Nonroad Diesel Technical Amendments and Tier 3 Technical Relief Provision

[Federal Register: September 18, 2007 (Volume 72, Number 180)]
[Proposed Rules]
[Page 53204-53211]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr18se07-27]

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ENVIRONMENTAL PROTECTION AGENCY
40 CFR Parts 9, 89, and 1039
[EPA-HQ-OAR-2007-0652; FRL-8467-1]
RIN 2060-AO37

AGENCY: Environmental Protection Agency (EPA).
ACTION: Notice of proposed rulemaking.

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SUMMARY: In this proposed rulemaking, EPA is making certain technical
corrections to the rules establishing emission standards for nonroad
diesel engines. In addition, we are amending those rules to provide
nonroad diesel equipment manufacturers with a production technical
relief provision for Tier 3 equipment which is similar to the technical
relief provision already available for Tier 4 equipment. Like the Tier
4 provisions, the new Tier 3 technical relief provision deals with a
situation where an equipment manufacturer which is not vertically
integrated with its engine supplier is

[[Page 53205]]

unable to complete redesign of the equipment within the time required
by rule (here, the Tier 3 rule). To be eligible, the equipment
manufacturer must show both that its inability to furnish a compliant
equipment design is due to the engine supplier, and that the equipment
manufacturer has exhausted other flexibilities already provided by the
Tier 3 rule. Unlike the Tier 4 technical relief provision, however, the
Tier 3 Technical flexibility will apply up to a maximum of an
additional 50% of production beyond the original 80% provided by the
Tier 3 production flexibility provision. In addition, each grant of
Tier 3 technical relief is associated with the likelihood of earlier
use of Tier 4 nonroad diesel engines. The rule thus provides that for
each one percent of use of Tier 3 technical relief, some percentage of
the automatic Tier 4 production flexibility for the same engine power
category, and some percentage of potential Tier 4 technical relief, is
no longer available. The percentage varies based on the type of engine
for which Tier 3 technical relief is granted, the largest Tier 4
``penalty'' being associated with use of the

DATES: Written comments must be received by October 18, 2007. Request
for a public hearing must be received by October 3, 2007. If EPA
receives adverse comment, we will publish a timely withdrawal in the
Federal Register informing the public that the rule will not take
effect. If we receive a request for a public hearing, we will publish
information related to the timing and location of the hearing and the
timing of a new deadline for public comments.

ADDRESSES: Submit your comments, identified by Docket ID No. EPA-HQ-
OAR-2007-0652, by one of the following methods:
• Federal eRulemaking Portal: http://www.regulations.gov.
Follow the on-line instructions for submitting comments.
• E-mail: a-and-r-Docket@epa.gov.
• Fax: (202) 566-9744.
• Mail: U.S. Environmental Protection Agency, EPA Docket
Center (EPA/DC), Air and Radiation Docket, Mail Code 2822T, 1200
Pennsylvania Avenue, NW., Washington, DC 20460. Deliveries are only
accepted during the Docket's normal hours of operation from 8:30 a.m.
to 4:30 p.m. Eastern Standard Time (EST), Monday through Friday, except
on government holidays. If your Docket requires the submission of
multiple copies, please insert the following here:
• Please include a total of copies.
• If the comment involves an ICR that will be submitted to
OMB for review and approval under 5 CFR 1320.11, then you must also
include the following language pursuant to 1320.11(a): ``In addition,
please mail a copy of your comments on the information collection
provisions to the Office of Information and Regulatory Affairs, Office
of Management and Budget (OMB), Attn: Desk Officer for EPA, 725 17th
St. NW., Washington, DC 20503.''
• Hand Delivery: EPA Docket Center (Air Docket), U.S.
Environmental Protection Agency, EPA West Building, 1301 Constitution
Avenue, NW., Room: 3334, Mail Code 2822T, Washington, DC. Such
deliveries are only accepted during the Docket's normal hours of
operation from 8:30 a.m. to 4:30 p.m. Eastern Standard Time (EST),
Monday through Friday, except on government holidays, and special
arrangements should be made for deliveries of boxed information.
Instructions: Direct your comments to Docket ID No. EPA-HQ-OAR-
2007-0652. EPA's policy is that all comments received will be included
in the public docket without change and may be made available online at
http://www.regulations.gov, including any personal information
provided, unless the comment includes information claimed to be
Confidential Business Information (CBI) or other information whose
disclosure is restricted by statute. Do not submit information that you
consider to be CBI or otherwise protected through http://
www.regulations.gov or e-mail. The http://www.regulations.gov website
is an ``anonymous access'' systems, which means EPA will not know your
identity or contact information unless you provide it in the body of
your comment. If you send an e-mail comment directly to EPA without
going through http://www.regulations.gov your e-mail address will be
automatically captured and included as part of the comment that is
placed in the public docket and made available on the Internet. If you
submit an electronic comment, EPA recommends that you include your name
and other contact information in the body of your comment and with any
disk or CD-ROM you submit. If EPA cannot read your comment due to
technical difficulties and cannot contact you for clarification, EPA
may not be able to consider your comment. Electronic files should avoid
the use of special characters, any form of encryption, and be free of
any defects or viruses. For additional information about EPA's public
docket visit the EPA Docket Center homepage at
http://www.epa.gov/epahome/dockets.htm.
Public Hearing: If a public hearing is held, it will be held at 10
a.m. on October 18, 2007 at the EPA NVFEL Office Building, 2000
Traverwood Drive Ann Arbor, MI, or at an alternate site nearby. Persons
interested in presenting oral testimony must contact Zuimdie Guerra,
Environmental Protection Agency, Office of Transportation and Air
Quality, Assessment and Standards Division, 2000 Traverwood Drive Ann
Arbor, MI 48105; e-mail guerra.zuimdie@epa.gov; telephone (734) 214-
4387; fax number (734) 214-4050, no later than October 15, 2007.
Persons interested in attending the public hearing must also call
Zuimdie Guerra to verify the time, date, and location of the hearing.
If no one contacts Zuimdie Guerra by October 15, 2007 with a request to
present oral testimony at the hearing, the hearing will be cancel.
Docket: All documents in the docket are listed in the
http://www.regulations.gov index. Although listed in the index, some
information is not publicly available, e.g., 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
http://www.regulations.gov or in hard copy at the EPA Docket Center
(EPA/DC), Air Docket, Public Reading Room, Room 3334, EPA West
Building, 1301 Constitution Avenue, NW., Washington, DC. The EPA Docket
Center Public Reading Room is open from 8:30 a.m. to 4:30 p.m. Eastern
Standard Time (EST), Monday through Friday, except on government
holidays. You can reach the Air Docket by telephone at (202) 566-1742
and by facsimile at (202) 566-9744. You may be charged a reasonable fee
for photocopying docket materials, as provided in 40 CFR part 2.

FOR FURTHER INFORMATION CONTACT: Zuimdie Guerra, Environmental
Protection Agency, Office of Transportation and Air Quality, Assessment
and Standards Division, 2000 Traverwood Drive Ann Arbor, MI 48105; e-
mail address guerra.zuimdie@epa.gov; telephone (734) 214-4387; fax
number (734) 214-4050.

SUPPLEMENTARY INFORMATION:

I. General Information

A. Background

In the ``Rules and Regulations'' section of this Federal Register,
we are making these revisions as a direct final rule without prior
proposal because we

[[Page 53206]]

view these revisions as noncontroversial and anticipate no adverse comment.
We have explained our reasons for these revisions in the preamble
to the direct final rule. If we receive no adverse comment, we will not
take further action on this proposed rule. If we receive adverse
comment on the rule, or on one or more distinct actions in the rule, we
will withdraw the direct final rule, or the portions of the rule
receiving adverse comment. We will address all public comments in a
subsequent final rule based on this proposed rule. We will not
institute a second comment period on this action. Any parties
interested in commenting must do so at this time.

B. Does This Action Apply to Me?

This action will affect companies that manufacture and certify
nonroad equipment powered by diesel engines in the United States.

------------------------------------------------------------------------
NAICS code Examples of potentially
Category \a\ affected entities
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U.S. Industry................ 333111 Farm Machinery and Equipment
Manufacturing.
U.S. Industry................ 333112 Lawn and Garden Tractor and
Home Lawn and Garden
Equipment Manufacturing.
U.S. Industry................ 333131 Mining Machinery and
Equipment Manufacturing.
U.S. Industry................ 333132 Oil and Gas Field Machinery
and Equipment
Manufacturing.
Industry..................... 33341 Ventilation, Heating, Air-
Conditioning, and
Commercial Refrigeration
Equipment Manufacturing.
Industry..................... 33361 Engine, Turbine, and Power
Transmission Equipment
Manufacturing.
U.S. Industry................ 333911 Pump and Pumping Equipment
Manufacturing.
U.S. Industry................ 333912 Air and Gas Compressor
Manufacturing.
Industry..................... 33392 Material Handling Equipment
Manufacturing.
U.S. Industry................ 333924 Industrial Truck, Tractor,
Trailer, and Stacker
Machinery Manufacturing.
U.S. Industry................ 333991 Power-Driven Handtool
Manufacturing.
U.S. Industry................ 333992 Welding and Soldering
Equipment Manufacturing.
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\a\ North American Industry Classification System (NAICS).

To determine whether particular activities may be affected by this
action, you should carefully examine the regulations. You may direct
questions regarding the applicability of this action as noted in FOR
FURTHER INFORMATION CONTACT.

C. What Should I Consider as I Prepare My Comments for EPA?

1. Submitting CBI. Do not submit this information to EPA through
http://www.regulations.gov or e-mail. Clearly mark the part or all of
the information that you claim to be CBI. For CBI information in a disk
or CD ROM that you mail to EPA, mark the outside of the disk or CD ROM
as CBI and then identify electronically within the disk or CD ROM the
specific information that is claimed as CBI). In addition to one
complete version of the comment that includes information claimed as
CBI, a copy of the comment that does not contain the information
claimed as CBI must be submitted for inclusion in the public docket.
Information so marked will not be disclosed except in accordance with
procedures set forth in 40 CFR part 2.
2. Tips for Preparing Your Comments. When submitting comments,
remember to:
i. Identify the rulemaking by docket number and other identifying
information (subject heading, Federal Register date and page number).
ii. Follow directions--The agency may ask you to respond to
specific questions or organize comments by referencing a Code of
Federal Regulations (CFR) part or section number.
iii. Explain why you agree or disagree; suggest alternatives and
substitute language for your requested changes.
iv. Describe any assumptions and provide any technical information
and/or data that you used.
v. If you estimate potential costs or burdens, explain how you
arrived at your estimate in sufficient detail to allow for it to be
reproduced.
vi. Provide specific examples to illustrate your concerns, and
suggest alternatives.
vii. Explain your views as clearly as possible, avoiding the use of
profanity or personal threats.
viii. Make sure to submit your comments by the comment period
deadline identified.

D. How Can I Get Copies of This Document and Send Comments?

See the direct final rule EPA has published in the ``Rules and
Regulations'' section of today's Federal Register for information about
accessing these documents. The direct final rule also includes detailed
instructions for sending comments to EPA.

II. Summary of Rule

A. EPA is making the following technical amendments to correct a
variety of regulatory provisions in the regulations establishing
emission standards for nonroad diesel engines:
• 40 CFR 9.1: Adding the approved information collection for
nonroad diesel engines to the summary table in 40 CFR part 9.
• 40 CFR 89.1: Correcting a typographical error.
• 40 CFR 89.101: Adding a provision to allow manufacturers
to start using the provisions already adopted for Tier 4 engines in the
time that Tier 2 or Tier 3 standards continue to apply. We would allow
this only to the extent that it does not affect our ability to ensure
that manufacturers fully comply with applicable requirements.
• 40 CFR 89.102: Clarifying the legal status for equipment
using engines exempted from current standards under the Transition
Program for Equipment Manufacturers. The original language does not
clearly exempt the equipment from the otherwise applicable prohibition
in Sec. 89.1003, which would be necessary for this whole program.
• 40 CFR 89.102: Clarifying the limitation of allowances
based on engine families. Since these engines are not certified, we
clarify that this term relates to the characteristics described for
certifying engines in Sec. 89.116.
• 40 CFR 89.102: Technical relief provision; discussion
below in part B.
• 40 CFR 89.108: Adding a provision for engines to be
adjusted outside the normal range of parameter adjustment for
applications involving landfill or wellhead gas. We have already
adopted this in 40 CFR part 1039 for Tier 4 engines, so this change
simply allows manufacturers to implement this provision earlier.
• 40 CFR 89.115: Requiring manufacturers to name an agent
for service in the United States. This simply allows us to ensure that
we will have a person in the United States who is able to speak for the
company and receive communication regarding any aspect of

[[Page 53207]]

our effort to certify engines and oversee compliance of certified products.
• 40 CFR 89.205: Clarifying provisions in the nonroad diesel
engine averaging, banking, and trading (ABT) program. The text change
is to clarify that these credits are considered to be Tier 2 credits.
• 40 CFR 89.601: Requiring importers to complete the EPA
declaration form before importing engines, and to keep the forms for
five years. This amendment simply restates the provisions that are
already in place for the U.S. Customs and Border Patrol at 19 CFR 12.74.
• 40 CFR 89.611: Defining the initial dates for implementing
emission standards for nonroad diesel engines below 37 kW. This
corrects an earlier oversight in the definition of the scope of the
exemption for importing engines that were built before emission
standards started to apply.
• 40 CFR 1039.102: Clarifying provisions in the nonroad
diesel engine averaging, banking, and trading (ABT) program.
• 40 CFR 1039.104: Clarifying provisions in the nonroad
diesel engine averaging, banking, and trading (ABT) program. The change
corrects an inconsistency with the existing regulatory text that
effectively prevents the use of credit-using Tier 3 engines in the
initial years of Tier 4 in certain situations.
• 40 CFR 1039.115: Specifying that crankcase requirements
apply throughout an engine's useful life. Without this clarifying
language, it is not clear how long this requirement applies, or whether
it ever expires. We are also clarifying that the requirements of this
section do not apply to engines that are subject to part 1039 requirements,
but have been exempted from the emission standards for any reason.
• 40 CFR 1039.125: Correcting an inadvertant reference to
nonroad equipment, which should refer instead to nonroad engines as is
clear from the context.
• 40 CFR 1039.135: Adding clarifying language to describe
when an engine's emission control information label is so obscured as
to require the equipment manufacturer to apply a separate duplicate
label. To be consistent with all other programs for nonroad engines, we
specify that a label that is visible during normal maintenance is not
obscured. We are also adding a specification that manufacturers keep
records of the engine families for which they send duplicate labels.
• 40 CFR 1039.205: Requiring submission of emission results
for each test mode if manufacturers conduct discrete-mode testing. This
does not apply for ramped-modal testing. These measurements would be
submitted for demonstrating compliance with not-to-exceed standards, so
this should not include any additional testing or reporting burden.
• 40 CFR 1039.205: Requiring manufacturers to name an agent
for service in the United States, as described above for Sec. 89.115.
• 40 CFR 1039.205: Requiring that manufacturers make good-
faith estimates of projected production volumes.
• 40 CFR 1039.210: Clarifying EPA's role in preliminary
approvals to describe that we generally would not reverse a decision
without new information supporting a different decision.
• 40 CFR 1039.225: Revising the language to avoid using the
term ``new nonroad engine,'' since that defined term is not appropriate
for this section.
• 40 CFR 1039.235: Clarifying that carryover of emission
data is possible for engine families that have engine changes in a new
model year, as long there are no changes that might affect emissions.
• 40 CFR 1039.245: Removing a regulatory provision that was
inadvertently included in two separate paragraphs.
• 40 CFR 1039.255: Narrowing the scope of recordkeeping that
would subject an engine manufacturer to an action that could result in
the certificate of conformity being revoked or voided, consistent with
the similar provisions in our other nonroad engine programs.
• 40 CFR 1039.501: Clarifying the emission standards to
which specific test procedures apply.
• 40 CFR 1039.505: Clarifying that cycle statistics for
discrete-mode testing should be based on a calculation for each mode
rather than the sequence of modes.
• 40 CFR 1039.605 and 40 CFR 1039.610: Amending the regulatory
language to address a variety of legal and technical clarifications.
• 40 CFR 1039.625: Amending the regulatory language to
specify the proper engine power lower bound.
• 40 CFR 1039.705: Amending the description for calculating
emission credits to clarify the steps in making the calculation.
• 40 CFR 1039.730: Revising the description of emission
credit calculations to clarify that manufacturers need consider only
those families that generate or use emission credits. The emission
credit program described in this subpart for these engines is not based
on fleet-average compliance.
• 40 CFR 1039.735: Clarifying the recordkeeping provisions
related to emission credits and adding a requirement to keep records as
long as the banked credits are considered valid for demonstrating
compliance with emission standards.
• 40 CFR 1039.801: Correcting various definitions to be consistent
with more recent rulemakings that used somewhat different wording.
• 40 CFR 1039.810: Removing the incorporation by reference
for the document that defines our rounding conventions, since we are
already relying on the same reference established in 40 CFR part 1065.
• 40 CFR 1039.825: Adding a new section to summarize the
information collection requirements in part 1039.
B. This rulemaking also provides nonroad diesel equipment
manufacturers that are not vertically integrated with engine suppliers
with a production technical relief provision for Tier 3 equipment,
modeled on the comparable provision for Tier 4 equipment found in 40
CFR section 1039.625 (m).
Only equipment manufacturers who do not make the engines used in
the equipment for which technical relief is sought are eligible to
apply for technical relief under this provision (since the engine
production and equipment production segments of integrated entities
would necessarily be in contact and therefore not experience the type
of unexpected redesign changes which could warrant technical relief).
This applies exclusively to equipment manufacturers as described in
section 1039.626. Engine manufacturers and importers thus may not
request this relief.
The Tier 4 nonroad diesel rule applies both to diesel engine
manufacturers and to equipment manufacturers who install engines made
by engine manufacturers. Equipment manufacturers are ultimately
responsible for producing non-road applications which comply with the
rule's standards by the rule's compliance date. However, there can be
circumstances when equipment manufacturers, through no fault of their
own, receive engines from their suppliers too late to meet compliance
dates. Although the Tier 4 rule contains a number of equipment
manufacturer flexibility provisions which apply automatically (i.e.
without any showing of need or any requirement to obtain EPA approval),
we were convinced that some additional flexibility was needed to cover
circumstances where (a) an equipment manufacturer has exhausted

[[Page 53208]]

its automatic flexibilities, and (b) it demonstrates to EPA that it
cannot comply with the rule because, through no fault of its own, the
engine manufacturer failed to deliver a compliant engine to the
equipment manufacturer in sufficient time. The provision is also to be
used only as a last resort, so an equipment manufacturer is eligible
for relief under the provision only after it exhausts all other
flexibility provisions and implementation options. This provision
(which we call ``technical relief'' \1\) is explained in the Tier 4
nonroad preamble at 69 FR 39007-39008 (June 29, 2004), and (as noted)
is codified at section 1039.625 (m).
---------------------------------------------------------------------------

\1\ The Tier 4 rule uses the phrase `technical or engineering
hardship' to describe this provision, and today's rule uses that
same language.
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The same issue can arise for producers of Tier 3 nonroad diesel
equipment, but the Tier 3 rule does not contain the technical relief
provision. This rule essentially adds the same technical relief provision
to the Tier 3 rule, for the same reasons EPA adopted it in Tier 4.
Tier 3 equipment manufacturers may need this technical relief to
address challenges that may occur as engine manufacturers choose to
implement technical changes for Tier 3. If an engine manufacturer
changes their plan late in the design implementation process, an
equipment company with unique or complicated equipment designs could
face challenges with their internal redesign process. If the equipment
manufacturer has already used its other flexibilities, there thus may
still be circumstances warranting technical relief for Tier 3 equipment.
There are two principal differences between the Tier 3 technical
relief provision, and the existing provision in Tier 4. The first is
that the dirtier the substitute engine used if technical relief is
granted for Tier 3 equipment, the more Tier 4 flexibilities (both
automatically available flexibilities and potential technical relief)
the equipment manufacturer must give up (further details are explained
below). This encourages earlier use of Tier 4 engines (the cleanest),
and ensures that the net emission reductions from Tier 3 and Tier 4
engines remain the greatest achievable, as required by section 213 of
the Act. Another difference between the Tier 3 and Tier 4 technical
relief provisions is that for the Tier 3 program, relief is limited to
50% of one year's production volume for each power category (as opposed
to 70% under Tier 4). This allows for the transitional nature of this
program to be realized, while limiting the potential for abuse beyond
the need to facilitate a transition to cleaner engines.
However, for the most part, the Tier 3 technical provision mirrors
that in Tier 4. As with the parallel provision in Tier 4, this
technical relief provision provides a case-by-case exemption granted by
EPA to an equipment manufacturer after evaluating the equipment
manufacturer's application. Any engine produced utilizing this relief
must be appropriately labeled to avoid the introduction into commerce
of engines that are not in compliance. A clearly visible label thus
must be provided which indicates the regulatory flexibility under which
these engines are being produced. The provision applies to equipment
that would otherwise be required to use engines certified to the Tier 3
standard (i.e. model year 2006 to 2008 equipment with 37 to 560 kW
nonroad diesel engines). The equipment manufacturer would have the
burden of demonstrating existence of an extreme technical or
engineering hardship condition that is outside its control, i.e. is
essentially due to conduct of the (nonintegrated) engine supplier and
therefore out of the equipment manufacturer's control. The equipment
manufacturer must also demonstrate that it has exercised reasonable due
diligence to try to avoid being in the situation.
In order to meet these criteria, the equipment manufacturer needs
to provide to EPA documentation, or a written explanation, addressing
the following issues:
• Documentation of the technical or engineering problem that
was unsolvable within the lead time provided by the Tier 3 rule.
• A description of the normal design cycle between the
engine manufacturer and the equipment manufacturer and why that process
did not work in this instance.
• All information (such as written specifications,
performance data, prototype engines) received by the equipment
manufacturer from the engine manufacturer.
• Comparison of the design process for the equipment model
for which the exemption is requested versus those for which the
exemption is not needed.
• A description of efforts the equipment maker has made to
find other compliant engines for the model.
• Documentation that existing flexibilities will be fully
utilized before the need for technical relief.
EPA would then decide on a case by case basis what percentage, if
any, of additional relief (i.e. relief above and beyond that afforded
by the automatic percent of production flexibility) would be provided.
Applicability of the Tier 3 technical relief provision is
restricted to:
• Up to a maximum of an additional 50% beyond original 80%
automatic per cent of production technical flexibility (a change from
Tier 4, as noted above).
• Full allowance is limited to the first two (2) years of Tier 3.
• Phased-in by power category.
• The Tier 3 automatic flexibility provisions continue to
apply for their original seven years or until fully consumed.
• Applies to 56 to 560 kW categories only for the percent of
production and only available between 37 to 75 kW for the small volume.
A significant feature of this Tier 3 technical relief provision,
which has no counterpart in the Tier 4 provision, is that for every 1%
of the equipment production using this relief provision in the Tier 3
timeframe (i.e. equipment that uses engines not conforming to the Tier
3 standard in the Tier 3 timeframe), a percentage of the (automatic)
production equipment flexibility allowance for Tier 4 is sacrificed
from the comparable Tier 4 power category (i.e. this per cent of the
otherwise automatic flexibility is no longer available), and an
additional 1% is sacrificed from any potential Tier 4 technical relief
that the Agency may grant for that power category. Please see Table 1.
In other words, to utilize the Tier 3 technical relief, the equipment
manufacturer must give up some amount of its otherwise automatic Tier 4
flexibility and some portion of its potential Tier 4 technical relief.
The Tier 4 percent of production sacrifice is based on the percentage
of earlier Tier (e.g. Tier 1 or 2) engines utilized in place of Tier 3
engines. Grant of Tier 3 technical relief thus would be linked to
earlier use of Tier 4 engines.

[[Page 53209]]

Table 1.--Technical Relief Usage
[In percent]
----------------------------------------------------------------------------------------------------------------
Offsetting deductions required for use of one percent of Tier 3 technical
Use of percent of production relief
allowances by equipment manufacturer ---------------------------------------------------------------------------
during implementation of Tier 2 Tier 4 percent of production
program allowance Tier 4 technical relief
----------------------------------------------------------------------------------------------------------------
0-20 0 1
20-40 1 1
40-60 2 1
60-80 3 1
----------------------------------------------------------------------------------------------------------------

For example, if you used 45 percent of your production flexibility
for equipment using Tier 2 engines of a given power category (i.e. if
in the Tier 2 timeframe you used 45% of the total 80% percent of
production flexibility for that power category), you must forfeit 2
percent of the (automatic) production flexibility for Tier 4 engines of
that power category for every 1 percent technical relief EPA grants for
Tier 3 equipment using engines of that power category. You must also
forfeit 1 percent of any potential technical relief which could be
granted for Tier 4 engines (i.e. for equipment using Tier 4 engines)
for every 1 percent technical relief exemption EPA grants for Tier 3
engines. If you use the Tier 3 technical relief allowances for 5
percent of your equipment for two years, you have used a total
allowance of 10 percent. Therefore, as shown in Table 1, you must
forfeit a total of 20 percent of production flexibility for Tier 4
engines plus 10 percent of any technical relief which could be granted
for Tier 4 engines.
The technical relief will be further adjusted based on the sales
volume by power category. Because the Tier 3 and Tier 4 rules have
different power category ranges, today's rule specifies which power
categories in Tier 4 correspond to those in Tier 3 for purposes of this
rule. The Tier 3 power categories of 37kW to 75kW and 75kW to 130kW
correspond to the Tier 4 power category of 56kW to 130kW. For the Tier
3 equipment in the 37 to 75kW category, you must only use the sales
volume for equipment that uses engines with a rated power greater than
56kW. For example, if you have a Tier 3 piece of equipment that uses a
40 kW engine, the sales of the equipment are counted in the Tier 4
power category of 19kW to 56kW. If you have a Tier 3 piece of equipment
that uses a 60kW engine, the sales of the equipment are counted in the
Tier 4 power category of 56kW to 130kW. The Tier 3 power categories of
130kW to 225kW, 225kW to 450kW and 450kW to 560kW correspond to the
Tier 4 power category of 130kW to 560kW. You will need to sum the sales
of the Tier 3 power categories that correspond to the Tier 4 power
category. Please see Table 2. If EPA grants technical relief, the sum
of all the Tier 3 units that are so exempted are divided by the sum of
all the Tier 3 units sold in the corresponding Tier 4 power category to
determine the percentage of Tier 4 equipments affected.

Table 2.--Power Categories
------------------------------------------------------------------------
Tier 3 power category Tier 4 power category
------------------------------------------------------------------------
37kW to 75kW *............................ 19kW to 56kW.
37kW to 75kW **, 75kW to 130kW............ 56kW to 130kW.
130kW to 225kW, 225kW to 450kW, 450kW to 130kW to 560kW
560kW..
------------------------------------------------------------------------
* Applies only to use of engines rated between 37kW and 56kW by small
volume equipment manufacturers.
** Includes only equipment that uses engines with a rated power greater
than 56kW.

For example, if you produce 50 units using Tier 3 technical relief
in the range of 130kW to 225kW, and you produce 50 units using Tier 3
technical relief in the range of 225 to 450kW, and no units are
produced in the 450kW to 560kW range, and your overall sales volume for
the power ranges of 130kW to 560kW in Tier 3 is 400 units, the amount
of Tier 3 technical relief used is 100/400 or 25 percent. Because you
forfeit 1 percent of your Tier 4 technical relief for every 1 percent
of Tier 3 technical relief used (see Table 1 above), then you will lose
25 percent of your (potential) Tier 4 technical relief in the 130kW to
560kW power range category. If you used 45 percent of your production
flexibility for Tier 2 engines, you must forfeit 2 percent of
production flexibility for Tier 4 engines for every 1 percent of Tier 3
technical relief. Therefore, you will forfeit 50 percent of your Tier 4
production allowance in the 130kW to 560kW power range category.
Because the technical relief provision was not originally included
in the Tier 3 program, we believe it is important to maintain the
emission benefits of the Tier 3 rule by requiring a consistent emission
trade-off with Tier 4. EPA has already found that the greatest
emissions reduction achievable industry-wide for Tier 3 and Tier 4 do
not include Tier 3 technical relief plus all of the other Tier 3 and
Tier 4 flexibilities. The requirement that certain otherwise-available
Tier 4 flexibilities be foregone is designed to ensure protection of
the environment, prevent abuse, and encourage earlier introduction of
Tier 4 technology. Most basically, as noted above, the linkage is
designed to assure that the Tier 3 and Tier 4 rules, in combination,
continue to result in the greatest emissions reduction achievable
industry-wide, as required by section 213(a) of the Act.
The technical relief for small volume equipment manufacturers is
similar to the equipment manufacturer technical relief with the
distinction that it applies to small volume equipment manufacturers.
The following criteria for small volume apply:
• 100 unit cap.
• Small volume technical relief is only available to the 37
to 56 kW range and the 56 to 75 kW range.

III. Statutory and Executive Order Reviews

A. Executive Order 12866: Regulatory Planning and Review

This action is not a ``significant regulatory action'' under the
terms of Executive Order (EO) 12866 (58 FR 51735, October 4, 1993) and
is therefore not subject to review under the EO.

B. Paperwork Reduction Act

This action does not impose an information collection burden under
the provisions of the Paperwork Reduction Act, 44 U.S.C. 3501 et seq.
The Agency believes this action does not impose information collection
burden because this rulemaking only provides a production technical
relief provision for nonroad equipment manufactures.
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

[[Page 53210]]

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.
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

Today's proposed rule is not subject to the Regulatory Flexibility
Act (RFA), which generally requires an agency to prepare a regulatory
flexibility analysis for any rule that will have a significant economic
impact on a substantial number of small entities. The RFA applies only
to rules subject to notice and comment rulemaking requirements under
the Administrative Procedure Act (APA) or any other statute. Although
the rule is subject to the APA, the Agency has invoked the ``good
cause'' exemption under 5 U.S.C. 553(b), therefore it is not subject to
the notice and comment requirement.

D. Unfunded Mandates Reform Act

Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Public
Law 104-4, establishes requirements for Federal agencies to assess the
effects of their regulatory actions on State, local, and tribal
governments and the private sector. Under section 202 of the UMRA, EPA
generally must prepare a written statement, including a cost-benefit
analysis, for proposed and final rules with ``Federal mandates'' that
may result in expenditures to State, local, and tribal governments, in
the aggregate, or to the private sector, of $100 million or more in any
one year. Before promulgating an EPA rule for which a written statement
is needed, section 205 of the UMRA generally requires EPA to identify
and consider a reasonable number of regulatory alternatives and adopt
the least costly, most cost-effective or least burdensome alternative
that achieves the objectives of the rule. The provisions of section 205
do not apply when they are inconsistent with applicable law. Moreover,
section 205 allows EPA to adopt an alternative other than the least
costly, most cost-effective or least burdensome alternative if the
Administrator publishes with the final rule an explanation 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. Today's final rule contains no Federal mandates for
State, local, or Tribal governments or the private sector. The rule
imposes no new expenditure or enforceable duty on any State, local or
Tribal governments or the private sector, and EPA has determined that
this rule contains no regulatory requirements that might significantly
or uniquely affect small governments.

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.''
This proposed rule does not have federalism implications. It will
not have substantial direct effects on the States, on the relationship
between the national government and the States, or on the distribution
of power and responsibilities among the various levels of government,
as specified in Executive Order 13132. This rulemaking affects only
nonroad equipment manufacturers providing them a production technical
relief provision. Thus, Executive Order 13132 does not apply to this rule.

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

Executive Order 13175, entitled ``Consultation and Coordination
with Indian Tribal Governments'' (59 FR 22951, 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 proposed rule does not
have tribal implications, as specified in Executive Order 13175. This
rulemaking affects only nonroad equipment manufacturers providing them
a production technical relief provision. 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 rule is not subject to the Executive Order because it is not
economically significant, and does not involve decisions on environmental
health or safety risks that may disproportionately affect children.

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

This rule is not subject to Executive Order 13211, ``Actions
Concerning Regulations That Significantly Affect Energy Supply,
Distribution, or Use'' (66 FR 28355 (May 22, 2001)) because it is not a
significant regulatory action under Executive Order 12866.

I. National Technology Transfer and Advancement Act

Section 12(d) of the National Technology Transfer and Advancement
Act of 1995 (``NTTAA''), Public Law No. 104-113, 12(d) (15 U.S.C. 272
note) directs EPA to use voluntary consensus standards in its
regulatory activities unless to do so would be inconsistent with
applicable law or otherwise impractical. Voluntary consensus standards
are technical standards (e.g., materials specifications, test methods,
sampling procedures, and business practices) that are developed or
adopted by voluntary consensus standards bodies. The NTTAA directs EPA to

[[Page 53211]]

provide Congress, through OMB, explanations when the Agency decides not
to use available and applicable voluntary consensus standards.
This proposed rulemaking does not involve technical standards.
Therefore, EPA is not considering the use of any voluntary consensus
standards.

J. 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 proposed rule will not have
disproportionately high and adverse human health or environmental
effects on minority or low-income populations because it does not
affect the level of protection provided to human health or the
environment. The technical amendments on this rule do not relax the
control measures on sources regulated by the rule and therefore will
not cause emissions increases from these sources. The technical relief
for the Tier 3 timeframe seeks to compensate for any emissions impact
by encouraging earlier use of Tier 4 engines requiring the equipment
manufacturer to give up specific Tier 4 flexibilities.

K. Statutory Authority

The statutory authority for this action comes from section 202 of
the Clean Air Act as amended (42 U.S.C. 7521). This action is a
rulemaking subject to the provisions of Clean Air Act section 307(d).
See 42 U.S.C. 7607(d).

List of Subjects

40 CFR Part 9

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

40 CFR Part 89

40 CFR Part 1039

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

Dated: September 6, 2007.
Stephen L. Johnson,
Administrator.
[FR Doc. E7-18163 Filed 9-17-07; 8:45 am]
BILLING CODE 6560-50-P

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