Nonroad Diesel Technical Amendments and Tier 3 Technical Relief Provision

[Federal Register: September 18, 2007 (Volume 72, Number 180)]
[Rules and Regulations]
[Page 53118-53134]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr18se07-13]

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ENVIRONMENTAL PROTECTION AGENCY
40 CFR Parts 9, 89, and 1039
[EPA-HQ-OAR-2007-0652; FRL-8467-2]
RIN 2060-AO37

AGENCY: Environmental Protection Agency (EPA).
ACTION: Direct final rule.

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SUMMARY: In this 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 unable to complete redesign of
the equipment within the time required by rule (here, the Tier 3 rule).
To be

[[Page 53119]]

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. The amount of relief under the
Tier 3 technical relief provision is somewhat less than is available
under the parallel Tier 4 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 higher emitting earlier
tier engines.

DATES: This direct final rule is effective on November 19, 2007 without
further notice, unless we receive adverse comments by October 18, 2007
or receive a request for a public hearing by October 3, 2007. If we
receive any significant adverse comments on this direct final rule, or
on one or more amendments in this direct final rule, or receive a
request for a hearing within the time frame described above, we will
publish a timely withdrawal in the Federal Register informing the
public that this rule, or the provisions of this rule that are the
subject of significant adverse comment, will not take effect.

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 Headquarters Library, Room Number
3334 in the EPA West Building, located at 1301 Constitution Ave., NW.,
Washington, DC. Such deliveries are only accepted during the Docket's
normal hours of operation. 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, 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 canceled.
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, EPA Headquarters Library, Room Number 3334 in the
EPA West Building, located at 1301 Constitution Ave., 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

[[Page 53120]]

(734) 214-4387; fax number (734) 214-4050.

SUPPLEMENTARY INFORMATION:

I. General Information

EPA is publishing this rule without a prior proposal because we
view this action as noncontroversial and anticipate no adverse comment.
For this reason, we believe that notice and comment procedures are
``unnecessary'', within the meaning of 5 U.S.C. section 553 (b) and
that therefore there is good cause to adopt this rule without utilizing
such procedures. However, in the ``Proposed Rules'' section of today's
Federal Register publication, we are publishing a separate document
that will serve as the proposal to adopt the provisions in this Direct
Final Rule if our assumption is incorrect and significant adverse
comments are filed. This rule will be effective on November 19, 2007
without further notice unless we receive significant adverse comment by
October 18, 2007 or a request for a public hearing by October 3, 2007.
If we receive significant adverse comment on one or more distinct
provisions of this rule, we will publish a timely withdrawal in the
Federal Register indicating which provisions are being withdrawn due to
adverse comment. We may address all adverse comments in a subsequent
final rule based on the proposed rule. We are not planning to institute
a second comment period on this action. Any parties interested in
commenting must do so at this time. For further information about
commenting on this rule, see the ADDRESSES section of this document.
Any distinct provisions of today's rulemaking for which we do not
receive adverse comment will become effective on the date set out
above, notwithstanding any adverse comment on any other discrete
provisions of today's rule.

A. Regulated Entities

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

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NAICS Examples of potentially
Category code \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..................... 333618 Manufacturers of new
engines.
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.
U.S. Industry..................... 811112 Commercial importers of
vehicles and vehicle
components.
U.S. Industry..................... 811198 Commercial importers of
vehicles and vehicle
components.
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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.

B. 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.

C. How and to Whom Do I Submit Comments?

You may summit comments on this direct final rule as described in
this section. You should note that we are also publishing a notice of
proposed rulemaking in the ``Proposed Rules'' section of today's
Federal Register, which matches the substance of this direct final
rule. Your comments on this direct final rule will be considered to
also be applicable to that notice of proposed rulemaking. As explained
above, if we receive any adverse comments on this direct final rule or
receive a request for a hearing within the time frame described above,
we will publish a timely withdrawal in the Federal Register informing
the public that this rule, or the provisions of this rule for which we
received adverse comment, will not take effect. We may then take final
action in a final rule based on the accompanying proposal. We will not
institute a second comment period.

[[Page 53121]]

You may submit comments electronically, by mail, by facsimile, or
through hand delivery/courier. To ensure proper receipt by EPA,
identify the appropriate docket identification number in the subject
line on the first page of your comment. Please ensure that your
comments are submitted within the specified comment period. Comments
received after the close of the comment period will be marked ``late.''
EPA is not required to consider these late comments.
1. Electronically. If you submit an electronic comment as
prescribed below, EPA recommends that you include your name, mailing
address, and an e-mail address or other contact information in the body
of your comment. Also include this contact information on the outside
of any disk or CD-ROM you submit, and in any cover letter accompanying
the disk or CD-ROM. This ensures that you can be identified as the
submitter of the comment and allows EPA to contact you in case EPA
cannot read your comment due to technical difficulties or needs further
information on the substance of your comment. EPA's policy is that EPA
will not edit your comment, and any identifying or contact information
provided in the body of a comment will be included as part of the
comment that is placed in the official public docket, and made
available in EPA's electronic public docket. 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.
i. EPA dockets. Your use of EPA's electronic public docket to submit
comments to EPA electronically is EPA's preferred method for receiving
comments directly to EPA Dockets at http://www.regulations.gov
and follow the online instructions for submitting comments. Once in the
system, select ``search,'' and then key in Docket ID No.
EPA-HQ-OAR-2007-0652. The system is an ``anonymous access'' system, which
means EPA will not know your identity, e-mail address, or other contact
information unless you provide it in the body of your comment.
ii. E-mail. Comments may be sent by electronic mail (e-mail) to
a-and-r-Docket@epa.gov. Attention Air Docket ID No. EPA-HQ-OAR-2007-0652.
In contrast to EPA's electronic public docket, EPA's e-mail system is
not an ``anonymous access'' system. If you send an e-mail comment
directly to the Docket without going through EPA's electronic public
docket, EPA's e-mail system automatically captures your e-mail address.
E-mail addresses that are automatically captured by EPA's e-mail system
are included as part of the comment that is placed in the official
public docket, and made available in EPA's electronic public docket.
iii. Disk or CD-ROM. You may submit comments on a disk or CD-ROM
that you mail to the mailing address identified in ADDRESSES above.
These electronic submissions will be accepted in WordPerfect or ASCII file
format. Avoid the use of special characters and any form of encryption.
2. By Mail. Send two copies of your comments to: U.S. Environmental
Protection Agency, EPA Docket Center (EPA/DC), Air and Radiation
Docket, Mail Code 2822T, 1200 Pennsylvania Avenue, NW., Washington, DC
20460., Attention Docket ID No. EPA-HQ-OAR-2007-0652.
3. By Hand Delivery or Courier. Deliver your comments to: EPA
Docket Center (Air Docket), U.S. Environmental Protection Agency, EPA
West Building, 1301 Constitution Avenue, NW., Room: 3334, Mail Code:
2822T, Washington, DC, Attention Air Docket ID No. EPA-HQ-OAR-2007-
0652. Such deliveries are only accepted during the Docket's normal
hours of operation as identified in Unit I.
4. By Facsimile. Fax your comments to: (202) 566-9744, Attention
Docket ID No. EPA-HQ-OAR-2007-0652.

B. How Can I Get Copies of This Document?

1. Docket. EPA has established an official public docket for this
action under Air Docket Number EPA-HQ-OAR-2007-0652. The official
public docket consists of the documents specifically referenced in this
action, any public comments received, and other information related to
this action. Although a part of the official docket, the public docket
does not include Confidential Business Information (CBI) or other
information whose disclosure is restricted by statute. The official
public docket is the collection of materials that is available for
public viewing at the Air Docket in the EPA Docket Center (EPA/DC), EPA
Headquarters Library, Room Number 3334 in the EPA West Building,
located at 1301 Constitution Ave., 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, excluding legal holidays.
The telephone number for the Public Reading Room is (202) 566-1744, and
the telephone number for the Air Docket is (202) 566-9744.
2. Electronic Access. This direct final rule is available
electronically from the EPA Internet Web site. This service is free of
charge, except for any cost incurred for internet connectivity. The
electronic version of this final rule is made available on the date of
publication on the primary web site listed below. The EPA Office of
Transportation and Air Quality also publishes Federal Register notices
and related documents on the secondary web site listed below.
i. http://www.epa.gov/docs/fedrgstr/EPA-AIR (either select desired
date or use Search features).
ii. http://www.epa.gov/otaq (look in What's New or under the
specific rulemaking topic).
Please note that due to differences between the software used to
develop the documents and the software into which the document may be
downloaded, format changes may occur.

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.

[[Page 53122]]

• 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 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 inadvertent 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 as 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 nonroad 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

[[Page 53123]]

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 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 can 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
39007-008 (June 29, 2004), and (as noted) is codified at section
1039.625(m).
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\1\ The Tier 4 rule uses the phrase ``technical or engineering
hardship'' to describe this provision, and today's rule uses that
same language.
---------------------------------------------------------------------------

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. Today's 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
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 provided
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 percent 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 percent 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 53124]]

Table 1.--Technical Relief Usage
------------------------------------------------------------------------
Offsetting deductions
required for use of one
percent of Tier 3
technical relief
Use of percent of production allowances by ---------------------------
equipment manufacturer during implementation Tier 4
of Tier 2 program (percent) percent of Tier 4
production technical
allowance relief
(percent) (percent)
------------------------------------------------------------------------
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 37kW 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
40kW 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 equipment 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 225kW 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 does
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 technical relief
provision for nonroad equipment manufacturers.
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.
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.

[[Page 53125]]

C. Regulatory Flexibility Act

Today's direct final 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), Pub.
L. 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 direct final 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 direct final 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 provide Congress, through OMB, explanations when the Agency decides
not to use available and applicable voluntary consensus standards.
This action does not involve technical standards. Therefore, EPA
did not consider 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

[[Page 53126]]

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 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. 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. Section 808 allows the issuing agency to make a rule
effective sooner than otherwise provided by the CRA if the agency makes
a good cause finding that notice and public procedure is impracticable,
unnecessary or contrary to the public interest. This determination must
be supported by a brief statement. 5 U.S.C. 808(2). As stated
previously, EPA has made such a good cause finding, including the
reasons therefore, and established an effective date of November 19,
2007. EPA will submit a report containing this rule and other required
information to the U.S. Senate, the U.S. House of Representatives, and
the Comptroller General of the United States prior to publication of
the rule in the Federal Register.This action is not a ``major rule'' as
defined by 5 U.S.C. 804(2).

L. Statutory Authority

The statutory authority for this action comes from section 213 of
the Clean Air Act as amended (42 U.S.C. 7547). This action is a
rulemaking subject to the provisions of the Administrative Procedure
Act (see Clean Air Act section 307(d)(1) final sentence).

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.

• For the reasons set forth in the premable, title 40, chapter I of the
Code of Federal Regulations is amended as follows:

PART 9--OMB APPROVALS UNDER THE PAPERWORK REDUCTION ACT

• 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.

• 2. Section 9.1 is amended in the table by adding a center heading and
an entry in numerical order to read as follows:

Sec. 9.1 OMB approvals under the Paperwork Reduction Act.

* * * * *

------------------------------------------------------------------------
40 CFR citation OMB control No.
------------------------------------------------------------------------

* * * * * * *
------------------------------------------------------------------------
Control of Emissions from New and In-use Nonroad Compression-Ignition
Engines
------------------------------------------------------------------------
1039.825............................ .2060-0287.

* * * * * * *
------------------------------------------------------------------------

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

• 3. The authority citation for part 89 is revised to read as follows:

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

Subpart A--[Amended]

• 4. Section 89.1 is amended by revising paragraph (b)(2) to read as follows:

Sec. 89.1 Applicability.

* * * * *
(b) * * *
(2) Mining engines. This part does not apply for engines used in
underground mining equipment and regulated by the Mining Safety and
Health Administration (MSHA) in 30 CFR parts 7, 31, 32, 36, 56, 57, 70,
and 75.
* * * * *

• 5. Section 89.2 is amended by adding a definition for ``Designated
Enforcement Officer'' in alphabetical order to read as follows:

Sec. 89.2 Definitions.

* * * * *
Designated Enforcement Officer means the Director, Air Enforcement
Division (2242A), U.S. Environmental Protection Agency, 1200
Pennsylvania Ave., NW.,Washington, DC 20460.
* * * * *

[[Page 53127]]

Subpart B--[Amended]

• 6. Section 89.101 is revised to read as follows:

Sec. 89.101 Applicability.

(a) The requirements of subpart B of this part are applicable to
all new nonroad compression-ignition engines subject to the provisions
of subpart A of this part 89, pursuant to the schedule delineated in
Sec. 89.102.
(b) In a given model year, you may ask us to approve the use of
procedures for certification, labeling, reporting, and recordkeeping
specified in 40 CFR part 1039 or 1068 instead of the comparable
procedures specified in this part 89. We will approve the request as
long as it does not prevent us from ensuring that you fully comply with
the intent of this part.

• 7. Section 89.102 is amended by revising paragraphs (d) introductory
text, (d)(2)(iii) and (g) and adding paragraphs (i) through (m) to read
as follows:

Sec. 89.102 Effective dates, optional inclusion, flexibility for
equipment manufacturers.

* * * * *
(d) Implementation flexibility for equipment and vehicle
manufacturers and post-manufacture marinizers. Nonroad equipment and
vehicle manufacturers and post-manufacture marinizers may take any of
the otherwise prohibited actions identified in Sec. 89.1003(a)(1) and
(b)(4) with respect to nonroad equipment and vehicles and marine diesel
engines, subject to the requirements of paragraph (e) of this section.
The following allowances apply separately to each engine power category
subject to standards under Sec. 89.112: * * *
(2) * * *
(iii) Does not use engines from more than one engine family, or,
for excepted equipment vehicles, and marine diesel engines using
engines not belonging to any engine family, from more than one engine
manufacturer. For purposes of this paragraph (d)(2)(iii), engine family
refers to engines that have common characteristics as described in
Sec. 89.116.
* * * * *
(g) Allowance for the production of engines. Engine manufacturers
may take any of the otherwise prohibited actions identified in Sec.
89.1003(a)(1) with regard to uncertified engines, Tier 1 engines, or
Tier 2 engines, as appropriate, if the engine manufacturer has received
written assurance from the equipment manufacturer that the engine is
required to meet the demand for engines created under paragraph (d),
(f), or (h) of this section.
* * * * *
(i) Additional exemptions for technical or engineering hardship.
You may request additional engine allowances under paragraph (d)(1) of
this section for 56-560 kW power categories or, if you are a small
equipment manufacturer, under paragraph (d)(2) of this section for
engines at or above 37 and below 75 kW. However, you may use these
extra allowances only for those equipment models for which you, or an
affiliated company, do not also produce the engine. After considering
the circumstances, we may permit you to introduce into U.S. commerce
equipment with such engines that do not comply with Tier 3 emission
standards, as follows:
(1) We may approve additional exemptions if extreme and unusual
circumstances that are clearly outside your control and that could not
have been avoided with reasonable discretion have resulted in technical
or engineering problems that prevent you from meeting the requirements
of this part. You must show that you exercised prudent planning and
have taken all reasonable steps to minimize the scope of your request
for additional allowances.
(2) To apply for exemptions under this paragraph (i), send the
Designated Compliance Officer and the Designated Enforcement Officer a
written request as soon as possible before you are in violation. In
your request, include the following information:
(i) Describe your process for designing equipment.
(ii) Describe how you normally work cooperatively or concurrently
with your engine supplier to design products.
(iii) Describe the engineering or technical problems causing you to
request the exemption and explain why you have not been able to solve
them. Describe the extreme and unusual circumstances that led to these
problems and explain how they were unavoidable.
(iv) Describe any information or products you received from your engine
supplier related to equipment design--such as written specifications,
performance data, or prototype engines--and when you received it.
(v) Compare the design processes of the equipment model for which
you need additional exemptions and that for other models for which you
do not need additional exemptions. Explain the technical differences
that justify your request.
(vi) Describe your efforts to find and use other compliant engines,
or otherwise explain why none is available.
(vii) Describe the steps you have taken to minimize the scope of
your request.
(viii) Include other relevant information. You must give us other
relevant information if we ask for it.
(ix) Estimate the increased percent of production you need for each
equipment model covered by your request, as described in paragraph
(i)(3) of this section. Estimate the increased number of allowances you
need for each equipment model covered by your request, as described in
paragraph (i)(4) of this section.
(3) We may approve your request to increase the allowances under
paragraph (d)(1) of this section, subject to the following limitations:
(i) The additional allowances will not exceed 50 percent for each
power category.
(ii) You must use up the allowances under paragraph (d)(1) of this
section before using any additional allowance under this paragraph (i).
(iii) Any allowances we approve under this paragraph (i)(3) expire
24 months after the provisions of this section start for a given power
category. You may use these allowances only for the specific equipment
models covered by your request.
(4) We may approve your request to increase the allowances for the
37-75kW power category under paragraph (d)(2) of this section, subject
to the following limitations:
(i) You are eligible for additional allowances under this paragraph
(i)(4) only if you are a small equipment manufacturer and you do not
use the provisions of paragraph (i)(3) of this section to obtain
additional allowances for the 37-75kW power category.
(ii) You must use up all the available allowances for the 37-75kW
power category under paragraph (d)(2) of this section in a given year
before using any additional allowances under this paragraph (i)(4).
(iii) Base your request only on equipment you produce with engines
at or above 37kW and below 75kW. You may use any additional allowances
only for equipment you produce with engines at or above 37kW and below
75kW.
(iv) Any allowances we approve under this paragraph (i)(4) expire
24 months after the provisions of this section start for this power
category. These additional allowances are not subject to the annual
limits specified in paragraph (d)(2) of this section. You may use these
allowances only for the

[[Page 53128]]

specific equipment models covered by your request.
(v) The total allowances under paragraph (d)(2) of this section for
the 37-75kW power category will not exceed 700 units. The total
allowances under this paragraph (i)(4) follow the requirements under
paragraph (d)(2) of this section for the 37-75kW power category and
will not exceed 200 units. Therefore, the total maximum allowances for
the 37-75kW power category will not exceed 900 units.
(5) For purposes of this paragraph (i), small equipment
manufacturer means an equipment manufacturer that had annual U.S.-
directed production volume of equipment using nonroad diesel engines
between 37 and 75kW of no more than 3,000 units in 2002 and all earlier
calendar years, and has 750 or fewer employees (500 or fewer employees
for nonroad equipment manufacturers that produce no construction
equipment or industrial trucks). For manufacturers owned by a parent
company, the production limit applies to the production of the parent
company and all its subsidiaries and the employee limit applies to the
total number of employees of the parent company and all its subsidiaries.
(6) The following provisions for adjusted flexibilities for Tier 4
engines apply to equipment manufacturers that are granted additional
exemptions for technical or engineering hardship:
(i) If you use the additional allowance under this paragraph (i)
you shall forfeit percent of production flexibility plus technical or
engineering hardship exemptions available for Tier 4 engines in the
amounts shown in Table 1 of this section.
(ii) Table 1 of this section shows the percent of production
flexibility and technical or engineering hardship exemptions that you
must forfeit for Tier 4 engines. The amount of Tier 4 flexibility
forfeited by each equipment manufacturer depends on the percent of
production flexibility used for Tier 2 engines and the technical or
engineering hardship exemptions granted for Tier 3 engines in the
proportions shown in Table 1. For example, if you used 45 percent of
your production flexibility for Tier 2 engines, you must forfeit 2
percent of your production flexibility for Tier 4 engines for every 1
percent of technical or engineering hardship flexibility granted for
Tier 3 engines. In addition you must also forfeit 1 percent of any
technical or engineering hardship exemptions available for Tier 4
engines for every 1 percent technical or engineering hardship
exemptions available for Tier 3 engines. If you use the Tier 3
technical or engineering hardship allowances for 5 percent of your
equipment in each of two different years, you have used a total
allowance of 10 percent. Therefore you must forfeit a total of 20
percent of production flexibility for Tier 4 engines plus 10 percent of
any technical or engineering hardship exemptions available for Tier 4
engines.

Table 1 of Sec. 89.102.--Adjustments to Tier 4 Flexibilities
------------------------------------------------------------------------
Percent of Percent of
forfeit tier forfeit tier
Percent of use tier 2 production flexibility 4 production 4 Tech./Eng.
(percent) flexibility exemption
(percent) (percent)
------------------------------------------------------------------------
0-20....................................... 0 1
20-40...................................... 1 1
40-60...................................... 2 1
60-80...................................... 3 1
------------------------------------------------------------------------

(iii) Because the Tier 3 and Tier 4 rules have different power
category ranges, the availability of technical relief will be further
adjusted based on the sales volume by power category. Table 2 of this
section shows the applicable power categories for Tier 3 and Tier 4.
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
40kW 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
during each calendar year in which Tier 3 technical relief is used. The
sum of all the Tier 3 units that are produced and exempted by the
technical relief divided by the sum of all the Tier 3 units sold in the
corresponding Tier 4 power category will determine the percentage of
Tier 4 flexibility affected. 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, then you will lose
25 percent of your 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.

Table 2 of Sec. 89.102.--Corresponding Tier 3 and Tier 4 Power
Categories
------------------------------------------------------------------------
Tier 3 Power Catgories Tier 4 Power Categories
------------------------------------------------------------------------
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.

(iv) Manufacturers using allowances under this paragraph (i) must
comply with the notification and reporting requirements specified in
paragraph (j) of this section.
(j) 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 the first year you intend to use the provisions of this
section, send the Designated Compliance Officer and the Designated
Enforcement Officer a written notice of your intent, including:
(i) Your company's name and address, and your parent company's name
and address, if applicable.
(ii) Whom 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 the company that produces the engines
you will be using for the equipment exempted under this section.
(v) Your best estimate of the number of units in each power
category you will produce under this section and whether you intend to
comply under paragraph (d)(1) or (d)(2) of this section.
(vi) The number of units in each power category you have sold in

[[Page 53129]]

previous calendar years under paragraph (d) of this section.
(2) For each year that you use the provisions of this section, send
the Designated Compliance Officer and the Designated Enforcement
Officer a written report by March 31 of the following year. Include in
your report the total number of engines you sold in the preceding year
for each power category, based on actual U.S.-directed production
information. Also identify 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 (d)
of this section.
(k) Recordkeeping. Keep the following records of all equipment with
exempted engines you produce under this section for at least five full
years after the final year in which allowances are available for each
power category:
(1) The model number, serial number, and the date of manufacture
for each engine and piece of equipment.
(2) The maximum power of each engine.
(3) The total number or percentage of equipment with exempted
engines, as described in paragraph (d) of this section and all
documentation supporting your calculation.
(4) The notifications and reports we require under paragraph (j) of
this section.
(l) Equipment Labeling. Any engine produced under this provision
must meet the labeling requirements of 40 CFR 89.110, but add the
following statement instead of the compliance statement in 40 CFR
89.110(b)(10): THIS ENGINE MEETS U.S. EPA EMISSION STANDARDS UNDER 40
CFR 89.102. SELLING OR INSTALLING THIS ENGINE FOR ANY PURPOSE OTHER
THAN FOR THE EQUIPMENT FLEXIBILITY PROVISIONS OF 40 CFR 89.102 MAY BE A
VIOLATION OF FEDERAL LAW SUBJECT TO CIVIL PENALTY.
(m) Enforcement. Producing more exempted engines or equipment than
we allow under this section or installing engines that do not meet the
applicable Tier 1 emission standards described in Sec. 89.112 violates
the prohibitions in Sec. 89.1003(a)(1). You must give us the records
we require under this section if we ask for them (see Sec.
89.1003(a)(2)).

• 8. Section 89.108 is revised by adding paragraph (d) to read as follows:

Sec. 89.108 Adjustable parameters, requirements.

* * * * *
(d) For engines that use noncommercial fuels significantly
different than the specified test fuel of the same type, the
manufacturer may ask to use the parameter-adjustment provisions of 40
CFR 1039.615 instead of those in this section. Engines certified under
this paragraph (d) must be in a separate engine family. See 40 CFR
1039.801 for the definition of ``noncommercial fuels''.

• 9. Section 89.115 is amended by adding paragraph (g) to read as follows:

Sec. 89.115 Application for certificate.

* * * * *
(g) The manufacturer must name an agent for service located in the
United States. Service on this agent constitutes service on the
manufacturer or any of its officers or employees for any action by EPA
or otherwise by the United States related to the requirements of this part.

• 10. Section 89.205 is amended by revising to paragraph (a) to read as
follows:

Sec. 89.205 Banking.

(a) Requirements for Tier 1 engines rated at or above 37 kW. (1) A
manufacturer of a nonroad engine family with a NO_X FEL below
the applicable standard for a given model year may bank credits in that
model year for use in averaging and trading in any subsequent model
year.
(2) A manufacturer of a nonroad engine family may bank
NO_X credits up to one calendar year prior to the effective
date of mandatory certification. Such engines must meet the
requirements of subparts A, B, D, E, F, G, H, I, J, and K of this part.
(3)(i) A manufacturer of a nonroad engine family may bank PM
credits from Tier 1 engines under the provisions specified in Sec.
89.207(b) for use in averaging and trading in the Tier 2 or later
timeframe. These credits are considered to be Tier 2 credits.
(ii) Such engine families are subject to all provisions specified
in subparts A, B, D, E, F, G, H, I, J, and K of this part, except that
the applicable PM FEL replaces the PM emission standard for the family
participating in the banking and trading program.
* * * * *

Subpart G--[Amended]

• 11. Section 89.601 is amended by adding paragraph (d) to read as follows:

Sec. 89.601 Applicability.

* * * * *
(d) Importers must complete the appropriate 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
upon request.

• 12. Section 89.611 is amended by adding paragraphs (f)(1)(v) and
(f)(1)(vi) to read as follows:

Sec. 89.611 Exemptions and exclusions.

* * * * *
(f) * * *
(1) * * *
(v) All nonroad engines greater than or equal to 19 kW but less
than 37 kW originally manufactured prior to January 1, 1999.
(vi) All nonroad engines less than 19 kW originally manufactured
prior to January 1, 2000.
* * * * *

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

• 13. The authority citation for part 1039 continues to read as follows:

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

Subpart A--[Amended]

• 14. A new Sec. 1039.2 is added to read as follows:

Sec. 1039.2 Who is responsible for compliance?

The regulations in this part 1039 contain provisions that affect
both engine manufacturers and others. However, the requirements of this
part are generally addressed to the engine manufacturer. The term
``you'' generally means the engine manufacturer, as defined in Sec.
1039.801, especially for issues related to certification.

• 15. Section 1039.10 is amended by revising the introductory text to
read as follows:

Sec. 1039.10 How is this part organized?

This part 1039 is divided into the following subparts:
* * * * *

Subpart B--[Amended]

• 16. Section 1039.102 is amended by revising paragraphs (g)(2) 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?

* * * * *

[[Page 53130]]

(g) * * *
(2) Interim FEL caps. As described in Sec. 1039.101(d), you may
participate in the ABT program in subpart H of this part by certifying
engines to FELs for PM, NO_X, or NO_X+NMHC instead
of the standards in Tables 1 through 7 of this section for the model
years shown. The FEL caps listed in the following table apply instead
of the FEL caps in Sec. 1039.101(d)(1), except as allowed by Sec.
1039.104(g):

Table 8 of Sec. 1039.102.--Interim Tier 4 FEL Caps, g/kW-hr
----------------------------------------------------------------------------------------------------------------
Model years
Maximum engine power Phase-in option \1\ PM NOX NOX+NMHC
----------------------------------------------------------------------------------------------------------------
kW < 19................................ ........................... 2008-2014 0.80 ....... 2 9.5
19 < = kW < 37.......................... ........................... 2008-2012 0.60 ....... 9.5
37 < = kW < 56.......................... ........................... 3 2008-2012 0.40 ....... 7.5
56 < = kW < 130......................... phase-in................... 2012-2013 0.04 0.80 ...........
56 < = kW < 130......................... phase-out.................. 2012-2013 0.04 ....... \4\ 6.6
130 < = kW < = 560....................... phase-in................... 2011-2013 0.04 0.80 ...........
130 < = kW < = 560....................... phase-out.................. 2011-2013 0.04 ....... \5\ 6.4
kW > 560............................... ........................... 2011-2014 0.20 6.2 ...........
----------------------------------------------------------------------------------------------------------------
\1\ For model years before 2015 where this table does not specify FEL caps, apply the FEL caps shown in Sec.
1039.101.
\2\ For engines below 8 kW, the FEL cap is 10.5 g/kW-hr for NOX+NMHC emissions.
\3\ For manufacturers certifying engines to the standards of this part 1039 in 2012 under Option #2 of
Table 3 of Sec. 1039.102, the FEL caps for 37-56 kW engines in the 19-56 kW category of Table 2 of Sec.
1039.101 apply for model year 2012 and later; see 40 CFR part 89 for provisions that apply to earlier model
years.
\4\ For engines below 75 kW, the FEL cap is 7.5 g/kW-hr for NOX+NMHC emissions.
\5\ For engines below 225 kW, the FEL cap is 6.6 g/kW-hr for NOX+NMHC emissions.

* * * * *

• 17. Section 1039.104 is amended by revising Table 1 in paragraph (g)(4)
to read as follows:

Sec. 1039.104 Are there interim provisions that apply only for a
limited time?

* * * * *
(g) * * *
(4) * * *

Table 1 of Sec. 1039.104.--Alternate FEL Caps
----------------------------------------------------------------------------------------------------------------
Model years Model years
PM FEL cap, g/ for the NOX FEL cap, g/ for the
Maximum engine power kW-hr alternate PM kW-hr alternate NOX
FEL cap FEL cap
----------------------------------------------------------------------------------------------------------------
19 < = kW < 56................................... 0.30 \1\ 2012-2015 .............. ..............
56 < = kW < 130 \2\.............................. 0.30 2012-2015 3.8 \3\ 2012-2015
130 < = kW < = 560................................ 0.20 2011-2014 3.8 \4\ 2011-2014
kW > 560 \5\.................................... 0.10 2015-2018 3.5 2015-2018
----------------------------------------------------------------------------------------------------------------
\1\ For manufacturers certifying engines under Option #1 of Table 3 of Sec. 1039.102, these alternate
FEL caps apply to all 19-56 kW engines for model years from 2013 through 2016 instead of in the years
indicated in this table. For manufacturers certifying engines under Option #2 of Table 3 of Sec.
1039.102, these alternate FEL caps do not apply to 19-37 kW engines except in model years 2013 to 2015.
\2\ For engines below 75 kW, the FEL caps are 0.40 g/kW-hr for PM emissions and 4.4 g/kW-hr for NOX emissions.
\3\ For manufacturers certifying engines in this power category using a percentage phase-in/phase-out approach
instead of the alternate NOX standards of Sec. 1039.102(e)(1), the alternate NOX FEL cap in the table
applies only in the 2014-2015 model years if certifying under Sec. 1039.102(d)(1), and only in the 2015
model year if certifying under (1039.102(d)(2).
\4\ For manufacturers certifying engines in this power category using the percentage phase-in/phase-out approach
instead of the alternate NOX standard of Sec. 1039.102(e)(2), the alternate NOX FEL cap in the table applies
only for the 2014 model year.
\5\ For engines above 560 kW, the provision for alternate NOX FEL caps is limited to generator-set engines. For
example, if you produce 1,000 generator-set engines above 560 kW in 2015, up to 200 of them may be certified
to the alternate NOX FEL caps.

• 18. Section 1039.115 is amended by revising the section heading, the
introductory text, and paragraph (a) introductory text to read as follows:

Sec. 1039.115 What other requirements apply?

Engines that are required to meet the emission standards of this
part must meet the following requirements, except as noted elsewhere in
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:
* * * * *

• 19. Section 1039.125 is amended by revising paragraph (f) introductory
text to read as follows:

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

* * * * *
(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:
* * * * *

• 20. Section 1039.135 is amended by revising paragraph (g) to read as
follows:

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

* * * * *
(g) If you obscure the engine label while installing the engine in
the equipment such that the label cannot be

[[Page 53131]]

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.

Subpart C--[Amended]

• 21. Section 1039.205 is amended by revising paragraphs (o) and (x) and
adding paragraph (aa) to read as follows

Sec. 1039.205 What must I include in my application?

* * * * *
(o) Present emission data for hydrocarbons (such as NMHC or THCE,
as applicable), NO_X, PM, and CO on an emission-data engine
to show your engines meet the applicable duty-cycle emission standards
we specify in Sec. 1039.101. Show emission figures before and after
applying adjustment factors for regeneration and deterioration factors
for each engine. Include emission results for each mode if you do
discrete-mode testing under Sec. 1039.505. Present emission data to
show that you meet any applicable smoke standards we specify in Sec.
1039.105. If we specify more than one grade of any fuel type (for
example, high-sulfur and low-sulfur diesel fuel), you need to submit
test data only for one grade, unless the regulations of this part
specify otherwise for your engine. Note that Sec. 1039.235 allows you
to submit an application in certain cases without new emission data.
* * * * *
(x) 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 United
States related to the requirements of this part.

• 22. Section 1039.210 is revised to read as follows:

Sec. 1039.210 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 NTE deficiencies and carve-outs.
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 best-efforts to 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.

• 23. Section 1039.225 is amended by revising paragraphs (a), (b)(3),
(d), and (e) to read as follows:

Sec. 1039.225 How do I amend my application for certification to
include new or modified engines or change an FEL?

* * * * *
(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. 1039.230.
(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) * * *
(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.
* * * * *
(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. 1039.820).
(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, you must stop producing the new or modified engines.
* * * * *

• 24. Section 1039.230 is amended by revising paragraph (a) to read as
follows:

Sec. 1039.230 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.
* * * * *

• 25. Section 1039.235 is amended by revising paragraph (d)(1) to read as
follows:

Sec. 1039.235 What emission testing must I perform for my application
for a certificate of conformity?

* * * * *
(d) * * *
(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.
* * * * *

• 26. Section 1039.245 is amended by revising the introductory text to
read as follows:

Sec. 1039.245 How do I determine deterioration factors from exhaust
durability testing?

Establish deterioration factors to determine whether your engines
will meet emission standards for each

[[Page 53132]]

pollutant throughout the useful life, as described in Sec. Sec.
1039.101 and 1039.240. This section describes how to determine
deterioration factors, either with an engineering analysis, with pre-
existing test data, or with new emission measurements.
* * * * *

• 27. Section 1039.255 is amended by revising paragraph (d) to read as
follows:

Sec. 1039.255 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 F--[Amended]

• 28. Section 1039.501 is amended by revising paragraphs (a) and (b) to
read as follows:

Sec. 1039.501 How do I run a valid emission test?

(a) Use the equipment and procedures for compression-ignition
engines in 40 CFR part 1065 to determine whether engines meet the duty-
cycle emission standards in subpart B of this part. Measure the
emissions of all the regulated pollutants as specified in 40 CFR part
1065. Use the applicable duty cycles specified in Sec. Sec. 1039.505
and 1039.510.
(b) Section 1039.515 describes the supplemental procedures for
evaluating whether engines meet the not-to-exceed emission standards in
subpart B of this part.
* * * * *

• 29. Section 1039.505 is amended by revising paragraphs (a)(1)
introductory text and (a)(1)(ii) to read as follows:

Sec. 1039.505 How do I test engines using steady-state duty cycles,
including ramped-modal testing?

* * * * *
(a) * * *
(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 for each mode and compare with the specified values in 40
CFR part 1065 to confirm that the test is valid. Operate the engine and
sampling system as follows:
* * * * *
(ii) Engines without NO_X aftertreatment. For other
engines, operate the engine for at least 5 minutes, then sample
emissions for at least 1 minute in each mode.
* * * * *

Subpart G--[Amended]

• 30. Section 1039.605 is amended by revising paragraphs (a), (b), (c),
(d) introductory text, (d)(8)(ii), and (d)(8)(iii) to read as follows:

Sec. 1039.605 What provisions apply to engines certified under the
motor-vehicle program?

(a) General provisions. If you are an engine manufacturer, this
section allows you to introduce new nonroad engines into commerce if
they are already certified to the requirements that apply to
compression-ignition engines under 40 CFR parts 85 and 86 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 for
each engine to also be a valid certificate of conformity under this
part 1039 for its model year, without a separate application for
certification under the requirements of this part 1039. See Sec.
1039.610 for similar provisions that apply to engines certified to
chassis-based standards for motor vehicles.
(b) Equipment-manufacturer provisions. If you are not an engine
manufacturer, you may produce nonroad equipment using motor-vehicle
engines under this section as long as you meet all the requirements and
conditions specified in paragraph (d) of this section. You must also
add the fuel-inlet label we specify in Sec. 1039.135(e). If you modify
the motor-vehicle engine in any of the ways described in paragraph
(d)(2) of this section, we will consider you a manufacturer of a new
nonroad 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. This applies to engine manufacturers, equipment
manufacturers who use these engines, and all other persons as if these
engines were used in a motor vehicle. The prohibited acts of 40 CFR
1068.101(a)(1) apply to these new engines and equipment; however, we
consider the certificate issued under 40 CFR part 86 for each engine to
also be a valid certificate of conformity under this part 1039 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 40 CFR 1068.505.
(d) Specific requirements. If you are an engine manufacturer or
equipment manufacturer and meet all the following criteria and
requirements regarding your new nonroad engine, the engine is eligible
for an exemption under this section:
* * * * *
(8) * * *
(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.
(iii) State: ``We produce each listed [engine or equipment] model
for nonroad application without making any changes that could increase
its certified emission levels, as described in 40 CFR 1039.605.''.
* * * * *

• 31. Section 1039.610 is amended by revising paragraphs (a), (b), (c),
(d)(7)(ii), and (d)(7)(iii) to read as follows:

Sec. 1039.610 What provisions apply to vehicles certified under the
motor-vehicle program?

(a) General provisions. If you are a motor-vehicle manufacturer,
this section allows you to introduce new nonroad engines or equipment
into commerce if the vehicle is already certified to the requirements
that apply under 40 CFR parts 85 and 86 for the appropriate model year.
If you comply with all of the provisions of this section, we consider
the certificate issued under 40 CFR part 86 for each motor vehicle to
also be a valid certificate of conformity for the engine under this
part 1039 for its model year, without a separate application for
certification under the requirements of this part 1039. See Sec.
1039.605 for similar provisions that apply to motor-vehicle engines
produced for nonroad equipment.
(b) Equipment-manufacturer provisions. If you are not a motor-
vehicle manufacturer, you may produce nonroad equipment from motor
vehicles under this section as long as you meet all the requirements
and conditions specified in paragraph (d) of this section. You must
also add the fuel-inlet label we specify in Sec. 1039.135(e). If you
modify the motor vehicle or its engine in any of the ways described in
paragraph (d)(2) of this section, we will consider you a manufacturer
of a new nonroad engine. Such modifications prevent you from using the
provisions of this section.

[[Page 53133]]

(c) Liability. Engines, vehicles, and equipment 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. This applies to
engine manufacturers, equipment manufacturers, and all other persons as
if the nonroad equipment were motor vehicles. The prohibited acts of 40
CFR 1068.101(a)(1) apply to these new pieces of equipment; however, we
consider the certificate issued under 40 CFR part 86 for each motor
vehicle to also be a valid certificate of conformity for the engine
under this part 1039 for its model year. If we make a determination
that these engines, vehicles, or equipment do not conform to the
regulations during their useful life, we may require you to recall them
under 40 CFR part 86 or 40 CFR 1068.505.
(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.
(iii) State: ``We produced each listed engine or equipment model
for nonroad application without making any changes that could increase
its certified emission levels, as described in 40 CFR 1039.610.''
* * * * *

• 32. Section 1039.625 is amended by revising paragraph (e)(3) as follows:

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

* * * * *
(e) * * *
(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 Sec.
89.112. Engines below 56 kW and engines above 560 kW must meet the
appropriate Tier 2 standards described in Sec. 89.112.
* * * * *

Subpart H--[Amended]

• 33. Section 1039.705 is amended by removing and reserving paragraph (a)
and revising paragraph (b) before the equation to read as follows:

Sec. 1039.705 How do I generate and calculate emission credits?

* * * * *
(a) [Reserved]
(b) 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 calculated
emission credits to the nearest kilogram (kg), using consistent units
throughout the following equation:
* * * * *

• 34. Section 1039.730 is amended by revising paragraph (c)(1) to read as
follows:

Sec. 1039.730 What ABT reports must I send to EPA?

* * * * *
(c) * * *
(1) Show that your net balance of emission credits from all your
participating engine families in each averaging set in the applicable
model year is not negative.
* * * * *

• 35. Section 1039.735 is amended by revising paragraph (b) to read as
follows:

Sec. 1039.735 What records must I keep?

* * * * *
(b) Keep the records required by this section for 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.
* * * * *

Subpart I--[Amended]

• 36. Section 1039.801 is amended by revising the definitions for
``Certification'', ``Constant-speed operation'', ``Designated
Compliance Officer'', ``Emission-control system'', ``Intermediate test
speed'', paragraph (1) of the definition of ``New nonroad engine'',
``Nonmethane hydrocarbon'', ``Oxides of nitrogen'', ``Round'', and
``Steady-state'' and adding a definition for ``Owners manual'' in
alphabetical order to read as follows:

Sec. 1039.801 What definitions apply to this part?

* * * * *
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.
* * * * *
Constant-speed operation has the meaning given in 40 CFR 1065.1001.
* * * * *
Designated Compliance Officer means the Manager, Heavy-Duty and
Nonroad Engine Group (6403-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.
* * * * *
Intermediate test speed has the meaning given in 40 CFR 1065.1001.
* * * * *
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.
* * * * *
Nonmethane hydrocarbons (NMHC) means the sum of all hydrocarbon
species except methane. Refer to 40 CFR 1065.660 for NMHC determination.
* * * * *
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.
Oxides of nitrogen has the meaning given in 40 CFR 1065.1001.
* * * * *
Round has the meaning given in 40 CFR 1065.1001.
* * * * *
Steady-state has the meaning given in 40 CFR 1065.1001.
* * * * *

• 37. Section 1039.810 is amended by revising paragraph (a) and removing
and reserving paragraph (b) to read as follows:

[[Page 53134]]

Sec. 1039.810 What materials does this part reference?

* * * * *
(a) SAE material. Table 1 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 1 follows:

Table 1 of Sec. 1039.810.--SAE Materials
------------------------------------------------------------------------
Part 1039
Document number and name reference
------------------------------------------------------------------------
SAE J1930, Electrical/Electronic Systems Diagnostic Terms, 1039.135
Definitions, Abbreviations, and Acronyms, revised May 1998
------------------------------------------------------------------------

(b) [Reserved]

• 38. A new Sec. 1039.825 is added to read as follows:

Sec. 1039.825 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 1039:
(1) In Sec. 1039.20 we require engine manufacturers to label
stationary engines that do not meet the standards in this part.
(2) In Sec. 1039.135 we require engine manufacturers to keep certain
records related to duplicate labels sent to equipment manufacturers.
(3) [Reserved]
(4) In subpart C of this part we identify a wide range of
information required to certify engines.
(5) [Reserved]
(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. For example,
equipment manufacturers must submit reports and keep records related to
the flexibility provisions in Sec. 1039.625.
(8) In Sec. 1039.725, 1039.730, and 1039.735 we specify certain
records related to averaging, banking, and trading.
(b) 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.
(c) 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.

[FR Doc. E7-18161 Filed 9-17-07; 8:45 am]
BILLING CODE 6560-50-P

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