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

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

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

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

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

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

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

F. Economic Impact Analysis

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

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

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

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

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

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

[GRAPHIC] [TIFF OMITTED] TR08OC08.073

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

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

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

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

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

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

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

X. Public Participation

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

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

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

XI. Statutory and Executive Order Reviews

A. Executive Order 12866: Regulatory Planning and Review

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

B. Paperwork Reduction Act

    The information collection requirements in this final rule have
been submitted for approval to the Office of Management and Budget
(OMB) under the Paperwork Reduction Act, 44 U.S.C. 3501 et seq. The
Information Collection Request (ICR) documents prepared by EPA have
been assigned EPA ICR numbers 2251.02 and 1722.06.
    The Agency will collect information to ensure compliance with the
provisions in this rule. This includes a variety of requirements, both
for engine manufacturers, equipment manufacturers and manufacturers of
fuel system components. Section 208(a) of the Clean Air Act requires
that manufacturers provide information the Administrator may reasonably
require to determine compliance with the regulations; submission of the
information is therefore mandatory.
    As shown in Table XIV-1, the total annual burden associated with
this final rule is about 131,000 hours and $17 million based on a
projection of 1,031 respondents. The estimated burden for engine
manufacturers is a total estimate for both new and existing reporting
requirements. Most information collection is based on annual reporting.
Burden means the total time, effort, or financial resources expended by
persons to generate, maintain, retain, or disclose or provide
information to or for a Federal agency. This includes the time needed
to review instructions; develop, acquire, install, and utilize
technology and systems for the purposes of collecting, validating, and
verifying information, processing and maintaining information, and
disclosing and providing information; adjust the existing ways to
comply with any previously applicable instructions and requirements;
train personnel to be able to respond to a collection of information;
search data sources; complete and review the collection of information;
and transmit or otherwise disclose the information.

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

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

    An agency may not conduct or sponsor, and a person is not required
to respond to a collection of information unless it displays a
currently valid OMB control number. The OMB control numbers for EPA's
regulations in 40 CFR are listed in 40 CFR part 9.

C. Regulatory Flexibility Act

(1) Overview
    The Regulatory Flexibility Act (RFA) generally requires an agency
to prepare a regulatory flexibility analysis of any rule subject to
notice and comment rulemaking requirements under the Administrative
Procedure Act or any other statute unless the agency certifies that the
rule will not have a significant economic impact on a substantial
number of small entities. Small entities include small businesses,
small organizations, and small governmental jurisdictions.
    For purposes of assessing the impacts of this action on small
entities, small

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

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

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

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

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

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

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

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

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

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

D. Unfunded Mandates Reform Act

    Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Public
Law 104-4, establishes requirements for federal agencies to assess the
effects of their regulatory actions on state, local, and tribal
governments and the private sector. Under section 202 of the UMRA, EPA
generally must prepare a written statement, including a cost-benefit
analysis, for proposed and final rules with ``federal mandates'' that
may result in expenditures to state, local, and tribal governments, in
the aggregate, or to the private sector, of $100 million or more in any
one year. Before promulgating an EPA rule for which a written statement
is needed, section 205 of the UMRA generally requires that EPA identify
and consider a reasonable number of regulatory alternatives and adopt
the least costly, most cost-effective, or least burdensome alternative
that achieves the objectives of the rule. The provisions of section 205
do not apply when they are inconsistent with applicable law. Moreover,
section 205 allows EPA to adopt an alternative other than the least
costly, most cost-effective, or least burdensome alternative if the
Administrator publishes with the final rule an explanation of why that
alternative was not adopted.
    Before EPA establishes any regulatory requirements that may
significantly or uniquely affect small governments, including tribal
governments, it must have developed under section 203 of the UMRA a
small government agency plan. The plan must provide for notifying
potentially affected small governments, enabling officials of affected
small governments to have meaningful and timely input in the
development of EPA regulatory proposals with significant federal
intergovernmental mandates, and informing, educating, and advising
small governments on compliance with the regulatory requirements.
    This rule contains no federal mandates for state, local, or tribal
governments as defined by the provisions of Title II of the UMRA. The
rule imposes no enforceable duties on any of these governmental
entities. Nothing in the rule will significantly or uniquely affect
small governments.
    EPA has determined that this rule contains federal mandates that
may result in expenditures of more than $100 million to the private
sector in a single year. EPA believes that the final rule represents
the least costly, most cost-effective approach to achieve the air
quality goals of the rule. The costs and benefits associated with the
final rule are discussed in Section IX and in the Final Regulatory
Impact Analysis as required by the UMRA.

E. Executive Order 13132: Federalism

    Executive Order 13132, entitled ``Federalism'' (64 FR 43255, August
10, 1999), requires EPA to develop an accountable process to ensure
``meaningful and timely input by State and local officials in the
development of regulatory policies that have federalism implications.''
``Policies that have federalism implications'' is defined in the
Executive Order to include regulations that have ``substantial direct
effects on the States, on the relationship between the national
government and the States, or on the distribution of power and
responsibilities among the various levels of government.''
    Under section 6 of Executive Order 13132, EPA may not issue a
regulation that has federalism implications, that imposes substantial
direct compliance costs, and that is not required by statute, unless
the Federal government provides the funds necessary to pay the direct
compliance costs incurred by State and local governments, or EPA
consults with State and local officials early in the process of
developing the proposed regulation. EPA also may not issue a regulation
that has federalism implications and that preempts State law, unless
the Agency consults with State and local officials early in the process
of developing the regulation.
    Section 4 of the Executive Order contains additional requirements
for rules that preempt State or local law, even if those rules do not
have federalism implications (i.e., the rules will not have substantial
direct effects on the States, on the relationship between the national
government and the states, or on the distribution of power and
responsibilities among the various levels of government). Those
requirements include providing all affected State and local officials
notice and an opportunity for appropriate participation in the
development of the regulation. If the preemption is not based on
express or implied statutory authority, EPA also must consult, to the
extent practicable, with appropriate State and local officials
regarding the conflict between State law and Federally protected
interests within the agency's area of regulatory responsibility.
    This final rule has federalism implications because it preempts
State law. It does not include any significant revisions from current
statutory and regulatory requirements, but it codifies existing
statutory requirements. Prior to the passage of Public Law 108-199, the
various states could adopt and enforce nonroad emission control
standards previously adopted by the state of California under section
209(e) of the Clean Air Act, once California had received authorization
from EPA to enforce such standards. As part of directing EPA to
undertake this rulemaking, section 428 of Public Law 108-199 has taken
away the authority of states' to adopt California standards for any
nonroad spark-ignition engine under 50 horsepower that they had not
already adopted by September 1, 2003. No state had done so by that
date. No current state law is affected by the provisions of Public Law
108-199 mentioned above. This rule codifies the statutory provision
prohibiting other states from adopting California standards for nonroad
spark-ignition engines under 50 horsepower. It does not affect the
independent authority of California.
    EPA did consult with representatives of various State and local
governments in developing this rule. EPA has also consulted
representatives from the National Association of Clean Air Agencies
(NACAA), which represents state and local air pollution officials.
These officials participated in two EPA workshops regarding the Small
SI safety study in which they expressed concern about the language of
section 428 of Public Law 108-199 limiting the states' ability to adopt
the California standards for nonroad spark-ignition engines under 50
horsepower and urged EPA to move expeditiously in adopting new Federal
emission standards for this category.
    As required by section 8(a) of Executive Order 13132, EPA included
a certification from its Federalism Official stating that EPA had met
the Executive Order's requirements in a meaningful and timely manner,
when it sent the draft of this final rule to OMB for review pursuant to
Executive Order 12866. A copy of this certification has been included
in the public version of the official record for this final rule.

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

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

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

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

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

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

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

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

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

J. National Technology Transfer Advancement Act

    Section 12(d) of the National Technology Transfer and Advancement
Act of 1995 (``NTTAA''), Public Law 104-113, section 12(d) (15 U.S.C.
272 note) directs EPA to use voluntary consensus standards in its
regulatory activities unless doing so will be inconsistent with
applicable law or otherwise impractical. Voluntary consensus standards
are technical standards (e.g., materials specifications, test methods,
sampling procedures, and business practices) that are developed or
adopted by voluntary consensus standards bodies. NTTAA directs EPA to
provide Congress, through OMB, explanations when the Agency decides not
to use available and applicable voluntary consensus standards.
    This final rulemaking involves technical standards. EPA will use
the test procedures specified in 40 CFR part 1065. While the Agency
identified the test procedures specified by the International
Organization for Standardization (ISO 8178) as being potentially
applicable, we are not adopting them in this final rulemaking. The use
of this voluntary consensus standard will be impractical because we
have been working with engine manufacturers and other interested
parties in comprehensive improvements to test procedures for measuring
engine emissions, as reflected by the provisions in part 1065. We
expect these procedures to form the basis for internationally
harmonized test procedures that will be adopted by ISO, other testing
organizations, and other national governments.

K. Congressional Review Act

    The Congressional Review Act, 5 U.S.C. 801 et seq., as added by the
Small Business Regulatory Enforcement Fairness Act of 1996, generally
provides that before a rule may take effect, the agency promulgating
the rule must submit a rule report, which includes a copy of the rule,
to each House of the Congress and to the Comptroller General of the
United States. EPA will submit a report containing this rule and other
required information to the U.S. Senate, the U.S. House of
Representatives, and the Comptroller General of the United States prior
to publication of the rule in the Federal Register. A Major rule cannot
take effect until 60 days after it is published in the Federal
Register. This action is a ``major rule'' as defined by 5 U.S.C.
804(2). This rule will be effective December 8, 2008.

List of Subjects

40 CFR Part 9

    Reporting and recordkeeping requirements.

40 CFR Part 60

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

40 CFR Part 80

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

40 CFR Part 85

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

40 CFR Part 86

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

40 CFR Part 89

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

40 CFR Part 90

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

40 CFR Part 91

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

40 CFR Part 92

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

40 CFR Part 94

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

40 CFR Part 1027

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

40 CFR Parts 10333 and 1039

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

40 CFR Part 1042

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

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

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

40 CFR Part 1065

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

40 CFR Part 1068

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

40 CFR Part 1074

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

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

0
For the reasons set out in the preamble, title 40, chapter I of the
Code of Federal Regulations is amended as set forth below.

PART 9--OMB APPROVALS UNDER THE PAPERWORK REDUCTION ACT

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

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

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

Sec.  9.1  OMB approvals under the Paperwork Reduction Act.

* * * * *

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

                              * * * * * * *
------------------------------------------------------------------------
       Fees for Engine, Vehicle, and Equipment Compliance Programs
------------------------------------------------------------------------
1027.140...............................  2060-0104, 2060-0545

                              * * * * * * *
------------------------------------------------------------------------
   Control of Emissions from Spark-ignition Propulsion Marine Engines
------------------------------------------------------------------------
1045.825...............................  2060-0321
------------------------------------------------------------------------
   Control of Emissions from New, Large Nonroad Spark-ignition Engines
------------------------------------------------------------------------
1048.825...............................  2060-0338
------------------------------------------------------------------------

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

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

* * * * *

PART 60--STANDARDS OF PERFORMANCE FOR NEW STATIONARY SOURCES

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

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

Subpart JJJJ--[Amended]

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Sec.  60.4248  What definitions apply to this subpart?

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

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

PART 80--REGULATION OF FUELS AND FUEL ADDITIVES

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

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

Subpart B--[Amended]

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

Sec.  80.22  Controls and prohibitions.

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

PART 85--CONTROL OF AIR POLLUTION FROM MOBILE SOURCES

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

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

Subpart Q--[Removed and reserved]

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

Subpart R--[Amended]

Sec.  85.1703  [Amended]

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

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

Sec.  85.1713  Delegated-assembly exemption.

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

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

Sec.  85.1714  Replacement-engine exemption.

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

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

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

Sec.  85.2401  Assessment of fees.

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

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

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

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

Subpart N--[Amended]

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

Sec.  86.1305-2010  Introduction; structure of subpart.

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

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

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

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

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

Subpart G--[Amended]

Sec.  89.614  [Removed]

0
24. Section 89.614 is removed.

Subpart K--[Amended]

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

Sec.  89.1003  Prohibited acts.

* * * * *
    (b) * * *
    (7) * * *
    (iii) If the engine being replaced was not subject to any emission
standards under this part, the replacement engine must have a permanent
label with your corporate name and trademark and the following
language, or similar alternate language approved by the Administrator:
THIS ENGINE DOES NOT COMPLY WITH FEDERAL NONROAD OR ON-HIGHWAY EMISSION
REQUIREMENTS. SALE OR INSTALLATION OF THIS ENGINE FOR ANY PURPOSE OTHER
THAN AS A REPLACEMENT ENGINE FOR AN ENGINE MANUFACTURED PRIOR TO
JANUARY 1 [INSERT APPROPRIATE YEAR] IS A VIOLATION OF FEDERAL LAW
SUBJECT TO CIVIL PENALTY.
    (iv) If the engine being replaced was subject to emission standards
less stringent than those in effect when you produce the replacement
engine, the replacement engine must have a permanent label with your
corporate name and trademark and the following language, or similar
alternate language approved by the Administrator:
    THIS ENGINE COMPLIES WITH U.S. EPA NONROAD EMISSION REQUIREMENTS
FOR [Identify the appropriate emission standards (by model year, tier,
or emission levels) for the replaced engine] ENGINES UNDER 40 CFR
89.1003(b)(7). SELLING OR INSTALLING THIS ENGINE FOR ANY PURPOSE OTHER
THAN TO REPLACE A [Identify the appropriate emission standards (by
model year, tier, or emission levels) for the replaced engine] ENGINE
MAY BE A VIOLATION OF FEDERAL LAW SUBJECT TO CIVIL PENALTY.
    (v) If the old engine was subject to emission standards less
stringent than those in effect when you produce the replacement engine,
you must make the replacement engine in a configuration identical in
all material respects to the old engine. You may alternatively make the
replacement engine in a configuration identical in all material
respects to another certified engine of the same or later model year,
as long as the engine is not certified with a family emission limit
higher than that of the engine being replaced.
* * * * *

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

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

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

Subpart A--[Amended]

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

Sec.  90.1  Applicability.

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

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

Sec.  90.2  Effective dates.

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

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

Sec.  90.3  Definitions.

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

Subpart B--[Amended]

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

Sec.  90.101  Applicability.

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

you fully comply with the intent of this part.

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

Sec.  90.107  Application for certification.

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

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

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

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

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

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

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

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

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

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

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

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

    The following permeation standards apply to new nonhandheld engines
and equipment with respect to fuel lines:
    (a) Emission standards and related requirements. New nonhandheld
engines and equipment with a date of manufacture of January 1, 2009 or
later that run on a volatile liquid fuel (such as gasoline) must meet
the emission standards specified in paragraph (a)(1) or (a)(2) of this
section as follows:
    (1) New nonhandheld engines and equipment must use only fuel lines
that meet a permeation emission standard of 15 g/m\2\/day when measured
according to the test procedure described in 40 CFR 1060.515.
    (2) Alternatively, new nonhandheld engines and equipment must use
only fuel lines that meet standards that apply for these engines and
equipment in California for the same model year (see 40 CFR 1060.810).
This may involve SHED-based measurements for equipment or testing with
fuel lines alone. If this involves SHED-based measurements, all
elements of the emission control system must remain in place for fully
assembled engines and equipment.
    (3) The emission standards in this section apply with respect to
discrete fuel line segments of any length. Compliance may also be
demonstrated using aggregated systems that include multiple sections of
fuel line with connectors, and fittings. The standard applies with
respect to the total permeation emissions divided by the wetted
internal surface area of the assembly. Where it is not practical to
determine the wetted internal surface area of the assembly, the
internal surface area per unit length of the assembly may be assumed to
be equal to the ratio of internal surface area per unit length of the
hose section of the assembly.
    (4) The emission standards in this section apply over a useful life
of five years.
    (5) Starting with the 2010 model year, fuel lines must be labeled
in a permanent and legible manner with one of the following approaches:
    (i) By meeting the labeling requirements that apply for these
engines and equipment in California.
    (ii) By identifying the certificate holder's corporate name or
trademark, or the fuel line manufacturer's corporate name or trademark,
and the fuel line's permeation level. For example, the fuel line may
identify the emission standard from this section, the applicable SAE