

[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

 
Nonroad Diesel Technical Amendments and Tier 3 Technical Relief 
Provision

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:

    [rtrif] Please include a total of copies.
    [rtrif] 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.

------------------------------------------------------------------------
                                      NAICS     Examples of potentially
             Category               code \a\       affected entities
------------------------------------------------------------------------
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.
------------------------------------------------------------------------
\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).
---------------------------------------------------------------------------

    \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'' (65 FR 67249, November 9, 2000), 
requires EPA to develop an accountable process to ensure ``meaningful 
and timely input by tribal officials in the development of regulatory 
policies that have tribal implications.'' This 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

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

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.

0
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

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

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


0
2. 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

0
3. The authority citation for part 89 is revised to read as follows:

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

Subpart A--[Amended]

0
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.
* * * * *

0
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]

0
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.

0
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)).

0
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''.

0
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.


0
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 NOX 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 
NOX 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]

0
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.


0
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

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

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

Subpart A--[Amended]

0
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.


0
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]

0
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, NOX, or NOX+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.

* * * * *

0
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.


0
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:
* * * * *

0
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:
* * * * *


0
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]

0
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), NOX, 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.


0
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.


0
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.
* * * * *


0
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.
* * * * *


0
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.
* * * * *


0
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.
* * * * *


0
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]


0
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.
* * * * *


0
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 NOX 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]


0
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.''.
* * * * *


0
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.''
* * * * *


0
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]


0
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:
* * * * *


0
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.
* * * * *


0
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]

0
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.
* * * * *


0
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]


0
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
