40 CFR part 1068.
    (d) You may use alternate programs for testing production-line 
engines in the following circumstances:
    (1) You may use analyzers and sampling systems that meet the field-
testing requirements of 40 CFR part 1065, subpart J, but not the 
otherwise applicable requirements in 40 CFR part 1065 for laboratory 
testing, to demonstrate compliance with emission standards if you 
double the minimum sampling rate specified in Sec.  1054.310(b). Use 
measured test results to determine whether engines comply with 
applicable standards without applying a measurement allowance. This 
alternate program does not require prior approval but we may disallow 
use of this option where we determine that use of field-grade equipment 
would prevent you from being able to demonstrate that your engines are 
being produced to conform to the specifications in your application for 
certification.
    (2) You may ask to use another alternate program for testing 
production-line engines. In your request, you must show us that the 
alternate program gives equal assurance that your products meet the 
requirements of this part. We may waive some or all of this subpart's 
requirements if we approve your alternate approach. For example, in 
certain circumstances you may be able to give us equal assurance that 
your products meet the requirements of this part by using less rigorous 
measurement methods if you offset that by increasing the number of test 
engines.
    (e) If you certify an engine family with carryover emission data, 
as described in Sec.  1054.235(d), and these equivalent engine families 
consistently pass the production-line testing requirements over the 
preceding two-year period, you may ask for a reduced testing rate for 
further production-line testing for that family. The minimum testing 
rate is one engine per engine family. If we reduce your testing rate, 
we may limit our approval to any number of model years. In determining 
whether to approve your request, we may consider the number of engines 
that have failed the emission tests.
    (f) We may ask you to make a reasonable number of production-line 
engines available for a reasonable time so we can test or inspect them 
for compliance with the requirements of this part.

[[Page 59276]]

Sec.  1054.305  How must I prepare and test my production-line engines?

    This section describes how to prepare and test production-line 
engines. You must assemble the test engine in a way that represents the 
assembly procedures for other engines in the engine family. You must 
ask us to approve any deviations from your normal assembly procedures 
for other production engines in the engine family.
    (a) Test procedures. Test your production-line engines using the 
applicable testing procedures in subpart F of this part to show you 
meet the emission standards in subpart B of this part.
    (b) Modifying a test engine. Once an engine is selected for testing 
(see Sec.  1054.310), you may adjust, repair, prepare, or modify it or 
check its emissions only if one of the following is true:
    (1) You document the need for doing so in your procedures for 
assembling and inspecting all your production engines and make the 
action routine for all the engines in the engine family.
    (2) This subpart otherwise specifically allows your action.
    (3) We approve your action in advance.
    (c) Engine malfunction. If an engine malfunction prevents further 
emission testing, ask us to approve your decision to either repair the 
engine or delete it from the test sequence.
    (d) Setting adjustable parameters. Before any test, we may require 
you to adjust any adjustable parameter to any setting within its 
physically adjustable range.
    (1) [Reserved]
    (2) We may specify adjustments within the physically adjustable 
range by considering their effect on emission levels. We may also 
consider how likely it is that someone will make such an adjustment 
with in-use equipment.
    (3) We may specify an air-fuel ratio within the adjustable range 
specified in Sec.  1054.115(b).
    (e) Stabilizing emission levels. Use good engineering judgment to 
operate your engines before testing such that deterioration factors can 
be applied appropriately. Determine the stabilization period as 
follows:
    (1) For engine families with a useful life at or below 300 hours, 
operate the engine for the same number of hours before starting 
emission measurements that you used for the emission-data engine, 
within one hour. For example, if the emission-data engine operated for 
8 hours before the low-hour emission test, operate the test engines for 
7 to 9 hours before starting emission measurements.
    (2) For engine families with a useful life above 300 hours, operate 
each engine for no more than the greater of two periods:
    (i) 12 hours.
    (ii) The number of hours you operated your emission-data engine for 
certifying the engine family (see 40 CFR part 1065, subpart E, or the 
applicable regulations governing how you should prepare your test 
engine).
    (f) Damage during shipment. If shipping an engine to a remote 
facility for production-line testing makes necessary an adjustment or 
repair, you must wait until after the initial emission test to do this 
work. We may waive this requirement if the test would be impossible or 
unsafe or if it would permanently damage the engine. Report to us, in 
your written report under Sec.  1054.345, all adjustments or repairs 
you make on test engines before each test.
    (g) Retesting after invalid tests. You may retest an engine if you 
determine an emission test is invalid under subpart F of this part. 
Explain in your written report reasons for invalidating any test and 
the emission results from all tests. If we determine that you 
improperly invalidated a test, we may require you to ask for our 
approval for future testing before substituting results of the new 
tests for invalid ones.


Sec.  1054.310  How must I select engines for production-line testing?

    (a) Test engines from each engine family as described in this 
section based on test periods, as follows:
    (1) For engine families with projected U.S.-directed production 
volume of at least 1,600, the test periods are consecutive quarters (3 
months). However, if your annual production period is less than 12 
months long, you may take the following alternative approach to define 
quarterly test periods:
    (i) If your annual production period is 120 days or less, the whole 
model year constitutes a single test period.
    (ii) If your annual production period is 121 to 210 days, divide 
the annual production period evenly into two test periods.
    (iii) If your annual production period is 211 to 300 days, divide 
the annual production period evenly into three test periods.
    (iv) If your annual production period is 301 days or longer, divide 
the annual production period evenly into four test periods.
    (2) For engine families with projected U.S.-directed production 
volume below 1,600, the whole model year constitutes a single test 
period.
    (b) Early in each test period, randomly select and test an engine 
from the end of the assembly line for each engine family.
    (1) In the first test period for newly certified engines, randomly 
select and test one more engine. Then, calculate the required sample 
size for the model year as described in paragraph (c) of this section.
    (2) In later test periods of the same model year, combine the new 
test result with all previous testing in the model year. Then, 
calculate the required sample size for the model year as described in 
paragraph (c) of this section.
    (3) In the first test period for engine families relying on 
previously submitted test data, combine the new test result with the 
last test result from the previous model year. Then, calculate the 
required sample size for the model year as described in paragraph (c) 
of this section. Use the last test result from the previous model year 
only for this first calculation. For all subsequent calculations, use 
only results from the current model year.
    (c) Calculate the required sample size for each engine family. 
Separately calculate this figure for HC+NOX and CO. The 
required sample size is the greater of these calculated values. Use the 
following equation:
[GRAPHIC] [TIFF OMITTED] TR08OC08.095

Where:

N = Required sample size for the model year.
t95 = 95% confidence coefficient, which depends on the 
number of tests completed, n, as specified in the table in paragraph 
(c)(1) of this section. It defines 95% confidence intervals for a 
one-tail distribution.
[sigma] = Test sample standard deviation (see paragraph (c)(2) of 
this section).
x = Mean of emission test results of the sample.
STD = Emission standard (or family emission limit, if applicable).

    (1) Determine the 95% confidence coefficient, t\95\, from the 
following table:

--------------------------------------------------------------------------------------------------------------------------------------------------------
                                 n                                         t95               n               t95               n               t95
--------------------------------------------------------------------------------------------------------------------------------------------------------
 2.................................................................            6.31               12             1.80               22             1.72

[[Page 59277]]

 
 3.................................................................            2.92               13             1.78               23             1.72
 4.................................................................            2.35               14             1.77               24             1.71
 5.................................................................            2.13               15             1.76               25             1.71
 6.................................................................            2.02               16             1.75               26             1.71
 7.................................................................            1.94               17             1.75               27             1.71
 8.................................................................            1.90               18             1.74               28             1.70
 9.................................................................            1.86               19             1.73               29             1.70
10.................................................................            1.83               20             1.73               30             1.70
11.................................................................            1.81               21             1.72              31+             1.65
--------------------------------------------------------------------------------------------------------------------------------------------------------

    (2) Calculate the standard deviation, for the test sample using the 
following formula:
[GRAPHIC] [TIFF OMITTED] TR08OC08.096

Where:

Xi = Emission test result for an individual engine.
n = The number of tests completed in an engine family.

    (d) Use final deteriorated test results to calculate the variables 
in the equations in paragraph (c) of this section (see Sec.  
1054.315(a)(2)).
    (e) After each new test, recalculate the required sample size using 
the updated mean values, standard deviations, and the appropriate 95-
percent confidence coefficient.
    (f) Distribute the remaining engine tests evenly throughout the 
rest of the year. You may need to adjust your schedule for selecting 
engines if the required sample size changes. If your scheduled 
quarterly testing for the remainder of the model year is sufficient to 
meet the calculated sample size, you may wait until the next quarter to 
do additional testing. Continue to randomly select engines from each 
engine family.
    (g) Continue testing until one of the following things happens:
    (1) After completing the minimum number of tests required in 
paragraph (b) of this section, the number of tests completed in an 
engine family, n, is greater than the required sample size, N, and the 
sample mean, x, is less than or equal to the emission standard. For 
example, if N = 5.1 after the fifth test, the sample-size calculation 
does not allow you to stop testing.
    (2) The engine family does not comply according to Sec.  1054.315.
    (3) You test 30 engines from the engine family.
    (4) You test one percent of your projected annual U.S.-directed 
production volume for the engine family, rounded to the nearest whole 
number. Do not count an engine under this paragraph (g)(4) if it fails 
to meet an applicable emission standard.
    (5) You choose to declare that the engine family does not comply 
with the requirements of this subpart.
    (h) If the sample-size calculation allows you to stop testing for 
one pollutant but not another, you must continue measuring emission 
levels of all pollutants for any additional tests required under this 
section. However, you need not continue making the calculations 
specified in this subpart for the pollutant for which testing is not 
required. This paragraph (h) does not affect the number of tests 
required under this section, the required calculations in Sec.  
1054.315, or the remedial steps required under Sec.  1054.320.
    (i) You may elect to test more randomly chosen engines than we 
require under this section. Include these engines in the sample-size 
calculations.


Sec.  1054.315  How do I know when my engine family fails the 
production-line testing requirements?

    This section describes the pass-fail criteria for the production-
line testing requirements. We apply these criteria on an emission-
family basis. See Sec.  1054.320 for the requirements that apply to 
individual engines that fail a production-line test.
    (a) Calculate your test results as follows:
    (1) Initial and final test results. Calculate and round the test 
results for each engine. If you do several tests on an engine, 
calculate the initial results for each test, then add all the test 
results together and divide by the number of tests. Round this final 
calculated value for the final test results on that engine.
    (2) Final deteriorated test results. Apply the deterioration factor 
for the engine family to the final test results (see Sec.  
1054.240(c)).
    (3) Round deteriorated test results. Round the results to the 
number of decimal places in the emission standard expressed to one more 
decimal place.
    (b) Construct the following CumSum Equation for each engine family 
for HC+NOX and CO emissions:

Ci = Max [0 or Ci-1 + Xi-(STD + 
0.25 x [sigma])]

Where:

Ci = The current CumSum statistic.
Ci-1 = The previous CumSum statistic. For the first test, 
the CumSum statistic is 0 (i.e., C1 = 0).
Xi = The current emission test result for an individual 
engine.
STD = Emission standard (or family emission limit, if applicable).

    (c) Use final deteriorated test results to calculate the variables 
in the equation in paragraph (b) of this section (see Sec.  
1054.315(a)).
    (d) After each new test, recalculate the CumSum statistic.
    (e) If you test more than the required number of engines, include 
the results from these additional tests in the CumSum Equation.
    (f) After each test, compare the current CumSum statistic, 
Ci, to the recalculated Action Limit, H, defined as H = 5.0 
x [sigma].
    (g) If the CumSum statistic exceeds the Action Limit in two 
consecutive tests, the engine family fails the production-line testing 
requirements of this subpart. Tell us within ten working days if this 
happens. You may request to amend the application for certification to 
raise the FEL of the entire engine family as described in Sec.  
1054.225(f).
    (h) If you amend the application for certification for an engine 
family under Sec.  1054.225, do not change any previous calculations of 
sample size or CumSum statistics for the model year.


Sec.  1054.320  What happens if one of my production-line engines fails 
to meet emission standards?

    (a) If you have a production-line engine with final deteriorated 
test results exceeding one or more emission standards (see Sec.  
1054.315(a)), the certificate of conformity is automatically suspended 
for that failing engine. You must take the following actions before 
your certificate of conformity can cover that engine:
    (1) Correct the problem and retest the engine to show it complies 
with all emission standards.
    (2) Include the test results and describe the remedy for each 
engine in

[[Page 59278]]

the written report required under Sec.  1054.345.
    (b) You may request to amend the application for certification to 
raise the FEL of the entire engine family at this point (see Sec.  
1054.225).


Sec.  1054.325  What happens if an engine family fails the production-
line testing requirements?

    (a) We may suspend your certificate of conformity for an engine 
family if it fails under Sec.  1054.315. The suspension may apply to 
all facilities producing engines from an engine family even if you find 
noncompliant engines only at one facility.
    (b) We will tell you in writing if we suspend your certificate in 
whole or in part. We will not suspend a certificate until at least 15 
days after the engine family fails. The suspension is effective when 
you receive our notice.
    (c) Up to 15 days after we suspend the certificate for an engine 
family, you may ask for a hearing (see Sec.  1054.820). If we agree 
before a hearing occurs that we used erroneous information in deciding 
to suspend the certificate, we will reinstate the certificate.
    (d) Section 1054.335 specifies steps you must take to remedy the 
cause of the engine family's production-line failure. All the engines 
you have produced since the end of the last test period are presumed 
noncompliant and should be addressed in your proposed remedy. We may 
require you to apply the remedy to engines produced earlier if we 
determine that the cause of the failure is likely to have affected the 
earlier engines.
    (e) You may request to amend the application for certification to 
raise the FEL of the engine family before or after we suspend your 
certificate as described in Sec.  1054.225(f). We will approve your 
request if the failure is not caused by a defect and it is clear that 
you used good engineering judgment in establishing the original FEL.


Sec.  1054.330  May I sell engines from an engine family with a 
suspended certificate of conformity?

    You may sell engines that you produce after we suspend the engine 
family's certificate of conformity under Sec.  1054.315 only if one of 
the following occurs:
    (a) You test each engine you produce and show it complies with 
emission standards that apply.
    (b) We conditionally reinstate the certificate for the engine 
family. We may do so if you agree to recall all the affected engines 
and remedy any noncompliance at no expense to the owner if later 
testing shows that the engine family still does not comply.


Sec.  1054.335  How do I ask EPA to reinstate my suspended certificate?

    (a) Send us a written report asking us to reinstate your suspended 
certificate. In your report, identify the reason for noncompliance, 
propose a remedy for the engine family, and commit to a date for 
carrying it out. In your proposed remedy include any quality control 
measures you propose to keep the problem from happening again.
    (b) Give us data from production-line testing that shows the 
remedied engine family complies with all the emission standards that 
apply.


Sec.  1054.340  When may EPA revoke my certificate under this subpart 
and how may I sell these engines again?

    (a) We may revoke your certificate for an engine family in the 
following cases:
    (1) You do not meet the reporting requirements.
    (2) Your engine family fails to comply with the requirements of 
this subpart and your proposed remedy to address a suspended 
certificate under Sec.  1054.335 is inadequate to solve the problem or 
requires you to change the engine's design or emission control system.
    (b) To sell engines from an engine family with a revoked 
certificate of conformity, you must modify the engine family and then 
show it complies with the requirements of this part.
    (1) If we determine your proposed design change may not control 
emissions for the engine's full useful life, we will tell you within 
five working days after receiving your report. In this case we will 
decide whether production-line testing will be enough for us to 
evaluate the change or whether you need to do more testing.
    (2) Unless we require more testing, you may show compliance by 
testing production-line engines as described in this subpart.
    (3) We will issue a new or updated certificate of conformity when 
you have met these requirements.


Sec.  1054.345  What production-line testing records must I send to 
EPA?

    (a) Within 45 days of the end of each test period, send us a report 
with the following information:
    (1) Describe any facility used to test production-line engines and 
state its location.
    (2) State the total U.S.-directed production volume and number of 
tests for each engine family.
    (3) Describe how you randomly selected engines.
    (4) Describe each test engine, including the engine family's 
identification and the engine's model year, build date, model number, 
identification number, and number of hours of operation before testing.
    (5) Identify how you accumulated hours of operation on the engines 
and describe the procedure and schedule you used.
    (6) Provide the test number; the date, time and duration of 
testing; test procedure; all initial test results; final test results; 
and final deteriorated test results for all tests. Provide the emission 
results for all measured pollutants. Include information for both valid 
and invalid tests and the reason for any invalidation.
    (7) Describe completely and justify any nonroutine adjustment, 
modification, repair, preparation, maintenance, or test for the test 
engine if you did not report it separately under this subpart. Include 
the results of any emission measurements, regardless of the procedure 
or type of engine.
    (8) Provide the CumSum analysis required in Sec.  1054.315 and the 
sample-size calculation required in Sec.  1054.310 for each engine 
family.
    (9) Report on each failed engine as described in Sec.  1054.320.
    (10) State the date the test period ended for each engine family.
    (b) We may ask you to add information to your written report so we 
can determine whether your new engines conform with the requirements of 
this subpart. We may also ask you to send less information.
    (c) An authorized representative of your company must sign the 
following statement:

    We submit this report under sections 208 and 213 of the Clean 
Air Act. Our production-line testing conformed completely with the 
requirements of 40 CFR part 1054. We have not changed production 
processes or quality-control procedures for test engines in a way 
that might affect emission controls. All the information in this 
report is true and accurate to the best of my knowledge. I know of 
the penalties for violating the Clean Air Act and the regulations. 
(Authorized Company Representative)

    (d) Send electronic reports of production-line testing to the 
Designated Compliance Officer using an approved information format. If 
you want to use a different format, send us a written request with 
justification for a waiver.
    (e) We will send copies of your reports to anyone from the public 
who asks for them. Section 1054.815 describes how we treat information 
you consider confidential.


Sec.  1054.350  What records must I keep?

    (a) Organize and maintain your records as described in this 
section. We may review your records at any time.

[[Page 59279]]

    (b) Keep paper or electronic records of your production-line 
testing for eight years after you complete all the testing required for 
an engine family in a model year.
    (c) Keep a copy of the written reports described in Sec.  1054.345.
    (d) Keep the following additional records:
    (1) A description of all test equipment for each test cell that you 
can use to test production-line engines.
    (2) The names of supervisors involved in each test.
    (3) The name of anyone who authorizes adjusting, repairing, 
preparing, or modifying a test engine and the names of all supervisors 
who oversee this work.
    (4) If you shipped the engine for testing, the date you shipped it, 
the associated storage or port facility, and the date the engine 
arrived at the testing facility.
    (5) Any records related to your production-line tests that are not 
in the written report.
    (6) A brief description of any significant events during testing 
not otherwise described in the written report or in this section.
    (7) Any information specified in Sec.  1054.345 that you do not 
include in your written reports.
    (e) If we ask, you must give us a more detailed description of 
projected or actual production figures for an engine family. We may ask 
you to divide your production figures by maximum engine power, 
displacement, fuel type, or assembly plant (if you produce engines at 
more than one plant).
    (f) Keep records of the engine identification number for each 
engine you produce under each certificate of conformity. You may 
identify these numbers as a range. Give us these records within 30 days 
if we ask for them.
    (g) We may ask you to keep or send other information necessary to 
implement this subpart.

Subpart E--In-use Testing


Sec.  1054.401  General provisions.

    We may perform in-use testing of any engines or equipment subject 
to the standards of this part. We will consult with you as needed for 
information or special equipment related to testing your engines.

Subpart F--Test Procedures


Sec.  1054.501  How do I run a valid emission test?

    (a) Applicability. This subpart is addressed to you as a 
manufacturer but it applies equally to anyone who does testing for you, 
and to us when we perform testing to determine if your engines or 
equipment meet emission standards.
    (b) General requirements. Use the equipment and procedures for 
spark-ignition engines in 40 CFR part 1065 to determine whether engines 
meet the exhaust emission standards, as follows:
    (1) Measure the emissions of all regulated pollutants as specified 
in Sec.  1054.505 and 40 CFR part 1065. See Sec.  1054.650 for special 
provisions that apply for variable-speed engines (including engines 
shipped without governors).
    (2) Use the fuels and lubricants specified in 40 CFR part 1065, 
subpart H, for all the testing we require in this part. Except as 
specified in paragraph (d) of this section, use gasoline meeting the 
specifications described in 40 CFR 1065.710 for general testing. For 
service accumulation, use the test fuel or any commercially available 
fuel that is representative of the fuel that in-use engines will use. 
You may alternatively use gasoline blended with ethanol as follows:
    (i) For handheld engines, you may use the ethanol-blended fuel for 
certifying engines under this part without our advance approval. If you 
use the blended fuel for certifying a given engine family, you may also 
use it for production-line testing or any other testing you perform for 
that engine family under this part. If you use the blended fuel for 
certifying a given engine family, we may use the blended fuel or the 
specified gasoline test fuel with that engine family.
    (ii) For nonhandheld engines, you may use the blended fuel for 
certifying engines under this part without our advance approval. If you 
use the blended fuel for certifying a given engine family, you must 
also use it for production-line testing or any other testing you 
perform for that engine family under this part. If the certification of 
all your Class I (or Class II) engine families in a given model year is 
based on test data collected using the blended fuel, we will also use 
the blended fuel for testing your Class I (or Class II) engines. If the 
certification of some but not all of your Class I (or Class II) engine 
families in a given model year is based on test data collected using 
the blended fuel, we may use the blended fuel or the specified gasoline 
test fuel for testing any of your Class I (or Class II) engines.
    (iii) The blended fuel must consist of a mix of gasoline meeting 
the specifications described in 40 CFR 1065.710 for general testing and 
fuel-grade ethanol meeting the specifications described in 40 CFR 
1060.501(c) such that the blended fuel has 10.01.0 percent 
ethanol by volume. You may also use ethanol with a higher or lower 
purity if you show us that it will not affect your ability to 
demonstrate compliance with the applicable emission standards. You do 
not need to measure the ethanol concentration of such blended fuels and 
may instead calculate the blended composition by assuming that the 
ethanol is pure and mixes perfectly with the base fuel.
    (iv) You may ask to use the provisions of this paragraph (b)(2) for 
a blended test fuel containing less than 10 percent ethanol if your 
engine is subject to emission standards from other organizations that 
specify testing with that fuel. If we approve testing with such a fuel, 
we may test your engines with that test fuel, with gasoline, or with a 
10-percent ethanol blend.
    (3) Ambient conditions for duty-cycle testing must be within ranges 
specified in 40 CFR 1065.520, subject to the provisions of Sec.  
1054.115(c).
    (i) Corrections. Emissions may not be corrected for the effects of 
test temperature or pressure. You may correct emissions for humidity as 
specified in 40 CFR 1065.670.
    (ii) Intake air temperature. Measure engine intake air temperature 
as described in 40 CFR 1065.125, and control it if necessary, 
consistent with good engineering judgment. For example, since the 
purpose of this requirement is to ensure that the measured air 
temperature is consistent with the intake air temperature that would 
occur during in-use operation at the same ambient temperature, do not 
cool the intake air and do not measure air temperature at a point where 
engine heat affects the temperature measurement.
    (4) The provisions of 40 CFR 1065.405 describes how to prepare an 
engine for testing. However, you may consider emission levels stable 
without measurement after 12 hours of engine operation, except for the 
following special provisions that apply for engine families with a 
useful life of 300 hours or less:
    (i) We will not approve a stabilization period longer than 12 hours 
even if you show that emissions are not yet stabilized.
    (ii) Identify the number of hours you use to stabilize engines for 
low-hour emission measurements. You may consider emissions stable at 
any point less than 12 hours. For example, you may choose a point at 
which emission levels reach a low value before the effects of 
deterioration are established.

[[Page 59280]]

    (5) Prepare your engines for testing by installing a governor that 
you normally use on production engines, consistent with Sec. Sec.  
1054.235(b) and 1054.505.
    (6) During testing, supply the engine with fuel in a manner 
consistent with how it will be supplied with fuel in use. If you sell 
engines with complete fuel systems and your production engines will be 
equipped with a vapor line that routes running loss vapors into the 
engine's intake system, measure exhaust emissions using a complete fuel 
system representing a production configuration that sends fuel vapors 
to the test engine's intake system in a way that represents the 
expected in-use operation. You may alternatively demonstrate by 
engineering analysis that your engines will continue to meet emission 
standards for any amount of running loss vapor that can reasonably be 
expected during in-use operation.
    (7) Determine the carbon mass fraction of fuel, wc, using a 
calculation based on measured fuel properties as described in 40 CFR 
1065.655(d)(1). You may not use the default values specified in 40 CFR 
1065.655(d)(2).
    (c) Special and alternate procedures. You may use special or 
alternate procedures to the extent we allow them under 40 CFR 1065.10. 
The following additional provisions apply:
    (1) If you are unable to run the test cycle specified in this part 
for your engine, use an alternate test cycle that will result in a 
cycle-weighted emission measurement equivalent to the expected average 
in-use emissions. This cycle must be approved under 40 CFR 1065.10.
    (2) Describe in your application for certification any specially 
designed fixtures or other hardware if they are needed for proper 
testing of your engines. (Note: You do not need to specify the size or 
performance characteristics of engine dynamometers.) You must send us 
these fixtures or other hardware if we ask for them. We may waive the 
requirement of Sec.  1054.205(aa) to identify a test facility in the 
United States for such engine families as long as the projected U.S.-
directed production volume of all your engine families using the 
provisions of this paragraph (c)(2) is less than 5 percent of your 
total production volume from all engine families certified under this 
part 1054.
    (d) Wintertime engines. You may test wintertime engines at the 
ambient temperatures specified in 40 CFR 1065.520, even though this 
does not represent in-use operation for these engines (40 CFR 
1065.10(c)(1)). In this case, you may use good engineering judgment to 
modify the test engine as needed to achieve intake temperatures that 
are analogous to in-use conditions. You may also test wintertime 
engines at reduced ambient temperatures as specified in 40 CFR 
1051.505. Use the gasoline specified for low-temperature testing only 
if you test your engines at ambient temperatures below 20 [deg]C.


Sec.  1054.505  How do I test engines?

    (a) This section describes how to test engines under steady-state 
conditions. For handheld engines you must perform tests with discrete-
mode sampling. For nonhandheld engines we allow you to perform tests 
with either discrete-mode or ramped-modal testing methods. You must use 
the same modal testing method for certification and all other testing 
you perform for an engine family. If we test your engines to confirm 
that they meet emission standards, we will use the modal testing method 
you select for your own testing. If you submit certification test data 
collected with both discrete-mode and ramped-modal testing (either in 
your original application or in an amendment to your application), 
either method may be used for subsequent testing. We may also perform 
other testing as allowed by the Clean Air Act. Conduct duty-cycle 
testing as follows:
    (1) For discrete-mode testing, sample emissions separately for each 
mode, then calculate an average emission level for the whole cycle 
using the weighting factors specified for each mode. In each mode, 
operate the engine for at least 5 minutes, then sample emissions for at 
least 1 minute. Control engine speed as specified in this section. Use 
one of the following methods for confirming torque values for 
nonhandheld engines:
    (i) Calculate torque-related cycle statistics and compare with the 
established criteria as specified in 40 CFR 1065.514 to confirm that 
the test is valid.
    (ii) Evaluate each mode separately to validate the duty cycle. All 
torque feedback values recorded during non-idle sampling periods must 
be within 2 percent of the reference value or within 0.27 N[middot]m of the reference value, whichever is greater. 
Also, the mean torque value during non-idle sampling periods must be 
within 1 percent of the reference value or 0.12 
N[middot]m of the reference value, whichever is greater. Control torque 
during idle as specified in paragraph (c) of this section.
    (2) For ramped-modal testing, start sampling at the beginning of 
the first mode and continue sampling until the end of the last mode. 
Calculate emissions and cycle statistics the same as for transient 
testing as specified in 40 CFR part 1065. Unless we specify otherwise, 
you may simulate the governor for ramped-modal testing consistent with 
good engineering judgment.
    (b) Measure emissions by testing the engine on a dynamometer with 
the test procedures for constant-speed engines in 40 CFR part 1065 
while using one of the steady-state duty cycles identified in this 
paragraph (b) to determine whether it meets the exhaust emission 
standards specified in Sec.  1054.101(a). This requirement applies for 
all engines, including those not meeting the definition of ``constant-
speed engine'' in 40 CFR 1065.1001.
    (1) For handheld engines, use the two-mode duty cycle described in 
paragraph (a) of Appendix II of this part. Establish an engine's rated 
speed as follows:
    (i) For ungoverned handheld engines used in fixed-speed 
applications all having approximately the same nominal in-use operating 
speed, hold engine speed within 350 rpm of the nominal speed for 
testing. We may allow you to include in your engine family without 
additional testing a small number engines that will be installed such 
that they have a different nominal speed. If your engine family 
includes a majority of engines with approximately the same nominal in-
use operating speed and a substantial number of engines with different 
nominal speeds, you must test engines as specified in this paragraph 
(b)(1)(i) and paragraph (b)(1)(ii) of this section.
    (ii) For ungoverned handheld engines for which there is not a 
dominant value for nominal in-use operating speeds, hold engine speed 
within 350 rpm of the point at which the engine generates maximum 
power.
    (iii) For governed handheld engines, hold engine speed at maximum 
test speed, as defined in 40 CFR 1065.1001.
    (2) For nonhandheld engines, use the six-mode duty cycle or the 
corresponding ramped-modal cycle described in paragraph (b) of Appendix 
II of this part. Control engine speeds and torques during idle mode as 
specified in paragraph (c) of this section and during full-load 
operating modes as specified in paragraph (d) of this section. For all 
other modes, control torque as needed to meet the cycle-validation 
criteria in 40 CFR 1065.514; control the engine speed to within 5 
percent of the nominal speed specified in paragraph (d) of this section 
or let the installed governor (in the production configuration) control 
engine speed. The governor may be adjusted before emission sampling to 
target the nominal speed identified in paragraph (d) of this section, 
but the installed governor must control engine speed throughout the

[[Page 59281]]

emission-sampling period whether the governor is adjusted or not. Note 
that ramped-modal testing involves continuous sampling, so governor 
adjustments may not occur during such a test. Note also that our 
testing may involve running the engine with the governor in the 
standard configuration even if you adjust the governor as described in 
this paragraph (a)(2) for certification or production-line testing.
    (c) During idle mode for nonhandheld engines, operate the engine 
with the following parameters:
    (1) Allow the engine to operate at the idle speed determined by the 
installed governor. If any production engines from the engine family 
have a user-selectable idle speed, operate the engine with an installed 
governor that controls engine speed to the lowest available speed 
setting.
    (2) Keep engine torque under 5 percent of the nominal torque value 
for Mode 1.
    (3) You must conduct testing at the idle mode even if the allowable 
torque values overlap with those for another specified mode.
    (d) During full-load operation for nonhandheld engines, operate the 
engine with the following parameters:
    (1) In normal circumstances, select a test speed of either 3060 rpm 
or 3600 rpm that is most appropriate for the engine family. If all the 
engines in the engine family are used in intermediate-speed equipment, 
select a test speed of 3060 rpm. The test associated with intermediate-
speed operation is referred to as the A Cycle. If all the engines in 
the engine family are used in rated-speed equipment, select a test 
speed of 3600 rpm. The test associated with rated-speed operation is 
referred to as the B Cycle. If an engine family includes engines used 
in both intermediate-speed equipment and rated-speed equipment, select 
the test speed for emission-data engines that will result in worst-case 
emissions. In unusual circumstances, you may ask to use a test speed 
different than that specified in this paragraph (d)(1) if it better 
represents in-use operation.
    (2) Operate the engine ungoverned at wide-open throttle at the test 
speed established in paragraph (d)(1) of this section until the engine 
reaches thermal stability as described in 40 CFR 1065.530(a)(2)(ii). 
Record the torque value after stabilization. Use this value for the 
full-load torque setting and for denormalizing the rest of the duty 
cycle.
    (3) Control engine speed during emission sampling to stay within 5 
percent of the nominal speed identified in paragraph (d)(1) of this 
section.
    (4) The provisions of this paragraph (d) apply instead of the 
engine mapping procedures in 40 CFR 1065.510.
    (e) See 40 CFR part 1065 for detailed specifications of tolerances 
and calculations.


Sec.  1054.520  What testing must I perform to establish deterioration 
factors?

    Sections 1054.240 and 1054.245 describe the required methods for 
testing to establish deterioration factors for an emission family.

Subpart G--Special Compliance Provisions


Sec.  1054.601  What compliance provisions apply to these engines?

    (a) Engine and equipment manufacturers, as well as owners, 
operators, and rebuilders of engines subject to the requirements of 
this part, and all other persons, must observe the provisions of this 
part, the requirements and prohibitions in 40 CFR part 1068, and the 
provisions of the Clean Air Act.
    (b) Note that the provisions of 40 CFR 1068.103(f) prohibit engine 
manufacturers from deviating from normal production and inventory 
practices to stockpile engines with a date of manufacture before new or 
changed emission standards take effect. If your normal practice for 
producing engines subject to this part 1054 includes maintaining 
engines in inventory for some engine families for more than 12 months, 
you must get our prior approval to continue this practice for model 
years in which emission standards change. Include in your request 
information showing that this is necessary and it is consistent with 
your normal business practice. Unless we specify otherwise, include 
relevant inventory and production records from the preceding eight 
years. Note that 40 CFR 1068.103(f) applies to any engines inventoried 
beyond your normal practice and authorizes us to review your records to 
verify your normal practices, whether or not you maintain the engines 
in inventory for more than 12 months.


Sec.  1054.610  What is the exemption for delegated final assembly?

    The provisions of 40 CFR 1068.261 related to delegated final 
assembly do not apply for handheld engines certified under this part 
1054. The provisions of 40 CFR 1068.261 apply for nonhandheld engines, 
with the following exceptions and clarifications:
    (a) Through the 2014 model year, you may use the provisions of this 
section for engines you sell to a distributor, where you establish a 
contractual arrangement in which you designate the distributor to be 
your agent in all matters related to compliance with the requirements 
of this section. Identify each of the distributors you intend to 
designate as your agent under this paragraph (a) in your application 
for certification. You may continue to use the provisions of this 
paragraph (a) this for later model years for specific distributors if 
we approve it based on your clear and convincing demonstration that 
each distributor can be expected to comply fully with the requirements 
of this section and 40 CFR 1068.261. We may set additional conditions 
beyond the provisions specified in this section to ensure that all 
engines will be in a certified configuration when installed by the 
equipment manufacturer.
    (b) If you identify distributors as your agents under paragraph (a) 
of this section, you must perform or arrange for audits of all 
participating distributors and equipment manufacturers based on the 
following auditing rate instead of the provisions specified in 40 CFR 
1068.261(d)(3)(i) and (ii):
    (1) If you sell engines to 48 or more equipment manufacturers under 
the provisions of this section, you must annually perform or arrange 
for audits of twelve equipment manufacturers to whom you sell engines 
under this section. To select individual equipment manufacturers, 
divide all the affected equipment manufacturers into quartiles based on 
the number of engines they buy from you; select equal numbers of 
equipment manufacturers from each quartile each model year as much as 
possible. Vary the equipment manufacturers selected for auditing from 
year to year, though audits may be repeated in later model years if you 
find or suspect that a particular equipment manufacturer is not 
properly installing aftertreatment devices.
    (2) If you sell engines to fewer than 48 equipment manufacturers 
under the provisions of this section, set up a plan to perform or 
arrange for audits of each equipment manufacturer on average once every 
four model years.


Sec.  1054.612  What special provisions apply for equipment 
manufacturers modifying certified nonhandheld engines?

    The provisions of this section apply for all emission families 
through the 2014 model year; starting with the 2015 model year, these 
provisions are limited to small-volume emission families.
    (a) General provisions. If you buy certified nonhandheld engines 
for installation in equipment you produce, but you install the engines 
such that they use intake or exhaust systems that are not part of the 
originally certified

[[Page 59282]]

configuration, you become the engine manufacturer for those engines and 
must certify that they will meet emission standards. We will allow you 
to utilize the provisions for simplified certification specified in 
paragraph (b) of this section, as long as your design stays within the 
overall specifications from the original engine manufacturer (such as 
exhaust backpressure) and you use a catalyst as described in the 
original engine manufacturer's application for certification.
    (b) Simplified certification. You must perform testing with an 
emission-data engine to show that you meet exhaust emission standards; 
however, you may use the deterioration factor from the original engine 
manufacturer. The production-line testing requirements in subpart D of 
this part do not apply for engines certified under this section. You 
must meet all the other requirements that apply to engine manufacturers 
for engines subject to standards under this part. The engine family 
must have the same useful life value specified by the original engine 
manufacturer for that engine. In your application for certification 
describe any differences between the original engine manufacturer's 
design and yours and explain why the deterioration data generated by 
the original engine manufacturer is appropriate for your configuration.
    (c) Engine exemption. As an engine manufacturer, you may produce 
nonconforming engines for equipment manufacturers as allowed under this 
section. You do not have to request this exemption for your engines, 
but you must have written assurance from equipment manufacturers that 
they need a certain number of exempted engines under this section. Add 
a removable label to the engines as described in 40 CFR 1068.262.


Sec.  1054.615  What is the exemption for engines certified to 
standards for Large SI engines?

    (a) An engine is exempt from the requirements of this part if it is 
in an emission family that has a valid certificate of conformity 
showing that it meets emission standards and other requirements under 
40 CFR part 1048 for the appropriate model year.
    (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) If your engines do not have the certificate required in 
paragraph (a) of this section, they will be subject to the provisions 
of this part. Introducing these engines into U.S. commerce without a 
valid exemption or certificate of conformity violates the prohibitions 
in 40 CFR 1068.101(a).
    (d) Engines exempted under this section are subject to all the 
requirements affecting engines under 40 CFR part 1048, including 
evaporative emission standards. The requirements and restrictions of 40 
CFR part 1048 apply to anyone manufacturing these engines, anyone 
manufacturing equipment that uses these engines, and all other persons 
in the same manner as if these were nonroad spark-ignition engines 
above 19 kW.
    (e) Engines exempted under this section may not generate or use 
emission credits under this part 1054.


Sec.  1054.620  What are the provisions for exempting engines used 
solely for competition?

    The provisions of this section apply for new engines and equipment 
built on or after January 1, 2010.
    (a) We may grant you an exemption from the standards and 
requirements of this part for a new engine on the grounds that it is to 
be used solely for competition. The requirements of this part, other 
than those in this section, do not apply to engines that we exempt for 
use solely for competition.
    (b) We will exempt engines that we determine will be used solely 
for competition. The basis of our determination is described in 
paragraphs (c) and (d) of this section. Exemptions granted under this 
section are good for only one model year and you must request renewal 
for each subsequent model year. We will not approve your renewal 
request if we determine the engine will not be used solely for 
competition.
    (c) Engines meeting all the following criteria are considered to be 
used solely for competition:
    (1) Neither the engine nor any equipment containing the engine may 
be displayed for sale in any public dealership or otherwise offered for 
sale to the general public. Note that this does not preclude display of 
these engines as long as they are not available for sale to the general 
public.
    (2) Sale of the equipment in which the engine is installed must be 
limited to professional competition teams, professional competitors, or 
other qualified competitors. For replacement engines, the sale of the 
engine itself must be limited to professional racing teams, 
professional racers, other qualified racers, or to the original 
equipment manufacturer.
    (3) The engine and the equipment in which it is installed must have 
performance characteristics that are substantially superior to 
noncompetitive models.
    (4) The engines are intended for use only as specified in paragraph 
(e) of this section.
    (d) You may ask us to approve an exemption for engines not meeting 
the criteria listed in paragraph (c) of this section as long as you 
have clear and convincing evidence that the engines will be used solely 
for competition.
    (e) Engines are considered to be used solely for competition only 
if their use is limited to competition events sanctioned by a state or 
federal government agency or another widely recognized public 
organization with authorizing permits for participating competitors. 
Operation of such engines may include only racing events, trials to 
qualify for racing events, and practice associated with racing events. 
Authorized attempts to set speed records are also considered racing 
events. Engines will not be considered to be used solely for 
competition if they are ever used for any recreational or other 
noncompetitive purpose. Any use of exempt engines in recreational 
events is a violation of 40 CFR 1068.101(b)(4).
    (f) You must permanently label engines exempted under this section 
to clearly indicate that they are to be used only for competition. 
Failure to properly label an engine will void the exemption for that 
engine.
    (g) If we request it, you must provide us any information we need 
to determine whether the engines are used solely for competition. This 
would generally include documentation regarding the number of engines 
and the ultimate purchaser of each engine as well as any documentation 
showing an equipment manufacturer's request for an exempted engine. 
Keep these records for five years.


Sec.  1054.625  What requirements apply under the Transition Program 
for Equipment Manufacturers?

    The provisions of this section allow equipment manufacturers to 
produce equipment with Class II engines that are subject to less 
stringent exhaust emission standards after the Phase 3 emission 
standards begin to apply. To be eligible to use these provisions, you 
must follow all the instructions in this section. See Sec.  1054.626 
for requirements that apply specifically to companies that manufacture 
equipment outside the United States and to companies that import such 
equipment without manufacturing it. Engines and equipment you produce 
under this section are exempt from the prohibitions in 40 CFR 
1068.101(a)(1) with respect to exhaust emissions,

[[Page 59283]]

subject to the provisions of this section. Except as specified in 
paragraph (e) of this section, equipment exempted under this section 
must meet all applicable requirements related to evaporative emissions.
    (a) General. If you are an equipment manufacturer, you may 
introduce into U.S. commerce limited numbers of nonroad equipment with 
Class II engines exempted under this section. You may use the 
exemptions in this section only if you have primary responsibility for 
designing and manufacturing equipment and your manufacturing procedures 
include installing some engines in this equipment. Consider all U.S.-
directed equipment production in showing that you meet the requirements 
of this section, including those from any parent or subsidiary 
companies and those from any other companies you license to produce 
equipment for you. If you produce a type of equipment that has more 
than one engine, count each engine separately. These provisions are 
available during the first four model years that the Phase 3 exhaust 
emission standards apply.
    (b) Allowances. Calculate how many pieces of equipment with 
exempted engines you may produce under this section by determining your 
U.S.-directed production volume of equipment with Class II engines from 
January 1, 2007 through December 31, 2009, calculating your annual 
average production for this period, and multiplying the average value 
by 0.3. The same calculation applies for small-volume equipment 
manufacturers, except that average annual production is multiplied by 
2.0. For companies with no eligible production in a given year, 
calculate annual average production based only on those years in which 
you produce equipment during the specified period with Class II engines 
for sale in the United States. Use these allowances for equipment using 
model year 2011 and later Class II engines. You may use these 
allowances for equipment you produce before December 31, 2014.
    (c) Access to exempted engines. You may use one of the following 
approaches to get exempted engines under this section:
    (1) Request a certain number of exempted Class II engines from the 
engine manufacturer as described in paragraph (j)(1) of this section.
    (2) You may make arrangements with the engine manufacturer to 
receive an engine without an exhaust system and install exhaust systems 
without aftertreatment that would otherwise be required to meet Phase 3 
standards, as described in paragraph (j)(2) of this section. You must 
follow the engine manufacturer's instructions for installing 
noncatalyzed mufflers. You must keep records to show which engines you 
modify as described in this paragraph (c)(2) and make them available to 
the engine manufacturer for any auditing under the provisions of Sec.  
1054.610. If you do not place the label we specify in paragraph (f) of 
this section adjacent to the engine manufacturer's emission control 
information label, you must place an additional permanent label as 
close as possible to the engine's emission control information label 
where it will be readily visible in the final installation with at 
least the following items:
    (i) Your corporate name and trademark.
    (ii) The following statement: ``THIS ENGINE MEETS PHASE 2 STANDARDS 
UNDER Sec.  1054.625(c)(2).''
    (d) Inclusion of engines not subject to Phase 3 standards. The 
following provisions apply to engines that are not subject to Phase 3 
standards:
    (1) If you use the provisions of 40 CFR 1068.105(a) to use up your 
inventories of engines not certified to new emission standards, do not 
include these units in your count of equipment with exempted engines 
under paragraph (g)(2) of this section.
    (2) If you install engines that are exempted from the Phase 3 
standards for any reason, other than for equipment-manufacturer 
allowances under this section, do not include these units in your count 
of equipment with exempted engines under paragraph (g)(2) of this 
section. For example, if we grant a hardship exemption for the engine 
manufacturer, you may count these as compliant engines under this 
section. This paragraph (d)(2) applies only if the engine has a 
permanent label describing why it is exempted from the Phase 3 
standards.
    (e) Standards. If you produce equipment with exempted engines under 
this section, the engines must meet the Phase 2 emission standards 
specified in 40 CFR part 90. Any equipment using exempted engines under 
this section is also exempt from the running loss standard specified in 
Sec.  1054.112.
    (f) Equipment labeling. You must add a permanent label, written 
legibly in English, to the engine or another readily visible part of 
each piece of equipment with exempted engines you produce under this 
section. This label, which supplements the engine manufacturer's 
emission control information label, must include at least the following 
items:
    (1) The label heading ``EMISSION CONTROL INFORMATION''.
    (2) Your corporate name and trademark.
    (3) The calendar year in which the equipment is manufactured.
    (4) An e-mail address and phone number to contact for further 
information, or a Web site that includes this contact information.
    (5) The following statement: THIS EQUIPMENT [or identify the type 
of equipment] HAS AN ENGINE THAT MEETS U.S. EPA EMISSION STANDARDS 
UNDER 40 CFR 1054.625.
    (g) Notification and reporting. You must notify us of your intent 
to produce equipment under the provisions of this section and send us 
an annual report to verify that you are not exceeding the production 
limits for equipment with exempted engines, as follows:
    (1) Send the Designated Compliance Officer a written notice of your 
intent before you use the provisions of this section including all the 
following:
    (i) Your company's name and address, and your parent company's name 
and address, if applicable. Also identify the names of any other 
companies operating under the same parent company.
    (ii) The name, phone number and e-mail address of a person to 
contact for more information.
    (iii) The calendar years in which you expect to use the exemption 
provisions of this section.
    (iv) The name and address of each company you expect to produce 
engines for the equipment you manufacture under this section.
    (v) How many pieces of equipment with exempted engines you may sell 
under this section, as described in paragraph (b) of this section. 
Include your production figures for the period from January 1, 2007 
through December 31, 2009, including figures broken down by equipment 
model and calendar year. You may send corrected figures with lower 
production volumes anytime after your initial notification. To make a 
correction for higher production volumes, send us the corrected figures 
by September 30, 2010. We may ask you to give us additional information 
to confirm your production figures.
    (2) For each year that you use the provisions of this section, send 
the Designated Compliance Officer a written report by March 31 of the 
following year. Identify the following things in your report:
    (i) The total count of equipment with exempted engines you sold in 
the preceding year, based on actual U.S.-directed production 
information. If you produce equipment in the 2010 calendar year with 
exempted engines from the

[[Page 59284]]

2011 model year, include these units in your March 31, 2012 report.
    (ii) Cumulative figures describing how many pieces of equipment 
with exempted engines you have produced for all the years you used the 
provisions of this section.
    (iii) The manufacturer of the engine installed in the equipment you 
produce under this section, if this is different than you specified 
under paragraph (g)(1)(iv) of this section.
    (3) If you send your initial notification under paragraph (g)(1) of 
this section after the specified deadline, we may approve your use of 
allowances under this section. In your request, describe why you were 
unable to meet the deadline.
    (h) Recordkeeping. Keep the following records of all equipment with 
exempted engines you produce under this section until at least December 
31, 2019:
    (1) The model number for each piece of equipment.
    (2) Detailed figures for determining how many pieces of equipment 
with exempted engines you may produce under this section, as described 
in paragraph (b) of this section.
    (3) The notifications and reports we require under paragraph (g) of 
this section.
    (i) Enforcement. Producing more exempted engines or equipment than 
we allow under this section or installing engines that do not meet the 
emission standards of paragraph (e) of this section violates the 
prohibitions in 40 CFR 1068.101(a)(1). You must give us the records we 
require under this section if we ask for them (see 40 CFR 
1068.101(a)(2)).
    (j) Provisions for engine manufacturers. As an engine manufacturer, 
use one of the following approaches to produce exempted engines under 
this section:
    (1) The provisions of this paragraph (j)(1) apply if you do not use 
the delegated-assembly provisions of Sec.  1054.610 for any of the 
engines in an engine family. You must have written assurance from 
equipment manufacturers or your authorized distributors that they need 
a certain number of exempted engines under this section. Keep these 
records for at least five years after you stop producing engines under 
this section. You must also send us an annual report of the engines you 
produce under this section, as described under Sec.  1054.250(a). The 
engines must meet the emission standards in paragraph (e) of this 
section and you must meet all the requirements of 40 CFR 1068.265. You 
must meet the labeling requirements in 40 CFR 90.114, but add the 
following statement instead of the compliance statement in 40 CFR 
90.114(b)(7): THIS ENGINE MEETS U.S. EPA EMISSION STANDARDS UNDER 40 
CFR 1054.625 AND MUST BE USED ONLY UNDER THOSE FLEXIBILITY PROVISIONS.
    (2) The following provisions apply if you notify us that you plan 
to use the delegated-assembly provisions of Sec.  1054.610 for one or 
more equipment manufacturers for an engine family:
    (i) Include test data in your application for certification showing 
that your engines will meet the standards specified in paragraph (e) of 
this section if they have a noncatalyzed muffler in place of the 
aftertreatment that is part of the certified configuration. Use good 
engineering judgment for these measurements, which may involve sampling 
exhaust upstream of the catalyst or operating the engine with a 
noncatalyzed muffler. This may be based on emission measurements from 
previous model years if the data is still appropriate for the current 
engine configuration.
    (ii) Produce all your engines with the emission control information 
label we specify in Sec.  1054.135. The engines must also be labeled as 
specified in 40 CFR 1068.261.
    (iii) Include in the installation instructions required under Sec.  
1054.610 any appropriate instructions or limitations on installing 
noncatalyzed mufflers to ensure that the fully assembled engine will 
meet the emission standards specified in paragraph (e) of this section. 
You may identify an appropriate range of backpressures, but this may 
not involve any instructions related to changing the fuel system for 
different fueling rates.
    (iv) Use one of the following approaches to properly account for 
emission credits if your engine family generates exhaust emission 
credits under subpart H of this part:
    (A) Multiply the credits calculated under Sec.  1054.705 by 0.9. 
This is based on the expectation that equipment manufacturers will 
modify 10 percent of the engines to no longer meet Phase 3 standards.
    (B) Include in your emission-credit calculations only those engines 
for which you can establish that the equipment manufacturer did not use 
the provisions of this section. This would involve an evaluation for 
each affected equipment manufacturer. For example, under this provision 
you may count emission credits for engines that you sell to equipment 
manufacturers with which you have no contract for delegated assembly. 
You may also count emission credits for engines that you sell to 
equipment manufacturers with which you have a delegated-assembly 
relationship if you confirm that the equipment manufacturer did not use 
the provisions of this section for those engines.
    (k) Additional exemptions for mid-sized companies. If your annual 
production of equipment with Class II engines in 2007, 2008, and 2009 
is between 5,000 and 50,000 units, you may request additional engine 
allowances under this section. To do this, notify us by January 31, 
2010 if you believe the provisions of this section will not allow you 
to sell certain equipment models starting in the 2011 model year. In 
your notification, show us that you will be able to produce a number of 
Class II equipment models representing at least half your total U.S.-
directed production volume in the 2011 model year that will be 
compliant with all Phase 3 exhaust and evaporative emission standards. 
Also describe why you need more allowances under this section to 
accommodate anticipated changes in engine designs resulting from engine 
manufacturers' compliance with changing exhaust emission standards. 
Include a proposal for the number of additional allowances you would 
need, with supporting rationale. We may approve allowances up to a 
total of 100 percent of the average annual U.S.-directed production 
volume you report under paragraph (b) of this section (in place of the 
30 percent that is otherwise allowed).


Sec.  1054.626  What special provisions apply to equipment imported 
under the Transition Program for Equipment Manufacturers?

    This section describes requirements that apply to equipment 
manufacturers using the provisions of Sec.  1054.625 for equipment 
produced outside the United States. Note that Sec.  1054.625 limits 
these provisions to equipment manufacturers that install some engines 
and have primary responsibility for designing and manufacturing 
equipment. Companies that import equipment into the United States 
without meeting these criteria are not eligible for allowances under 
Sec.  1054.625. Such importers may import equipment with exempted 
engines only as described in paragraph (b) of this section.
    (a) You or someone else may import your equipment with exempted 
engines under this section if you comply with the provisions in Sec.  
1054.625 and commit to the following:
    (1) Give any EPA inspector or auditor complete and immediate access 
to inspect and audit, as follows:
    (i) Inspections and audits may be announced or unannounced.

[[Page 59285]]

    (ii) Inspections and audits may be performed by EPA employees or 
EPA contractors.
    (iii) You must provide access to any location where--
    (A) Any nonroad engine, equipment, or vehicle is produced or 
stored.
    (B) Documents related to manufacturer operations are kept.
    (C) Equipment, engines, or vehicles are tested or stored for 
testing.
    (iv) You must provide any documents requested by an EPA inspector 
or auditor that are related to matters covered by the inspections or 
audit.
    (v) EPA inspections and audits may include review and copying of 
any documents related to demonstrating compliance with the exemptions 
in Sec.  1054.625.
    (vi) EPA inspections and audits may include inspection and 
evaluation of complete or incomplete equipment, engines, or vehicles, 
and interviewing employees.
    (vii) You must make any of your employees available for interview 
by the EPA inspector or auditor, on request, within a reasonable time 
period.
    (viii) You must provide English language translations of any 
documents to an EPA inspector or auditor, on request, within 10 working 
days.
    (ix) You must provide English-language interpreters to accompany 
EPA inspectors and auditors, on request.
    (2) Name an agent for service located in the United States. Service 
on this agent constitutes service on you or any of your officers or 
employees for any action by EPA or otherwise by the United States 
related to the requirements of this part.
    (3) The forum for any civil or criminal enforcement action related 
to the provisions of this section for violations of the Clean Air Act 
or regulations promulgated thereunder shall be governed by the Clean 
Air Act.
    (4) The substantive and procedural laws of the United States shall 
apply to any civil or criminal enforcement action against you or any of 
your officers or employees related to the provisions of this section.
    (5) Provide the notification required by Sec.  1054.625(g). Include 
in the notice of intent in Sec.  1054.625(g)(1) a commitment to comply 
with the requirements and obligations of Sec.  1054.625 and this 
section. This commitment must be signed by the owner or president.
    (6) You, your agents, officers, and employees must not seek to 
detain or to impose civil or criminal remedies against EPA inspectors 
or auditors, whether EPA employees or EPA contractors, for actions 
performed within the scope of EPA employment related to the provisions 
of this section.
    (7) By submitting notification of your intent to use the provisions 
of Sec.  1054.625, producing and exporting for resale to the United 
States nonroad equipment under this section, or taking other actions to 
comply with the requirements of this part, you, your agents, officers, 
and employees, without exception, become subject to the full operation 
of the administrative and judicial enforcement powers and provisions of 
the United States as described in 28 U.S.C. 1605(a)(2), without 
limitation based on sovereign immunity, for conduct that violates the 
requirements applicable to you under this part 1054--including such 
conduct that violates 18 U.S.C. 1001, 42 U.S.C. 7413(c)(2), or other 
applicable provisions of the Clean Air Act--with respect to actions 
instituted against you and your agents, officers, and employees in any 
court or other tribunal in the United States.
    (8) Any report or other document you submit to us must be in the 
English language or include a complete translation in English.
    (9) You may be required to post a bond to cover any potential 
enforcement actions under the Clean Air Act before you or anyone else 
imports your equipment with exempted engines under this section, as 
specified in Sec.  1054.690. Use the bond amount specified in Sec.  
1054.690 without adjusting for inflation. Note that you may post a 
single bond to meet the requirements of this section and Sec.  1054.690 
together.
    (b) The provisions of this paragraph (b) apply to importers that do 
not install engines into equipment and do not have primary 
responsibility for designing and manufacturing equipment. Such 
importers may import equipment with engines exempted under Sec.  
1054.625 only if each engine is exempted under an allowance provided to 
an equipment manufacturer meeting the requirements of Sec.  1054.625 
and this section. You must notify us of your intent to use the 
provisions of this section and send us an annual report, as follows:
    (1) Notify the Designated Compliance Officer in writing before you 
use the provisions of Sec.  1054.625. Include the following 
information:
    (i) Your company's name and address, and your parent company's name 
and address, if applicable.
    (ii) The name and address of the companies that produce the 
equipment and engines you will be importing under this section.
    (iii) Your best estimate of the number of units you will import 
under this section in the upcoming calendar year, broken down by 
equipment manufacturer.
    (2) For each year that you use the provisions of this section, send 
the Designated Compliance Officer a written report by March 31 of the 
following year. Include in your report the total number of engines you 
imported under this section in the preceding calendar year, broken down 
by engine manufacturer and by equipment manufacturer.


Sec.  1054.630  What provisions apply for importation of individual 
items for personal use?

    (a) Any individual may import previously used nonconforming engines 
for purposes other than resale, but no more than once in any five-year 
period. This may include up to three nonconforming engines imported at 
the same time. To import engines under this section, provide to the 
Customs official the following information:
    (1) Identify your name, address, and telephone number.
    (2) If you are importing engines under this section on behalf of 
another person, identify the ultimate engine owner's name, address, and 
telephone number.
    (3) Identify the total number of engines you are importing and 
specify the make, model, identification number, and original production 
year of each engine.
    (4) State: ``I am importing these previously used engines for 
personal use. I have not imported any engines under the provisions of 
40 CFR 1054.630 within the previous five years. I am not importing 
these engines for purpose of resale. I authorize EPA enforcement 
officers to inspect my engines and my facilities as permitted by the 
Clean Air Act.''
    (b) We may require you to send us additional information but you do 
not need written approval from us to import engines under this section. 
We will also not require a U.S. Customs Service bond for engines you 
import under this section.
    (c) The provisions of this section may not be used to circumvent 
emission standards that apply to new engines under this part. For 
example, you may not purchase new engines and use them in a trivial 
manner outside of the United States to qualify for importation under 
this section.
    (d) If you violate the provisions of this section, or submit false 
information to obtain this exemption, you will be subject to civil 
penalties as specified in 40 CFR 1068.101(a)(2) and (b)(5).

[[Page 59286]]

Sec.  1054.635  What special provisions apply for small-volume engine 
and equipment manufacturers?

    This section describes how we apply the special provisions in this 
part for small-volume engine and equipment manufacturers.
    (a) If you qualify under paragraph (1) or (2) of the definition of 
small-volume engine manufacturer or under paragraph (1) or (2) of the 
definition of small-volume equipment manufacturer in Sec.  1054.801, 
the small-volume provisions apply as specified in this part.
    (b) If you are a small business (as defined by the Small Business 
Administration at 13 CFR 121.201) that manufactures nonroad spark-
ignition engines or equipment, but you do not qualify under paragraph 
(1) or (2) of the definition of small-volume engine manufacturer or 
under paragraph (1) or (2) of the definition of small-volume equipment 
manufacturer in Sec.  1054.801, you may ask us to designate you to be a 
small-volume engine or equipment manufacturer. You may do this whether 
you began manufacturing engines before, during, or after 2007. We may 
set other reasonable conditions that are consistent with the intent of 
this section and the Clean Air Act.
    (c) Special provisions apply for small-volume engine and equipment 
manufacturers, as illustrated by the following examples:
    (1) Additional lead time and other provisions related to the 
transition to new emission standards. See Sec.  1054.145.
    (2) More flexible arrangements for creating engine families. See 
Sec.  1054.230.
    (3) Assigned deterioration factors. See Sec.  1054.240.
    (4) Waived requirements for production-line testing. See Sec.  
1054.301.
    (5) Streamlined certification provisions for equipment 
manufacturers relying on engine manufacturer's design parameters. See 
Sec.  1054.612.
    (6) Additional allowances under the Transition Program for 
Equipment Manufacturers. See Sec.  1054.625.
    (7) Additional special provisions apply for small-volume engine and 
equipment manufacturers under 40 CFR part 1068. For example, see 40 CFR 
1068.250.
    (d) Small-volume engine and equipment manufacturers may ask us to 
waive or modify the requirements of Sec.  1054.690 if this would cause 
a serious economic hardship, as long as you demonstrate to us in some 
other way that you will meet any potential compliance-or enforcement-
related obligations. In evaluating such a request, we would consider 
the extent to which there is a risk of noncompliance or nonconformity 
and the extent to which the manufacturer could be expected to fulfill 
future regulatory obligations and administrative judgments. We may also 
consider how many years the manufacturer has certified engines without 
a violation or a finding of noncompliance to determine whether to 
adjust applicable asset thresholds or to reduce the minimum bond value. 
We may set other reasonable conditions to ensure that the manufacturer 
will meet applicable requirements.
    (e) If you use any of the provisions of this part that apply 
specifically to small-volume manufacturers and we find that you exceed 
the production limits or otherwise do not qualify as a small-volume 
manufacturer, we may consider you to be in violation of the 
requirements that apply for companies that are not small-volume 
manufacturers for those engines produced in excess of the specified 
production limits. If you no longer qualify as a small-volume engine 
manufacturer (based on increased production volumes or other factors), 
we will work with you to determine a reasonable schedule for complying 
with additional requirements that apply. For example, if you no longer 
qualify as a small-volume engine manufacturer shortly before you 
certify your engines for the next model year, we might allow you to use 
assigned deterioration factors for one more model year.


Sec.  1054.640  What special provisions apply to branded engines?

    The following provisions apply if you identify the name and 
trademark of another company instead of your own on your emission 
control information label, as provided by Sec.  1054.135(c)(2):
    (a) You must have a contractual agreement with the other company 
that obligates that company to take the following steps:
    (1) Meet the emission warranty requirements that apply under Sec.  
1054.120. This may involve a separate agreement involving reimbursement 
of warranty-related expenses.
    (2) Report all warranty-related information to the certificate 
holder.
    (b) In your application for certification, identify the company 
whose trademark you will use.
    (c) You remain responsible for meeting all the requirements of this 
chapter, including warranty and defect-reporting provisions.


Sec.  1054.645  What special provisions apply for converting an engine 
to use an alternate fuel?

    A certificate of conformity is no longer valid for an engine if the 
engine is modified such that it is not in a configuration covered by 
the certificate. This section applies if such modifications are done to 
convert the engine to run on a different fuel type. Such engines may 
need to be recertified as specified in this section if the certificate 
is no longer valid for that engine.
    (a) Converting a certified new engine to run on a different fuel 
type violates 40 CFR 1068.101(a)(1) if the modified engine is not 
covered by a certificate of conformity.
    (b) Converting a certified engine that is not new to run on a 
different fuel type violates 40 CFR 1068.101(b)(1) if the modified 
engine is not covered by a certificate of conformity. We may specify 
alternate certification provisions consistent with the requirements of 
this part. For example, you may certify the modified engine for a 
partial useful life. For example, if the engine is modified halfway 
through its original useful life period, you may generally certify the 
engine based on completing the original useful life period; or if the 
engine is modified after the original useful life period is past, you 
may generally certify the engine based on testing that does not involve 
further durability demonstration.
    (c) Engines may be certified using the certification procedures for 
new engines as specified in this part or using the certification 
procedures for aftermarket parts as specified in 40 CFR part 85, 
subpart V. Unless the original engine manufacturer continues to be 
responsible for the engine as specified in paragraph (d) of this 
section, you must remove the original engine manufacturer's emission 
control information label if you recertify the engine.
    (d) The original engine manufacturer is not responsible for 
operation of modified engines in configurations resulting from 
modifications performed by others. In cases where the modification 
allows an engine to be operated in either its original configuration or 
a modified configuration, the original engine manufacturer remains 
responsible for operation of the modified engine in its original 
configuration.
    (e) Entities producing conversion kits may obtain certificates of 
conformity for the converted engines. Such entities are engine 
manufacturers for purposes of this part.


Sec.  1054.650  What special provisions apply for adding or changing 
governors?

    The special provisions in this section apply for engines that will 
not be governed to control engine speeds

[[Page 59287]]

consistent with the constant-speed operation reflected by the duty 
cycles specified in Sec.  1054.505. We refer to these as constant-speed 
governors in this section. Paragraph (a) of this section also applies 
for any engines shipped without installed governors.
    (a) The representative-testing requirements of 40 CFR 1065.10(c)(1) 
related to in-use duty cycles do not apply to engines you produce and 
ship without constant-speed governors if you comply with all the 
following requirements:
    (1) You must have test data showing that the effectiveness of the 
engine's emission controls over the expected range of in-use operation 
will be similar to that measured over the specified duty cycle. 
Alternatively, if your emission controls depend on maintaining a 
consistent air-fuel ratio, you may demonstrate that the engine is 
calibrated to maintain a consistent air-fuel ratio over the expected 
range of in-use operation.
    (2) Describe in your application for certification the data and 
analysis that supports your conclusion.
    (b) It is a violation of the tampering provisions in 40 CFR 
1068.101(b)(1) to remove a governor from a certified engine unless you 
recertify the engine in the modified configuration.


Sec.  1054.655  What special provisions apply for installing and 
removing altitude kits?

    An action for the purpose of installing or modifying altitude kits 
and performing other changes to compensate for changing altitude is not 
considered a prohibited act under 40 CFR 1068.101(b) as long as as it 
is done consistent with the manufacturer's instructions.


Sec.  1054.660  What are the provisions for exempting emergency rescue 
equipment?

    The provisions of this section apply for new equipment built on or 
after January 1, 2010.
    (a) Equipment manufacturers may introduce into U.S. commerce 
equipment that is not certified to current emission standards under the 
following conditions if the equipment will be used solely in emergency 
rescue situations:
    (1) You must determine annually that no engines certified to 
current emission standards are available to power the equipment safely 
and practically. We may review your records supporting this 
determination at any time.
    (2) You may not use exempted engines for the following equipment 
used to provide remote power to a rescue tool: generators, alternators, 
compressors, or pumps.
    (3) If engines that meet less stringent emission standards are 
capable of powering your equipment safely and practically, you must use 
them as a condition of this exemption. You must use available engines 
meeting the most stringent standards feasible.
    (4) You must send the engine manufacturer a written request for 
each exempted equipment model.
    (5) You must notify the Designated Compliance Officer of your 
intent to use the provisions of this section. We may require you to 
notify us annually or to send us annual reports describing how you meet 
the conditions of this section.
    (b) For the purposes of this section, ``emergency rescue 
situations'' means firefighting or other situations in which a person 
is retrieved from imminent danger.
    (c) As an engine manufacturer, you may produce exempt engines under 
this section without our prior approval if you have a written request 
for an exempted engine for use in emergency rescue equipment from the 
equipment manufacturer. You must permanently label engines with the 
following statement: ``EMERGENCY RESCUE EQUIPMENT--EXEMPT FROM EMISSION 
STANDARDS UNDER 40 CFR 1054.660.'' Failure to properly label an engine 
will void the exemption.
    (d) We may discontinue an exemption under this section if we find 
that engines are not used solely for emergency rescue equipment or if 
we find that a certified engine is available to power the equipment 
safely and practically.


Sec.  1054.690  What bond requirements apply for certified engines?

    (a) Before introducing certified engines into U.S. commerce, you 
must post a bond to cover any potential compliance or enforcement 
actions under the Clean Air Act unless you demonstrate to us in your 
application for certification that you are able to meet any potential 
compliance-or enforcement-related obligations, as described in this 
section. See paragraph (i) of this section for the requirements related 
to importing engines that have been certified by someone else. Note 
that you might also post bond under this section to meet your 
obligations under Sec.  1054.120.
    (b) The bonding requirements apply if you do not have long-term 
assets in the United States meeting any of the following thresholds:
    (1) A threshold of $3 million applies if you have been a 
certificate holder in each of the preceding ten years without failing a 
test conducted by EPA officials or having been found by EPA to be 
noncompliant under applicable regulations.
    (2) A threshold of $6 million applies if you are a secondary engine 
manufacturer.
    (3) A threshold of $10 million applies if you do not qualify for 
the smaller bond thresholds in paragraph (b)(1) or (2) of this section.
    (c) For the purpose of establishing your level of long-term assets 
under paragraph (b) of this section, include the values from your most 
recent balance sheet for buildings, land, and fixed equipment, but 
subtract depreciation and related long-term liabilities (such as a 
mortgage). If you have sufficient long-term assets to avoid bond 
payments under this section, you must identify the location of these 
assets in your application for certification.
    (d) The minimum value of the bond is $500,000. A higher bond value 
may apply based on the per-engine bond values shown in Table 1 to this 
section and on the U.S.-directed production volume from each 
displacement grouping for the calendar year. For example, if you have 
projected U.S.-directed production volumes of 10,000 engines with 180 
cc displacement and 10,000 engines with 400 cc displacement in 2013, 
the appropriate bond amount is $750,000. Adjust the value of the bond 
as follows:
    (1) If your estimated or actual U.S.-directed production volume in 
any later calendar year increases beyond the level appropriate for your 
current bond payment, you must post additional bond to reflect the 
increased volume within 90 days after you change your estimate or 
determine the actual production volume. You may not decrease your bond.
    (2) If you sell engines without aftertreatment components under the 
provisions of Sec.  1054.610, you must increase the per-engine bond 
values for the current year by 20 percent. Round calculated values to 
the nearest dollar.

           Table 1 to Sec.   1054.690--Per-Engine Bond Values
------------------------------------------------------------------------
                                                             The per-
 For engines with displacement falling in the following     engine bond
                      ranges . . .                        value is . . .
------------------------------------------------------------------------
Disp. < 225 cc..........................................             $25
225 <= Disp. < 740 cc...................................              50
740 <= Disp. <= 1,000 cc................................             100
Disp. > 1,000 cc........................................             200
------------------------------------------------------------------------

    (e) The threshold identified in paragraph (b) of this section and 
the bond values identified in paragraph (d) of this section are in 2008 
dollars. Adjust these values in 2010 and later calendar years by 
comparing the

[[Page 59288]]

Consumer Price Index values published by the Bureau of Labor Statistics 
for the preceding June and June 2008 (see ftp://ftp.bls.gov/pub/special.requests/cpi/cpiai.txt). Round calculated values for the 
thresholds and for total bond obligations to the nearest thousand 
dollars.
    (f) You may meet the bond requirements of this section by obtaining 
a bond from a third-party surety that is cited in the U.S. Department 
of Treasury Circular 570, ``Companies Holding Certificates of Authority 
as Acceptable Sureties on Federal Bonds and as Acceptable Reinsuring 
Companies'' (http://www.fms.treas.gov/c570/c570.html#certified). You 
must maintain this bond for every year in which you sell certified 
engines and for five years after you no longer hold a certificate of 
conformity.
    (g) If you forfeit some or all of your bond in an enforcement 
action, you must post any appropriate bond for continuing sale within 
90 days after you forfeit the bond amount.
    (h) You will forfeit the proceeds of the bond posted under this 
section if you need to satisfy any United States administrative 
settlement agreement, administrative final order, or judicial judgment 
against you arising from your violation of this chapter, or violation 
of 18 U.S.C. 1001, 42 U.S.C. 7413(c)(2), or other applicable provisions 
of the Clean Air Act.
    (i) If you are required to post a bond under this section, you must 
note that in your application for certification as described in Sec.  
1054.205. Your certification is conditioned on your compliance with 
this section. Your certificate is automatically suspended if you fail 
to comply with the requirements of this section. We may also revoke 
your certificate.
    (j) The following provisions apply if you import engines for resale 
when those engines have been certified by someone else (or equipment 
containing such engines):
    (1) You and the certificate holder are each responsible for 
compliance with the requirements of this part and the Clean Air Act. 
For example, we may require you to comply with the warranty 
requirements in the standard-setting part.
    (2) You do not need to post bond if the certificate holder complies 
with the bond requirements of this section. You also do not need to 
post bond if the certificate holder complies with the asset 
requirements of this section and the repair-network provisions of Sec.  
1054.120(f)(4).

Subpart H--Averaging, Banking, and Trading for Certification


Sec.  1054.701  General provisions.

    (a) You may average, bank, and trade (ABT) emission credits for 
purposes of certification as described in this subpart to show 
compliance with the standards of this part. This applies for engines 
with respect to exhaust emissions and for equipment with respect to 
evaporative emissions. Participation in this program is voluntary.
    (b) The definitions of subpart I of this part apply to this 
subpart. The following definitions also apply:
    (1) Actual emission credits means emission credits you have 
generated that we have verified by reviewing your final report.
    (2) Averaging set means a set of engines (or equipment) in which 
emission credits may be exchanged only with other engines (or 
equipment) in the same averaging set.
    (3) Broker means any entity that facilitates a trade of emission 
credits between a buyer and seller.
    (4) Buyer means the entity that receives emission credits as a 
result of a trade.
    (5) Family means engine family for exhaust credits or emission 
family for evaporative credits.
    (6) Reserved emission credits means emission credits you have 
generated that we have not yet verified by reviewing your final report.
    (7) Seller means the entity that provides emission credits during a 
trade.
    (8) Standard means the emission standard that applies under subpart 
B of this part for engines or fuel-system components not participating 
in the ABT program of this subpart.
    (9) Trade means to exchange emission credits, either as a buyer or 
seller.
    (c) The use of emission credits is limited to averaging sets, as 
follows:
    (1) You may not average or exchange exhaust credits with 
evaporative credits, or vice versa.
    (2) Handheld engines and nonhandheld engines are in separate 
averaging sets with respect to exhaust emissions except as specified in 
Sec.  1054.740(e). You may use emission credits generated under 40 CFR 
part 90 for handheld engines subject to the standards in Sec.  1054.103 
only if you can demonstrate that those credits were generated by 
handheld engines, except as specified in Sec.  1054.740(e). You may use 
emission credits generated under 40 CFR part 90 for nonhandheld engines 
only if you can demonstrate that those credits were generated by 
nonhandheld engines, subject to the provisions of Sec.  1054.740.
    (3) Equipment using handheld engines and equipment using 
nonhandheld engines are in separate averaging sets with respect to 
evaporative emissions. You may not average or exchange evaporative 
credits between either of these averaging sets.
    (4) For purposes of calculating emission credits under this 
subpart, engines with displacement at or below 80 cc are presumed to be 
handheld engines. You may treat these as nonhandheld engines for 
calculating exhaust or evaporative emission credits only for those 
engines you can demonstrate will be installed in nonhandheld equipment. 
For example, if 50 percent of engines in a family will be used in 
nonhandheld equipment, you may calculate the emission credits for 50 
percent of the engines to be nonhandheld credits. Use the specified 
calculation methods for handheld engines to quantify positive or 
negative exhaust emission credits for all engines at or below 80 cc.
    (d) You may not generate evaporative credits based on permeation 
measurements from metal fuel tanks.
    (e) You may not use emission credits generated under this subpart 
to offset any emissions that exceed an FEL or standard. This applies 
for all testing, including certification testing, in-use testing, 
selective enforcement audits, and other production-line testing. 
However, if exhaust emissions from an engine exceed an exhaust FEL or 
standard (for example, during a selective enforcement audit), you may 
use emission credits to recertify the family with a higher FEL that 
applies only to future production.
    (f) Emission credits may be used in the model year they are 
generated (averaging) and in future model years (banking). Emission 
credits may not be used for past model years.
    (g) You may increase or decrease an exhaust FEL during the model 
year by amending your application for certification under Sec.  
1054.225. See 40 CFR 1060.225 for provisions related to changing an FEL 
for fuel tank permeation.
    (h) Engine and equipment manufacturers certifying with respect to 
evaporative emissions may use emission credits to demonstrate 
compliance under this subpart. Component manufacturers may establish 
FELs for their certified products, but they may not generate or use 
emission credits under this subpart.
    (i) In your application for certification, base your showing of 
compliance on projected production

[[Page 59289]]

volumes for engines or equipment intended for sale in the United 
States. As described in Sec.  1054.730, compliance with the 
requirements of this subpart is determined at the end of the model year 
based on actual production volumes for engines or equipment intended 
for sale in the United States. Do not include any of the following 
engines or equipment to calculate emission credits:
    (1) Engines or equipment exempted under subpart G of this part or 
under 40 CFR part 1068.
    (2) Engines or equipment intended for export.
    (3) Engines or equipment that are subject to state emission 
standards for that model year. However, this restriction does not apply 
if we determine that the state standards and requirements are 
equivalent to those of this part and that products sold in such a state 
will not generate credits under the state program. For example, you may 
not include engines or equipment certified for California if California 
has more stringent emission standards for these products or if your 
products generate or use emission credits under the California program.
    (4) Engines or equipment not subject to the requirements of this 
part, such as those excluded under Sec.  1054.5.
    (5) Any other engines or equipment where we indicate elsewhere in 
this part 1054 that they are not to be included in the calculations of 
this subpart.


Sec.  1054.705  How do I generate and calculate exhaust emission 
credits?

    The provisions of this section apply for calculating exhaust 
emission credits. You may generate exhaust emission credits only if you 
are a certifying engine manufacturer.
    (a) For each participating family, calculate positive or negative 
emission credits relative to the otherwise applicable emission 
standard. Calculate positive emission credits for a family that has an 
FEL below the standard. Calculate negative emission credits for a 
family that has an FEL above the standard. Sum your positive and 
negative credits for the model year before rounding. Round the sum of 
emission credits to the nearest kilogram (kg) using consistent units 
throughout the following equation:

Emission credits (kg) = (STD - FEL) x (Volume) x (Power) x (UL) x (LF) 
x (10-3)

Where:
STD = the emission standard, in g/kW-hr.
FEL = the family emission limit for the family, in g/kW-hr.
Volume = the number of engines eligible to participate in the 
averaging, banking, and trading program within the given family 
during the model year, as described in Sec.  1054.701(i).
Power = the maximum modal power of the emission-data engine as 
calculated from the applicable test procedure described in subpart F 
of this part, in kilowatts.
UL = the useful life for the given family, in hours.
LF = load factor. Use 0.47 for nonhandheld engines and 0.85 for 
handheld engines. We may specify a different load factor if we 
approve the use of special test procedures for a family under 40 CFR 
1065.10(c)(2), consistent with good engineering judgment.

    (b) [Reserved]


Sec.  1054.706  How do I generate and calculate evaporative emission 
credits?

    The provisions of this section apply for calculating evaporative 
emission credits related to fuel tank permeation. You may generate 
credits only if you are a certifying equipment manufacturer. This may 
include engine manufacturers that make engines with complete fuel 
systems as described in Sec.  1054.2.
    (a) For each participating family, calculate positive or negative 
emission credits relative to the otherwise applicable emission 
standard. Calculate positive emission credits for a family that has an 
FEL below the standard. Calculate negative emission credits for a 
family that has an FEL above the standard. Sum your positive and 
negative credits for the model year before rounding. Round the sum of 
emission credits to the nearest kilogram (kg) using consistent units 
throughout the following equation:

Emission credits (kg) = (STD-FEL) x (Total Area) x (UL) x (AF) x (365) 
x (10-3)

Where:STD = the emission standard, in g/m2/day.
FEL = the family emission limit for the family, in g/m2/
day, as described in paragraph (b) of this section.
Total Area = The combined internal surface area of all fuel tanks in 
the family, taking production volume into account, in m2.
UL = 5 years, which represents the useful life for the given family.
AF= adjustment factor. Use 1.0 for testing at 28 [deg]C; use 0.60 
for testing at 40 [deg]C.

    (b) For calculating credits under paragraph (a) of this section, 
the emission standard and FEL must both be based on test measurements 
at the same temperature (28 [deg] or 40 [deg]C). Determine the FEL for 
calculating emission credits relative to testing at 28 [deg]C as 
described in paragraphs (b)(1) and (2) of this section. Determine the 
FEL for calculating emission credits relative to testing at 40 [deg]C 
as described in paragraph (b)(3) of this section.
    (1) To use an FEL below 5.0 g/m2/day, it must be based 
on emission measurements.
    (2) The provisions of this paragraph (b)(2) apply for all emission 
families with FELs at or above 5.0 g/m2/day. To calculate 
emission credits for such emission families, you must choose from one 
of the following options and apply it to all your emission families 
with FELs at or above 5.0 g/m2/day:
    (i) Option 1: Establish all your FELs based on emission 
measurements. This may include measurements from a certifying fuel tank 
manufacturer.
    (ii) Option 2: Use an assigned FEL of 10.4 g/m2/day. 
This would apply without regard to whether any of these emission 
families have measured emission levels below 10.4 g/m2/day. 
If any of your fuel tanks were otherwise certified (by you or the fuel 
tank manufacturer) with an FEL at or above 5.0 g/m2/day, the 
assigned FEL of 10.4 g/m2/day applies only for emission 
credit calculations.
    (3) Determine the FEL for calculating emission credits relative to 
testing at 40 [deg]C as described in paragraph (b)(1) and (2) of this 
section, but use 8.3 g/m2/day instead of 5.0 g/
m2/day and use 17.3 g/m2/day instead of 10.4 g/
m2/day.


Sec.  1054.710  How do I average emission credits?

    (a) Averaging is the exchange of emission credits among your 
families. You may average emission credits only within the same 
averaging set.
    (b) You may certify one or more families to an FEL above the 
emission standard, subject to the FEL caps and other provisions in 
subpart B of this part, if you show in your application for 
certification that your projected balance of all emission-credit 
transactions in that model year is greater than or equal to zero.
    (c) If you certify a family to an FEL that exceeds the otherwise 
applicable standard, you must obtain enough emission credits to offset 
the family's deficit by the due date for the final report required in 
Sec.  1054.730. The emission credits used to address the deficit may 
come from your other families that generate emission credits in the 
same model year, from emission credits you have banked, or from 
emission credits you obtain through trading.


Sec.  1054.715  How do I bank emission credits?

    (a) Banking is the retention of emission credits by the 
manufacturer generating the emission credits for use in future model 
years for averaging or trading. You may use banked emission credits 
only within the averaging set in which they were generated, except as 
described in this subpart.

[[Page 59290]]

    (b) You may designate any emission credits you plan to bank in the 
reports you submit under Sec.  1054.730. During the model year and 
before the due date for the final report, you may designate your 
reserved emission credits for averaging or trading.
    (c) Reserved credits become actual emission credits when you submit 
your final report. However, we may revoke these emission credits if we 
are unable to verify them after reviewing your reports or auditing your 
records.


Sec.  1054.720  How do I trade emission credits?

    (a) Trading is the exchange of emission credits between 
manufacturers. You may use traded emission credits for averaging, 
banking, or further trading transactions. Traded emission credits may 
be used only within the averaging set in which they were generated, 
except as described in this subpart.
    (b) You may trade actual emission credits as described in this 
subpart. You may also trade reserved emission credits, but we may 
revoke these emission credits based on our review of your records or 
reports or those of the company with which you traded emission credits. 
You may trade banked credits within an averaging set to any certifying 
engine or equipment manufacturer.
    (c) If a negative emission credit balance results from a 
transaction, both the buyer and seller are liable, except in cases we 
deem to involve fraud. See Sec.  1054.255(e) for cases involving fraud. 
We may void the certificates of all families participating in a trade 
that results in a manufacturer having a negative balance of emission 
credits. See Sec.  1054.745.


Sec.  1054.725  What must I include in my application for 
certification?

    (a) You must declare in your application for certification your 
intent to use the provisions of this subpart for each family that will 
be certified using the ABT program. You must also declare the FELs you 
select for the family for each pollutant for which you are using the 
ABT program. Your FELs must comply with the specifications of subpart B 
of this part, including the FEL caps. FELs must be expressed to the 
same number of decimal places as the emission standard.
    (b) Include the following in your application for certification:
    (1) A statement that, to the best of your belief, you will not have 
a negative balance of emission credits for any averaging set when all 
emission credits are calculated at the end of the year.
    (2) Detailed calculations of projected emission credits (positive 
or negative) based on projected production volumes. We may require you 
to include similar calculations from your other engine families to 
demonstrate that you will be able to avoid a negative credit balance 
for the model year. If you project negative emission credits for a 
family, state the source of positive emission credits you expect to use 
to offset the negative emission credits.


Sec.  1054.730  What ABT reports must I send to EPA?

    (a) If any of your families are certified using the ABT provisions 
of this subpart, you must send an end-of-year report within 90 days 
after the end of the model year and a final report within 270 days 
after the end of the model year. We may waive the requirement to send 
the end-of-year report as long as you send the final report on time.
    (b) Your end-of-year and final reports must include the following 
information for each family participating in the ABT program:
    (1) Family designation.
    (2) The emission standards that would otherwise apply to the 
family.
    (3) The FEL for each pollutant. If you change the FEL after the 
start of production, identify the date that you started using the new 
FEL and/or give the engine identification number for the first engine 
covered by the new FEL. In this case, identify each applicable FEL and 
calculate the positive or negative emission credits under each FEL.
    (4) The projected and actual production volumes for the model year 
with a point of retail sale in the United States, as described in Sec.  
1054.701(i). For fuel tanks, state the production volume in terms of 
surface area and production volume for each fuel tank configuration and 
state the total surface area for the emission family. If you changed an 
FEL during the model year, identify the actual production volume 
associated with each FEL.
    (5) The maximum modal power of the emission-data engine or the 
appropriate internal surface area of the fuel tank.
    (6) Useful life.
    (7) Calculated positive or negative emission credits for the whole 
family. Identify any emission credits that you traded, as described in 
paragraph (d)(1) of this section.
    (c) Your end-of-year and final reports must include the following 
additional information:
    (1) Show that your net balance of emission credits from all your 
participating families in each averaging set in the applicable model 
year is not negative.
    (2) State whether you will retain any emission credits for banking.
    (3) State that the report's contents are accurate.
    (d) If you trade emission credits, you must send us a report within 
90 days after the transaction, as follows:
    (1) As the seller, you must include the following information in 
your report:
    (i) The corporate names of the buyer and any brokers.
    (ii) A copy of any contracts related to the trade.
    (iii) The families that generated emission credits for the trade, 
including the number of emission credits from each family.
    (2) As the buyer, you must include the following information in 
your report:
    (i) The corporate names of the seller and any brokers.
    (ii) A copy of any contracts related to the trade.
    (iii) How you intend to use the emission credits, including the 
number of emission credits you intend to apply to each family (if 
known).
    (e) Send your reports electronically to the Designated Compliance 
Officer using an approved information format. If you want to use a 
different format, send us a written request with justification for a 
waiver.
    (f) Correct errors in your end-of-year report or final report as 
follows:
    (1) You may correct any errors in your end-of-year report when you 
prepare the final report as long as you send us the final report by the 
time it is due.
    (2) If you or we determine within 270 days after the end of the 
model year that errors mistakenly decreased your balance of emission 
credits, you may correct the errors and recalculate the balance of 
emission credits. You may not make these corrections for errors that 
are determined more than 270 days after the end of the model year. If 
you report a negative balance of emission credits, we may disallow 
corrections under this paragraph (f)(2).
    (3) If you or we determine anytime that errors mistakenly increased 
your balance of emission credits, you must correct the errors and 
recalculate the balance of emission credits.


Sec.  1054.735  What records must I keep?

    (a) You must organize and maintain your records as described in 
this section. We may review your records at any time.
    (b) Keep the records required by this section for at least eight 
years after the due date for the end-of-year report. You may not use 
emission credits for any engines or equipment if you do not keep all 
the records required under this section. You must therefore keep these

[[Page 59291]]

records to continue to bank valid credits. Store these records in any 
format and on any media as long as you can promptly send us organized, 
written records in English if we ask for them. You must keep these 
records readily available. We may review them at any time.
    (c) Keep a copy of the reports we require in Sec.  1054.730.
    (d) Keep records of the engine identification number for each 
engine or piece of equipment you produce that generates or uses 
emission credits under the ABT program. You may identify these numbers 
as a range. If you change the FEL after the start of production, 
identify the date you started using each FEL and the range of engine 
identification numbers associated with each FEL.
    (e) We may require you to keep additional records or to send us 
relevant information not required by this section in accordance with 
the Clean Air Act.


Sec.  1054.740  What special provisions apply for generating and using 
emission credits?

    (a) You may generate Phase 3 emission credits from 2008 through 
2011 model year Class I engines if you voluntarily meet the Phase 3 
exhaust emission standards specified in Sec.  1054.105. Divide these 
into transitional and enduring emission credits as follows:
    (1) Transitional credits are based on reducing emissions from Phase 
2 levels down to Phase 3 levels. Calculate the value of transitional 
emission credits as described in Sec.  1054.705, based on setting STD 
equal to 15.0 g/kW-hr and FEL equal to 10.0 g/kW-hr. You may use these 
transitional credits only for Class I engines in 2012 through 2014 
model years. You may not use these transitional credits for Class II 
engines.
    (2) Enduring credits are based on reducing emissions below Phase 3 
levels. Calculate the value of enduring credits as described in Sec.  
1054.705, based on setting STD equal to 10.0 g/kW-hr and FEL to the 
value of the family emission limit you select for the family. You may 
use these enduring credits for any nonhandheld engines certified to the 
Phase 3 standards under this part, except as specified in paragraph (d) 
of this section.
    (b) You may generate Phase 3 emission credits from 2008 through 
2010 model year Class II engines if you voluntarily meet the Phase 3 
exhaust emission standards specified in Sec.  1054.105. Divide these 
into transitional and enduring emission credits as follows:
    (1) Transitional credits are based on reducing emissions from Phase 
2 levels down to Phase 3 levels. Calculate the value of transitional 
emission credits as described in Sec.  1054.705, based on setting STD 
equal to 11.0 g/kW-hr and FEL equal to 8.0 g/kW-hr. You may use these 
transitional credits only for Class II engines in 2011 through 2013 
model years. You may not use these transitional credits for Class I 
engines.
    (2) Enduring credits are based on reducing emissions below Phase 3 
levels. Calculate the value of enduring credits as described in Sec.  
1054.705, based on setting STD equal to 8.0 g/kW-hr and FEL to the 
value of the family emission limit you select for the family. You may 
use these enduring credits for any nonhandheld engines certified to the 
Phase 3 standards under this part, except as specified in paragraph (d) 
of this section.
    (c) You may use emission credits generated by Class I and Class II 
engines subject to Phase 2 emission standards under 40 CFR part 90 to 
demonstrate compliance with the Phase 3 exhaust emission standards, but 
only after you have exhausted all transitional credits from engines 
meeting Phase 3 standards, subject to the conditions of paragraph (d) 
of this section. You may use these Phase 2 emission credits only in the 
2012 and 2013 model years for Class I engines and only in the 2011 
through 2013 model years for Class II engines. Determine a maximum 
number of Phase 2 emission credits for demonstrating compliance with 
the Phase 3 standards for a given engine class (Class I or Class II) as 
follows:
    (1) Calculate a Phase 2 credit allowance for each engine class 
based on production information for model years 2007, 2008, and 2009 
using the following equation:

Credit allowance (kg) = (Emissions Delta) x (Volume) x (Avg. Power) x 
(Avg. UL) x (LF) x(10-3)

Where:

Emissions Delta = 1.6 g/kW-hr for Class I and 2.1 g/kW-hr for Class 
II.
Volume = the number of your engines eligible to participate in the 
averaging, banking, and trading program, as described in Sec.  
1054.701(i), based on actual U.S.-directed production volumes.
Avg. Power = the production-weighted average value of the maximum 
modal power for all your engine families in the engine class, as 
described in Sec.  1054.705(a), in kilowatts.
Avg. UL = the production-weighted average value of the useful life 
for all your engine families in the engine class, in hours.
LF = load factor. Use 0.47.

    (2) Do not include wintertime engines in the calculation of credit 
allowances unless they are certified to meet the otherwise applicable 
HC+NOX emission standard.
    (3) Calculate the average annual Phase 2 credit allowance for each 
engine class over three model years as specified in paragraph (c)(1) of 
this section. The resulting average value is the maximum number of 
Phase 2 emission credits you may use under this paragraph (c) for each 
engine class.
    (4) For 2013 and earlier model years, include in the reports 
described in Sec.  1054.730 the total allowable number of Phase 2 
emission credits and your cumulative totals of Phase 2 credits you have 
used to comply with the requirements of this part for each engine 
class.
    (d) If you generate enduring emission credits from Class I engines 
under paragraph (a) of this section, you may not use these for Class II 
engines in the 2011 or 2012 model year. Similarly, if you generate 
enduring emission credits from Class II engines under paragraph (b) of 
this section, you may not use these for Class I engines in the 2012 
model year. These restrictions also apply for emission credits you 
generate for engines subject to the standards of this part in the 2011 
or 2012 model year.
    (e) You may use Phase 2 or Phase 3 emission credits from 
nonhandheld engines to demonstrate compliance with the Phase 3 
standards for handheld engines subject to the following restrictions:
    (1) The handheld family must be certified in 2008 and all later 
model years using carryover of emission data from an engine family that 
was most recently certified with new emission data in 2007 or an 
earlier model year.
    (2) The handheld family's FEL may not increase above the level 
selected for the 2007 model year in later years unless such an increase 
is based on emission data from production engines.
    (3) Your total production of handheld engines certified under this 
paragraph (e) may not exceed 30,000 in any model year.


Sec.  1054.745  What can happen if I do not comply with the provisions 
of this subpart?

    (a) For each family participating in the ABT program, the 
certificate of conformity is conditional upon full compliance with the 
provisions of this subpart during and after the model year. You are 
responsible to establish to our satisfaction that you fully comply with 
applicable requirements. We may void the certificate of conformity for 
a family if you fail to comply with any provisions of this subpart.
    (b) You may certify your family to an FEL above an emission 
standard based on a projection that you will have

[[Page 59292]]

enough emission credits to offset the deficit for the family. However, 
we may void the certificate of conformity if you cannot show in your 
final report that you have enough actual emission credits to offset a 
deficit for any pollutant in a family.
    (c) We may void the certificate of conformity for a family if you 
fail to keep records, send reports, or give us information we request.
    (d) You may ask for a hearing if we void your certificate under 
this section (see Sec.  1054.820).

Subpart I--Definitions and Other Reference Information


Sec.  1054.801  What definitions apply to this part?

    The following definitions apply to this part. The definitions apply 
to all subparts unless we note otherwise. All undefined terms have the 
meaning the Clean Air Act gives to them. The definitions follow:
    Adjustable parameter means any device, system, or element of design 
that someone can adjust (including those which are difficult to access) 
and that, if adjusted, may affect emissions or engine performance 
during emission testing or normal in-use operation. This includes, but 
is not limited to, parameters related to injection timing and fueling 
rate. You may ask us to exclude a parameter that is difficult to access 
if it cannot be adjusted to affect emissions without significantly 
degrading engine performance, or if you otherwise show us that it will 
not be adjusted in a way that affects emissions during in-use 
operation.
    Aftertreatment means relating to a catalytic converter, particulate 
filter, thermal reactor, or any other system, component, or technology 
mounted downstream of the exhaust valve (or exhaust port) whose design 
function is to decrease emissions in the engine exhaust before it is 
exhausted to the environment. Exhaust-gas recirculation (EGR), 
turbochargers, and oxygen sensors are not aftertreatment.
    Alcohol-fueled engine means an engine that is designed to run using 
an alcohol fuel. For purposes of this definition, alcohol fuels do not 
include fuels with a nominal alcohol content below 25 percent by 
volume.
    Amphibious vehicle means a vehicle with wheels or tracks that is 
designed primarily for operation on land and secondarily for operation 
in water.
    Applicable emission standard or applicable standard means an 
emission standard to which an engine (or equipment) is subject. 
Additionally, if an engine (or equipment) has been or is being 
certified to another standard or FEL, applicable emission standard 
means the FEL or other standard to which the engine (or equipment) has 
been or is being certified. This definition does not apply to subpart H 
of this part.
    Auxiliary emission control device means any element of design that 
senses temperature, motive speed, engine RPM, transmission gear, or any 
other parameter for the purpose of activating, modulating, delaying, or 
deactivating the operation of any part of the emission control system.
    Brake power means the usable power output of the engine, not 
including power required to fuel, lubricate, or heat the engine, 
circulate coolant to the engine, or to operate aftertreatment devices.
    Calibration means the set of specifications and tolerances specific 
to a particular design, version, or application of a component or 
assembly capable of functionally describing its operation over its 
working range.
    Carryover means relating to certification based on emission data 
generated from an earlier model year as described in Sec.  1054.235(d).
    Certification means relating to the process of obtaining a 
certificate of conformity for an emission family that complies with the 
emission standards and requirements in this part.
    Certified emission level means the highest deteriorated emission 
level in an emission family for a given pollutant from either transient 
or steady-state testing.
    Class I means relating to nonhandheld engines with total 
displacement below 225 cc. See Sec.  1054.101 for special provisions 
that apply for engines with total displacement at or below 80 cc.
    Class II means relating to nonhandheld engines with total 
displacement at or above 225 cc.
    Class III means relating to handheld engines with total 
displacement below 20 cc.
    Class IV means relating to handheld engines with total displacement 
at or above 20 cc but below 50 cc.
    Class V means relating to handheld engines with total displacement 
at or above 50 cc.
    Clean Air Act means the Clean Air Act, as amended, 42 U.S.C. 7401-
7671q.
    Cold-weather equipment is limited to the following types of 
handheld equipment: chainsaws, cut-off saws, clearing saws, brush 
cutters with engines at or above 40cc, commercial earth and wood 
drills, and ice augers. This includes earth augers if they are also 
marketed as ice augers.
    Crankcase emissions means airborne substances emitted to the 
atmosphere from any part of the engine crankcase's ventilation or 
lubrication systems. The crankcase is the housing for the crankshaft 
and other related internal parts.
    Critical emission-related component means any of the following 
components:
    (1) Electronic control units, aftertreatment devices, fuel-metering 
components, EGR-system components, crankcase-ventilation valves, all 
components related to charge-air compression and cooling, air filters, 
spark plugs, and all sensors and actuators associated with any of these 
components.
    (2) Any other component whose primary purpose is to reduce 
emissions.
    Date of manufacture has the meaning given in 40 CFR 1068.30.
    Days means calendar days unless otherwise specified. For example, 
when we specify working days we mean calendar days, excluding weekends 
and U.S. national holidays.
    Designated Compliance Officer means the Manager, Heavy-Duty and 
Nonroad Engine Group (6405-J), U.S. Environmental Protection Agency, 
1200 Pennsylvania Ave., NW., Washington, DC 20460.
    Designated Enforcement Officer means the Director, Air Enforcement 
Division (2242A), U.S. Environmental Protection Agency, 1200 
Pennsylvania Ave., NW.,Washington, DC 20460.
    Deteriorated emission level means the emission level that results 
from applying the appropriate deterioration factor to the official 
emission result of the emission-data engine.
    Deterioration factor means the relationship between emissions at 
the end of useful life and emissions at the low-hour test point (see 
Sec. Sec.  1054.240 and 1054.245), expressed in one of the following 
ways:
    (1) For multiplicative deterioration factors, the ratio of 
emissions at the end of useful life to emissions at the low-hour test 
point.
    (2) For additive deterioration factors, the difference between 
emissions at the end of useful life and emissions at the low-hour test 
point.
    Discrete-mode means relating to the discrete-mode type of steady-
state test described in Sec.  1054.505.
    Displacement has the meaning given in Sec.  1054.140.
    Dry weight means the weight of the equipment as sold without fuel, 
oil, or engine coolant.
    Dual-fuel engine means an engine designed for operation on two 
different fuels but not on a continuous mixture of those fuels.

[[Page 59293]]

    Emission control system means any device, system, or element of 
design that controls or reduces the emissions of regulated pollutants 
from an engine.
    Emission-data engine means an engine that is tested for 
certification. This includes engines tested to establish deterioration 
factors.
    Emission-data equipment means an engine, piece of equipment, or 
fuel system component that is tested for certification. This includes 
units tested to establish deterioration factors.
    Emission family has the meaning given in Sec.  1054.230. We may 
refer to emission families as ``engine families'' where provisions 
relate only to exhaust emissions from engines.
    Emission-related maintenance means maintenance that substantially 
affects emissions or is likely to substantially affect emission 
deterioration.
    Engine has the meaning given in 40 CFR 1068.30. This includes 
complete and partially complete engines.
    Engine configuration means a unique combination of engine hardware 
and calibration within an emission family. Engines within a single 
engine configuration differ only with respect to normal production 
variability.
    Engine manufacturer means the manufacturer of the engine. See the 
definition of ``manufacturer'' in this section.
    Equipment means any mechanical device commonly known as equipment, 
including vehicles. If the equipment has an installed engine, the term 
equipment includes the installed engine and fuel system components.
    Equipment manufacturer means a manufacturer of nonroad equipment. 
All nonroad equipment manufacturing entities under the control of the 
same person are considered to be a single nonroad equipment 
manufacturer. (Note: In Sec.  1054.626, the term ``equipment 
manufacturer'' has a narrower meaning that applies only to that 
section.).
    Evaporative means relating to fuel emissions controlled by 40 CFR 
part 1060. This generally includes emissions that result from 
permeation of fuel through the fuel-system materials or from 
ventilation of the fuel system.
    Excluded means relating to an engine that either:
    (1) Has been determined not to be a nonroad engine, as specified in 
40 CFR 1068.30; or
    (2) Is a nonroad engine that, according to Sec.  1054.5, is not 
subject to this part 1054.
    Exempted has the meaning given in 40 CFR 1068.30.
    Exhaust-gas recirculation (EGR) means a technology that reduces 
emissions by routing exhaust gases that had been exhausted from the 
combustion chamber(s) back into the engine to be mixed with incoming 
air before 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 before or during combustion is not considered 
exhaust-gas recirculation for the purposes of this part.
    Family emission limit (FEL) means an emission level declared by the 
manufacturer to serve in place of an otherwise applicable emission 
standard under the ABT program in subpart H of this part. The family 
emission limit must be expressed to the same number of decimal places 
as the emission standard it replaces. The family emission limit serves 
as the emission standard for the engine family (exhaust) or emission 
family (evaporative) with respect to all required testing.
    Flexible-fuel engine means an engine designed for operation on any 
mixture of two or more different fuels.
    Fuel line means hose or tubing designed to contain liquid fuel 
(including molded hose or tubing). This does not include any of the 
following:
    (1) Fuel tank vent lines.
    (2) Segments of hose or tubing whose external surface is normally 
exposed to liquid fuel inside the fuel tank.
    (3) Hose or tubing designed to return unused fuel from the 
carburetor to the fuel tank for handheld engines.
    (4) Primer bulbs that contain liquid fuel only for priming the 
engine before starting.
    Fuel system means all components involved in transporting, 
metering, and mixing the fuel from the fuel tank to the combustion 
chamber(s), including the fuel tank, fuel tank cap, fuel pump, fuel 
filters, fuel lines, carburetor or fuel-injection components, and all 
fuel-system vents.
    Fuel type means a general category of fuels such as gasoline or 
natural gas. There can be multiple grades within a single fuel type, 
such as low-temperature or all-season gasoline.
    Good engineering judgment has the meaning given in 40 CFR 1068.30. 
See 40 CFR 1068.5 for the administrative process we use to evaluate 
good engineering judgment.
    Handheld means relating to equipment that meets any of the 
following criteria:
    (1) It is carried by the operator throughout the performance of its 
intended function.
    (2) It is designed to operate multi-positionally, such as upside 
down or sideways, to complete its intended function.
    (3) It has a combined engine and equipment dry weight under 16.0 
kilograms, has no more than two wheels, and at least one of the 
following attributes is also present:
    (i) The operator provides support or carries the equipment 
throughout the performance of its intended function. Carry means to 
completely bear the weight of the equipment, including the engine. 
Support means to hold a piece of equipment in position to prevent it 
from falling, slipping, or sinking, without carrying it.
    (ii) The operator provides support or attitudinal control for the 
equipment throughout the performance of its intended function. 
Attitudinal control involves regulating the horizontal or vertical 
position of the equipment.
    (4) It is an auger with a combined engine and equipment dry weight 
under 22.0 kilograms.
    (5) It is used in a recreational application with a combined total 
vehicle dry weight under 20.0 kilograms. Note that snowmobiles, offroad 
motorcycles, and all-terrain vehicles are regulated under 40 CFR part 
1051 and marine vessels are regulated under 40 CFR part 1045.
    (6) It is a hand-supported jackhammer or rammer/compactor. This 
does not include equipment that can remain upright without operator 
support, such as a plate compactor.
    Hydrocarbon (HC) means the hydrocarbon group on which the emission 
standards are based for each fuel type, as described in subpart B of 
this part.
    Identification number means a unique specification (for example, a 
model number/serial number combination) that allows someone to 
distinguish a particular engine from other similar engines.
    Integrated equipment manufacturer means an equipment manufacturer 
that also manufactures the engines for its equipment. Equipment 
manufacturers that manufacture the engines for some but not all of 
their equipment are considered to be integrated manufacturers for that 
equipment using the manufacturer's own engines.
    Intermediate-speed equipment means nonhandheld equipment in which 
the installed engine is intended for operation at speeds substantially 
below 3600 rpm.
    Low-hour means relating to an engine that is considered to have 
stabilized emissions and represents the undeteriorated emission level. 
A low-hour engine typically operates no more than a few hours beyond 
the minimum stabilization period. However, a low-hour engine could have 
more hours as

[[Page 59294]]

long as emissions remain stable. In the absence of other information, a 
low-hour engine with a useful life of 300 hours or less would generally 
have operated no more than 15 hours and a low-hour engine with a longer 
useful life would generally have operated no more than 24 hours.
    Manufacture means the physical and engineering process of 
designing, constructing, and assembling an engine or piece of 
equipment.
    Manufacturer has the meaning given in section 216(1) of the Clean 
Air Act (42 U.S.C. 7550(1)). In general, this term includes any person 
who manufactures an engine, vehicle, vessel, or piece of equipment for 
sale in the United States or otherwise introduces a new nonroad engine 
or piece of equipment into U.S. commerce. This includes importers who 
import engines, equipment, or vehicles for resale, but not dealers. All 
manufacturing entities under the control of the same person are 
considered to be a single manufacturer.
    Marine engine means a nonroad engine that is installed or intended 
to be installed on a vessel. There are two kinds of marine engines:
    (1) Propulsion marine engine means a marine engine that moves a 
vessel through the water or directs the vessel's movement.
    (2) Auxiliary marine engine means a marine engine not used for 
propulsion. This includes a portable auxiliary marine engine only if 
its fueling, cooling, or exhaust system is an integral part of the 
vessel.
    Marine generator engine means an auxiliary marine engine used 
primarily to operate an electrical generator or alternator to produce 
electric power.
    Marine vessel has the meaning given in 1 U.S.C. 3, except that it 
does not include amphibious vehicles. The definition in 1 U.S.C. 3 very 
broadly includes every craft capable of being used as a means of 
transportation on water.
    Maximum engine power has the meaning given in Sec.  1054.140.
    Maximum test torque has the meaning given in 40 CFR 1065.1001.
    Model year has the meaning given in 40 CFR part 1060 for equipment 
and means one of the following things for engines:
    (1) For freshly manufactured engines (see definition of ``new 
nonroad engine,'' paragraph (1)), model year means your annual new 
model production period. This must include January 1 of the calendar 
year for which the model year is named. It may not begin before January 
2 of the previous calendar year and it must end by December 31 of the 
named calendar year. For seasonal production periods not including 
January 1, model year means the calendar year in which the production 
occurs, unless you choose to certify the applicable emission family 
with the following model year. For example, if your production period 
is June 1, 2010 through November 30, 2010, your model year would be 
2010 unless you choose to certify the emission family for model year 
2011.
    (2) For an engine that is converted to a nonroad engine after being 
placed into service as a stationary engine, or being certified and 
placed into service as a motor vehicle engine, model year means the 
calendar year in which the engine was originally produced. For a motor 
vehicle engine that is converted to be a nonroad engine without having 
been certified, model year means the calendar year in which the engine 
becomes a new nonroad engine. (See definition of ``new nonroad 
engine,'' paragraph (2).)
    (3) For a nonroad engine excluded under Sec.  1054.5 that is later 
converted to operate in an application that is not excluded, model year 
means the calendar year in which the engine was originally produced 
(see definition of ``new nonroad engine,'' paragraph (3)).
    (4) For engines that are not freshly manufactured but are installed 
in new nonroad equipment, model year means the calendar year in which 
the engine is installed in the new nonroad equipment (see definition of 
``new nonroad engine,'' paragraph (4)).
    (5) For imported engines:
    (i) For imported engines described in paragraph (5)(i) of the 
definition of ``new nonroad engine,'' model year has the meaning given 
in paragraphs (1) through (4) of this definition.
    (ii) For imported engines described in paragraph (5)(ii) of the 
definition of ``new nonroad engine,'' model year means the calendar 
year in which the engine is assembled in its final certified 
configuration.
    (iii) For imported engines described in paragraph (5)(iii) of the 
definition of ``new nonroad engine,'' model year means the calendar 
year in which the engine is assembled in its imported configuration, 
unless specified otherwise in this part or in 40 CFR part 1068.
    Motor vehicle has the meaning given in 40 CFR 85.1703(a).
    New nonroad engine means any of the following things:
    (1) A freshly manufactured nonroad engine for which the ultimate 
purchaser has never received the equitable or legal title. This kind of 
engine might commonly be thought of as ``brand new.'' In the case of 
this paragraph (1), the engine is new from the time it is produced 
until the ultimate purchaser receives the title or the product is 
placed into service, whichever comes first.
    (2) An engine originally manufactured as a motor vehicle engine or 
a stationary engine that is later used or intended to be used in a 
piece of nonroad equipment. In this case, the engine is no longer a 
motor vehicle or stationary engine and becomes a ``new nonroad 
engine.'' The engine is no longer new when it is placed into nonroad 
service. This paragraph (2) applies if a motor vehicle engine or a 
stationary engine is installed in nonroad equipment, or if a motor 
vehicle or a piece of stationary equipment is modified (or moved) to 
become nonroad equipment.
    (3) A nonroad engine that has been previously placed into service 
in an application we exclude under Sec.  1054.5, when that engine is 
installed in a piece of equipment that is covered by this part 1054. 
The engine is no longer new when it is placed into nonroad service 
covered by this part 1054. For example, this would apply to a marine-
propulsion engine that is no longer used in a marine vessel but is 
instead installed in a piece of nonroad equipment subject to the 
provisions of this part.
    (4) An engine not covered by paragraphs (1) through (3) of this 
definition that is intended to be installed in new nonroad equipment. 
This generally includes installation of used engines in new equipment. 
The engine is no longer new when the ultimate purchaser receives a 
title for the equipment or the product is placed into service, 
whichever comes first.
    (5) An imported nonroad engine, subject to the following 
provisions:
    (i) An imported nonroad engine covered by a certificate of 
conformity issued under this part that meets the criteria of one or 
more of paragraphs (1) through (4) of this definition, where the 
original engine manufacturer holds the certificate, is new as defined 
by those applicable paragraphs.
    (ii) An imported engine that will be covered by a certificate of 
conformity issued under this part, where someone other than the 
original engine manufacturer holds the certificate (such as when the 
engine is modified after its initial assembly), is a new nonroad engine 
when it is imported. It is no longer new when the ultimate purchaser 
receives a title for the engine or it is placed into service, whichever 
comes first.
    (iii) An imported nonroad engine that is not covered by a 
certificate of conformity issued under this part at the time of 
importation is new. This addresses uncertified engines and

[[Page 59295]]

equipment initially placed into service that someone seeks to import 
into the United States. Importation of this kind of engine (or 
equipment containing such an engine) is generally prohibited by 40 CFR 
part 1068. However, the importation of such an engine is not prohibited 
if the engine has a model year before 1997, since it is not subject to 
standards.
    New nonroad equipment means either of the following things:
    (1) A nonroad piece of equipment for which the ultimate purchaser 
has never received the equitable or legal title. The product is no 
longer new when the ultimate purchaser receives this title or the 
product is placed into service, whichever comes first.
    (2) A nonroad piece of equipment with an engine that becomes new 
while installed in the equipment. For example a complete piece of 
equipment that was imported without being covered by a certificate of 
conformity would be new nonroad equipment because the engine would be 
considered to be new at the time of importation.
    Noncompliant engine or noncompliant equipment means an engine or 
equipment that was originally covered by a certificate of conformity 
but is not in the certified configuration or otherwise does not comply 
with the conditions of the certificate.
    Nonconforming engine or nonconforming equipment means an engine or 
equipment not covered by a certificate of conformity that would 
otherwise be subject to emission standards.
    Nonhandheld means relating to an engine (or equipment) subject to 
the standards of this part that is not a handheld engine (or 
equipment).
    Nonintegrated equipment manufacturer means an equipment 
manufacturer that is not an integrated equipment manufacturer. 
Equipment manufacturers that manufacture the engines for some but not 
all of their equipment are considered to be nonintegrated manufacturers 
for that equipment using a different engine manufacturer's engines.
    Nonmethane hydrocarbon has the meaning given in 40 CFR 1065.1001. 
This generally means the difference between the emitted mass of total 
hydrocarbons and the emitted mass of methane.
    Nonroad means relating to nonroad engines or equipment that 
includes nonroad engines.
    Nonroad engine has the meaning given in 40 CFR 1068.30. In general 
this means all internal-combustion engines except motor vehicle 
engines, stationary engines, engines used solely for competition, or 
engines used in aircraft.
    Official emission result means the measured emission rate for an 
emission-data engine on a given duty cycle before the application of 
any deterioration factor.
    Overhead valve means relating to a four-stroke spark-ignition 
engine in which the intake and exhaust valves are located above the 
combustion chamber within the cylinder head. Such engines are sometimes 
referred to as ``valve-in-head'' engines.
    Owners manual means a document or collection of documents prepared 
by the engine manufacturer for the owner or operator to describe 
appropriate engine maintenance, applicable warranties, and any other 
information related to operating or keeping the engine. The owners 
manual is typically provided to the ultimate purchaser at the time of 
sale. The owners manual may be in paper or electronic format.
    Oxides of nitrogen has the meaning given in 40 CFR part 1065.1001
    Percent has the meaning given in 40 CFR 1065.1001.
    Permeation emissions means fuel that escapes from the fuel system 
by diffusing through the walls of fuel-system components.
    Phase 1 means relating to the Phase 1 emission standards described 
in 40 CFR 90.103.
    Phase 2 means relating to the Phase 2 emission standards described 
in 40 CFR 90.103.
    Phase 3 means relating to the Phase 3 exhaust emission standards 
described in Sec.  1054.105.
    Placed into service means put into initial use for its intended 
purpose.
    Pressurized oil system means a system designed to deliver 
lubricating oil to internal engine components, including a step to 
circulate oil through a filter.
    Ramped-modal means relating to the ramped-modal type of steady-
state test described in Sec.  1054.505.
    Rated-speed equipment means nonhandheld equipment in which the 
installed engine is intended for operation at a rated speed that is 
nominally 3600 rpm or higher.
    Recreational application means an application in which a vehicle is 
ridden primarily for pleasure. Note that engines used in reduced-scale 
model vehicles that cannot be ridden (such as model airplanes) are 
excluded from this part under Sec.  1054.5.
    Relating to as used in this section means relating to something in 
a specific, direct manner. This expression is used in this section only 
to define terms as adjectives and not to broaden the meaning of the 
terms.
    Revoke has the meaning given in 40 CFR 1068.30. In general this 
means to terminate the certificate or an exemption for an engine 
family.
    Round has the meaning given in 40 CFR 1065.1001.
    Running loss emissions has the meaning given in 40 CFR 1060.801.
    Scheduled maintenance means adjusting, repairing, removing, 
disassembling, cleaning, or replacing components or systems 
periodically to keep a part or system from failing, malfunctioning, or 
wearing prematurely. It also may mean actions you expect are necessary 
to correct an overt indication of failure or malfunction for which 
periodic maintenance is not appropriate.
    Side valve means relating to a four-stroke spark-ignition engine in 
which the intake and exhaust valves are located to the side of the 
cylinder, not within the cylinder head. Such engines are sometimes 
referred to as ``L-head'' engines.
    Small-volume emission family means one of the following:
    (1) For requirements related to exhaust emissions for nonhandheld 
engines and to exhaust and evaporative emissions for handheld engines, 
small-volume emission family means any emission family whose U.S.-
directed production volume in a given model year is projected at the 
time of certification to be no more than 5,000 engines.
    (2) For requirements related to evaporative emissions for 
nonhandheld equipment, small-volume emission family means any equipment 
manufacturer's U.S.-directed production volume for identical fuel tank 
is projected at the time of certification to be no more than 5,000 
units. Tanks are generally considered identical if they are produced 
under a single part number to conform to a single design or blueprint. 
Tanks should be considered identical if they differ only with respect 
to production variability, post-production changes (such as different 
fittings or grommets), supplier, color, or other extraneous design 
variables.
    Small-volume engine manufacturer means one of the following:
    (1) For handheld engines, an engine manufacturer that had U.S.-
directed production volume of handheld engines of no more than 25,000 
handheld engines in any calendar year. For manufacturers owned by a 
parent company, this production limit applies to the production of the 
parent company and all its subsidiaries.
    (2) For nonhandheld engines, an engine manufacturer that had U.S.-
directed production volume of no more

[[Page 59296]]

than 10,000 nonhandheld engines in any calendar year. For manufacturers 
owned by a parent company, this production limit applies to the 
production of the parent company and all its subsidiaries.
    (3) An engine manufacturer that we designate to be a small-volume 
engine manufacturer under Sec.  1054.635.
    Small-volume equipment manufacturer means one of the following:
    (1) For handheld equipment, an equipment manufacturer that had a 
U.S.-directed production volume of no more than 25,000 pieces of 
handheld equipment in any calendar year. For manufacturers owned by a 
parent company, this production limit applies to the production of the 
parent company and all its subsidiaries.
    (2) For nonhandheld equipment, an equipment manufacturer with 
annual U.S.-directed production volumes of no more than 5,000 pieces of 
nonhandheld equipment in 2007, 2008, and 2009. For manufacturers owned 
by a parent company, this production limit applies to the production of 
the parent company and all its subsidiaries.
    (3) An equipment manufacturer that we designate to be a small-
volume equipment manufacturer under Sec.  1054.635.
    Snowthrower engine means an engine used exclusively to power 
snowthrowers.
    Spark-ignition means relating to a gasoline-fueled engine or any 
other type of engine with a spark plug (or other sparking device) and 
with operating characteristics significantly similar to the theoretical 
Otto combustion cycle. Spark-ignition engines usually use a throttle to 
regulate intake air flow to control power during normal operation.
    Steady-state means relating to emission tests in which engine speed 
and load are held at a finite set of essentially constant values. 
Steady-state tests are either discrete-mode tests or ramped-modal 
tests.
    Structurally integrated nylon fuel tank has the meaning given in 40 
CFR 1060.801.
    Subchapter U means the portion of the Code of Federal Regulations 
including 40 CFR parts 1000 through 1299.
    Suspend has the meaning given in 40 CFR 1068.30. In general this 
means to temporarily discontinue the certificate or an exemption for an 
engine family.
    Test engine means an engine in a test sample.
    Test sample means the collection of engines selected from the 
population of an emission family for emission testing. This may include 
testing for certification, production-line testing, or in-use testing.
    Tethered gas cap means a gas cap that is loosely but permanently 
connected to the fuel tank.
    Thermal reactor means a hot surface in the engine exhaust system 
that has the effect of significantly lowering emissions of one or more 
regulated pollutants. Hot surfaces that have an inconsequential effect 
on emissions are not thermal reactors.
    Total hydrocarbon has the meaning given in 40 CFR 1065.1001. This 
generally means the combined mass of organic compounds measured by the 
specified procedure for measuring total hydrocarbon, expressed as a 
hydrocarbon with a hydrogen-to-carbon mass ratio of 1.85:1.
    Total hydrocarbon equivalent has the meaning given in 40 CFR 
1065.1001. This generally 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 exhaust hydrocarbon from petroleum-fueled 
engines. The hydrogen-to-carbon ratio of the equivalent hydrocarbon is 
1.85:1.
    Ultimate purchaser means, with respect to any new nonroad equipment 
or new nonroad engine, the first person who in good faith purchases 
such new nonroad equipment or new nonroad engine for purposes other 
than resale.
    United States has the meaning given in 40 CFR 1068.30.
    Upcoming model year for an emission family means the model year 
after the one currently in production.
    U.S.-directed production volume means the number of engine or 
equipment units, subject to the requirements of this part, produced by 
a manufacturer for which the manufacturer has a reasonable assurance 
that sale was or will be made to ultimate purchasers in the United 
States.
    Useful life means the period during which the engine and equipment 
are designed to properly function in terms of power output and intended 
function, without being remanufactured, specified as a number of hours 
of operation or calendar years, whichever comes first. It is the period 
during which a nonroad engine is required to comply with all applicable 
emission standards. See, for example, Sec. Sec.  1054.107, 1054.110, 
and 1054.112. If an engine has no hour meter, the specified number of 
hours does not limit the period during which an in-use engine is 
required to comply with emission standards unless the degree of service 
accumulation can be verified separately.
    Variable-speed engine means an engine that is not a constant-speed 
engine.
    Vessel means marine vessel.
    Void has the meaning given in 40 CFR 1068.30. In general this means 
to invalidate a certificate or an exemption both retroactively and 
prospectively.
    Volatile liquid fuel means any fuel other than diesel or biodiesel 
that is a liquid at atmospheric pressure and has a Reid Vapor Pressure 
higher than 2.0 pounds per square inch.
    We (us, our) means the Administrator of the Environmental 
Protection Agency and any authorized representatives.
    Wide-open throttle means maximum throttle opening.
    Wintertime engine means an engine used exclusively to power 
equipment that is used only in wintertime, such as snowthrowers and ice 
augers.


Sec.  1054.805  What symbols, acronyms, and abbreviations does this 
part use?

    The following symbols, acronyms, and abbreviations apply to this 
part:
ABT Averaging, banking, and trading.
cc cubic centimeters.
CFR Code of Federal Regulations.
CH4 methane.
CO carbon monoxide.
CO2 carbon dioxide.
EPA Environmental Protection Agency.
FEL Family Emission Limit.
g gram.
HC hydrocarbon.
hr hour.
kPa kilopascals.
kW kilowatts.
N2O nitrous oxide.
NMHC nonmethane hydrocarbons.
NOX oxides of nitrogen (NO and NO2).
psig pounds per square inch of gauge pressure.
RPM revolutions per minute.
THC total hydrocarbon.
THCE total hydrocarbon equivalent.
U.S.C. United States Code.


Sec.  1054.815  What provisions apply to confidential information?

    (a) Clearly show what you consider confidential by marking, 
circling, bracketing, stamping, or some other method.
    (b) We will store your confidential information as described in 40 
CFR part 2. Also, we will disclose it only as specified in 40 CFR part 
2. This applies both to any information you send us and to any 
information we collect from inspections, audits, or other site visits.
    (c) If you send us a second copy without the confidential 
information, we will assume it contains nothing

[[Page 59297]]

confidential whenever we need to release information from it.
    (d) If you send us information without claiming it is confidential, 
we may make it available to the public without further notice to you, 
as described in 40 CFR 2.204.


Sec.  1054.820  How do I request a hearing?

    (a) You may request a hearing under certain circumstances as 
described elsewhere in this part. To do this, you must file a written 
request, including a description of your objection and any supporting 
data, within 30 days after we make a decision.
    (b) For a hearing you request under the provisions of this part, we 
will approve your request if we find that your request raises a 
substantial factual issue.
    (c) If we agree to hold a hearing, we will use the procedures 
specified in 40 CFR part 1068, subpart G.


Sec.  1054.825  What reporting and recordkeeping requirements apply 
under this part?

    Under the Paperwork Reduction Act (44 U.S.C. 3501 et seq.), the 
Office of Management and Budget approves the reporting and 
recordkeeping specified in the applicable regulations. The following 
items illustrate the kind of reporting and recordkeeping we require for 
engines and equipment regulated under this part:
    (a) We specify the following requirements related to engine and 
equipment certification in this part 1054:
    (1) In Sec.  1054.20 we require equipment manufacturers to label 
their equipment if they are relying on component certification.
    (2) In Sec.  1054.135 we require engine manufacturers to keep 
certain records related to duplicate labels sent to equipment 
manufacturers.
    (3) In Sec.  1054.145 we include various reporting and 
recordkeeping requirements related to interim provisions.
    (4) In subpart C of this part we identify a wide range of 
information required to certify engines.
    (5) In Sec. Sec.  1054.345 and 1054.350 we specify certain records 
related to production-line testing.
    (6) [Reserved]
    (7) In subpart G of this part we identify several reporting and 
recordkeeping items for making demonstrations and getting approval 
related to various special compliance provisions.
    (8) In Sec. Sec.  1054.725, 1054.730, and 1054.735 we specify 
certain records related to averaging, banking, and trading.
    (b) We specify the following requirements related to equipment and 
component certification in 40 CFR part 1060:
    (1) In 40 CFR 1060.20 we give an overview of principles for 
reporting information.
    (2) In 40 CFR part 1060, subpart C, we identify a wide range of 
information required to certify products.
    (3) In 40 CFR 1060.301 we require manufacturers to make engines or 
equipment available for our testing if we make such a request.
    (4) In 40 CFR 1060.505 we specify information needs for 
establishing various changes to published test procedures.
    (c) We specify the following requirements related to testing in 40 
CFR part 1065:
    (1) In 40 CFR 1065.2 we give an overview of principles for 
reporting information.
    (2) In 40 CFR 1065.10 and 1065.12 we specify information needs for 
establishing various changes to published test procedures.
    (3) In 40 CFR 1065.25 we establish basic guidelines for storing 
test information.
    (4) In 40 CFR 1065.695 we identify data that may be appropriate for 
collecting during testing of in-use engines using portable analyzers.
    (d) We specify the following requirements related to the general 
compliance provisions in 40 CFR part 1068:
    (1) In 40 CFR 1068.5 we establish a process for evaluating good 
engineering judgment related to testing and certification.
    (2) In 40 CFR 1068.25 we describe general provisions related to 
sending and keeping information.
    (3) In 40 CFR 1068.27 we require manufacturers to make engines 
available for our testing or inspection if we make such a request.
    (4) In 40 CFR 1068.105 we require equipment manufacturers to keep 
certain records related to duplicate labels from engine manufacturers.
    (5) In 40 CFR 1068.120 we specify recordkeeping related to 
rebuilding engines.
    (6) In 40 CFR part 1068, subpart C, we identify several reporting 
and recordkeeping items for making demonstrations and getting approval 
related to various exemptions.
    (7) In 40 CFR part 1068, subpart D, we identify several reporting 
and recordkeeping items for making demonstrations and getting approval 
related to importing engines.
    (8) In 40 CFR 1068.450 and 1068.455 we specify certain records 
related to testing production-line engines in a selective enforcement 
audit.
    (9) In 40 CFR 1068.501 we specify certain records related to 
investigating and reporting emission-related defects.
    (10) In 40 CFR 1068.525 and 1068.530 we specify certain records 
related to recalling nonconforming engines.

Appendix I to Part 1054--Summary of Previous Emission Standards

    The following standards apply to nonroad spark-ignition engines 
produced before the model years specified in Sec.  1054.1:
    (a) Handheld engines. Phase 1 and Phase 2 standards apply for 
handheld engines as specified in 40 CFR 90.103 and summarized in the 
following tables:

 Table 1 to Appendix I--Phase 1 Emission Standards for Handheld Engines
                              (g/kW-hr) \a\
------------------------------------------------------------------------
             Engine displacement class                 HC    NOX     CO
------------------------------------------------------------------------
Class III..........................................    295   5.36    805
Class IV...........................................    241   5.36    805
Class V............................................    161   5.36    603
------------------------------------------------------------------------
\a\ Phase 1 standards are based on testing with new engines only.


 Table 2 to Appendix I--Phase 2 Emission Standards for Handheld Engines
                              (g/kW-hr) \a\
------------------------------------------------------------------------
                 Engine displacement class                   HC+NOX   CO
------------------------------------------------------------------------
Class III.................................................       50  805
Class IV..................................................       50  805
Class V...................................................       72  603
 
------------------------------------------------------------------------
\a\ The standards shown are the fully phased-in standards. See 40 CFR
  90.103 for standards that applied during the phase-in period.

    (b) Nonhandheld engines. Phase 1 and Phase 2 standards apply for 
nonhandheld engines as specified in 40 CFR 90.103 and summarized in the 
following tables:

    Table 3 to Appendix I--Phase 1 Emission Standards for Nonhandheld
                          Engines (g/kW-hr) \a\
------------------------------------------------------------------------
              Engine displacement class                HC+NOX      CO
------------------------------------------------------------------------
Class I.............................................      16.1       519
Class II............................................      13.4      519
------------------------------------------------------------------------
\a\ Phase 1 standards are based on testing with new engines only.


[[Page 59298]]


    Table 4 to Appendix I--Phase 2 Emission Standards for Nonhandheld
                            Engines (g/kW-hr)
 
------------------------------------------------------------------------
        Engine displacement class            HC+NOX   NMHC+ NOX     CO
------------------------------------------------------------------------
Class I-A................................       50    .........      610
Class I-B................................       40         37        610
Class I..................................       16.1       14.8      610
Class II \a\.............................       12.1       11.3      610
------------------------------------------------------------------------
\a\ The Class II standards shown are the fully phased-in standards. See
  40 CFR 90.103 for standards that applied during the phase-in period.

Appendix II to Part 1054--Duty Cycles for Laboratory Testing

    (a) Test handheld engines with the following steady-state duty 
cycle:

------------------------------------------------------------------------
                                                      Torque
          G3 mode No.            Engine speed \a\   (percent)  Weighting
                                                       \b\      factors
------------------------------------------------------------------------
1.............................  Rated speed.......       100       0.85
2.............................  Warm idle                  0      0.15
------------------------------------------------------------------------
\a\ Test engines at the specified speeds as described in Sec.
  1054.505.
\b\ Test engines at 100 percent torque by setting operator demand to
  maximum. Control torque during idle at its warm idle speed as
  described in 40 CFR 1065.510.

    (b) Test nonhandheld engines with one of the following steady-
state duty cycles:
    (1) The following duty cycle applies for discrete-mode testing:

------------------------------------------------------------------------
                                                     Torque
                  G2 mode No.\a\                   (percent)   Weighting
                                                      \b\       factors
------------------------------------------------------------------------
1................................................        100        0.09
2................................................         75        0.2
3................................................         50        0.29
4................................................         25        0.3
5................................................         10        0.07
6................................................          0        0.05 
------------------------------------------------------------------------
\a\ Control engine speed as described in Sec.   1054.505. Control engine
  speed for Mode 6 as described in Sec.   1054.505(c) for idle
  operation.
\b\ The percent torque is relative to the value established for full-
  load torque, as described in Sec.   1054.505.

    (2) The following duty cycle applies for ramped-modal testing:

------------------------------------------------------------------------
                                                      Time in    Torque
                   RMC mode \a\                        mode    (percent)
                                                    (seconds)   \b,\ \c\
------------------------------------------------------------------------
1a Steady-state...................................         41          0
1b Transition.....................................         20          *
2a Steady-state...................................        135        100
2b Transition.....................................         20          *
3a Steady-state...................................        112         10
3b Transition.....................................         20          *
4a Steady-state...................................        337         75
4b Transition.....................................         20          *
5a Steady-state...................................        518         25
5b Transition.....................................         20          *
6a Steady-state...................................        494         50
6b Transition.....................................         20          *
7 Steady-state....................................         43          0
------------------------------------------------------------------------
* Linear transition.
\a\ Control engine speed as described in Sec.   1054.505. Control engine
  speed for Mode 6 as described in Sec.   1054.505(c) for idle
  operation.
\b\ Advance from one mode to the next within a 20-second transition
  phase. During the transition phase, command a linear progression from
  the torque setting of the current mode to the torque setting of the
  next mode.
\c\ The percent torque is relative to the value established for full-
  load torque, as described in Sec.   1054.505.


0
Sec.  208. A new part 1060 is added to subchapter U of chapter I to 
read as follows:

PART 1060--CONTROL OF EVAPORATIVE EMISSIONS FROM NEW AND IN--USE 
NONROAD AND STATIONARY EQUIPMENT

Subpart A--Overview and Applicability
Sec.
1060.1 Which products are subject to this part's requirements?
1060.5 Do the requirements of this part apply to me?
1060.10 How is this part organized?
1060.15 Do any other CFR parts apply to me?
1060.30 Submission of information.
Subpart B--Emission Standards and Related Requirements
1060.101 What evaporative emission requirements apply under this 
part?
1060.102 What permeation emission control requirements apply for 
fuel lines?
1060.103 What permeation emission control requirements apply for 
fuel tanks?
1060.104 What running loss emission control requirements apply?
1060.105 What diurnal requirements apply for equipment?
1060.120 What emission-related warranty requirements apply?
1060.125 What maintenance instructions must I give to buyers?
1060.130 What installation instructions must I give to equipment 
manufacturers?
1060.135 How must I label and identify the engines and equipment I 
produce?
1060.137 How must I label and identify the fuel-system components I 
produce?
Subpart C--Certifying Emission Families
1060.201 What are the general requirements for obtaining a 
certificate of conformity?
1060.202 What are the certification requirements related to the 
general standards in Sec.  1060.101?
1060.205 What must I include in my application?
1060.210 What records should equipment manufacturers keep if they do 
not apply for certification?
1060.225 How do I amend my application for certification?
1060.230 How do I select emission families?
1060.235 What emission testing must I perform for my application for 
a certificate of conformity?
1060.240 How do I demonstrate that my emission family complies with 
evaporative emission standards?
1060.250 What records must I keep?
1060.255 What decisions may EPA make regarding my certificate of 
conformity?
Subpart D--Production Verification Testing
1060.301 Manufacturer testing.
1060.310 Supplying products to EPA for testing.
Subpart E--In-Use Testing
1060.401 General Provisions.
Subpart F--Test Procedures
1060.501 General testing provisions.
1060.505 Other procedures.
1060.510 How do I test EPA Low-Emission Fuel Lines for permeation 
emissions?
1060.515 How do I test EPA Nonroad Fuel Lines and EPA Cold-Weather 
Fuel Lines for permeation emissions?
1060.520 How do I test fuel tanks for permeation emissions?
1060.521 How do I test fuel caps for permeation emissions?
1060.525 How do I test fuel systems for diurnal emissions?
Subpart G--Special Compliance Provisions
1060.601 How do the prohibitions of 40 CFR 1068.101 apply with 
respect to the requirements of this part?
1060.605 Exemptions from evaporative emission standards.
1060.640 What special provisions apply to branded equipment?
Subpart H--Averaging, Banking, and Trading Provisions
1060.701 Applicability.
1060.705 How do I certify components to an emission level other than 
the standard under this part or use such components in my equipment?
Subpart I--Definitions and Other Reference Information
1060.801 What definitions apply to this part?
1060.805 What symbols, acronyms, and abbreviations does this part 
use?
1060.810 What materials does this part reference?
1060.815 What provisions apply to confidential information?
1060.820 How do I request a hearing?
1060.825 What reporting and recordkeeping requirements apply under 
this part?

    Authority: 42 U.S.C. 7401-7671q.

[[Page 59299]]

Subpart A--Overview and Applicability


Sec.  1060.1  Which products are subject to this part's requirements?

    (a) The standards and other requirements in this part 1060 apply to 
the fuel lines, fuel tanks, couplings and fittings, and fuel caps used 
or intended to be used in the following categories of new engines and 
equipment that are fueled with a volatile liquid fuel (such as 
gasoline, but not including diesel fuel), and to the equipment in which 
these components are installed, starting with the model years shown in 
Table 1 to this section:
    (1) Compression-ignition engines we regulate under 40 CFR part 
1039. This includes stationary compression-ignition engines we regulate 
under the provisions of 40 CFR part 1039, as indicated under 40 CFR 
part 60, subpart IIII. See the evaporative emission standards specified 
in 40 CFR 1048.105. These engines are considered to be Large SI engines 
for purposes of this part 1060.
    (2) Marine compression-ignition engines we regulate under 40 CFR 
part 1042. See the evaporative emission standards specified in 40 CFR 
1045.112. These engines are considered to be Marine SI engines for 
purposes of this part 1060.
    (3) Marine SI engines we regulate under 40 CFR part 1045. See the 
evaporative emission standards specified in 40 CFR 1045.112.
    (4) Large SI engines we regulate under 40 CFR part 1048. This 
includes stationary spark-ignition engines subject to standards under 
40 CFR parts 1048 or 1054 as indicated in 40 CFR part 60, subpart JJJJ. 
See the evaporative emission standards specified in 40 CFR 1048.105.
    (5) Recreational vehicles and engines we regulate under 40 CFR part 
1051 (such as snowmobiles and off-highway motorcycles). This includes 
highway motorcycles subject to standards under 40 CFR part 1051 as 
indicated in 40 CFR part 86, subpart E since these motorcycles are 
considered to be recreational vehicles for purposes of this part 1060. 
See the evaporative emission standards specified in 40 CFR 1051.110.
    (6) Small SI engines we regulate under 40 CFR part 1054. See the 
evaporative emission standards specified for handheld engines in 40 CFR 
1054.110 and for nonhandheld engines in 40 CFR 1054.112.
    (7) Portable marine fuel tanks and fuel lines associated with such 
fuel tanks must meet evaporative emission standards specified in 40 CFR 
1045.112. Portable nonroad fuel tanks and fuel lines associated with 
such fuel tanks must also meet evaporative emission standards specified 
in 40 CFR 1045.112, whether or not they are used with marine vessels. 
Portable nonroad fuel tanks are considered to be portable marine fuel 
tanks for purposes of this part 1060.
    (b) The regulations in this part 1060 apply for new replacement 
components used with any of the engines or equipment specified in 
paragraph (a) of this section as described in Sec.  1060.601.
    (c) Fuel caps are subject to evaporative emission standards at the 
point of installation on a fuel tank. If a fuel cap is certified for 
use with Marine SI engines or Small SI engines under the optional 
standards of Sec.  1060.103, it is subject to all the requirements of 
this part 1060 as if these optional standards were mandatory.
    (d) This part 1060 does not apply to any diesel-fueled engine or 
any other engine that does not use a volatile liquid fuel. In addition, 
this part does not apply to any engines or equipment in the following 
categories even if they use a volatile liquid fuel:
    (1) Light-duty motor vehicles (see 40 CFR part 86).
    (2) Heavy-duty motor vehicles and heavy-duty motor vehicle engines 
(see 40 CFR part 86). This part 1060 also does not apply to fuel 
systems for nonroad engines where such fuel systems are subject to part 
86 because they are part of a heavy-duty motor vehicle.
    (3) Aircraft engines (see 40 CFR part 87).
    (4) Locomotives (see 40 CFR part 92 and 1033).
    (5) Land-based nonroad diesel engines we regulate under 40 CFR part 
89.
    (6) Marine diesel engines we regulate under 40 CFR part 89, 94, or 
1042.
    (7) Land-based spark-ignition engines at or below 19 kW that we 
regulate under 40 CFR part 90. Note that there are provisions in 40 CFR 
part 90 that reference specific portions of this part 1060.
    (8) Marine spark-ignition engines we regulate under 40 CFR part 91.
    (e) This part 1060 does not apply for fuel lines made wholly of 
metal.

                              Table 1 to Sec.   1060.1--Part 1060 Applicability \a\
----------------------------------------------------------------------------------------------------------------
     Equipment  category or            Fuel line                                                 Running loss
           subcategory                permeation        Tank permeation   Diurnal  emissions       emissions
----------------------------------------------------------------------------------------------------------------
Marine SI--portable marine fuel   January 1, 2009     January 1, 2011...  January 1, 2010...  Not applicable.
 tanks.                            \b\.
Marine SI--personal watercraft..  January 1, 2009...  Model year 2011...  Model year 2010...  Not applicable.
Marine SI--other vessels with     January 1, 2009     Model year 2012...  July 31, 2011.....  Not applicable.
 installed fuel tanks.             \b\.
Large SI........................  Model year 2007...  Not applicable....  Model year 2007     Model year 2007.
                                                                           (includes tank
                                                                           permeation).
Recreational vehicles...........  Model year 2008...  Model year 2008...  Not applicable....  Not applicable.
Small SI--handheld..............  Model year 2012     Model year 2010     Not applicable....  Not applicable.
                                   \c\.                \d\.
Small SI--Class I nonhandheld...  January 1, 2009...  Model year 2012...  Not applicable \e\  Model year 2012.
Small SI--Class II nonhandheld..  January 1, 2009...  Model year 2011...  Not applicable \e\  Model year 2011.
----------------------------------------------------------------------------------------------------------------
\a\ Implementation is based on the date of manufacture of the equipment. Where we do not identify a specific
  date, the emission standards start to apply at the beginning of the model year.
\b\ January 1, 2011 for primer bulbs. Standards phase in for under-cowl fuel lines on outboard engines, by
  length: 30% in 2010, 60% in 2011, 90% in 2012-2014, 100% in 2015.
\c\ 2013 for small-volume emission families that do not include cold-weather fuel lines.
\d\ 2011 for structurally integrated nylon fuel tanks and 2013 for all small-volume emission families.
\e\ Manufacturers may optionally meet diurnal standards as specified in Sec.   1060.105(e).


[[Page 59300]]

Sec.  1060.5  Do the requirements of this part apply to me?

    The requirements of this part are generally addressed to the 
manufacturers that are subject to this part's requirements as described 
in paragraph (a) of this section. The term ``you'' generally means the 
manufacturer or manufacturers that are subject to these requirements. 
Paragraphs (b) through (e) of this section describe which manufacturers 
may or must certify their products. (Note: Sec.  1060.601(f) allows the 
certification responsibility to be delegated in certain circumstances.)
    (a) Overall responsibilities. Manufacturers of the engines, 
equipment, and fuel-system components described in Sec.  1060.1 are 
subject to the standards and other requirements of this part 1060 
except as otherwise noted. Multiple manufacturers may be subject to 
these standards and other requirements. For example, when a Small SI 
equipment manufacturer buys fuel line manufactured by another person 
and installs them in its equipment, both the equipment manufacturer and 
the fuel line manufacturer are subject to the standards and other 
requirements of this part. The following provisions apply in such 
cases:
    (1) Each person meeting the definition of manufacturer for a 
product that is subject to the standards and other requirements of this 
part must comply with such requirements. However, if one person 
complies with a specific requirement for a given product, then all 
manufacturers are deemed to have complied with that specific 
requirement. For example, if a Small SI equipment manufacturer uses 
fuel lines manufactured and certified by another company, the equipment 
manufacturer is not required to obtain a certificate with respect to 
the fuel line emission standards. Such an equipment manufacturer 
remains subject to the standards and other requirements of this part. 
However, where a provision requires a specific manufacturer to comply 
with certain provisions, this paragraph (a) does not change or modify 
such a requirement. For example, this paragraph (a) does not allow you 
to rely on another company to certify instead of you if we specifically 
require you to certify.
    (2) The requirements of subparts C and D of this part apply to the 
manufacturer that obtains the certificate of conformity. Other 
manufacturers are required to comply with the requirements of subparts 
C and D of this part only when we send notification. In our 
notification, we will specify a reasonable period for complying with 
the requirements identified in the notice. See Sec.  1060.601 for the 
applicability of 40 CFR part 1068 to these other manufacturers.
    (3) Certificate holders are responsible for meeting all applicable 
requirements even if other manufacturers are also subject to those 
requirements.
    (b) Marine SI. Certify vessels, engines, and fuel-system components 
as follows:
    (1) Component manufacturers must certify their fuel lines and fuel 
tanks intended for installation with Marine SI engines and vessels 
under this part 1060, except as allowed by Sec.  1060.601(f). This 
includes permeation and diurnal emission standards.
    (2) Vessel manufacturers are subject to all the requirements of 
this part 1060 that apply to Marine SI engines and fuel systems. 
However, they must certify their vessels to the emission standards 
specified in Sec. Sec.  1060.102 through 1060.105 only if one or more 
of the following conditions apply:
    (i) Vessel manufacturers install certified components that are not 
certified to meet all applicable evaporative emission standards, 
including both permeation and diurnal standards. This would include 
vessel manufacturers that make their own fuel tanks. Vessel 
manufacturers would certify under this part 1060.
    (ii) Vessel manufacturers intend to generate or use evaporative 
emission credits, even if they use only certified components to meet 
all applicable evaporative emission standards. Vessel manufacturers 
would certify under part 40 CFR part 1045 using the emission-credit 
provisions in subpart H of that part to demonstrate compliance with the 
emission standard.
    (3) Engine manufacturers must meet all the requirements of this 
part 1060 that apply to vessel manufacturers for all fuel-system 
components they install on their engines. For example, engine 
manufacturers that install under-cowl fuel lines and fuel tanks must 
comply with the requirements specified for vessel manufacturers with 
respect to those components.
    (c) Large SI. Certify engines, equipment, and fuel-system 
components as follows:
    (1) Engine manufacturers must certify their engines under 40 CFR 
part 1048.
    (2) Equipment manufacturers and component manufacturers may certify 
fuel lines and fuel tanks intended for use with Large SI engines under 
this part 1060.
    (d) Recreational vehicles. Certify vehicles, engines and fuel-
system components as follows:
    (1) Vehicle manufacturers must certify their vehicles under 40 CFR 
part 1051.
    (2) Engine manufacturers must meet all the requirements of 40 CFR 
part 1051 that apply to vehicle manufacturers for all fuel-system 
components they install on their engines. For example, engine 
manufacturers that install fuel-line segments on the engines they ship 
to vehicle manufacturers must comply with the requirements specified 
for equipment manufacturers with respect to those components.
    (3) Component manufacturers may certify fuel lines and fuel tanks 
intended for recreational vehicles under this part 1060.
    (e) Small SI. Certify engines, equipment, and fuel-system 
components as follows:
    (1) Component manufacturers must certify their fuel lines and fuel 
tanks intended for Small SI engines and equipment under this part 1060, 
except as allowed by Sec.  1060.601(f).
    (2) Engine manufacturers must meet all the requirements of this 
part 1060 that apply to equipment manufacturers for all fuel-system 
components they install on their engines. Engine manufacturers that 
produce Small SI engines with complete fuel systems are considered the 
equipment manufacturers for those engines under this part 1060.
    (3) Equipment manufacturers must certify their equipment and are 
subject to all the requirements of this part 1060.
    (f) Summary of certification responsibilities. Tables 1 through 3 
of this section summarize the certification responsibilities for 
different kinds of manufacturers as described in paragraphs (b) through 
(e) of this section. The term ``No'' as used in the tables means that a 
manufacturer is not required to obtain a certificate of conformity 
under paragraphs (b) through (e) of this section. In situations where 
multiple manufacturers are subject to the standards and other 
requirements of this part, such a manufacturer must nevertheless 
certify if the manufacturer who is required to certify under paragraphs 
(b) through (e) of this section fails to obtain a certificate of 
conformity.

[[Page 59301]]



 Table 1 to Sec.   1060.5--Summary of Engine Manufacturer Certification
                            Responsibilities
------------------------------------------------------------------------
                                     Is the engine       Code of Federal
                                 manufacturer required  Regulations cite
        Equipment type              to certify fuel            for
                                     systems? \a\         certification
------------------------------------------------------------------------
Marine SI.....................  No....................
Large SI......................  Yes...................  40 CFR part
                                                         1048.
Recreational vehicles.........  No....................
Small SI......................  No, unless engines are  40 CFR part
                                 sold with complete      1060.
                                 fuel systems.
------------------------------------------------------------------------
\a\ Fuel lines and fuel tanks that are attached to or sold with engines
  must be covered by a certificate of conformity.


       Table 2 to Sec.   1060.5--Summary of Equipment Manufacturer
                     Certification Responsibilities
------------------------------------------------------------------------
                                   Is the equipment      Code of Federal
                                 manufacturer required  Regulations cite
        Equipment type              to certify fuel            for
                                       systems?           certification
------------------------------------------------------------------------
Marine SI.....................  Yes, but only if        40 CFR part
                                 vessel manufacturers    1060.\a\
                                 install uncertified
                                 fuel lines or fuel
                                 tanks or intend to
                                 generate or use
                                 evaporative emission
                                 credits.
Large SI......................  Allowed but not         40 CFR part
                                 required.               1060.
Recreational vehicles.........  Yes, even if vehicle    40 CFR part
                                 manufacturers install   1051.
                                 certified components.
Small SI......................  Yes...................  40 CFR part
                                                         1060.\a\
------------------------------------------------------------------------
\a\ See the exhaust standard-setting part for provisions related to
  generating or using evaporative emission credits.


       Table 3 of Sec.   1060.5--Summary of Component Manufacturer
                     Certification Responsibilities
------------------------------------------------------------------------
                                   Is the component      Code of Federal
                                 manufacturer required  Regulations cite
        Equipment type           to certify fuel lines         for
                                    and fuel tanks?       certification
------------------------------------------------------------------------
Marine SI.....................  Yes, including          40 CFR part
                                 portable marine fuel    1060.
                                 tanks and associated
                                 fuel lines.
Large SI......................  Allowed but not         40 CFR part
                                 required.               1060.
Recreational vehicles.........  Allowed but not         40 CFR part
                                 required.               1060.
Small SI......................  Yes \a\...............  40 CFR part
                                                         1060.
------------------------------------------------------------------------
\a\ See Sec.   1060.601 for an allowance to make contractual
  arrangements with engine or equipment manufacturers instead of
  certifying.

Sec.  1060.10  How is this part organized?

    This part 1060 is divided into the following subparts:
    (a) Subpart A of this part defines the applicability of part 1060 
and gives an overview of regulatory requirements.
    (b) Subpart B of this part describes the emission standards and 
other requirements that must be met to certify equipment or components 
under this part. Note that Sec.  1060.110 discusses certain interim 
requirements and compliance provisions that apply only for a limited 
time.
    (c) Subpart C of this part describes how to apply for a certificate 
of conformity.
    (d) Subpart D of this part describes the requirements related to 
verifying that products are being produced as described in an approved 
application for certification.
    (e) Subpart E of this part describes the requirements related to 
verifying that products are meeting the standards in use.
    (f) Subpart F of this part describes how to measure evaporative 
emissions.
    (g) Subpart G of this part and 40 CFR part 1068 describe 
requirements, prohibitions, and other provisions that apply to 
manufacturers, owners, operators, and all others.
    (h) Subpart H of this part describes how to certify your equipment 
or components for inclusion in an emission averaging program allowed by 
an exhaust standard-setting part.
    (i) Subpart I of this part contains definitions and other reference 
information.


Sec.  1060.15  Do any other CFR parts apply to me?

    (a) There is a separate part of the CFR that includes exhaust 
emission requirements for each particular application, as described in 
Sec.  1060.1(a). We refer to these as the exhaust standard-setting 
parts. In cases where an exhaust standard-setting part includes 
evaporative requirements, apply this part 1060 as specified in the 
exhaust standard-setting part, as follows:
    (1) The requirements in the exhaust standard-setting part may 
differ from the requirements in this part. In cases where it is not 
possible to comply with both the exhaust standard-setting part and this 
part, you must comply with the requirements in the exhaust standard-
setting part. The exhaust standard-setting part may also allow you to 
deviate from the procedures of this part for other reasons.
    (2) The exhaust standard-setting parts may reference some sections 
of this part 1060 or may allow or require certification under this part 
1060. See the exhaust standard-setting parts to determine what 
provisions of this part 1060 apply for these equipment types.
    (b) The requirements and prohibitions of part 1068 of this chapter 
apply to everyone, including anyone who manufactures, imports, owns, 
operates, or services any of the fuel systems subject to this part 
1060. Part 1068 of this chapter describes general provisions, including 
the following areas:
    (1) Prohibited acts and penalties for engine manufacturers, 
equipment manufacturers, and others.
    (2) Exclusions and exemptions for certain products.
    (3) Importing products.
    (4) Defect reporting and recall.
    (5) Procedures for hearings.
    (c) Other parts of this chapter apply if referenced in this part.


Sec.  1060.30  Submission of information.

    (a) This part includes various requirements to record data or other 
information. Refer to Sec.  1060.825, 40 CFR

[[Page 59302]]

1068.25, and the exhaust standard-setting part regarding recordkeeping 
requirements. If recordkeeping requirements are not specified, store 
these records in any format and on any media and keep them readily 
available for one year after you send an associated application for 
certification, or one year after you generate the data if they do not 
support an application for certification. You must promptly send us 
organized, written records in English if we ask for them. We may review 
them at any time.
    (b) The regulations in Sec.  1060.255 and 40 CFR 1068.101 describe 
your obligation to report truthful and complete information and the 
consequences of failing to meet this obligation. This includes 
information not related to certification.
    (c) Send all reports and requests for approval to the Designated 
Compliance Officer (see Sec.  1060.801).
    (d) Any written information we require you to send to or receive 
from another company is deemed to be a required record under this 
section. Such records are also deemed to be submissions to EPA. We may 
require you to send us these records whether or not you are a 
certificate holder.

Subpart B--Emission Standards and Related Requirements


Sec.  1060.101  What evaporative emission requirements apply under this 
part?

    Products subject to this part must meet emission standards and 
related requirements as follows:
    (a) Section 1060.102 describes permeation emission control 
requirements for fuel lines.
    (b) Section 1060.103 describes permeation emission control 
requirements for fuel tanks.
    (c) Section 1060.104 describes running loss emission control 
requirements for fuel systems.
    (d) Section 1060.105 describes diurnal emission control 
requirements for fuel tanks.
    (e) The following general requirements apply for components and 
equipment subject to the emission standards in Sec. Sec.  1060.102 
through 1060.105:
    (1) Adjustable parameters. Components or equipment with adjustable 
parameters must meet all the requirements of this part for any 
adjustment in the physically adjustable range.
    (2) Prohibited controls. The following controls are prohibited:
    (i) For anyone to design, manufacture, or install emission control 
systems so they cause or contribute to an unreasonable risk to public 
health, welfare, or safety while operating.
    (ii) For anyone to design, manufacture, or install emission control 
systems with features that disable, deactivate, or bypass the emission 
controls, either actively or passively. For example, you may not 
include a manual vent that the operator can open to bypass emission 
controls. You may ask us to allow such features if needed for safety 
reasons or if the features are fully functional during emission tests 
described in subpart F of this part.
    (3) Emission credits. Equipment manufacturers are allowed to comply 
with the emission standards in this part using evaporative emission 
credits only if the exhaust standard-setting part explicitly allows it 
for evaporative emissions. See the exhaust standard-setting part and 
subpart H of this part for information about complying with evaporative 
emission credits. For equipment manufacturers to generate or use 
evaporative emission credits, components must be certified to a family 
emission limit, which serves as the standard for those components.
    (f) This paragraph (f) specifies requirements that apply to 
equipment manufacturers subject to requirements under this part, 
whether or not they are subject to and certify to any of the emission 
standards in Sec. Sec.  1060.102 through 1060.105. Equipment 
manufacturers meeting these requirements will be deemed to be certified 
as in conformity with the requirements of this paragraph (f) without 
submitting an application for certification, as follows:
    (1) Fuel caps, vents, and carbon canisters. You are responsible for 
ensuring that proper caps and vents are installed on each new piece of 
equipment that is subject to emission standards under this part. The 
following particular requirements apply to equipment that is subject to 
running loss or diurnal emission standards, including portable marine 
fuel tanks:
    (i) All equipment must have a tethered fuel cap. Fuel caps must 
also include a visual, audible, or other physical indication that they 
have been properly sealed.
    (ii) You may not add vents unless they are specified in or allowed 
by the applicable certificates of conformity.
    (iii) If the emission controls rely on carbon canisters, they must 
be installed in a way that prevents exposing the carbon to water or 
liquid fuel.
    (2) Fuel-line fittings. The following requirements apply for fuel-
line fittings that will be used with fuel lines that must meet 
permeation emission standards:
    (i) Use good engineering judgment to ensure that all fuel-line 
fittings will remain securely connected to prevent fuel leakage 
throughout the useful life of the equipment.
    (ii) Fuel lines that are intended to be detachable (such as those 
for portable marine fuel tanks) must be self-sealing when detached from 
the fuel tank or engine.
    (3) Refueling. For any equipment using fuel tanks that are subject 
to diurnal or permeation emission standards under this part, you must 
design and build your equipment such that operators can reasonably be 
expected to fill the fuel tank without spitback or spillage during the 
refueling event. The following examples illustrate designs that meet 
this requirement:
    (i) Equipment that is commonly refueled using a portable gasoline 
container should have a fuel tank inlet that is larger than a typical 
dispensing spout. The fuel tank inlet should be located so the operator 
can place the nozzle directly in the fuel tank inlet and see the fuel 
level in the tank while pouring the fuel from an appropriately sized 
refueling container (either through the tank wall or the fuel tank 
inlet). We will deem you to comply with the requirements of this 
paragraph (f)(3)(i) if you design your equipment to meet applicable 
industry standards related to fuel tank inlets.
    (ii) Marine SI vessels with a filler neck extending to the side of 
the boat should be designed for automatic fuel shutoff. Alternatively, 
the filler neck should be designed such that the orientation of the 
filler neck allows dispensed fuel that collects in the filler neck to 
flow back into the fuel tank. A filler neck that ends with a horizontal 
or nearly horizontal segment at the opening where fuel is dispensed 
would not be an acceptable design.
    (g) Components and equipment must meet the standards specified in 
this part throughout the applicable useful life. Where we do not 
specify procedures for demonstrating the durability of emission 
controls, use good engineering judgment to ensure that your products 
will meet the standards throughout the useful life. The useful life is 
one of the following values:
    (1) The useful life in years specified for the components or 
equipment in the exhaust standard-setting part.
    (2) The useful life in years specified for the engine in the 
exhaust standard-setting part if the exhaust standards are specified 
for the engine rather than the equipment and there is no useful life 
given for components or equipment.
    (3) Five years if no useful life is specified in years for the 
components, equipment, or engines in the exhaust standard-setting part.

[[Page 59303]]

Sec.  1060.102  What permeation emission control requirements apply for 
fuel lines?

    (a) Nonmetal fuel lines must meet permeation requirements as 
follows:
    (1) Marine SI fuel lines, including fuel lines associated with 
outboard engines or portable marine fuel tanks, must meet the 
permeation requirements in this section.
    (2) Large SI fuel lines must meet the permeation requirements 
specified in 40 CFR 1048.105.
    (3) Fuel lines for recreational vehicles must meet the permeation 
requirements specified in 40 CFR 1051.110 or in this section.
    (4) Small SI fuel lines must meet the permeation requirements in 
this section, unless they are installed in equipment certified to meet 
diurnal emission standards under Sec.  1060.105(e).
    (b) Different categories of nonroad equipment are subject to 
different requirements with respect to fuel line permeation. Fuel lines 
are classified based on measured emissions over the test procedure 
specified for the class.
    (c) The regulations in 40 CFR part 1048 require that fuel lines 
used with Large SI engines must meet the standards for EPA Low-Emission 
Fuel Lines. The regulations in 40 CFR part 1054 require that fuel lines 
used with handheld Small SI engines installed in cold-weather equipment 
must meet the standards for EPA Cold-Weather Fuel Lines. Unless 
specified otherwise in this subchapter U, fuel lines used with all 
other engines and equipment subject to the provisions of this part 
1060, including fuel lines associated with outboard engines or portable 
marine fuel tanks, must meet the standards for EPA Nonroad Fuel Lines.
    (d) The following standards apply for each fuel line 
classification:
    (1) EPA Low-Emission Fuel Lines must have permeation emissions at 
or below 10 g/m2/day when measured according to the test 
procedure described in Sec.  1060.510.
    (2) EPA Nonroad Fuel Lines must have permeation emissions at or 
below 15 g/m2/day when measured according to the test 
procedure described in Sec.  1060.515.
    (3) EPA Cold-Weather Fuel Lines must meet the following permeation 
emission standards when measured according to the test procedure 
described in Sec.  1060.515:

  Table 1 to Sec.   1060.102--Permeation Standards for EPA Cold-Weather
                               Fuel Lines
------------------------------------------------------------------------
                                                           Standard  (g/
                       Model year                            m\2\/day)
------------------------------------------------------------------------
2012....................................................             290
2013....................................................             275
2014....................................................             260
2015....................................................             245
2016 and later..........................................             225
------------------------------------------------------------------------

    (e) You may certify fuel lines as follow:
    (1) You may certify straight-run fuel lines as sections of any 
length.
    (2) You may certify molded fuel lines in any configuration 
representing your actual production, subject to the provisions for 
selecting a worst-case configuration in Sec.  1060.235(b).
    (3) You may certify fuel line assemblies as aggregated systems that 
include multiple sections of fuel line with connectors and fittings. 
For example, you may certify fuel lines for portable marine fuel tanks 
as assemblies of fuel hose, primer bulbs, and self-sealing end 
connections. The length of such an assembly must not be longer than a 
typical in-use installation and must always be less than 2.5 meters 
long. You may also certify primer bulbs separately. The standard 
applies with respect to the total permeation emissions divided by the 
wetted internal surface area of the assembly. Where it is not practical 
to determine the actual internal surface area of the assembly, you may 
assume that the internal surface area per unit length of the assembly 
is equal to the ratio of internal surface area per unit length of the 
hose section of the assembly.


Sec.  1060.103  What permeation emission control requirements apply for 
fuel tanks?

    (a) Fuel tanks must meet permeation requirements as follows:
    (1) Marine SI fuel tanks, including engine-mounted fuel tanks and 
portable marine fuel tanks, must meet the permeation requirements in 
this section.
    (2) Large SI fuel tanks must meet diurnal emission standards as 
specified in Sec.  1060.105, which includes measurement of permeation 
emissions. No separate permeation standard applies.
    (3) Fuel tanks for recreational vehicles must meet the permeation 
requirements specified in 40 CFR 1051.110 or in this section.
    (4) Small SI fuel tanks must meet the permeation requirements in 
this section unless they are installed in equipment certified to meet 
diurnal emission standards under Sec.  1060.105(e).
    (b) Permeation emissions from fuel tanks may not exceed 1.5 g/
m2/day when measured at a nominal temperature of 28 [deg]C 
with the test procedures for tank permeation in Sec.  1060.520. You may 
also choose to meet a standard of 2.5 g/m2/day if you 
perform testing at a nominal temperature of 40 [deg]C under Sec.  
1060.520(d).
    (c) The exhaust standard-setting part may allow for certification 
of fuel tanks to a family emission limit for calculating evaporative 
emission credits as described in subpart H of this part instead of 
meeting the emission standards in this section.
    (d) For purposes of this part, fuel tanks do not include fuel lines 
that are subject to Sec.  1060.102, petcocks designed for draining 
fuel, or grommets used with fuel lines. Fuel tanks include other 
fittings (such as fuel caps, gaskets, and O-rings) that are directly 
mounted to the fuel tank.
    (e) Fuel caps may be certified separately to the permeation 
emission standard in paragraph (b) of this section using the test 
procedures specified in Sec.  1060.521. For the purposes of this 
paragraph (e), gaskets or O-rings that are produced as part of an 
assembly with the fuel cap are considered part of the fuel cap.
    (f) Metal fuel tanks that meet the permeation criteria in Sec.  
1060.240(d)(2) or use certified nonmetal fuel caps will be deemed to be 
certified as in conformity with the requirements of this section 
without submitting an application for certification.


Sec.  1060.104  What running loss emission control requirements apply?

    (a) Engines and equipment must meet running loss requirements as 
follows:
    (1) Marine SI engines and vessels are not subject to running loss 
emission standards.
    (2) Large SI engines and equipment must prevent fuel boiling during 
operation as specified in 40 CFR 1048.105.
    (3) Recreational vehicles are not subject to running loss emission 
standards.
    (4) Nonhandheld Small SI engines and equipment that are not used in 
wintertime equipment must meet running loss requirements described in 
this section. Handheld Small SI engines and equipment are not subject 
to running loss emission standards.
    (b) You must demonstrate control of running loss emissions in one 
of the following ways if your engines or equipment are subject to the 
requirements of this section:

[[Page 59304]]

    (1) Route running loss emissions into the engine intake system so 
fuel vapors vented from the tank during engine operation are combusted 
in the engine. This may involve routing vapors through a carbon 
canister. If another company has certified the engine with respect to 
exhaust emissions, state in your application for certification that you 
have followed the engine manufacturer's installation instructions.
    (2) Use a fuel tank that remains sealed under normal operating 
conditions. This may involve a bladder or other means to prevent 
pressurized fuel tanks.
    (3) Get an approved Executive Order from the California Air 
Resources Board showing that your system meets applicable running loss 
standards in California.
    (c) If you are subject to both running loss and diurnal emission 
standards, use good engineering judgment to ensure that the emission 
controls are compatible.


Sec.  1060.105  What diurnal requirements apply for equipment?

    (a) Fuel tanks must meet diurnal emission requirements as follows:
    (1) Marine SI fuel tanks, including engine-mounted fuel tanks and 
portable marine fuel tanks, must meet the requirements related to 
diurnal emissions specified in this section.
    (2) Large SI fuel tanks must meet the requirements related to 
diurnal emissions specified in 40 CFR 1048.105.
    (3) Recreational vehicles are not subject to diurnal emission 
standards.
    (4) Small SI fuel tanks are not subject to diurnal emission 
standards, except as specified in paragraph (e) of this section.
    (b) Diurnal emissions from Marine SI fuel tanks may not exceed 0.40 
g/gal/day when measured using the test procedures specified in Sec.  
1060.525 for general fuel temperatures. An alternative standard of 0.16 
g/gal/day applies for fuel tanks installed in nontrailerable boats when 
measured using the corresponding fuel temperature profile in Sec.  
1060.525. Portable marine fuel tanks are not subject to the 
requirements of this paragraph (b), but must instead comply with the 
requirements of paragraphs (c) and (d) of this section.
    (c) Portable marine fuel tanks and associated fuel-system 
components must meet the following requirements:
    (1) They must be self-sealing (without any manual vents) when not 
attached to the engines. The tanks may not vent to the atmosphere when 
attached to an engine.
    (2) They must remain sealed up to a positive pressure of 34.5 kPa 
(5.0 psig); however, they may contain air inlets that open when there 
is a vacuum pressure inside the tank.
    (d) Detachable fuel lines that are intended for use with portable 
marine fuel tanks must be self-sealing (without any manual vents) when 
not attached to the engine or fuel tank.
    (e) Manufacturers of nonhandheld Small SI equipment may optionally 
meet the diurnal emission standards adopted by the California Air 
Resources Board in the Final Regulation Order, Article 1, Chapter 15, 
Division 3, Title 13, California Code of Regulations, July 26, 2004 
(incorporated by reference in Sec.  1060.810). To meet this 
requirement, equipment must be certified to the performance standards 
specified in Title 13 CCR Sec.  2754(a) based on the applicable 
requirements specified in CP-902 and TP-902, including the requirements 
related to fuel caps in Title 13 CCR Sec.  2756. Equipment certified 
under this paragraph (e) does not need to use fuel lines or fuel tanks 
that have been certified separately. Equipment certified under this 
paragraph (e) are subject to all the referenced requirements as if 
these specifications were mandatory.
    (f) The following general provisions apply for controlling diurnal 
emissions:
    (1) If you are subject to both running loss and diurnal emission 
standards, use good engineering judgment to ensure that the emission 
controls are compatible.
    (2) You may not use diurnal emission controls that increase the 
occurrence of fuel spitback or spillage during in-use refueling. Also, 
if you use a carbon canister, you must incorporate design features that 
prevent liquid gasoline from reaching the canister during refueling or 
as a result of fuel sloshing or fuel expansion.


Sec.  1060.120  What emission-related warranty requirements apply?

    (a) General requirements. The certifying manufacturer must warrant 
to the ultimate purchaser and each subsequent purchaser that the new 
nonroad equipment, including its evaporative emission control system, 
meets two conditions:
    (1) It is designed, built, and equipped so it conforms at the time 
of sale to the ultimate purchaser with the requirements of this part.
    (2) It is free from defects in materials and workmanship that may 
keep it from meeting these requirements.
    (b) Warranty period. Your emission-related warranty must be valid 
for at least two years from the point of first retail sale.
    (c) Components covered. The emission-related warranty covers all 
components whose failure would increase the evaporative emissions, 
including those listed in 40 CFR part 1068, Appendix I, and those from 
any other system you develop to control emissions. Your emission-
related warranty does not cover components whose failure would not 
increase evaporative emissions.
    (d) Relationships between manufacturers.
    (1) The emission-related warranty required for equipment 
manufacturers that certify equipment must cover all specified 
components even if another company produces the component.
    (2) Where an equipment manufacturer fulfills a warranty obligation 
for a given component, the component manufacturer is deemed to have 
also met that obligation.


Sec.  1060.125  What maintenance instructions must I give to buyers?

    Give ultimate purchasers written instructions for properly 
maintaining and using the emission control system. You may not specify 
any maintenance more frequently than once per year. For example, if you 
produce cold-weather equipment that requires replacement of fuel cap 
gaskets or O-rings, provide clear instructions to the ultimate 
purchaser, including the required replacement interval.


Sec.  1060.130  What installation instructions must I give to equipment 
manufacturers?

    (a) If you sell a certified fuel-system component for someone else 
to install in equipment, give the installer instructions for installing 
it consistent with the requirements of this part.
    (b) Make sure the instructions have the following information:
    (1) Include the heading: ``Emission-related installation 
instructions''.
    (2) State: ``Failing to follow these instructions when installing 
[IDENTIFY COMPONENT(S)] in a piece of nonroad equipment violates 
federal law (40 CFR 1068.105(b)), subject to fines or other penalties 
as described in the Clean Air Act.''
    (3) Describe any limits on the range of applications needed to 
ensure that the component operates consistently with your application 
for certification. For example:
    (i) For fuel tanks sold without fuel caps, you must specify the 
requirements for the fuel cap, such as the allowable materials, thread 
pattern, how it must seal, etc. You must also include instructions to 
tether the fuel cap as described in Sec.  1060.101(f)(1) if you do not 
sell your fuel tanks with tethered fuel caps.

[[Page 59305]]

    (ii) If your fuel lines do not meet permeation standards specified 
in Sec.  1060.102 for EPA Low-Emission Fuel Lines, tell equipment 
manufacturers not to install the fuel lines with Large SI engines that 
operate on gasoline or another volatile liquid fuel.
    (4) Describe instructions for installing components so they will 
operate according to design specifications in your application for 
certification. Specify sufficient detail to ensure that the equipment 
will meet the applicable standards when your component is installed.
    (5) If you certify a component with a family emission limit above 
the emission standard, be sure to indicate that the equipment 
manufacturer must have a source of credits to offset the higher 
emissions. Also indicate the applications for which the regulations 
allow for compliance using evaporative emission credits.
    (6) Instruct the equipment manufacturers that they must comply with 
the requirements of Sec.  1060.202.
    (c) You do not need installation instructions for components you 
install in your own equipment.
    (d) Provide instructions in writing or in an equivalent format. For 
example, you may post instructions on a publicly available Web site for 
downloading or printing, provided you keep a copy of these instructions 
in your records. If you do not provide the instructions in writing, 
explain in your application for certification how you will ensure that 
each installer is informed of the installation requirements.


Sec.  1060.135  How must I label and identify the engines and equipment 
I produce?

    The labeling requirements of this section apply for all equipment 
manufacturers and for engine manufacturers that certify with respect to 
evaporative emissions. See Sec.  1060.137 for the labeling requirements 
that apply separately for fuel lines, fuel tanks, and other fuel-system 
components.
    (a) You must affix a permanent and legible label identifying each 
engine or piece of equipment before introducing it into U.S. commerce. 
The label must be--
    (1) Attached in one piece so it is not removable without being 
destroyed or defaced.
    (2) Secured to a part of the engine or equipment needed for normal 
operation and not normally requiring replacement.
    (3) Durable and readable for the equipment's entire life.
    (4) Written in English.
    (5) Readily visible in the final installation. It may be under a 
hinged door or other readily opened cover. It may not be hidden by any 
cover attached with screws or any similar designs. Labels on marine 
vessels must be visible from the helm.
    (b) If you hold a certificate for your engine or equipment with 
respect to evaporative emissions, the engine or equipment label 
specified in paragraph (a) of this section must--
    (1) Include the heading ``EMISSION CONTROL INFORMATION''.
    (2) Include your corporate name and trademark. You may identify 
another company and use its trademark instead of yours if you comply 
with the provisions of Sec.  1060.640.
    (3) State the date of manufacture [MONTH and YEAR] of the 
equipment; however, you may omit this from the label if you stamp or 
engrave it on the equipment.
    (4) State: ``THIS EQUIPMENT [or VEHICLE or BOAT] MEETS U.S. EPA 
EVAP STANDARDS.''
    (5) Identify the certified fuel-system components installed on the 
equipment as described in this paragraph (b)(5). Establish a component 
code for each certified fuel-system component, including those 
certified by other companies. You may use part numbers, certification 
numbers, or any other unique code that you or the certifying component 
manufacturer establish. This identifying information must correspond to 
printing or other labeling on each certified fuel-system component, 
whether you or the component manufacturer certifies the individual 
component. You may identify multiple part numbers if your equipment 
design might include an option to use more than one component design 
(such as from multiple component manufacturers). Use one of the 
following methods to include information on the label that identifies 
certified fuel-system components:
    (i) Use the component codes to identify each certified fuel-system 
component on the label specified in this paragraph (b).
    (ii) Identify the emission family on the label using EPA's 
standardized designation or an abbreviated equipment code that you 
establish in your application for certification. Equipment 
manufacturers that also certify their engines with respect to exhaust 
emissions may use the same emission family name for both exhaust and 
evaporative emissions. If you use the provisions of this paragraph 
(b)(5)(ii), you must identify all the certified fuel-system components 
and the associated component codes in your application for 
certification. In this case the label specified in this paragraph (b) 
may omit the information related to specific fuel-system components.
    (c) If you produce equipment without certifying with respect to 
evaporative emissions, the equipment label specified in paragraph (a) 
of this section must--
    (1) State: ``MEETS U.S. EPA EVAP STANDARDS USING CERTIFIED 
COMPONENTS.''
    (2) Include your corporate name.
    (d) You may add information to the emission control information 
label as follows:
    (1) You may identify other emission standards that the engine meets 
or does not meet (such as California standards). You may include this 
information by adding it to the statement we specify or by including a 
separate statement.
    (2) You may add other information to ensure that the engine will be 
properly maintained and used.
    (3) You may add appropriate features to prevent counterfeit labels. 
For example, you may include the engine's unique identification number 
on the label.
    (e) Anyone subject to the labeling requirements in this part 1060 
may ask us to approve modified labeling requirements if it is necessary 
or appropriate. We will approve the request if the alternate label is 
consistent with the requirements of this part.


Sec.  1060.137  How must I label and identify the fuel-system 
components I produce?

    The requirements of this section apply for manufacturers of fuel-
system components subject to emission standards under this part 1060. 
However, these requirements do not apply if you produce fuel-system 
components that will be covered by a certificate of conformity from 
another company under Sec.  1060.601(f). These requirements also do not 
apply for components you certify if you also certify the equipment in 
which the component is installed and meet the labeling requirements in 
Sec.  1060.135.
    (a) Label the following components as described in this section:
    (1) All fuel tanks, except for metal fuel tanks that are deemed 
certified under Sec.  1060.103(f).
    (2) Fuel lines. This includes primer bulbs unless they are excluded 
from the definition of ``fuel line'' under the standard-setting part. 
Label primer bulbs separately.
    (3) Carbon canisters.
    (4) Fuel caps, as described in this paragraph (a)(4). Fuel caps 
must be labeled if they are separately certified under Sec.  1060.103 
or if the diurnal control system requires that the fuel

[[Page 59306]]

tank hold pressure. Fuel caps must also be labeled if they are attached 
directly to the fuel tank, unless the fuel tank is certified based on a 
worst-case fuel cap.
    (5) Replaceable pressure-relief assemblies. This does not apply if 
the component is integral to the fuel tank or fuel cap.
    (6) Other components we determine to be critical to the proper 
functioning of evaporative emission controls.
    (b) Label your certified fuel-system components at the time of 
manufacture. The label must be--
    (1) Attached so it is not removable without being destroyed or 
defaced. This may involve printing directly on the product. For molded 
products, you may use the mold to apply the label.
    (2) Durable and readable for the equipment's entire life.
    (3) Written in English.
    (c) Except as specified in paragraph (d) of this section, you must 
create the label specified in paragraph (b) of this section as follows:
    (1) Include your corporate name. You may identify another company 
instead of yours if you comply with the provisions of Sec.  1054.640.
    (2) Include EPA's standardized designation for the emission family.
    (3) State: ``EPA COMPLIANT''.
    (4) Fuel tank labels must identify the FEL, if applicable.
    (5) Fuel line labels must identify the applicable permeation level. 
This may involve any of the following approaches:
    (i) Identify the applicable numerical emission standard (such as 15 
g/m \2\/day).
    (ii) Identify the applicable emission standards using EPA 
classifications (such as EPA Nonroad Fuel Lines).
    (iii) Identify the applicable industry standard specification (such 
as SAE J30 R12).
    (6) Fuel line labels must be continuous, with no more than 12 
inches before repeating. We will consider labels to be continuous if 
the space between repeating segments is no longer than that of the 
repeated information. You may add a continuous stripe or other pattern 
to help identify the particular type or grade of your products.
    (d) You may create an abbreviated label for your components. Such a 
label may rely on codes to identify the component. The code must at a 
minimum identify the certification status, your corporate name, and the 
emission family. For example, XYZ Manufacturing may label its fuel 
lines as ``EPA-XYZ-A15'' to designate that their ``A15'' family was 
certified to meet EPA's 15 g/m \2\/day standard. If you do this, you 
must describe the abbreviated label in your application for 
certification and identify all the associated information specified in 
paragraph (c) of this section.
    (e) You may ask us to approve modified labeling requirements in 
this section as described in Sec.  1060.135(e).

Subpart C--Certifying Emission Families


Sec.  1060.201  What are the general requirements for obtaining a 
certificate of conformity?

    Manufacturers of engines, equipment, or fuel-system components may 
need to certify their products with respect to evaporative emission 
standards as described in Sec. Sec.  1060.1 and 1060.601. See Sec.  
1060.202 for requirements related to certifying with respect to the 
requirements specified in Sec.  1060.101(f). The following general 
requirements apply for obtaining a certificate of conformity:
    (a) You must send us a separate application for a certificate of 
conformity for each emission family. A certificate of conformity for 
equipment is valid starting with the indicated effective date but it is 
not valid for any production after December 31 of the model year for 
which it is issued. No certificate will be issued after December 31 of 
the model year. A certificate of conformity for a component is valid 
starting with the indicated effective date but it is not valid for any 
production after the end of the production period for which it is 
issued.
    (b) The application must contain all the information required by 
this part and must not include false or incomplete statements or 
information (see Sec.  1060.255).
    (c) We may ask you to include less information than we specify in 
this subpart as long as you maintain all the information required by 
Sec.  1060.250. For example, equipment manufacturers might use only 
components that are certified by other companies to meet applicable 
emission standards, in which case we would not require submission of 
emission data already submitted by the component manufacturer.
    (d) You must use good engineering judgment for all decisions 
related to your application (see 40 CFR 1068.5).
    (e) An authorized representative of your company must approve and 
sign the application.
    (f) See Sec.  1060.255 for provisions describing how we will 
process your application.
    (g) We may specify streamlined procedures for small-volume 
equipment manufacturers.


Sec.  1060.202  What are the certification requirements related to the 
general standards in Sec.  1060.101?

    Equipment manufacturers must ensure that their equipment is 
certified with respect to the general standards specified in Sec.  
1060.101(f) as follows:
    (a) If Sec.  1060.5 requires you to certify your equipment to any 
of the emission standards specified in Sec. Sec.  1060.102 through 
1060.105, describe in your application for certification how you will 
meet the general standards specified in Sec.  1060.101(f).
    (b) If Sec.  1060.5 does not require you to certify your equipment 
to any of the emission standards specified in Sec. Sec.  1060.102 
through 1060.105, your equipment is deemed to be certified with respect 
to the general standards specified in Sec.  1060.101(f) if you design 
and produce your equipment to meet those standards.
    (1) You must keep records as described in Sec.  1060.210. The other 
provisions of this part for certificate holders apply only as specified 
in Sec.  1060.5.
    (2) Your equipment is deemed to be certified only to the extent 
that it meets the general standards in Sec.  1060.101(f). Thus, it is a 
violation of 40 CFR 1068.101(a)(1) to introduce into U.S. commerce such 
equipment that does not meet applicable requirements under Sec.  
1060.101(f).
    (c) Instead of relying on paragraph (b) of this section, you may 
submit an application for certification and obtain a certificate from 
us. The provisions of this part apply in the same manner for 
certificates issued under this paragraph (c) as for any other 
certificate issued under this part.


Sec.  1060.205  What must I include in my application?

    This section specifies the information that must be in your 
application, unless we ask you to include less information under Sec.  
1060.201(c). We may require you to provide additional information to 
evaluate your application.
    (a) Describe the emission family's specifications and other basic 
parameters of the emission controls. Describe how you meet the running 
loss emission control requirements in Sec.  1060.104, if applicable. 
Describe how you meet any applicable equipment-based requirements of 
Sec.  1060.101(e) and (f). State whether you are requesting 
certification for gasoline or some other fuel type. List each 
distinguishable configuration in the emission family.
    (b) Describe the products you selected for testing and the reasons 
for selecting them.

[[Page 59307]]

    (c) Describe the test equipment and procedures that you used, 
including any special or alternate test procedures you used (see Sec.  
1060.501).
    (d) List the specifications of the test fuel to show that it falls 
within the required ranges specified in subpart F of this part.
    (e) State the equipment applications to which your certification is 
limited. For example, if your fuel system meets the emission 
requirements of this part applicable only to handheld Small SI 
equipment, state that the requested certificate would apply only for 
handheld Small SI equipment.
    (f) Identify the emission family's useful life.
    (g) Include the maintenance instructions you will give to the 
ultimate purchaser of each new nonroad engine (see Sec.  1060.125).
    (h) Include the emission-related installation instructions you will 
provide if someone else will install your component in a piece of 
nonroad equipment (see Sec.  1060.130).
    (i) Describe your emission control information label (see 
Sec. Sec.  1060.135 and 1060.137).
    (j) Identify the emission standards or FELs to which you are 
certifying the emission family.
    (k) Present emission data to show your products meet the applicable 
emission standards. Note that Sec. Sec.  1060.235 and 1060.240 allow 
you to submit an application in certain cases without new emission 
data.
    (l) State that your product was tested as described in the 
application (including the test procedures, test parameters, and test 
fuels) to show you meet the requirements of this part. If you did not 
do the testing, identify the source of the data.
    (m) Report all test results, including those from invalid tests, 
whether or not they were conducted according to the test procedures of 
subpart F of this part. We may ask you to send other information to 
confirm that your tests were valid under the requirements of this part.
    (n) Unconditionally certify that all the products in the emission 
family comply with the requirements of this part, other referenced 
parts of the CFR, and the Clean Air Act.
    (o) Include good-faith estimates of U.S.-directed production 
volumes. Include a justification for the estimated production volumes 
if they are substantially different than actual production volumes in 
earlier years for similar models.
    (p) Include other applicable information, such as information 
required by other subparts of this part.
    (q) Name an agent for service located in the United States. Service 
on this agent constitutes service on you or any of your officers or 
employees for any action by EPA or otherwise by the United States 
related to the requirements of this part.


Sec.  1060.210  What records should equipment manufacturers keep if 
they do not apply for certification?

    If you are an equipment manufacturer that does not need to obtain a 
certificate of conformity for your equipment as described in Sec.  
1060.5, you must keep the records specified in this section to document 
compliance with applicable requirements. We may review these records at 
any time. If we ask, you must send us these records within 30 days. You 
must keep these records for eight years from the end of the model year.
    (a) Identify your equipment models and the annual U.S.-directed 
production volumes for each model.
    (b) Identify the emission family names of the certificates that 
will cover your equipment, the part numbers of those certified 
components, and the names of the companies that hold the certificates. 
You must be able to identify this information for each piece of 
equipment you produce.
    (c) Describe how you comply with any emission-related installation 
instructions, labeling requirements, and the general standards in Sec.  
1060.101(e) and (f).


Sec.  1060.225  How do I amend my application for certification?

    Before we issue a certificate of conformity, you may amend your 
application to include new or modified configurations, subject to the 
provisions of this section. After we have issued your certificate of 
conformity, you may send us an amended application requesting that we 
include new or modified configurations within the scope of the 
certificate, subject to the provisions of this section. You must amend 
your application if any changes occur with respect to any information 
included in your application.
    (a) You must amend your application before you take any of the 
following actions:
    (1) Add a configuration to an emission family. In this case, the 
configuration added must be consistent with other configurations in the 
emission family with respect to the criteria listed in Sec.  1060.230.
    (2) Change a configuration already included in an emission family 
in a way that may affect emissions, or change any of the components you 
described in your application for certification. This includes 
production and design changes that may affect emissions any time during 
the equipment's lifetime.
    (3) Modify an FEL for an emission family as described in paragraph 
(f) of this section. Note however that component manufacturers may not 
modify an FEL for their products unless they submit a separate 
application for a new emission family.
    (b) To amend your application for certification, send the 
Designated Compliance Officer the following information:
    (1) Describe in detail the addition or change in the configuration 
you intend to make.
    (2) Include engineering evaluations or data showing that the 
amended emission family complies with all applicable requirements. You 
may do this by showing that the original emission data are still 
appropriate for showing that the amended family complies with all 
applicable requirements.
    (3) If the original emission data for the emission family are not 
appropriate to show compliance for the new or modified configuration, 
include new test data showing that the new or modified configuration 
meets the requirements of this part.
    (c) We may ask for more test data or engineering evaluations. 
Within 30 days after we make our request, you must provide the 
information or describe your plan for providing it in a timely manner.
    (d) For emission families already covered by a certificate of 
conformity, we will determine whether the existing certificate of 
conformity covers your new or modified configuration. You may ask for a 
hearing if we deny your request (see Sec.  1060.820).
    (e) For emission families already covered by a certificate of 
conformity, you may start producing the new or modified configuration 
anytime after you send us your amended application and before we make a 
decision under paragraph (d) of this section. However, if we determine 
that the affected configurations do not meet applicable requirements, 
we will notify you to cease production of the configurations and may 
require you to recall the equipment at no expense to the owner. 
Choosing to produce equipment under this paragraph (e) is deemed to be 
consent to recall all equipment that we determine do not meet 
applicable emission standards or other requirements and to remedy the 
nonconformity at no expense to the owner. If you do not provide 
information we request under paragraph (c) of this section within 30 
days after

[[Page 59308]]

we request it, you must stop producing the new or modified equipment.
    (f) If you hold a certificate of conformity for equipment and you 
have certified the fuel tank that you install in the equipment, you may 
ask us to approve a change to your FEL after the start of production. 
The changed FEL may not apply to equipment you have already introduced 
into U.S. commerce, except as described in this paragraph (f). If we 
approve a changed FEL after the start of production, you must identify 
the date or serial number for applying the new FEL. If you identify 
this by month and year, we will consider that a lowered FEL applies on 
the last day of the month and a raised FEL applies on the first day of 
the month. You may ask us to approve a change to your FEL in the 
following cases:
    (1) You may ask to raise your FEL for your emission family at any 
time. In your request, you must show that you will still be able to 
meet the emission standards as specified in the exhaust standard-
setting part. If you amend your application by submitting new test data 
to include a newly added or modified fuel tank configuration, as 
described in paragraph (b)(3) of this section, use the appropriate FELs 
with corresponding production volumes to calculate your production-
weighted average FEL for the model year. In all other circumstances, 
you must use the higher FEL for the entire family to calculate your 
production-weighted average FEL under subpart H of this part.
    (2) You may ask to lower the FEL for your emission family only if 
you have test data from production units showing that emissions are 
below the proposed lower FEL. The lower FEL applies only for units you 
produce after we approve the new FEL. Use the appropriate FELs with 
corresponding production volumes to calculate your production-weighted 
average FEL for the model year.
    (g) Component manufacturers may not change an emission family's FEL 
under any circumstances. Changing the FEL would require submission of a 
new application for certification.


Sec.  1060.230  How do I select emission families?

    (a) For purposes of certification, divide your product line into 
families of equipment (or components) that are expected to have similar 
emission characteristics throughout their useful life.
    (b) Group fuel lines into the same emission family if they are the 
same in all the following aspects:
    (1) Type of material including barrier layer.
    (2) Production method.
    (3) Types of connectors and fittings (material, approximate wall 
thickness, etc.) for fuel line assemblies certified together.
    (c) Group fuel tanks (or fuel systems including fuel tanks) into 
the same emission family if they are the same in all the following 
aspects:
    (1) Type of material, including any pigments, plasticizers, UV 
inhibitors, or other additives that are expected to affect control of 
emissions.
    (2) Production method.
    (3) Relevant characteristics of fuel cap design for fuel systems 
subject to diurnal emission requirements.
    (4) Gasket material.
    (5) Emission control strategy.
    (6) Family emission limit, if applicable.
    (d) Group other fuel-system components and equipment into the same 
emission family if they are the same in all the following aspects:
    (1) Emission control strategy and design.
    (2) Type of material (such as type of charcoal used in a carbon 
canister). This criteria does not apply for materials that are 
unrelated to emission control performance.
    (3) The fuel systems meet the running loss emission standard based 
on the same type of compliance demonstration specified in Sec.  
1060.104(b), if applicable.
    (e) You may subdivide a group of equipment or components that are 
identical under paragraphs (b) through (d) of this section into 
different emission families if you show the expected emission 
characteristics are different during the useful life.
    (f) In unusual circumstances, you may group equipment or components 
that are not identical with respect to the things listed in paragraph 
(b) through (d) of this section into the same emission family if you 
show that their emission characteristics during the useful life will be 
similar. The provisions of this paragraph (f) do not exempt any engines 
or equipment from meeting all the applicable standards and requirements 
in subpart B of this part.
    (g) Emission families may include components used in multiple 
equipment categories. Such families are covered by a single 
certificate. For example, a single emission family may contain fuel 
tanks used in both Small SI equipment and Marine SI vessels.


Sec.  1060.235  What emission testing must I perform for my application 
for a certificate of conformity?

    This section describes the emission testing you must perform to 
show compliance with the emission standards in subpart B of this part.
    (a) Test your products using the procedures and equipment specified 
in subpart F of this part.
    (b) Select an emission-data unit from each emission family for 
testing. If you are certifying with a family emission limit, you must 
test at least three emission-data units. In general, you must test a 
preproduction product that will represent actual production. However, 
for fuel tank permeation, you may test a tank with standardized 
geometry provided that it is made of the same material(s) and 
appropriate wall thickness. In general, the test procedures specify 
that components or systems be tested rather than complete equipment. 
For example, to certify your family of Small SI equipment, you would 
need to test a sample of fuel line for permeation emissions and a fuel 
tank for permeation emissions. Note that paragraph (e) of this section 
and Sec.  1060.240 allow you in certain circumstances to certify 
without testing an emission-data unit from the emission family. Select 
test components that are most likely to exceed (or have emissions 
nearer to) the applicable emission standards as follows:
    (1) For fuel tanks, consider the following factors associated with 
higher emission levels:
    (i) Smallest average wall thickness (or barrier thickness, as 
appropriate).
    (ii) Greatest extent of pinch welds for tanks using barrier 
technologies.
    (iii) Greatest relative area of gasket material, especially if 
gaskets are made of high-permeation materials.
    (2) For fuel lines, consider the following factors associated with 
higher emission levels:
    (i) Smallest average wall thickness (or barrier thickness, as 
appropriate).
    (ii) Smallest inner diameter.
    (c) You may not do maintenance on emission-data units.
    (d) We may measure emissions from any of your products from the 
emission family, as follows:
    (1) You must supply your products to us if we choose to perform 
confirmatory testing.
    (2) If we measure emissions on one of your products, the results of 
that testing become the official emission results for the emission 
family. Unless we later invalidate these data, we may decide not to 
consider your data in determining if your emission family meets 
applicable requirements.
    (e) You may ask to use carryover emission data from a previous 
production period instead of doing new tests, but only if all the 
following are true:
    (1) The emission family from the previous production period differs 
from

[[Page 59309]]

the current emission family only with respect to production period or 
other characteristics unrelated to emissions. You may also ask to add a 
configuration subject to Sec.  1060.225.
    (2) The emission-data unit from the previous production period 
remains the appropriate emission-data unit under paragraph (b) of this 
section. For example, you may not carryover emission data for your 
family of nylon fuel tanks if you have added a thinner-walled fuel tank 
than was tested previously.
    (3) The data show that the emission-data unit would meet all the 
requirements that apply to the emission family covered by the 
application for certification.
    (f) We may require you to test another unit of the same or 
different configuration in addition to the unit(s) tested under 
paragraph (b) of this section.
    (g) If you use an alternate test procedure under Sec.  1060.505, 
and later testing shows that such testing does not produce results that 
are equivalent to the procedures specified in this part, we may reject 
data you generated using the alternate procedure.


Sec.  1060.240  How do I demonstrate that my emission family complies 
with evaporative emission standards?

    (a) For purposes of certification, your emission family is 
considered in compliance with an evaporative emission standard in 
subpart B of this part if you do either of the following:
    (1) You have test results showing a certified emission level from 
the fuel tank or fuel line (as applicable) in the family are at or 
below the applicable standard.
    (2) You comply with design specifications as specified in 
paragraphs (d) through (f) of this section.
    (b) Your emission family is deemed not to comply if any fuel tank 
or fuel line representing that family has an official emission result 
above the standard.
    (c) Round each official emission result to the same number of 
decimal places as the emission standard.
    (d) You may demonstrate for certification that your emission family 
complies with the fuel tank permeation standards specified in Sec.  
1060.103 with any of the following control technologies:
    (1) A coextruded high-density polyethylene fuel tank with a 
continuous ethylene vinyl alcohol barrier layer (with not more than 40 
molar percent ethylene) making up at least 2 percent of the fuel tank's 
overall wall thickness with any of the following gasket and fuel-cap 
characteristics:
    (i) No nonmetal gaskets or fuel caps.
    (ii) All nonmetal gaskets and fuel caps made from low-permeability 
materials.
    (iii) Nonmetal gaskets and fuel caps that are not made from low-
permeability materials up to the following limits:
    (A) Gaskets with a total exposed surface area less than 0.25 
percent of the total inside surface area of the fuel tank. For example, 
a fuel tank with an inside surface area of 0.40 square meters may use 
high-permeation gasket material representing a surface area of up to 
1,000 mm2 (0.25% x \1/100\ x 0.40 m2 x 1,000,000 
mm2/m2). Determine surface area based on the 
amount of material exposed to liquid fuel.
    (B) Fuel caps directly mounted to the fuel tank with the surface 
area of the fuel cap less than 3.0 percent of the total inside surface 
area of the fuel tank. Use the smallest inside cross-sectional area of 
the opening on which the cap is mounted as the fuel cap's surface area.
    (2) A metal fuel tank with the gasket and fuel-cap characteristics 
meeting the specifications in paragraphs (d)(1)(i) through (iii) of 
this section.
    (e) You may demonstrate for certification that your emission family 
complies with the diurnal emission standards specified in Sec.  
1060.105 with any of the following control technologies:
    (1) A Marine SI fuel tank sealed up to a positive pressure of 7.0 
kPa (1.0 psig); however, the fuel tank may contain air inlets that open 
when there is a vacuum pressure inside the tank.
    (2) A Marine SI fuel tank equipped with a passively purged carbon 
canister that meets the requirements of this paragraph (e)(2). The 
carbon must adsorb no more than 0.5 grams of water per gram of carbon 
at 90% relative humidity and a temperature of 255 [deg]C. 
The carbon granules must have a minimum mean diameter of 3.1 mm based 
on the procedures in ASTM D2862 (incorporated by reference in Sec.  
1060.810). The carbon must also pass a dust attrition test based on 
ASTM D3802 (incorporated by reference in Sec.  1060.810), except that 
hardness is defined as the ratio of mean particle diameter before and 
after the test and the procedure must involve twenty \1/2\-inch steel 
balls and ten \3/4\-inch steel balls. Use good engineering judgment in 
the structural design of the carbon canister. The canister must have a 
volume compensator or some other device to prevent the carbon pellets 
from moving within the canister as a result of vibration or changing 
temperature. The canister must have a minimum working capacity as 
follows:
    (i) You may use the measurement procedures specified by the 
California Air Resources Board in Attachment 1 to TP-902 to show that 
canister working capacity is least 3.6 grams of vapor storage capacity 
per gallon of nominal fuel tank capacity (or 1.4 grams of vapor storage 
capacity per gallon of nominal fuel tank capacity for fuel tanks used 
in nontrailerable boats). TP-902 is part of Final Regulation Order, 
Article 1, Chapter 15, Division 3, Title 13, California Code of 
Regulations, July 26, 2004 as adopted by the California Air Resources 
Board (incorporated by reference in Sec.  1060.810).
    (ii) You may produce canisters with a minimum carbon volume of 
0.040 liters per gallon of nominal fuel tank capacity (or 0.016 liters 
per gallon for fuel tanks used in nontrailerable boats). The carbon 
canister must have a minimum effective length-to-diameter ratio of 3.5 
and the vapor flow must be directed with the intent of using the whole 
carbon bed. The carbon must have a minimum carbon working capacity of 
90 grams per liter.
    (f) We may establish additional design certification options where 
we find that new test data demonstrate that the use of a different 
technology design will ensure compliance with the applicable emission 
standards.
    (g) You may not establish a family emission limit below the 
emission standard for components certified based on design 
specifications under this section even if actual emission rates are 
much lower.


Sec.  1060.250  What records must I keep?

    (a) Organize and maintain the following records:
    (1) A copy of all applications and any summary information you send 
us.
    (2) Any of the information we specify in Sec.  1060.205 that you 
were not required to include in your application.
    (3) A detailed history of each emission-data unit. For each 
emission data unit, include all of the following:
    (i) The emission-data unit's construction, including its origin and 
buildup, steps you took to ensure that it represents production 
equipment, any components you built specially for it, and all the 
components you include in your application for certification.
    (ii) All your emission tests, including documentation on routine 
and standard tests, and the date and purpose of each test.
    (iii) All tests to diagnose emission control performance, giving 
the date and time of each and the reasons for the test.
    (iv) Any other significant events.
    (4) Annual production figures for each emission family divided by 
assembly plant.
    (5) Keep a list of equipment identification numbers for all the

[[Page 59310]]

equipment you produce under each certificate of conformity.
    (b) Keep required data from routine emission tests (such as 
temperature measurements) for one year after we issue the associated 
certificate of conformity. Keep all other information specified in 
paragraph (a) of this section for eight years after we issue your 
certificate.
    (c) Store these records in any format and on any media as long as 
you can promptly send us organized, written records in English if we 
ask for them. You must keep these records readily available. We may 
review them at any time.


Sec.  1060.255  What decisions may EPA make regarding my certificate of 
conformity?

    (a) If we determine your application is complete and shows that the 
emission family meets all the requirements of this part and the Clean 
Air Act, we will issue a certificate of conformity for your emission 
family for that production period. We may make the approval subject to 
additional conditions.
    (b) We may deny your application for certification if we determine 
that your emission family fails to comply with emission standards or 
other requirements of this part or the Clean Air Act. We will base our 
decision on all available information. If we deny your application, we 
will explain why in writing.
    (c) In addition, we may deny your application or suspend or revoke 
your certificate if you do any of the following:
    (1) Refuse to comply with any testing or reporting requirements.
    (2) Submit false or incomplete information (paragraph (e) of this 
section applies if this is fraudulent).
    (3) Render inaccurate any test data.
    (4) Deny us from completing authorized activities despite our 
presenting a warrant or court order (see 40 CFR 1068.20). This includes 
a failure to provide reasonable assistance.
    (5) Produce equipment or components for importation into the United 
States at a location where local law prohibits us from carrying out 
authorized activities.
    (6) Fail to supply requested information or amend your application 
to include all equipment or components being produced.
    (7) Take any action that otherwise circumvents the intent of the 
Clean Air Act or this part.
    (d) We may void your certificate if you do not keep the records we 
require or do not give us information when we ask for it.
    (e) We may void your certificate if we find that you intentionally 
submitted false or incomplete information.
    (f) If we deny your application or suspend, revoke, or void your 
certificate, you may ask for a hearing (see Sec.  1060.820).

Subpart D--Production Verification Testing


Sec.  1060.301  Manufacturer testing.

    (a) Using good engineering judgment, you must evaluate production 
samples to verify that equipment or components you produce are as 
specified in the certificate of conformity. This may involve testing 
using certification procedures or other measurements.
    (b) You must give us records to document your evaluation if we ask 
for them.


Sec.  1060.310  Supplying products to EPA for testing.

    Upon our request, you must supply a reasonable number of production 
samples to us for verification testing.

Subpart E--In-use Testing


Sec.  1060.401  General Provisions.

    We may perform in-use testing of any equipment or fuel-system 
components subject to the standards of this part.

Subpart F--Test Procedures


Sec.  1060.501  General testing provisions.

    (a) This subpart is addressed to you as a certifying manufacturer 
but it applies equally to anyone who does testing for you.
    (b) Unless we specify otherwise, the terms ``procedures'' and 
``test procedures'' in this part include all aspects of testing, 
including the equipment specifications, calibrations, calculations, and 
other protocols and procedural specifications needed to measure 
emissions.
    (c) The specification for gasoline to be used for testing is given 
in 40 CFR 1065.710. Use the grade of gasoline specified for general 
testing. For testing specified in this part that requires a blend of 
gasoline and ethanol, blend this grade of gasoline with fuel-grade 
ethanol meeting the specifications of ASTM D4806 (incorporated by 
reference in Sec.  1060.810). You do not need to measure the ethanol 
concentration of such blended fuels and may instead calculate the 
blended composition by assuming that the ethanol is pure and mixes 
perfectly with the base fuel. For example, if you mix 10.0 liters of 
fuel-grade ethanol with 90.0 liters of gasoline, you may assume the 
resulting mixture is 10.0 percent ethanol. You may use more or less 
pure ethanol if you can demonstrate that it will not affect your 
ability to demonstrate compliance with the applicable emission 
standards. Note that unless we specify otherwise, any references to 
gasoline-ethanol mixtures containing a specified ethanol concentration 
means mixtures meeting the provisions of this paragraph (c).
    (d) Accuracy and precision of all temperature measurements must be 
1.0 [deg]C or better. If you use multiple sensors to 
measure differences in temperature, calibrate the sensors so they will 
be within 0.5 [deg]C of each other when they are in thermal equilibrium 
at a point within the range of test temperatures (use the starting 
temperature in Table 1 to Sec.  1060.525 unless this is not feasible).
    (e) Accuracy and precision of mass balances must be sufficient to 
ensure accuracy and precision of two percent or better for emission 
measurements for products at the maximum level allowed by the standard. 
The readability of the display may not be coarser than half of the 
required accuracy and precision. Examples are shown in the following 
table:

----------------------------------------------------------------------------------------------------------------
                                    Example 1    Example 2           Example 3
----------------------------------------------------------------------------------------------------------------
Applicable standard..............  1.5 g/m2/day........  1.5 g/m2/day........  15 g/m2/day.
Internal surface area............  1.15 m2.............  0.47 m2.............  0.070 m2.
Length of test...................  14 days.............  14 days.............  28 days.
Maximum allowable mass change....  24.15 g.............  9.87 g..............  1.96 g.
Required accuracy and precision..  0.483 g   0.197 g   0.0392 g or better.
                                    or better.            or better.
Required readability.............  0.1 g or better.....  0.1 g or better.....  0.01 g or better.
----------------------------------------------------------------------------------------------------------------

Sec.  1060.505  Other procedures.

    (a) Your testing. The procedures in this part apply for all testing 
you do to show compliance with emission standards, with certain 
exceptions listed in this section.
    (b) Our testing. These procedures generally apply for testing that 
we do to determine if your equipment complies

[[Page 59311]]

with applicable emission standards. We may perform other testing as 
allowed by the Clean Air Act.
    (c) Exceptions. We may allow or require you to use procedures other 
than those specified in this part in the following cases:
    (1) You may request to use special procedures if your equipment 
cannot be tested using the specified procedures. We will approve your 
request if we determine that it would produce emission measurements 
that represent in-use operation and we determine that it can be used to 
show compliance with the requirements of the standard-setting part.
    (2) You may ask to use emission data collected using other 
procedures, such as those of the California Air Resources Board or the 
International Organization for Standardization. We will approve this 
only if you show us that using these other procedures does not affect 
your ability to show compliance with the applicable emission standards. 
This generally requires emission levels to be far enough below the 
applicable emission standards so any test differences do not affect 
your ability to state unconditionally that your equipment will meet all 
applicable emission standards when tested using the specified test 
procedures.
    (3) You may request to use alternate procedures that are equivalent 
to allowed procedures or are more accurate or more precise than allowed 
procedures. See 40 CFR 1065.12 for a description of the information 
that is generally required to show that an alternate test procedure is 
equivalent.
    (4) The test procedures are specified for gasoline-fueled 
equipment. If your equipment will use another volatile liquid fuel 
instead of gasoline, use a test fuel that is representative of the fuel 
that will be used with the equipment in use. You may ask us to approve 
other changes to the test procedures to reflect the effects of using a 
fuel other than gasoline.
    (d) Approval. If we require you to request approval to use other 
procedures under paragraph (c) of this section, you may not use them 
until we approve your request.


Sec.  1060.510  How do I test EPA Low-Emission Fuel Lines for 
permeation emissions?

    For EPA Low-Emission Fuel Lines, measure emissions according to SAE 
J2260, which is incorporated by reference in Sec.  1054.810.


Sec.  1060.515  How do I test EPA Nonroad Fuel Lines and EPA Cold-
Weather Fuel Lines for permeation emissions?

    Measure emission as follows for EPA Nonroad Fuel Lines and EPA 
Cold-Weather Fuel Lines:
    (a) Prior to permeation testing, use good engineering judgment to 
precondition the fuel line by filling it with the fuel specified in 
this paragraph (a), sealing the openings, and soaking it for at least 
four weeks at 43 5 [deg]C or eight weeks at 23  
5 [deg]C.
    (1) For EPA Nonroad Fuel Lines, use Fuel CE10, which is Fuel C as 
specified in ASTM D471 (incorporated by reference in Sec.  1054.810) 
blended with ethanol such that the blended fuel has 10.0  
1.0 percent ethanol by volume.
    (2) For EPA Cold-Weather Fuel Lines, use gasoline blended with 
ethanol such that the blended fuel has 10.0  1.0 percent 
ethanol by volume.
    (b) Drain the fuel line and refill it immediately with the fuel 
specified in paragraph (a) of this section. Be careful not to spill any 
fuel.
    (c) Measure fuel line permeation emissions using the equipment and 
procedures for weight-loss testing specified in SAE J30 or SAE J1527 
(incorporated by reference in Sec.  1054.810). Start the measurement 
procedure within 8 hours after draining and refilling the fuel line. 
Perform the emission test over a sampling period of 14 days.
    (d) Use good engineering judgment to test fuel line segments with 
short length or narrow inner diameter. For example, size the fuel 
reservoir appropriately for the tested fuel line and take steps to 
eliminate air bubbles from narrow-diameter fuel lines.


Sec.  1060.520  How do I test fuel tanks for permeation emissions?

    Measure permeation emissions by weighing a sealed fuel tank before 
and after a temperature-controlled soak.
    (a) Preconditioning durability testing. Take the following steps 
before an emission test, in any order, if your emission control 
technology involves surface treatment or other post-processing 
treatments such as an epoxy coating:
    (1) Pressure cycling. Perform a pressure test by sealing the tank 
and cycling it between +13.8 and -1.7 kPa (+2.0 and -0.5 psig) for 
10,000 cycles at a rate of 60 seconds per cycle. The purpose of this 
test is to represent environmental wall stresses caused by pressure 
changes and other factors (such as vibration or thermal expansion). If 
your tank cannot be tested using the pressure cycles specified by this 
paragraph (a)(1), you may ask to use special test procedures under 
Sec.  1060.505.
    (2) UV exposure. Perform a sunlight-exposure test by exposing the 
tank to an ultraviolet light of at least 24 W/m2 (0.40 W-hr/
m2/min) on the tank surface for at least 450 hours. 
Alternatively, the fuel tank may be exposed to direct natural sunlight 
for an equivalent period of time as long as you ensure that the tank is 
exposed to at least 450 daylight hours.
    (3) Slosh testing. Perform a slosh test by filling the tank to 40-
50 percent of its capacity with the fuel specified in paragraph (e) of 
this section and rocking it at a rate of 15 cycles per minute until you 
reach one million total cycles. Use an angle deviation of +15[deg] to -
15[deg] from level.
    (b) Preconditioning fuel soak. Take the following steps before an 
emission test:
    (1) Fill the tank with the fuel specified in paragraph (e) of this 
section, seal it, and allow it to soak at 28 5[deg]C for at 
least 20 weeks. Alternatively, the tank may be soaked for at least 10 
weeks at 435[deg]C. You may count the time of the 
preconditioning steps in paragraph (a) of this section as part of the 
preconditioning fuel soak as long as the ambient temperature remains 
within the specified temperature range and the fuel tank is at least 40 
percent full; you may add or replace fuel as needed to conduct the 
specified durability procedures.
    (2) Empty the fuel tank and immediately refill it with the 
specified test fuel to its nominal capacity. Be careful not to spill 
any fuel.
    (3) Perform durability cycles on fuel caps intended for use with 
handheld equipment by putting the fuel cap on and taking it off 300 
times. Tighten the fuel cap each time in a way that represents the 
typical in-use experience.
    (4) Allow the tank and its contents to equilibrate to the 
temperatures specified in paragraph (d)(7) of this section. Seal the 
fuel tank as described in paragraph (b)(5) of this section once the 
fuel temperatures are stabilized at the test temperature. You must seal 
the tank no more than eight hours after refueling. Until the fuel tank 
is sealed, take steps to minimize the vapor losses from the fuel tank, 
such as keeping the fuel cap loose on the fuel inlet or routing vapors 
through a vent hose.
    (5) Seal the fuel tank as follows:
    (i) If fuel tanks are designed for use with a filler neck such that 
the fuel cap is not directly mounted on the fuel tank, you may seal the 
fuel inlet with a nonpermeable covering.

[[Page 59312]]

    (ii) If fuel tanks are designed with fuel caps directly mounted on 
the fuel tank, take one of the following approaches:
    (A) Use a production fuel cap expected to have permeation emissions 
at least as high as the highest-emitting fuel cap that you expect to be 
used with fuel tanks from the emission family. It would generally be 
appropriate to consider an HDPE fuel cap with a nitrile rubber seal to 
be worst-case.
    (B) You may seal the fuel inlet with a nonpermeable covering if you 
separately measure the permeation from a worst-case fuel cap as 
described in Sec.  1060.521.
    (C) If you use or specify a fuel gasket made of low-permeability 
material, you may seal the fuel inlet with a nonpermeable covering and 
calculate an emission rate for the complete fuel tank using a default 
value of 30 g/m2/day for the fuel cap (or 50 g/
m2/day for testing at 40[deg]C). Use the smallest inside 
cross-sectional area of the opening on which the cap is mounted as the 
fuel cap's surface area.
    (iii) Openings that are not normally sealed on the fuel tank (such 
as hose-connection fittings and vents in fuel caps) may be sealed using 
nonpermeable fittings such as metal or fluoropolymer plugs.
    (iv) Openings for petcocks that are designed for draining fuel may 
be sealed using nonpermeable fittings such as metal or fluoropolymer 
plugs.
    (v) Openings for grommets may be sealed using nonpermeable fittings 
such as metal or fluoropolymer plugs.
    (vi) Rather than sealing a fuel tank with nonpermeable fittings, 
you may produce a fuel tank for testing without machining or stamping 
those holes.
    (c) Reference tank. A reference tank is required to correct for 
buoyancy effects that may occur during testing. Prepare the reference 
tank as follows:
    (1) Obtain a second tank that is identical to the test tank. You 
may not use a tank that has previously contained fuel or any other 
contents that might affect its mass stability.
    (2) Fill the reference tank with enough glass beads (or other inert 
material) so the mass of the reference tank is approximately the same 
as the test tank when filled with fuel. Considering the performance 
characteristics of your balance, use good engineering judgment to 
determine how similar the mass of the reference tank needs to be to the 
mass of the test tank.
    (3) Ensure that the inert material is dry.
    (4) Seal the tank.
    (d) Permeation test run. To run the test, take the following steps 
after preconditioning:
    (1) Determine the fuel tank's internal surface area in square-
meters, accurate to at least three significant figures. You may use 
less accurate estimates of the surface area if you make sure not to 
overestimate the surface area.
    (2) Weigh the sealed test tank and record the weight. Place the 
reference tank on the balance and tare it so it reads zero. Place the 
sealed test tank on the balance and record the difference between the 
test tank and the reference tank. This value is Mo. Take 
this measurement directly after sealing the test tank as specified in 
paragraphs (b)(4) and (5) of this section.
    (3) Carefully place the tank within a temperature-controlled room 
or enclosure. Do not spill or add any fuel.
    (4) Close the room or enclosure as needed to control temperatures 
and record the time. However, you may need to take steps to prevent an 
accumulation of hydrocarbon vapors in the room or enclosure that might 
affect the degree to which fuel permeates through the fuel tank. This 
might simply involve passive ventilation to allow fresh air exchanges.
    (5) Ensure that the measured temperature in the room or enclosure 
stays within the temperatures specified in paragraph (d)(6) of this 
section.
    (6) Leave the tank in the room or enclosure for the duration of the 
test run.
    (7) Hold the temperature of the room or enclosure at 28  2 [deg]C; measure and record the temperature at least daily. You 
may alternatively hold the temperature of the room or enclosure at 40 
 2 [deg]C to demonstrate compliance with the alternative 
standards specified in Sec.  1060.103(b).
    (8) Measure weight loss daily by retaring the balance using the 
reference tank and weighing the sealed test tank. Calculate the 
cumulative weight loss in g/m2/day for each measurement. 
Calculate the coefficient of determination, r2, based on a 
linear plot of cumulative weight loss vs. test days as described in 40 
CFR 1065.602(k). Continue testing for ten full days or, if 
r2 is below 0.95, continue testing until r2 is at 
or above 0.95. If r2 is not at or above 0.95 within 20 days 
of testing, discontinue the test and precondition the fuel tank further 
until it has stabilized emission levels, then repeat the testing. The 
daily measurements must be at approximately the same time each day. You 
may omit up to two daily measurements in any seven-day period.
    (9) Record the difference in mass between the reference tank and 
the test tank for each measurement. This value is Mi, where 
i is a counter representing the number of days elapsed. Subtract 
Mi from Mo and divide the difference by the 
internal surface area of the fuel tank. Divide this g/m2 
value by the number of test days (using at least two decimal places) to 
calculate the emission rate in g/m2/day. Example: If a tank 
with an internal surface area of 0.720 m2 weighed 1.31 grams 
less than the reference tank at the beginning of the test and weighed 
9.86 grams less than the reference tank after soaking for 10.03 days, 
the emission rate would be--

((-1.31 g) - (-9.82 g)) / 0.720 m2 / 10.03 days = 1.36 g/
m2/day.

    (10) Round your result to the same number of decimal places as the 
emission standard.
    (e) Fuel specifications. Use gasoline blended with ethanol such 
that the blended fuel has 10.0  1.0 percent ethanol by 
volume as specified in Sec.  1060.501. As an alternative, you may use 
Fuel CE10, as described in Sec.  1060.515(a)(1).
    (f) Flow chart. The following figure presents a flow chart for the 
permeation testing described in this section:
BILLING CODE 6560-50-P

[[Page 59313]]

[GRAPHIC] [TIFF OMITTED] TR08OC08.078

BILLING CODE 6560-50-C


Sec.  1060.521  How do I test fuel caps for permeation emissions?

    If you measure a fuel tank's permeation emissions with a 
nonpermeable covering in place of the fuel cap under Sec.  
1060.520(b)(5)(ii)(B), you must separately measure permeation emissions 
from a fuel cap. You may show that your fuel tank and fuel cap meet 
emission standards by certifying them separately or by combining the 
separate measurements into a single emission rate based on the relative 
surface areas of the fuel tank

[[Page 59314]]

and fuel cap. However, you may not combine these emission measurements 
if you test the fuel cap at a nominal temperature of 28 [deg]C and you 
test the fuel tank at 40 [deg]C. Measure the fuel cap's permeation 
emissions as follows:
    (a) Select a fuel cap expected to have permeation emissions at 
least as high as the highest-emitting fuel cap that you expect to be 
used with fuel tanks from the emission family. Include a gasket that 
represents production models. If the fuel cap includes vent paths, seal 
these vents as follows:
    (1) If the vent path is through grooves in the gasket, you may use 
another gasket with no vent grooves if it is otherwise the same as a 
production gasket.
    (2) If the vent path is through the cap, seal any vents for 
testing.
    (b) Attach the fuel cap to a fuel tank with a capacity of at least 
one liter made of metal or some other impermeable material.
    (c) Use the procedures specified in Sec.  1060.520 to measure 
permeation emissions. Calculate emission rates using the smallest 
inside cross sectional area of the opening on which the cap is mounted 
as the fuel cap's surface area.


Sec.  1060.525   How do I test fuel systems for diurnal emissions?

    Use the procedures of this section to determine whether your fuel 
tanks meet diurnal emission standards as specified in Sec.  1060.105.
    (a) Except as specified in paragraph (c) of this section, use the 
following procedure to measure diurnal emissions:
    (1) Diurnal measurements are based on a representative temperature 
cycle. For marine fuel tanks, the temperature cycle specifies fuel 
temperatures rather than ambient temperatures. The applicable 
temperature cycle is indicated in the following table:

                     Table 1 to Sec.   1060.525--Diurnal Temperature Profiles for Fuel Tanks
----------------------------------------------------------------------------------------------------------------
                                                                               General Fuel     Fuel Temperature
                                                              Ambient          Temperature        Profile for
                                                            Temperature        Profile for     Marine Fuel Tanks
                      Time (hours)                       Profile for Land-   Installed Marine     Installed in
                                                          based Fuel Tanks      Fuel Tanks       Nontrailerable
                                                              ([deg]C)           ([deg]C)        Boats ([deg]C)
----------------------------------------------------------------------------------------------------------------
0......................................................               22.2               25.6               27.6
1......................................................               22.5               25.7               27.6
2......................................................               24.2               26.5               27.9
3......................................................               26.8               27.9               28.5
4......................................................               29.6               29.2               29.0
5......................................................               31.9               30.4               29.5
6......................................................               33.9               31.4               29.9
7......................................................               35.1               32.0               30.1
8......................................................               35.4               32.2               30.2
9......................................................               35.6               32.2               30.2
10.....................................................               35.3               32.1               30.2
11.....................................................               34.5               31.7               30.0
12.....................................................               33.2               31.0               29.7
13.....................................................               31.4               30.2               29.4
14.....................................................               29.7               29.3               29.1
15.....................................................               28.2               28.6               28.8
16.....................................................               27.2               28.0               28.5
17.....................................................               26.1               27.5               28.3
18.....................................................               25.1               27.0               28.1
19.....................................................               24.3               26.6               28.0
20.....................................................               23.7               26.3               27.9
21.....................................................               23.3               26.1               27.8
22.....................................................               22.9               25.9               27.7
23.....................................................               22.6               25.7               27.6
24.....................................................               22.2               25.6               27.6
----------------------------------------------------------------------------------------------------------------

    (2) Fill the fuel tank to 40 percent of nominal capacity with the 
gasoline specified in 40 CFR 1065.710 for general testing.
    (3) Install a vapor line from any vent ports that would not be 
sealed in the final in-use configuration. Use a length of vapor line 
representing the largest inside diameter and shortest length that would 
be expected with the range of in-use installations for the emission 
family.
    (4) Stabilize the fuel tank at the starting temperature of the 
applicable temperature profile from paragraph (a)(1) of this section. 
For sealed fuel systems, replace the fuel cap once the fuel reaches 
equilibrium at the appropriate starting temperature.
    (5) If the fuel tank is equipped with a carbon canister, load the 
canister with butane or gasoline vapors to its canister working 
capacity as specified in Sec.  1060.240(e)(2)(i) and attach it to the 
fuel tank in a way that represents a typical in-use configuration.
    (6) Place the fuel tank with the carbon canister and vent line in a 
SHED meeting the specifications of 40 CFR 86.107-96(a)(1). Follow the 
applicable temperature trace from paragraph (a)(1) of this section for 
one 24-hour period. You need not measure emissions during this 
stabilization step.
    (7) As soon as possible after the stabilization in paragraph (a)(6) 
of this section, purge the SHED and follow the applicable temperature 
trace from paragraph (a)(1) of this section for three consecutive 24-
hour periods. Start measuring emissions when you start the temperature 
profile. The end of the first, second, and third emission sampling 
periods must occur 1440  6, 2880  6, and 4320 
 6 minutes, respectively, after starting the measurement 
procedure. Use the highest of the three emission levels to determine 
whether your fuel tank meets the diurnal emission standard.
    (8) For emission control technologies that rely on a sealed fuel 
system, you may omit the stabilization step in paragraph (a)(6) of this 
section and the last two 24-hour periods of emission

[[Page 59315]]

measurements in paragraph (a)(7) of this section. For purposes of this 
paragraph (a), sealed fuel systems include those that rely on pressure-
relief valves, limiting flow orifices, bladder fuel tanks, and volume-
compensating air bags.
    (b) You may subtract your fuel tank's permeation emissions from the 
measured diurnal emissions if the fuel tank is preconditioned with 
diurnal test fuel as described in Sec.  1060.520(b) or if you use good 
engineering judgment to otherwise establish that the fuel tank has 
stabilized permeation emissions. Measure permeation emissions for 
subtraction as specified in Sec.  1060.520(c) and (d) before measuring 
diurnal emissions, except that the permeation measurement must be done 
with diurnal test fuel at 28  2 [deg]C. Use appropriate 
units and corrections to subtract the permeation emissions from the 
fuel tank during the diurnal emission test. You may not subtract a 
greater mass of emissions under this paragraph (b) than the fuel tank 
would emit based on meeting the applicable emission standard for 
permeation.

Subpart G--Special Compliance Provisions


Sec.  1060.601  How do the prohibitions of 40 CFR 1068.101 apply with 
respect to the requirements of this part?

    (a) As described in Sec.  1060.1, fuel tanks and fuel lines that 
are used with or intended to be used with new nonroad engines or 
equipment are subject to evaporative emission standards under this part 
1060. This includes portable marine fuel tanks and fuel lines and other 
fuel-system components associated with portable marine fuel tanks. Note 
that Sec.  1060.1 specifies an implementation schedule based on the 
date of manufacture of nonroad equipment, so new fuel tanks and fuel 
lines are not subject to standards under this part 1060 if they will be 
installed for use in equipment built before the specified dates for 
implementing the appropriate standards, subject to the limitations in 
paragraph (b) of this section. Except as specified in paragraph (f) of 
this section, fuel-system components that are subject to permeation or 
diurnal emission standards under this part 1060 must be covered by a 
valid certificate of conformity before being introduced into U.S. 
commerce to avoid violating the prohibition of 40 CFR 1068.101(a). To 
the extent we allow it under the exhaust standard-setting part, fuel-
system components may be certified with a family emission limit higher 
than the specified emission standard. The provisions of this paragraph 
(a) do not apply to fuel caps.
    (b) New replacement fuel tanks and fuel lines must meet the 
requirements of this part 1060 if they are intended to be used with 
nonroad engines or equipment regulated under this part 1060, as 
follows:
    (1) Applicability of standards between January 1, 2012 and December 
31, 2019. Manufacturers, distributors, retailers, and importers must 
clearly state on the packaging for all replacement components that 
could reasonably be used with nonroad engines how such components may 
be used consistent with the prohibition in paragraph (a) of this 
section. It is presumed that such components are intended for use with 
nonroad engines regulated under this part 1060 unless the components, 
or the packaging for such components, clearly identify appropriate 
restrictions. This requirement does not apply for components that are 
clearly not intended for use with fuels.
    (2) Applicability of standards after January 1, 2020. Starting 
January 1, 2020 it is presumed that replacement components will be used 
with nonroad engines regulated under this part 1060 if they can 
reasonably be used with such engines. Manufacturers, distributors, 
retailers, and importers are therefore obligated to take reasonable 
steps to ensure that any uncertified components are not used to replace 
certified components. This would require labeling the components and 
may also require restricting the sales and requiring the ultimate 
purchaser to agree to not use the components inappropriately. This 
requirement does not apply for components that are clearly not intended 
for use with fuels.
    (3) Applicability of the tampering prohibition. If a fuel tank or 
fuel line needing replacement was certified to meet the emission 
standards in this part with a family emission limit below the otherwise 
applicable standard, the new replacement fuel tank or fuel line must be 
certified to current emission standards, but need not be certified with 
the same or lower family emission limit to avoid violating the 
tampering prohibition in 40 CFR 1068.101(b)(1).
    (c) [Reserved]
    (d) Manufacturers that generate or use evaporative emission credits 
related to Marine SI engines in 40 CFR part 1045 or Small SI engines in 
40 CFR part 1054 are subject to the emission standards for which they 
are generating or using evaporative emission credits. These engines or 
equipment must therefore be covered by a valid certificate of 
conformity showing compliance with emission-credit provisions before 
being introduced into U.S. commerce to avoid violating the prohibition 
of 40 CFR 1068.101(a).
    (e) If there is no valid certificate of conformity for any given 
evaporative emission standard for new equipment, the manufacturers of 
the engine, equipment and fuel-system components are each liable for 
violations of the prohibited acts with respect to the fuel systems and 
fuel-system components they have introduced into U.S. commerce, 
including fuel systems and fuel-system components installed in engines 
or equipment at the time the engines or equipment are introduced into 
U.S. commerce.
    (f) If you manufacture fuel lines or fuel tanks that are subject to 
the requirements of this part as described in paragraph (a) of this 
section, 40 CFR 1068.101(a) does not prohibit you from shipping your 
products directly to an equipment manufacturer or another manufacturer 
from which you have received a written commitment to be responsible for 
certifying the components as required under this part 1060. This 
includes SHED-based certification of Small SI equipment as described in 
Sec.  1060.105. If you ship fuel lines or fuel tanks under this 
paragraph (f), you must include documentation that accompanies the 
shipped products identifying the name and address of the company 
receiving shipment and stating that the fuel lines or fuel tanks are 
exempt under the provisions of 40 CFR 1060.601(f).
    (g) If new evaporative emission standards apply in a given model 
year, your equipment in that model year must have fuel-system 
components that are certified to the new standards, except that you may 
continue to use up your normal inventory of earlier fuel-system 
components that were built before the date of the new or changed 
standards. For example, if your normal inventory practice is to keep on 
hand a one-month supply of fuel tanks based on your upcoming production 
schedules, and a new tier of standards starts to apply for the 2012 
model year, you may order fuel tanks based on your normal inventory 
requirements late in the fuel tank manufacturer's 2011 model year and 
install those fuel tanks in your equipment, regardless of the date of 
installation. Also, if your model year starts before the end of the 
calendar year preceding new standards, you may use fuel-system 
components from the previous model year (or uncertified components if 
no standards were in place) for those units you produce before January 
1 of the year that new standards apply. If emission standards do not 
change in a given model year,

[[Page 59316]]

you may continue to install fuel-system components from the previous 
model year without restriction. You may not circumvent the provisions 
of 40 CFR 1068.101(a)(1) by stockpiling fuel-system components that 
were built before new or changed standards take effect.


Sec.  1060.605  Exemptions from evaporative emission standards.

    (a) Except as specified in the exhaust standard-setting part and 
paragraph (b) of this section, equipment using an engine that is exempt 
from exhaust emission standards under the provisions in 40 CFR part 
1068, subpart C or D, is also exempt from the requirements of this part 
1060. For example, engines or equipment exempted from exhaust emission 
standards for purposes of national security do not need to meet 
evaporative emission standards. Also, any engine that is exempt from 
emission standards because it will be used solely for competition does 
not need to meet evaporative emission standards. Equipment that is 
exempt from all exhaust emission standards under the standard-setting 
part are also exempt from the requirements of this part 1060; however, 
this does not apply for engines that must meet a less stringent exhaust 
emission standard as a condition of the exemption.
    (b) Engines produced under the replacement-engine exemption in 40 
CFR 1068.240 must use fuel-system components that meet the evaporative 
emission standards based on the model year of the engine being replaced 
subject to the provisions of 40 CFR 1068.265. If no evaporative 
emission standards applied at that time, no requirements related to 
evaporative emissions apply to the new engine. Installing a replacement 
engine does not change the applicability of requirements for the 
equipment into which the replacement engine is installed.
    (c) Engines or equipment that are temporarily exempt from EPA 
exhaust emission standards are also exempt from the requirements of 
this part 1060 for the same period as the exhaust exemption.
    (d) For equipment powered by more than one engine, all the engines 
installed in the equipment must be exempt from all applicable EPA 
exhaust emission standards for the equipment to also be exempt under 
paragraph (a) or (b) of this section.
    (e) In unusual circumstances, we may exempt components or equipment 
from the requirements of this part 1060 even if the equipment is 
powered by one or more engines that are subject to EPA exhaust emission 
standards. See 40 CFR part 1068. Such exemptions will be limited to:
    (1) Testing. See 40 CFR 1068.210.
    (2) National security. See 40 CFR 1068.225.
    (3) Economic hardship. See 40 CFR 1068.245 and 1068.250.
    (f) Evaporative emission standards generally apply based on the 
model year of the equipment, which is determined by the equipment's 
date of final assembly. However, in the first year of new emission 
standards, equipment manufacturers may apply evaporative emission 
standards based on the model year of the engine as shown on the 
engine's emission control information label. For example, for fuel tank 
permeation standards starting in 2012, equipment manufacturers may 
order a batch of 2011 model year engines for installation in 2012 model 
year equipment, subject to the anti-stockpiling provisions of 40 CFR 
1068.105(a). The equipment with the 2011 model year engines would not 
need to meet fuel tank permeation standards as long as the equipment is 
fully assembled by December 31, 2012.


Sec.  1060.640  What special provisions apply to branded equipment?

    The following provisions apply if you identify the name and 
trademark of another company instead of your own on your emission 
control information label for equipment, as provided by Sec. Sec.  
1060.135 and 1060.137:
    (a) You must have a contractual agreement with the other company 
that obligates that company to take the following steps:
    (1) Meet the emission warranty requirements that apply under Sec.  
1060.120. This may involve a separate agreement involving reimbursement 
of warranty-related expenses.
    (2) Report all warranty-related information to the certificate 
holder.
    (b) In your application for certification, identify the company 
whose trademark you will use and describe the arrangements you have 
made to meet your requirements under this section.
    (c) You remain responsible for meeting all the requirements of this 
chapter, including warranty and defect-reporting provisions.

Subpart H--Averaging, Banking, and Trading Provisions


Sec.  1060.701  Applicability.

    (a) You are allowed to comply with the emission standards in this 
part with evaporative emission credits only if the exhaust standard-
setting part explicitly allows it for evaporative emissions.
    (b) The following exhaust standard-setting parts allow some use of 
evaporative emission credits:
    (1) 40 CFR part 1045 for marine vessels.
    (2) 40 CFR part 1051 for recreational vehicles.
    (3) 40 CFR part 1054 for Small SI equipment.
    (c) As specified in 40 CFR part 1048, there is no allowance to 
generate or use emission credits with Large SI equipment.


Sec.  1060.705  How do I certify components to an emission level other 
than the standard under this part or use such components in my 
equipment?

    As specified in this section, a fuel-system component may be 
certified to a family emission limit (FEL) instead of the otherwise 
applicable emission standard. Note that the exhaust standard-setting 
part may apply maximum values for an FEL (i.e., FEL caps).
    (a) Requirements for certifying component manufacturers. See 
subpart C of this part for instructions regarding the general 
requirements for certifying components.
    (1) When you submit your application for certification, indicate 
the FEL to which your components will be certified. This FEL will serve 
as the applicable standard for your component, and the equipment that 
uses the component. For example, when the regulations of this part use 
the phrase ``demonstrate compliance with the applicable emission 
standard'' it will mean ``demonstrate compliance with the FEL'' for 
your component.
    (2) You may not change the FEL for an emission family. To specify a 
different FEL for your components, you must send a new application for 
certification for a new emission family.
    (3) Unless your FEL is below all emission standards that could 
potentially apply, you must ensure that all equipment manufacturers 
that will use your component are aware of the limitations regarding the 
conditions under which they may use your component.
    (4) It is your responsibility to read the instructions relative to 
emission-credit provisions in the standard-setting parts identified in 
Sec.  1060.1.
    (b) Requirements for equipment manufacturers. See subpart C of this 
part for instructions regarding your ability to rely on the component 
manufacturer's certificate.
    (1) The FEL of the component will serve as the applicable standard 
for your equipment.
    (2) You may not specify more than one FEL for an emission family at 
one

[[Page 59317]]

time; however, you may change the FEL during the model year as 
described in Sec.  1060.225(f).
    (3) If the FEL is above the emission standard you must ensure that 
the exhaust standard-setting part allows you to use evaporative 
emission credits to comply with emission standards and that you will 
have an adequate source of evaporative emission credits. You must 
certify your equipment as specified in Sec.  1060.201 and the rest of 
subpart C of this part.

Subpart I--Definitions and Other Reference Information


Sec.  1060.801  What definitions apply to this part?

    The following definitions apply to this part. The definitions apply 
to all subparts unless we note otherwise. All undefined terms have the 
meaning the Clean Air Act gives to them. The definitions follow:
    Accuracy and precision means the sum of accuracy and repeatability, 
as defined in 40 CFR 1065.1001. For example, if a measurement device is 
determined to have an accuracy of 1% and a repeatability of 
2%, then its accuracy and precision would be 3%.
    Adjustable parameter means any device, system, or element of design 
that someone can adjust and that, if adjusted, may affect emissions. 
You may ask us to exclude a parameter if you show us that it will not 
be adjusted in use in a way that affects emissions.
    Applicable emission standard or applicable standard means an 
emission standard to which a fuel-system component is subject. 
Additionally, if a fuel-system component has been or is being certified 
to another standard or FEL, applicable emission standard means the FEL 
or other standard to which the fuel-system component has been or is 
being certified. This definition does not apply to subpart H of this 
part.
    Canister working capacity means the measured amount of hydrocarbon 
vapor that can be stored in a canister as specified in Sec.  
1060.240(e)(2)(i).
    Carbon working capacity means the measured amount of hydrocarbon 
vapor that can be stored in a given volume of carbon when tested 
according to ASTM D5228 (incorporated by reference in Sec.  1060.810). 
See Sec.  1060.240(e)(2)(ii).
    Certification means relating to the process of obtaining a 
certificate of conformity for an emission family that complies with the 
emission standards and requirements in this part.
    Certified emission level means the highest official emission result 
in an emission family.
    Clean Air Act means the Clean Air Act, as amended, 42 U.S.C. 7401-
7671q.
    Cold-weather equipment is limited to the following types of 
handheld equipment: Chainsaws, cut-off saws, clearing saws, brush 
cutters with engines at or above 40cc, commercial earth and wood 
drills, and ice augers. This includes earth augers if they are also 
marketed as ice augers.
    Configuration means a unique combination of hardware (material, 
geometry, and size) and calibration within an emission family. Units 
within a single configuration differ only with respect to normal 
production variability.
    Date of manufacture, means one of the following with respect to 
equipment:
    (1) For outboard engines with under-cowl fuel tanks and for vessels 
equipped with outboard engines and installed fuel tanks, date of 
manufacture means the date on which the fuel tank is installed.
    (2) For all other equipment, date of manufacture has the meaning 
given in 40 CFR 1068.30.
    Days means calendar days unless otherwise specified. For example, 
when we specify working days we mean calendar days, excluding weekends 
and U.S. national holidays.
    Designated Compliance Officer means the Manager, Heavy-Duty and 
Nonroad Engine Group (6405-J), U.S. Environmental Protection Agency, 
1200 Pennsylvania Ave., NW., Washington, DC 20460.
    Detachable fuel line means a fuel line or fuel line assembly 
intended to be used with a portable nonroad fuel tank and which is 
connected by special fittings to the fuel tank and/or engine for easy 
disassembly. Fuel lines that require a wrench or other tools to 
disconnect are not considered detachable fuel lines.
    Diurnal emissions means evaporative emissions that occur as a 
result of venting fuel tank vapors during daily temperature changes 
while the engine is not operating.
    Effective length-to-diameter ratio means the mean vapor path length 
of a carbon canister divided by the effective diameter of that vapor 
path. The effective diameter is the diameter of a circle with the same 
cross-sectional area as the average cross-sectional area of the carbon 
canister's vapor path.
    Emission control system means any device, system, or element of 
design that controls or reduces the regulated evaporative emissions 
from a piece of nonroad equipment.
    Emission-data unit means a fuel line, fuel tank, fuel system, or 
fuel-system component that is tested for certification. This includes 
components tested by EPA.
    Emission family has the meaning given in Sec.  1060.230.
    Emission-related maintenance means maintenance that substantially 
affects emissions or is likely to substantially affect emission 
deterioration.
    Equipment means vehicles, marine vessels, and other types of 
nonroad equipment that are subject to this part's requirements.
    Evaporative means relating to fuel emissions that result from 
permeation of fuel through the fuel-system materials or from 
ventilation of the fuel system.
    Exhaust standard-setting part means the part in the Code of Federal 
Regulations that contains exhaust emission standards for a particular 
piece of equipment (or the engine in that piece of equipment). For 
example, the exhaust standard-setting part for off-highway motorcycles 
is 40 CFR part 1051. Exhaust standard-setting parts may include 
evaporative emission requirements or describe how the requirements of 
this part 1060 apply.
    Exposed gasket surface area means the surface area of the gasket 
inside the fuel tank that is exposed to fuel or fuel vapor. For the 
purposes of calculating exposed surface area of a gasket, the thickness 
of the gasket and the outside dimension of the opening being sealed are 
used. Gasket overhang into the fuel tank should be ignored for the 
purpose of this calculation.
    Family emission limit (FEL) means an emission level declared by the 
manufacturer to serve in place of an otherwise applicable emission 
standard under an ABT program specified by the exhaust standard-setting 
part. The family emission limit must be expressed to the same number of 
decimal places as the emission standard it replaces. The family 
emission limit serves as the emission standard for the emission family 
with respect to all required testing.
    Fuel CE10 has the meaning given in Sec.  1060.515(a).
    Fuel line means hoses or tubing designed to contain liquid fuel. 
The exhaust standard-setting part may further specify which types of 
hoses and tubing are subject to the standards of this part.
    Fuel system means all components involved in transporting, 
metering, and mixing the fuel from the fuel tank to the combustion 
chamber(s), including the fuel tank, fuel tank cap, fuel pump, fuel 
filters, fuel lines, carburetor or fuel-injection components, and all 
fuel-system vents. In the case where the fuel tank cap or other 
components (excluding fuel lines) are directly mounted on the fuel 
tank, they are considered to be a part of the fuel tank.

[[Page 59318]]

    Fuel type means a general category of fuels such as gasoline or 
natural gas. There can be multiple grades within a single fuel type, 
such as premium gasoline, regular gasoline, or gasoline with 10 percent 
ethanol.
    Gasoline means one of the following:
    (1) For in-use fuels, gasoline means fuel that is commonly and 
commercially know as gasoline, including ethanol blends.
    (2) For testing, gasoline has the meaning given in subpart F of 
this part.
    Good engineering judgment means judgments made consistent with 
generally accepted scientific and engineering principles and all 
available relevant information. See 40 CFR 1068.5 for the 
administrative process we use to evaluate good engineering judgment.
    High-permeability material means any nonmetal material that does 
not qualify as low-permeability material.
    Installed marine fuel tank means a fuel tank designed for 
delivering fuel to a Marine SI engine, excluding portable marine fuel 
tanks.
    Large SI means relating to engines that are subject to evaporative 
emission standards in 40 CFR part 1048.
    Low-permeability material means, for gaskets, a material with 
permeation emission rates at or below 10 (g-mm)/m2/day when 
measured according to SAE J2659 (incorporated by reference in Sec.  
1060.810), where the test temperature is 23 [deg]C, the test fuel is 
Fuel CE10, and testing immediately follows a four-week preconditioning 
soak with the test fuel.
    Manufacture means the physical and engineering process of 
designing, constructing, and assembling an engine, piece of nonroad 
equipment, or fuel-system components subject to the requirements of 
this part.
    Manufacturer has the meaning given in section 216(1) of the Clean 
Air Act (42 U.S.C. 7550(1)). In general, this term includes:
    (1) Any person who manufactures an engine or piece of nonroad 
equipment for sale in the United States or otherwise introduces a new 
nonroad engine or a piece of new nonroad equipment into U.S. commerce.
    (2) Any person who manufactures a fuel-system component for an 
engine subject to the requirements of this part as described in Sec.  
1060.1(a).
    (3) Importers who import such products into the United States.
    Marine SI means relating to vessels powered by engines that are 
subject to exhaust emission standards in 40 CFR part 1045.
    Marine vessel has the meaning given in 40 CFR Sec.  1045.801, which 
generally includes all nonroad equipment used as a means of 
transportation on water.
    Model year means one of the following things:
    (1) For equipment defined as ``new nonroad equipment'' under 
paragraph (1) of the definition of ``new nonroad engine,'' model year 
means one of the following:
    (i) Calendar year.
    (ii) Your annual new model production period if it is different 
than the calendar year. This must include January 1 of the calendar 
year for which the model year is named. It may not begin before January 
2 of the previous calendar year and it must end by December 31 of the 
named calendar year.
    (2) For other equipment defined as ``new nonroad equipment'' under 
paragraph (2) of the definition of ``new nonroad engine,'' model year 
has the meaning given in the exhaust standard-setting part.
    (3) For other equipment defined as ``new nonroad equipment'' under 
paragraph (3) or paragraph (4) of the definition of ``new nonroad 
engine,'' model year means the model year of the engine as defined in 
the exhaust standard-setting part.
    New nonroad equipment means equipment meeting one or more of the 
following criteria:
    (1) Nonroad equipment for which the ultimate purchaser has never 
received the equitable or legal title. The equipment is no longer new 
when the ultimate purchaser receives this title or the product is 
placed into service, whichever comes first.
    (2) Nonroad equipment that is defined as new under the exhaust 
standard-setting part. (Note: equipment that is not defined as new 
under the exhaust standard-setting part may be defined as new under 
this definition of ``new nonroad equipment.'')
    (3) Nonroad equipment with an engine that becomes new (as defined 
in the exhaust standard-setting part) while installed in the equipment. 
The equipment is no longer new when it is subsequently placed into 
service. This paragraph (3) does not apply if the engine becomes new 
before being installed in the equipment.
    (4) Nonroad equipment not covered by a certificate of conformity 
issued under this part at the time of importation and manufactured 
after the requirements of this part start to apply (see Sec.  1060.1). 
The equipment is no longer new when it is subsequently placed into 
service. Importation of this kind of new nonroad equipment is generally 
prohibited by 40 CFR part 1068.
    Nominal capacity means a fuel tank's volume as specified by the 
fuel tank manufacturer, using at least two significant figures, based 
on the maximum volume of fuel the tank can hold with standard refueling 
techniques.
    Nonroad engine has the meaning we give in 40 CFR 1068.30. In 
general this means all internal-combustion engines except motor vehicle 
engines, stationary engines, engines used solely for competition, or 
engines used in aircraft. This part does not apply to all nonroad 
engines (see Sec.  1060.1).
    Nonroad equipment means a piece of equipment that is powered by or 
intended to be powered by one or more nonroad engines. Note that 
Sec. Sec.  1060.5 and 1060.601 describes how we treat outboard engines, 
portable marine fuel tanks, and associated fuel-system components as 
nonroad equipment under this part 1060.
    Nontrailerable boat means a vessel whose length is 26.0 feet or 
more, or whose width is more than 8.5 feet.
    Official emission result means the measured emission rate for an 
emission-data unit.
    Placed into service means put into initial use for its intended 
purpose.
    Portable marine fuel tank means a portable fuel tank that is used 
or intended to be used to supply fuel to a marine engine during 
operation.
    Portable nonroad fuel tank means a fuel tank that meets each of the 
following criteria:
    (1) It has design features indicative of use in portable 
applications, such as a carrying handle and fuel line fitting that can 
be readily attached to and detached from a nonroad engine.
    (2) It has a nominal fuel capacity of 12 gallons or less.
    (3) It is designed to supply fuel to an engine while the engine is 
operating.
    (4) It is not used or intended to be used to supply fuel to a 
marine engine.
    Production period means the period in which a component or piece of 
equipment will be produced under a certificate of conformity. A given 
production period for an emission family may not include components 
certified using different test data. A production period may not exceed 
five years for certified components. Note that the definition of model 
year includes specifications related to production periods for which a 
certificate is valid for equipment.
    Recreational vehicle means vehicles that are subject to evaporative 
emission standards in 40 CFR part 1051. This generally includes engines 
that will be installed in recreational vehicles if the engines are 
certified separately under 40 CFR 1051.20.

[[Page 59319]]

    Relating to as used in this section means relating to something in 
a specific, direct manner. This expression is used in this section only 
to define terms as adjectives and not to broaden the meaning of the 
terms.
    Revoke has the meaning given in 40 CFR 1068.30. If we revoke a 
certificate or an exemption, you must apply for a new certificate or 
exemption before continuing to introduce the affected equipment into 
U.S. commerce.
    Round means to round numbers according to standard procedures as 
specified in 40 CFR 1065.1001.
    Running loss emissions means unburned fuel vapor that escapes from 
the fuel system to the ambient atmosphere while the engine is 
operating, excluding permeation emissions and diurnal emissions. 
Running loss emissions generally result from fuel-temperature increases 
caused by heat released from in-tank fuel pumps, fuel recirculation, or 
proximity to heat sources such as the engine or exhaust components.
    Sealed means lacking openings to the atmosphere that would allow a 
measurable amount of liquid or vapor to leak out under normal operating 
pressures or other pressures specified in this part. For example, you 
may generally establish a maximum value for operating pressures based 
on the highest pressure you would observe from an installed fuel tank 
during continuous equipment operation on a sunny day with ambient 
temperatures of 35 [deg]C. Sealed fuel systems may have openings for 
emission controls or for fuel lines needed to route fuel to the engine.
    Small SI means relating to engines that are subject to emission 
standards in 40 CFR part 90 or 1054.
    Structurally integrated nylon fuel tank means a fuel tank having 
all the following characteristics:
    (1) The fuel tank is made of a polyamide material that does not 
contain more than 50 percent by weight of a reinforcing glass fiber or 
mineral filler and does not contain more than 10 percent by weight of 
impact modified polyamides that use rubberized agents such as EPDM 
rubber.
    (2) The fuel tank must be used in a cut-off saw or chainsaw or be 
integrated into a major structural member where, as a single component, 
the fuel tank material is a primary structural/stress member for other 
major components such as the engine, transmission, or cutting 
attachment.
    Subchapter U means 40 CFR parts 1000 through 1299.
    Suspend has the meaning given in 40 CFR 1068.30. If we suspend a 
certificate, you may not introduce into U.S. commerce equipment from 
that emission family unless we reinstate the certificate or approve a 
new one. If we suspend an exemption, you may not introduce into U.S. 
commerce equipment that was previously covered by the exemption unless 
we reinstate the exemption.
    Tare means to use a container or other reference mass to zero a 
balance before weighing a sample. Generally, this means placing the 
container or reference mass on the balance, allowing it to stabilize, 
then zeroing the balance without removing the container or reference 
mass. This allows you to use the balance to determine the difference in 
mass between the sample and the container or reference mass.
    Test sample means the collection of fuel lines, fuel tanks, or fuel 
systems selected from the population of an emission family for emission 
testing. This may include certification testing or any kind of 
confirmatory testing.
    Test unit means a piece of fuel line, a fuel tank, or a fuel system 
in a test sample.
    Ultimate purchaser means, with respect to any new nonroad 
equipment, the first person who in good faith purchases such new 
nonroad equipment for purposes other than resale.
    Ultraviolet light means electromagnetic radiation with a wavelength 
between 300 and 400 nanometers.
    United States has the meaning given in 40 CFR 1068.30.
    U.S.-directed production volume means the amount of equipment, 
subject to the requirements of this part, produced by a manufacturer 
for which the manufacturer has a reasonable assurance that sale was or 
will be made to ultimate purchasers in the United States.
    Useful life means the period during which new nonroad equipment is 
required to comply with all applicable emission standards. See Sec.  
1060.101.
    Void has the meaning given in 40 CFR 1068.30. In general this means 
to invalidate a certificate or an exemption both retroactively and 
prospectively.
    Volatile liquid fuel means any fuel other than diesel or biodiesel 
that is a liquid at atmospheric pressure and has a Reid Vapor Pressure 
higher than 2.0 pounds per square inch.
    We (us, our) means the Administrator of the Environmental 
Protection Agency and any authorized representatives.
    Wintertime equipment means equipment using a wintertime engine, as 
defined in 40 CFR 1054.801. Note this definition applies only for Small 
SI equipment.


Sec.  1060.805  What symbols, acronyms, and abbreviations does this 
part use?

    The following symbols, acronyms, and abbreviations apply to this 
part:

[deg] degree.
ASTM American Society for Testing and Materials.
C Celsius.
CFR Code of Federal Regulations.
EPA Environmental Protection Agency.
FEL family emission limit.
g gram.
gal gallon.
hr hour.
in inch.
kPa kilopascal.
kW kilowatt.
L liter.
m meter.
min minute.
mm millimeter.
psig pounds per square inch of gauge pressure.
SAE Society of Automotive Engineers.
SHED Sealed Housing for Evaporative Determination.
U.S. United States.
U.S.C. United States Code.
W watt.


Sec.  1060.810  What materials does this part reference?

    Documents listed in this section have been incorporated by 
reference into this part. The Director of the Federal Register approved 
the incorporation by reference as prescribed in 5 U.S.C. 552(a) and 1 
CFR part 51. Anyone may inspect copies at the U.S. EPA, Air and 
Radiation Docket and Information Center, 1301 Constitution Ave., NW., 
Room B102, EPA West Building, Washington, DC 20460 or at the National 
Archives and Records Administration (NARA). For information on the 
availability of this material at NARA, call 202-741-6030, or go to: 
http://www.archives.gov/federal_register/code_of_federal_regulations/ibr_locations.html.
    (a) ASTM material. Table 1 to this section lists material from the 
American Society for Testing and Materials that we have incorporated by 
reference. The first column lists the number and name of the material. 
The second column lists the sections of this part where we reference 
it. Anyone may purchase copies of these materials from the American 
Society for Testing and Materials, 100 Barr Harbor Dr., P.O. Box C700, 
West Conshohocken, PA 19428 or http://www.astm.com. Table 1 follows:

[[Page 59320]]



               Table 1 to Sec.   1060.810--ASTM Materials
------------------------------------------------------------------------
                                                             Part 1060
                Document number and name                     reference
------------------------------------------------------------------------
ASTM D471-06, Standard Test Method for Rubber Property--        1060.515
 Effect of Liquids (``ASTM D471'')......................
ASTM D2862-97 (Reapproved 2004), Standard Test Method           1060.240
 for Particle Size Distribution of Granular Activated
 Carbon (``ASTM D2862'')................................
ASTM D3802-79 (Reapproved 2005), Standard Test Method           1060.240
 for Ball-Pan Hardness of Activated Carbon (``ASTM
 D3802'')...............................................
ASTM D4806-07, Standard Specification for Denatured Fuel        1060.501
 Ethanol for Blending with Gasolines for Use as
 Automotive Spark-Ignition Engine Fuel (``ASTM D4806'').
ASTM D5228-92 (Reapproved 2005), Standard Test Method           1060.801
 for Determination of Butane Working Capacity of
 Activated Carbon (``ASTM D5228'')......................
------------------------------------------------------------------------

    (b) SAE material. Table 2 to this section lists material from the 
Society of Automotive Engineers that we have incorporated by reference. 
The first column lists the number and name of the material. The second 
column lists the sections of this part where we reference it. Anyone 
may purchase copies of these materials from the Society of Automotive 
Engineers, 400 Commonwealth Drive, Warrendale, PA 15096 or http://www.sae.org. Table 2 follows:

                Table 2 to Sec.   1060.810--SAE Materials
------------------------------------------------------------------------
                                                             Part 1060
                Document number and name                     reference
------------------------------------------------------------------------
SAE J30, Fuel and Oil Hoses, June 1998..................        1060.515
SAE J1527, Marine Fuel Hoses, January 1993 (Issued 1985-        1060.515
 12, Revised 1993-02)...................................
SAE J2260, Nonmetallic Fuel System Tubing with One or           1060.510
 More Layers, November 2004.............................
SAE J2659, Test Method to Measure Fluid Permeation of           1060.801
 Polymeric Materials by Speciation, December 2003.......
------------------------------------------------------------------------

    (c) California Air Resources Board material. Table 3 to this 
section lists material from the California Air Resources Board that we 
have incorporated by reference. The first column lists the number and 
name of the material. The second column lists the sections of this part 
where we reference it. Anyone may obtain copies of these materials from 
California Air Resources Board, Haagen-Smit Laboratory, 9528 Telstar 
Avenue, El Monte, CA 91731-2990 or http://www.arb.ca.gov. Table 3 
follows:

  Table 3 to Sec.   1060.810--California Air Resources Board Materials
------------------------------------------------------------------------
                                                             Part 1060
                Document number and name                     reference
------------------------------------------------------------------------
Final Regulation Order, Article 1, Chapter 15, Division        1060.105,
 3, Title 13, California Code of Regulations, July 26,          1060.240
 2004...................................................
------------------------------------------------------------------------

Sec.  1060.815  What provisions apply to confidential information?

    (a) Clearly show what you consider confidential by marking, 
circling, bracketing, stamping, or some other method.
    (b) We will store your confidential information as described in 40 
CFR part 2. Also, we will disclose it only as specified in 40 CFR part 
2. This applies both to any information you send us and to any 
information we collect from inspections, audits, or other site visits.
    (c) If you send us a second copy without the confidential 
information, we will assume it contains nothing confidential whenever 
we need to release information from it.
    (d) If you send us information without claiming it is confidential, 
we may make it available to the public without further notice to you, 
as described in 40 CFR 2.204.


Sec.  1060.820  How do I request a hearing?

    (a) You may request a hearing under certain circumstances as 
described elsewhere in this part. To do this, you must file a written 
request, including a description of your objection and any supporting 
data, within 30 days after we make a decision.
    (b) For a hearing you request under the provisions of this part, we 
will approve your request if we find that your request raises a 
substantial factual issue.
    (c) If we agree to hold a hearing, we will use the procedures 
specified in 40 CFR part 1068, subpart G.


Sec.  1060.825  What reporting and recordkeeping requirements apply 
under this part?

    Under the Paperwork Reduction Act (44 U.S.C. 3501 et seq), the 
Office of Management and Budget approves the reporting and 
recordkeeping specified in the applicable regulations. The following 
items illustrate the kind of reporting and recordkeeping we require for 
products regulated under this part:
    (a) We specify the following requirements related to equipment 
certification in this part 1060:
    (1) In 40 CFR 1060.20 we give an overview of principles for 
reporting information.
    (2) In 40 CFR part 1060, subpart C, we identify a wide range of 
information required to certify engines.
    (3) In 40 CFR 1060.301 we require manufacturers to make engines or 
equipment available for our testing if we make such a request.
    (4) In 40 CFR 1060.505 we specify information needs for 
establishing various changes to published test procedures.
    (b) We specify the following requirements related to the general

[[Page 59321]]

compliance provisions in 40 CFR part 1068:
    (1) In 40 CFR 1068.5 we establish a process for evaluating good 
engineering judgment related to testing and certification.
    (2) In 40 CFR 1068.25 we describe general provisions related to 
sending and keeping information.
    (3) In 40 CFR 1068.27 we require manufacturers to make equipment 
available for our testing or inspection if we make such a request.
    (4) In 40 CFR 1068.105 we require equipment manufacturers to keep 
certain records related to duplicate labels from engine manufacturers.
    (5) [Reserved]
    (6) In 40 CFR part 1068, subpart C, we identify several reporting 
and recordkeeping items for making demonstrations and getting approval 
related to various exemptions.
    (7) In 40 CFR part 1068, subpart D, we identify several reporting 
and recordkeeping items for making demonstrations and getting approval 
related to importing equipment.
    (8) In 40 CFR 1068.450 and 1068.455 we specify certain records 
related to testing production-line products in a selective enforcement 
audit.
    (9) In 40 CFR 1068.501 we specify certain records related to 
investigating and reporting emission-related defects.
    (10) In 40 CFR 1068.525 and 1068.530 we specify certain records 
related to recalling nonconforming equipment.

PART 1065--ENGINE-TESTING PROCEDURES

0
209. The authority citation for part 1065 continues to read as follows:

    Authority: 42 U.S.C. 7401-7671q.

Subpart A--[Amended]

0
210. Section 1065.1 is amended by revising paragraphs (a)(5) and (a)(8) 
to read as follows:


Sec.  1065.1  Applicability.

    (a) * * *
    (5) Marine spark-ignition engines we regulate under 40 CFR part 
1045. For earlier model years, manufacturers may use the test 
procedures in this part or those specified in 40 CFR part 91 according 
to Sec.  1065.10.
* * * * *
    (8) Small nonroad spark-ignition engines we regulate under 40 CFR 
part 1054 and stationary engines that are certified to the standards in 
40 CFR part 1054 as specified in 40 CFR part 60, subpart JJJJ. For 
earlier model years, manufacturers may use the test procedures in this 
part or those specified in 40 CFR part 90 according to Sec.  1065.10.
* * * * *

Subpart B--[Amended]

0
211. Section 1065.125 is amended by revising paragraphs (b) and (c) to 
read as follows:


Sec.  1065.125  Engine intake air.

* * * * *
    (b) Measure temperature, humidity, and atmospheric pressure near 
the entrance of the furthest upstream engine or in-use intake system 
component. This would generally be near the engine's air filter, or 
near the inlet to the in-use air intake system for engines that have no 
air filter. For engines with multiple intakes, make measurements near 
the entrance of each intake.
    (1) Pressure. You may use a single shared atmospheric pressure 
meter as long as your laboratory equipment for handling intake air 
maintains ambient pressure at all intakes within 1 kPa of 
the shared atmospheric pressure. For engines with multiple intakes with 
separate atmospheric pressure measurements at each intake, use an 
average value for verifying compliance to Sec.  1065.520(b)(2).
    (2) Humidity. You may use a single shared humidity measurement for 
intake air as long as your equipment for handling intake air maintains 
dewpoint at all intakes to within 0.5 [deg]C of the shared 
humidity measurement. For engines with multiple intakes with separate 
humidity measurements at each intake, use a flow-weighted average 
humidity for NOX corrections. If individual flows of each 
intake are not measured, use good engineering judgment to estimate a 
flow-weighted average humidity.
    (3) Temperature. Good engineering judgment may require that you 
shield the temperature sensors or move them upstream of an elbow in the 
laboratory intake system to prevent measurement errors due to radiant 
heating from hot engine surfaces or in-use intake system components. 
You must limit the distance between the temperature sensor and the 
entrance to the furthest upstream engine or in-use intake system 
component to no more than 12 times the outer hydraulic diameter of the 
entrance to the furthest upstream engine or in-use intake system 
component. However, you may exceed this limit if you use good 
engineering judgment to show that the temperature at the furthest 
upstream engine or in-use intake system component meets the 
specification in paragraph (c) of this section. For engines with 
multiple intakes, use a flow-weighted average value to verify 
compliance with the specification in paragraph (c) of this section. If 
individual flows of each intake are not measured, you may use good 
engineering judgment to estimate a flow-weighted average temperature. 
You may also verify that each individual intake complies with the 
specification in paragraph (c) of this section.
    (c) Unless stated otherwise in the standard-setting part, maintain 
the temperature of intake air to (25  5) [deg]C.
* * * * *

0
212. Section 1065.170 is amended by revising paragraphs (a)(2), (c)(1), 
and Figure 1 to read as follows:


Sec.  1065.170  Batch sampling for gaseous and PM constituents.

* * * * *
    (a) * * *
    (2) You must follow the requirements in Sec.  1065.140(e)(2) 
related to PM dilution ratios. For each filter, if you expect the net 
PM mass on the filter to exceed 400 [mu]g, assuming a 38 mm diameter 
filter stain area, you may take the following actions in sequence:
    (i) For discrete-mode testing only, you may reduce sample time as 
needed to target a filter loading of 400 [mu]g, but not below the 
minimum sample time specified in the standard-setting part.
    (ii) Reduce filter face velocity as needed to target a filter 
loading of 400 [mu]g, down to 50 cm/s or less.
    (iii) Increase overall dilution ratio above the values specified in 
Sec.  1065.140(e)(2) to target a filter loading of 400 [mu]g.
* * * * *
    (c) * * *
    (1) If you use filter-based sampling media to extract and store PM 
for measurement, your procedure must meet the following specifications:
    (i) If you expect that a filter's total surface concentration of PM 
will exceed 400 [mu]g, assuming a 38 mm diameter filter stain area, for 
a given test interval, you may use filter media with a minimum initial 
collection efficiency of 98%; otherwise you must use a filter media 
with a minimum initial collection efficiency of 99.7%. Collection 
efficiency must be measured as described in ASTM D2986-95a 
(incorporated by reference in Sec.  1065.1010), though you may rely on 
the sample-media manufacturer's measurements reflected in their product 
ratings to show that you meet this requirement.
    (ii) The filter must be circular, with an overall diameter of 46.50 
0.6 mm and an exposed diameter of at least 38 mm. See the 
cassette specifications in paragraph (c)(1)(vii) of this section.

[[Page 59322]]

    (iii) We highly recommend that you use a pure PTFE filter material 
that does not have any flow-through support bonded to the back and has 
an overall thickness of 40 20 [mu]m. An inert polymer ring 
may be bonded to the periphery of the filter material for support and 
for sealing between the filter cassette parts. We consider 
Polymethylpentene (PMP) and PTFE inert materials for a support ring, 
but other inert materials may be used. See the cassette specifications 
in paragraph (c)(1)(vii) of this section. We allow the use of PTFE-
coated glass fiber filter material, as long as this filter media 
selection does not affect your ability to demonstrate compliance with 
the applicable standards, which we base on a pure PTFE filter material. 
Note that we will use pure PTFE filter material for compliance testing, 
and we may require you to use pure PTFE filter material for any 
compliance testing we require, such as for selective enforcement 
audits.
    (iv) You may request to use other filter materials or sizes under 
the provisions of Sec.  1065.10.
    (v) To minimize turbulent deposition and to deposit PM evenly on a 
filter, use a filter holder with a 12.5[deg] (from center) divergent 
cone angle to transition from the transfer-line inside diameter to the 
exposed diameter of the filter face. Use 300 series stainless steel for 
this transition.
    (vi) Maintain a filter face velocity near 100 cm/s with less than 
5% of the recorded flow values exceeding 100 cm/s, unless you expect 
either the net PM mass on the filter to exceed 400 [mu]g, assuming a 38 
mm diameter filter stain area. Measure face velocity as the volumetric 
flow rate of the sample at the pressure upstream of the filter and 
temperature of the filter face as measured in Sec.  1065.140(e), 
divided by the filter's exposed area. You may use the exhaust stack or 
CVS tunnel pressure for the upstream pressure if the pressure drop 
through the PM sampler up to the filter is less than 2 kPa.
    (vii) Use a clean cassette designed to the specifications of Figure 
1 of Sec.  1065.170. In auto changer configurations, you may use 
cassettes of similar design. Cassettes must be made of one of the 
following materials: Delrin\TM\, 300 series stainless steel, 
polycarbonate, acrylonitrile-butadiene-styrene (ABS) resin, or 
conductive polypropylene. We recommend that you keep filter cassettes 
clean by periodically washing or wiping them with a compatible solvent 
applied using a lint-free cloth. Depending upon your cassette material, 
ethanol (C2H5OH) might be an acceptable solvent. 
Your cleaning frequency will depend on your engine's PM and HC 
emissions.
    (viii) If you keep the cassette in the filter holder after 
sampling, prevent flow through the filter until either the holder or 
cassette is removed from the PM sampler. If you remove the cassettes 
from filter holders after sampling, transfer the cassette to an 
individual container that is covered or sealed to prevent communication 
of semi-volatile matter from one filter to another. If you remove the 
filter holder, cap the inlet and outlet. Keep them covered or sealed 
until they return to the stabilization or weighing environments.
    (ix) The filters should not be handled outside of the PM 
stabilization and weighing environments and should be loaded into 
cassettes, filter holders, or auto changer apparatus before removal 
from these environments.
* * * * *
BILLING CODE 6560-50-P
[GRAPHIC] [TIFF OMITTED] TR08OC08.079


[[Page 59323]]



0
213. Section 1065.190 is amended by revising paragraph (d)(2) to read 
as follows:


Sec.  1065.190  PM-stabilization and weighing environments for 
gravimetric analysis.

* * * * *
    (d) * * *
    (2) Dewpoint. Maintain a dewpoint of 9.5 [deg]C in both 
environments. This dewpoint will control the amount of water associated 
with sulfuric acid (H2SO4) PM, such that 1.2216 
grams of water will be associated with each gram of 
H2SO4.
* * * * *

Subpart C--[Amended]

0
214. Section 1065.205 is amended by revising Table 1 to read as 
follows:


Sec.  1065.205  Performance specifications for measurement instruments.

* * * * *
[GRAPHIC] [TIFF OMITTED] TR08OC08.080

BILLING CODE 6560-50-C


0
215. Section 1065.272 is amended by revising paragraph (a) to read as 
follows:


Sec.  1065.272  Nondispersive ultraviolet analyzer.

    (a) Application. You may use a nondispersive ultraviolet (NDUV) 
analyzer to measure NOX concentration in raw or diluted 
exhaust for batch or continuous sampling. We generally accept an NDUV 
for NOX measurement, even though it measures only NO and 
NO2, since conventional engines and aftertreatment systems 
do not emit significant amounts of other NOX species. 
Measure other NOX species if required by the standard-
setting part. Note that good engineering judgment may preclude you from 
using an NDUV analyzer if sampled exhaust from test engines contains 
oil (or other contaminants) in sufficiently high concentrations to 
interfere with proper operation.
* * * * *

Subpart D--[Amended]

0
216. Section 1065.303 is revised to read as follows:


Sec.  1065.303  Summary of required calibration and verifications

    The following table summarizes the required and recommended 
calibrations and verifications described in this subpart and indicates 
when these have to be performed:

[[Page 59324]]



     Table 1 of Sec.   1065.303--Summary of Required Calibration and
                              Verifications
------------------------------------------------------------------------
  Type of calibration or verification         Minimum frequency \a\
------------------------------------------------------------------------
Sec.   1065.305: Accuracy,               Accuracy: Not required, but
 repeatability and noise.                 recommended for initial
                                          installation.
                                         Repeatability: Not required,
                                          but recommended for initial
                                          installation.
                                         Noise: Not required, but
                                          recommended for initial
                                          installation.
                                         Speed: Upon initial
                                          installation, within 370 days
                                          before testing and after major
                                          maintenance.
                                         Torque: Upon initial
                                          installation, within 370 days
                                          before testing and after major
                                          maintenance.
                                         Electrical power: Upon initial
                                          installation, within 370 days
                                          before testing and after major
                                          maintenance.
                                         Clean gas and diluted exhaust
                                          flows: Upon initial
                                          installation, within 370 days
                                          before testing and after major
                                          maintenance, unless flow is
                                          verified by propane check or
                                          by carbon or oxygen balance.
Sec.   1065.307: Linearity.............  Raw exhaust flow: Upon initial
                                          installation, within 185 days
                                          before testing and after major
                                          maintenance, unless flow is
                                          verified by propane check or
                                          by carbon or oxygen balance.
                                         Gas analyzers: Upon initial
                                          installation, within 35 days
                                          before testing and after major
                                          maintenance.
                                         PM balance: Upon initial
                                          installation, within 370 days
                                          before testing and after major
                                          maintenance.
                                         Stand-alone pressure and
                                          temperature: Upon initial
                                          installation, within 370 days
                                          before testing and after major
                                          maintenance.
Sec.   1065.308: Continuous gas          Upon initial installation or
 analyzer system response and updating-   after system modification that
 recording verification--for gas          would affect response.
 analyzers not continuously compensated
 for other gas species.
Sec.   1065.309: Continuous gas          Upon initial installation or
 analyzer system-response and updating-   after system modification that
 recording verification--for gas          would affect response.
 analyzers continuously compensated for
 other gas species.
Sec.   1065.310: Torque................  Upon initial installation and
                                          after major maintenance.
Sec.   1065.315: Pressure, temperature,  Upon initial installation and
 dewpoint.                                after major maintenance.
Sec.   1065.320: Fuel flow.............  Upon initial installation and
                                          after major maintenance.
Sec.   1065.325: Intake flow...........  Upon initial installation and
                                          after major maintenance.
Sec.   1065.330: Exhaust flow..........  Upon initial installation and
                                          after major maintenance.
Sec.   1065.340: Diluted exhaust flow    Upon initial installation and
 (CVS).                                   after major maintenance.
Sec.   1065.341: CVS and batch sampler   Upon initial installation,
 verification \b\.                        within 35 days before testing,
                                          and after major maintenance.
Sec.   1065.345: Vacuum leak...........  Before each laboratory test
                                          according to subpart F of this
                                          part and before each field
                                          test according to subpart J of
                                          this part.
Sec.   1065.350: CO2 NDIR H2O            Upon initial installation and
 interference.                            after major maintenance.
Sec.   1065.355: CO NDIR CO2 and H2O     Upon initial installation and
 interference.                            after major maintenance.
                                         Calibrate all FID analyzers:
                                          upon initial installation and
                                          after major maintenance.
Sec.   1065.360: FID calibration THC     Optimize and determine CH4
 FID optimization, and THC FID            response for THC FID
 verification..                           analyzers: upon initial
                                          installation and after major
                                          maintenance.
                                         Verify CH4 response for THC FID
                                          analyzers: upon initial
                                          installation, within 185 days
                                          before testing, and after
                                          major maintenance.
Sec.   1065.362: Raw exhaust FID O2      For all FID analyzers: upon
 interference.                            initial installation, and
                                          after major maintenance.
                                         For THC FID analyzers: upon
                                          initial installation, after
                                          major maintenance, and after
                                          FID optimization according to
                                          Sec.   1065.360.
Sec.   1065.365: Nonmethane cutter       Upon initial installation,
 penetration.                             within 185 days before
                                          testing, and after major
                                          maintenance.
Sec.   1065.370: CLD CO2 and H2O quench  Upon initial installation and
                                          after major maintenance.
Sec.   1065.372: NDUV HC and H2O         Upon initial installation and
 interference.                            after major maintenance.
Sec.   1065.376: Chiller NO2             Upon initial installation and
 penetration.                             after major maintenance.
Sec.   1065.378: NO2-to-NO converter     Upon initial installation,
 conversion.                              within 35 days before testing,
                                          and after major maintenance.
Sec.   1065.390: PM balance and          Independent verification: upon
 weighing.                                initial installation, within
                                          370 days before testing, and
                                          after major maintenance.
                                         Zero, span, and reference
                                          sample verifications: within
                                          12 hours of weighing, and
                                          after major maintenance.
Sec.   1065.395: Inertial PM balance     Independent verification: upon
 and weighing.                            initial installation, within
                                          370 days before testing, and
                                          after major maintenance.
                                         Other verifications: upon
                                          initial installation and after
                                          major maintenance.
------------------------------------------------------------------------
\a\ Perform calibrations and verifications more frequently, according to
  measurement system manufacturer instructions and good engineering
  judgment.
\b\ The CVS verification described in Sec.   1065.341 is not required
  for systems that agree within  2% based on a chemical
  balance of carbon or oxygen of the intake air, fuel, and diluted
  exhaust.


[[Page 59325]]


0
217. Section 1065.307 is amended by revising paragraphs (e)(2) and 
(e)(3) to read as follows:


Sec.  1065.307  Linearity verification.

* * * * *
    (e) * * *
    (2) The expression ``xmin'' refers to the reference 
value used during the linearity verification that is closest to zero. 
This is the value used to calculate the first tolerance in Table 1 of 
this section using the intercept, a0. Note that this value 
may be zero, positive, or negative depending on the reference values. 
For example, if the reference values chosen to validate a pressure 
transducer vary from -10 to -1 kPa, xmin is -1 kPa. If the 
reference values used to validate a temperature device vary from 290 to 
390 K, xmin is 290 K.
    (3) The expression ``max'' generally refers to the absolute value 
of the reference value used during the linearity verification that is 
furthest from zero. This is the value used to scale the first and third 
tolerances in Table 1 of this section using a0 and SEE. For 
example, if the reference values chosen to validate a pressure 
transducer vary from -10 to -1 kPa, then pmax is +10 kPa. If 
the reference values used to validate a temperature device vary from 
290 to 390 K, then Tmax is 390 K. For gas dividers, 
xmax is the undivided, undiluted, span gas concentration. 
The following are special cases where ``max'' refers to a different 
value:
    (i) For linearity verification with a PM balance, mmax 
refers to the typical mass of a PM filter.
    (ii) For linearity verification of torque, Tmax refers 
to the manufacturer's specified engine torque peak value of the lowest 
torque engine to be tested.
* * * * *

0
218. Section 1065.308 is revised to read as follows:


Sec.  1065.308  Continuous gas analyzer system-response and updating-
recording verification--for gas analyzers not continuously compensated 
for other gas species.

    (a) Scope and frequency. This section describes a verification 
procedure for system response and updating-recording frequency for 
continuous gas analyzers that output a gas species mole fraction (i.e., 
concentration) using a single gas detector, i.e., gas analyzers not 
continuously compensated for other gas species measured with multiple 
gas detectors. See Sec.  1065.309 for verification procedures that 
apply to continuous gas analyzers that are continuously compensated for 
other gas species measured with multiple gas detectors. Perform this 
verification to determine the system response of the continuous gas 
analyzer and its sampling system. This verification is required for 
continuous gas analyzers used for transient or ramped-modal testing. 
You need not perform this verification for batch gas analyzer systems 
or for continuous gas analyzer systems that are used only for discrete-
mode testing. Perform this verification after initial installation 
(i.e., test cell commissioning) and after any modifications to the 
system that would change system response. For example, perform this 
verification if you add a significant volume to the transfer lines by 
increasing their length or adding a filter; or if you reduce the 
frequency at which the gas analyzer updates its output or the frequency 
at which you sample and record gas-analyzer concentrations.
    (b) Measurement principles. This test verifies that the updating 
and recording frequencies match the overall system response to a rapid 
change in the value of concentrations at the sample probe. Gas 
analyzers and their sampling systems must be optimized such that their 
overall response to a rapid change in concentration is updated and 
recorded at an appropriate frequency to prevent loss of information. 
This test also verifies that the measurement system meets a minimum 
response time. You may use the results of this test to determine 
transformation time, t50, for the purposes of time alignment 
of continuous data in accordance with Sec.  1065.650(c)(2)(i). You may 
also use an alternate procedure to determine t50 in 
accordance with good engineering judgment. Note that any such procedure 
for determining t50 must account for both transport delay 
and analyzer response time.
    (c) System requirements. Demonstrate that each continuous analyzer 
has adequate update and recording frequencies and has a minimum rise 
time and a minimum fall time during a rapid change in gas 
concentration. You must meet one of the following criteria:
    (1) The product of the mean rise time, t10-90, and the 
frequency at which the system records an updated concentration must be 
at least 5, and the product of the mean fall time, t90-10, 
and the frequency at which the system records an updated concentration 
must be at least 5. If the recording frequency is different than the 
analyzer's output update frequency, you must use the lower of these two 
frequencies for this verification, which is referred to as the 
updating-recording frequency. This verification applies to the nominal 
updating and recording frequencies. This criterion makes no assumption 
regarding the frequency content of changes in emission concentrations 
during emission testing; therefore, it is valid for any testing. Also, 
the mean rise time must be at or below 10 seconds and the mean fall 
time must be at or below 10 seconds.
    (2) The frequency at which the system records an updated 
concentration must be at least 5 Hz. This criterion assumes that the 
frequency content of significant changes in emission concentrations 
during emission testing do not exceed 1 Hz. Also, the mean rise time 
must be at or below 10 seconds and the mean fall time must be at or 
below 10 seconds.
    (3) You may use other criteria if we approve the criteria in 
advance.
    (4) You may meet the overall PEMS verification in Sec.  1065.920 
instead of the verification in this section for field testing with 
PEMS.
    (d) Procedure. Use the following procedure to verify the response 
of each continuous gas analyzer:
    (1) Instrument setup. Follow the analyzer manufacturer's start-up 
and operating instructions. Adjust the measurement system as needed to 
optimize performance. Run this verification with the analyzer operating 
in the same manner you will use for emission testing. If the analyzer 
shares its sampling system with other analyzers, and if gas flow to the 
other analyzers will affect the system response time, then start up and 
operate the other analyzers while running this verification test. You 
may run this verification test on multiple analyzers sharing the same 
sampling system at the same time. If you use any analog or real-time 
digital filters during emission testing, you must operate those filters 
in the same manner during this verification.
    (2) Equipment setup. We recommend using minimal lengths of gas 
transfer lines between all connections and fast-acting three-way valves 
(2 inlets, 1 outlet) to control the flow of zero and blended span gases 
to the sample system's probe inlet or a tee near the outlet of the 
probe. Normally the gas flow rate is higher than the probe sample flow 
rate and the excess is overflowed out the inlet of the probe. If the 
gas flow rate is lower than the probe flow rate, the gas concentrations 
must be adjusted to account for the dilution from ambient air drawn 
into the probe. Select span gases for the species being measured. You 
may use binary or multi-gas span gases. You may use a gas blending or 
mixing device to blend span gases. A gas blending or mixing device is 
recommended when blending span gases diluted in N2 with span 
gases diluted in air. You may use a multi-gas

[[Page 59326]]

span gas, such as NO-CO-CO2-C3H8-
CH4, to verify multiple analyzers at the same time. If you 
use standard binary span gases, you must run separate response tests 
for each analyzer. In designing your experimental setup, avoid pressure 
pulsations due to stopping the flow through the gas-blending device.
    (3) Data collection. (i) Start the flow of zero gas.
    (ii) Allow for stabilization, accounting for transport delays and 
the slowest analyzer's full response.
    (iii) Start recording data. For this verification you must record 
data at a frequency greater than or equal to that of the updating-
recording frequency used during emission testing. You may not use 
interpolation or filtering to alter the recorded values.
    (iv) Switch the flow to allow the blended span gases to flow to the 
analyzer. If you intend to use the data from this test to determine 
t50 for time alignment, record this time as t0.
    (v) Allow for transport delays and the slowest analyzer's full 
response.
    (vi) Switch the flow to allow zero gas to flow to the analyzer. If 
you intend to use the data from this test to determine t50 
for time alignment, record this time as t100.
    (vii) Allow for transport delays and the slowest analyzer's full 
response.
    (viii) Repeat the steps in paragraphs (d)(3)(iv) through (vii) of 
this section to record seven full cycles, ending with zero gas flowing 
to the analyzers.
    (ix) Stop recording.
    (e) Performance evaluation. (1) If you choose to demonstrate 
compliance with paragraph (c)(1) of this section, use the data from 
paragraph (d)(3) of this section to calculate the mean rise time, 
t10-90, and mean fall time, t90-10, for each of 
the analyzers being verified. You may use interpolation between 
recorded values to determine rise and fall times. If the recording 
frequency used during emission testing is different from the analyzer's 
output update frequency, you must use the lower of these two 
frequencies for this verification. Multiply these times (in seconds) by 
their respective updating-recording frequencies in Hertz (1/second). 
The resulting product must be at least 5 for both rise time and fall 
time. If either value is less than 5, increase the updating-recording 
frequency, or adjust the flows or design of the sampling system to 
increase the rise time and fall time as needed. You may also configure 
analog or digital filters before recording to increase rise and fall 
times. In no case may the mean rise time or mean fall time be greater 
than 10 seconds.
    (2) If a measurement system fails the criterion in paragraph (e)(1) 
of this section, ensure that signals from the system are updated and 
recorded at a frequency of at least 5 Hz. In no case may the mean rise 
time or mean fall time be greater than 10 seconds.
    (3) If a measurement system fails the criteria in paragraphs (e)(1) 
and (2) of this section, you may use the measurement system only if the 
deficiency does not adversely affect your ability to show compliance 
with the applicable standards.
    (f) Transformation time, t50, determination. If you 
choose to determine t50 for purposes of time alignment using 
data generated in paragraph (d)(3) of this section, calculate the mean 
t0-50 and the mean t100-50 from the recorded 
data. Average these two values to determine the final t50 
for the purposes of time alignment in accordance with Sec.  
1065.650(c)(2)(i).

0
219. Section 1065.309 is revised to read as follows:


Sec.  1065.309  Continuous gas analyzer system-response and updating-
recording verification--for gas analyzers continuously compensated for 
other gas species.

    (a) Scope and frequency. This section describes a verification 
procedure for system response and updating-recording frequency for 
continuous gas analyzers that output a single gas species mole fraction 
(i.e., concentration) based on a continuous combination of multiple gas 
species measured with multiple detectors (i.e., gas analyzers 
continuously compensated for other gas species). See Sec.  1065.308 for 
verification procedures that apply to continuous gas analyzers that are 
not continuously compensated for other gas species or that use only one 
detector for gaseous species. Perform this verification to determine 
the system response of the continuous gas analyzer and its sampling 
system. This verification is required for continuous gas analyzers used 
for transient or ramped-modal testing. You need not perform this 
verification for batch gas analyzers or for continuous gas analyzers 
that are used only for discrete-mode testing. For this check we 
consider water vapor a gaseous constituent. This verification does not 
apply to any processing of individual analyzer signals that are time 
aligned to their t50 times and were verified according to 
Sec.  1065.308. For example, this verification does not apply to 
correction for water removed from the sample done in post-processing 
according to Sec.  1065.659 and it does not apply to NMHC determination 
from THC and CH4 according to Sec.  1065.660. Perform this 
verification after initial installation (i.e., test cell commissioning) 
and after any modifications to the system that would change the system 
response.
    (b) Measurement principles. This procedure verifies that the 
updating and recording frequencies match the overall system response to 
a rapid change in the value of concentrations at the sample probe. It 
indirectly verifies the time-alignment and uniform response of all the 
continuous gas detectors used to generate a continuously combined/
compensated concentration measurement signal. Gas analyzer systems must 
be optimized such that their overall response to rapid change in 
concentration is updated and recorded at an appropriate frequency to 
prevent loss of information. This test also verifies that the 
measurement system meets a minimum response time. For this procedure, 
ensure that all compensation algorithms and humidity corrections are 
turned on. You may use the results of this test to determine 
transformation time, t50, for the purposes of time alignment 
of continuous data in accordance with Sec.  1065.650(c)(2)(i). You may 
also use an alternate procedure to determine t50 consistent 
with good engineering judgment. Note that any such procedure for 
determining t50 must account for both transport delay and 
analyzer response time.
    (c) System requirements. Demonstrate that each continuously 
combined/compensated concentration measurement has adequate updating 
and recording frequencies and has a minimum rise time and a minimum 
fall time during a system response to a rapid change in multiple gas 
concentrations, including H2O concentration if 
H2O compensation is applied. You must meet one of the 
following criteria:
    (1) The product of the mean rise time, t10-90, and the 
frequency at which the system records an updated concentration must be 
at least 5, and the product of the mean fall time, t90-10, 
and the frequency at which the system records an updated concentration 
must be at least 5. If the recording frequency is different than the 
update frequency of the continuously combined/compensated signal, you 
must use the lower of these two frequencies for this verification. This 
criterion makes no assumption regarding the frequency content of 
changes in emission concentrations during emission testing; therefore, 
it is valid for any testing. Also, the mean rise time must be at or 
below 10 seconds and the mean fall time must be at or below 10 seconds.
    (2) The frequency at which the system records an updated 
concentration must be at least 5 Hz. This criterion assumes that the 
frequency content of significant

[[Page 59327]]

changes in emission concentrations during emission testing do not 
exceed 1 Hz. Also, the mean rise time must be at or below 10 seconds 
and the mean fall time must be at or below 10 seconds.
    (3) You may use other criteria if we approve them in advance.
    (4) You may meet the overall PEMS verification in Sec.  1065.920 
instead of the verification in this section for field testing with 
PEMS.
    (d) Procedure. Use the following procedure to verify the response 
of each continuously compensated analyzer (verify the combined signal, 
not each individual continuously combined concentration signal):
    (1) Instrument setup. Follow the analyzer manufacturer's start-up 
and operating instructions. Adjust the measurement system as needed to 
optimize performance. Run this verification with the analyzer operating 
in the same manner you will use for emission testing. If the analyzer 
shares its sampling system with other analyzers, and if gas flow to the 
other analyzers will affect the system response time, then start up and 
operate the other analyzers while running this verification test. You 
may run this verification test on multiple analyzers sharing the same 
sampling system at the same time. If you use any analog or real-time 
digital filters during emission testing, you must operate those filters 
in the same manner during this verification.
    (2) Equipment setup. We recommend using minimal lengths of gas 
transfer lines between all connections and fast-acting three-way valves 
(2 inlets, 1 outlet) to control the flow of zero and blended span gases 
to the sample system's probe inlet or a tee near the outlet of the 
probe. Normally the gas flow rate is higher than the probe sample flow 
rate and the excess is overflowed out the inlet of the probe. If the 
gas flow rate is lower than the probe flow rate, the gas concentrations 
must be adjusted to account for the dilution from ambient air drawn 
into the probe. Select span gases for the species being continuously 
combined, other than H2O. Select concentrations of 
compensating species that will yield concentrations of these species at 
the analyzer inlet that covers the range of concentrations expected 
during testing. You may use binary or multi-gas span gases. You may use 
a gas blending or mixing device to blend span gases. A gas blending or 
mixing device is recommended when blending span gases diluted in 
N2 with span gases diluted in air. You may use a multi-gas 
span gas, such as NO-CO-CO2-C3H8-
CH4, to verify multiple analyzers at the same time. In 
designing your experimental setup, avoid pressure pulsations due to 
stopping the flow through the gas blending device. If H2O 
correction is applicable, then span gases must be humidified before 
entering the analyzer; however, you may not humidify NO2 
span gas by passing it through a sealed humidification vessel that 
contains water. You must humidify NO2 span gas with another 
moist gas stream. We recommend humidifying your NO-CO-CO2-
C3H8-CH4, balance N2 
blended gas by flowing the gas mixture through a sealed vessel that 
humidifies the gas by bubbling it through distilled water and then 
mixing the gas with dry NO2 gas, balance purified synthetic 
air. If your system does not use a sample dryer to remove water from 
the sample gas, you must humidify your span gas to the highest sample 
H2O content that you estimate during emission sampling. If 
your system uses a sample dryer during testing, it must pass the sample 
dryer verification check in Sec.  1065.342, and you must humidify your 
span gas to an H2O content greater than or equal to the 
level determined in Sec.  1065.145(d)(2). If you are humidifying span 
gases without NO2, use good engineering judgment to ensure 
that the wall temperatures in the transfer lines, fittings, and valves 
from the humidifying system to the probe are above the dewpoint 
required for the target H2O content. If you are humidifying 
span gases with NO2, use good engineering judgment to ensure 
that there is no condensation in the transfer lines, fittings, or 
valves from the point where humidified gas is mixed with NO2 
span gas to the probe. We recommend that you design your setup so that 
the wall temperatures in the transfer lines, fittings, and valves from 
the humidifying system to the probe are at least 5 [deg]C above the 
local sample gas dewpoint. Operate the measurement and sample handling 
system as you do for emission testing. Make no modifications to the 
sample handling system to reduce the risk of condensation. Flow 
humidified gas through the sampling system before this check to allow 
stabilization of the measurement system's sampling handling system to 
occur, as it would for an emission test.
    (3) Data collection. (i) Start the flow of zero gas.
    (ii) Allow for stabilization, accounting for transport delays and 
the slowest analyzer's full response.
    (iii) Start recording data. For this verification you must record 
data at a frequency greater than or equal to that of the updating-
recording frequency used during emission testing. You may not use 
interpolation or filtering to alter the recorded values.
    (iv) Switch the flow to allow the blended span gases to flow to the 
analyzer. If you intend to use the data from this test to determine 
t50 for time alignment, record this time as t0.
    (v) Allow for transport delays and the slowest analyzer's full 
response.
    (vi) Switch the flow to allow zero gas to flow to the analyzer. If 
you intend to use the data from this test to determine t50 
for time alignment, record this time as t100.
    (vii) Allow for transport delays and the slowest analyzer's full 
response.
    (viii) Repeat the steps in paragraphs (d)(3)(iv) through (vii) of 
this section to record seven full cycles, ending with zero gas flowing 
to the analyzers.
    (ix) Stop recording.
    (e) Performance evaluations. (1) If you choose to demonstrate 
compliance with paragraph (c)(1) of this section, use the data from 
paragraph (d)(3) of this section to calculate the mean rise time, 
t10-90, and mean fall time, t90-10, for the 
continuously combined signal from each analyzer being verified. You may 
use interpolation between recorded values to determine rise and fall 
times. If the recording frequency used during emission testing is 
different from the analyzer's output update frequency, you must use the 
lower of these two frequencies for this verification. Multiply these 
times (in seconds) by their respective updating-recording frequencies 
in Hz (1/second). The resulting product must be at least 5 for both 
rise time and fall time. If either value is less than 5, increase the 
updating-recording frequency or adjust the flows or design of the 
sampling system to increase the rise time and fall time as needed. You 
may also configure analog or digital filters before recording to 
increase rise and fall times. In no case may the mean rise time or mean 
fall time be greater than 10 seconds.
    (2) If a measurement system fails the criterion in paragraph (e)(1) 
of this section, ensure that signals from the system are updated and 
recorded at a frequency of at least 5 Hz. In no case may the mean rise 
time or mean fall time be greater than 10 seconds.
    (3) If a measurement system fails the criteria in paragraphs (e)(1) 
and (2) of this section, you may use the measurement system only if the 
deficiency does not adversely affect your ability to show compliance 
with the applicable standards.
    (f) Transformation time, t50, determination. If you 
choose to determine t50 for purposes of time alignment using 
data generated in paragraph (d)(3) of this section,

[[Page 59328]]

calculate the mean t0-50 and the mean t100-50 
from the recorded data. Average these two values to determine the final 
t50 for the purposes of time alignment in accordance with 
Sec.  1065.650(c)(2)(i).


0
220. Section 1065.341 is amended by revising paragraph (d)(4) to read 
as follows:


Sec.  1065.341  CVS and batch sampler verification (propane check).

* * * * *
    (d) * * *
    (4) Overflow zero air at the HC probe inlet or into a tee near the 
outlet of the probe.
* * * * *

0
221. Section 1065.342 is amended by revising paragraphs (d) and (e) to 
read as follows:


Sec.  1065.342  Sample dryer verification.

* * * * *
    (d) Sample dryer verification procedure. Use the following method 
to determine sample dryer performance. Run this verification with the 
dryer and associated sampling system operating in the same manner you 
will use for emission testing (including operation of sample pumps). 
You may run this verification test on multiple sample dryers sharing 
the same sampling system at the same time. You may run this 
verification on the sample dryer alone, but you must use the maximum 
gas flow rate expected during testing. You may use good engineering 
judgment to develop a different protocol.
    (1) Use PTFE or stainless steel tubing to make necessary 
connections.
    (2) Humidify room air, N2, or purified air by bubbling 
it through distilled water in a sealed vessel that humidifies the gas 
to the highest sample water content that you estimate during emission 
sampling.
    (3) Introduce the humidified gas upstream of the sample dryer. You 
may disconnect the transfer line from the probe and introduce the 
humidified gas at the inlet of the transfer line of the sample system 
used during testing. You may use the sample pumps in the sample system 
to draw gas through the vessel.
    (4) Maintain the sample lines, fittings, and valves from the 
location where the humidified gas water content is measured to the 
inlet of the sampling system at a temperature at least 5 [deg]C above 
the local humidified gas dewpoint. For dryers used in NOX 
sample systems, verify the sample system components used in this 
verification prevent aqueous condensation as required in Sec.  
1065.145(c)(1)(i). We recommend that the sample system components be 
maintained at least 5 [deg]C above the local humidified gas dewpoint to 
prevent aqueous condensation.
    (5) Measure the humidified gas dewpoint, Tdew, and 
absolute pressure, ptotal, as close as possible to the inlet 
of the sample dryer or inlet of the sample system to verify the water 
content is at least as high as the highest value that you estimated 
during emission sampling. You may verify the water content based on any 
humidity parameter (e.g. mole fraction water, local dewpoint, or 
absolute humidity).
    (6) Measure the humidified gas dewpoint, Tdew, and 
absolute pressure, ptotal, as close as possible to the 
outlet of the sample dryer. Note that the dewpoint changes with 
absolute pressure. If the dewpoint at the sample dryer outlet is 
measured at a different pressure, then this reading must be corrected 
to the dewpoint at the sample dryer absolute pressure, 
ptotal.
    (7) The sample dryer meets the verification if the dewpoint at the 
sample dryer pressure as measured in paragraph (d)(6) of this section 
is less than the dewpoint corresponding to the sample dryer 
specifications as determined in Sec.  1065.145(d)(2) plus 2 [deg]C or 
if the mole fraction of water as measured in (d)(6) is less than the 
corresponding sample dryer specifications plus 0.002 mol/mol.
    (e) Alternate sample dryer verification procedure. The following 
method may be used in place of the sample dryer verification procedure 
in (d) of this section. If you use a humidity sensor for continuous 
monitoring of dewpoint at the sample dryer outlet you may skip the 
performance check in Sec.  1065.342(d), but you must make sure that the 
dryer outlet humidity is at or below the minimum value used for quench, 
interference, and compensation checks.


0
222. Section 1065.345 is amended by revising paragraph (d)(3) to read 
as follows:


Sec.  1065.345  Vacuum-side leak verification.

* * * * *
    (d) * * *
    (3) Route overflow span gas to the inlet of the sample probe or at 
a tee fitting in the transfer line near the exit of the probe. You may 
use a valve upstream of the overflow fitting to prevent overflow of 
span gas out of the inlet of the probe, but you must then provide an 
overflow vent in the overflow supply line.
* * * * *

0
223. Section 1065.350 is amended by revising paragraphs (d)(4) and 
(d)(5) to read as follows:


Sec.  1065.350  H2O interference verification for 
CO2 NDIR analyzers.

* * * * *
    (d) * * *
    (4) Measure the water mole fraction, xH2O, of the 
humidified test gas, as close as possible to the inlet of the analyzer. 
For example, measure dewpoint, Tdew, and absolute pressure, 
ptotal, to calculate xH2O.
    (5) Use good engineering judgment to prevent condensation in the 
transfer lines, fittings, or valves from the point where 
xH2O is measured to the analyzer. We recommend that you 
design your system so the wall temperatures in the transfer lines, 
fittings, and valves from the point where xH2O is measured 
to the analyzer are at least 5 [deg]C above the local sample gas 
dewpoint.
* * * * *

0
224. Section 1065.355 is amended by revising paragraphs (d)(4) and 
(d)(5) to read as follows:


Sec.  1065.355  H2O and CO2 interference 
verification for CO NDIR analyzers.

* * * * *
    (d) * * *
    (4) Measure the water mole fraction, xH2O, of the 
humidified CO2 test gas as close as possible to the inlet of 
the analyzer. For example, measure dewpoint, Tdew, and 
absolute pressure, ptotal, to calculate xH2O.
    (5) Use good engineering judgment to prevent condensation in the 
transfer lines, fittings, or valves from the point where 
xH2O is measured to the analyzer. We recommend that you 
design your system so the wall temperatures in the transfer lines, 
fittings, and valves from the point where xH2O is measured 
to the analyzer are at least 5 [deg]C above the local sample gas 
dewpoint.
* * * * *

0
225. Section 1065.370 is revised to read as follows:


Sec.  1065.370  CLD CO2 and H2O quench 
verification.

    (a) Scope and frequency. If you use a CLD analyzer to measure 
NOX, verify the amount of H2O and CO2 
quench after installing the CLD analyzer and after major maintenance.
    (b) Measurement principles. H2O and CO2 can 
negatively interfere with a CLD's NOX response by 
collisional quenching, which inhibits the chemiluminescent reaction 
that a CLD utilizes to detect NOX. This procedure and the 
calculations in Sec.  1065.675 determine quench and scale the quench 
results to the maximum mole fraction of

[[Page 59329]]

H2O and the maximum CO2 concentration expected 
during emission testing. If the CLD analyzer uses quench compensation 
algorithms that utilize H2O and/or CO2 
measurement instruments, evaluate quench with these instruments active 
and evaluate quench with the compensation algorithms applied.
    (c) System requirements. A CLD analyzer must have a combined 
H2O and CO2 quench of  3% or less, 
though we strongly recommend a quench of  1% or less. 
Combined quench is the sum of the CO2 quench determined as 
described in paragraph (d) of this section, plus the H2O 
quench determined in paragraph (e) of this section.
    (d) CO2 quench verification procedure. Use the following 
method to determine CO2 quench by using a gas divider that 
blends binary span gases with zero gas as the diluent and meets the 
specifications in Sec.  1065.248, or use good engineering judgment to 
develop a different protocol:
    (1) Use PTFE or stainless steel tubing to make necessary 
connections.
    (2) Configure the gas divider such that nearly equal amounts of the 
span and diluent gases are blended with each other.
    (3) If the CLD analyzer has an operating mode in which it detects 
NO-only, as opposed to total NOX, operate the CLD analyzer 
in the NO-only operating mode.
    (4) Use a CO2 span gas that meets the specifications of 
Sec.  1065.750 and a concentration that is approximately twice the 
maximum CO2 concentration expected during emission testing.
    (5) Use an NO span gas that meets the specifications of Sec.  
1065.750 and a concentration that is approximately twice the maximum NO 
concentration expected during emission testing.
    (6) Zero and span the CLD analyzer. Span the CLD analyzer with the 
NO span gas from paragraph (d)(5) of this section through the gas 
divider. Connect the NO span gas to the span port of the gas divider; 
connect a zero gas to the diluent port of the gas divider; use the same 
nominal blend ratio selected in paragraph (d)(2) of this section; and 
use the gas divider's output concentration of NO to span the CLD 
analyzer. Apply gas property corrections as necessary to ensure 
accurate gas division.
    (7) Connect the CO2 span gas to the span port of the gas 
divider.
    (8) Connect the NO span gas to the diluent port of the gas divider.
    (9) While flowing NO and CO2 through the gas divider, 
stabilize the output of the gas divider. Determine the CO2 
concentration from the gas divider output, applying gas property 
correction as necessary to ensure accurate gas division. Record this 
concentration, xCO2act, and use it in the quench 
verification calculations in Sec.  1065.675. Alternatively, you may use 
a simple gas blending device and use an NDIR to determine this 
CO2 concentration. If you use an NDIR, it must meet the 
requirements of this part for laboratory testing and you must span it 
with the CO2 span gas from paragraph (d)(4) of this section.
    (10) Measure the NO concentration downstream of the gas divider 
with the CLD analyzer. Allow time for the analyzer response to 
stabilize. Stabilization time may include time to purge the transfer 
line and to account for analyzer response. While the analyzer measures 
the sample's concentration, record the analyzer's output for 30 
seconds. Calculate the arithmetic mean concentration from these data, 
xNOmeas. Record xNOmeas, and use it in the quench 
verification calculations in Sec.  1065.675.
    (11) Calculate the actual NO concentration at the gas divider's 
outlet, xNOact, based on the span gas concentrations and 
xCO2act according to Equation 1065.675-2. Use the calculated 
value in the quench verification calculations in Equation 1065.675-1.
    (12) Use the values recorded according to this paragraph (d) and 
paragraph (e) of this section to calculate quench as described in Sec.  
1065.675.
    (e) H2O quench verification procedure. Use the following 
method to determine H2O quench, or use good engineering 
judgment to develop a different protocol:
    (1) Use PTFE or stainless steel tubing to make necessary 
connections.
    (2) If the CLD analyzer has an operating mode in which it detects 
NO-only, as opposed to total NOX, operate the CLD analyzer 
in the NO-only operating mode.
    (3) Use an NO span gas that meets the specifications of Sec.  
1065.750 and a concentration that is near the maximum concentration 
expected during emission testing.
    (4) Zero and span the CLD analyzer. Span the CLD analyzer with the 
NO span gas from paragraph (e)(3) of this section, record the span gas 
concentration as xNOdry, and use it in the quench 
verification calculations in Sec.  1065.675.
    (5) Humidify the NO span gas by bubbling it through distilled water 
in a sealed vessel. If the humidified NO span gas sample does not pass 
through a sample dryer for this verification test, control the vessel 
temperature to generate an H2O level approximately equal to 
the maximum mole fraction of H2O expected during emission 
testing. If the humidified NO span gas sample does not pass through a 
sample dryer, the quench verification calculations in Sec.  1065.675 
scale the measured H2O quench to the highest mole fraction 
of H2O expected during emission testing. If the humidified 
NO span gas sample passes through a dryer for this verification test, 
control the vessel temperature to generate an H2O level at 
least as high as the level determined in Sec.  1065.145(d)(2). For this 
case, the quench verification calculations in Sec.  1065.675 do not 
scale the measured H2O quench.
    (6) Introduce the humidified NO test gas into the sample system. 
You may introduce it upstream or downstream of any sample dryer that is 
used during emission testing. Note that the sample dryer must meet the 
sample dryer verification check in Sec.  1065.342.
    (7) Measure the mole fraction of H2O in the humidified 
NO span gas downstream of the sample dryer, xH2Omeas. We 
recommend that you measure xH2Omeas as close as possible to 
the CLD analyzer inlet. You may calculate xH2Omeas from 
measurements of dew point, Tdew, and absolute pressure, 
ptotal.
    (8) Use good engineering judgment to prevent condensation in the 
transfer lines, fittings, or valves from the point where 
xH2Omeas is measured to the analyzer. We recommend that you 
design your system so the wall temperatures in the transfer lines, 
fittings, and valves from the point where xH2Omeas is 
measured to the analyzer are at least 5 [deg]C above the local sample 
gas dew point.
    (9) Measure the humidified NO span gas concentration with the CLD 
analyzer. Allow time for the analyzer response to stabilize. 
Stabilization time may include time to purge the transfer line and to 
account for analyzer response. While the analyzer measures the sample's 
concentration, record the analyzer's output for 30 seconds. Calculate 
the arithmetic mean of these data, xNOwet. Record 
xNOwet and use it in the quench verification calculations in 
Sec.  1065.675.
    (f) Corrective action. If the sum of the H2O quench plus 
the CO2 quench is less than -2% or greater than +2%, take 
corrective action by repairing or replacing the analyzer. Before 
running emission tests, verify that the corrective action successfully 
restored the analyzer to proper functioning.
    (g) Exceptions. The following exceptions apply:
    (1) You may omit this verification if you can show by engineering 
analysis

[[Page 59330]]

that for your NOX sampling system and your emission 
calculations procedures, the combined CO2 and H2O 
interference for your NOX CLD analyzer always affects your 
brake-specific NOX emission results within no more than 
1.0% of the applicable NOX standard.
    (2) You may use a NOX CLD analyzer that you determine 
does not meet this verification, as long as you try to correct the 
problem and the measurement deficiency does not adversely affect your 
ability to show that engines comply with all applicable emission 
standards.

0
226. Section 1065.378 is amended by revising paragraph (d)(4) to read 
as follows:


Sec.  1065.378  NO2-to-NO converter conversion verification.

* * * * *
    (d) * * *
    (4) Performance evaluation. Calculate the efficiency of the 
NOX converter by substituting the concentrations obtained 
into the following equation:
[GRAPHIC] [TIFF OMITTED] TR08OC08.097

* * * * *

Subpart F--[Amended]

0
227. Section 1065.510 is amended by revising paragraphs (b)(3) and 
(b)(6) to read as follows:


Sec.  1065.510  Engine mapping.

* * * * *
    (b) * * *
    (3) Operate the engine at its warm idle speed as follows:
    (i) For engines with a low-speed governor, set the operator demand 
to minimum, use the dynamometer or other loading device to target a 
torque of zero on the engine's primary output shaft, and allow the 
engine to govern the speed. Measure this warm idle speed; we recommend 
recording at least 30 values of speed and using the mean of those 
values.
    (ii) For engines without a low-speed governor, operate the engine 
at warm idle speed and zero torque on the engine's primary output 
shaft. You may use the dynamometer to target a torque of zero on the 
engine's primary output shaft, and manipulate the operator demand to 
control the speed to target the manufacturer-declared value for the 
lowest engine speed possible with minimum load (also known as 
manufacturer-declared warm idle speed). You may alternatively use the 
dynamometer to target the manufacturer-declared warm idle speed and 
manipulate the operator demand to control the torque on the engine's 
primary output shaft to zero.
    (iii) For variable-speed engines with or without a low-speed 
governor, if a nonzero idle torque is representative of in-use 
operation, you may use the dynamometer or operator demand to target the 
manufacturer-declared idle torque instead of targeting zero torque as 
specified in paragraphs (b)(3)(i) and (ii) of this section. Control 
speed as specified in paragraph (b)(3)(i) or (ii) of this section, as 
applicable. If you use this option for engines with a low-speed 
governor to measure the warm idle speed with the manufacturer-declared 
torque at this step, you may use this as the warm-idle speed for cycle 
generation as specified in paragraph (b)(6) of this section. However, 
if you identify multiple warm idle torques under paragraph (f)(4)(i) of 
this section, measure the warm idle speed at only one torque level for 
this paragraph (b)(3).
* * * * *
    (6) For engines with a low-speed governor, if a nonzero idle torque 
is representative of in-use operation, operate the engine at warm idle 
with the manufacturer-declared idle torque. Set the operator demand to 
minimum, use the dynamometer to target the declared idle torque, and 
allow the engine to govern the speed. Measure this speed and use it as 
the warm idle speed for cycle generation in Sec.  1065.512. We 
recommend recording at least 30 values of speed and using the mean of 
those values. If you identify multiple warm idle torques under 
paragraph (f)(4)(i) of this section, measure the warm idle speed at 
each torque. You may map the idle governor at multiple load levels and 
use this map to determine the measured warm idle speed at the declared 
idle torque(s).
* * * * *

0
228. Section 1065.514 is amended by revising paragraph (f)(3) to read 
as follows:


Sec.  1065.514  Cycle-validation criteria for operation over specified 
duty cycles.

* * * * *
    (f) * * *
    (3) For discrete-mode steady-state testing, apply cycle-validation 
criteria by treating the sampling periods from the series of test modes 
as a continuous sampling period, analogous to ramped-modal testing and 
apply statistical criteria as described in paragraph (f)(1) or (2) of 
this section.
* * * * *

0
229. Section 1065.520 is amended by revising paragraphs (g)(4) and 
(g)(5)(ii) to read as follows:


Sec.  1065.520  Pre-test verification procedures and pre-test data 
collection.

* * * * *
    (g) * * *
    (4) Overflow zero gas at the HC probe inlet or into a tee near the 
probe outlet.
    (5) * * *
    (ii) For batch sampling, fill the sample medium (e.g., bag) and 
record its mean THC concentration.
* * * * *

Subpart G--[Amended]

0
230. Section 1065.610 is amended by revising paragraphs (a) and (b) to 
read as follows:


Sec.  1065.610  Duty cycle generation.

* * * * *
    (a) Maximum test speed, fntest. This section generally 
applies to duty cycles for variable-speed engines. For constant-speed 
engines subject to duty cycles that specify normalized speed commands, 
use the no-load governed speed as the measured fntest. This 
is the highest engine speed where an engine outputs zero torque. For 
variable-speed engines, determine the measured fntest from 
the power-versus-speed map, generated according to Sec.  1065.510, as 
follows:
    (1) Based on the map, determine maximum power, Pmax, and 
the speed at which maximum power occurred, fnPmax. If 
maximum power occurs at multiple speeds, take fnPmax as the 
lowest of these speeds. Divide every recorded power by Pmax 
and divide every recorded speed by fnPmax. The result is a 
normalized power-versus-speed map. Your measured fntest is 
the speed at which the sum of the squares of normalized speed and power 
is maximum. Note that if multiple maximum values are found, 
fntest should be taken as the lowest speed of all points 
with the same maximum sum of squares.
    Determine fntest as follows:

[[Page 59331]]

[GRAPHIC] [TIFF OMITTED] TR08OC08.098

Where:

fntest = maximum test speed.
i = an indexing variable that represents one recorded value of an 
engine map.
fnnormi = an engine speed normalized by dividing it by 
fnPmax.
Pnormi = an engine power normalized by dividing it by 
Pmax.

Example:

(fnnorm1 = 1.002, Pnorm1 = 0.978, 
fn1 = 2359.71)
(fnnorm2 = 1.004, Pnorm2 = 0.977, 
fn2 = 2364.42)
(fnnorm3 = 1.006, Pnorm3 = 0.974, 
fn3 = 2369.13)
(fnnorm12 + Pnorm1\2\) = (1.002\2\ 
+ 0.978\2\) = 1.960
(fnnorm2\2\ + Pnorm2\2\) = (1.004\2\ + 
0.977\2\) = 1.963
(fnnorm3\2\ + Pnorm3\2\) = (1.006\2\ + 
0.974\2\) = 1.961
maximum = 1.963 at i = 2
fntest = 2364.42 rev/min

    (2) For variable-speed engines, transform normalized speeds to 
reference speeds according to paragraph (c) of this section by using 
the measured maximum test speed determined according to paragraph 
(a)(1) of this section--or use your declared maximum test speed, as 
allowed in Sec.  1065.510.
    (3) For constant-speed engines, transform normalized speeds to 
reference speeds according to paragraph (c) of this section by using 
the measured no-load governed speed--or use your declared maximum test 
speed, as allowed in Sec.  1065.510.
    (b) Maximum test torque, Ttest. For constant-speed 
engines, determine the measured Ttest from the power-versus-
speed map, generated according to Sec.  1065.510, as follows:
    (1) Based on the map, determine maximum power, Pmax, and 
the speed at which maximum power occurs, fnPmax. If maximun 
power occurs at multiple speeds, take fnPmax as the lowest 
of these speeds. Divide every recorded power by Pmax and 
divide every recorded speed by fnPmax. The result is a 
normalized power-versus-speed map. Your measured Ttest is 
the torque at which the sum of the squares of normalized speed and 
power is maximum. Note that that if multiple maximum values are found, 
Ttest should be taken as the highest torque of all points 
with the same maximum sum of squares. Determine Ttest as 
follows:
[GRAPHIC] [TIFF OMITTED] TR08OC08.099

Where:

Ttest = maximum test torque.


Example:

(fnnorm1 = 1.002, Pnorm1 = 0.978, 
T1 = 722.62 N[middot]m)
(fnnorm2 = 1.004, Pnorm2 = 0.977, 
T2 = 720.44 N[middot]m)
(fnnorm3 = 1.006, Pnorm3 = 0.974, 
T3 = 716.80 N[middot]m)
(fnnorm1\2\ + Pnorm1\2\) = (1.002\2\ + 
0.978\2\) = 1.960
(fnnorm1\2\ + Pnorm1\2\) = (1.004\2\ + 
0.977\2\) = 1.963
(fnnorm1\2\ + Pnorm1\2\) = (1.006\2\ + 
0.974\2\) = 1.961
maximum = 1.963 at i = 2
Ttest = 720.44 N[middot]m

    (2) Transform normalized torques to reference torques according to 
paragraph (d) of this section by using the measured maximum test torque 
determined according to paragraph (b)(1) of this section--or use your 
declared maximum test torque, as allowed in Sec.  1065.510.
* * * * *
0
231. Section 1065.640 is amended by revising paragraph (a) to read as 
follows:


Sec.  1065.640  Flow meter calibration calculations.

* * * * *
    (a) Reference meter conversions. The calibration equations in this 
section use molar flow rate, nref, as a reference quantity. 
If your reference meter outputs a flow rate in a different quantity, 
such as standard volume rate, Vstdref, actual volume rate, 
Vactref, or mass rate, mref, convert your 
reference meter output to a molar flow rate using the following 
equations, noting that while values for volume rate, mass rate, 
pressure, temperature, and molar mass may change during an emission 
test, you should ensure that they are as constant as practical for each 
individual set point during a flow meter calibration:
[GRAPHIC] [TIFF OMITTED] TR08OC08.100


Eq. 1065.640-1

Where:
nref = reference molar flow rate.
Vstdref = reference volume flow rate, corrected to a 
standard pressure and a standard temperature.
Vactref = reference volume flow rate at the actual 
pressure and temperature of the flow rate.
mref = reference mass flow.
Pstd = standard pressure.
Pact = actual pressure of the flow rate.
Tstd = standard temperature.
Tact = actual temperature of the flow rate.
R = molar gas constant.
Mmix = molar mass of the flow rate.

Example 1:

Vstdref = 1000.00 ft3/min = 0.471948 
m3/s
P = 29.9213 in Hg @ 32 [deg]F = 101325 Pa
T = 68.0 [deg]F = 293.15 K
R = 8.314472 J/(mol[middot]K)
[GRAPHIC] [TIFF OMITTED] TR08OC08.101

nref = 19.619 mol/s

Example 2:

mref = 17.2683 kg/min = 287.805 g/s
Mmix = 28.7805 g/mol
[GRAPHIC] [TIFF OMITTED] TR08OC08.102

nref = 10.0000 mol/s
* * * * *
0
232. Section 1065.645 is amended by revising paragraphs (a) and (b) to 
read as follows:


Sec.  1065.645  Amount of water in an ideal gas.

* * * * *
    (a) Vapor pressure of water. Calculate the vapor pressure of water 
for a given saturation temperature condition, Tsat, as 
follows, or use good engineering judgment to use a different 
relationship of the vapor pressure of water to a given saturation 
temperature condition:
    (1) For humidity measurements made at ambient temperatures from (0 
to 100) [deg]C, or for humidity measurements made over super-cooled 
water at ambient temperatures from (-50 to 0) [deg]C, use the following 
equation:

[[Page 59332]]

[GRAPHIC] [TIFF OMITTED] TR08OC08.000

Where:

pH20 = vapor pressure of water at saturation temperature 
condition, kPa.
Tsat = saturation temperature of water at measured 
conditions, K.

Example:

Tsat = 9.5 [deg]C
Tdsat = 9.5 + 273.15 = 282.65 K
[GRAPHIC] [TIFF OMITTED] TR08OC08.001

log10(pH20) = 0.074297
pH20 = 100.074297 = 1.186581 kPa

    (2) For humidity measurements over ice at ambient temperatures from 
(-100 to 0) [deg]C, use the following equation:
[GRAPHIC] [TIFF OMITTED] TR08OC08.002

Example:

Tice = -15.4 [deg]C
Tice = -15.4 + 273.15 = 257.75 K
[GRAPHIC] [TIFF OMITTED] TR08OC08.003

log10(pH2O) =-0.798207
pH2O = 100.79821 = 0.159145 kPa

    (b) Dewpoint. If you measure humidity as a dewpoint, determine the 
amount of water in an ideal gas, xH2O, as follows:
[GRAPHIC] [TIFF OMITTED] TR08OC08.004

Where:

xH2O = amount of water in an ideal gas.
pH2O = water vapor pressure at the measured dewpoint, 
Tsat = Tdew.
pabs = wet static absolute pressure at the location of 
your dewpoint measurement.

Example:

pabs = 99.980 kPa
Tsat = Tdew = 9.5 [deg]C
Using Eq. 1065.645-1,
pH2O = 1.18489 kPa
xH2O = 1.18489/99.980
xH2O = 0.011851 mol/mol

* * * * *
0
233. Section 1065.650 is amended by revising paragraphs (b)(3), 
(c)(2)(i), (d)(8), (e)(4), (f)(2), and (g) and adding paragraph (h) to 
read as follows:


Sec.  1065.650  Emission calculations.

* * * * *
    (b) * * *
    (3) For field testing, you may calculate the ratio of total mass to 
total work, where these individual values are determined as described 
in paragraph (f) of this section. You may also use this approach for 
laboratory testing, consistent with good engineering judgment. This is 
a special case in which you use a signal linearly

[[Page 59333]]

proportional to raw exhaust molar flow rate to determine a value 
proportional to total emissions. You then use the same linearly 
proportional signal to determine total work using a chemical balance of 
fuel, intake air, and exhaust as described in Sec.  1065.655, plus 
information about your engine's brake-specific fuel consumption. Under 
this method, flow meters need not meet accuracy specifications, but 
they must meet the applicable linearity and repeatability 
specifications in subpart D or subpart J of this part. The result is a 
brake-specific emission value calculated as follows:
[GRAPHIC] [TIFF OMITTED] TR08OC08.005

Example:

m = 805.5 g
W = 52.102 kW[middot]hr
eCO = 805.5/52.102
eCO = 2.520 g/(kW[middot]hr)

    (c) * * *
    (2) * * *
    (i) Varying flow rate. If you continuously sample from a changing 
exhaust flow rate, time align and then multiply concentration 
measurements by the flow rate from which you extracted it. Use good 
engineering judgment to time align flow and concentration data to match 
transformation time, t50, to within 1 s. We 
consider the following to be examples of changing flows that require a 
continuous multiplication of concentration times molar flow rate: Raw 
exhaust, exhaust diluted with a constant flow rate of dilution air, and 
CVS dilution with a CVS flowmeter that does not have an upstream heat 
exchanger or electronic flow control. This multiplication results in 
the flow rate of the emission itself. Integrate the emission flow rate 
over a test interval to determine the total emission. If the total 
emission is a molar quantity, convert this quantity to a mass by 
multiplying it by its molar mass, M. The result is the mass of the 
emission, m. Calculate m for continuous sampling with variable flow 
using the following equations:
[GRAPHIC] [TIFF OMITTED] TR08OC08.006

Where:

[GRAPHIC] [TIFF OMITTED] TR08OC08.007

Example:

MNMHC = 13.875389 g/mol
N = 1200
xNMHC1 = 84.5 [mu]mol/mol = 84.5 [middot] 10-6 
mol/mol
xNMHC2 = 86.0 [mu]mol/mol = 86.0 [middot] 10-6 
mol/mol
nexh1 = 2.876 mol/s
nexh2 = 2.224 mol/s
frecord = 1 Hz
Using Eq. 1065.650-5,
[Delta]t = 1/1 =1 s
mNMHC = 13.875389 [middot] (84.5 [middot] 10-6 
[middot] 2.876 + 86.0 [middot] 10-6 [middot] 2.224 + ... 
+ xNMHC1200 [middot] nexh) [middot] 1
mNMHC = 25.53 g

* * * * *
    (d) * * *
    (8) You may use a trapezoidal integration method instead of the 
rectangular integration described in this paragraph (d). To do this, 
you must integrate the fraction of work between points where the torque 
is positive. You may assume that speed and torque are linear between 
data points. You may not set negative values to zero before running the 
integration.
    (e) * * *
    (4) The following example shows how to calculate mass of emissions 
using mean mass rate and mean power:

MCO = 28.0101 g/mol
xCO = 12.00 mmol/mol = 0.01200 mol/mol
n = 1.530 mol/s
fn = 3584.5 rev/min = 375.37 rad/s
T = 121.50 N [middot] m
m = 28.0101 [middot] 0.01200 [middot] 1.530
m = 0.514 g/s = 1850.4 g/hr
P = 121.5 [middot] 375.37
P = 45607 W
P = 45.607 kW
eCO = 1850.4/45.61
eCO = 40.57 g/(kW [middot] hr)

    (f) * * *
    (2) Total work. To calculate a value proportional to total work 
over a test interval, integrate a value that is proportional to power. 
Use information about the brake-specific fuel consumption of your 
engine, efuel, to convert a signal proportional to fuel flow 
rate to a signal proportional to power. To determine a signal 
proportional to fuel flow rate, divide a signal that is proportional to 
the mass rate of carbon products by the fraction of carbon in your 
fuel, wc.. You may use a measured wc or you may 
use the default values for a given fuel as described in Sec.  1065.655. 
Calculate the mass rate of carbon from the amount of carbon and water 
in the exhaust, which you determine with a chemical balance of fuel, 
intake air, and exhaust as described in Sec.  1065.655. In the chemical 
balance, you must use concentrations from the flow that generated the 
signal proportional to molar flow rate, n, in paragraph (e)(1) of this 
section. Calculate a value proportional to total work as follows:
[GRAPHIC] [TIFF OMITTED] TR08OC08.008

Where:

[[Page 59334]]

[GRAPHIC] [TIFF OMITTED] TR08OC08.009

* * * * *
    (g) Calculating cycle-weighted mean values. Unless the standard-
setting part specifies otherwise, use the approach specified in this 
paragraph (g) to calculate cycle-weighted means of different test 
segments or modes. Weighting factors are generally intended to 
represent the ratio of time spent operating at each mode in a 
theoretical duty cycle. Use good engineering judgment to calculate the 
cycle-weighted mean consistent with this intent. The following examples 
illustrate the two primary methods:
    (1) For discrete-mode testing, a cycle-weighted mean may be 
calculated by dividing the sum of the weighted mass emission rates 
(weighting factor times mass emission rate in g/hr) by the sum of the 
weighted brake power (kW). You are not required to have identical 
sampling times for each mode with this approach.
    (2) For any testing where the sampling time for each mode is 
identical, a cycle-weighted mean may be calculated by dividing the sum 
of the weighted mass emissions (weighting factor times total mass 
emission for the mode in g) by the sum of the weighted brake work 
(kW.hr).
    (h) Rounding. Round emission values only after all calculations are 
complete and the result is in g/(kW[middot]hr) or units equivalent to 
the units of the standard, such as g/(hp[middot]hr). See the definition 
of ``Round'' in Sec.  1065.1001.

0
234. Section 1065.655 is amended by revising paragraphs (c) and (d) and 
adding paragraph (e) to read as follows:


Sec.  1065.655  Chemical balances of fuel, intake air, and exhaust.

* * * * *
    (c) Chemical balance procedure. The calculations for a chemical 
balance involve a system of equations that require iteration. We 
recommend using a computer to solve this system of equations. You must 
guess the initial values of up to three quantities: The amount of water 
in the measured flow, xH2Oexh, fraction of dilution air in 
diluted exhaust, xdil/exh, and the amount of products on a 
C1 basis per dry mole of dry measured flow, 
xCcombdry. You may use time-weighted mean values of 
combustion air humidity and dilution air humidity in the chemical 
balance; as long as your combustion air and dilution air humidities 
remain within tolerances of 0.0025 mol/mol of their 
respective mean values over the test interval. For each emission 
concentration, x, and amount of water, xH2Oexh, you must 
determine their completely dry concentrations, xdry and 
xH2Oexhdry. You must also use your fuel's atomic hydrogen-
to-carbon ratio, [alpha], and oxygen-to-carbon ratio, [beta]. You may 
measure [alpha] and [beta] or you may use default values for a given 
fuel as described in Sec.  1065.655(d). Use the following steps to 
complete a chemical balance:
    (1) Convert your measured concentrations such as, 
xCO2meas, xNOmeas, and xH2Oint, to dry 
concentrations by dividing them by one minus the amount of water 
present during their respective measurements; for example: 
xH2OxCO2meas, xH2OxNOmeas, and 
xH2Oint. If the amount of water present during a ``wet'' 
measurement is the same as the unknown amount of water in the exhaust 
flow, xH2Oexh, iteratively solve for that value in the 
system of equations. If you measure only total NOX and not 
NO and NO2 separately, use good engineering judgment to 
estimate a split in your total NOX concentration between NO 
and NO2 for the chemical balances. For example, if you 
measure emissions from a stoichiometric spark-ignition engine, you may 
assume all NOX is NO. For a compression-ignition engine, you 
may assume that your molar concentration of NOX, 
xNOX, is 75% NO and 25% NO2. For NO2 
storage aftertreatment systems, you may assume xNOX is 25% 
NO and 75% NO2. Note that for calculating the mass of 
NOX emissions, you must use the molar mass of NO2 
for the effective molar mass of all NOX species, regardless 
of the actual NO2 fraction of NOX.
    (2) Enter the equations in paragraph (c)(4) of this section into a 
computer program to iteratively solve for xH2Oexh, 
xCcombdry, and xdil/exh. Use good engineering 
judgment to guess initial values for xH2Oexh, 
xCcombdry, and xdil/exh. We recommend guessing an 
initial amount of water that is about twice the amount of water in your 
intake or dilution air. We recommend guessing an initial value of 
xCcombdry as the sum of your measured CO2, CO, 
and THC values. We also recommend guessing an initial 
xdil/exh between 0.75 and 0.95, such as 0.8. Iterate values 
in the system of equations until the most recently updated guesses are 
all within 1% of their respective most recently calculated 
values.
    (3) Use the following symbols and subscripts in the equations for 
this paragraph (c):

xdil/exh = Amount of dilution gas or excess air per mole 
of exhaust.
xH2Oexh = Amount of water in exhaust per mole of exhaust.
xCcombdry = Amount of carbon from fuel in the exhaust per 
mole of dry exhaust.
xH2dry = Amount of H2 in exhaust per amount of 
dry exhaust.
KH2Ogas = Water-gas reaction equilibrium coefficient. You 
may use 3.5 or calculate your own value using good engineering 
judgment.
xH2Oexhdry = Amount of water in exhaust per dry mole of 
dry exhaust.
xprod/intdry = Amount of dry stoichiometric products per 
dry mole of intake air.
xdil/exhdry = Amount of dilution gas and/or excess air 
per mole of dry exhaust.
xint/exhdry = Amount of intake air required to produce 
actual combustion products per mole of dry (raw or diluted) exhaust.
xraw/exhdry = Amount of undiluted exhaust, without excess 
air, per mole of dry (raw or diluted) exhaust.
xO2int = Amount of intake air O2 per mole of 
intake air.
xCO2intdry = Amount of intake air CO2 per mole 
of dry intake air. You may use xCO2intdry = 375 [mu]mol/
mol, but we recommend measuring the actual concentration in the 
intake air.
xH2Ointdry = Amount of intake air H2O per mole 
of dry intake air.
xCO2int = Amount of intake air CO2 per mole of 
intake air.
xCO2dil = Amount of dilution gas CO2 per mole 
of dilution gas.
xCO2dildry = Amount of dilution gas CO2 per 
mole of dry dilution gas. If you use air as diluent, you may use 
xCO2dildry = 375 [mu]mol/mol, but we recommend measuring 
the actual concentration in the intake air.
xH2Odildry = Amount of dilution gas H2O per 
mole of dry dilution gas.
xH2Odil = Amount of dilution gas H2O per mole 
of dilution gas.
x[emission]meas = Amount of measured emission in the 
sample at the respective gas analyzer.
x[emission]dry = Amount of emission per dry mole of dry 
sample.
xH2O[emission]meas = Amount of water in sample at 
emission-detection location. Measure or estimate these values 
according to Sec.  1065.145(d)(2).
xH2Oint = Amount of water in the intake air, based on a 
humidity measurement of intake air.
[alpha] = Atomic hydrogen-to-carbon ratio in fuel.
[beta] = Atomic oxygen-to-carbon ratio in fuel.

    (4) Use the following equations to iteratively solve for 
xdil/exh, xH2Oexh, and

[[Page 59335]]

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[[Page 59336]]


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[GRAPHIC] [TIFF OMITTED] TR08OC08.026

[GRAPHIC] [TIFF OMITTED] TR08OC08.027

    (5) The following example is a solution for xdil/exh, 
xH2Oexh, and xCcombdry using the equations in 
paragraph (c)(4) of this section:
[GRAPHIC] [TIFF OMITTED] TR08OC08.028

[GRAPHIC] [TIFF OMITTED] TR08OC08.029

[GRAPHIC] [TIFF OMITTED] TR08OC08.030

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[[Page 59337]]


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[GRAPHIC] [TIFF OMITTED] TR08OC08.045


[[Page 59338]]


[alpha] = 1.8
[beta] = 0.05

    (d) Carbon mass fraction. Determine carbon mass fraction of fuel, 
wc, using one of the following methods:
    (1) You may calculate wC using the following equation 
based on measured fuel properties:
[GRAPHIC] [TIFF OMITTED] TR08OC08.046

Where:

wC, = carbon mass fraction of fuel
[alpha] = atomic hydrogen-to-carbon ratio
[beta] = atomic oxygen-to-carbon ratio
MC = molar mass of carbon
MH = molar mass of hydrogen
MO = molar mass of oxygen

    (2) You may use the default values in the following table to 
determine wC for a given fuel:

            Table 1 of Sec.   1065.655.--Default Values of [alpha] [beta], and wC, for Various Fuels
----------------------------------------------------------------------------------------------------------------
                                                                                                   Carbon mass
                      Fuel                           Atomic  hydrogen and  oxygen-to-carbon     fraction, wC  g/
                                                            ratios  CH[alpha]O[beta]                    g
----------------------------------------------------------------------------------------------------------------
Gasoline........................................  CH1.85O0                                                 0.866
2 Diesel...............................  CH1.80O0                                                 0.869
1 Diesel...............................  CH1.93O0                                                 0.861
Liquified Petroleum Gas.........................  CH2.64O0                                                 0.819
Natural gas.....................................  CH3.78O0.016                                             0.747
Ethanol.........................................  CH3O0.5                                                  0.521
Methanol........................................  CH4O1                                                    0.375
----------------------------------------------------------------------------------------------------------------

    (e) Calculated raw exhaust molar flow rate from measured intake air 
molar flow rate or fuel mass flow rate. You may calculate the raw 
exhaust molar flow rate from which you sampled emissions, 
nexh, based on the measured intake air molar flow rate, 
nint, or the measured fuel mass flow rate, mfuel, 
and the values calculated using the chemical balance in paragraph (c) 
of this section. Note that the chemical balance must be based on raw 
exhaust gas concentrations. Solve for the chemical balance in paragraph 
(c) of this section at the same frequency that you update and record 
nint or mfuel.
    (1) Crankcase flow rate. If engines are not subject to crankcase 
controls under the standard-setting part, you may calculate raw exhaust 
flow based on nint or mfuel using one of the 
following:
    (i) You may measure flow rate through the crankcase vent and 
subtract it from the calculated exhaust flow.
    (ii) You may estimate flow rate through the crankcase vent by 
engineering analysis as long as the uncertainty in your calculation 
does not adversely affect your ability to show that your engines comply 
with applicable emission standards.
    (iii) You may assume your crankcase vent flow rate is zero.
    (2) Intake air molar flow rate calculation. Based on 
nint, calculate nexh as follows:
[GRAPHIC] [TIFF OMITTED] TR08OC08.047

Where:

nexh = raw exhaust molar flow rate from which you 
measured emissions.
nint = intake air molar flow rate including humidity in 
intake air.

Example:

nint = 3.780 mol/s
xint/exhdry = 0.69021 mol/mol
xraw/exhdry = 1.10764 mol/mol
xH20exhdry = 107.64 mmol/mol = 0.10764 mol/mol
[GRAPHIC] [TIFF OMITTED] TR08OC08.048

nexh = 6.066 mol/s

    (3) Fuel mass flow rate calculation. Based on mfuel, 
calculate nexh as follows:

[[Page 59339]]

[GRAPHIC] [TIFF OMITTED] TR08OC08.049

Where:

nexh = raw exhaust molar flow rate from which you 
measured emissions.
mfuel = fuel flow rate including humidity in intake air.

Example:

mfuel = 7.559 g/s
wC = 0.869 g/g
MC = 12.0107 g/mol
xCcombdry = 99.87 mmol/mol = 0.09987 mol/mol
xH20exhdry = 107.64 mmol/mol = 0.10764 mol/mol
[GRAPHIC] [TIFF OMITTED] TR08OC08.050

nexh = 6.066 mol/s


0
235. Section 1065.660 is amended by revising paragraphs (b)(2)(i) and 
(b)(3) to read as follows:


Sec.  1065.660  THC and NMHC determination.

* * * * *
    (b) * * *
    (2) * * *
    (i) Use the following equation for penetration fractions determined 
using an NMC configuration as outlined in Sec.  1065.365(d):
[GRAPHIC] [TIFF OMITTED] TR08OC08.051

Where:

xNMHC = concentration of NMHC.
xTHC[THC-FID]cor = concentration of THC, HC contamination 
and dry-to-wet corrected, as measured by the THC FID during sampling 
while bypassing the NMC.
xTHC[NMC-FID] = concentration of THC, HC contamination 
(optional) and dry-to-wet corrected, as measured by the NMC FID 
during sampling through the NMC.
RFCH4[THC-FID] = response factor of THC FID to 
CH4, according to Sec.  1065.360(d).
RFPFC2H6[NMC-FID] = nonmethane cutter combined ethane 
response factor and penetration fraction, according to Sec.  
1065.365(d).

Example:

xTHC[THC-FID]cor = 150.3 [mu]mol/mol
xTHC[NMC-FID] = 20.5 [mu]mol/mol
RFPFC2H6[NMC-FID] = 0.019
RFCH4[THC-FID] = 1.05
[GRAPHIC] [TIFF OMITTED] TR08OC08.052

xNMHC = 131.4 [mu]mol/mol

* * * * *
    (3) For a gas chromatograph, calculate xNMHC using the 
THC analyzer's response factor (RF) for CH4, from Sec.  
1065.360, and the HC contamination and wet-to-dry corrected initial THC 
concentration xTHC[THC-FID]cor as determined in section (a) 
above as follows:
[GRAPHIC] [TIFF OMITTED] TR08OC08.053

Where:
xNMHC = concentration of NMHC.
xTHC[THC-FID]cor = concentration of THC, HC contamination 
and dry-to-wet corrected, as measured by the THC FID.
xCH4 = concentration of CH4, HC contamination 
(optional) and dry-to-wet corrected, as measured by the gas 
chromatograph FID.
RFCH4[THC-FID] = response factor of THC-FID to 
CH4.

Example:

xTHC[THC-FID][cor = 145.6 [mu]mol/mol
RFCH4[THC-FID] = 0.970
xCH4 = 18.9 [mu]mol/mol
xNMHC = 145.6-0.970 [middot] 18.9
xNMHC = 127.3 [mu]mol/mol


0
236. Section 1065.667 is revised to read as follows:


Sec.  1065.667  Dilution air background emission correction.

    (a) To determine the mass of background emissions to subtract from 
a diluted exhaust sample, first determine the total flow of dilution 
air, ndil, over the test interval. This may be a measured 
quantity or a quantity calculated from the diluted exhaust flow and the 
flow-weighted mean fraction of dilution air in diluted exhaust, 
xdil/exh. Multiply the total flow of dilution air by the 
mean concentration of a background emission. This may be a time-
weighted mean or a flow-weighted mean (e.g., a proportionally sampled 
background). The product of ndil and the mean concentration 
of a background emission is the total amount of a background emission. 
If this is a molar quantity, convert it to a mass by multiplying it by 
its molar mass, M. The result is the mass of the background emission, 
m. In the case of PM, where the mean PM concentration is already in 
units of mass per mole of sample, MPM, multiply it by the 
total amount of dilution air, and the result is the total background 
mass of PM, mPM. Subtract total background masses from total 
mass to correct for background emissions.

[[Page 59340]]

    (b) You may determine the total flow of dilution air by a direct 
flow measurement. In this case, calculate the total mass of background 
as described in Sec.  1065.650(c), using the dilution air flow, 
ndil. Subtract the background mass from the total mass. Use 
the result in brake-specific emission calculations.
    (c) You may determine the total flow of dilution air from the total 
flow of diluted exhaust and a chemical balance of the fuel, intake air, 
and exhaust as described in Sec.  1065.655. In this case, calculate the 
total mass of background as described in Sec.  1065.650(c), using the 
total flow of diluted exhaust, ndexh, then multiply this 
result by the flow-weighted mean fraction of dilution air in diluted 
exhaust, xdil/exh. Calculate xdil/exh using flow-
weighted mean concentrations of emissions in the chemical balance, as 
described in Sec.  1065.655. You may assume that your engine operates 
stoichiometrically, even if it is a lean-burn engine, such as a 
compression-ignition engine. Note that for lean-burn engines this 
assumption could result in an error in emission calculations. This 
error could occur because the chemical balances in Sec.  1065.655 
correct excess air passing through a lean-burn engine as if it was 
dilution air. If an emission concentration expected at the standard is 
about 100 times its dilution air background concentration, this error 
is negligible. However, if an emission concentration expected at the 
standard is similar to its background concentration, this error could 
be significant. If this error might affect your ability to show that 
your engines comply with applicable standards, we recommend that you 
remove background emissions from dilution air by HEPA filtration, 
chemical adsorption, or catalytic scrubbing. You might also consider 
using a partial-flow dilution technique such as a bag mini-diluter, 
which uses purified air as the dilution air.
    (d) The following is an example of using the flow-weighted mean 
fraction of dilution air in diluted exhaust, xdil/exh, and 
the total mass of background emissions calculated using the total flow 
of diluted exhaust, ndexh, as described in Sec.  
1065.650(c):
[GRAPHIC] [TIFF OMITTED] TR08OC08.054

[GRAPHIC] [TIFF OMITTED] TR08OC08.055

Example:

MNOx = 46.0055 g/mol
xbkgnd = 0.05 [mu]mol/mol = 0.05[middot]10-6 
mol/mol
ndexh = 23280.5 mol
xdil/exh = 0.843
mbkgndNOxdexh = 
46.0055[middot]0.05[middot]10-6 [middot] 23280.5
mbkgndNOxdexh = 0.0536 g
mbkgndNOx = 0.843[middot]0.0536
mbkgndNOx = 0.0452 g
    (e) The following is an example of using the fraction of dilution 
air in diluted exhaust, xdil/exh, and the mass rate of 
background emissions calculated using the flow rate of diluted exhaust, 
ndexh, as described in Sec.  1065.650(c):
[GRAPHIC] [TIFF OMITTED] TR08OC08.056

[GRAPHIC] [TIFF OMITTED] TR08OC08.057

Example:

MNOX = 46.0055 g/mol
xbkgnd = 0.05 [mu]mol/mol = 0.05 [middot] 10-6 
mol/mol
ndexh = 23280.5 mol/s
xdil/exh = 0.843
mbkgndNOxdexh = 46.0055 [middot] 0.05 [middot] 
10-6 [middot] 23280.5
mbkgndNOxdexh = 0.0536 g/hr
mbkgndNOx = 0.843 [middot] 0.0536
mbkgndNOx = 0.0452 g/hr

0
237. Section 1065.675 is revised to read as follows:


Sec.  1065.675  CLD quench verification calculations.

    Perform CLD quench-check calculations as follows:
    (a) Perform a CLD analyzer quench verification test as described in 
Sec.  1065.370.
    (b) Estimate the maximum expected mole fraction of water during 
emission testing, xH2Oexp. Make this estimate where the 
humidified NO span gas was introduced in Sec.  1065.370(e)(6). When 
estimating the maximum expected mole fraction of water, consider the 
maximum expected water content in combustion air, fuel combustion 
products, and dilution air (if applicable). If you introduced the 
humidified NO span gas into the sample system upstream of a sample 
dryer during the verification test, you need not estimate the maximum 
expected mole fraction of water and you must set xH2Oexp 
equal to xH2Omeas.
    (c) Estimate the maximum expected CO2 concentration 
during emission testing, xCO2exp. Make this estimate at the 
sample system location where the blended NO and CO2 span 
gases are introduced according to Sec.  1065.370(d)(10). When 
estimating the maximum expected CO2 concentration, consider 
the maximum expected CO2 content in fuel combustion products 
and dilution air.
    (d) Calculate quench as follows:
    [GRAPHIC] [TIFF OMITTED] TR08OC08.058
    

[[Page 59341]]


Where:

quench = amount of CLD quench.
xNOdry = concentration of NO upstream of a bubbler, 
according to Sec.  1065.370(e)(4).
xNOwet = measured concentration of NO downstream of a 
bubbler, according to Sec.  1065.370(e)(9).
xH2Oexp = maximum expected mole fraction of water during 
emission testing, according to paragraph (b) of this section.
xH2Omeas = measured mole fraction of water during the 
quench verification, according to Sec.  1065.370(e)(7).
xNOmeas = measured concentration of NO when NO span gas 
is blended with CO2 span gas, according to Sec.  
1065.370(d)(10).
xNOact = actual concentration of NO when NO span gas is 
blended with CO2 span gas, according to Sec.  
1065.370(d)(11) and calculated according to Equation 1065.675-2.
xCO2exp = maximum expected concentration of 
CO2 during emission testing, according to paragraph (c) 
of this section.
xCO2act = actual concentration of CO2 when NO 
span gas is blended with CO2 span gas, according to Sec.  
1065.370(d)(9).
[GRAPHIC] [TIFF OMITTED] TR08OC08.059

Where:

xNOspan = the NO span gas concentration input to the gas 
divider, according to Sec.  1065.370(d)(5).
xCO2span = the CO2 span gas concentration 
input to the gas divider, according to Sec.  1065.370(d)(4).

Example:

xNOdry = 1800.0 [mu]mol/mol
xNOwet = 1729.6 [mu]mol/mol
xH2Oexp = 0.030 mol/mol
xH2Omeas = 0.030 mol/mol
xNOmeas = 1495.2 [mu]mol/mol
xNOspan = 3001.6 [mu]mol/mol
xCO2exp = 3.2%
xCO2span = 6.00%
xCO2act = 2.98%
[GRAPHIC] [TIFF OMITTED] TR08OC08.060

quench = (-0.00939-0.01109) [middot] 100% = -2.0048% = -2%

Subpart H--[Amended]

0
238. Section 1065.701 is amended by redesignating paragraph (e) as 
paragraph (f) and adding a new paragraph (e) to read as follows:


Sec.  1065.701  General requirements for test fuels.

* * * * *
    (e) Two-stroke fuel/oil mixing. For two-stroke engines, use a fuel/
oil mixture meeting the manufacturer's specifications.
* * * * *
0
239. Section 1065.703 is amended by revising Table 1 to read as 
follows:


Sec.  1065.703  Distillate diesel fuel.

* * * * *

                 Table 1 of Sec.   1065.703--Test Fuel Specifications for Distillate Diesel Fuel
----------------------------------------------------------------------------------------------------------------
                                                      Ultra low                                    Reference
              Item                     Units           sulfur      Low sulfur    High sulfur     procedure\1\
----------------------------------------------------------------------------------------------------------------
Cetane Number..................  --...............         40-50         40-50         40-50  ASTM D613-05
Distillation range:              [deg]C...........  ............  ............  ............  ..................
    Initial boiling point......  .................       171-204       171-204       171-204  ASTM D86-07a.
    10 pct. point..............  .................       204-238       204-238       204-238  ..................
    50 pct. point..............  .................       243-282       243-282       243-282  ..................
    90 pct. point..............  .................       293-332       293-332       293-332  ..................
    Endpoint...................  .................       321-366       321-366       321-366  ..................
Gravity........................  [deg]API.........         32-37         32-37         32-37  ASTM D4052-96e01.
Total sulfur, ultra low sulfur.  mg/kg............          7-15  ............  ............  See 40 CFR 80.580.
Total sulfur, low and high       mg/kg............  ............       300-500     2000-4000  ASTM D2622-07 or
 sulfur.                                                                                       alternates as
                                                                                               allowed under 40
                                                                                               CFR 80.580.
Aromatics, min. (Remainder       g/kg.............           100           100           100  ASTM D5186-03.
 shall be paraffins,
 naphthalenes, and olefins).
Flashpoint, min................  [deg]C...........            54            54            54  ASTM D93-07.
Kinematic Viscosity............  cSt..............       2.0-3.2       2.0-3.2       2.0-3.2  ASTM D445-06
----------------------------------------------------------------------------------------------------------------
\1\ ASTM procedures are incorporated by reference in Sec.   1065.1010. See Sec.   1065.701(d) for other allowed
  procedures.


[[Page 59342]]

Subpart J--[Amended]

0
240. Section 1065.915 is amended by revising paragraph (a) to read as 
follows:


Sec.  1065.915  PEMS instruments.

    (a) Instrument specifications. We recommend that you use PEMS that 
meet the specifications of subpart C of this part. For unrestricted use 
of PEMS in a laboratory or similar environment, use a PEMS that meets 
the same specifications as each lab instrument it replaces. For field 
testing or for testing with PEMS in a laboratory or similar 
environment, under the provisions of Sec.  1065.905(b), the 
specifications in the following table apply instead of the 
specifications in Table 1 of Sec.  1065.205.

                                 Table 1 of Sec.   1065.915--Recommended Minimum PEMS Measurement Instrument Performance
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                      Rise time, t10-90,
          Measurement             Measured quantity   and Fall time, t90-  Recording update      Accuracy \1\    Repeatability \1\        Noise \1\
                                        symbol                10               frequency
--------------------------------------------------------------------------------------------------------------------------------------------------------
Engine speed transducer........  fn.................  1 s...............  1 Hz means........   5.0 % of pt. or   2.0 % of pt. or    0.5 % of max.
                                                                                               1.0 % of max.      1.0 % of max.
Engine torque estimator, BSFC    T or BSFC..........  1 s...............  1 Hz means........  8.0 % of pt. or 5  2.0 % of pt. or    1.0 % of max.
 (This is a signal from an                                                                     % of max.          1.0 % of max.
 engine's ECM).
General pressure transducer      p..................  5 s...............  1 Hz..............  5.0 % of pt. or    2.0 % of pt. or    1.0 % of max.
 (not a part of another                                                                        5.0 % of max.      0.5 % of max.
 instrument).
Atmospheric pressure meter.....  patmos.............  50 s..............  0.1 Hz............  250 Pa...........  200 Pa...........  100 Pa.
General temperature sensor (not  T..................  5 s...............  1 Hz..............  1.0 % of pt. K or  0.5 % of pt. K or  0.5 % of max 0.5 K.
 a part of another instrument).                                                                5 K.               2 K.
General dewpoint sensor........  Tdew...............  50 s..............  0.1 Hz............  3 K..............  1 K..............  1 K.
Exhaust flow meter.............  n .................  1 s...............  1 Hz means........  5.0 % of pt. or    2.0 % of pt......  2.0 % of max.
                                                                                               3.0 % of max.
Dilution air, inlet air,         n .................  1 s...............  1 Hz means........  2.5 % of pt. or    1.25 % of pt. or   1.0 % of max.
 exhaust, and sample flow                                                                      1.5 % of max.      0.75 % of max.
 meters.
Continuous gas analyzer........  x..................  5 s...............  1 Hz..............  4.0 % of pt. or    2.0 % of pt. or    1.0 % of max.
                                                                                               4.0 % of meas.     2.0 % of meas.
Gravimetric PM balance.........  mPM................  N/A...............  N/A...............  See Sec.           0.5 [mu]g........  N/A.
                                                                                               1065.790.
Inertial PM balance............  mPM................  5 s...............  1 Hz..............  4.0 % of pt. or    2.0 % of pt. or    1.0 % of max.
                                                                                               4.0 % of meas.     2.0 % of meas.
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ Accuracy, repeatability, and noise are all determined with the same collected data, as described in Sec.   1065.305, and based on absolute values.
  ``pt.'' refers to the overall flow-weighted mean value expected at the standard; ``max.'' refers to the peak value expected at the standard over any
  test interval, not the maximum of the instrument's range; ``meas'' refers to the actual flow-weighted mean measured over any test interval.

* * * * *

0
241. Section 1065.925 is amended by revising paragraph (h)(4) to read 
as follows:


Sec.  1065.925  PEMS preparation for field testing.

* * * * *
    (h) * * *
    (4) Overflow zero or ambient air at the HC probe inlet or into a 
tee near the probe outlet.
* * * * *

Subpart K--[Amended]

0
242. Section 1065.1001 is amended by adding definitions for 
``Calibration gas'', ``Span gas'', ``Transformation time, 
t50'', ``t0-50'', and ``t100-50'' in 
alphabetical order to read as follows:


Sec.  1065.1001  Definitions.

* * * * *
    Calibration gas means a purified gas mixture used to calibrate gas 
analyzers. Calibration gases must meet the specifications of Sec.  
1065.750. Note that calibration gases and span gases are qualitatively 
the same, but differ in terms of their primary function. Various 
performance verification checks for gas analyzers and sample handling 
components might refer to either calibration gases or span gases.
* * * * *
    Span gas means a purified gas mixture used to span gas analyzers. 
Span gases must meet the specifications of Sec.  1065.750. Note that 
calibration gases and span gases are qualitatively the same, but differ 
in terms of their primary function. Various performance verification 
checks for gas analyzers and sample handling components might refer to 
either calibration gases or span gases.
* * * * *
    Transformation time, t50, means the overall system 
response time to any step change in input, generally the average of the 
time to reach 50% response to a step increase, t0-50, or to 
a step decrease, t100-50.
    t0-50 means the time interval of a measurement system's 
response after any step increase to the input between the following 
points:
    (1) The point at which the step change is initiated at the sample 
probe.
    (2) The point at which the response has risen 50% of the total 
amount it will rise in response to the step change.
    t100-50 means the time interval of a measurement 
system's response after any step decrease to the input between the 
following points:
    (1) The point at which the step change is initiated at the sample 
probe.
    (2) The point at which the response has fallen 50% of the total 
amount it will fall in response to the step change.
* * * * *

0
243. Section 1065.1005 is amended by revising paragraph (a) to read as 
follows:


Sec.  1065.1005  Symbols, abbreviations, acronyms, and units of 
measure.

* * * * *
    (a) Symbols for quantities. This part uses the following symbols 
and units of measure for various quantities:

[[Page 59343]]



----------------------------------------------------------------------------------------------------------------
      Symbol              Quantity                  Unit                 Unit symbol           Base SI units
----------------------------------------------------------------------------------------------------------------
%................  percent...............  0.01..................  %.....................  10-2
[alpha]..........  atomic hydrogen to      mole per mole.........  mol/mol...............  1
                    carbon ratio.
A................  area..................  square meter..........  m\2\..................  m\2\
A0...............  intercept of least
                    squares regression.
A1...............  slope of least squares
                    regression.
[beta]...........  ratio of diameters....  meter per meter.......  m/m...................  1
[beta]...........  atomic oxygen to        mole per mole.........  mol/mol...............  1
                    carbon ratio.
C#...............  number of carbon atoms
                    in a molecule.
d................  Diameter..............  meter.................  m.....................  m
DR...............  dilution ratio........  mole per mol..........  mol/mol...............  1
[egr]............  error between a
                    quantity and its
                    reference.
e................  brake-specific basis..  gram per kilowatt hour  g/(kW.h)..............  g.3.6-1.106.m-2.kgs2
F................  F-test statistic......
f................  frequency.............  hertz.................  Hz....................  s-1
fn...............  rotational frequency    revolutions per minute  rev/min...............  2.pi.60-1.s-1
                    (shaft).
[gamma]..........  ratio of specific       (joule per kilogram     (J/(kg.K))/(J/(kg.K)).  1
                    heats.                  kelvin) per (joule
                                            per kilogram kelvin).
K................  correction factor.....  ......................  ......................  1
l................  length................  meter.................  m.....................  m
[mu].............  viscosity, dynamic....  pascal second.........  Pa's..................  m-1.kg.s-1
M................  molar mass\1\.........  gram per mole.........  g/mol.................  10-3.kg.mol-1
m................  mass..................  kilogram..............  kg....................  kg
m................  mass rate.............  kilogram per second...  kg/s..................  kg.s-1
v................  viscosity, kinematic..   meter squared per      m\2\/s................  m\2\.s-1
                                            second.
N................  total number in series
n................  amount of substance...  mole..................  mol...................  mol
n................  amount of substance     mole per second.......  mol/s.................  mol.s-1
                    rate.
P................  power.................  kilowatt..............  kW....................  103.m2.kg.s-3
PF...............  penetration fraction..
p................  pressure..............  pascal................  Pa....................  m-1.kg.s-2
[rho]............  mass density..........  kilogram per cubic      kg/m\3\...............  kg.m-3
                                            meter.
r................  ratio of pressures....  pascal per pascal.....  Pa/Pa.................  1
R \2\............  coefficient of
                    determination.
Ra...............  average surface         micrometer............  [mu]m.................   m-6
                    roughness.
Re#..............  Reynolds number.......
RF...............  response factor.......
RH %.............  relative humidity.....  0.01..................  %.....................  10-2
[sigma]..........  non-biased standard
                    deviation.
S................  Sutherland constant...  kelvin................  K.....................  K
SEE..............  standard estimate of
                    error.
T................  absolute temperature..  kelvin................  K.....................  K
T................  Celsius temperature...  degree Celsius........  [deg]C................  K-273.15
T................  torque (moment of       newton meter..........  N.m...................  m\2\.kg.s-2
                    force).
t................  time..................  second................  s.....................  s
[Delta] t........  time interval, period,  second................  s.....................  s
                    1/frequency.
V................  volume................  cubic meter...........  m\3\..................  m\3\
V................  volume rate...........  cubic meter per second  m\3\/s................  m\3\.s-1
W................  work..................  kilowatt hour.........  kW.h..................  3.6.10-6.m\2\.kg.s-2
wc...............  carbon mass fraction..  gram per gram.........  g/g...................  1
x................  amount of substance     mole per mole.........  mol/mol...............  1
                    mole fraction 2.
X................  flow-weighted mean      mole per mole.........  mol/mol...............  1
                    concentration.
y................  generic variable .....
----------------------------------------------------------------------------------------------------------------
\1\ See paragraph (f)(2) of this section for the values to use for molar masses. Note that in the cases of NOX
  and HC, the regulations specify effective molar masses based on assumed speciation rather than actual
  speciation.
\2\ Note that mole fractions for THC, THCE, NMHC, NMHCE, and NOTHC are expressed on a C1 equivalent basis.

* * * * *

0
244. Section 1065.1010 is amended by revising paragraph (d) to read as 
follows:


Sec.  1065.1010  Reference materials.

* * * * *
    (d) SAE material. Table 4 of this section lists material from the 
Society of Automotive Engineering that we have incorporated by 
reference. The first column lists the number and name of the material. 
The second column lists the sections of this part where we reference 
it. Anyone may purchase copies of these materials from the Society of 
Automotive Engineers, 400 Commonwealth Drive, Warrendale, PA 15096 or 
http://www.sae.org. Table 4 follows:

[[Page 59344]]



                Table 4 of Sec.   1065.1010--SAE Material
------------------------------------------------------------------------
                                                             Part 1065
                Document number and name                     reference
------------------------------------------------------------------------
``Optimization of Flame Ionization Detector for                 1065.360
 Determination of Hydrocarbon in Diluted Automotive
 Exhausts,'' Reschke Glen D., SAE 770141................
------------------------------------------------------------------------

* * * * *

0
245. Part 1068 is revised to read as follows:

PART 1068--GENERAL COMPLIANCE PROVISIONS FOR NONROAD PROGRAMS

Subpart A--Applicability and Miscellaneous Provisions
Sec.
1068.1 Does this part apply to me?
1068.2 How does this part apply for engines and how does it apply 
for equipment?
1068.5 How must manufacturers apply good engineering judgment?
1068.10 What provisions apply to confidential information?
1068.15 What general provisions apply for EPA decision-making?
1068.20 May EPA enter my facilities for inspections?
1068.25 What information must I give to EPA?
1068.27 May EPA conduct testing with my production engines/
equipment?
1068.30 What definitions apply to this part?
1068.31 What provisions apply to nonroad or stationary engines that 
change their status?
1068.35 What symbols, acronyms, and abbreviations does this part 
use?
1068.40 What special provisions apply for implementing technical 
amendments?
1068.45 General labeling provisions.
1068.95 What materials does this part reference?
Subpart B--Prohibited Actions and Related Requirements
1068.101 What general actions does this regulation prohibit?
1068.103 What are the provisions related to the duration and 
applicability of certificates of conformity?
1068.105 What other provisions apply to me specifically if I 
manufacture equipment needing certified engines?
1068.110 What other provisions apply to engines/equipment in 
service?
1068.115 When must manufacturers honor emission-related warranty 
claims?
1068.120 What requirements must I follow to rebuild engines?
1068.125 What happens if I violate the regulations?
Subpart C--Exemptions and Exclusions
1068.201 Does EPA exempt or exclude any engines/equipment from the 
prohibited acts?
1068.210 What are the provisions for exempting test engines/
equipment?
1068.215 What are the provisions for exempting manufacturer-owned 
engines/equipment?
1068.220 What are the provisions for exempting display engines/
equipment?
1068.225 What are the provisions for exempting engines/equipment for 
national security?
1068.230 What are the provisions for exempting engines/equipment for 
export?
1068.235 What are the provisions for exempting engines/equipment 
used solely for competition?
1068.240 What are the provisions for exempting new replacement 
engines?
1068.245 What temporary provisions address hardship due to unusual 
circumstances?
1068.250 What are the provisions for extending compliance deadlines 
for small businesses under hardship?
1068.255 What are the provisions for exempting engines and fuel-
system components for hardship for equipment manufacturers and 
secondary engine manufacturers?
1068.260 What general provisions apply for selling or shipping 
engines that are not yet in their certified configuration?
1068.261 What provisions apply for selling or shipping certified 
engines that are not yet in the certified configuration?
1068.262 What are the provisions for temporarily exempting engines 
for shipment to secondary engine manufacturers?
1068.265 What provisions apply to engines/equipment that are 
conditionally exempted from certification?
Subpart D--Imports 1068.301 What general provisions apply?
1068.305 How do I get an exemption or exclusion for imported 
engines/equipment?
1068.310 What are the exclusions for imported engines/equipment?
1068.315 What are the permanent exemptions for imported engines/
equipment?
1068.325 What are the temporary exemptions for imported engines/
equipment?
1068.335 What are the penalties for violations?
1068.360 What restrictions apply to assigning a model year to 
imported engines and equipment?
Subpart E--Selective Enforcement Auditing
1068.401 What is a selective enforcement audit?
1068.405 What is in a test order?
1068.410 How must I select and prepare my engines/equipment?
1068.415 How do I test my engines/equipment?
1068.420 How do I know when my engine family fails an SEA?
1068.425 What happens if one of my production-line engines/equipment 
exceeds the emission standards?
1068.430 What happens if a family fails an SEA?
1068.435 May I sell engines/equipment from a family with a suspended 
certificate of conformity?
1068.440 How do I ask EPA to reinstate my suspended certificate?
1068.445 When may EPA revoke my certificate under this subpart and 
how may I sell these engines/equipment again?
1068.450 What records must I send to EPA?
1068.455 What records must I keep?

Appendix A to Subpart E of Part 1068--Plans for Selective Enforcement 
Auditing

Subpart F--Reporting Defects and Recalling Engines/Equipment
1068.501 How do I report emission-related defects?
1068.505 How does the recall program work?
1068.510 How do I prepare and apply my remedial plan?
1068.515 How do I mark or label repaired engines/equipment?
1068.520 How do I notify affected owners?
1068.525 What records must I send to EPA?
1068.530 What records must I keep?
1068.535 How can I do a voluntary recall for emission-related 
problems?
Subpart G--Hearings


1068.601  What are the procedures for hearings?

Appendix I to Part 1068--Emission-Related Components

Appendix II to Part 1068--Emission-Related Parameters and 
Specifications

Appendix III to Part 1068--High-Altitude Counties

    Authority: 42 U.S.C. 7401-7671q.

Subpart A--Applicability and Miscellaneous Provisions


Sec.  1068.1  Does this part apply to me?

    (a) The provisions of this part apply to everyone with respect to 
the following engines and to equipment using the following engines 
(including owners, operators, parts manufacturers, and persons 
performing maintenance).
    (1) Locomotives we regulate under 40 CFR part 1033.
    (2) Land-based nonroad compression-ignition engines we regulate 
under 40 CFR part 1039.

[[Page 59345]]

    (3) Stationary compression-ignition engines certified using the 
provisions of 40 CFR part 1039, as indicated in 40 CFR part 60, subpart 
IIII.
    (4) Marine diesel engines we regulate under 40 CFR part 1042.
    (5) Marine spark-ignition engines we regulate under 40 CFR part 
1045.
    (6) Large nonroad spark-ignition engines we regulate under 40 CFR 
part 1048.
    (7) Stationary spark-ignition engines certified using the 
provisions of 40 CFR parts 1048 or 1054, as indicated in 40 CFR part 
60, subpart JJJJ.
    (8) Recreational engines and vehicles we regulate under 40 CFR part 
1051 (such as snowmobiles and off-highway motorcycles).
    (9) Small nonroad spark-ignition engines we regulate under 40 CFR 
part 1054.
    (b) This part does not apply to any of the following engine or 
vehicle categories:
    (1) Light-duty motor vehicles (see 40 CFR part 86).
    (2) Heavy-duty motor vehicles and motor vehicle engines (see 40 CFR 
part 86).
    (3) Aircraft engines (see 40 CFR part 87).
    (4) Land-based nonroad diesel engines we regulate under 40 CFR part 
89.
    (5) Small nonroad spark-ignition engines we regulate under 40 CFR 
part 90.
    (6) Marine spark-ignition engines we regulate under 40 CFR part 91.
    (7) Locomotive engines we regulate under 40 CFR part 92.
    (8) Marine diesel engines we regulate under 40 CFR parts 89 or 94.
    (c) Paragraph (a) of this section identifies the parts of the CFR 
that define emission standards and other requirements for particular 
types of engines and equipment. This part 1068 refers to each of these 
other parts generically as the ``standard-setting part.'' For example, 
40 CFR part 1051 is always the standard-setting part for snowmobiles. 
Follow the provisions of the standard-setting part if they are 
different than any of the provisions in this part.
    (d)(1) The provisions of Sec. Sec.  1068.30, 1068.310, and 1068.320 
apply for stationary spark-ignition engines built on or after January 
1, 2004, and for stationary compression-ignition engines built on or 
after January 1, 2006.
    (2) The provisions of Sec. Sec.  1068.30 and 1068.235 apply for the 
types of engines/equipment listed in paragraph (a) of this section 
beginning January 1, 2004, if they are used solely for competition.


Sec.  1068.2  How does this part apply for engines and how does it 
apply for equipment?

    (a) See the standard-setting part to determine if engine-based and/
or equipment-based standards apply. (Note: Some equipment is subject to 
engine-based standards for exhaust emission and equipment-based 
standards for evaporative emissions.)
    (b) The provisions of this part apply differently depending on 
whether the engine or equipment is required to be certified.
    (1) Subpart A and subpart B of this part apply to engines and 
equipment, without regard to which is subject to certification 
requirements in the standard-setting part.
    (2) Subparts C, D, and E of this part apply to the engines or to 
the equipment, whichever is subject to certification requirements in 
the standard-setting part.
    (3) Subpart F of this part generally applies to the engines or to 
the equipment, whichever is subject to standards under the standard-
setting part. However, since subpart F of this part addresses in-use 
engines and equipment (in which the engine is installed in the 
equipment), the requirements do not always distinguish between engines 
and equipment.
    (c) For issues related to testing, read the term ``engines/
equipment'' to mean engines for engines subject to engine-based testing 
and equipment for equipment subject to equipment-based testing; 
otherwise, read the term ``engines/equipment'' to mean engines for 
sources subject to engine-based standards and equipment for sources 
subject to equipment-based standards.
    (d) When we use the term engines (rather than engines/equipment), 
read it to mean engines without regard to whether the source is subject 
to engine-based standards or testing. When we use the term equipment 
(rather than engines/equipment), read it to mean equipment without 
regard to whether the source is subject to equipment-based standards or 
testing. (Note: The definition of ``equipment'' in Sec.  1068.30 
includes the engine.)
    (e) The terminology convention described in this section is not 
intended to limit our authority or your obligations under the Clean Air 
Act.


Sec.  1068.5  How must manufacturers apply good engineering judgment?

    (a) You must use good engineering judgment for decisions related to 
any requirements under this chapter. This includes your applications 
for certification, any testing you do to show that your certification, 
production-line, and in-use engines/equipment comply with requirements 
that apply to them, and how you select, categorize, determine, and 
apply these requirements.
    (b) If we send you a written request, you must give us a written 
description of the engineering judgment in question. Respond within 15 
working days of receiving our request unless we allow more time.
    (c) We may reject your decision if it is not based on good 
engineering judgment or is otherwise inconsistent with the requirements 
that apply, based on the following provisions:
    (1) We may suspend, revoke, or void a certificate of conformity if 
we determine you deliberately used incorrect information or overlooked 
important information, that you did not decide in good faith, or that 
your decision was not rational.
    (2) If we believe a different decision would better reflect good 
engineering judgment, but none of the provisions of paragraph (c)(1) of 
this section apply, we will tell you of our concern (and its basis). 
You will have 30 days to respond to our concerns, or more time if we 
agree that you need it to generate more information. After considering 
your information, we will give you a final ruling. If we conclude that 
you did not use good engineering judgment, we may reject your decision 
and apply the new ruling to similar situations as soon as possible.
    (d) We will tell you in writing of the conclusions we reach under 
paragraph (c) of this section and explain our reasons for them.
    (e) If you disagree with our conclusions, you may file a request 
for a hearing with the Designated Compliance Officer as described in 
subpart G of this part. In your request, specify your objections, 
include data or supporting analysis, and get your authorized 
representative's signature. If we agree that your request raises a 
substantial factual issue, we will hold the hearing according to 
subpart F of this part.


Sec.  1068.10  What provisions apply to confidential information?

    (a) Clearly show what you consider confidential by marking, 
circling, bracketing, stamping, or some other method.
    (b) We will store your confidential information as described in 40 
CFR part 2. Also, we will disclose it only as specified in 40 CFR part 
2. This applies both to any information you send us and to any 
information we collect from inspections, audits, or other site visits.

[[Page 59346]]

    (c) If you send us a second copy without the confidential 
information, we will assume it contains nothing confidential whenever 
we need to release information from it.
    (d) If you send us information without claiming it is confidential, 
we may make it available to the public without further notice to you, 
as described in 40 CFR 2.204.


Sec.  1068.15  What general provisions apply for EPA decision-making?

    (a) The Administrator of the Environmental Protection Agency or any 
official to whom the Administrator has delegated specific authority may 
represent the Agency. For more information, ask for a copy of the 
relevant sections of the EPA Delegations Manual from the Designated 
Compliance Officer.
    (b) The regulations in this part and in the standard-setting part 
have specific requirements describing how to get EPA approval before 
you take specific actions. These regulations also allow us to waive 
some specific requirements. For provisions or flexibilities that we 
address frequently, we may choose to provide detailed guidance in 
supplemental compliance instructions for manufacturers. Such 
instructions will generally state how they relate to the need for pre-
approval. Unless we explicitly state so, you should not consider full 
compliance with the instructions to be equivalent to EPA approval.


Sec.  1068.20  May EPA enter my facilities for inspections?

    (a) We may inspect your testing, manufacturing processes, storage 
facilities (including port facilities for imported engines and 
equipment or other relevant facilities), or records, as authorized by 
the Clean Air Act, to enforce the provisions of this chapter. 
Inspectors will have authorizing credentials and will limit inspections 
to reasonable times--usually, normal operating hours.
    (b) If we come to inspect, we may or may not have a warrant or 
court order.
    (1) If we do not have a warrant or court order, you may deny us 
entry.
    (2) If we have a warrant or court order, you must allow us to enter 
the facility and carry out the activities it describes.
    (c) We may seek a warrant or court order authorizing an inspection 
described in this section whether or not we first tried to get your 
permission to inspect.
    (d) We may select any facility to do any of the following:
    (1) Inspect and monitor any aspect of engine or equipment 
manufacturing, assembly, storage, or other procedures, and any 
facilities where you do them.
    (2) Inspect and monitor any aspect of engine or equipment test 
procedures or test-related activities, including test engine/equipment 
selection, preparation, service accumulation, emission duty cycles, and 
maintenance and verification of your test equipment's calibration.
    (3) Inspect and copy records or documents related to assembling, 
storing, selecting, and testing an engine or piece of equipment.
    (4) Inspect and photograph any part or aspect of engines or 
equipment and components you use for assembly.
    (e) You must give us reasonable help without charge during an 
inspection authorized by the Clean Air Act. For example, you may need 
to help us arrange an inspection with the facility's managers, 
including clerical support, copying, and translation. You may also need 
to show us how the facility operates and answer other questions. If we 
ask in writing to see a particular employee at the inspection, you must 
ensure that he or she is present (legal counsel may accompany the 
employee).
    (f) If you have facilities in other countries, we expect you to 
locate them in places where local law does not keep us from inspecting 
as described in this section. We will not try to inspect if we learn 
that local law prohibits it, but we may suspend your certificate if we 
are not allowed to inspect.


Sec.  1068.25  What information must I give to EPA?

    If you are subject to the requirements of this part, we may require 
you to give us information to evaluate your compliance with any 
regulations that apply, as authorized by the Clean Air Act. This 
includes the following things:
    (a) You must provide the information we require in this chapter. We 
may require an authorized representative of your company to approve and 
sign any submission of information to us, and to certify that the 
information is accurate and complete.
    (b) You must establish and maintain records, perform tests, make 
reports and provide additional information that we may reasonably 
require under section 208 of the Clean Air Act (42 U.S.C. 7542). This 
also applies to engines/equipment we exempt from emission standards or 
prohibited acts. Unless we specify otherwise, you must keep required 
records for eight years.


Sec.  1068.27  May EPA conduct testing with my production engines/
equipment?

    If we request it, you must make a reasonable number of production-
line engines or pieces of production-line equipment available for a 
reasonable time so we can test or inspect them for compliance with the 
requirements of this chapter.


Sec.  1068.30  What definitions apply to this part?

    The following definitions apply to this part. The definitions apply 
to all subparts unless we note otherwise. All undefined terms have the 
meaning the Clean Air Act gives to them. The definitions follow:
    Aftertreatment means relating to a catalytic converter, particulate 
filter, or any other system, component, or technology mounted 
downstream of the exhaust valve (or exhaust port) whose design function 
is to reduce emissions in the engine exhaust before it is exhausted to 
the environment. Exhaust-gas recirculation (EGR) is not aftertreatment.
    Aircraft means any vehicle capable of sustained air travel above 
treetop heights.
    Certificate holder means a manufacturer (including importers) with 
a currently valid certificate of conformity for at least one family in 
a given model year.
    Clean Air Act means the Clean Air Act, as amended, 42 U.S.C. 7401-
7671q.
    Date of manufacture means one of the following:
    (1) For engines, the date on which the crankshaft is installed in 
an engine block, with the following exceptions:
    (i) For engines produced by secondary engine manufacturers under 
Sec.  1068.262, date of manufacture means the date the engine is 
received from the original engine manufacturer. You may assign an 
earlier date up to 30 days before you received the engine, but not 
before the crankshaft was installed. You may not assign an earlier date 
if you cannot demonstrate the date the crankshaft was installed.
    (ii) Manufacturers may assign a date of manufacture at a point in 
the assembly process later than the date otherwise specified under this 
definition. For example, a manufacturer may use the build date printed 
on the label or stamped on the engine as the date of manufacture.
    (2) For equipment, the date on which the engine is installed, 
unless otherwise specified in the standard-setting part. Manufacturers 
may alternatively assign a date of manufacture later in the assembly 
process.
    Days means calendar days, including weekends and holidays.
    Defeat device has the meaning given in the standard-setting part.
    Designated Compliance Officer means the Manager, Heavy-Duty and 
Nonroad

[[Page 59347]]

Engine Group (6405-J), U.S. Environmental Protection Agency, 1200 
Pennsylvania Ave., Washington, DC 20460.
    Designated Enforcement Officer means the Director, Air Enforcement 
Division (2242A), U.S. Environmental Protection Agency, 1200 
Pennsylvania Ave., NW.,Washington, DC 20460.
    Engine means an engine block with an installed crankshaft. The term 
engine does not include engine blocks without an installed crankshaft, 
nor does it include any assembly of engine components that does not 
include the engine block. (Note: For purposes of this definition, any 
component that is the primary means of converting an engine's energy 
into usable work is considered a crankshaft, whether or not it is known 
commercially as a crankshaft.) This includes complete and partially 
complete engines as follows:
    (1) A complete engine is a fully assembled engine in its final 
configuration. In the case of equipment-based standards, an engine is 
not considered complete until it is installed in the equipment, even if 
the engine itself is fully assembled.
    (2) A partially complete engine is an engine that is not fully 
assembled or is not in its final configuration. Except where we specify 
otherwise in this part or the standard-setting part, partially complete 
engines are subject to the same standards and requirements as complete 
engines. The following would be considered examples of partially 
complete engines:
    (i) An engine that is missing certain emission-related components.
    (ii) A new engine that was originally assembled as a motor-vehicle 
engine that will be recalibrated for use as a nonroad engine.
    (iii) A new engine that was originally assembled as a land-based 
engine that will be modified for use as a marine propulsion engine.
    (iv) A short block consisting of a crankshaft and other engine 
components connected to the engine block, but missing the head 
assembly.
    (v) A long block consisting of all engine components except the 
fuel system and an intake manifold.
    (vi) In the case of equipment-based standards, a fully functioning 
engine that is not yet installed in the equipment. For example, a fully 
functioning engine that will be installed in an off-highway motorcycle 
or a locomotive is considered partially complete until it is installed 
in the equipment.
    Engine-based standard means an emission standard expressed in units 
of grams of pollutant per kilowatt-hour that applies to the engine. 
Emission standards are either engine-based or equipment-based. Note 
that engines may be subject to additional standards such as smoke 
standards.
    Engine-based test means an emission test intended to measure 
emissions in units of grams of pollutant per kilowatt-hour, without 
regard to whether the standard applies to the engine or equipment. Note 
that some products that are subject to engine-based testing are subject 
to additional test requirements such as for smoke.
    Engine/equipment and engines/equipment mean engine(s) and/or 
equipment depending on the context. Specifically these terms mean the 
following:
    (1) Engine(s) when only engine-based standards apply.
    (2) Engine(s) for testing issues when engine-based testing applies.
    (3) Engine(s) and equipment when both engine-based and equipment-
based standards apply.
    (4) Equipment when only equipment-based standards apply.
    (5) Equipment for testing issues when equipment-based testing 
applies.
    Equipment means one of the following things:
    (1) Any vehicle, vessel, or other type of equipment that is subject 
to the requirements of this part or that uses an engine that is subject 
to the requirements of this part. An installed engine is part of the 
equipment.
    (2) Fuel-system components that are subject to an equipment-based 
standard under this chapter. Installed fuel-system components are part 
of the engine.
    Equipment-based standard means an emission standard that applies to 
the equipment in which an engine is used or to fuel-system components 
associated with an engine, without regard to how the emissions are 
measured. If equipment-based standards apply, we require that the 
equipment or fuel-system components be certified rather than just the 
engine. Emission standards are either engine-based or equipment-based. 
For example, recreational vehicles we regulate under 40 CFR part 1051 
are subject to equipment-based standards even if emission measurements 
are based on engine operation alone.
    Exempted means relating to engines/equipment that are not required 
to meet otherwise applicable standards. Exempted engines/equipment must 
conform to regulatory conditions specified for an exemption in this 
part 1068 or in the standard-setting part. Exempted engines/equipment 
are deemed to be ``subject to'' the standards of the standard-setting 
part even though they are not required to comply with the otherwise 
applicable requirements. Engines/equipment exempted with respect to a 
certain tier of standards may be required to comply with an earlier 
tier of standards as a condition of the exemption; for example, engines 
exempted with respect to Tier 3 standards may be required to comply 
with Tier 1 or Tier 2 standards.
    Family means engine family or emission family, as applicable under 
the standard-setting part.
    Final deteriorated test result has the meaning given in the 
standard-setting part. If it is not defined in the standard-setting 
part, it means the emission level that results from applying all 
appropriate adjustments (such as deterioration factors) to the measured 
emission result of the emission-data engine.
    Good engineering judgment means judgments made consistent with 
generally accepted scientific and engineering principles and all 
available relevant information.
    Manufacturer has the meaning given in section 216(1) of the Clean 
Air Act (42 U.S.C. 7550(1)). In general, this term includes any person 
who manufactures an engine or piece of equipment for sale in the United 
States or otherwise introduces a new engine or piece of equipment into 
U.S. commerce. This includes importers that import new engines or new 
equipment into the United States for resale. It also includes secondary 
engine manufacturers.
    Model year has the meaning given in the standard-setting part. 
Unless the standard-setting part specifies otherwise, model year for 
individual engines/equipment is based on the date of manufacture or a 
later stage in the assembly process determined by the manufacturer, 
subject to the limitations described in Sec. Sec.  1068.103 and 
1068.360. The model year of a new engine that is neither certified nor 
exempt is deemed to be the calendar year in which it is sold, offered 
for sale, imported, or delivered or otherwise introduced into U.S. 
commerce.
    Motor vehicle has the meaning given in 40 CFR 85.1703(a).
    New has the meaning we give it in the standard-setting part.
    Nonroad engine means:
    (1) Except as discussed in paragraph (2) of this definition, a 
nonroad engine is an internal combustion engine that meets any of the 
following criteria:
    (i) It is (or will be) used in or on a piece of equipment that is 
self-propelled or serves a dual purpose by both propelling itself and 
performing another function (such as garden tractors, off-highway 
mobile cranes and bulldozers).

[[Page 59348]]

    (ii) It is (or will be) used in or on a piece of equipment that is 
intended to be propelled while performing its function (such as 
lawnmowers and string trimmers).
    (iii) By itself or in or on a piece of equipment, it is portable or 
transportable, meaning designed to be and capable of being carried or 
moved from one location to another. Indicia of transportability 
include, but are not limited to, wheels, skids, carrying handles, 
dolly, trailer, or platform.
    (2) An internal combustion engine is not a nonroad engine if it 
meets any of the following criteria:
    (i) The engine is used to propel a motor vehicle, an aircraft, or 
equipment used solely for competition.
    (ii) The engine is regulated under 40 CFR part 60, (or otherwise 
regulated by a federal New Source Performance Standard promulgated 
under section 111 of the Clean Air Act (42 U.S.C. 7411)).
    (iii) The engine otherwise included in paragraph (1)(iii) of this 
definition remains or will remain at a location for more than 12 
consecutive months or a shorter period of time for an engine located at 
a seasonal source. A location is any single site at a building, 
structure, facility, or installation. Any engine (or engines) that 
replaces an engine at a location and that is intended to perform the 
same or similar function as the engine replaced will be included in 
calculating the consecutive time period. An engine located at a 
seasonal source is an engine that remains at a seasonal source during 
the full annual operating period of the seasonal source. A seasonal 
source is a stationary source that remains in a single location on a 
permanent basis (i.e., at least two years) and that operates at that 
single location approximately three months (or more) each year. See 
Sec.  1068.31 for provisions that apply if the engine is removed from 
the location.
    Operating hours means:
    (1) For engine and equipment storage areas or facilities, times 
during which people other than custodians and security personnel are at 
work near, and can access, a storage area or facility.
    (2) For other areas or facilities, times during which an assembly 
line operates or any of the following activities occurs:
    (i) Testing, maintenance, or service accumulation.
    (ii) Production or compilation of records.
    (iii) Certification testing.
    (iv) Translation of designs from the test stage to the production 
stage.
    (v) Engine or equipment manufacture or assembly.
    Piece of equipment means any vehicle, vessel, locomotive, aircraft, 
or other type of equipment using engines to which this part applies.
    Placed into service means used for its intended purpose.
    Reasonable technical basis means information that would lead a 
person familiar with engine design and function to reasonably believe a 
conclusion related to compliance with the requirements of this part. 
For example, it would be reasonable to believe that parts performing 
the same function as the original parts (and to the same degree) would 
control emissions to the same degree as the original parts.
    Relating to as used in this section means relating to something in 
a specific, direct manner. This expression is used in this section only 
to define terms as adjectives and not to broaden the meaning of the 
terms.
    Replacement engine means an engine exempted as a replacement engine 
under Sec.  1068.240.
    Revoke means to terminate the certificate or an exemption for a 
family. If we revoke a certificate or exemption, you must apply for a 
new certificate or exemption before continuing to introduce the 
affected engines/equipment into U.S. commerce. This does not apply to 
engines/equipment you no longer possess.
    Secondary engine manufacturer means anyone who produces a new 
engine by modifying a complete or partially complete engine that was 
made by a different company. For the purpose of this definition, 
``modifying'' does not include making changes that do not remove an 
engine from its original certified configuration. Secondary engine 
manufacturing includes, for example, converting automotive engines for 
use in industrial applications, or land-based engines for use in marine 
applications. This applies whether it involves a complete or partially 
complete engine and whether the engine was previously certified to 
emission standards or not. Manufacturers controlled by the manufacturer 
of the base engine (or by an entity that also controls the manufacturer 
of the base engine) are not secondary engine manufacturers; rather, 
both entities are considered to be one manufacturer for purposes of 
this part. This definition applies equally to equipment manufacturers 
that modify engines. Also, equipment manufacturers that certify to 
equipment-based standards using engines produced by another company are 
deemed to be secondary engine manufacturers. Companies importing 
complete engines into the United States are not secondary engine 
manufacturers regardless of the procedures and relationships between 
companies for assembling the engines.
    Small business means either of the following:
    (1) A company that qualifies under the standard-setting part for 
special provisions for small businesses or small-volume manufacturers.
    (2) A company that qualifies as a small business under the 
regulations adopted by the Small Business Administration at 13 CFR 
121.201 if the standard-setting part does not establish such qualifying 
criteria.
    Standard-setting part means a part in the Code of Federal 
Regulations that defines emission standards for a particular engine 
and/or piece of equipment (see Sec.  1068.1(a)). For example, the 
standard-setting part for marine spark-ignition engines is 40 CFR part 
1045. For provisions related to evaporative emissions, the standard-
setting part may be 40 CFR part 1060, as specified in 40 CFR 1060.1.
    Suspend means to temporarily discontinue the certificate or an 
exemption for a family. If we suspend a certificate, you may not 
introduce into U.S. commerce engines/equipment from that family unless 
we reinstate the certificate or approve a new one. If we suspend an 
exemption, you may not introduce into U.S. commerce engines/equipment 
that were previously covered by the exemption unless we reinstate the 
exemption.
    Ultimate purchaser means the first person who in good faith 
purchases a new nonroad engine or new piece of equipment for purposes 
other than resale.
    United States means the States, the District of Columbia, the 
Commonwealth of Puerto Rico, the Commonwealth of the Northern Mariana 
Islands, Guam, American Samoa, and the U.S. Virgin Islands.
    U.S.-directed production volume means the number of engine/
equipment units, subject to the requirements of this part, produced by 
a manufacturer for which the manufacturer has a reasonable assurance 
that sale was or will be made to ultimate purchasers in the United 
States.
    Void means to invalidate a certificate or an exemption ab initio. 
If we void a certificate, all the engines/equipment introduced into 
U.S. commerce under that family for that model year are considered 
noncompliant, and you are liable for all engines/equipment introduced 
into U.S. commerce under the certificate and may face civil or criminal 
penalties or both. This applies equally to all engines/equipment in the 
family, including engines/equipment

[[Page 59349]]

introduced into U.S. commerce before we voided the certificate. If we 
void an exemption, all the engines/equipment introduced into U.S. 
commerce under that exemption are considered uncertified (or 
nonconforming), and you are liable for engines/equipment introduced 
into U.S. commerce under the exemption and may face civil or criminal 
penalties or both. You may not introduce into U.S. commerce any 
additional engines/equipment using the voided exemption.
    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 engine 
owners have been notified.
    We (us, our) means the Administrator of the Environmental 
Protection Agency and any authorized representatives.


Sec.  1068.31  What provisions apply to nonroad or stationary engines 
that change their status?

    This section specifies the provisions that apply when an engine 
previously used in a nonroad application is subsequently used in an 
application other than a nonroad application, or when an engine 
previously used in a stationary application (i.e., an engine that was 
not used as a nonroad engine and that was not used to propel a motor 
vehicle, an aircraft, or equipment used solely for competition) is 
moved.
    (a) Changing the status of a stationary engine to be a new nonroad 
engine as described in paragraph (b) of this section is a violation of 
Sec.  1068.101(a)(1) or (b)(3) unless the engine has been certified to 
be compliant with all requirements of this chapter that apply to new 
nonroad engines of the same type (for example, a compression-ignition 
engine rated at 40 kW) and model year, and is in its certified 
configuration. Note that the definitions of ``model year'' in the 
standard-setting parts generally identify the engine's original date of 
manufacture as the basis for determining which standards apply if it 
becomes a nonroad engine after it is no longer new. For example, see 40 
CFR 1039.801 and 1048.801.
    (b) A stationary engine becomes a new nonroad engine if--
    (1) It is used in an application that meets the criteria specified 
in paragraphs (1)(i) or (ii) in the definition of ``nonroad engine'' in 
Sec.  1068.30.
    (2) It meets the criteria specified in paragraph (1)(iii) of the 
definition of ``nonroad engine'' in Sec.  1068.30 and is moved so that 
it fails to meet (or no longer meets) the criteria specified in 
paragraph (2)(iii) in the definition of ``nonroad engine'' in Sec.  
1068.30.
    (c) A stationary engine does not become a new nonroad engine if it 
is moved but continues to meet the criteria specified in paragraph 
(2)(iii) in the definition of ``nonroad engine'' in Sec.  1068.30 in 
its new location. For example, a transportable engine that is used in a 
single specific location for 18 months and is later moved to a second 
specific location where it will remain for at least 12 months is 
considered to be a stationary engine in both locations. Note that for 
engines that are neither portable nor transportable in actual use, the 
residence-time restrictions in the definition of ``nonroad engine'' 
generally do not apply.
    (d) Changing the status of a nonroad engine to be a new stationary 
engine as described in paragraph (e) of this section is a violation of 
Sec.  1068.101(a)(1) unless the engine complies with all the 
requirements of this chapter for new stationary engines of the same 
type (for example, a compression-ignition engine rated at 40 kW) and 
model year. For a new stationary engine that is required to be 
certified under 40 CFR part 60, the engine must have been certified to 
be compliant with all the requirements that apply to new stationary 
engines of the same type and model year, and must be in its certified 
configuration.
    (e) A nonroad engine ceases to be a nonroad engine and becomes a 
new stationary engine if--
    (1) At any time, it meets the criteria specified in paragraph 
(2)(iii) in the definition of ``nonroad engine'' in Sec.  1068.30. For 
example, a portable generator engine ceases to be a nonroad engine if 
it is used or will be used in a single specific location for 12 months 
or longer. If we determine that an engine will be or has been used in a 
single specific location for 12 months or longer, it ceased to be a 
nonroad engine when it was placed in that location.
    (2) It is otherwise regulated by a federal New Source Performance 
Standard promulgated under section 111 of the Clean Air Act (42 U.S.C. 
7411).
    (f) A nonroad engine ceases to be a nonroad engine if it is used to 
propel a motor vehicle, an aircraft, or equipment used solely for 
competition. See 40 CFR part 86 for requirements applicable to motor 
vehicles and motor vehicle engines. See 40 CFR part 87 for requirements 
applicable to aircraft and aircraft engines. See Sec.  1068.235 for 
requirements applicable to equipment used solely for competition.


Sec.  1068.35  What symbols, acronyms, and abbreviations does this part 
use?

    The following symbols, acronyms, and abbreviations apply to this 
part:

$ U.S. dollars.
CFR Code of Federal Regulations.
disp engine displacement.
EPA Environmental Protection Agency.
kW kilowatt.
L/cyl liters per cylinder.
NARA National Archives and Records Administration.
NOX Oxides of nitrogen.
SAE Society of Automotive Engineers.
SEA selective enforcement audit.
U.S. United States.
U.S.C. United States Code.


Sec.  1068.40  What special provisions apply for implementing technical 
amendments?

    During the 12 months following the effective date of any change in 
the provisions of this part, you may ask to apply the previously 
applicable provisions. We will generally approve your request if you 
can demonstrate that it would be impractical to comply with the new 
requirements. We may consider the potential for adverse environmental 
impacts in our decision. Similarly, in unusual circumstances, you may 
ask for relief under this section from new requirements that apply 
under the standard-setting part.


Sec.  1068.45  General labeling provisions.

    The provisions of this part and the standard-setting part include a 
variety of labeling requirements. The following general provisions 
apply:
    (a) Permanent labels. Where we specify that you apply a permanent 
label, you must meet the following requirements unless the standard-
setting part includes other specific label requirements:
    (1) Attach the label so no one can remove it without destroying or 
defacing it.
    (2) Make sure it is durable and readable for the engine/equipment's 
entire life.
    (3) Secure it to a part of the engine/equipment needed for normal 
operation and not normally requiring replacement.
    (4) Write it in English.
    (5) Make the labels readily visible to the average person after all 
installation and assembly are complete.
    (b) Removable labels. Where we specify that you apply a removable 
label, it must meet the following conditions:
    (1) You must attach the label in a way that does not allow it to be 
separated from the engine/equipment without a deliberate effort. Note 
that for exemptions requiring removable labels, the exemption no longer 
applies once the label is separated from the engine/equipment.
    (2) The label must be durable and readable throughout the period of 
its

[[Page 59350]]

intended purpose. This period generally includes all distribution in 
U.S. commerce during which the exemption applies.
    (3) Except as specified in paragraph (c) of this section, the label 
must be attached directly to the engine/equipment in a visible 
location. We consider a tag that meets the specified requirements to be 
an attached label.
    (c) Labels on packaging. This part or the standard-setting part may 
in certain cases allow you to label the packaging if you ship engines/
equipment packaged together instead of applying a removable label to 
engines/equipment individually. For example, this may involve packaging 
engines together by attaching them to a rack, binding them together on 
a pallet, or enclosing them in a box. The provisions of this paragraph 
(c) also apply for engines/equipment boxed individually where you do 
not apply labels directly to the engines/equipment. The following 
provisions apply if you label the packaging instead of labeling 
engines/equipment individually:
    (1) You may use the provisions of this paragraph (c) only if all 
the engines/equipment packaged together need the same label.
    (2) You must place the label on the package in a readily visible 
location. This may require labeling the package in multiple locations.
    (3) You must package the engines/equipment such that the labels 
will not be separated from the engines/equipment or otherwise become 
unreadable throughout the period that the label applies. For example, 
labels required for shipping engines to a secondary engine manufacturer 
under Sec.  1068.262 must remain attached and readable until they reach 
the secondary engine manufacturer. Similarly, removable labels 
specified in Sec.  1068.240 for replacement engines must remain 
attached and readable until they reach the point of final installation.
    (4) You are in violation of Sec.  1068.101(a)(1) if such engines/
equipment are removed from the package or are otherwise separated from 
the label before reaching the point at which the label is no longer 
needed.
    (d) Temporary consumer labels. Where we specify that you apply 
temporary consumer labels (including tags), each label must meet the 
following conditions:
    (1) You must attach the label in a way that does not allow it to be 
separated from the engine/equipment without a deliberate effort.
    (2) The label must be sufficiently durable to be readable until it 
reaches the ultimate purchaser.
    (3) The label must be attached directly to the engine/equipment in 
a visible location.
    (e) Prohibitions against removing labels. Removing permanent labels 
may be a violation of Sec.  1068.101(b)(7). Removing temporary or 
removable labels prematurely may also be a violation of Sec.  
1068.101(b)(7).
    (f) Identifying emission control systems. If the standard-setting 
part specifies that you use standardized terms and abbreviations to 
identify emission control systems, use terms and abbreviations 
consistent with SAE J1930 (incorporated by reference in Sec.  1068.95).


Sec.  1068.95  What materials does this part reference?

    Documents listed in this section have been incorporated by 
reference into this part. The Director of the Federal Register approved 
the incorporation by reference as prescribed in 5 U.S.C. 552(a) and 1 
CFR part 51. Anyone may inspect copies at the U.S. EPA, Air and 
Radiation Docket and Information Center, 1301 Constitution Ave., NW., 
Room B102, EPA West Building, Washington, DC 20460 or at the National 
Archives and Records Administration (NARA). For information on the 
availability of this material at NARA, call 202-741-6030, or go to: 
http://www.archives.gov/federal_register/code_of_federal_regulations/ibr_locations.html.
    (a) SAE material. Table 1 to this section lists material from the 
Society of Automotive Engineers that we have incorporated by reference. 
The first column lists the number and name of the material. The second 
column lists the sections of this part where we reference it. Anyone 
may purchase copies of these materials from the Society of Automotive 
Engineers, 400 Commonwealth Drive, Warrendale, PA 15096 or http://www.sae.org. Table 1 follows:

                Table 1 to Sec.   1068.95--SAE Materials
------------------------------------------------------------------------
                                                             Part 1068
                Document number and name                     reference
------------------------------------------------------------------------
SAE J1930, Electrical/Electronic Systems Diagnostic              1068.95
 Terms, Definitions, Abbreviations, and Acronyms,
 revised April 2002.....................................
------------------------------------------------------------------------

    (b) [Reserved]

Subpart B--Prohibited Actions and Related Requirements


Sec.  1068.101  What general actions does this regulation prohibit?

    This section specifies actions that are prohibited and the maximum 
civil penalties that we can assess for each violation in accordance 
with 42 U.S.C. 7522 and 7524. The maximum penalty values listed in 
paragraphs (a) and (b) of this section are shown for calendar year 
2004. As described in paragraph (e) of this section, maximum penalty 
limits for later years are set forth in 40 CFR part 19.
    (a) The following prohibitions and requirements apply to 
manufacturers of new engines, manufacturers of equipment containing 
these engines, and manufacturers of new equipment, except as described 
in subparts C and D of this part:
    (1) Introduction into commerce. You may not sell, offer for sale, 
or introduce or deliver into commerce in the United States or import 
into the United States any new engine/equipment after emission 
standards take effect for the engine/equipment, unless it is covered by 
a valid certificate of conformity for its model year and has the 
required label or tag. You also may not take any of the actions listed 
in the previous sentence with respect to any equipment containing an 
engine subject to this part's provisions unless the engine is covered 
by a valid certificate of conformity for its model year and has the 
required engine label or tag. We may assess a civil penalty up to 
$32,500 for each engine or piece of equipment in violation.
    (i) For purposes of this paragraph (a)(1), a valid certificate of 
conformity is one that applies for the same model year as the model 
year of the equipment (except as allowed by Sec.  1068.105(a)), covers 
the appropriate category of engines/equipment (such as locomotive or 
Marine SI), and conforms to all requirements specified for equipment in 
the standard-setting part. Engines/equipment are considered not covered 
by a certificate unless they are in a configuration described in the 
application for certification.

[[Page 59351]]

    (ii) The requirements of this paragraph (a)(1) also cover new 
engines you produce to replace an older engine in a piece of equipment, 
unless the engine qualifies for the replacement-engine exemption in 
Sec.  1068.240.
    (iii) For engines used in equipment subject to equipment-based 
standards, you may not sell, offer for sale, or introduce or deliver 
into commerce in the United States or import into the United States any 
new engine unless it is covered by a valid certificate of conformity 
for its model year and has the required label or tag. See the standard-
setting part for more information about how this prohibition applies.
    (2) Reporting and recordkeeping. This chapter requires you to 
record certain types of information to show that you meet our 
standards. You must comply with these requirements to make and maintain 
required records (including those described in Sec.  1068.501). You may 
not deny us access to your records or the ability to copy your records 
if we have the authority to see or copy them. Also, you must give us 
complete and accurate reports and information without delay as required 
under this chapter. Failure to comply with the requirements of this 
paragraph is prohibited. We may assess a civil penalty up to $32,500 
for each day you are in violation. In addition, knowingly submitting 
false information is a violation of 18 U.S.C. 1001, which may involve 
criminal penalties and up to five years imprisonment.
    (3) Testing and access to facilities. You may not keep us from 
entering your facility to test engines/equipment or inspect if we are 
authorized to do so. Also, you must perform the tests we require (or 
have the tests done for you). Failure to perform this testing is 
prohibited. We may assess a civil penalty up to $32,500 for each day 
you are in violation.
    (b) The following prohibitions apply to everyone with respect to 
the engines and equipment to which this part applies:
    (1) Tampering. You may not remove or render inoperative any device 
or element of design installed on or in engines/equipment in compliance 
with the regulations prior to its sale and delivery to the ultimate 
purchaser. You also may not knowingly remove or render inoperative any 
such device or element of design after such sale and delivery to the 
ultimate purchaser. This includes, for example, operating an engine 
without a supply of appropriate quality urea if the emissions control 
system relies on urea to reduce NOX emissions or the use of 
incorrect fuel or engine oil that renders the emissions control system 
inoperative. Section 1068.120 describes how this applies to rebuilding 
engines. See the standard-setting part, which may include additional 
provisions regarding actions prohibited by this requirement. For a 
manufacturer or dealer, we may assess a civil penalty up to $32,500 for 
each engine or piece of equipment in violation. For anyone else, we may 
assess a civil penalty up to $2,750 for each day an engine or piece of 
equipment is operated in violation. This prohibition does not apply in 
any of the following situations:
    (i) You need to repair the engine/equipment and you restore it to 
proper functioning when the repair is complete.
    (ii) You need to modify the engine/equipment to respond to a 
temporary emergency and you restore it to proper functioning as soon as 
possible.
    (iii) You modify new engines/equipment that another manufacturer 
has already certified to meet emission standards and recertify them 
under your own family. In this case you must tell the original 
manufacturer not to include the modified engines/equipment in the 
original family.
    (2) Defeat devices. You may not knowingly manufacture, sell, offer 
to sell, or install, any part that bypasses, impairs, defeats, or 
disables the control of emissions of any regulated pollutant, except as 
explicitly allowed by the standard-setting part. We may assess a civil 
penalty up to $2,750 for each part in violation.
    (3) Stationary engines. For an engine that is excluded from any 
requirements of this chapter because it is a stationary engine, you may 
not move it or install it in any mobile equipment except as allowed by 
the provisions of this chapter. You may not circumvent or attempt to 
circumvent the residence-time requirements of paragraph (2)(iii) of the 
nonroad engine definition in Sec.  1068.30. Anyone violating this 
paragraph (b)(3) is deemed to be a manufacturer in violation of 
paragraph (a)(1) of this section. We may assess a civil penalty up to 
$32,500 for each day you are in violation.
    (4) Competition engines/equipment. For uncertified engines/
equipment that are excluded or exempted from any requirements of this 
chapter because they are to be used solely for competition, you may not 
use any of them in a manner that is inconsistent with use solely for 
competition. Anyone violating this paragraph (b)(4) is deemed to be a 
manufacturer in violation of paragraph (a)(1) of this section. We may 
assess a civil penalty up to $32,500 for each day you are in violation.
    (5) Importation. You may not import an uncertified engine or piece 
of equipment if it is defined to be new in the standard-setting part 
with a model year for which emission standards applied. Anyone 
violating this paragraph (b)(5) is deemed to be a manufacturer in 
violation of paragraph (a)(1) of this section. We may assess a civil 
penalty up to $32,500 for each day you are in violation. Note the 
following:
    (i) The definition of new is broad for imported engines/equipment; 
uncertified engines and equipment (including used engines and 
equipment) are generally considered to be new when imported.
    (ii) Used engines/equipment that were originally manufactured 
before applicable EPA standards were in effect are generally not 
subject to emission standards.
    (6) Warranty, recall, and maintenance instructions. You must meet 
your obligation to honor your emission-related warranty under Sec.  
1068.115, including any commitments you identify in your application 
for certification. You must also fulfill all applicable requirements 
under subpart F of this part related to emission-related defects and 
recalls. You must also provide emission-related installation and 
maintenance instructions as described in the standard-setting part. 
Failure to meet these obligations is prohibited. Also, except as 
specifically provided by regulation, you are prohibited from directly 
or indirectly communicating to the ultimate purchaser or a later 
purchaser that the emission-related warranty is valid only if the owner 
has service performed at authorized facilities or only if the owner 
uses authorized parts, components, or systems. We may assess a civil 
penalty up to $32,500 for each engine or piece of equipment in 
violation.
    (7) Labeling. (i) You may not remove or alter an emission control 
information label or other required permanent label except as specified 
in this paragraph (b)(7) or otherwise allowed by this chapter. Removing 
or altering an emission control information label is a violation of 
paragraph (b)(1) of this section. However, it is not a violation to 
remove a label in the following circumstances:
    (A) The engine is destroyed, is permanently disassembled, or 
otherwise loses its identity such that the original title to the engine 
is no longer valid.
    (B) The regulations specifically direct you to remove the label. 
For example, see Sec.  1068.235.

[[Page 59352]]

    (C) The part on which the label is mounted needs to be replaced. In 
this case, you must have a replacement part with a duplicate of the 
original label installed by the certifying manufacturer or an 
authorized agent, except that the replacement label may omit the date 
of manufacture if applicable. We generally require labels to be 
permanently attached to parts that will not normally be replaced, but 
this provision allows for replacements in unusual circumstances, such 
as damage in a collision or other accident.
    (D) The original label is incorrect, provided that it is replaced 
with the correct label from the certifying manufacturer or an 
authorized agent. This allowance to replace incorrect labels does not 
affect whether the application of an incorrect original label is a 
violation.
    (ii) Removing or altering a temporary or removable label contrary 
to the provisions of this paragraph (b)(7)(ii) is a violation of 
paragraph (b)(1) of this section.
    (A) For labels identifying temporary exemptions, you may not remove 
or alter the label while the engine/equipment is in an exempt status. 
The exemption is automatically revoked for each engine/equipment for 
which the label has been removed.
    (B) For temporary or removable consumer information labels, only 
the ultimate purchaser may remove the label.
    (iii) You may not apply a false emission control information label. 
You also may not manufacture, sell, or offer to sell false labels. The 
application, manufacture, sale, or offer for sale of false labels is a 
violation of this section (such as paragraph (a)(1) or (b)(2) of this 
section). Note that applying an otherwise valid emission control 
information label to the wrong engine is considered to be applying a 
false label.
    (c) If you cause someone to commit a prohibited act in paragraph 
(a) or (b) of this section, you are in violation of that prohibition.
    (d) Exemptions from these prohibitions are described in subparts C 
and D of this part and in the standard-setting part.
    (e) The standard-setting parts describe more requirements and 
prohibitions that apply to manufacturers (including importers) and 
others under this chapter.
    (f) The specification of prohibitions and penalties in this part 
does not limit the prohibitions and penalties described in the Clean 
Air Act. Additionally, a single act may trigger multiple violations 
under this section and the Act. We may pursue all available 
administrative, civil, or criminal remedies for those violations even 
if the regulation references only a single prohibited act in this 
section.
    (g) [Reserved]
    (h) The maximum penalty values listed in paragraphs (a) and (b) of 
this section are shown for calendar year 2004. Maximum penalty limits 
for later years may be adjusted based on the Consumer Price Index. The 
specific regulatory provisions for changing the maximum penalties, 
published in 40 CFR part 19, reference the applicable U.S. Code 
citation on which the prohibited action is based. The following table 
is shown here for informational purposes:

Table 1 of Sec.   1068.101--Legal Citation for Specific Prohibitions for
                   Determining Maximum Penalty Amounts
------------------------------------------------------------------------
                                                            U.S. Code
 Part 1068 regulatory citation  General description of    citation for
     of  prohibited action            prohibition         Clean Air Act
                                                            authority
------------------------------------------------------------------------
Sec.   1068.101 (a)(1)........  Introduction into U.S.  42 U.S.C.
                                 commerce of an          7522(a)(1) and
                                 uncertified source.     (a)(4).
Sec.   1068.101(a)(2).........  Failure to provide      42 U.S.C.
                                 information.            7522(a)(2).
Sec.   1068.101(a)(3).........  Denying access to       42 U.S.C.
                                 facilities.             7522(a)(2).
Sec.   1068.101(b)(1).........  Tampering with          42 U.S.C.
                                 emission controls by    7522(a)(3).
                                 a manufacturer or
                                 dealer.
                                Tampering with          ................
                                 emission controls by
                                 someone other than a
                                 manufacturer or
                                 dealer.
Sec.   1068.101(b)(2).........  Sale or use of a        42 U.S.C.
                                 defeat device.          7522(a)(3).
Sec.   1068.101(b)(3).........  Mobile use of a         42 U.S.C.
                                 stationary engine.      7522(a)(1) and
                                                         (a)(4).
Sec.   1068.101(b)(4).........  Noncompetitive use of   42 U.S.C.
                                 uncertified engines/    7522(a)(1) and
                                 equipment that is       (a)(4).
                                 exempted for
                                 competition.
Sec.   1068.101(b)(5).........  Importation of an       42 U.S.C.
                                 uncertified source.     7522(a)(1) and
                                                         (a)(4).
Sec.   1068.101(b)(6).........  Recall and warranty...  42 U.S.C.
                                                         7522(a)(4).
Sec.   1068.101(b)(7).........  Removing labels.......  42 U.S.C.
                                                         7522(a)(3).
------------------------------------------------------------------------

1068.103  What are the provisions related to the duration and 
applicability of certificates of conformity?

    (a) Engines/equipment covered by a certificate of conformity are 
limited to those that are produced during the period specified in the 
certificate and conform to the specifications described in the 
certificate and the associated application for certification. For 
example, if the application for certification specifies certain engine 
models or production facilities, the certificate does not cover any 
models that are not specified and it does not cover engines/equipment 
produced at production facilities that are not specified.
    (b) Unless the standard-setting part specifies otherwise, determine 
the production period corresponding to each certificate of conformity 
as specified in this paragraph (b). In general, the production period 
is the manufacturer's annual production period identified as a model 
year.
    (1) For engines/equipment subject to emission standards based on 
model years, the first day of the annual production period can be no 
earlier than January 2 of the calendar year preceding the year for 
which the model year is named, or the earliest date of manufacture for 
any engine/equipment in the engine family, whichever is later. The last 
day of the annual production period can be no later than December 31 of 
the calendar year for which the model year is named or the latest date 
of manufacture for any engine/equipment in the engine family, whichever 
is sooner.
    (2) For fuel-system components certified to evaporative emission 
standards based on production periods rather than model years, the 
production period is either the calendar year or a longer period we 
specify consistent with the manufacturer's normal production practices.
    (c) A certificate of conformity will not cover engines/equipment 
you produce with a date of manufacture earlier than the date you submit 
the application for certification for the family. You may start to 
produce engines/equipment after

[[Page 59353]]

you submit an application for certification and before the effective 
date of a certificate of conformity, subject to the following 
conditions:
    (1) The engines/equipment must conform in all material respects to 
the engines/equipment described in your application. Note that if we 
require you to modify your application, you must ensure that all 
engines/equipment conform to the specifications of the modified 
application.
    (2) The engines/equipment may not be sold, offered for sale, 
introduced into commerce, or delivered for introduction into U.S. 
commerce before the effective date of the certificate of conformity.
    (3) You must notify us in your application for certification that 
you plan to use the provisions of this paragraph (c) and when you 
intend to start production. If the standard-setting part specifies 
mandatory testing for production-line engines, you must start testing 
as directed in the standard-setting part based on your actual start of 
production, even if that occurs before we approve your certification. 
You must also agree to give us full opportunity to inspect and/or test 
the engines/equipment during and after production. For example, we must 
have the opportunity to specify selective enforcement audits as allowed 
by the standard-setting part and the Clean Air Act as if the engines/
equipment were produced after the effective date of the certificate.
    (4) See Sec.  1068.262 for special provisions that apply for 
secondary engine manufacturers receiving shipment of partially complete 
engines before the effective date of a certificate.
    (d) Engines/equipment with a date of manufacture after December 31 
of the calendar year for which a model year is named are not covered by 
the certificate of conformity for that model year. You must submit an 
application for a new certificate of conformity demonstrating 
compliance with applicable standards even if the engines/equipment are 
identical to those built before December 31.
    (e) The flexible approach to naming the annual production period 
described in paragraph (b)(1) of this section is intended to allow you 
to introduce new products at any point during the year. This is based 
on the expectation that production periods generally run on consistent 
schedules from year to year. You may not use this flexibility to 
arrange your production periods such that you can avoid annual 
certification.
    (f) An engine is generally assigned a model year based on its date 
of manufacture, which is typically based on the date the crankshaft is 
installed in the engine (see Sec.  1068.30). You may not circumvent the 
provisions of Sec.  1068.101(a)(1) by stockpiling engines with a date 
of manufacture before new or changed emission standards take effect by 
deviating from your normal production and inventory practices. (For 
purposes of this paragraph (f), normal production and inventory 
practices means those practices you typically use for similar families 
in years in which emission standards do not change. We may require you 
to provide us routine production and inventory records that document 
your normal practices for the preceding eight years.) For most engines 
you should plan to complete the assembly of an engine of a given model 
year within the first week after the end of the model year if new 
emission standards start to apply in that model year. For special 
circumstances it may be appropriate for your normal business practice 
to involve more time. For engines with per-cylinder displacement below 
2.5 liters, we would consider it to be a violation to complete the 
assembly of an engine of a given model year more than 30 days after the 
end of the model year for that engine family if new emission standards 
start to apply in that year. For example, in the case where new 
standards apply in the 2010 model year, and your normal production 
period is based on the calendar year, you must complete the assembly of 
all your 2009 model year engines before January 31, 2010, or an earlier 
date consistent with your normal production and inventory practices. 
For engines with per-cylinder displacement at or above 2.5 liters, this 
time may not exceed 60 days. Note that for the purposes of this 
paragraph (f), an engine shipped under Sec.  1068.261 is deemed to be a 
complete engine. Note also that Sec.  1068.245 allows flexibility for 
additional time in unusual circumstances. Note finally that disassembly 
of complete engines and reassembly (such as for shipment) does not 
affect the determination of model year; the provisions of this 
paragraph (f) apply based on the date on which initial assembly is 
complete.


Sec.  1068.105  What other provisions apply to me specifically if I 
manufacture equipment needing certified engines?

    This section describes general provisions that apply to equipment 
manufacturers for sources subject to engine-based standards. See the 
standard-setting part for any requirements that apply for certain 
applications. See Sec.  1068.101 for penalties associated with 
violations under this section and for other prohibitions related to 
your equipment.
    (a) Transitioning to new engine-based standards. If new engine-
based emission standards apply in a given model year, your equipment in 
that calendar year must have engines that are certified to the new 
standards, except that you may continue to use up your normal inventory 
of earlier engines that were built before the date of the new or 
changed standards. (Note: this paragraph (a) does not apply in the case 
of new remanufacturing standards.) For example, if your normal 
inventory practice is to keep on hand a one-month supply of engines 
based on your upcoming production schedules, and a new tier of 
standards starts to apply for the 2015 model year, you may order 
engines consistent with your normal inventory requirements late in the 
engine manufacturer's 2014 model year and install those engines in your 
equipment, regardless of the date of installation. Also, if your model 
year starts before the end of the calendar year preceding new 
standards, you may use engines from the previous model year for those 
units you produce before January 1 of the year that new standards 
apply. If emission standards for the engine do not change in a given 
model year, you may continue to install engines from the previous model 
year without restriction. You may not circumvent the provisions of 
Sec.  1068.101(a)(1) by stockpiling engines that were built before new 
or changed standards take effect. Note that this allowance does not 
apply for equipment subject to equipment-based standards. See 40 CFR 
1060.601 for similar provisions that apply for equipment subject to 
evaporative emission standards.
    (b) Installing engines or certified components. The provisions in 
Sec.  1068.101(a)(1) generally prohibit you from introducing into U.S. 
commerce any new equipment that includes engines not covered by a 
certificate of conformity. In addition, you must follow the engine 
manufacturer's emission-related installation instructions. For example, 
you may need to constrain where you place an exhaust aftertreatment 
device or integrate into your equipment models a device for sending 
visual or audible signals to the operator. Similarly, you must follow 
the emission-related installation instructions from the manufacturer of 
a component that has been certified for controlling evaporative 
emissions under 40 CFR part 1060. Not meeting the manufacturer's 
emission-related installation instructions is a violation of one or 
more of the prohibitions of

[[Page 59354]]

Sec.  1068.101. See Sec.  1068.261 for special provisions that apply 
when the engine manufacturer delegates final assembly of emission 
controls to you.
    (c) Attaching a duplicate label. If you obscure the engine's label, 
you must do four things to avoid violating Sec.  1068.101(a)(1):
    (1) Send a request for duplicate labels in writing on your 
company's letterhead to the engine manufacturer. Include the following 
information in your request:
    (i) Identify the type of equipment and the specific engine and 
equipment models needing duplicate labels.
    (ii) Identify the family (from the original engine label).
    (iii) State the reason that you need a duplicate label for each 
equipment model.
    (iv) Identify the number of duplicate labels you will need.
    (2) Permanently attach the duplicate label to your equipment by 
securing it to a part needed for normal operation and not normally 
requiring replacement. Make sure an average person can easily read it.
    (3) Destroy any unused duplicate labels if you find that you will 
not need them.
    (4) Keep the following records for at least eight years after the 
end of the model year identified on the engine label:
    (i) Keep a copy of your written request.
    (ii) Keep drawings or descriptions that show how you apply the 
duplicate labels to your equipment.
    (iii) Maintain a count of those duplicate labels you use and those 
you destroy.


Sec.  1068.110  What other provisions apply to engines/equipment in 
service?

    (a) Aftermarket parts and service. As the certifying manufacturer, 
you may not require anyone to use your parts or service to maintain or 
repair an engine or piece of equipment, unless we approve this in your 
application for certification. It is a violation of the Clean Air Act 
for anyone to manufacture any part if one of its main effects is to 
reduce the effectiveness of the emission controls. See Sec.  
1068.101(b)(2).
    (b) Certifying aftermarket parts. As the manufacturer or rebuilder 
of an aftermarket engine or equipment part, you may--but are not 
required to--certify according to 40 CFR part 85, subpart V, that using 
the part will not cause engines/equipment to fail to meet emission 
standards. Whether you certify or not, you must keep any information 
showing how your parts or service affect emissions.
    (c) Compliance with standards. We may test engines and equipment to 
investigate compliance with emission standards and other requirements. 
We may also require the manufacturer to do this testing.
    (d) Defeat devices. We may test engines and equipment to 
investigate potential defeat devices. We may also require the 
manufacturer to do this testing. If we choose to investigate one of 
your designs, we may require you to show us that it does not have a 
defeat device. To do this, you may have to share with us information 
regarding test programs, engineering evaluations, design 
specifications, calibrations, on-board computer algorithms, and design 
strategies. It is a violation of the Clean Air Act for anyone to make, 
install or use defeat devices. See Sec.  1068.101(b)(2) and the 
standard-setting part.
    (e) Warranty and maintenance. Owners are responsible for properly 
maintaining their engines/equipment; however, owners may make warranty 
claims against the manufacturer for all expenses related to diagnosing 
and repairing or replacing emission-related parts, as described in 
Sec.  1068.115. Manufacturers may ask to limit diagnosis and repair to 
authorized service facilities, provided this does not limit their 
ability to meet their warranty obligations under Sec.  1068.115. The 
warranty period begins when the equipment is first placed into service. 
See the standard-setting part for specific requirements. It is a 
violation of the Clean Air Act for anyone to disable emission controls; 
see Sec.  1068.101(b)(1) and the standard-setting part.


Sec.  1068.115  When must manufacturers honor emission-related warranty 
claims?

    Section 207(a) of the Clean Air Act (42 U.S.C. 7541(a)) requires 
certifying manufacturers to warrant to purchasers that their engines/
equipment are designed, built, and equipped to conform at the time of 
sale to the applicable regulations for their full useful life, 
including a warranty that the engines/equipment are free from defects 
in materials and workmanship that would cause any engine/equipment to 
fail to conform to the applicable regulations during the specified 
warranty period. This section codifies the warranty requirements of 
section 207(a) without intending to limit these requirements.
    (a) As a certifying manufacturer, you may deny warranty claims only 
for failures that have been caused by the owner's or operator's 
improper maintenance or use, by accidents for which you have no 
responsibility, or by acts of God. For example, you would not need to 
honor warranty claims for failures that have been directly caused by 
the operator's abuse of the engine/equipment or the operator's use of 
the engine/equipment in a manner for which it was not designed and are 
not attributable to you in any way.
    (b) As a certifying manufacturer, you may not deny emission-related 
warranty claims based on any of the following:
    (1) Maintenance or other service you or your authorized facilities 
performed.
    (2) Engine/equipment repair work that an operator performed to 
correct an unsafe, emergency condition attributable to you as long as 
the operator tries to restore the engine/equipment to its proper 
configuration as soon as possible.
    (3) Any action or inaction by the operator unrelated to the 
warranty claim.
    (4) Maintenance that was performed more frequently than you 
specify.
    (5) Anything that is your fault or responsibility.
    (6) The use of any fuel that is commonly available where the 
equipment operates unless your written maintenance instructions state 
that this fuel would harm the equipment's emission control system and 
operators can readily find the proper fuel.


Sec.  1068.120  What requirements must I follow to rebuild engines?

    (a) This section describes the steps to take when rebuilding 
engines to avoid violating the tampering prohibition in Sec.  
1068.101(b)(1). These requirements apply to anyone rebuilding an engine 
subject to this part, but the recordkeeping requirements in paragraphs 
(j) and (k) of this section apply only to businesses. For maintenance 
or service that is not rebuilding, including any maintenance related to 
evaporative emission controls, you may not make changes that might 
increase emissions of any regulated pollutant, but you do not need to 
keep any records.
    (b) The term ``rebuilding'' refers to a rebuild of an engine or 
engine system, including a major overhaul in which you replace the 
engine's pistons or power assemblies or make other changes that 
significantly increase the service life of the engine. It also includes 
replacing or rebuilding an engine's turbocharger or aftercooler or the 
engine's systems for fuel metering or electronic control so that it 
significantly increases the service life of the engine. For these 
provisions, rebuilding may or may not involve removing the engine from 
the equipment. Rebuilding does not normally include the following:
    (1) Scheduled emission-related maintenance that the standard-
setting

[[Page 59355]]

part allows during the useful life period (such as replacing fuel 
injectors).
    (2) Unscheduled maintenance that occurs commonly within the useful 
life period. For example, replacing a water pump is not rebuilding an 
engine.
    (c) [Reserved]
    (d) If you rebuild an engine or engine system, you must have a 
reasonable technical basis for knowing that the rebuilt engine's 
emission control system performs as well as, or better than, it 
performs in its certified configuration. Identify the model year of the 
resulting engine configuration. You have a reasonable basis if you meet 
two main conditions:
    (1) Install parts--new, used, or rebuilt--so a person familiar with 
engine design and function would reasonably believe that the engine 
with those parts will control emissions of all pollutants at least to 
the same degree as with the original parts. For example, it would be 
reasonable to believe that parts performing the same function as the 
original parts (and to the same degree) would control emissions to the 
same degree as the original parts.
    (2) Adjust parameters or change design elements only according to 
the original engine manufacturer's instructions. Or, if you differ from 
these instructions, you must have data or some other technical basis to 
show you should not expect in-use emissions to increase.
    (e) If the rebuilt engine remains installed or is reinstalled in 
the same piece of equipment, you must rebuild it to the original 
configuration or another certified configuration of the same or later 
model year.
    (f) A rebuilt engine may replace another certified engine in a 
piece of equipment only if the engine was rebuilt to a certified 
configuration meeting equivalent or more stringent emission standards. 
Note that a certified configuration would generally include more than 
one model year. A rebuilt engine being installed that is from the same 
model year or a newer model year than the engine being replaced meets 
this requirement. The following examples illustrate the provisions of 
this paragraph (f):
    (1) In most cases, you may use a rebuilt Tier 2 engine to replace a 
Tier 1 engine or another Tier 2 engine.
    (2) You may use a rebuilt Tier 1 engine to replace a Tier 2 engine 
if the two engines differ only with respect to model year or other 
characteristics unrelated to emissions since such engines would be 
considered to be in the same configuration. This may occur if the Tier 
1 engine had emission levels below the Tier 2 standards or if the Tier 
2 engine was certified with a Family Emission Limit for calculating 
emission credits.
    (3) You may use a rebuilt engine that originally met the Tier 1 
standards without certification, as provided under 40 CFR 1068.265, to 
replace a certified Tier 1 engine. This may occur for engines produced 
under a Transition Program for Equipment Manufacturers such as that 
described in 40 CFR 1039.625.
    (4) You may never replace a certified engine with an engine rebuilt 
to a configuration that does not meet EPA emission standards. Note that 
a configuration is considered to meet EPA emission standards if it was 
previously certified or was otherwise shown to meet emission standards 
(see Sec.  1068.265).
    (g) Do not erase or reset emission-related codes or signals from 
onboard monitoring systems without diagnosing and responding 
appropriately to any diagnostic codes. This requirement applies 
regardless of the manufacturer's reason for installing the monitoring 
system and regardless of its form or interface. Clear any codes from 
diagnostic systems when you return the rebuilt engine to service. Do 
not disable a diagnostic signal without addressing its cause.
    (h) When you rebuild an engine, check, clean, adjust, repair, or 
replace all emission-related components (listed in Appendix I of this 
part) as needed according to the original manufacturer's recommended 
practice. In particular, replace oxygen sensors, replace the catalyst 
if there is evidence of malfunction, clean gaseous fuel-system 
components, and replace fuel injectors (if applicable), unless you have 
a reasonable technical basis for believing any of these components do 
not need replacement.
    (i) If you are installing an engine that someone else has rebuilt, 
check all emission-related components listed in Appendix I of this part 
as needed according to the original manufacturer's recommended 
practice.
    (j) Keep at least the following records for all engines except 
spark-ignition engines with total displacement below 225 cc:
    (1) Identify the hours of operation (or mileage, as appropriate) at 
the time of rebuild. These may be noted as approximate values if the 
engine has no hour meter (or odometer).
    (2) Identify the work done on the engine or any emission-related 
control components, including a listing of parts and components you 
used.
    (3) Describe any engine parameter adjustments.
    (4) Identify any emission-related codes or signals you responded to 
and reset.
    (k) You must show us or send us your records if we ask for them. 
Keep records for at least two years after rebuilding an engine. Keep 
them in any format that allows us to readily review them.
    (1) You do not need to keep information that is not reasonably 
available through normal business practices. We do not expect you to 
have information that you cannot reasonably access.
    (2) You do not need to keep records of what other companies do.
    (3) You may keep records based on families rather than individual 
engines if that is the way you normally do business.


Sec.  1068.125  What happens if I violate the regulations?

    (a) Civil penalties and injunctions. We may bring a civil action to 
assess and recover civil penalties and/or enjoin and restrain 
violations in the United States District Court for the district where 
you allegedly violated a requirement, or the district where you live or 
have your main place of business. Actions to assess civil penalties or 
restrain violations of Sec.  1068.101 must be brought by and in the 
name of the United States. The selected court has jurisdiction to 
restrain violations and assess civil penalties.
    (1) To determine the amount of a civil penalty and reach a just 
conclusion, the court considers these factors:
    (i) The seriousness of your violation.
    (ii) How much you benefited or saved because of the violation.
    (iii) The size of your business.
    (iv) Your history of compliance with Title II of the Clean Air Act 
(42 U.S.C. 7401-7590).
    (v) What you did to remedy the violation.
    (vi) How the penalty will affect your ability to continue in 
business.
    (vii) Such other matters as justice may require.
    (2) Subpoenas for witnesses who must attend a district court in any 
district may apply to any other district.
    (b) Administrative penalties. Instead of bringing a civil action, 
we may assess administrative penalties if the total is less than 
$270,000 against you individually. This maximum penalty may be greater 
if the Administrator and the Attorney General jointly determine that a 
greater administrative penalty assessment is appropriate, or if the 
limit is adjusted under 40 CFR part 19. No court may review this 
determination. Before we assess an administrative penalty, you may ask 
for a hearing

[[Page 59356]]

(subject to 40 CFR part 22). The Administrator may compromise or remit, 
with or without conditions, any administrative penalty that may be 
imposed under this section.
    (1) To determine the amount of an administrative penalty, we will 
consider the factors described in paragraph (a)(1) of this section.
    (2) An administrative order we issue under this paragraph (b) 
becomes final 30 days after we issue it unless you ask for judicial 
review by that time (see paragraph (c) of this section). You may ask 
for review by any of the district courts listed in paragraph (a) of 
this section. Send the Administrator a copy of the filing by certified 
mail.
    (3) We will not pursue an administrative penalty for a particular 
violation if either of the following two conditions is true:
    (i) We are separately prosecuting the violation under this subpart.
    (ii) We have issued a final order for a violation, no longer 
subject to judicial review, for which you have already paid a penalty.
    (c) Judicial review. If you ask a court to review a civil or 
administrative penalty, we will file in the appropriate court within 30 
days of your request a certified copy or certified index of the record 
on which the court or the Administrator issued the order.
    (1) The judge may set aside or remand any order issued under this 
section only if one of the following is true:
    (i) Substantial evidence does not exist in the record, taken as a 
whole, to support finding a violation.
    (ii) The Administrator's assessment of the penalty is an abuse of 
discretion.
    (2) The judge may not add civil penalties unless our penalty is an 
abuse of discretion that favors you.
    (d) Effect of enforcement actions on other requirements. Our 
pursuit of civil or administrative penalties does not affect or limit 
our authority to enforce any provisions of this chapter.
    (e) Penalties. In any proceedings, the United States government may 
seek to collect civil penalties assessed under this section.
    (1) Once a penalty assessment is final, if you do not pay it, the 
Administrator will ask the Attorney General to bring a civil action in 
an appropriate district court to recover the money. We may collect 
interest from the date of the final order or final judgment at rates 
established by the Internal Revenue Code of 1986 (26 U.S.C. 
6621(a)(2)). In this action to collect overdue penalties, the court 
will not review the validity, amount, and appropriateness of the 
penalty.
    (2) In addition, if you do not pay the full amount of a penalty on 
time, you must then pay more to cover interest, enforcement expenses 
(including attorney's fees and costs for collection), and a quarterly 
nonpayment penalty for each quarter you do not pay. The quarterly 
nonpayment penalty is 10 percent of your total penalties plus any 
unpaid nonpayment penalties from previous quarters.

Subpart C--Exemptions and Exclusions


Sec.  1068.201  Does EPA exempt or exclude any engines/equipment from 
the prohibited acts?

    We may exempt new engines/equipment from some or all of the 
prohibited acts or requirements of this part under provisions described 
in this subpart. We may exempt engines/equipment already placed in 
service in the United States from the prohibition in Sec.  
1068.101(b)(1) if the exemption for engines/equipment used solely for 
competition applies (see Sec.  1068.235). In addition, see Sec.  1068.1 
and the standard-setting parts to determine if other engines/equipment 
are excluded from some or all of the regulations in this chapter.
    (a) This subpart identifies which engines/equipment qualify for 
exemptions and what information we need. We may ask for more 
information.
    (b) If you violate any of the terms, conditions, instructions, or 
requirements to qualify for an exemption, we may void, revoke, or 
suspend the exemption.
    (c) If you use an exemption under this subpart, we may require you 
to add a permanent label to your exempted engines/equipment. You may 
ask us to modify these labeling requirements if it is appropriate for 
your engine/equipment.
    (d) If you produce engines/equipment we exempt under this subpart, 
we may require you to make and keep records, perform tests, make 
reports and provide information as needed to reasonably evaluate the 
validity of the exemption.
    (e) If you own or operate engines/equipment we exempt under this 
subpart, we may require you to provide information as needed to 
reasonably evaluate the validity of the exemption.
    (f) Subpart D of this part describes how we apply these exemptions 
to engines/equipment you import (or intend to import).
    (g) If you want to ask for an exemption or need more information, 
write to the Designated Compliance Officer.
    (h) You may ask us to modify the administrative requirements for 
the exemptions described in this subpart. We may approve your request 
if we determine that such approval is consistent with the intent of 
this part. For example, waivable administrative requirements might 
include some reporting requirements, but would not include any 
eligibility requirements or use restrictions.
    (i) If you want to take an action with respect to an exempted or 
excluded engine/equipment that is prohibited by the exemption or 
exclusion, such as selling it, you need to certify the engine/
equipment. We will issue a certificate of conformity if you send us an 
application for certification showing that you meet all the applicable 
requirements from the standard-setting part and pay the appropriate 
fee. Alternatively, we may allow you to include in an existing 
certified engine family those engines/equipment you modify (or 
otherwise demonstrate) to be identical to engines/equipment already 
covered by the certificate. We would base such an approval on our 
review of any appropriate documentation. These engines/equipment must 
have emission control information labels that accurately describe their 
status.


Sec.  1068.210  What are the provisions for exempting test engines/
equipment?

    (a) We may exempt engines/equipment that you will use for research, 
investigations, studies, demonstrations, or training. Note that you are 
not required to get an exemption under this section for engines that 
are exempted under other provisions of this part, such as the 
manufacturer-owned exemption in Sec.  1068.215.
    (b) Anyone may ask for a testing exemption.
    (c) If you are a certificate holder, you may request an exemption 
for engines/equipment you intend to include in test programs over a 
two-year period.
    (1) In your request, tell us the maximum number of engines/
equipment involved and describe how you will make sure exempted 
engines/equipment are used only for this testing.
    (2) Give us the information described in paragraph (d) of this 
section if we ask for it.
    (d) If you are not a certificate holder, do all the following 
things:
    (1) Show that the proposed test program has a valid purpose under 
paragraph (a) of this section.
    (2) Show you need an exemption to achieve the purpose of the test 
program (time constraints may be a basis for needing an exemption, but 
the cost of certification alone is not).

[[Page 59357]]

    (3) Estimate the duration of the proposed test program and the 
number of engines/equipment involved.
    (4) Allow us to monitor the testing.
    (5) Describe how you will ensure that you stay within this 
exemption's purposes. Address at least the following things:
    (i) The technical nature of the test.
    (ii) The test site.
    (iii) The duration and accumulated engine/equipment operation 
associated with the test.
    (iv) Ownership and control of the engines/equipment involved in the 
test.
    (v) The intended final disposition of the engines/equipment.
    (vi) How you will identify, record, and make available the engine/
equipment identification numbers.
    (vii) The means or procedure for recording test results.
    (e) If we approve your request for a testing exemption, we will 
send you a letter or a memorandum for your signature describing the 
basis and scope of the exemption. The exemption does not take effect 
until we receive the signed letter or memorandum from you. It will also 
include any necessary terms and conditions, which normally require you 
to do the following:
    (1) Stay within the scope of the exemption.
    (2) Create and maintain adequate records that we may inspect.
    (3) Add a permanent label to all engines/equipment exempted under 
this section, consistent with Sec.  1068.45, with at least the 
following items:
    (i) The label heading ``EMISSION CONTROL INFORMATION''.
    (ii) Your corporate name and trademark.
    (iii) Engine displacement, family identification, and model year of 
the engine/equipment (as applicable), or whom to contact for further 
information.
    (iv) One of these statements (as applicable):
    (A) ``THIS ENGINE IS EXEMPT UNDER 40 CFR 1068.210 OR 1068.215 FROM 
EMISSION STANDARDS AND RELATED REQUIREMENTS.''
    (B) ``THIS EQUIPMENT IS EXEMPT UNDER 40 CFR 1068.210 OR 1068.215 
FROM EMISSION STANDARDS AND RELATED REQUIREMENTS.''
    (4) Tell us when the test program is finished.
    (5) Tell us the final disposition of the engines/equipment.
    (6) Send us a written confirmation that you meet the terms and 
conditions of this exemption.


Sec.  1068.215  What are the provisions for exempting manufacturer-
owned engines/equipment?

    (a) You are eligible for the exemption for manufacturer-owned 
engines/equipment only if you are a certificate holder.
    (b) Engines/equipment may be exempt without a request if they are 
nonconforming engines/equipment under your ownership, possession, and 
control and you operate them to develop products, assess production 
methods, or promote your engines/equipment in the marketplace. You may 
not loan, lease, sell, or use the engine/equipment to generate revenue, 
either by itself or for an engine installed in a piece of equipment. 
Note that this paragraph (b) does not prevent the sale or shipment of a 
partially complete engine to a secondary engine manufacturer that will 
meet the requirements of this paragraph (b). See Sec.  1068.262 for 
provisions related to shipping partially complete engines to secondary 
engine manufacturers.
    (c) To use this exemption, you must do three things:
    (1) Establish, maintain, and keep adequately organized and indexed 
information on all exempted engines/equipment, including the engine/
equipment identification number, the use of the engine/equipment on 
exempt status, and the final disposition of any engine/equipment 
removed from exempt status.
    (2) Let us access these records, as described in Sec.  1068.20.
    (3) Add a permanent label to all engines/equipment exempted under 
this section, consistent with Sec.  1068.45, with at least the 
following items:
    (i) The label heading ``EMISSION CONTROL INFORMATION''.
    (ii) Your corporate name and trademark.
    (iii) Family identification and model year of the engine/equipment 
(as applicable), or whom to contact for further information.
    (iv) One of these statements (as applicable):
    (A) ``THIS ENGINE IS EXEMPT UNDER 40 CFR 1068.210 OR 1068.215 FROM 
EMISSION STANDARDS AND RELATED REQUIREMENTS.''
    (B) ``THIS EQUIPMENT IS EXEMPT UNDER 40 CFR 1068.210 OR 1068.215 
FROM EMISSION STANDARDS AND RELATED REQUIREMENTS.''


Sec.  1068.220  What are the provisions for exempting display engines/
equipment?

    (a) Anyone may request an exemption for display engines/equipment.
    (b) Nonconforming display engines/equipment will be exempted if 
they are used only for displays in the interest of a business or the 
general public. This exemption does not apply to engines/equipment 
displayed for private use, private collections, or any other purpose we 
determine is inappropriate for a display exemption.
    (c) You may operate the exempted engine/equipment, but only if we 
approve specific operation that is part of the display.
    (d) You may sell or lease the exempted engine/equipment only with 
our advance approval; you may not use it to generate revenue.
    (e) To use this exemption, you must add a permanent label to all 
engines/equipment exempted under this section, consistent with Sec.  
1068.45, with at least the following items:
    (1) The label heading ``EMISSION CONTROL INFORMATION''.
    (2) Your corporate name and trademark.
    (3) Engine displacement, family identification, and model year of 
the engine/equipment (as applicable), or whom to contact for further 
information.
    (4) One of these statements (as applicable):
    (i) ``THIS ENGINE IS EXEMPT UNDER 40 CFR 1068.220 FROM EMISSION 
STANDARDS AND RELATED REQUIREMENTS.''
    (ii) ``THIS EQUIPMENT IS EXEMPT UNDER 40 CFR 1068.220 FROM EMISSION 
STANDARDS AND RELATED REQUIREMENTS.''
    (f) We may set other conditions for approval of this exemption.


Sec.  1068.225  What are the provisions for exempting engines/equipment 
for national security?

    (a) You are eligible for the exemption for national security only 
if you are a manufacturer.
    (b) Your engine/equipment is exempt without a request if it will be 
used or owned by an agency of the federal government responsible for 
national defense, where the equipment has armor, permanently attached 
weaponry, or other substantial features typical of military combat.
    (c) You may request a national security exemption for engines/
equipment not meeting the conditions of paragraph (b) of this section 
as long as your request is endorsed by an agency of the federal 
government responsible for national defense. In your request, explain 
why you need the exemption.
    (d) Add a permanent label to all engines/equipment exempted under 
this section, consistent with Sec.  1068.45, with at least the 
following items:
    (1) The label heading ``EMISSION CONTROL INFORMATION''.

[[Page 59358]]

    (2) Your corporate name and trademark.
    (3) Engine displacement, family identification, and model year of 
the engine/equipment (as applicable), or whom to contact for further 
information.
    (4) One of these statements (as applicable):
    (i) ``THIS ENGINE HAS AN EXEMPTION FOR NATIONAL SECURITY UNDER 40 
CFR 1068.225.''
    (ii) ``THIS EQUIPMENT HAS AN EXEMPTION FOR NATIONAL SECURITY UNDER 
40 CFR 1068.225.''


Sec.  1068.230  What are the provisions for exempting engines/equipment 
for export?

    The provisions of this section apply differently depending on the 
country to which the engines/equipment are being exported.
    (a) We will not exempt new engines/equipment if you export them to 
a country with emission standards identical to ours, in which case they 
must be covered by a certificate of conformity. Where we determine that 
such engines/equipment will not be placed into service in the United 
States, the following provisions apply for special export-only 
certification:
    (1) The engines/equipment must be covered by a certificate of 
conformity or equivalent approval issued by the destination country.
    (2) To get an export-only certificate of conformity, send the 
Designated Compliance Officer a request. We may require you to provide 
information such as documentation of the foreign certification and 
related test data.
    (3) No fees apply for export-only certification.
    (4) The engines/equipment must be labeled as specified in paragraph 
(d) of this section.
    (5) This export-only certificate is not considered a valid 
certificate of conformity with respect to the prohibition in Sec.  
1068.101(a)(1) for sale to ultimate purchasers in the United States. 
These engines/equipment also may not reenter the United States unless 
the regulations of this chapter otherwise allow it.
    (b) Engines/equipment exported to a country not covered by 
paragraph (a) of this section are exempt from the prohibited acts in 
this part without a request. If you produce exempt engines/equipment 
for export and any of them are sold or offered for sale to an ultimate 
purchaser in the United States, we will void the exemption for those 
engines/equipment.
    (c) Except as specified in paragraph (d) of this section, label 
exempted engines/equipment (including shipping containers if the label 
on the engine/equipment will be obscured by the container) with a label 
showing that they are not certified for sale or use in the United 
States. This label may be permanent or removable. See Sec.  1068.45 for 
provisions related to the use of removable labels and applying labels 
to containers without labeling individual engines/equipment. The label 
must include your corporate name and trademark and one of the following 
statements (as applicable):
    (1) ``THIS ENGINE IS SOLELY FOR EXPORT AND IS THEREFORE EXEMPT 
UNDER 40 CFR 1068.230 FROM U.S. EMISSION STANDARDS AND RELATED 
REQUIREMENTS.''
    (2) ``THIS EQUIPMENT IS SOLELY FOR EXPORT AND IS THEREFORE EXEMPT 
UNDER 40 CFR 1068.230 FROM U.S. EMISSION STANDARDS AND RELATED 
REQUIREMENTS.''
    (d) You must apply a permanent label as specified in this paragraph 
(d) for engines/equipment certified under paragraph (a) of this 
section. You may apply a permanent label as specified in this paragraph 
(d) instead of the label specified in paragraph (c) of this section for 
exempted engines/equipment. Add a permanent label meeting the 
requirements of the destination country and include in the bill of 
lading a statement that the engines/equipment must be exported to avoid 
violating EPA regulations. We may modify applicable labeling 
requirements to align with the labeling requirements that apply for the 
destination country.
    (e) We may set other reasonable conditions to ensure that engines/
equipment exempted under this section are not placed into service in 
the United States.
    (f) Exemptions under this section expire once engines are no longer 
in the United States. Therefore exemptions under this section do not 
allow engines to be imported back into the United States.


Sec.  1068.235  What are the provisions for exempting engines/equipment 
used solely for competition?

    (a) New engines/equipment you produce that are used solely for 
competition are generally excluded from emission standards. See the 
standard-setting parts for specific provisions where applicable.
    (b) If you modify any engines/equipment after they have been placed 
into service in the United States so they will be used solely for 
competition, they are exempt without request. This exemption applies 
only to the prohibition in Sec.  1068.101(b)(1) and is valid only as 
long as the engine/equipment is used solely for competition. You may 
not use the provisions of this paragraph (b) to circumvent the 
requirements that apply to the sale of new competition engines under 
the standard-setting part.
    (c) If you modify any engines/equipment under paragraph (b) of this 
section, you must destroy the original emission labels. If you loan, 
lease, sell, or give any of these engines/equipment to someone else, 
you must tell the new owner (or operator, if applicable) in writing 
that they may be used only for competition.


Sec.  1068.240  What are the provisions for exempting new replacement 
engines?

    The prohibitions in Sec.  1068.101(a)(1) do not apply to a new 
engine if it is exempt under this section as a replacement engine. For 
purposes of this section, a replacement engine is a new engine that is 
used to replace an engine that has already been placed into service 
(whether the previous engine is replaced in whole or in part with a new 
engine).
    (a) General provisions. You are eligible for the exemption for new 
replacement engines only if you are a certificate holder. Note that 
this exemption does not apply for locomotives (40 CFR 1033.601) and 
that unique provisions apply to marine compression-ignition engines (40 
CFR 1042.615). Paragraphs (b) and (c) describe two different approaches 
for exempting new replacement engines where the engines are specially 
built to correspond to an earlier model year that was subject to less 
stringent standards than those that apply for current production (or is 
no longer covered by a certificate of conformity). Paragraphs (d) and 
(e) describe a simpler approach for exempting partially complete new 
replacement engines that are built under a certificate of conformity 
that is valid for producing engines for the current model year.
    (b) Previous-tier replacement engines with tracking. You may 
produce any number of new replacement engines under this section if all 
the following conditions are true:
    (1) You produce a new engine to replace an engine already placed 
into service in a piece of equipment.
    (2) The engine being replaced was not originally subject to 
emission standards or was originally subject to less stringent emission 
standards than those that would otherwise apply to the new engine. The 
provisions of this paragraph (b) also apply for engines that were 
originally certified to the same standards that apply for the current 
model year if you no longer have a

[[Page 59359]]

certificate of conformity to continue producing that engine 
configuration.
    (3) You determine that you do not produce an engine certified to 
meet current requirements that has the appropriate physical or 
performance characteristics to repower the equipment. If the engine 
being replaced was made by a different company, you must make this 
determination also for engines produced by this other company. You must 
keep records to document your basis for making this determination.
    (4) You or your agent takes possession of the old engine or 
confirms that the old engine has been destroyed.
    (5) If the old engine was subject to emission standards, you must 
make the new replacement engine in a configuration identical in all 
material respects to the old engine and meet the requirements of Sec.  
1068.265. You may alternatively make the new replacement engine in a 
configuration identical in all material respects to another certified 
engine of the same or later model year as long as the engine is not 
certified with a family emission limit higher than that of the old 
engine.
    (6) You add a permanent label, consistent with Sec.  1068.45, with 
your corporate name and trademark and the following additional 
information:
    (i) Add the following statement if the engine being replaced was 
not subject to any emission standards under this chapter:

THIS ENGINE DOES NOT COMPLY WITH U.S. EPA NONROAD EMISSION 
REQUIREMENTS. SELLING OR INSTALLING THIS ENGINE FOR ANY PURPOSE OTHER 
THAN TO REPLACE A NONROAD ENGINE BUILT BEFORE JANUARY 1, [Insert 
appropriate year reflecting when the earliest tier of standards began 
to apply to engines of that size and type] MAY BE A VIOLATION OF 
FEDERAL LAW SUBJECT TO CIVIL PENALTY.

    (ii) Add the following statement if the engine being replaced was 
subject to emission standards:


THIS ENGINE COMPLIES WITH U.S. EPA NONROAD EMISSION REQUIREMENTS FOR 
[Identify the appropriate emission standards (by model year, tier, or 
emission levels) for the replaced engine] ENGINES UNDER 40 CFR 
1068.240. SELLING OR INSTALLING THIS ENGINE FOR ANY PURPOSE OTHER THAN 
TO REPLACE A [Identify the appropriate emission standards for the 
replaced engine, by model year(s), tier(s), or emission levels)] ENGINE 
MAY BE A VIOLATION OF FEDERAL LAW SUBJECT TO CIVIL PENALTY.
    (c) Previous-tier replacement engines without tracking. You may 
produce a limited number of new replacement engines that are not from a 
currently certified engine family under the provisions of this 
paragraph (c). This would apply, for example, for engine configurations 
that were certified in an earlier model year but are no longer covered 
by a certificate of conformity. You must comply with the requirements 
of paragraph (b) of this section for any number of replacement engines 
you produce in excess of what we allow under this paragraph (c). The 
following provisions apply to engines exempted under this paragraph 
(c):
    (1) You may produce a limited number of replacement engines under 
this paragraph (c) representing 0.5 percent of your annual production 
volumes for each category and subcategory of engines identified in 
Table 1 to this section (1.0 percent through 2013). Calculate this 
number by multiplying your annual U.S.-directed production volume by 
0.005 (or 0.01 through 2013) and rounding to the nearest whole number. 
Determine the appropriate production volume by identifying the highest 
total annual U.S.-directed production volume of engines from the 
previous three model years for all your certified engines from each 
category or subcategory identified in Table 1 to this section, as 
applicable. In unusual circumstances, you may ask us to base your 
production limits on U.S.-directed production volume for a model year 
more than three years prior. Include only those stationary engines from 
your U.S.-directed production volume that are certified under one of 
the standard-setting parts identified in Table 1 to this section. Do 
not include any exempted engines you produce as part of your U.S.-
directed production volume, even if those engines must meet emission 
standards as a condition of the exemption. Include U.S.-directed 
engines produced by any parent or subsidiary companies and those from 
any other companies you license to produce engines for you.
    (2) Count every exempted new replacement engine from your total 
U.S.-directed production volume that you produce in a given calendar 
year under this paragraph (c), including partially complete engines, 
except for the following:
    (i) Engines built to specifications for an earlier model year under 
paragraph (b) of this section.
    (ii) Partially complete engines exempted under paragraph (d) or (e) 
of this section.
    (3) Send the Designated Compliance Officer a report by February 15 
of the year following any year in which you produced exempted 
replacement engines under this paragraph (c). In your report include 
the total number of replacement engines you produce under this 
paragraph (c) for each category or subcategory, as appropriate, and the 
corresponding total production volumes determined under paragraph 
(c)(1) of this section. If you send us a report under this paragraph 
(c)(3), you must also include the total number of replacement engines 
you produced under paragraphs (b), (d), and (e) of this section. You 
may include this information in production reports required under the 
standard-setting part.
    (4) Add a permanent label as specified in paragraph (b)(6) of this 
section. For partially complete engines, you may alternatively add a 
permanent or removable label as specified in paragraph (d) of this 
section, except that the appropriate regulatory cite is 40 CFR 
1068.240(c).
    (5) You may not use the provisions of this paragraph (c) for any 
engines in the following engine categories or subcategories:
    (i) Land-based nonroad compression-ignition engines we regulate 
under 40 CFR part 1039 with a per-cylinder displacement at or above 7.0 
liters.
    (ii) Marine compression-ignition engines we regulate under 40 CFR 
part 1042 with a per-cylinder displacement at or above 7.0 liters.
    (iii) Locomotive engines we regulate under 40 CFR part 1033.
    (d) Current-tier replacement engines for engine-based standards. 
You may introduce into U.S. commerce short blocks or other partially 
complete engines from a currently certified engine family as 
replacement components for in-use equipment powered by engines you 
originally produced. You must be able to identify all the engine models 
and model years for which the partially complete engine may properly be 
used for replacement purposes. You must label the engine as follows:
    (1) If you have a reasonable basis to believe that the fully 
assembled engine will include the original emission control information 
label, you may add a removable label to the engine with your corporate 
name and trademark and the statement: ``This replacement engine is 
exempt under 40 CFR 1068.240(d).'' This would generally apply if all 
the engine models that are compatible with the replacement engine were 
covered by a certificate of conformity and they were labeled in a 
position on the engine or equipment that is not included as part of the 
partially complete engine being shipped for replacement purposes.

[[Page 59360]]

Removable labels must meet the requirements specified in Sec.  1068.45.
    (2) If you do not qualify for using a removable label in paragraph 
(d)(1) of this section, you must add a permanent label in a readily 
visible location, though it may be obscured after installation in a 
piece of equipment. Include on the permanent label your corporate name 
and trademark, the engine's part number (or other identifying 
information), and the statement: ``This replacement engine is exempt 
under 40 CFR 1068.240(d).'' If there is not enough space for this 
statement, you may alternatively add: ``REPLACEMENT'' or ``SERVICE 
ENGINE''. For purposes of this paragraph (d)(2), engine part numbers 
permanently stamped or engraved on the engine are considered to be 
included on the label.
    (e) Current-tier replacement engines for equipment-based standards. 
In the case of equipment subject to equipment-based standards, you may 
introduce into U.S. commerce engines that are identical to engines 
covered by a current certificate of conformity demonstrating compliance 
with currently applicable standards where the engines will be installed 
as replacement engines. These engines might be fully assembled, but we 
would consider them to be partially complete engines because they are 
not yet installed in the equipment. You must be able to identify all 
the engine and equipment models and model years for which such an 
engine may properly be used for replacement purposes. Add a permanent 
or removable label to these engines as described in paragraph (d) of 
this section, except that the appropriate regulatory cite is 40 CFR 
1068.240(e).
    (f) Emission credits. Replacement engines exempted under this 
section may not generate or use emission credits under the standard-
setting part nor be part of any associated credit calculations.
    (g) Circumvention. The provisions of this section may not be used 
to circumvent emission standards that apply to new engines under the 
standard-setting part.
    (1) The provisions of this section are intended to allow for 
replacement of engines that fail prematurely if none of the following 
is true:
    (i) The engine can reasonably be repaired or rebuilt.
    (ii) A different used engine (including rebuilt engines) can be 
used, consistent with applicable regulations. Note that the regulations 
limit the use of used engines from certain categories, such as 
converting land-based engines for use in marine vessels.
    (iii) A new certified engine is available with the appropriate 
physical and performance characteristics.
    (2) Anyone installing an exempted new replacement engine is deemed 
to be a manufacturer of a new engine with respect to the prohibitions 
of Sec.  1068.101(a)(1). This applies to all engines exempted under 
this section.
    (3) The stockpiling restrictions specified in Sec.  1068.103(f) do 
not apply for engines that will be introduced into U.S. commerce only 
as allowed by this section. The model year restrictions specified in 
Sec.  1068.103(f) do not apply for engines produced under paragraphs 
(d) and (e) of this section if you can demonstrate that the engines 
will be used only as replacement engines.

  Table 1 to Sec.   1068.240--Engine Categories and Subcategories for Streamlined Compliance Provisions for New
                                               Replacement Engines
----------------------------------------------------------------------------------------------------------------
            Engine category               Standard-setting part \1\              Engine subcategories
----------------------------------------------------------------------------------------------------------------
Highway CI.............................  40 CFR part 86............  disp. < 0.6 L/cyl
                                                                     0.6 <= disp. < 1.2 L/cyl
                                                                     disp. >= 1.2 L/cyl
----------------------------------------------------------------------------------------------------------------
Nonroad CI, Stationary CI, and Marine    40 CFR part 1039, or 40     disp. < 0.6 L/cyl
 CI.                                      CFR part 1042.             0.6 <= disp. < 1.2 L/cyl
                                                                     1.2 <= disp. < 2.5 L/cyl
                                                                     2.5 <= disp. < 7.0 L/cyl
----------------------------------------------------------------------------------------------------------------
Marine SI..............................  40 CFR part 1045..........  outboard.
                                                                     personal watercraft.
----------------------------------------------------------------------------------------------------------------
Large SI, Stationary SI, and Marine SI   40 CFR part 1048 or 40 CFR  all engines.
 (sterndrive/ inboard only).              part 1045.
----------------------------------------------------------------------------------------------------------------
Recreational vehicles..................  40 CFR part 1051..........  off-highway motorcycle.
                                                                     all-terrain vehicle.
                                                                     snowmobile.
----------------------------------------------------------------------------------------------------------------
Small SI and Stationary SI.............  40 CFR part 1054..........  handheld.
                                                                     Class I.
                                                                     Class II.
----------------------------------------------------------------------------------------------------------------
\1\ Include an engine as being subject to the identified standard-setting part if it will eventually be subject
  to emission standards under that part. For example, if you certify marine compression-ignition engines under
  part 94, count those as if they were already subject to part 1042.

Sec.  1068.245  What temporary provisions address hardship due to 
unusual circumstances?

    (a) After considering the circumstances, we may permit you to 
introduce into U.S. commerce engines/equipment that do not comply with 
emission-related requirements for a limited time if all the following 
conditions apply:
    (1) Unusual circumstances that are clearly outside your control 
prevent you from meeting requirements from this chapter.
    (2) You exercised prudent planning and were not able to avoid the 
violation; you have taken all reasonable steps to minimize the extent 
of the nonconformity.
    (3) No other allowances are available under the regulations in this 
chapter to avoid the impending violation, including the provisions of 
Sec.  1068.250.
    (4) Not having the exemption will jeopardize the solvency of your 
company.

[[Page 59361]]

    (b) If your unusual circumstances are only related to compliance 
with the model-year provisions of Sec.  1068.103(f), we may grant 
hardship under this section without a demonstration that the solvency 
of your company is in jeopardy as follows:
    (1) You must demonstrate that the conditions specified in 
paragraphs (a)(1) through (3) of this section apply.
    (2) Your engines/equipment must comply with standards and other 
requirements that would have applied if assembly were completed on 
schedule.
    (3) You may generally request this exemption only for engines/
equipment for which assembly has been substantially completed; you may 
not begin assembly of any additional engines/equipment under this 
exemption after the cause for delay has occurred. We may make an 
exception to this general restriction for secondary engine 
manufacturers.
    (4) As an example, if your normal production process involves 
purchase of partially complete engines and a supplier fails to deliver 
all the ordered engines in time for your assembly according to your 
previously established schedule as a result of a fire at its factory, 
you may request that we treat those engine as if they had been 
completed on the original schedule. Note that we would grant relief 
only for those engines where you had a reasonable basis for expecting 
the engines to be delivered on time based on past performance and terms 
of purchase.
    (c) To apply for an exemption, you must send the Designated 
Compliance Officer a written request as soon as possible before you are 
in violation. In your request, show that you meet all the conditions 
and requirements in paragraph (a) of this section.
    (d) Include in your request a plan showing how you will meet all 
the applicable requirements as quickly as possible.
    (e) You must give us other relevant information if we ask for it.
    (f) We may include reasonable additional conditions on an approval 
granted under this section, including provisions to recover or 
otherwise address the lost environmental benefit or paying fees to 
offset any economic gain resulting from the exemption. For example, in 
the case of multiple tiers of emission standards, we may require that 
you meet the standards from the previous tier whether or not your 
hardship is granted under paragraph (b) of this section.
    (g) Add a permanent label to all engines/equipment exempted under 
this section, consistent with Sec.  1068.45, with at least the 
following items:
    (1) The label heading ``EMISSION CONTROL INFORMATION''.
    (2) Your corporate name and trademark.
    (3) Engine displacement (in liters or cubic centimeters), and model 
year of the engine/equipment, (as applicable); or whom to contact for 
further information. We may also require that you include maximum 
engine power.
    (4) A statement describing the engine's status as an exempted 
engine:
    (i) If the engine/equipment does not meet any emission standards, 
add one of the following statements:
    (A) ``THIS ENGINE IS EXEMPT UNDER 40 CFR 1068.245 FROM EMISSION 
STANDARDS AND RELATED REQUIREMENTS.''
    (B) ``THIS EQUIPMENT IS EXEMPT UNDER 40 CFR 1068.245 FROM EMISSION 
STANDARDS AND RELATED REQUIREMENTS.''
    (ii) If the engines/equipment meet alternate emission standards as 
a condition of an exemption under this section, we may specify a 
different statement to identify the alternate emission standards.


Sec.  1068.250  What are the provisions for extending compliance 
deadlines for small businesses under hardship?

    (a) After considering the circumstances, we may extend the 
compliance deadline for you to meet new or revised emission standards 
as long as you meet all the conditions and requirements in this 
section.
    (b) You must be a small business to be eligible for this exemption.
    (c) Send the Designated Compliance Officer a written request for an 
extension. In your request, show that all the following conditions and 
requirements apply:
    (1) You have taken all possible business, technical, and economic 
steps to comply.
    (i) In the case of importers of engines/equipment produced by other 
companies, show that you attempted to find a manufacturer capable of 
supplying complying products as soon as you became aware of the 
applicable requirements but were unable to do so.
    (ii) For all other manufacturers, show that the burden of 
compliance costs prevents you from meeting the requirements of this 
chapter.
    (2) Not having the exemption will jeopardize the solvency of your 
company.
    (3) No other allowances are available under the regulations in this 
chapter to avoid the impending violation.
    (d) In describing the steps you have taken to comply under 
paragraph (c)(1) of this section, include at least the following 
information:
    (1) Describe your business plan, showing the range of projects 
active or under consideration.
    (2) Describe your current and projected financial status, with and 
without the burden of complying fully with the applicable regulations 
in this chapter.
    (3) Describe your efforts to raise capital to comply with 
regulations in this chapter (this may not apply for importers).
    (4) Identify the engineering and technical steps you have taken or 
those you plan to take to comply with regulations in this chapter.
    (5) Identify the level of compliance you can achieve. For example, 
you may be able to produce engines/equipment that meet a somewhat less 
stringent emission standard than the regulations in this chapter 
require.
    (e) Include in your request a plan showing how you will meet all 
the applicable requirements as quickly as possible.
    (f) You must give us other relevant information if we ask for it.
    (g) An authorized representative of your company must sign the 
request and include the statement: ``All the information in this 
request is true and accurate to the best of my knowledge.''
    (h) Send your request for this extension at least nine months 
before the relevant deadline. If different deadlines apply to companies 
that are not small-volume manufacturers, do not send your request 
before the regulations in question apply to the other manufacturers. 
Otherwise, do not send your request more than three years before the 
relevant deadline.
    (i) We may include reasonable requirements on an approval granted 
under this section, including provisions to recover or otherwise 
address the lost environmental benefit. For example, we may require 
that you meet a less stringent emission standard or buy and use 
available emission credits.
    (j) We may approve extensions of the compliance deadlines as 
reasonable under the circumstances up to one model year at a time, and 
up to three years total.
    (k) Add a permanent label to all engines/equipment exempted under 
this section, consistent with Sec.  1068.45, with at least the 
following items:
    (1) The label heading ``EMISSION CONTROL INFORMATION''.
    (2) Your corporate name and trademark.
    (3) Engine displacement (in liters or cubic centimeters), and model 
year of the engine/equipment (as applicable); or

[[Page 59362]]

whom to contact for further information. We may also require that you 
include maximum engine power.
    (4) A statement describing the engine's status as an exempted 
engine:
    (i) If the engine/equipment does not meet any emission standards, 
add one of the following statements:
    (A) ``THIS ENGINE IS EXEMPT UNDER 40 CFR 1068.250 FROM EMISSION 
STANDARDS AND RELATED REQUIREMENTS.''
    (B) ``THIS EQUIPMENT IS EXEMPT UNDER 40 CFR 1068.250 FROM EMISSION 
STANDARDS AND RELATED REQUIREMENTS.''
    (ii) If the engine/equipment meets alternate emission standards as 
a condition of an exemption under this section, we may specify a 
different statement to identify the alternate emission standards.


Sec.  1068.255  What are the provisions for exempting engines and fuel-
system components for hardship for equipment manufacturers and 
secondary engine manufacturers?

    This section describes how, in unusual circumstances, we may 
approve an exemption to prevent hardship to an equipment manufacturer 
or a secondary engine manufacturer. This section does not apply to 
products that are subject to equipment-based exhaust emission 
standards.
    (a) Equipment exemption. As an equipment manufacturer, you may ask 
for approval to produce exempted equipment for up to 12 months. We will 
generally limit this to the first year that new or revised emission 
standards apply. Send the Designated Compliance Officer a written 
request for an exemption before you are in violation. In your request, 
you must show you are not at fault for the impending violation and that 
you would face serious economic hardship if we do not grant the 
exemption. This exemption is not available under this paragraph (a) if 
you manufacture the engine or fuel-system components you need for your 
own equipment, or if complying engines or fuel-system components are 
available from other manufacturers that could be used in your 
equipment, unless we allow it elsewhere in this chapter. We may impose 
other conditions, including provisions to use products meeting less 
stringent emission standards or to recover the lost environmental 
benefit. In determining whether to grant the exemptions, we will 
consider all relevant factors, including the following:
    (1) The number of engines or fuel-system components involved.
    (2) The size of your company and your ability to endure the 
hardship.
    (3) The amount of time you had to redesign your equipment to 
accommodate complying products.
    (4) Whether there was any breach of contract by a supplier.
    (5) The potential for market disruption.
    (b) Engine and fuel-system component exemption. As an engine 
manufacturer or fuel-system component manufacturer, you may produce 
nonconforming products for the equipment we exempt in paragraph (a) of 
this section. You do not have to request this exemption but you must 
have written assurance from equipment manufacturers that they need a 
certain number of exempted products under this section. Label engines 
or fuel-system components as follows, consistent with Sec.  1068.45:
    (1) Engines. Add a permanent label to all engines/equipment 
exempted under this section with at least the following items:
    (i) The label heading ``EMISSION CONTROL INFORMATION''.
    (ii) Your corporate name and trademark.
    (iii) Engine displacement (in liters or cubic centimeters) and 
model year of the engine, or whom to contact for further information. 
We may also require that you include maximum engine power.
    (iv) If the engine does not meet any emission standards: ``THIS 
ENGINE IS EXEMPT UNDER 40 CFR 1068.255 FROM EMISSION STANDARDS AND 
RELATED REQUIREMENTS.'' If the engine meets alternate emission 
standards as a condition of an exemption under this section, we may 
specify a different statement to identify the alternate emission 
standards.
    (2) Fuel-system components. Add a permanent label to all engines/
equipment exempted under this section with at least the following 
items:
    (i) Your corporate name and trademark.
    (ii) The statement ``EXEMPT UNDER 40 CFR 1068.255''.
    (c) Secondary engine manufacturers. As a secondary engine 
manufacturer, you may ask for approval to produce exempted engines 
under this section for up to 12 months. We may require you to certify 
your engines to compliance levels above the emission standards that 
apply. For example, in the case of multiple tiers of emission 
standards, we may require you to meet the standards from the previous 
tier.
    (1) The provisions in paragraph (a) of this section that apply to 
equipment manufacturers requesting an exemption apply equally to you 
except that you may manufacture the engines. Before we approve an 
exemption under this section, we will generally require that you commit 
to a plan to make up the lost environmental benefit.
    (i) If you produce uncertified engines under this exemption, we 
will calculate the lost environmental benefit based on our best 
estimate of uncontrolled emission rates for your engines.
    (ii) If you produce engines under this exemption that are certified 
to a compliance level less stringent than the emission standards that 
would otherwise apply, we will calculate the lost environmental benefit 
based on the compliance level you select for your engines.
    (2) The labeling requirements in paragraph (b) of this section 
apply to your exempted engines; however, if you certify engines to 
specific compliance levels, state on the label the compliance levels 
that apply to each engine.


Sec.  1068.260  What general provisions apply for selling or shipping 
engines that are not yet in their certified configuration?

    Except as specified in paragraph (e) of this section, all new 
engines in the United States are presumed to be subject to the 
prohibitions of Sec.  1068.101, which generally require that all new 
engines be in a certified configuration before being introduced into 
U.S. commerce. All emission-related components generally need to be 
installed on an engine for such an engine to be in its certified 
configuration. This section specifies clarifications and exemptions 
related to these requirements for engines. Except for paragraph (c) of 
this section, the provisions of this section generally apply for 
engine-based standards but not for equipment-based standards.
    (a) You may ship engines with emission-related components that are 
not yet assembled to the engine in circumstances where the final 
assembly depends on equipment design parameters and shipment of the 
fully assembled engine is impractical. For example, you may generally 
ship aftertreatment devices along with engines rather than installing 
them on the engine before shipment. You do not need an exemption to 
ship an engine under this paragraph (a) but we may require you to 
describe how you plan to use this provision in your application for 
certification.
    (b) You do not need an exemption to ship engines without specific 
components if they are not emission-related components identified in 
Appendix I of this part. For example, you may generally ship engines 
without radiators needed to cool the engine. You may ask us at the time 
of certification to allow you to ship your engines without other 
equipment-related

[[Page 59363]]

components (such as a vehicle speed sensor) that are described in your 
application for certification. If we allow it, we may specify 
conditions that we determine are needed to ensure that shipping the 
engine without such components will not result in the engine being 
operated outside of its certified configuration.
    (c) If you are a certificate holder, you may ask us to provide a 
temporary exemption to allow you to ship or transport partially 
complete engines between two of your facilities as long as you maintain 
ownership and control of the engines until they reach their 
destination. We may also allow this where you do not maintain actual 
ownership and control of the engines (such as hiring a shipping company 
to transport the engines) but only if you demonstrate that the engines 
will be transported only according to your specifications. See Sec.  
1068.261(b) for the provisions that apply instead of this paragraph (c) 
for the special case of integrated manufacturers using the delegated-
assembly exemption. Send your request for this exemption to the 
Designated Compliance Officer in your application for certification, if 
applicable; in this case, your exemption is approved when we grant your 
certificate. You may send your request in a separate submission if you 
will not be the certificate holder for the engines in question. We may 
require you to take specific steps to ensure that such engines are in a 
certified configuration before reaching the ultimate purchaser. Note 
that since this is a temporary exemption, it does not allow you to sell 
or otherwise distribute to ultimate purchasers an engine in an 
uncertified configuration. Note also that the exempted engine remains 
new and subject to emission standards (see definition of ``exempted'' 
in Sec.  1068.30) until its title is transferred to the ultimate 
purchaser or it otherwise ceases to be new.
    (d) See Sec.  1068.261 for delegated-assembly provisions in which 
certificate-holding manufacturers introduce into U.S. commerce engines 
that are not yet equipped with certain emission-related components. See 
Sec.  1068.262 for provisions related to manufacturers introducing into 
U.S. commerce partially complete engines for which a secondary engine 
manufacturer holds the certificate of conformity.
    (e) Engines used in hobby vehicles are not presumed to be engines 
subject to the prohibitions of Sec.  1068.101. Hobby vehicles are 
reduced-scale models of vehicles that are not capable of transporting a 
person. Other engines that do not have a valid certificate of 
conformity or exemption when introduced into U.S. commerce are presumed 
to be engines subject to the prohibitions of Sec.  1068.101 unless we 
determine that such engines are excluded from the prohibitions of Sec.  
1068.101.
    (f) While we presume that new nonhobby engines are subject to the 
prohibitions of Sec.  1068.101, we may determine that a specific engine 
is not subject to these prohibitions based on information you provide 
or other information that is available to us. For example, the 
provisions of this part 1068 and the standard-setting parts provide for 
exemptions in certain circumstances. Also, some engines are subject to 
separate prohibitions under subchapter C instead of the prohibitions of 
Sec.  1068.101 (see for example, 40 CFR 89.1003).


Sec.  1068.261  What provisions apply for selling or shipping certified 
engines that are not yet in the certified configuration?

    This section describes an exemption that allows certificate holders 
to sell or ship engines that are missing certain emission-related 
components if those components will be installed by an equipment 
manufacturer. This section does not apply to equipment subject to 
equipment-based standards. See the standard-setting part to determine 
whether and how the provisions of this section apply. (Note: See Sec.  
1068.262 for provisions related to manufacturers introducing into U.S. 
commerce partially complete engines for which someone else holds the 
certificate of conformity.) This exemption is temporary as described in 
paragraph (f) of this section.
    (a) Shipping an engine separately from an aftertreatment component 
that you have specified as part of its certified configuration will not 
be a violation of the prohibitions in Sec.  1068.101(a)(1) subject to 
the provisions in this section.
    (b) If you manufacture engines and install them in equipment you 
also produce, you must take steps to ensure that your facilities, 
procedures, and production records are set up to ensure that equipment 
and engines are assembled in their proper certified configurations. For 
example, you may demonstrate compliance with the requirements of this 
section by maintaining a database showing how you pair aftertreatment 
components with the appropriate engines such that the final product is 
in its certified configuration.
    (c) If you include the price of all aftertreatment components in 
the price of the engine and ship the aftertreatment components directly 
to the equipment manufacturer, or arrange for separate shipment by the 
component manufacturer to the equipment manufacturer, all the following 
conditions apply:
    (1) Apply for and receive a certificate of conformity for the 
engine and its emission control system before shipment as described in 
the standard-setting part. For an existing certificate of conformity, 
amend the application for certification by describing your plans to use 
the provisions of this section as described in paragraph (c)(8) of this 
section.
    (2) Provide installation instructions in enough detail to ensure 
that the engine will be in its certified configuration if someone 
follows these instructions. Provide the installation instructions in a 
timely manner, generally directly after you receive an order for 
shipping engines or earlier. If you apply removable labels as described 
in paragraph (c)(7)(i) of this section, include an instruction for the 
equipment manufacturer to remove the label after installing the 
appropriate aftertreatment component.
    (3) Have a contractual agreement with the equipment manufacturer 
obligating the equipment manufacturer to complete the final assembly of 
the engine so it is in its certified configuration when final assembly 
is complete. This agreement must also obligate the equipment 
manufacturer to provide the affidavits required under paragraph (c)(4) 
of this section.
    (4) Take appropriate additional steps to ensure that all engines 
will be in a certified configuration when installed by the equipment 
manufacturer. At a minimum, you must obtain annual affidavits from 
every equipment manufacturer to which you sell engines under this 
section. Include engines that you sell to distributors or dealers. The 
affidavits must list the part numbers of the aftertreatment devices 
that equipment manufacturers install on each engine they purchase from 
you under this section and include confirmation that the number of 
aftertreatment devices received were sufficient for the number of 
engines involved.
    (5) Describe in your application for certification how you plan to 
use the provisions of this section and any steps you plan to take under 
paragraph(c)(4) of this section.
    (6) Keep records to document how many engines you produce under 
this exemption. Also, keep records to document your contractual 
agreements under paragraph (c)(3) of this section. Keep all these 
records for five years after

[[Page 59364]]

the end of the applicable model year and make them available to us upon 
request.
    (7) Make sure the engine has the emission control information label 
we require under the standard-setting part. Include additional labeling 
using one of the following approaches:
    (i) Apply an additional removable label in a way that makes it 
unlikely that the engine will be installed in equipment other than in 
its certified configuration. The label must identify the engine as 
incomplete and include a clear statement that failing to install the 
aftertreatment device, or otherwise failing to bring the engine into 
its certified configuration, is a violation of federal law subject to 
civil penalty.
    (ii) Add the statement ``DELEGATED ASSEMBLY'' to the permanent 
emission control information label. You may alternatively add the 
abbreviated statement ``DEL ASSY'' if there is not enough room on the 
label.
    (8) Describe the following things in your application for 
certification:
    (i) How you plan to use the provisions of this section.
    (ii) A detailed plan for auditing equipment manufacturers, as 
described in paragraph (d)(3) of this section, if applicable.
    (iii) All other steps you plan to take under paragraph (c)(4) of 
this section.
    (9) If one of your engines produced under this section is selected 
for production-line testing or a selective enforcement audit, you must 
arrange to get a randomly selected aftertreatment component from either 
the equipment manufacturer or the equipment manufacturer's supplier. 
You may keep an inventory of these randomly selected parts, consistent 
with good engineering judgment and the intent of this section. You may 
obtain such aftertreatment components from any point in the normal 
distribution from the aftertreatment component manufacturer to the 
equipment manufacturer. Keep records describing how you randomly 
selected these aftertreatment components, consistent with the 
requirements specified in the standard-setting part.
    (10) Note that for purposes of importation, you may itemize your 
invoice to identify separate costs for engines and aftertreatment 
components that will be shipped separately. A copy of your invoice from 
the aftertreatment manufacturer may be needed to avoid payment of 
importation duties for the engine that also include the value of 
aftertreatment components.
    (d) If you do not include the price of all aftertreatment 
components in the price of the engine, you must meet all the conditions 
described in paragraphs (c)(1) through (9) of this section, with the 
following additional provisions:
    (1) The contractual agreement described in paragraph (c)(3) of this 
section must include a commitment that the equipment manufacturer will 
do the following things:
    (i) Purchase the aftertreatment components you have specified in 
your application for certification and keep records to document these 
purchases.
    (ii) Cooperate with the audits described in paragraph (d)(3) of 
this section.
    (2) You must have written confirmation that the equipment 
manufacturer has ordered the appropriate type of aftertreatment 
components for an initial shipment of engines under this section. For 
the purpose of this paragraph (d)(2), initial shipment means the first 
shipment of engines that are subject to new or more stringent emissions 
standard (or the first shipment of engines using the provisions of this 
section) to a given equipment manufacturer for a given engine family. 
For the purpose of this paragraph (d)(2), you may treat as a single 
engine family those engine families from different model years that 
differ only with respect to model year or other characteristics 
unrelated to emissions. You must receive the written confirmation 
within 30 days after shipment. If you do not receive written 
confirmation within 30 days, you may not ship any more engines from 
that engine family to that equipment manufacturer until you have the 
written confirmation. Note that it may be appropriate to obtain 
subsequent written confirmations to ensure compliance with this 
section, as described in paragraph (c)(4) of this section.
    (3) You must perform or arrange for audits of equipment 
manufacturers as follows:
    (i) If you sell engines to 16 or more equipment manufacturers under 
the provisions of this section, you must annually perform or arrange 
for audits of four equipment manufacturers to whom you sell engines 
under this section. To select individual equipment manufacturers, 
divide all the affected equipment manufacturers into quartiles based on 
the number of engines they buy from you; select a single equipment 
manufacturer from each quartile each model year. Vary the equipment 
manufacturers selected for auditing from year to year, though you may 
repeat an audit in a later model year if you find or suspect that a 
particular equipment manufacturer is not properly installing 
aftertreatment devices.
    (ii) If you sell engines to fewer than 16 equipment manufacturers 
under the provisions of this section, set up a plan to perform or 
arrange for audits of each equipment manufacturer on average once every 
four model years.
    (iii) Starting with the 2019 model year, if you sell engines to 
fewer than 40 equipment manufacturers under the provisions of this 
section, you may ask us to approve a reduced auditing rate. We may 
approve an alternate plan that involves audits of each equipment 
manufacturer on average once every ten model years as long as you show 
that you have met the auditing requirements in preceding years without 
finding noncompliance or improper procedures.
    (iv) To meet these audit requirements, you or your agent must at a 
minimum inspect the assembling companies' procedures and production 
records to monitor their compliance with your instructions, investigate 
some assembled engines, and confirm that the number of aftertreatment 
devices shipped were sufficient for the number of engines produced.
    (v) You must keep records of these audits for five years after the 
end of the applicable model year.
    (e) The following provisions apply if you ship engines without air 
filters or other portions of the air intake system that are 
specifically identified by part number (or other specific part 
reference) in the application for certification such that the shipped 
engine is not in its certified configuration. You do not need an 
exemption under this section to ship engines without air intake system 
components if you instead describe in your installation instructions 
how equipment manufacturers should use components meeting certain 
functional specifications.
    (1) If you are using the provisions of this section to ship an 
engine without aftertreatment, apply all the provisions of this section 
to ensure that each engine, including its intake system, is in its 
certified configuration before it reaches the ultimate purchaser.
    (2) If you are not using the provisions of this section to ship an 
engine without aftertreatment, shipping an engine without air-intake 
components that you have specified as part of its certified 
configuration will not be a violation of the prohibitions in Sec.  
1068.101(a) if you follow the provisions specified in paragraph (b) or 
paragraphs (c)(1) through (9) of this section. If we find there is a 
problem, we may require you to perform audits as specified in paragraph 
(d)(3) of this section.
    (f) Once the equipment manufacturer takes possession of an engine 
exempted under this section and the engine

[[Page 59365]]

reaches the point of final equipment assembly, the exemption expires 
and the engine is subject to all the prohibitions in Sec.  1068.101. 
Note that the engine's model year does not change based on the date the 
equipment manufacturer adds the aftertreatment device and/or air filter 
under this section.
    (g) You may use the provisions of this section for engines you sell 
to a distributor as described in this paragraph (g) using one of the 
following approaches:
    (1) You may sell engines through a distributor if you comply with 
the provisions of paragraph (d) of this section with respect to the 
equipment manufacturer.
    (2) You may treat the distributor as the equipment manufacturer as 
described in this paragraph (g)(2) for all applicable requirements and 
prohibitions. Such distributors must bring engines into their final 
certified configuration. This may include shipping the engine with the 
appropriate aftertreatment device and/or air filter, but without 
completing the assembly with all the components. The exemptions expire 
for such engines when the distributor no longer has control of them.
    (h) You must notify us within 15 days if you find from an audit or 
another source that engines produced under this section are not in a 
certified configuration at the point of final assembly or that an 
equipment manufacturer has otherwise failed to meet its obligations 
under this section. If this occurs, send us a report describing the 
circumstances related to the noncompliance within 75 days after you 
notify us.
    (i) We may suspend, revoke, or void an exemption under this 
section, as follows:
    (1) We may suspend or revoke your exemption for a specific 
equipment manufacturer if any of the engines are not in a certified 
configuration after installation in that manufacturer's equipment, or 
if we determine that the equipment manufacturer has otherwise failed to 
comply with the requirements of this section. We may also suspend or 
revoke your exemption for other engine families with respect to the 
equipment manufacturer unless you demonstrate that the noncompliance is 
limited to a specific engine family. You may not use this exemption for 
future shipments to the affected equipment manufacturer without taking 
action beyond the minimum steps specified in this section, such as 
performing on-site audits. We will approve further use of this 
exemption only if you convince us that you have adequately addressed 
the factors causing the noncompliance.
    (2) We may suspend or revoke your exemption for the entire engine 
family if we determine that you have failed to comply with the 
requirements of this section. If we make an adverse decision with 
respect to the exemption for any of your engine families under this 
paragraph (i), this exemption will not apply for future certificates 
unless you convince us that the factors causing the noncompliance do 
not apply to the other engine families. We may also set additional 
conditions beyond the provisions specified in this section.
    (3) We may void your exemption for the entire engine family if you 
intentionally submit false or incomplete information or fail to keep 
and provide to EPA the records required by this section. Note that all 
records and reports required under this section (whether generated by 
the engine manufacturer, equipment manufacturer, or others) are subject 
to the prohibition in Sec.  1068.101(a)(2), which prohibits the 
submission of false or incomplete information. For example, the 
affidavits required by this section are considered a submission.
    (j) You are liable for the in-use compliance of any engine that is 
exempt under this section.
    (k) It is a violation of Sec.  1068.101(a)(1) for any person to 
introduce into U.S. commerce a previously exempted engine, including as 
part of a piece of equipment, without complying fully with the 
installation instructions.


Sec.  1068.262  What are the provisions for temporarily exempting 
engines for shipment to secondary engine manufacturers?

    This section specifies when manufacturers may introduce into U.S. 
commerce partially complete engines that have an exemption or a 
certificate of conformity held by a secondary engine manufacturer and 
are not yet in a certified configuration. See the standard-setting part 
to determine whether and how the provisions of this section apply. 
(Note: See Sec.  1068.261 for provisions related to manufacturers 
introducing into U.S. commerce partially complete engines for which 
they hold the certificate of conformity.) This exemption is temporary 
as described in paragraph (g) of this section.
    (a) The provisions of this section generally apply where the 
secondary engine manufacturer has substantial control over the design 
and assembly of emission controls. In determining whether a 
manufacturer has substantial control over the design and assembly of 
emission controls, we would consider the degree to which the secondary 
engine manufacturer would be able to ensure that the engine will 
conform to the regulations in its final configuration. Such secondary 
engine manufacturers may finish assembly of partially complete engines 
in the following cases:
    (1) You obtain an engine that is not fully assembled with the 
intent to manufacture a complete engine.
    (2) You obtain an engine with the intent to modify it before it 
reaches the ultimate purchaser.
    (3) You obtain an engine with the intent to install it in equipment 
that will be subject to equipment-based standards.
    (b) Manufacturers may introduce into U.S. commerce partially 
complete engines as described in this section if they have a written 
request for such engines from a secondary engine manufacturer that has 
certified the engine and will finish the engine assembly. The written 
request must include a statement that the secondary engine manufacturer 
has a certificate of conformity for the engine and identify a valid 
engine family name associated with each engine model ordered (or the 
basis for an exemption if applicable, as specified in paragraph (e) of 
this section). The original engine manufacturer must apply a removable 
label meeting the requirements of Sec.  1068.45 that identifies the 
corporate name of the original manufacturer and states that the engine 
is exempt under the provisions of Sec.  1068.262. The name of the 
certifying manufacturer must also be on the label or, alternatively, on 
the bill of lading that accompanies the engines during shipment. The 
original engine manufacturer may not apply a permanent emission control 
information label identifying the engine's eventual status as a 
certified engine.
    (c) The manufacturer that will hold the certificate must include 
the following information in its application for certification:
    (1) Identify the original engine manufacturer of the partially 
complete engine or of the complete engine you will modify.
    (2) Describe briefly how and where final assembly will be 
completed. Specify how you have the ability to ensure that the engines 
will conform to the regulations in their final configuration. (Note: 
Paragraph (a) of this section prohibits using the provisions of this 
section unless you have substantial control over the design and 
assembly of emission controls.)
    (3) State unconditionally that you will not distribute the engines 
without conforming to all applicable regulations.

[[Page 59366]]

    (d) If you are a certificate holder, you may receive shipment of 
partially complete engines after you apply for a certificate of 
conformity but before the certificate's effective date. In this case, 
all the provisions of Sec.  1068.103(c)(1) through (3) apply. This 
exemption allows the original manufacturer to ship engines after you 
have applied for a certificate of conformity. Manufacturers may 
introduce into U.S. commerce partially complete engines as described in 
this paragraph (d) if they have a written request for such engines from 
a secondary engine manufacturer stating that the application for 
certification has been submitted (instead of the information we specify 
in paragraph (b) of this section). We may set additional conditions 
under this paragraph (d) to prevent circumvention of regulatory 
requirements. Consistent with Sec.  1068.103(c), we may also revoke an 
exemption under this paragraph (d) if we have reason to believe that 
the application for certification will not be approved or that the 
engines will otherwise not reach a certified configuration before 
reaching the ultimate purchaser. This may require that you export the 
engines.
    (e) The provisions of this section also apply for shipping 
partially complete engines if the engine is covered by a valid 
exemption and there is no valid engine family name that could be used 
to represent the engine model. Unless we approve otherwise in advance, 
you may do this only when shipping engines to secondary engine 
manufacturers that are certificate holders. In this case, the secondary 
engine manufacturer must identify the regulatory cite identifying the 
applicable exemption instead of a valid engine family name when 
ordering engines from the original engine manufacturer.
    (f) If secondary engine manufacturers determine after receiving an 
engine under this section that the engine will not be covered by a 
certificate or exemption as planned, they may ask us to allow for 
shipment of the engines back to the original engine manufacturer or to 
another secondary engine manufacturer. This might occur in the case of 
an incorrect shipment or excess inventory. We may modify the provisions 
of this section as appropriate to address these cases.
    (g) Both original and secondary engine manufacturers must keep the 
records described in this section for at least five years, including 
the written request for engines and the bill of lading for each 
shipment (if applicable). The written request is deemed to be a 
submission to EPA and is thus subject to the reporting requirements of 
40 CFR 1068.101(a)(2).
    (h) These provisions are intended only to allow you to obtain or 
transport engines in the specific circumstances identified in this 
section so any exemption under this section expires when the engine 
reaches the point of final assembly identified in accordance paragraph 
(c)(2) of this section.
    (i) For purposes of this section, an allowance to introduce engines 
into U.S. commerce includes a conditional allowance to sell, introduce, 
or deliver such partially complete engines into commerce in the United 
States or import them into the United States. It does not include a 
general allowance to offer such partially complete engines for sale 
because this exemption is intended to apply only for cases in which the 
certificate holder already has an arrangement to purchase the engines 
from the original engine manufacturer. This exemption does not allow 
the original engine manufacturer to subsequently offer the engines for 
sale to a different manufacturer who will hold the certificate unless 
that second manufacturer has also complied with the requirements of 
this part. The exemption does not apply for any individual engines that 
are not labeled as specified in this section or which are shipped to 
someone who is not a certificate holder.
    (j) We may suspend, revoke, or void an exemption under this 
section, as follows:
    (1) We may suspend or revoke your exemption if you fail to meet the 
requirements of this section. We may suspend or revoke your exemption 
for a specific secondary engine manufacturer if that manufacturer sells 
engines that are in not in a certified configuration in violation of 
the regulations. We may disallow this exemption for future shipments to 
the affected secondary engine manufacturer or set additional conditions 
to ensure that engines will be assembled in the certified 
configuration.
    (2) We may void your exemption for all the affected engines if you 
intentionally submit false or incomplete information or fail to keep 
and provide to EPA the records required by this section.
    (3) The exemption is void for an engine that is shipped to a 
company that is not a certificate holder or for an engine that is 
shipped to a secondary engine manufacturer that is not in compliance 
with the requirements of this section.
    (k) No exemption is needed to import equipment that does not 
include an engine. No exemption is available under this section for 
equipment subject to equipment-based standards if the engine has been 
installed.


Sec.  1068.265  What provisions apply to engines/equipment that are 
conditionally exempted from certification?

    In some cases, exempted engines may need to meet alternate emission 
standards as a condition of the exemption. For example, replacement 
engines exempted under Sec.  1068.240 in many cases need to meet the 
same standards as the engines they are replacing. The standard-setting 
part may similarly exempt engines/equipment from all certification 
requirements, or allow us to exempt engines/equipment from all 
certification requirements for certain cases, but require the engines/
equipment to meet alternate standards. In these cases, all the 
following provisions apply:
    (a) Your engines/equipment must meet the alternate standards we 
specify in (or pursuant to) the exemption section, and all other 
requirements applicable to engines/equipment that are subject to such 
standards.
    (b) You need not apply for and receive a certificate for the exempt 
engines/equipment. However, you must comply with all the requirements 
and obligations that would apply to the engines/equipment if you had 
received a certificate of conformity for them unless we specifically 
waive certain requirements.
    (c) You must have emission data from test engines/equipment using 
the appropriate procedures that demonstrate compliance with the 
alternate standards unless the engines/equipment are identical in all 
material respects to engines/equipment that you have previously 
certified to standards that are the same as, or more stringent than, 
the alternate standards. Note that ``engines/equipment that you have 
previously certified'' does not include any engines/equipment initially 
covered by a certificate that was later voided or otherwise 
invalidated, or engines/equipment that we have determined did not fully 
conform to the regulations.
    (d) See the provisions of the applicable exemption for labeling 
instructions, including those related to the compliance statement and 
other modifications to the label otherwise required in the standard-
setting part. If we do not identify specific labeling requirements for 
an exempted engine, you must meet the labeling requirements in the 
standard-setting part, with the following exceptions:
    (1) Modify the family designation by eliminating the character that 
identifies the model year.

[[Page 59367]]

    (2) We may also specify alternative language to replace the 
compliance statement otherwise required in the standard-setting part.
    (e) You may not generate emission credits for averaging, banking, 
or trading with engines/equipment meeting requirements under the 
provisions of this section.
    (f) Keep records to show that you meet the alternate standards as 
follows:
    (1) If your exempted engines/equipment are identical to previously 
certified engines/equipment, keep your most recent application for 
certification for the certified family.
    (2) If you previously certified a similar family, but have modified 
the exempted engines/equipment in a way that changes them from their 
previously certified configuration, keep your most recent application 
for certification for the certified family, a description of the 
relevant changes, and any test data or engineering evaluations that 
support your conclusions.
    (3) If you have not previously certified a similar family, keep all 
the records we specify for the application for certification and any 
additional records the standard-setting part requires you to keep.
    (g) We may require you to send us an annual report of the engines/
equipment you produce under this section.

Subpart D--Imports


Sec.  1068.301  What general provisions apply?

    (a) This subpart applies to you if you import into the United 
States engines or equipment subject to EPA emission standards or 
equipment containing engines subject to EPA emission standards.
    (b) In general, engines/equipment that you import must be covered 
by a certificate of conformity unless they were built before emission 
standards started to apply. This subpart describes the limited cases 
where we allow importation of exempt or excluded engines/equipment. For 
equipment not subject to equipment-based exhaust emission standards, an 
exemption of the engine allows you to import the equipment.
    (c) U.S. Customs and Border Protection may prevent you from 
importing engines or equipment if you do not meet the requirements of 
this subpart. In addition, U.S. Customs and Border Protection 
regulations may contain other requirements for engines/equipment 
imported into the United States (see 19 CFR Chapter I).
    (d) Complete the appropriate EPA declaration form before importing 
any engines or equipment. These forms are available on the Internet at 
http://www.epa.gov/OTAQ/imports/ or by phone at 734-214-4100. Importers 
must keep the forms for five years and make them available promptly 
upon request.


Sec.  1068.305  How do I get an exemption or exclusion for imported 
engines/equipment?

    (a) You must meet the requirements of the specific exemption or 
exclusion you intend to use, including any labeling requirements that 
apply, and complete the appropriate declaration form described in Sec.  
1068.301(d).
    (b) If we ask for it, prepare a written request in which you do the 
following:
    (1) Give your name, address, telephone number, and taxpayer 
identification number.
    (2) Give the engine/equipment owner's name, address, telephone 
number, and taxpayer identification number.
    (3) Identify the make, model, identification number, and original 
production year of all engines/equipment.
    (4) Identify which exemption or exclusion in this subpart allows 
you to import nonconforming engines/equipment and describe how your 
engine/equipment qualifies.
    (5) Tell us where you will keep your engines/equipment if you might 
need to store them until we approve your request.
    (6) Authorize us to inspect or test your engines/equipment as the 
Clean Air Act allows.
    (c) We may ask for more information.
    (d) You may import the nonconforming engines/equipment you identify 
in your request if you get prior written approval from us. U.S. Customs 
and Border Protection may require you to present the approval letter. 
We may temporarily or permanently approve the exemptions or exclusions, 
as described in this subpart.


Sec.  1068.310  What are the exclusions for imported engines/equipment?

    If you show us that your engines/equipment qualify under one of the 
paragraphs of this section, we will approve your request to import such 
excluded engines/equipment. You must have our approval before importing 
engines/equipment under paragraph (a) of this section. You may, but are 
not required to request our approval to import the engines/equipment 
under paragraph (b) through (c) of this section. The following engines/
equipment are excluded:
    (a) Engines/equipment used solely for competition. Engines/
equipment that you demonstrate will be used solely for competition are 
excluded from the restrictions on imports in Sec.  1068.301(b), but 
only if they are properly labeled. See the standard-setting part for 
provisions related to this demonstration. Section 1068.101(b)(4) 
prohibits anyone from using these excluded engines/equipment for 
purposes other than competition.
    (b) Stationary engines. The definition of nonroad engine in Sec.  
1068.30 does not include certain engines used in stationary 
applications. Such engines (and equipment containing such engines) may 
be subject to the standards of 40 CFR part 60. Engines that are 
excluded from the definition of nonroad engine in this part and are not 
required to be certified to standards under 40 CFR part 60 are not 
subject to the restrictions on imports in Sec.  1068.301(b), but only 
if they are properly labeled and there is clear and convincing evidence 
that each engine will be used in a stationary application (see 
paragraph (2)(iii) of the definition of ``Nonroad engine''). Section 
1068.101 restricts the use of stationary engines for non-stationary 
purposes unless they are certified under 40 CFR part 60 to the same 
standards that would apply to nonroad engines for the same model year.
    (c) Hobby engines. The standard-setting parts exclude engines used 
in reduced-scale models of vehicles that are not capable of 
transporting a person.
    (d) Other engines/equipment. The standard-setting parts may exclude 
engines/equipment used in certain applications. For example, engines 
used in aircraft are generally excluded. Engines/equipment used in 
underground mining are excluded if they are regulated by the Mine 
Safety and Health Administration.
    (e) Labeling. For engines/equipment imported under paragraph (a) or 
(b) of this section, you must add a permanent label, consistent with 
Sec.  1068.45, with at least the following items unless the standard-
setting part includes other specific labeling requirements or we 
approve alternate label language that is more accurate for your engine/
equipment:
    (1) Include the heading ``EMISSION CONTROL INFORMATION''.
    (2) Include your full corporate name and trademark.
    (3) State the engine displacement (in liters or cubic centimeters). 
We may also require that you include maximum engine power. If the 
engine's power is not established, state the approximate power.
    (4) State: ``THIS ENGINE IS EXEMPT FROM THE REQUIREMENTS OF 
[identify the part referenced in Sec.  1068.1(a) that would otherwise 
apply],

[[Page 59368]]

AS PROVIDED IN [identify the paragraph authorizing the exemption (for 
example, ``40 CFR 1068.315(a)'')]. INSTALLING THIS ENGINE IN ANY 
DIFFERENT APPLICATION MAY BE A VIOLATION OF FEDERAL LAW SUBJECT TO 
CIVIL PENALTY.''


Sec.  1068.315  What are the permanent exemptions for imported engines/
equipment?

    We may approve a permanent exemption from the restrictions on 
imports under Sec.  1068.301(b) under the following conditions:
    (a) National security exemption. You may import an engine or piece 
of equipment under the national security exemption in Sec.  1068.225, 
but only if it is properly labeled.
    (b) Manufacturer-owned engine/equipment exemption. You may import 
manufacturer-owned engines/equipment, as described in Sec.  1068.215.
    (c) Replacement engine exemption. You may import a nonconforming 
replacement engine as described in Sec.  1068.240. To use this 
exemption, you must be a certificate holder for a family we regulate 
under the same part as the replacement engine.
    (d) Extraordinary circumstances exemption. You may import a 
nonconforming engine or piece of equipment if we grant hardship relief 
as described in Sec.  1068.245.
    (e) Small-volume manufacturer exemption. You may import a 
nonconforming engine or piece of equipment if we grant hardship relief 
for a small-volume manufacturer, as described in Sec.  1068.250.
    (f) Equipment-manufacturer hardship exemption. You may import a 
nonconforming engine if we grant an exemption for the transition to new 
or revised emission standards, as described in Sec.  1068.255.
    (g) [Reserved]
    (h) Identical configuration exemption. Unless specified otherwise 
in the standard-setting part, you may import nonconforming engines/
equipment if they are identical to certified engines/equipment produced 
by the same manufacturer, subject to the following provisions:
    (1) You must meet all the following criteria:
    (i) You have owned the engines/equipment for at least six months.
    (ii) You agree not to sell, lease, donate, trade, or otherwise 
transfer ownership of the engines/equipment for at least five years. 
During this period, the only acceptable way to dispose of the engines/
equipment is to destroy or export them.
    (iii) You use data or evidence sufficient to show that the engines/
equipment are in a configuration that is identical to engines/equipment 
the original manufacturer has certified to meet emission standards that 
apply at the time the manufacturer finished assembling or modifying the 
engines/equipment in question. If you modify the engines/equipment to 
make them identical, you must completely follow the original 
manufacturer's written instructions.
    (2) We will tell you in writing if we find the information 
insufficient to show that the engines/equipment are eligible for this 
exemption. In this case, we will not consider your request further 
until you address our concerns.
    (i) Ancient engine/equipment exemption. If you are not the original 
engine/equipment manufacturer, you may import nonconforming engines/
equipment that are subject to a standard-setting part and were first 
manufactured at least 21 years earlier, as long as they are still in 
their original configurations.


Sec.  1068.325  What are the temporary exemptions for imported engines/
equipment?

    You may import engines/equipment under certain temporary 
exemptions, subject to the conditions in this section. We may ask U.S. 
Customs and Border Protection to require a specific bond amount to make 
sure you comply with the requirements of this subpart. You may not sell 
or lease one of these engines/equipment while it is in the United 
States. You must eventually export the engine/equipment as we describe 
in this section unless it conforms to a certificate of conformity or it 
qualifies for one of the permanent exemptions in Sec.  1068.315.
    (a) Exemption for repairs or alterations. You may temporarily 
import nonconforming engines/equipment under bond solely for repair or 
alteration, subject to our advance approval as described in paragraph 
(j) of this section. You may operate the engine/equipment in the United 
States only as necessary to repair it, alter it, or ship it to or from 
the service location. Export the engine/equipment directly after 
servicing is complete.
    (b) Testing exemption. You may temporarily import nonconforming 
engines/equipment under bond for testing if you follow the requirements 
of Sec.  1068.210, subject to our advance approval as described in 
paragraph (j) of this section. You may operate the engines/equipment in 
the United States only as needed to perform tests. This exemption 
expires one year after you import the engine/equipment unless we 
approve an extension. The engine/equipment must be exported before the 
exemption expires.
    (c) Display exemption. You may temporarily import nonconforming 
engines/equipment under bond for display if you follow the requirements 
of Sec.  1068.220, subject to our advance approval as described in 
paragraph (j) of this section. This exemption expires one year after 
you import the engine/equipment, unless we approve your request for an 
extension. We may approve an extension of up to one more year for each 
request, but no more than three years total. The engine/equipment must 
be exported by the time the exemption expires or directly after the 
display concludes, whichever comes first.
    (d) Export exemption. You may temporarily import nonconforming 
engines/equipment to export them, as described in Sec.  1068.230. You 
may operate the engine/equipment in the United States only as needed to 
prepare it for export. Label the engine/equipment as described in Sec.  
1068.230.
    (e) Diplomatic or military exemption. You may temporarily import 
nonconforming engines/equipment without bond if you represent a foreign 
government in a diplomatic or military capacity. In your request to the 
Designated Compliance Officer (see Sec.  1068.305), include either 
written confirmation from the U.S. State Department that you qualify 
for this exemption or a copy of your orders for military duty in the 
United States. We will rely on the State Department or your military 
orders to determine when your diplomatic or military status expires, at 
which time you must export your exempt engines/equipment.
    (f) Delegated-assembly exemption. You may import a nonconforming 
engine for final assembly under the provisions of Sec.  1068.261.
    (g) Partially complete engine exemption. You may import an engine 
if another company already has a certificate of conformity and will be 
modifying the engine to be in its final, certified configuration under 
the provisions of Sec.  1068.262. You may also import a partially 
complete engine by shipping it from one of your facilities to another 
under the provisions of Sec.  1068.260(c).
    (h) [Reserved]
    (i) Approvals. For the exemptions in this section requiring our 
approval, you must send a request to the Designated Compliance Officer 
before importing the engines/equipment. We will approve your request if 
you meet all the applicable requirements and conditions. If another 
section separately requires that you request approval for the

[[Page 59369]]

exemption, you may combine the information requirements in a single 
request. Include the following information in your request:
    (1) Identify the importer of the engine/equipment and the 
applicable postal address, e-mail address, and telephone number.
    (2) Identify the engine/equipment owner and the applicable postal 
address, e-mail address, and telephone number.
    (3) Identify the engine/equipment by model number (or name), serial 
number, and original production year.
    (4) Identify the specific regulatory provision under which you are 
seeking an exemption.
    (5) Authorize EPA enforcement officers to conduct inspections or 
testing as allowed under the Clean Air Act.
    (6) Include any additional information we specify for demonstrating 
that you qualify for the exemption.


Sec.  1068.335  What are the penalties for violations?

    (a) All imported engines/equipment. Unless you comply with the 
provisions of this subpart, importation of nonconforming engines/
equipment violates sections 203 and 213(d) of the Clean Air Act (42 
U.S.C. 7522 and 7547(d)). You may then have to export the engines/
equipment, pay civil penalties, or both. U.S. Customs and Border 
Protection may seize unlawfully imported engines and equipment.
    (b) Temporarily imported engines/equipment. If you do not comply 
with the provisions of this subpart for a temporary exemption under 
Sec.  1068.325, you may forfeit the total amount of the bond in 
addition to the sanctions we identify in paragraph (a) of this section. 
We will consider an engine or piece of equipment to be exported if it 
has been destroyed or delivered to U.S. Customs and Border Protection 
for export or other disposition under applicable Customs laws and 
regulations. EPA or U.S. Customs and Border Protection may offer you a 
grace period to allow you to export temporarily exempted engines/
equipment without penalty after the exemption expires.


Sec.  1068.360  What restrictions apply to assigning a model year to 
imported engines and equipment?

    This section includes limitations on assigning a model year to 
engines and equipment that are imported in a year later than the model 
year in which they were manufactured, except as specified in paragraph 
(e) of this section.
    (a) The term ``model year'' is defined in each of the standard-
setting parts. These definitions may vary slightly to address the 
different categories of engines and equipment. Except as specified in 
paragraphs (b) and (c) of this section, the emission standards and 
other emission-related requirements that apply for an imported engine 
or piece of equipment are determined by the model year as defined in 
the applicable standard-setting part and the provisions of 40 CFR 
1068.105(a).
    (b) This paragraph (b) applies for the importation of new engines 
and new equipment in any calendar year that is more than one year after 
the named model year of the engine or equipment when emission control 
requirements applying to current engines are different than for engines 
or equipment in the named model year, unless they are imported under 
special provisions for Independent Commercial Importers as allowed 
under the standard-setting part. Regardless of what other provisions of 
this subchapter U specify for the model year of the engine or 
equipment, such engines and equipment are deemed to have an applicable 
model year no more than one year earlier than the calendar year in 
which they are imported. For example, a new engine identified as a 2007 
model-year product that is imported on January 31, 2010 will be treated 
as a 2009 model-year engine; the same engine will be treated as a 2010 
model-year engine if it is imported any time in calendar year 2011.
    (c) If you claim that an engine or piece of equipment is not 
subject to standards-or is subject to standards less stringent than 
those currently in place--based on its original manufacture date 
because it has already been placed into service, you must provide clear 
and convincing evidence that it has already been placed into service. 
Such evidence must generally include, but not be limited to, 
documentary evidence of purchase and maintenance history and visible 
wear that is consistent with the reported manufacture date. Importing 
products for resale or importing more than one engine or piece of 
equipment at a time would generally require a greater degree of 
evidence under this paragraph (c). If you do not satisfactorily 
demonstrate that the engine or equipment has already been placed into 
service, the provisions of paragraph (b) of this section apply.
    (d) Nothing in this section should be interpreted to allow 
circumvention of the requirements of this part by mis-stating or mis-
labeling the model year of engines or equipment. For example, this 
section does not permit engines imported in the same year that they are 
manufactured to be treated as an engine manufactured in the previous 
year. To verify compliance with the provisions of this section, we may 
require you to verify the original manufacture date of the engine or 
equipment based on manufacturing records, title-transfer documents, 
service records, or other documentation.
    (e) If all the current emission control requirements are the same 
as in the named model year, the provisions of this section do not 
apply.

Subpart E--Selective Enforcement Auditing


Sec.  1068.401  What is a selective enforcement audit?

    (a) We may conduct or require you to conduct emission tests on your 
production engines/equipment in a selective enforcement audit. This 
requirement is independent of any requirement for you to routinely test 
production-line engines/equipment. For products subject to equipment-
based standards, but tested using engine-based test procedures, this 
subpart applies to the engines and/or the equipment, as applicable. 
Otherwise this subpart applies to engines for products subject to 
engine-based standards and to equipment for products subject to 
equipment-based standards.
    (b) If we send you a signed test order, you must follow its 
directions and the provisions of this subpart. We may tell you where to 
test the engines/equipment. This may be where you produce the engines/
equipment or any other emission testing facility.
    (c) If we select one or more of your families for a selective 
enforcement audit, we will send the test order to the person who signed 
the application for certification or we will deliver it in person.
    (d) If we do not select a testing facility, notify the Designated 
Compliance Officer within one working day of receiving the test order 
where you will test your engines/equipment.
    (e) You must do everything we require in the audit without delay.


Sec.  1068.405  What is in a test order?

    (a) In the test order, we will specify the following things:
    (1) The family and configuration (if any) we have identified for 
testing.
    (2) The engine/equipment assembly plant, storage facility, or (if 
you import the engines/equipment) port facility from which you must 
select engines/equipment.
    (3) The procedure for selecting engines/equipment for testing, 
including a selection rate.
    (4) The test procedures, duty cycles, and test points, as 
appropriate, for testing the engines/equipment to show that they meet 
emission standards.

[[Page 59370]]

    (b) We may state that we will select the test engines/equipment.
    (c) We may identify alternate families or configurations for 
testing in case we determine the intended engines/equipment are not 
available for testing or if you do not produce enough engines/equipment 
to meet the minimum rate for selecting test engines/equipment.
    (d) We may include other directions or information in the test 
order.
    (e) We may ask you to show us that you meet any additional 
requirements that apply to your engines/equipment (closed crankcases, 
for example).
    (f) In anticipation of a potential audit, you may give us a list of 
your preferred families and the corresponding assembly plants, storage 
facilities, or (if you import the engines/equipment) port facilities 
from which we should select engines/equipment for testing. The 
information would apply only for a single model year so it would be 
best to include this information in your application for certification. 
If you give us this list before we issue a test order, we will consider 
your recommendations, but we may select different engines/equipment.
    (g) If you also do routine production-line testing with the 
selected family in the same time period, the test order will tell you 
what changes you might need to make in your production-line testing 
schedule.


Sec.  1068.410  How must I select and prepare my engines/equipment?

    (a) Selecting engines/equipment. Select engines/equipment as 
described in the test order. If you are unable to select test engines/
equipment this way, you may ask us to approve an alternate plan as long 
as you make the request before you start selecting engines/equipment.
    (b) Assembling engines/equipment. Produce and assemble test 
engines/equipment using your normal production and assembly process for 
that family.
    (1) Notify us directly if you make any change in your production, 
assembly, or quality control processes that might affect emissions 
between the time you receive the test order and the time you finish 
selecting test engines/equipment.
    (2) If you do not fully assemble engines/equipment at the specified 
location, we will describe in the test order how to select components 
to finish assembling the engines/equipment. Assemble these components 
onto the test engines/equipment using your documented assembly and 
quality control procedures.
    (c) Modifying engines/equipment. Once an engine or piece of 
equipment is selected for testing, you may adjust, repair, prepare, or 
modify it or check its emissions only if one of the following is true:
    (1) You document the need for doing so in your procedures for 
assembling and inspecting all your production engines/equipment and 
make the action routine for all the engines/equipment in the family.
    (2) This subpart otherwise allows your action.
    (3) We approve your action in advance.
    (d) Engine/equipment malfunction. If an engine/equipment 
malfunction prevents further emission testing, ask us to approve your 
decision to either repair the engine or delete it from the test 
sequence.
    (e) Setting adjustable parameters. Before any test, we may adjust 
or require you to adjust any adjustable parameter to any setting within 
its physically adjustable range.
    (1) We may adjust or require you to adjust idle speed outside the 
physically adjustable range as needed until the engine has stabilized 
emission levels (see paragraph (f) of this section). We may ask you for 
information needed to establish an alternate minimum idle speed.
    (2) We may make or specify adjustments within the physically 
adjustable range by considering their effect on emission levels. We may 
also consider how likely it is that someone will make such an 
adjustment with in-use engines/equipment.
    (f) Stabilizing emission levels. (1) Before you test production-
line engines/equipment for exhaust emission, you may operate the 
engine/equipment to stabilize the exhaust emission levels. Using good 
engineering judgment, operate your engines/equipment in a way that 
represents the way production engines/equipment will be used. You may 
operate each engine or piece of equipment for no more than the greater 
of two periods:
    (i) 50 hours.
    (ii) The number of hours you operated your emission-data engine/
equipment for certifying the family (see 40 CFR part 1065, subpart E).
    (2) Use good engineering judgment and follow the standard-setting 
part to stabilize equipment for evaporative emissions, where 
appropriate.
    (g) Damage during shipment. If shipping the engine/equipment to a 
remote facility for testing under a selective enforcement audit makes 
necessary an adjustment or repair, you must wait until after the 
initial emission test to do this work. We may waive this requirement if 
the test would be impossible or unsafe or if it would permanently 
damage the engine/equipment. Report to us, in your written report under 
Sec.  1068.450, all adjustments or repairs you make on test engines/
equipment before each test.
    (h) Shipping engines/equipment. If you need to ship engines/
equipment to another facility for testing, make sure the test engines/
equipment arrive at the test facility within 24 hours after being 
selected. You may ask that we allow more time if you are unable to do 
this.
    (i) Retesting after invalid tests. You may retest an engine or 
piece of equipment if you determine an emission test is invalid under 
the standard-setting part. Explain in your written report reasons for 
invalidating any test and the emission results from all tests. If you 
retest an engine or piece of equipment and, within ten days after 
testing, ask to substitute results of the new tests for the original 
ones, we will answer within ten days after we receive your information.
    (j) Retesting after reaching a fail decision. You may retest your 
engines/equipment once a fail decision for the audit has been reached 
based on the first test on each engine or piece of equipment under 
Sec.  1068.420(c). You may test each engine or piece of equipment up to 
a total of three times, but you must perform the same number of tests 
on each engine or piece of equipment. You may further operate the 
engine/equipment to stabilize emission levels before testing, subject 
to the provisions of paragraph (f) of this section. We may approve 
retesting at other times if you send us a request with satisfactory 
justification.


Sec.  1068.415  How do I test my engines/equipment?

    (a) Use the test procedures specified in the standard-setting part 
for showing that your engines/equipment meet emission standards. The 
test order will give further testing instructions.
    (b) If no test cells are available at a given facility, you may 
make alternate testing arrangements with our approval.
    (c) Test at least two engines/equipment in each 24-hour period 
(including void tests). However, if your projected U.S. nonroad sales 
within the family are less than 7,500 for the year, you may test a 
minimum of one per 24-hour period. If you request and justify it, we 
may approve a lower testing rate.
    (d) For exhaust emissions, accumulate service on test engines/
equipment at a minimum rate of 6 hours per engine or piece of equipment 
during each 24-hour period. The first 24-hour period for service 
accumulation begins when you

[[Page 59371]]

finish preparing an engine or piece of equipment for testing. The 
minimum service accumulation rate does not apply on weekends or 
holidays. You may ask us to approve a lower service accumulation rate. 
We may require you to accumulate hours more rapidly than the minimum 
rate, as appropriate. Plan your service accumulation to allow testing 
at the rate specified in paragraph (c) of this section. Select 
operation for accumulating operating hours on your test engines/
equipment to represent normal in-use operation for the family.
    (e) Test engines/equipment in the same order you select them.


Sec.  1068.420  How do I know when my engine family fails an SEA?

    (a) A failed engine or piece of equipment is one whose final 
deteriorated test results exceed an applicable emission standard for 
any regulated pollutant.
    (b) Continue testing engines/equipment until you reach a pass 
decision for all pollutants or a fail decision for one pollutant.
    (c) You reach a pass decision for the SEA requirements when the 
number of failed engines/equipment is less than or equal to the pass 
decision number in Appendix A to this subpart for the total number of 
engines/equipment tested. You reach a fail decision for the SEA 
requirements when the number of failed engines/equipment is greater 
than or equal to the fail decision number in Appendix A to this subpart 
for the total number of engines/equipment you test. An acceptable 
quality level of 40 percent is the basis for the pass or fail decision.
    (d) Consider test results in the same order as the engine/equipment 
testing sequence.
    (e) If you reach a pass decision for one pollutant, but need to 
continue testing for another pollutant, we will disregard these later 
test results for the pollutant with the pass decision.
    (f) Appendix A to this subpart lists multiple sampling plans. Use 
the sampling plan for the projected sales volume you reported in your 
application for the audited family.
    (g) We may choose to stop testing after any number of tests.
    (h) If we test some of your engines/equipment in addition to your 
own testing, we may decide not to include your test results as official 
data for those engines/equipment if there is substantial disagreement 
between your testing and our testing. We will reinstate your data as 
valid if you show us that we made an error and your data are correct.
    (i) If we rely on our test data instead of yours, we will notify 
you in writing of our decision and the reasons we believe your facility 
is not appropriate for doing the tests we require under this subpart. 
You may request in writing that we consider your test results from the 
same facility for future testing if you show us that you have made 
changes to resolve the problem.


Sec.  1068.425  What happens if one of my production-line engines/
equipment exceeds the emission standards?

    (a) If one of your production-line engines/equipment fails to meet 
one or more emission standards (see Sec.  1068.420), the certificate of 
conformity is automatically suspended for that engine or piece of 
equipment. You must take the following actions before your certificate 
of conformity can cover that engine or piece of equipment:
    (1) Correct the problem and retest the engine/equipment to show it 
complies with all emission standards.
    (2) Include in your written report a description of the test 
results and the remedy for each engine or piece of equipment (see Sec.  
1068.450).
    (b) You may ask for a hearing at any time to determine whether the 
tests and sampling methods were proper (see subpart G of this part).


Sec.  1068.430  What happens if a family fails an SEA?

    (a) We may suspend your certificate of conformity for a family if 
it fails the SEA under Sec.  1068.420. The suspension may apply to all 
facilities producing engines/equipment from a family even if you find 
noncompliant engines/equipment only at one facility.
    (b) We will tell you in writing if we suspend your certificate in 
whole or in part. We will not suspend a certificate until at least 15 
days after the family fails the SEA. The suspension is effective when 
you receive our notice.
    (c) You may ask for a hearing to determine whether the tests and 
sampling methods were proper (see subpart G of this part) up to 15 days 
after we suspend the certificate for a family. If we agree that we used 
erroneous information in deciding to suspend the certificate before a 
hearing is held, we will reinstate the certificate.


Sec.  1068.435  May I sell engines/equipment from a family with a 
suspended certificate of conformity?

    You may sell engines/equipment that you produce after we suspend 
the family's certificate of conformity only if one of the following 
occurs:
    (a) You test each engine or piece of equipment you produce and show 
it complies with emission standards that apply.
    (b) We conditionally reinstate the certificate for the family. We 
may do so if you agree to recall all the affected engines/equipment and 
remedy any noncompliance at no expense to the owner if later testing 
shows that engines/equipment in the family still do not comply.


Sec.  1068.440  How do I ask EPA to reinstate my suspended certificate?

    (a) Send us a written report asking us to reinstate your suspended 
certificate. In your report, identify the reason for the SEA failure, 
propose a remedy, and commit to a date for carrying it out. In your 
proposed remedy include any quality control measures you propose to 
keep the problem from happening again.
    (b) Give us data from production-line testing showing that engines/
equipment in the remedied family comply with all the emission standards 
that apply.


Sec.  1068.445  When may EPA revoke my certificate under this subpart 
and how may I sell these engines/equipment again?

    (a) We may revoke your certificate for a family in the following 
cases:
    (1) You do not meet the reporting requirements under this subpart.
    (2) Your family fails an SEA and your proposed remedy to address a 
suspended certificate is inadequate to solve the problem or requires 
you to change the engine/equipment's design or emission control system.
    (b) To sell engines/equipment from a family with a revoked 
certificate of conformity, you must modify the family and then show it 
complies with the applicable requirements.
    (1) If we determine your proposed design change may not control 
emissions for the engine/equipment's full useful life, we will tell you 
within five working days after receiving your report. In this case we 
will decide whether production-line testing will be enough for us to 
evaluate the change or whether you need to do more testing.
    (2) Unless we require more testing, you may show compliance by 
testing production-line engines/equipment as described in this subpart.
    (3) We will issue a new or updated certificate of conformity when 
you have met these requirements.


Sec.  1068.450  What records must I send to EPA?

    (a) Within 30 days of the end of each audit, send us a report with 
the following information:
    (1) Describe any facility used to test production-line engines/
equipment and state its location.

[[Page 59372]]

    (2) State the total U.S.-directed production volume and number of 
tests for each family.
    (3) Describe your test engines/equipment, including the family's 
identification and the engine/equipment's model year, build date, model 
number, identification number, and number of hours of operation before 
testing for each test engine or piece of equipment.
    (4) Identify where you accumulated hours of operation on the 
engines/equipment and describe the procedure and schedule you used.
    (5) Provide the test number; the date, time and duration of 
testing; test procedure; initial test results before and after 
rounding; final test results; and final deteriorated test results for 
all tests. Provide the emission figures for all measured pollutants. 
Include information for both valid and invalid tests and the reason for 
any invalidation.
    (6) Describe completely and justify any nonroutine adjustment, 
modification, repair, preparation, maintenance, or test for the test 
engine/equipment if you did not report it separately under this 
subpart. Include the results of any emission measurements, regardless 
of the procedure or type of equipment.
    (7) Report on each failed engine or piece of equipment as described 
in Sec.  1068.425.
    (b) We may ask you to add information to your written report, so we 
can determine whether your new engines/equipment conform with the 
requirements of this subpart.
    (c) An authorized representative of your company must sign the 
following statement: We submit this report under Sections 208 and 213 
of the Clean Air Act. Our testing conformed completely with the 
requirements of 40 CFR part 1068. We have not changed production 
processes or quality-control procedures for the family in a way that 
might affect the emission control from production engines/equipment. 
All the information in this report is true and accurate to the best of 
my knowledge. I know of the penalties for violating the Clean Air Act 
and the regulations. (Authorized Company Representative)
    (d) Send reports of your testing to the Designated Compliance 
Officer using an approved information format. If you want to use a 
different format, send us a written request with justification for a 
waiver.
    (e) We may post test results on publicly accessible databases and 
we will send copies of your reports to anyone from the public who asks 
for them. We will not release information about your sales or 
production volumes, which is all we will consider confidential.


Sec.  1068.455  What records must I keep?

    (a) We may review your records at any time so it is important to 
keep required information readily available. Organize and maintain your 
records as described in this section.
    (b) Keep paper records for testing under this subpart for one full 
year after you complete all the testing required for the selective 
enforcement audit. For additional storage, you may use any format or 
media.
    (c) Keep a copy of the written reports described in Sec.  1068.450.
    (d) Keep the following additional records:
    (1) The names of supervisors involved in each test.
    (2) The name of anyone who authorizes adjusting, repairing, 
preparing, or modifying a test engine/equipment and the names of all 
supervisors who oversee this work.
    (3) If you shipped the engine/equipment for testing, the date you 
shipped it, the associated storage or port facility, and the date the 
engine/equipment arrived at the testing facility.
    (4) Any records related to your audit that are not in the written 
report.
    (5) A brief description of any significant events during testing 
not otherwise described in the written report or in this section.
    (e) If we ask, you must give us projected or actual production for 
a family. Include each assembly plant if you produce engines/equipment 
at more than one plant.
    (f) We may ask you to keep or send other information necessary to 
implement this subpart.

Appendix A to Subpart E of Part 1068--Plans for Selective Enforcement 
Auditing

    The following tables describe sampling plans for selective 
enforcement audits, as described in Sec.  1068.420:

                                      Table A-1--Sampling Plan Code Letter
----------------------------------------------------------------------------------------------------------------
                                                         Minimum number of tests
   Projected family       Code letter \1\    ----------------------------------------------   Maximum number of
        sales                                        To pass                To fail                 tests
----------------------------------------------------------------------------------------------------------------
            20-50                     AA                      3                      5                     20
            20-99                      A                      4                      6                     30
          100-299                      B                      5                      6                     40
          300-499                       C                     5                      6                     50
            500 +                      D                      5                      6                     60
----------------------------------------------------------------------------------------------------------------
\1\ A manufacturer may optionally use either the sampling plan for code letter ``AA'' or sampling plan for code
  letter ``A'' for Selective Enforcement Audits of families with annual sales between 20 and 50 engines/
  equipment. Additionally, the manufacturer may switch between these plans during the audit.


                                           Table A-2--Sampling Plans for Different Engine Family Sales Volumes
--------------------------------------------------------------------------------------------------------------------------------------------------------
                          AA                           A                           B                           C                           D
             -------------------------------------------------------------------------------------------------------------------------------------------
  Stage \a\   Pass             i>            i>            i>            i>            i>            i>            i>            i>            i>
--------------------------------------------------------------------------------------------------------------------------------------------------------
         1    ............  ............  ............  ............  ............  ............  ............  ............  ............  ............
         2    ............  ............  ............  ............  ............  ............  ............  ............  ............  ............
         3             0    ............  ............  ............  ............  ............  ............  ............  ............  ............
         4             0    ............           0    ............  ............  ............  ............  ............  ............  ............
         5             1             5             0    ............           0    ............           0    ............          0     ............
         6             1             6             1             6             1             6             0            6             0          6
         7             2             6             1             7             1             7             1            7             1          7

[[Page 59373]]

 
         8             2             7             2             7             2             7             2            7             2          8
         9             3             7             2             8             2             8             2            8             2          8
        10             3             8             3             8             3             8             3            9             3          9
        11             4             8             3             8             3             9             3            9             3          9
        12             4             9             4             9             4             9             4           10             4         10
        13             5             9             5            10             4            10             4           10             4         10
        14             5            10             5            10             5            10             5           11             5         11
        15             6            10             6            11             5            11             5           11             5         11
        16             6            10             6            11             6            12             6           12             6         12
        17             7            10             7            12             6            12             6           12             6         12
        18             8            10             7            12             7            13             7           13             7         13
        19             8            10             8            13             8            13             7           13             7         13
        20             9            10             8            13             8            14             8           14             8         14
        21    ............  ............           9            14             9            14             8           14             8         14
        22    ............  ............          10            14             9            15             9           15             9         15
        23    ............  ............          10            15            10            15            10           15             9         15
        24    ............  ............          11            15            10            16            10           16            10         16
        25    ............  ............          11            16            11            16            11           16            11         16
        26    ............  ............          12            16            11            17            11           17            11         17
        27    ............  ............          12            17            12            17            12           17            12         17
        28    ............  ............          13            17            12            18            12           18            12         18
        29    ............  ............          14            17            13            18            13           18            13         19
        30    ............  ............          16            17            13            19            13           19            13         19
        31    ............  ............  ............  ............          14            19            14           19            14         20
        32    ............  ............  ............  ............          14            20            14           20            14         20
        33    ............  ............  ............  ............          15            20            15           20            15         21
        34    ............  ............  ............  ............          16            21            15           21            15         21
        35    ............  ............  ............  ............          16            21            16           21            16         22
        36    ............  ............  ............  ............          17            22            16           22            16         22
        37    ............  ............  ............  ............          17            22            17           22            17         23
        38    ............  ............  ............  ............          18            22            18           23            17         23
        39    ............  ............  ............  ............          18            22            18           23            18         24
        40    ............  ............  ............  ............          21            22            19           24            18         24
        41    ............  ............  ............  ............  ............  ............          19           24            19         25
        42    ............  ............  ............  ............  ............  ............          20           25            19         26
        43    ............  ............  ............  ............  ............  ............          20           25            20         26
        44    ............  ............  ............  ............  ............  ............          21           26            21         27
        45    ............  ............  ............  ............  ............  ............          21           27            21         27
        46    ............  ............  ............  ............  ............  ............          22           27            22         28
        47    ............  ............  ............  ............  ............  ............          22           27            22         28
        48    ............  ............  ............  ............  ............  ............          23           27            23         29
        49    ............  ............  ............  ............  ............  ............          23           27            23         29
        50    ............  ............  ............  ............  ............  ............          26           27            24         30
        51    ............  ............  ............  ............  ............  ............  ............  ............         24         30
        52    ............  ............  ............  ............  ............  ............  ............  ............         25         31
        53    ............  ............  ............  ............  ............  ............  ............  ............         25         31
        54    ............  ............  ............  ............  ............  ............  ............  ............         26         32
        55    ............  ............  ............  ............  ............  ............  ............  ............         26         32
        56    ............  ............  ............  ............  ............  ............  ............  ............         27         33
        57    ............  ............  ............  ............  ............  ............  ............  ............         27         33
        58    ............  ............  ............  ............  ............  ............  ............  ............         28         33
        59    ............  ............  ............  ............  ............  ............  ............  ............         28         33
        60    ............  ............  ............  ............  ............  ............  ............  ............         32         33
--------------------------------------------------------------------------------------------------------------------------------------------------------
\a\ Stage refers to the cumulative number of engines/equipment tested.

Subpart F--Reporting Defects and Recalling Engines/Equipment


Sec.  1068.501  How do I report emission-related defects?

    This section addresses the certificate holder's responsibility to 
investigate and report emission-related defects in design, materials, 
or workmanship. The provisions of this section do not limit your 
liability under this part or the Clean Air Act. For example, selling an 
engine/equipment that does not conform to your application for 
certification is a violation of Sec.  1068.101(a)(1) independent of the 
requirements of this section. The requirements of this section apply 
separately to each certificate holder if there is more than one 
certificate holder for the equipment.
    (a) General provisions. As a certifying manufacturer, you must 
investigate in certain circumstances whether engines/equipment that 
have been introduced into U.S. commerce under your certificate have 
incorrect, improperly installed, or otherwise defective emission-
related components or systems. This includes defects in design, 
materials, or workmanship. You

[[Page 59374]]

must also send us reports as specified by this section.
    (1) This section addresses defects for any of the following 
emission-related components or systems containing the following 
components:
    (i) Electronic control units, aftertreatment devices, fuel-metering 
components, EGR-system components, crankcase-ventilation valves, all 
components related to charge-air compression and cooling, and all 
sensors associated with any of these components.
    (ii) For engines and equipment subject to evaporative emission 
standards, fuel tanks, fuel caps, and fuel lines and connectors.
    (iii) Any other component whose primary purpose is to reduce 
emissions.
    (iv) Any other component whose failure might increase emissions of 
any regulated pollutant without significantly degrading engine/
equipment performance.
    (2) The requirements of this section relate to defects in any of 
the components or systems identified in paragraph (a)(1) of this 
section if the defects might affect any of the parameters or 
specifications in Appendix II of this part or might otherwise affect 
the emissions of any regulated pollutant.
    (3) For the purposes of this section, defects do not include damage 
to emission-related components or systems (or maladjustment of 
parameters) caused by owners improperly maintaining or abusing their 
engines/equipment.
    (4) The requirements of this section do not apply to emission 
control information labels. Note however, that Sec.  1068.101(a)(1) 
prohibits the sale of engines/equipment without proper labels, which 
also applies to misprinted labels.
    (5) You must track the information specified in paragraph (b)(1) of 
this section. You must assess this data at least every three months to 
evaluate whether you exceed the thresholds specified in paragraphs (e) 
and (f) of this section. Where thresholds are based on a percentage of 
engines/equipment in the family, use actual sales figures for the whole 
model year when they become available. Use projected sales figures 
until the actual sales figures become available. You are not required 
to collect additional information other than that specified in 
paragraph (b)(1) of this section before reaching a threshold for an 
investigation specified in paragraph (e) of this section.
    (6) You may ask us to allow you to use alternate methods for 
tracking, investigating, reporting, and correcting emission-related 
defects. In your request, explain and demonstrate why you believe your 
alternate system will be at least as effective in the aggregate in 
tracking, identifying, investigating, evaluating, reporting, and 
correcting potential and actual emissions-related defects as the 
requirements in this section. In this case, provide all available data 
necessary to demonstrate why an alternate system is appropriate for 
your engines/equipment and how it will result in a system at least as 
effective as that required under this section.
    (7) If we determine that emission-related defects result in a 
substantial number of properly maintained and used engines/equipment 
not conforming to the regulations of this chapter during their useful 
life, we may order you to conduct a recall of your engines/equipment 
(see Sec.  1068.505).
    (8) Send all reports required by this section to the Designated 
Enforcement Officer.
    (9) This section distinguishes between defects and possible 
defects. A possible defect exists anytime there is an indication that 
an emission-related component or system might have a defect, as 
described in paragraph (b)(1) of this section.
    (b) Investigation of possible defects. Investigate possible defects 
as follows:
    (1) If the number of engines/equipment that have a possible defect, 
as defined by this paragraph (b)(1), exceeds a threshold specified in 
paragraph (e) of this section, you must conduct an investigation to 
determine if an emission-related component or system is actually 
defective. You must classify an engine/equipment component or system as 
having a possible defect if any of the following sources of information 
shows there is a significant possibility that a defect exists:
    (i) A warranty claim is submitted for the component, whether this 
is under your emission-related warranty or any other warranty.
    (ii) Your quality-assurance procedures suggest that a defect may 
exist.
    (iii) You receive any other information for which good engineering 
judgment would indicate the component or system may be defective, such 
as information from dealers, field-service personnel, equipment 
manufacturers, hotline complaints, or engine diagnostic systems.
    (2) If the number of shipped replacement parts for any individual 
component is high enough that good engineering judgment would indicate 
a significant possibility that a defect exists, you must conduct an 
investigation to determine if it is actually defective. Note that this 
paragraph (b)(2) does not require data-tracking or recording provisions 
related to shipment of replacement parts.
    (3) Your investigation must be prompt, thorough, consider all 
relevant information, follow accepted scientific and engineering 
principles, and be designed to obtain all the information specified in 
paragraph (d) of this section.
    (4) Your investigation needs to consider possible defects that 
occur only within the useful life period, or within five years after 
the end of the model year, whichever is longer.
    (5) You must continue your investigation until you are able to show 
that there is no emission-related defect or you obtain all the 
information specified for a defect report in paragraph (d) of this 
section.
    (6) If a component with a possible defect is used in additional 
families or model years, you must investigate whether the component may 
be defective when used in these additional families or model years, and 
include these results in any defect report you send under paragraph (c) 
of this section.
    (7) If your initial investigation concludes that the number of 
engines/equipment with a defect is fewer than any of the thresholds 
specified in paragraph (f) of this section, but other information later 
becomes available that may show that the number of engines/equipment 
with a defect exceeds a threshold, then you must resume your 
investigation. If you resume an investigation, you must include the 
information from the earlier investigation to determine whether to send 
a defect report.
    (c) Reporting defects. You must send us a defect report in either 
of the following cases:
    (1) Your investigation shows that the number of engines/equipment 
with a defect exceeds a threshold specified in paragraph (f) of this 
section. Send the defect report within 21 days after the date you 
identify this number of defective engines/equipment. See paragraph (h) 
of this section for reporting requirements that apply if the number of 
engines/equipment with a defect does not exceed any of the thresholds 
in paragraph (f) of this section.
    (2) You know there are emission-related defects for a component or 
system in a number of engines/equipment that exceeds a threshold 
specified in paragraph (f) of this section, regardless of how you 
obtain this information. Send the defect report within 21 days after 
you learn that the number of defects exceeds a threshold.

[[Page 59375]]

Send us an updated defect report anytime you have significant 
additional information.
    (d) Contents of a defect report. Include the following information 
in a defect report:
    (1) Your corporate name and a person to contact regarding this 
defect.
    (2) A description of the defect, including a summary of any 
engineering analyses and associated data, if available.
    (3) A description of the engines/equipment that have the defect, 
including families, models, and range of production dates.
    (4) An estimate of the number and percentage of each class or 
category of affected engines/equipment that have the defect, and an 
explanation of how you determined this number. Describe any statistical 
methods you used under paragraph (g)(6) of this section.
    (5) An estimate of the defect's impact on emissions, with an 
explanation of how you calculated this estimate and a summary of any 
emission data demonstrating the impact of the defect, if available.
    (6) A description of your plan for addressing the defect or an 
explanation of your reasons for not believing the defects must be 
addressed.
    (e) Thresholds for conducting a defect investigation. You must 
begin a defect investigation based on the following number of engines/
equipment that may have the defect:
    (1) For engines/equipment with maximum engine power at or below 560 
kW:
    (i) For families with annual sales below 500 units: 50 or more 
engines/equipment.
    (ii) For families with annual sales from 500 to 50,000 units: more 
than 10.0 percent of the total number of engines/equipment in the 
family.
    (iii) For families with annual sales from 50,000 to 550,000 units: 
more than the total number of engines/equipment represented by the 
following equation:


Investigation threshold = 5,000 + (Production units--50,000) x 0.04

    (iv) For families with annual sales above 550,000 units: 25,000 or 
more engines/equipment.
    (2) For engines/equipment with maximum engine power greater than 
560 kW:
    (i) For families with annual sales below 250 units: 25 or more 
engines/equipment.
    (ii) For families with annual sales at or above 250 units: more 
than 10.0 percent of the total number of engines/equipment in the 
family.
    (f) Thresholds for filing a defect report. You must send a defect 
report based on the following number of engines/equipment that have the 
defect:
    (1) For engines/equipment with maximum engine power at or below 560 
kW:
    (i) For families with annual sales below 1,000 units: 20 or more 
engines/equipment.
    (ii) For families with annual sales from 1,000 to 50,000 units: 
more than 2.0 percent of the total number of engines/equipment in the 
family.
    (iii) For families with annual sales from 50,000 to 550,000 units: 
more than the total number of engines/equipment represented by the 
following equation:
    Reporting threshold = 1,000 + (Production units--50,000) x 0.01
    (iv) For families with annual sales above 550,000 units: 6,000 or 
more engines/equipment.
    (2) For engines/equipment with maximum engine power greater than 
560 kW:
    (i) For families with annual sales below 150 units: 10 or more 
engines/equipment.
    (ii) For families with annual sales from 150 to 750 units: 15 or 
more engines/equipment.
    (iii) For families with annual sales above 750 units: more than 2.0 
percent of the total number of engines/equipment in the family.
    (g) How to count defects. (1) Track defects separately for each 
model year and family as much as possible. If information is not 
identifiable by model year or family, use good engineering judgment to 
evaluate whether you exceed a threshold in paragraph (e) or
    (f) of this section. Consider only your U.S.-directed production 
volume.
    (2) Within a family, track defects together for all components or 
systems that are the same in all material respects. If multiple 
companies separately supply a particular component or system, treat 
each company's component or system as unique.
    (3) For engine-based standards, if a possible defect is not 
attributed to any specific part of the engine, consider the complete 
engine a distinct component for evaluating whether you exceed a 
threshold in paragraph (e) of this section. For equipment-based 
standards, if a possible defect is not attributed to any specific part 
of the equipment, consider the complete piece of equipment a distinct 
component for evaluating whether you exceed a threshold in paragraph 
(e) of this section.
    (4) If you correct defects before they reach the ultimate purchaser 
as a result of your quality-assurance procedures, count these against 
the investigation thresholds in paragraph (e) of this section unless 
you routinely check every engine or piece of equipment in the family. 
Do not count any corrected defects as actual defects under paragraph 
(f) of this section.
    (5) Use aggregated data from all the different sources identified 
in paragraph (b)(1) of this section to determine whether you exceed a 
threshold in paragraphs (e) and (f) of this section.
    (6) If information is readily available to conclude that the 
possible defects identified in paragraph (b)(1) of this section are 
actual defects, count these toward the reporting thresholds in 
paragraph (f) of this section.
    (7) During an investigation, use appropriate statistical methods to 
project defect rates for engines/equipment that you are not otherwise 
able to evaluate. For example, if 75 percent of the components replaced 
under warranty are available for evaluation, it would be appropriate to 
extrapolate known information on failure rates to the components that 
are unavailable for evaluation. Take steps as necessary to prevent bias 
in sampled data. Make adjusted calculations to take into account any 
bias that may remain.
    (h) Investigation reports. Once you trigger an investigation 
threshold under paragraph (e) of this section, you must report your 
progress and conclusions. In your reports, include the information 
specified in paragraph (d) of this section, or explain why the 
information is not relevant. Send us the following reports:
    (1) While you are investigating, send us mid-year and end-of-year 
reports to describe the methods you are using and the status of the 
investigation. Send these status reports no later than June 30 and 
December 31 of each year.
    (2) If you find that the number of components or systems with an 
emission-related defect exceeds a threshold specified in paragraph (f) 
of this section, send us a report describing your findings within 21 
days after the date you reach this conclusion.
    (3) If you find that the number of components or systems with an 
emission-related defect does not exceed any of the thresholds specified 
in paragraph (f) of this section, send us a final report supporting 
this conclusion. For example, you may exclude warranty claims that 
resulted from misdiagnosis and you may exclude defects caused by 
improper maintenance, improper use, or misfueling. Send this report 
within 21 days after the date you reach this conclusion.
    (i) Future production. If you identify a design or manufacturing 
defect that prevents engines/equipment from

[[Page 59376]]

meeting the requirements of this part, you must correct the defect as 
soon as possible for future production of engines/equipment in every 
family affected by the defect. This applies without regard to whether 
you are required to conduct a defect investigation or submit a defect 
report under this section.


Sec.  1068.505  How does the recall program work?

    (a) If we make a determination that a substantial number of 
properly maintained and used engines/equipment do not conform to the 
regulations of this chapter during their useful life, you must submit a 
plan to remedy the nonconformity of your engines/equipment. We will 
notify you of our determination in writing. Our notice will identify 
the class or category of engines/equipment affected and describe how we 
reached our conclusion. If this happens, you must meet the requirements 
and follow the instructions in this subpart. You must remedy at your 
expense noncompliant engines/equipment that have been properly 
maintained and used, as described in Sec.  1068.510(a)(7). You may not 
transfer this expense to a dealer (or equipment manufacturer for 
engine-based standards) through a franchise or other agreement.
    (b) You may ask for a hearing if you disagree with our 
determination (see subpart G of this part).
    (c) Unless we withdraw the determination of noncompliance, you must 
respond to it by sending a remedial plan to the Designated Compliance 
Officer by the later of these two deadlines:
    (1) Within 60 days after we notify you.
    (2) Within 60 days after a hearing.
    (d) Once you have sold engines/equipment to the ultimate purchaser, 
we may inspect or test the engines/equipment only if the purchaser 
permits it, or if state or local inspection programs separately provide 
for it.
    (e) You may ask us to allow you to conduct your recall differently 
than specified in this subpart, consistent with section 207(c) of the 
Clean Air Act (42 U.S.C. 7541(c)).
    (f) You may do a voluntary recall under Sec.  1068.535 unless we 
have made the determination described in Sec.  1068.535(a).
    (g) For purposes of recall, owner means someone who owns an engine 
or piece of equipment affected by a remedial plan.


Sec.  1068.510  How do I prepare and apply my remedial plan?

    (a) In your remedial plan, describe all of the following:
    (1) The class or category of engines/equipment to be recalled, 
including the number of engines/equipment involved and the model year 
or other information needed to identify the engines/equipment.
    (2) The modifications, alterations, repairs, corrections, 
adjustments, or other changes you will make to correct the affected 
engines/equipment.
    (3) A brief description of the studies, tests, and data that 
support the effectiveness of the remedy you propose to use.
    (4) The instructions you will send to those who will repair the 
engines/equipment under the remedial plan.
    (5) How you will determine the owners' names and addresses.
    (6) How you will notify owners; include copies of any notification 
letters.
    (7) The proper maintenance or use you will specify, if any, as a 
condition to be eligible for repair under the remedial plan. Describe 
how these specifications meet the provisions of paragraph (e) of this 
section. Describe how the owners should show they meet your conditions.
    (8) The steps owners must take for you to do the repair. You may 
set a date or a range of dates, specify the amount of time you need, 
and designate certain facilities to do the repairs.
    (9) Which company (or group) you will assign to do or manage the 
repairs.
    (10) If your employees or authorized warranty agents will not be 
doing the work, state who will and describe their qualifications.
    (11) How you will ensure an adequate and timely supply of parts.
    (12) The effect of proposed changes on fuel consumption, 
driveability, and safety of the engines/equipment you will recall; 
include a brief summary of the information supporting these 
conclusions.
    (13) How you intend to label the engines/equipment you repair and 
where you will place the label on the engine/equipment (see Sec.  
1068.515).
    (b) We may require you to add information to your remedial plan.
    (c) We may require you to test the proposed repair to show it will 
remedy the noncompliance.
    (d) Use all reasonable means to locate owners. We may require you 
to use government or commercial registration lists to get owners' names 
and addresses so your notice will be effective.
    (e) The maintenance or use that you specify as a condition for 
eligibility under the remedial plan may include only things you can 
show would cause noncompliance. Do not require use of a component or 
service identified by brand, trade, or corporate name unless we 
approved this approach with your original certificate of conformity. 
Also, do not place conditions on who maintained the engine/equipment.
    (f) We may require you to adjust your repair plan if we determine 
owners would be without their engines or equipment for an unreasonably 
long time.
    (g) We will tell you in writing within 15 days of receiving your 
remedial plan whether we have approved or disapproved it. We will 
explain our reasons for any disapproval.
    (h) Begin notifying owners within 15 days after we approve your 
remedial plan. If we hold a hearing, but do not change our position 
about the noncompliance, you must begin notifying owners within 60 days 
after we complete the hearing unless we specify otherwise.


Sec.  1068.515  How do I mark or label repaired engines/equipment?

    (a) Attach a label to engines/equipment you repair under the 
remedial plan. At your discretion, you may label or mark engines/
equipment you inspect but do not repair.
    (b) Make the label from a durable material suitable for its planned 
location. Make sure no one can remove the label without destroying or 
defacing it.
    (c) On the label, designate the specific recall campaign and state 
where you repaired or inspected the engine/equipment.
    (d) We may waive or modify the labeling requirements if we 
determine they are overly burdensome.


Sec.  1068.520  How do I notify affected owners?

    (a) Notify owners by first class mail or e-mail unless we say 
otherwise. We may require you to use certified mail. Include the 
following in your notice:
    (1) State: ``The U.S. Environmental Protection Agency has 
determined that your engine/equipment may be emitting pollutants in 
excess of the federal emission standards as defined in Title 40 of the 
Code of Federal Regulations. These emission standards were established 
to protect the public health or welfare from air pollution.''
    (2) State that you (or someone you designate) will repair these 
engines/equipment at your expense.
    (3) If we approved maintenance and use conditions in your remedial 
plan, state that you will make these repairs

[[Page 59377]]

only if owners show their engines/equipment meet the conditions for 
proper maintenance and use. Describe these conditions and how owners 
should prove their engines/equipment are eligible for repair.
    (4) Describe the components your repair will affect and say 
generally how you will repair the engines/equipment.
    (5) State that the engine/equipment, if not repaired, may fail an 
emission inspection test if state or local law requires one.
    (6) Describe any adverse effects on its performance or driveability 
that would be caused by not repairing the engine/equipment.
    (7) Describe any adverse effects on the functions of other 
components that would be caused by not repairing the engine/equipment.
    (8) Specify the date you will start the repairs, the amount of time 
you will need to do them, and where you will do them. Include any other 
information owners may need to know.
    (9) Allow for the owner to inform you using one of the following 
methods if they have sold the engine/equipment:
    (i) Send a self-addressed card that owners can mail back to you; 
include a space for owners to write the name and address of a buyer.
    (ii) Provide owners with a toll-free number and an e-mail address 
or Web site they can use to identify the name and address of a buyer.
    (10) State that owners should call you at a phone number you give 
to report any difficulty in obtaining repairs.
    (11) State: ``To ensure your full protection under the emission 
warranty on your [engine/equipment] by federal law, and your right to 
participate in future recalls, we recommend you have your [engine/
equipment] serviced as soon as possible. We may consider your not 
servicing it to be improper maintenance.''
    (b) We may require you to add information to your notice or to send 
more notices.
    (c) You may not in any communication with owners or dealers say or 
imply that your noncompliance does not exist or that it will not 
degrade air quality.


Sec.  1068.525  What records must I send to EPA?

    (a) Send us a copy of all communications related to the remedial 
plan you sent to dealers and others doing the repairs. Mail or e-mail 
us the information at the same time you send it to others.
    (b) From the time you begin to notify owners, send us a report 
within 25 days of the end of each calendar quarter. Send reports for 
six consecutive quarters or until all the engines/equipment are 
inspected, whichever comes first. In these reports, identify the 
following:
    (1) The range of dates you needed to notify owners.
    (2) The total number of notices sent.
    (3) The number of engines/equipment you estimate fall under the 
remedial plan (explain how you determined this number).
    (4) The cumulative number of engines/equipment you inspected under 
the remedial plan.
    (5) The cumulative number of these engines/equipment you found 
needed the specified repair.
    (6) The cumulative number of these engines/equipment you have 
repaired.
    (7) The cumulative number of engines/equipment you determined to be 
unavailable due to exportation, theft, retirement, or other reasons 
(specify).
    (8) The cumulative number of engines/equipment you disqualified for 
not being properly maintained or used.
    (c) If your estimated number of engines/equipment falling under the 
remedial plan changes, change the estimate in your next report and add 
an explanation for the change.
    (d) We may ask for more information.
    (e) We may waive reporting requirements or adjust the reporting 
schedule.
    (f) If anyone asks to see the information in your reports, we will 
follow the provisions of Sec.  1068.10 for handling confidential 
information.


Sec.  1068.530  What records must I keep?

    We may review your records at any time so it is important that you 
keep required information readily available. Keep records associated 
with your recall campaign for three years after you send the last 
report we require under Sec.  1068.525(b). Organize and maintain your 
records as described in this section.
    (a) Keep a paper copy of the written reports described in Sec.  
1068.525.
    (b) Keep a record of the names and addresses of owners you 
notified. For each engine or piece of equipment, state whether you did 
any of the following:
    (1) Inspected the engine/equipment.
    (2) Disqualified the engine/equipment for not being properly 
maintained or used.
    (3) Completed the prescribed repairs.
    (c) You may keep the records in paragraph (b) of this section in 
any form we can inspect, including computer databases.


Sec.  1068.535  How can I do a voluntary recall for emission-related 
problems?

    If we have made a determination that a substantial number of 
properly maintained and used engines/equipment do not conform to the 
regulations of this chapter during their useful life, you may not use a 
voluntary recall or other alternate means to meet your obligation to 
remedy the noncompliance. Thus, this section applies only if you learn 
that your family does not meet the requirements of this chapter and we 
have not made such a determination.
    (a) To do a voluntary recall under this section, first send the 
Designated Compliance Officer a plan, following the guidelines in Sec.  
1068.510. Within 15 days, we will send you our comments on your plan.
    (b) Once we approve your plan, start notifying owners and carrying 
out the specified repairs. Make reasonable efforts to carry out the 
recall as quickly as possible.
    (c) From the time you start the recall campaign, send us a report 
within 25 days of the end of each calendar quarter, following the 
guidelines in Sec.  1068.525(b). Send reports for six consecutive 
quarters or until all the engines/equipment are inspected, whichever 
comes first.
    (d) Keep your reports and the supporting information as described 
in Sec.  1068.530.

Subpart G--Hearings


Sec.  1068.601  What are the procedures for hearings?

    If we agree to hold a hearing related to our decision to order a 
recall under Sec.  1068.505, we will hold the hearing according to the 
provisions of 40 CFR 85.1807. For any other issues, you may request an 
informal hearing as described in 40 CFR 86.1853-01.

Appendix I to Part 1068--Emission-Related Components

    This appendix specifies emission-related components that we 
refer to for describing such things as emission-related warranty or 
requirements related to rebuilding engines. Note that inclusion of a 
component in Section III of this Appendix does not make it an 
emission-related component for engines/equipment that are not 
subject to evaporative emission standards.
    I. For exhaust emissions, emission-related components include 
any engine parts related to the following systems:
    1. Air-induction system.
    2. Fuel system.
    3. Ignition system.
    4. Exhaust gas recirculation systems.
    II. The following parts are also considered emission-related 
components for exhaust emissions:

[[Page 59378]]

    1. Aftertreatment devices.
    2. Crankcase ventilation valves.
    3. Sensors.
    4. Electronic control units.
    III. The following parts are considered emission-related 
components for evaporative emissions:
    1. Fuel Tank.
    2. Fuel Cap.
    3. Fuel Line.
    4. Fuel Line Fittings.
    5. Clamps*.
    6. Pressure Relief Valves*.
    7. Control Valves*.
    8. Control Solenoids*.
    9. Electronic Controls*.
    10. Vacuum Control Diaphragms*.
    11. Control Cables*.
    12. Control Linkages*.
    13. Purge Valves.
    14. Vapor Hoses.
    15. Liquid/Vapor Separator.
    16. Carbon Canister.
    17. Canister Mounting Brackets.
    18. Carburetor Purge Port Connector.
    *As related to the evaporative emission control system.
    IV. Emission-related components also include any other part 
whose only purpose is to reduce emissions or whose failure will 
increase emissions without significantly degrading engine/equipment 
performance.

Appendix II to Part 1068--Emission-Related Parameters and 
Specifications

    This appendix specifies emission-related parameters and 
specifications that we refer to for describing such things as 
emission-related defects or requirements related to rebuilding 
engines.
    I. Basic Engine Parameters for 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 top-dead center 
or bottom-dead center).
    b. Valve closing--intake exhaust (degrees from top-dead center 
or bottom-dead center).
    c. Valve overlap (degrees).
    5. Ports--two stroke engines (intake and/or exhaust).
    a. Flow area.
    b. Opening timing (degrees from top-dead center or bottom-dead 
center).
    c. Closing timing (degrees from top-dead center or bottom-dead 
center).
    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.
    3. Temperature control system calibration.
    4. Maximum allowable inlet air restriction.
    III. Fuel System.
    1. General.
    a. Engine idle speed.
    b. Engine idle mixture.
    2. Carburetion.
    a. Air-fuel flow calibration.
    b. Idle mixture.
    c. Transient enrichment system calibration.
    d. Starting enrichment system calibration.
    e. Altitude compensation system calibration.
    f. Hot idle compensation system calibration.
    3. Fuel injection for spark-ignition engines.
    a. Control parameters and calibrations.
    b. Idle mixture.
    c. Fuel shutoff system calibration.
    d. Starting enrichment system calibration.
    e. Transient enrichment system calibration.
    f. Air-fuel flow calibration.
    g. Altitude compensation system calibration.
    h. Operating pressure(s).
    i. Injector timing calibration.
    4. Fuel injection for 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. Ignition System for Spark-ignition Engines.
    1. Control parameters and calibration.
    2. Initial timing setting.
    3. Dwell setting.
    4. Altitude compensation system calibration.
    5. Spark plug voltage.
    V. Engine Cooling System--thermostat calibration.
    VI. Exhaust System--maximum allowable back pressure.
    VII. System for Controlling Exhaust Emissions.
    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.
    VIII. System for Controlling Crankcase Emissions.
    1. Control parameters and calibrations.
    2. Valve calibrations.
    IX. Auxiliary Emission Control Devices (AECD).
    1. Control parameters and calibrations.
    2. Component calibration(s).
    X. System for Controlling Evaporative Emissions.
    1. Control parameters and calibrations.
    2. Fuel tank.
    a. Volume.
    b. Pressure and vacuum relief settings.
    XI. Warning Systems Related to Emission Controls.
    1. Control parameters and calibrations.
    2. Component calibrations.

Appendix III to Part 1068--High-Altitude Counties

    In some cases the standard-setting part includes requirements or 
other specifications that apply for high-altitude counties. The 
following counties have substantial populated areas above 4,000 feet 
above sea level and are therefore considered to be high-altitude 
counties:

STATE OF ARIZONA

Apache
Cochise
Coconino
Navajo
Yavapai

STATE OF COLORADO

Adams
Alamosa
Arapahoe
Archuleta
Boulder
Chaffee
Cheyenne
Clear Creek
Conejos
Costilla
Crowley
Custer
Delta
Denver
Dolores
Douglas
Eagle
Elbert
El Paso
Fremont
Garfield
Gilpin
Grand
Gunnison
Hinsdale
Huerfano
Jackson
Jefferson
Kit Carson
Lake
La Plata
Larimer
Las Animas
Lincoln
Mesa
Mineral
Moffat
Montezuma
Montrose
Morgan
Otero
Ouray
Park
Pitkin
Pueblo
Rio Blanco
Rio Grande
Routt
Saguache
San Juan
San Miguel
Summit
Teller
Washington
Weld

STATE OF IDAHO

Bannock
Bear Lake
Bingham
Blaine
Bonneville
Butte

[[Page 59379]]

Camas
Caribou
Cassia
Clark
Custer
Franklin
Fremont
Jefferson
Lemhi
Madison
Minidoka
Oneida
Power
Teton
Valley

STATE OF MONTANA

Beaverhead
Deer Lodge
Gallatin
Jefferson
Judith Basin
Powell
Madison
Meagher
Park
Silver Bow
Wheatland

STATE OF NEBRASKA

Banner
Cheyenne
Kimball
Sioux

STATE OF NEVADA

Carson City
Douglas
Elko
Esmeralda
Eureka
Humboldt
Lander
Lincoln
Lyon
Mineral
Nye
Pershing
Storey
Washoe
White Pine

STATE OF NEW MEXICO

Bernalillo
Catron
Colfax
Curry
De Baca
Grant
Guadalupe
Harding
Hidalgo
Lincoln
Los Alamos
Luna
McKinley
Mora
Otero
Rio Arriba
Roosevelt
Sandoval
San Juan
San Miguel
Santa Fe
Sierra
Socorro
Taos
Torrance
Union
Valencia

STATE OF OREGON

Harney
Lake
Klamath

STATE OF TEXAS

Jeff Davis
Judspeth
Parmer

STATE OF UTAH

Beaver
Box Elder
Cache
Carbon
Daggett
Davis
Duchesne
Emery
Garfield
Grand
Iron
Juab
Kane
Millard
Morgan
Piute
Rich
Salt Lake
San Juan
Sanpete
Sevier
Summit
Tooele
Uintah
Utah
Wasatch
Wayne
Weber

STATE OF WYOMING

Albany
Campbell
Carbon
Converse
Fremont
Goshen
Hot Springs
Johnson
Laramie
Lincoln
Natrona
Niobrara
Park
Platte
Sublette
Sweetwater
Teton
Uinta
Washakie
Weston

0
246. A new part 1074 is added to subchapter U of chapter I to read as 
follows:

PART 1074--PREEMPTION OF STATE STANDARDS AND PROCEDURES FOR WAIVER 
OF FEDERAL PREEMPTION FOR NONROAD ENGINES AND NONROAD VEHICLES

Subpart A--Applicability and General Provisions
Sec.
1074.1 Applicability.
1074.5 Definitions.
1074.10 Scope of preemption.
1074.12 Scope of preemption--specific provisions for locomotives and 
locomotive engines
Subpart B--Procedures for Authorization
1074.101 Procedures for California nonroad authorization requests.
1074.105 Criteria for granting authorization.
1074.110 Adoption of California standards by other states.
1074.115 Relationship of federal and state standards.

    Authority: 42 U.S.C. 7401-7671q.

Subpart A--Applicability and General Provisions


Sec.  1074.1  Applicability.

    The requirements of this part apply with respect to state and local 
standards and other requirements relating to the control of emissions 
from nonroad engines and nonroad vehicles.


Sec.  1074.5  Definitions.

    The definitions in this section apply to this part. As used in this 
part, all undefined terms have the meaning the Act gives to them. The 
definitions follow:
    Act means the Clean Air Act, as amended, 42 U.S.C. 7401-7671q.
    Administrator means the Administrator of the Environmental 
Protection Agency and any authorized representatives.
    Commercial means an activity engaged in as a vocation.
    Construction equipment or vehicle means any internal combustion 
engine-powered machine primarily used in construction and located on 
commercial construction sites.
    Engine used in a locomotive means either an engine placed in a 
locomotive to move other equipment, freight, or passenger traffic, or 
an engine mounted on a locomotive to provide auxiliary power.
    Farm equipment or vehicle means any internal combustion engine-
powered machine primarily used in the commercial production and/or 
commercial harvesting of food, fiber, wood, or commercial organic 
products or for the processing of such products for further use on the 
farm.
    Locomotive means a piece of equipment meeting the definition of

[[Page 59380]]

locomotive in 40 CFR 1033.901 that is propelled by a nonroad engine.
    New has the following meanings:
    (1) For locomotives, new has the meaning given in 40 CFR 1033.901.
    (2) For engines used in locomotives, new means an engine 
incorporated in (or intended to be incorporated in) in a new 
locomotive.
    (3) For other nonroad engines and equipment, new means a domestic 
or imported nonroad engine or nonroad vehicle the equitable or legal 
title to which has never been transferred to an ultimate purchaser. 
Where the equitable or legal title to an engine or vehicle is not 
transferred to an ultimate purchaser until after the engine or vehicle 
is placed into service, then the engine or vehicle will no longer be 
new once it is placed into service. A nonroad engine or vehicle is 
placed into service when it is used for its functional purposes. This 
paragraph (3) does not apply to locomotives or engines used in 
locomotives.
    Nonroad engine has the meaning given in 40 CFR 1068.30
    Primarily used means used 51 percent or more.
    States and localities means any or all of the states, 
commonwealths, and territories in the United States including the 
District of Columbia and any or all of their political subdivisions.
    Ultimate purchaser means the first person who in good faith 
purchases a new nonroad engine or new nonroad vehicle or equipment for 
purposes other than resale.
    United States has the meaning given in 40 CFR 1068.30.


Sec.  1074.10  Scope of preemption.

    (a) States and localities are preempted from adopting or enforcing 
standards or other requirements relating to the control of emissions 
from new engines smaller than 175 horsepower that are primarily used in 
farm or construction equipment or vehicles, as defined in this part. 
For equipment that is used in applications in addition to farming or 
construction activities, if the equipment is primarily used as farm 
and/or construction equipment or vehicles (as defined in this part), it 
is considered farm or construction equipment or vehicles.
    (b) For nonroad engines or vehicles other than those described in 
paragraph (a) of this section and Sec.  1074.12, States and localities 
are preempted from enforcing any standards or other requirements 
relating to control of emissions from nonroad engines or vehicles 
except as provided in subpart B of this part.


Sec.  1074.12  Scope of preemption-specific provisions for locomotives 
and locomotive engines

    (a) States and localities are preempted from adopting or enforcing 
standards or other requirements relating to the control of emissions 
from new locomotives and new engines used in locomotives.
    (b) During a period equivalent in length to 133 percent of the 
useful life, expressed as MW-hrs (or miles where applicable), beginning 
at the point at which the locomotive or engine becomes new, those 
standards or other requirements which are preempted include, but are 
not limited to, the following: emission standards, mandatory fleet 
average standards, certification requirements, retrofit and aftermarket 
equipment requirements, and nonfederal in-use testing requirements. The 
standards and other requirements specified in the preceding sentence 
are preempted whether applicable to new or other locomotives or 
locomotive engines.

Subpart B--Procedures for Authorization


Sec.  1074.101  Procedures for California nonroad authorization 
requests.

    (a) California must request authorization from the Administrator to 
enforce its adopted standards and other requirements relating to 
control of emissions from nonroad engines or vehicles that are not 
preempted by Sec.  1074.10(a) or Sec.  1074.12. The request must 
include the record on which the state rulemaking was based.
    (b) After receiving the authorization request, the Administrator 
will provide notice and opportunity for a public hearing regarding such 
requests.


Sec.  1074.105  Criteria for granting authorization.

    (a) The Administrator will grant the authorization if California 
determines that its standards will be, in the aggregate, at least as 
protective of public health and welfare as otherwise applicable federal 
standards.
    (b) The authorization will not be granted if the Administrator 
finds that any of the following are true:
    (1) California's determination is arbitrary and capricious.
    (2) California does not need such standards to meet compelling and 
extraordinary conditions.
    (3) The California standards and accompanying enforcement 
procedures are not consistent with section 209 of the Act (42 U.S.C. 
7543).
    (c) In considering any request from California to authorize the 
state to adopt or enforce standards or other requirements relating to 
control of emissions from new nonroad spark-ignition engines smaller 
than 50 horsepower, the Administrator will give appropriate 
consideration to safety factors (including the potential increased risk 
of burn or fire) associated with compliance with the California 
standard.


Sec.  1074.110  Adoption of California standards by other states.

    (a) Except as described in paragraph (b) of this section, any state 
other than California that has plan provisions approved under Part D of 
Title I of the Act (42 U.S.C. 7501 to 7515) may adopt and enforce 
emission standards for any period for nonroad engines and vehicles 
subject to the following requirements:
    (1) The state must provide notice to the Administrator that it has 
adopted such standards.
    (2) Such standards may not apply to new engines smaller than 175 
horsepower that are used in farm or construction equipment or vehicles, 
or to new locomotives or new engines used in locomotives.
    (3) Such standards and implementation and enforcement must be 
identical, for the period concerned, to the California standards 
authorized by the Administrator.
    (4) The state must adopt such standards at least two years before 
the standards first take effect.
    (5) California must have adopted such standards two years before 
the standards first take effect in the state that is adopting them 
under this section.
    (b) States and localities, other than the State of California, may 
not adopt or attempt to enforce any standard or other requirement 
applicable to the control of emissions from spark-ignition engines 
smaller than 50 horsepower, except standards or other requirements that 
were adopted by that state before September 1, 2003.


Sec.  1074.115  Relationship of federal and state standards.

    If state standards apply to a new nonroad engine or vehicle 
pursuant to authorization granted under section 209 of the Act (42 
U.S.C. 7543), compliance with such state standards will be treated as 
compliance with the otherwise applicable standards of this chapter for 
engines or vehicles introduced into commerce in that state.

 [FR Doc. E8-21093 Filed 10-7-08; 8:45 am]
BILLING CODE 6560-50-P