FEL above a standard that applies under 40 CFR part 86.

Sec.  1045.610  What provisions apply to using engines already
certified to Small SI emission standards?

    This section applies to marine engines that are identical to land-
based engines certified under 40 CFR part 90 or 1054. See Sec.
1045.605 for provisions that apply to marine engines that are certified
under other programs.
    (a) If an engine meets all the following criteria, it is exempt
from the requirements of this part:
    (1) The engine must be in an engine family that has a valid
certificate of conformity showing that it meets emission standards for
nonhandheld engines under 40 CFR part 90 or 1054 for the appropriate
model year.
    (2) You must show that fewer than 5 percent of the engine family's
total sales in the United States are used in marine applications. This
includes engines used in any application without regard to which
company manufactures the vessel or equipment.
    Show this as follows:
    (i) If you are the original manufacturer of the engine, base this
showing on your sales information.
    (ii) In all other cases, you must get the original manufacturer of
the engine to confirm this based on its sales information.
    (b) The only requirements or prohibitions from this part that apply
to an engine that meets the criteria in paragraph (a) of this section
are in this section.
    (c) Engines exempted under this section are subject to all the
requirements affecting engines under 40 CFR part 90 or 1054. The
requirements and restrictions of 40 CFR part 90 or 1054 apply to anyone
manufacturing these engines, anyone manufacturing equipment that uses
these engines, and all other persons in the same manner as if these
engines were not used as propulsion marine engines.
    (d) You may use the provisions of Sec.  1045.605 in addition to the
provisions of this section for engines certified under 40 CFR part
1054. Where Sec.  1045.605 references 40 CFR parts 85, 86, and/or 1048,
apply the applicable provisions of 40 CFR part 1054 instead. Include
the engines you sell under this section in your demonstration that you
meet the sales limit in Sec.  1045.605(d)(3).

Sec.  1045.620  What are the provisions for exempting engines used
solely for competition?

    The provisions of this section apply for new engines and vessels
built on or after January 1, 2010.
    (a) We may grant you an exemption from the standards and
requirements of this part for a new engine on the grounds that it is to
be used solely for competition. The requirements of this part, other
than those in this section, do not apply to engines that we exempt for
use solely for competition.
    (b) We will exempt engines that we determine will be used solely
for competition. The basis of our determination is described in
paragraphs (c) and (d) of this section. Exemptions granted under this
section are good for only one model year and you must request renewal
for each subsequent model year. We will not approve your renewal
request if we determine the engine will not be used solely for
competition.
    (c) Engines meeting all the following criteria are considered to be
used solely for competition:

    (1) Neither the engine nor any vessels containing the engine may be
displayed for sale in any public dealership or otherwise offered for
sale to the general public. Note that this does not preclude display of
these engines as long as they are not available for sale to the general
public.
    (2) Sale of the vessel in which the engine is installed must be
limited to professional racing teams, professional racers, or other
qualified racers. For replacement engines, the sale of the engine
itself must be limited to professional racing teams, professional
racers, other qualified racers, or to the original vessel manufacturer.
    (3) The engine and the vessel in which it is installed must have
performance characteristics that are substantially superior to
noncompetitive models.
    (4) The engines are intended for use only as specified in paragraph
(e) of this section.
    (d) You may ask us to approve an exemption for engines not meeting
the criteria listed in paragraph (c) of this section as long as you
have clear and convincing evidence that the engines will be used solely
for competition.
    (e) Engines are considered to be used solely for competition only
if their use is limited to competition events sanctioned by the U.S.
Coast Guard or another public organization with authorizing permits for
participating competitors. Operation of such engines may include only
racing events, trials to qualify for racing events, and practice
associated with racing events. Authorized attempts to set speed records
are also considered racing events. Engines will not be considered to be
used solely for competition if they are ever used for any recreational
or other noncompetitive purpose. Use of exempt engines in any
recreational events, such as poker runs and lobsterboat races, is a
violation of 40 CFR 1068.101(b)(4).
    (f) You must permanently label engines exempted under this section
to clearly indicate that they are to be used only for competition.
Failure to properly label an engine will void the exemption for that
engine.
    (g) If we request it, you must provide us any information we need
to determine whether the engines are used solely for competition. This
would include documentation regarding the number of engines and the
ultimate purchaser of each engine as well as any documentation showing
a vessel manufacturer's request for an exempted engine. Keep these
records for five years.

Sec.  1045.625  What requirements apply under the Diurnal Transition
Program?

    The provisions of this section allow vessel manufacturers to
produce a certain number of vessels with installed fuel tanks that do
not meet the diurnal emission standards specified in Sec.  1045.112(d)
and 40 CFR 1060.105. The provisions of this section do not apply for
portable marine fuel tanks, personal watercraft, or outboard engines
with under-cowl fuel tanks. Vessels you produce under this section are
exempt from the prohibitions in 40 CFR 1068.101(a)(1) with respect to
diurnal emissions, subject to the provisions of this section.
    (a) General. If you are a vessel manufacturer, you may introduce
into U.S. commerce limited numbers of exempted vessels under this
section. You may use the exemptions in this section only if you have
primary responsibility for designing and manufacturing vessels and your
manufacturing procedures include installing some engines in these
vessels. Consider all U.S.-directed vessel sales in showing that you
meet the requirements of this section, including those from any parent
or subsidiary companies and those from any other companies you license
to produce vessels for you. These provisions are available for vessels
you produce during the periods specified in paragraph (b) of this
section.
    (b) Allowances. You may choose one of the following options to
produce exempted vessels under this section:
    (1) Percent-of-production allowances. You may produce up to 50
percent of your vessels from July 31, 2011 through July 31, 2012 that
are exempt from the diurnal emission standards. Calculate this
percentage based on your total U.S.-directed production volume.
    (2) Small-volume allowances. Small-volume vessel manufacturers may
produce up to 1200 vessels from July 31, 2011 through July 31, 2013
that are exempt from the diurnal emission standards.
    (c) Vessel labeling. You must add a permanent label, written
legibly in English, to a readily visible part of each exempted vessel
you produce under this section. You may combine this with the label
required under 40 CFR 1060.135. This label must include at least the
following items:
    (1) The label heading ``EMISSION CONTROL INFORMATION''.
    (2) Your corporate name and trademark.
    (3) The vessel's date of manufacture.
    (4) The following statement: ``THIS VESSEL IS EXEMPT FROM DIURNAL
STANDARDS UNDER 40 CFR 1045.625.''
    (d) Notification and reporting. You must notify us of your intent
to use the provisions of this section and send us an annual report to
verify that you are not exceeding the allowances, as follows:
    (1) Before you produce vessels that are exempt under this section,
send the Designated Compliance Officer a written notice of your intent
with the following information:
    (i) Identify your company's name and address, and your parent
company's name and address, if applicable.
    (ii) Identify the name, e-mail address, and phone number of a
person to contact for further information.
    (iii) Identify the name and address of the company you expect to
produce the fuel tanks you will be using for the vessels exempted under
this section.
    (iv) If you qualify as a small-volume vessel manufacturer, state
whether you will comply under paragraph (b)(1) or (b)(2) of this
section.
    (v) Include your production figures for the period from July 31,
2009 through July 31, 2010, including figures broken down by model.
    (2) Send the Designated Compliance Officer a written report by
December 31, 2012. If you are a small-volume manufacturer using the
provisions of paragraph (b)(2) of this section to produce exempted
vessels after July 31, 2012, send us a second report by December 31,
2013. These reports must include the total number of vessels and the
number of exempted vessels you sold in the preceding year for each
model, based on actual U.S.-directed production information. You may
omit the count of compliant vessels if you include in the report a
statement that you are not using the percent-of-production allowances
in paragraph (b)(1) of this section. If you initially comply using the
percent-of-production allowances in paragraph (b)(1) of this section,
you may not use the small-volume allowances in paragraph (b)(2) of this
section for later production.
    (3) If you send your initial notification under paragraph (d)(1) of
this section after the specified deadline, we may approve your use of
allowances under this section. In your request, describe why you were
unable to meet the deadline. We will not approve your request if the
delay could have been avoided with reasonable care and discretion.
    (e) Recordkeeping. Keep the following records of all exempted
vessels you produce under this section:

    (1) The model number, serial number, and the date of manufacture
for each vessel.
    (2) The total number or percentage of exempted vessels as described
in paragraph (b) of this section and all documentation supporting your
calculation.
    (3) The notifications and reports we require under paragraph (d) of
this section.
    (f) Provisions for fuel tank manufacturers. As a fuel tank
manufacturer, you may produce fuel tanks as needed for vessel
manufacturers under this section without our prior approval. These fuel
tanks are exempt from the diurnal emission standards. Note that this
diurnal exemption does not affect the requirements related to
permeation emissions specified in Sec.  1045.112. You must have written
assurance from vessel manufacturers that they need a certain number of
exempted fuel tanks under this section. You must keep records of the
number of exempted fuel tanks you sell to each vessel manufacturer.
    (g) Enforcement. Producing more exempted vessels than we allow
under this section violates the prohibitions in 40 CFR 1068.101(a)(1).
Vessel manufacturers and fuel tank manufacturers must keep the records
we require under this section until at least December 31, 2017 and give
them to us if we ask for them (see 40 CFR 1068.101(a)(2)).

Sec.  1045.630  What is the personal-use exemption.

    This section applies to individuals who manufacture recreational
vessels for personal use with used engines. If you and your vessel meet
all the conditions of this section, the vessel and its engine are
considered to be exempt from the standards and requirements of this
part that apply to new engines, including standards and requirements
related to evaporative emissions. For example, you are not required to
use certified fuel system components or otherwise obtain certificates
of conformity showing that the vessel meets evaporative emission
standards, and you do not need to install a certified engine.
    (a) The vessel may not be manufactured from a previously certified
vessel, nor may it be manufactured from a partially complete vessel
that is equivalent to a certified vessel. The vessel must be
manufactured primarily from unassembled components, but may incorporate
some preassembled components. For example, fully preassembled steering
assemblies may be used. You may also power the vessel with an engine
that was previously used in a highway or land-based nonroad
application.
    (b) The vessel may not be sold within five years after the date of
final assembly.
    (c) No individual may manufacture more than one vessel in any five-
year period under this exemption.
    (d) You may not use the vessel in any revenue-generating service or
for any other commercial purpose. For example, this exemption does not
apply for vessels used in commercial fishing or charter service.
    (e) This exemption may not be used to circumvent the requirements
of this part or the requirements of the Clean Air Act. For example,
this exemption would not cover a case in which a person sells an almost
completely assembled vessel to another person, who would then complete
the assembly. This would be considered equivalent to the sale of the
complete new vessel. This section also does not allow engine
manufacturers to produce new engines that are exempt from emission
standards and it does not provide an exemption from the prohibition
against tampering with certified engines.

Sec.  1045.635  What special provisions apply for small-volume engine
manufacturers?

    This section describes how we apply the special provisions in this
part for small-volume engine manufacturers.
    (a) Special provisions apply for certain small-volume engine
manufacturers, as illustrated by the following examples:
    (1) Additional lead time and other provisions related to the
transition to new emission standards. See Sec.  1045.145.
    (2) More flexible arrangements for creating engine families for
high-performance engines. See Sec.  1045.230.
    (3) Assigned deterioration factors. See Sec.  1045.240.
    (4) Waived requirements for production-line testing. See Sec.
1045.301.
    (5) Additional special provisions apply for small-volume engine and
vessel manufacturers. For example, see Sec.  1045.625 and 40 CFR
1068.250.
    (b) If you use any of the provisions of this part that apply
specifically to small-volume engine manufacturers and we find that you
do not qualify to use these provisions, we may consider you to be in
violation of the requirements that apply for companies that are not
small-volume engine manufacturers. If your number of employees grows to
the point that you no longer qualify as a small-volume engine
manufacturer, we will work with you to determine a reasonable schedule
for complying with additional requirements that apply. For example, if
you no longer qualify as a small-volume engine manufacturer shortly
before you certify your engines for the next model year, we might allow
you to use assigned deterioration factors for one more model year.

Sec.  1045.640  What special provisions apply to branded engines?

    The following provisions apply if you identify the name and
trademark of another company instead of your own on your emission
control information label, as provided by Sec.  1045.135(c)(2):
    (a) You must have a contractual agreement with the other company
that obligates that company to take the following steps:
    (1) Meet the emission warranty requirements that apply under Sec.
1045.120. This may involve a separate agreement involving reimbursement
of warranty-related expenses.
    (2) Report all warranty-related information to the certificate
holder.
    (b) In your application for certification, identify the company
whose trademark you will use.
    (c) You remain responsible for meeting all the requirements of this
chapter, including warranty and defect-reporting provisions.

Sec.  1045.645  What special provisions apply for converting an engine
to use an alternate fuel?

    A certificate of conformity is no longer valid for an engine if the
engine is modified such that it is not in a configuration covered by
the certificate. This section applies if such modifications are done to
convert the engine to run on a different fuel type. Such engines may
need to be recertified as specified in this section if the certificate
is no longer valid for that engine.
    (a) Converting a certified new engine to run on a different fuel
type violates 40 CFR 1068.101(a)(1) if the modified engine is not
covered by a certificate of conformity.
    (b) Converting a certified engine that is not new to run on a
different fuel type violates 40 CFR 1068.101(b)(1) if the modified
engine is not covered by a certificate of conformity. We may specify
alternate certification provisions consistent with the requirements of
this part. For example, you may certify the modified engine for a
partial useful life. For example, if the engine is modified halfway
through its original useful life period, you may generally certify the
engine based on completing the original useful life period; or if the
engine is modified after the original useful life period is past, you
may generally certify

the engine based on testing that does not involve further durability
demonstration.
    (c) Engines may be certified using the certification procedures for
new engines as specified in this part or using the certification
procedures for aftermarket parts as specified in 40 CFR part 85,
subpart V. Unless the original engine manufacturer continues to be
responsible for the engine as specified in paragraph (d) of this
section, you must remove the original engine manufacturer's emission
control information label if you recertify the engine.
    (d) The original manufacturer is not responsible for operation of
modified engines in configurations resulting from modifications
performed by others. In cases where the modification allows an engine
to be operated in either its original configuration or a modified
configuration, the original manufacturer remains responsible for
operation of the modified engine in its original configuration.
    (e) Entities producing conversion kits may obtain certificates of
conformity for the converted engines. Such entities are engine
manufacturers for purposes of this part.

Sec.  1045.650  Do delegated-assembly provisions apply for marine
engines?

    The provisions of 40 CFR 1068.261 related to delegated final
assembly do not apply for marine spark-ignition engines certified under
this part 1045. This means that for engines requiring exhaust
aftertreatment (such as catalysts), the engine manufacturers must
either install the aftertreatment on the engine before introducing it
into U.S. commerce or ship the aftertreatment along with the engine.

Sec.  1045.655  What special provisions apply for installing and
removing altitude kits?

    An action for the purpose of installing or modifying altitude kits
and performing other changes to compensate for changing altitude is not
considered a prohibited act under 40 CFR 1068.101(b) as long as as it
is done consistent with the manufacturer's instructions.

Sec.  1045.660  How do I certify outboard or personal watercraft
engines for use in jet boats?

    (a) This section describes how to certify outboard or personal
watercraft engines for use in jet boats. To be certified under this
section, the jet boat engines must be identical in all physical
respects to the corresponding outboard or personal watercraft engines,
but may differ slightly with respect to engine calibrations.
    (b) The outboard or personal watercraft engines must meet all the
applicable requirements for outboard or personal watercraft engines.
Jet boat engines certified under this section must meet all the
applicable requirements for sterndrive/inboard engines.
    (c) The jet boat engines must be in an engine family separate from
the corresponding outboard or personal watercraft engines.
    (d) Jet boat engine families may use emission credits from outboard
or personal watercraft engine families, as described in Sec.
1045.701(d).
    (e) Jet-boat engines certified under the provisions of this section
must meet emission standards over the same useful-life period that
applies to the corresponding outboard or personal watercraft engine
family, as described in Sec.  1045.103(e).

Subpart H--Averaging, Banking, and Trading for Certification

Sec.  1045.701  General provisions.

    (a) You may average, bank, and trade (ABT) emission credits for
purposes of certification as described in this subpart to show
compliance with the standards of this part. This applies for engines
with respect to exhaust emissions and for vessels with respect to
evaporative emissions. Participation in this program is voluntary.
    (b) The definitions of subpart I of this part apply to this
subpart. The following definitions also apply:
    (1) Actual emission credits means emission credits you have
generated that we have verified by reviewing your final report.
    (2) Averaging set means a set of engines (or vessels) in which
emission credits may be exchanged only with other engines (or vessels)
in the same averaging set.
    (3) Broker means any entity that facilitates a trade of emission
credits between a buyer and seller.
    (4) Buyer means the entity that receives emission credits as a
result of a trade.
    (5) Family means engine family for exhaust credits or emission
family for evaporative credits.
    (6) Reserved emission credits means emission credits you have
generated that we have not yet verified by reviewing your final report.
    (7) Seller means the entity that provides emission credits during a
trade.
    (8) Standard means the emission standard that applies under subpart
B of this part for engines or fuel-system components not participating
in the ABT program of this subpart.
    (9) Trade means to exchange emission credits, either as a buyer or
seller.
    (c) You may not average or exchange banked or traded exhaust
credits with evaporative credits, or vice versa. Evaporative credits
generated by any vessels under this part may be used by any vessels
under this part. Exhaust credits may be exchanged only within an
averaging set. Except as specified in paragraph (d) of this section,
the following criteria define the applicable exhaust averaging sets:
    (1) Sterndrive/inboard engines.
    (2) Outboard and personal watercraft engines.
    (d) Sterndrive/inboard engines certified under Sec.  1045.660 for
jet boats may use HC+NOX and CO exhaust credits generated
from outboard and personal watercraft engines, as long as the credit-
using engine is the same model as an engine model from an outboard or
personal watercraft family. These emission credits may be used for
averaging, but not for banking or trading. The FEL caps for such jet
boat families are the HC+NOX and CO standard for outboard
and personal watercraft engines. U.S.-directed sales from jet boat
engines using the provisions of this paragraph (d) may not be greater
than the U.S.-directed sales of the same engine model for outboard or
personal watercraft engines.
    (e) You may not generate evaporative credits based on permeation
measurements from metal fuel tanks or portable marine fuel tanks.
    (f) You may not use emission credits generated under this subpart
to offset any emissions that exceed an FEL or standard. This applies
for all testing, including certification testing, in-use testing,
selective enforcement audits, and other production-line testing.
However, if exhaust emissions from an engine exceed an exhaust FEL or
standard (for example, during a selective enforcement audit), you may
use emission credits to recertify the family with a higher FEL that
applies only to future production.
    (g) Emission credits may be used in the model year they are
generated (averaging) and in future model years (banking), except that
CO emission credits for outboard and personal watercraft engines may
not be banked or traded.
    (h) You may increase or decrease an exhaust FEL during the model
year by amending your application for certification under Sec.
1045.225.
    (i) Engine and vessel manufacturers certifying with respect to
evaporative emissions may use emission credits to demonstrate
compliance under this subpart. Component manufacturers may

establish FELs for their certified products, but they may not generate
or use emission credits under this subpart.
    (j) In your application for certification, base your showing of
compliance on projected production volumes for engines or vessels
intended for sale in the United States. As described in Sec.  1045.730,
compliance with the requirements of this subpart is determined at the
end of the model year based on actual production volumes for engines or
vessels intended for sale in the United States. Do not include any of
the following engines or vessels to calculate emission credits:
    (1) Engines or vessels exempted under subpart G of this part or
under 40 CFR part 1068.
    (2) Engines or vessels intended for export.
    (3) Engines or vessels that are subject to state emission standards
for that model year. However, this restriction does not apply if we
determine that the state standards and requirements are equivalent to
those of this part and that products sold in such a state will not
generate credits under the state program. For example, you may not
include engines or vessels certified for California if California has
more stringent emission standards for these products or if your
products generate or use emission credits under the California program.
    (4) Engines or vessels not subject to the requirements of this
part, such as those excluded under Sec.  1054.5.
    (5) Any other engines or vessels where we indicate elsewhere in
this part 1054 that they are not to be included in the calculations of
this subpart.

Sec.  1045.705  How do I generate and calculate exhaust emission
credits?

    The provisions of this section apply for calculating exhaust
emission credits for HC+NOX or CO. You may generate exhaust
emission credits only if you are a certifying engine manufacturer.
    (a) For each participating family, calculate positive or negative
emission credits relative to the otherwise applicable emission
standard. Calculate positive emission credits for a family that has an
FEL below the standard. Calculate negative emission credits for a
family that has an FEL above the standard. Sum your positive and
negative credits for the model year before rounding. Round the sum of
emission credits to the nearest kilogram (kg) using consistent units
throughout the following equation:

Emission credits (kg) = (STD-FEL) x (Volume) x (Power) x (UL) x (LF) x
(10-3)
Where:

STD = the emission standard, in g/kW-hr.
FEL = the family emission limit for the family, in g/kW-hr.
Volume = the number of engines eligible to participate in the
averaging, banking, and trading program within the given family
during the model year, as described in Sec.  1045.701(j).
Power = maximum engine power for the family, in kilowatts (see Sec.
1045.140).
UL = The useful life for the given family.
LF = load factor. Use 0.207. We may specify a different load factor
if we approve the use of special test procedures for an family under
40 CFR 1065.10(c)(2), consistent with good engineering judgment.

    (b) [Reserved]

Sec.  1045.706  How do I generate and calculate evaporative emission
credits?

    The provisions of this section apply for calculating evaporative
emission credits. This applies only for fuel tank permeation. You may
generate credits only if you are a certifying vessel manufacturer. This
may include outboard engine manufacturers if they install under-cowl
fuel tanks.
    (a) For each participating vessel, calculate positive or negative
emission credits relative to the otherwise applicable emission
standard. Calculate positive emission credits for a family that has an
FEL below the standard. Calculate negative emission credits for a
family that has an FEL above the standard. Sum your positive and
negative credits for the model year before rounding. Round the sum of
emission credits to the nearest kilogram (kg) using consistent units
throughout the following equation:

Emission credits (kg) = (STD-FEL) x (Total Area) x (UL) x (AF) x (365)
x (10-3)
Where:

STD = the emission standard, in g/m2/day.
FEL = the family emission limit for the family, in g/m2/
day, as described in paragraph (b) of this section.
Total Area = The combined internal surface area of all fuel tanks in
the family, in m2.
UL = 5 years, which represents the useful life for the given family.
AF = adjustment factor. Use 1.0 for fuel tank testing performed at
28 [deg]C and 0.60 for testing performed at 40 [deg]C.

    (b) For calculating credits under paragraph (a) of this section,
the emission standard and FEL must both be based on test measurements
at the same temperature (28 [deg] or 40 [deg]C). Determine the FEL for
calculating emission credits (relative to testing at 28 [deg]C) as
follows:
    (1) To use an FEL below 5.0 g/m2/day, it must be based
on emission measurements.
    (2) The provisions of this paragraph (b)(2) apply for all emission
families with FELs at or above 5.0 g/m2/day. To calculate
emission credits for such emission families, you must choose from one
of the following options and apply it to all your emission families
with FELs at or above 5.0 g/m2/day:
    (i) Option 1: Establish all your FELs based on emission
measurements. This may include measurements from a certifying fuel tank
manufacturer.
    (ii) Option 2: Use an assigned FEL of 10.4 g/m2/day.
This would apply without regard to whether any of these emission
families have measured emission levels below 10.4 g/m2/day.
If any of your fuel tanks were otherwise certified (by you or the fuel
tank manufacturer) with an FEL between 5.0 and 10.4 g/m2/
day, the assigned FEL of 10.4 g/m2/day applies only for
emission credit calculations.

Sec.  1045.710  How do I average emission credits?

    (a) Averaging is the exchange of emission credits among your
families. You may average emission credits only within the same
averaging set.
    (b) You may certify one or more families to an FEL above the
emission standard, subject to the FEL caps and other provisions in
subpart B of this part, if you show in your application for
certification that your projected balance of all emission-credit
transactions in that model year is greater than or equal to zero.
    (c) If you certify a family to an FEL that exceeds the otherwise
applicable standard, you must obtain enough emission credits to offset
the family's deficit by the due date for the final report required in
Sec.  1045.730. The emission credits used to address the deficit may
come from your other families that generate emission credits in the
same model year, from emission credits you have banked, or from
emission credits you obtain through trading.

Sec.  1045.715  How do I bank emission credits?

    (a) Banking is the retention of emission credits by the
manufacturer generating the emission credits for use in future model
years for averaging or trading. You may use banked emission credits
only within the averaging set in which they were generated, except as
described in this subpart.
    (b) You may designate any emission credits you plan to bank in the
reports you submit under Sec.  1045.730. During the model year and
before the due date for the final report, you may designate your
reserved emission credits for averaging or trading.
    (c) Reserved credits become actual emission credits when you submit
your

final report. However, we may revoke these emission credits if we are
unable to verify them after reviewing your reports or auditing your
records.

Sec.  1045.720  How do I trade emission credits?

    (a) Trading is the exchange of emission credits between
manufacturers. You may use traded emission credits for averaging,
banking, or further trading transactions. Traded emission credits may
be used only within the averaging set in which they were generated,
except as described in this subpart.
    (b) You may trade actual emission credits as described in this
subpart. You may also trade reserved emission credits, but we may
revoke these emission credits based on our review of your records or
reports or those of the company with which you traded emission credits.
You may trade banked credits within an averaging set to any certifying
engine or vessel manufacturer.
    (c) If a negative emission credit balance results from a
transaction, both the buyer and seller are liable, except in cases we
deem to involve fraud. See Sec.  1045.255(e) for cases involving fraud.
We may void the certificates of all families participating in a trade
that results in a manufacturer having a negative balance of emission
credits. See Sec.  1045.745.

Sec.  1045.725  What must I include in my application for
certification?

    (a) You must declare in your application for certification your
intent to use the provisions of this subpart for each family that will
be certified using the ABT program. You must also declare the FELs you
select for the family for each pollutant for which you are using the
ABT program. Your FELs must comply with the specifications of subpart B
of this part, including the FEL caps. FELs must be expressed to the
same number of decimal places as the emission standard.
    (b) Include the following in your application for certification:
    (1) A statement that, to the best of your belief, you will not have
a negative balance of emission credits for any averaging set when all
emission credits are calculated at the end of the year.
    (2) Detailed calculations of projected emission credits (positive
or negative) based on projected production volumes. We may require you
to include similar calculations from your other engine families to
demonstrate that you will be able to avoid a negative credit balance
for the model year. If you project negative emission credits for a
family, state the source of positive emission credits you expect to use
to offset the negative emission credits.

Sec.  1045.730  What ABT reports must I send to EPA?

    (a) If any of your families are certified using the ABT provisions
of this subpart, you must send an end-of-year report within 90 days
after the end of the model year and a final report within 270 days
after the end of the model year. We may waive the requirement to send
the end-of year report as long as you send the final report on time.
    (b) Your end-of-year and final reports must include the following
information for each family participating in the ABT program:
    (1) Family designation.
    (2) The emission standards that would otherwise apply to the
family.
    (3) The FEL for each pollutant. If you change the FEL after the
start of production, identify the date that you started using the new
FEL and/or give the engine identification number for the first engine
covered by the new FEL. In this case, identify each applicable FEL and
calculate the positive or negative emission credits under each FEL.
    (4) The projected and actual production volumes for the model year
with a point of retail sale in the United States, as described in Sec.
1045.701(j). For fuel tanks, state the production volume in terms of
total surface area and production volume for each tank configuration
and state the total surface area for the emission family. If you
changed an FEL during the model year, identify the actual production
volume associated with each FEL.
    (5) Maximum engine power for each engine configuration, and your
declared value of maximum engine power for the engine family (see Sec.
1045.140).
    (6) Useful life.
    (7) Calculated positive or negative emission credits for the whole
family. Identify any emission credits that you traded, as described in
paragraph (d)(1) of this section.
    (c) Your end-of-year and final reports must include the following
additional information:
    (1) Show that your net balance of emission credits from all your
participating families in each averaging set in the applicable model
year is not negative.
    (2) State whether you will retain any emission credits for banking.
    (3) State that the report's contents are accurate.
    (d) If you trade emission credits, you must send us a report within
90 days after the transaction, as follows:
    (1) As the seller, you must include the following information in
your report:
    (i) The corporate names of the buyer and any brokers.
    (ii) A copy of any contracts related to the trade.
    (iii) The families that generated emission credits for the trade,
including the number of emission credits from each family.
    (2) As the buyer, you must include the following information in
your report:
    (i) The corporate names of the seller and any brokers.
    (ii) A copy of any contracts related to the trade.
    (iii) How you intend to use the emission credits, including the
number of emission credits you intend to apply to each family (if
known).
    (e) Send your reports electronically to the Designated Compliance
Officer using an approved information format. If you want to use a
different format, send us a written request with justification for a
waiver.
    (f) Correct errors in your end-of-year report or final report as
follows:
    (1) You may correct any errors in your end-of-year report when you
prepare the final report as long as you send us the final report by the
time it is due.
    (2) If you or we determine within 270 days after the end of the
model year that errors mistakenly decreased your balance of emission
credits, you may correct the errors and recalculate the balance of
emission credits. You may not make these corrections for errors that
are determined more than 270 days after the end of the model year. If
you report a negative balance of emission credits, we may disallow
corrections under this paragraph (f)(2).
    (3) If you or we determine anytime that errors mistakenly increased
your balance of emission credits, you must correct the errors and
recalculate the balance of emission credits.

Sec.  1045.735  What records must I keep?

    (a) You must organize and maintain your records as described in
this section. We may review your records at any time.
    (b) Keep the records required by this section for at least eight
years after the due date for the end-of-year report. You may not use
emission credits for any engines or vessel if you do not keep all the
records required under this section. You must therefore keep these
records to continue to bank valid credits. Store these records in any
format and on any media as long as you can promptly send us organized,
written records in English if we ask for them. You must keep these
records readily available. We may review them at any time.
    (c) Keep a copy of the reports we require in Sec. Sec.  1045.725
and 1045.730.

    (d) Keep records of the engine identification number for each
engine or vessel you produce that generates or uses emission credits
under the ABT program. You may identify these numbers as a range.
    (e) We may require you to keep additional records or to send us
relevant information not required by this section in accordance with
the Clean Air Act.

Sec.  1045.745  What can happen if I do not comply with the provisions
of this subpart?

    (a) For each family participating in the ABT program, the
certificate of conformity is conditional upon full compliance with the
provisions of this subpart during and after the model year. You are
responsible to establish to our satisfaction that you fully comply with
applicable requirements. We may void the certificate of conformity for
a family if you fail to comply with any provisions of this subpart.
    (b) You may certify your family to an FEL above an emission
standard based on a projection that you will have enough emission
credits to offset the deficit for the family. However, we may void the
certificate of conformity if you cannot show in your final report that
you have enough actual emission credits to offset a deficit for any
pollutant in a family.
    (c) We may void the certificate of conformity for a family if you
fail to keep records, send reports, or give us information we request.
    (d) You may ask for a hearing if we void your certificate under
this section (see Sec.  1045.820).

Subpart I--Definitions and Other Reference Information

Sec.  1045.801  What definitions apply to this part?

    The following definitions apply to this part. The definitions apply
to all subparts unless we note otherwise. All undefined terms have the
meaning the Clean Air Act gives to them. The definitions follow:
    Adjustable parameter means any device, system, or element of design
that someone can adjust (including those which are difficult to access)
and that, if adjusted, may affect emissions or engine performance
during emission testing or normal in-use operation. This includes, but
is not limited to, parameters related to injection timing and fueling
rate. You may ask us to exclude a parameter that is difficult to access
if it cannot be adjusted to affect emissions without significantly
degrading engine performance, or if you otherwise show us that it will
not be adjusted in a way that affects emissions during in-use
operation.
    Aftertreatment means relating to a catalytic converter, particulate
filter, or any other system, component, or technology mounted
downstream of the exhaust valve (or exhaust port) whose design function
is to decrease emissions in the engine exhaust before it is exhausted
to the environment. Exhaust-gas recirculation (EGR), turbochargers, and
oxygen sensors are not aftertreatment.
    Alcohol-fueled engine means an engine that is designed to run using
an alcohol fuel. For purposes of this definition, alcohol fuels do not
include fuels with a nominal alcohol content below 25 percent by
volume.
    Amphibious vehicle means a vehicle with wheels or tracks that is
designed primarily for operation on land and secondarily for operation
in water.
    Applicable emission standard or applicable standard means an
emission standard to which an engine (or vessel) is subject.
Additionally, if an engine (or vessel) has been or is being certified
to another standard or FEL, applicable emission standard means the FEL
or other standard to which the engine (or vessel) has been or is being
certified. This definition does not apply to subpart H of this part.
    Auxiliary emission control device means any element of design that
senses temperature, motive speed, engine RPM, transmission gear, or any
other parameter for the purpose of activating, modulating, delaying, or
deactivating the operation of any part of the emission control system.
    Brake power means the usable power output of the engine, not
including power required to fuel, lubricate, or heat the engine,
circulate coolant to the engine, or to operate aftertreatment devices.
    Calibration means the set of specifications and tolerances specific
to a particular design, version, or application of a component or
assembly capable of functionally describing its operation over its
working range.
    Carryover means relating to certification based on emission data
generated from an earlier model year, as described in Sec.
1045.235(d).
    Certification means relating to the process of obtaining a
certificate of conformity for an engine family that complies with the
emission standards and requirements in this part.
    Certified emission level means the highest deteriorated emission
level in an engine family for a given pollutant from either transient
or steady-state testing.
    Clean Air Act means the Clean Air Act, as amended, 42 U.S.C. 7401-
7671q.
    Conventional sterndrive/inboard engine means a sterndrive/inboard
engine that is not a high-performance engine.
    Crankcase emissions means airborne substances emitted to the
atmosphere from any part of the engine crankcase's ventilation or
lubrication systems. The crankcase is the housing for the crankshaft
and other related internal parts.
    Critical emission-related component means any of the following
components:
    (1) Electronic control units, aftertreatment devices, fuel-metering
components, EGR-system components, crankcase-ventilation valves, all
components related to charge-air compression and cooling, and all
sensors and actuators associated with any of these components.
    (2) Any other component whose primary purpose is to reduce
emissions.
    Date of manufacture has the meaning given in 40 CFR 1068.30.
    Days means calendar days unless otherwise specified. For example,
when we specify working days we mean calendar days, excluding weekends
and U.S. national holidays.
    Designated Compliance Officer means the Manager, Heavy-Duty and
Nonroad Engine Group (6405-J), U.S. Environmental Protection Agency,
1200 Pennsylvania Ave., NW., Washington, DC 20460.
    Designated Enforcement Officer means the Director, Air Enforcement
Division (2242A), U.S. Environmental Protection Agency, 1200
Pennsylvania Ave., NW.,Washington, DC 20460.
    Deteriorated emission level means the emission level that results
from applying the appropriate deterioration factor to the official
emission result of the emission-data engine.
    Deterioration factor means the relationship between emissions at
the end of useful life and emissions at the low-hour test point (see
Sec. Sec.  1045.240 and 1045.245), expressed in one of the following
ways:
    (1) For multiplicative deterioration factors, the ratio of
emissions at the end of useful life to emissions at the low-hour test
point.
    (2) For additive deterioration factors, the difference between
emissions at the end of useful life and emissions at the low-hour test
point.
    Discrete-mode means relating to the discrete-mode type of steady-
state test described in Sec.  1045.505.
    Dual fuel means relating to an engine designed for operation on two
different fuels but not on a continuous mixture of those fuels.
    Emission control system means any device, system, or element of
design that controls or reduces the emissions of regulated pollutants
from an engine.

    Emission-data engine means an engine that is tested for
certification. This includes engines tested to establish deterioration
factors.
    Emission-related maintenance means maintenance that substantially
affects emissions or is likely to substantially affect emission
deterioration.
    Engine has the meaning given in 40 CFR 1068.30. This includes
complete and partially complete engines.
    Engine configuration means a unique combination of engine hardware
and calibration within an engine family. Engines within a single engine
configuration differ only with respect to normal production
variability.
    Engine family has the meaning given in Sec.  1045.230.
    Engine manufacturer means the manufacturer of the engine. See the
definition of ``manufacturer'' in this section.
    Evaporative means relating to fuel emissions controlled by 40 CFR
part 1060. This generally includes emissions that result from
permeation of fuel through the fuel-system materials or from
ventilation of the fuel system.
    Excluded means relating to an engine that either:
    (1) Has been determined not to be a nonroad engine, as specified in
40 CFR 1068.30; or
    (2) Is a nonroad engine that, according to Sec.  1045.5, is not
subject to this part 1045.
    Exempted has the meaning given in 40 CFR 1068.30.
    Exhaust-gas recirculation (EGR) means a technology that reduces
emissions by routing exhaust gases that had been exhausted from the
combustion chamber(s) back into the engine to be mixed with incoming
air before or during combustion. The use of valve timing to increase
the amount of residual exhaust gas in the combustion chamber(s) that is
mixed with incoming air before or during combustion is not considered
exhaust-gas recirculation for the purposes of this part.
    Family emission limit (FEL) means an emission level declared by the
manufacturer to serve in place of the emission standards specified in
subpart B of this part under the ABT program in subpart H of this part.
The family emission limit must be expressed to the same number of
decimal places as the emission standard it replaces. The family
emission limit serves as the emission standard for the engine family
(exhaust) or emission family (evaporative) with respect to all required
testing.
    Flexible-fuel means relating to an engine designed for operation on
any mixture of two or more different fuels.
    Fuel line means hose, tubing, and primer bulbs containing or
exposed to liquid fuel, including hose or tubing that delivers fuel to
or from the engine, as follows:
    (1) This includes flexible molded sections for transporting liquid
fuel to or from the engine, but does not include inflexible components
for connecting hose or tubing.
    (2) This includes hose or tubing for the vent line or filler neck
if fuel systems are designed such that any portion of the vent-line or
filler-neck material continues to be exposed to liquid fuel after
completion of a refueling event in which an operator fills the fuel
tank using typical methods. For example, we would not consider a filler
neck to be a fuel line if an operator stops refueling after an initial
automatic shutoff that signals the fuel tank is full, where any liquid
fuel in the filler neck during the refueling procedure drains into the
fuel tank.
    (3) This does not include primer bulbs that contain liquid fuel
only for priming the engine before starting.
    Fuel system means all components involved in transporting,
metering, and mixing the fuel from the fuel tank to the combustion
chamber(s), including the fuel tank, fuel tank cap, fuel pump, fuel
filters, fuel lines, carburetor or fuel-injection components, and all
fuel-system vents.
    Fuel type means a general category of fuels such as gasoline or
natural gas. There can be multiple grades within a single fuel type,
such as low-temperature or all-season gasoline.
    Good engineering judgment has the meaning given in 40 CFR 1068.30.
See 40 CFR 1068.5 for the administrative process we use to evaluate
good engineering judgment.
    High-performance means relating to a sterndrive/inboard engine with
maximum engine power above 373 kW that has design features to enhance
power output such that the expected operating time until rebuild is
substantially shorter than 480 hours.
    Hydrocarbon (HC) means the hydrocarbon group on which the emission
standards are based for each fuel type, as described in subpart B of
this part.
    Identification number means a unique specification (for example, a
model number/serial number combination) that allows someone to
distinguish a particular engine from other similar engines.
    Jet boat means a vessel that uses an installed internal combustion
engine powering a water jet pump as its primary source of propulsion
and is designed with open area for carrying passengers. Jet boat
engines qualify as sterndrive/inboard engines.
    Low-hour means relating to an engine that has stabilized emissions
and represents the undeteriorated emission level. This would generally
involve less than 30 hours of operation.
    Manufacture means the physical and engineering process of
designing, constructing, and assembling an engine or vessel.
    Manufacturer has the meaning given in section 216(1) of the Clean
Air Act (42 U.S.C. 7550(1)). In general, this term includes any person
who manufactures an engine, or vessel for sale in the United States or
otherwise introduces a new marine engine into U.S. commerce. This
includes importers who import engines or vessels for resale, but not
dealers. All manufacturing entities under the control of the same
person are considered to be a single manufacturer.
    Marine engine means a nonroad engine that is installed or intended
to be installed on a vessel. This includes a portable auxiliary marine
engine only if its fueling, cooling, or exhaust system is an integral
part of the vessel. There are two kinds of marine engines:
    (1) Propulsion marine engine means a marine engine that moves a
vessel through the water or directs the vessel's movement.
    (2) Auxiliary marine engine means a marine engine not used for
propulsion.
    Marine vessel has the meaning given in 1 U.S.C. 3, except that it
does not include amphibious vehicles. The definition in 1 U.S.C. 3 very
broadly includes every craft capable of being used as a means of
transportation on water.
    Maximum engine power has the meaning given in Sec.  1045.140.
    Maximum test speed has one of the following meanings:
    (1) For all testing with two-stroke engines and for testing four-
stroke engines on an engine dynamometer, maximum test speed has the
meaning given in 40 CFR 1065.1001 and Sec.  1045.501.
    (2) For testing a four-stroke engine that remains installed in a
vessel, maximum test speed means the engine speed during sustained
operation with maximum operator demand.
    Model year means one of the following things:
    (1) For freshly manufactured vessels and engines (see definition of
``new propulsion marine engine,'' paragraph (1)), model year means one
of the following:
    (i) Calendar year.
    (ii) Your annual new model production period if it is different
than the calendar year. This must include

January 1 of the calendar year for which the model year is named. It
may not begin before January 2 of the previous calendar year and it
must end by December 31 of the named calendar year. For seasonal
production periods not including January 1, model year means the
calendar year in which the production occurs, unless you choose to
certify the applicable engine family with the following model year. For
example, if your production period is June 1, 2010 through November 30,
2010, your model year would be 2010 unless you choose to certify the
engine family for model year 2011.
    (2) For an engine that is converted to a propulsion marine engine
after being certified and placed into service as a motor vehicle
engine, a nonroad engine that is not a propulsion marine engine, or a
stationary engine, model year means the model year in which the engine
was originally produced. For an engine that is converted to a nonroad
engine after being placed into service as a motor vehicle engine, a
nonroad engine that is not a propulsion marine engine, or a stationary
engine without having been certified, model year means the calendar
year in which the engine becomes a new nonroad engine. (See definition
of ``new propulsion marine engine,'' paragraph (2).)
    (3) [Reserved]
    (4) For engines that are not freshly manufactured but are installed
in new vessels, model year means the calendar year in which the engine
is installed in the new vessel (see definition of ``new propulsion
marine engine,'' paragraph (4)).
    (5) For imported engines:
    (i) For imported engines described in paragraph (5)(i) of the
definition of ``new propulsion marine engine,'' model year has the
meaning given in paragraphs (1) through (4) of this definition.
    (ii) For imported engines described in paragraph (5)(ii) of the
definition of ``new propulsion marine engine,'' model year means the
calendar year in which the engine is modified.
    (iii) For imported engines described in paragraph (5)(iii) of the
definition of ``new nonroad engine,'' model year means the calendar
year in which the engine is assembled in its imported configuration,
unless specified otherwise in this part or in 40 CFR part 1068.
    New portable marine fuel tanks and fuel lines means portable marine
fuel tanks and fuel lines that have not yet been placed into service,
or which are otherwise offered for sales as new products.
    New propulsion marine engine or new engine means any of the
following things:
    (1) A freshly manufactured propulsion marine engine for which the
ultimate purchaser has never received the equitable or legal title.
This kind of engine might commonly be thought of as ``brand new.'' In
the case of this paragraph (1), the engine is new from the time it is
produced until the ultimate purchaser receives the title or the product
is placed into service, whichever comes first.
    (2) An engine originally manufactured as a motor vehicle engine, a
nonroad engine that is not a propulsion marine engine, or a stationary
engine that is later used or intended to be used as a propulsion marine
engine. In this case, the engine is no longer a motor vehicle,
nonpropulsion, or stationary engine and becomes a ``new propulsion
marine engine.'' The engine is no longer new when it is placed into
service as a marine propulsion engine. This paragraph (2) applies for
engines we exclude under Sec.  1045.5, where that engine is later
installed as a propulsion engine in a vessel that is covered by this
part 1045.
    (3) [Reserved]
    (4) An engine not covered by paragraphs (1) through (3) of this
definition that is intended to be installed in a new vessel. This
generally includes installation of used engines in new vessels. The
engine is no longer new when the ultimate purchaser receives a title
for the vessel or the product is placed into service, whichever comes
first.
    (5) An imported marine engine, subject to the following provisions:
    (i) An imported marine engine covered by a certificate of
conformity issued under this part that meets the criteria of one or
more of paragraphs (1) through (4) of this definition, where the
original engine manufacturer holds the certificate, is new as defined
by those applicable paragraphs.
    (ii) An imported engine that will be covered by a certificate of
conformity issued under this part, where someone other than the
original engine manufacturer holds the certificate (such as when the
engine is modified after its initial assembly), is a new propulsion
marine engine when it is imported. It is no longer new when the
ultimate purchaser receives a title for the engine or it is placed into
service, whichever comes first.
    (iii) An imported propulsion marine engine that is not covered by a
certificate of conformity issued under this part at the time of
importation is new. This addresses uncertified engines and vessels
initially placed into service that someone seeks to import into the
United States. Importation of this kind of engine (or vessel containing
such an engine) is generally prohibited by 40 CFR part 1068. However,
the importation of such an engine is not prohibited if the engine has
an earlier model year than that identified in the following table,
since it is not subject to standards:

    Applicability of Emission Standards for Propulsion Marine Engines
------------------------------------------------------------------------
                                                          Initial model
                                                             year of
                      Engine type                            emission
                                                            standards
------------------------------------------------------------------------
Outboard...............................................             1998
Personal watercraft....................................             1999
Sterndrive/inboard.....................................             2010
------------------------------------------------------------------------

    New vessel means either of the following things:
    (1) A vessel for which the ultimate purchaser has never received
the equitable or legal title. The product is no longer new when the
ultimate purchaser receives this title or it is placed into service,
whichever comes first.
    (2) An imported vessel that has already been placed into service,
where it has an engine not covered by a certificate of conformity
issued under this part at the time of importation that was manufactured
after the requirements of this part start to apply (see Sec.  1045.1).
    Noncompliant engine means an engine that was originally covered by
a certificate of conformity but is not in the certified configuration
or otherwise does not comply with the conditions of the certificate.
    Nonconforming engine means an engine not covered by a certificate
of conformity that would otherwise be subject to emission standards.
    Nonmethane hydrocarbon has the meaning given in 40 CFR 1065.1001.
This generally means the difference between the emitted mass of total
hydrocarbons and the emitted mass of methane.
    Nonroad means relating to nonroad engines, or vessels, or equipment
that include nonroad engines.
    Nonroad engine has the meaning given in 40 CFR 1068.30. In general,
this means all internal-combustion engines except motor vehicle
engines, stationary engines, engines used solely for competition, or
engines used in aircraft.
    Official emission result means the measured emission rate for an
emission-data engine on a given duty cycle before

the application of any deterioration factor.
    Outboard engine means an assembly of a spark-ignition engine and
drive unit used to propel a vessel from a properly mounted position
external to the hull of the vessel. An outboard drive unit is partially
submerged during operation and can be tilted out of the water when not
in use.
    Owners manual means a document or collection of documents prepared
by the engine manufacturer for the owner or operator to describe
appropriate engine maintenance, applicable warranties, and any other
information related to operating or keeping the engine. The owners
manual is typically provided to the ultimate purchaser at the time of
sale. The owners manual may be in paper or electronic format.
    Oxides of nitrogen has the meaning given in 40 CFR part 1065.1001.
    Personal watercraft means a vessel less than 4.0 meters (13 feet)
in length that uses an installed spark-ignition engine powering a water
jet pump as its primary source of propulsion and is designed with no
open load carrying area that would retain water. The vessel is designed
to be operated by a person or persons positioned on, rather than within
the confines of the hull. A vessel using an outboard engine as its
primary source of propulsion is not a personal watercraft.
    Personal watercraft engine means a spark-ignition engine used to
propel a personal watercraft.
    Placed into service means put into initial use for its intended
purpose.
    Point of first retail sale means the location at which the initial
retail sale occurs. This generally means an equipment dealership, but
may also include an engine seller or distributor in cases where loose
engines are sold to the general public for uses such as replacement
engines.
    Portable marine fuel tank has the meaning given in 40 CFR 1060.801.
    Ramped-modal means relating to the ramped-modal type of steady-
state test described in Sec.  1045.505.
    Revoke has the meaning given in 40 CFR 1068.30. In general this
means to terminate the certificate or an exemption for an engine
family.
    Round has the meaning given in 40 CFR 1065.1001.
    Scheduled maintenance means adjusting, repairing, removing,
disassembling, cleaning, or replacing components or systems
periodically to keep a part or system from failing, malfunctioning, or
wearing prematurely. It also may mean actions you expect are necessary
to correct an overt indication of failure or malfunction for which
periodic maintenance is not appropriate.
    Small-volume engine manufacturer means an engine manufacturer with
250 or fewer employees. This includes any employees working for a
parent company and all its subsidiaries.
    Small-volume vessel manufacturer means a vessel manufacturer with
500 or fewer employees. This includes any employees working for a
parent company and all its subsidiaries.
    Spark-ignition means relating to a gasoline-fueled engine or any
other type of engine with a spark plug (or other sparking device) and
with operating characteristics significantly similar to the theoretical
Otto combustion cycle. Spark-ignition engines usually use a throttle to
regulate intake air flow to control power during normal operation.
    Steady-state means relating to emission tests in which engine speed
and load are held at a finite set of essentially constant values.
Steady-state tests are either discrete-mode tests or ramped-modal
tests.
    Sterndrive/inboard engine means a spark-ignition engine that is
used to propel a vessel, but is not an outboard engine or a personal
watercraft engine. A sterndrive/inboard engine may be either a
conventional sterndrive/inboard engine or a high-performance engine.
Engines on propeller-driven vessels, jet boats, air boats, and
hovercraft are all sterndrive/inboard engines.
    Stoichiometric means relating to the particular ratio of air and
fuel such that if the fuel were fully oxidized, there would be no
remaining fuel or oxygen. For example, stoichiometric combustion in a
gasoline-fueled engine typically occurs at an air-to-fuel mass ratio of
about 14.7:1.
    Suspend has the meaning given in 40 CFR 1068.30. In general this
means to temporarily discontinue the certificate or an exemption for an
engine family.
    Test engine means an engine in a test sample.
    Test sample means the collection of engines selected from the
population of an engine family for emission testing. This may include
testing for certification, production-line testing, or in-use testing.
    Total hydrocarbon has the meaning given in 40 CFR 1065.1001. This
generally means the combined mass of organic compounds measured by the
specified procedure for measuring total hydrocarbon, expressed as a
hydrocarbon with a hydrogen-to-carbon mass ratio of 1.85:1.
    Total hydrocarbon equivalent has the meaning given in 40 CFR
1065.1001. This generally means the sum of the carbon mass
contributions of non-oxygenated hydrocarbons, alcohols and aldehydes,
or other organic compounds that are measured separately as contained in
a gas sample, expressed as exhaust hydrocarbon from petroleum-fueled
engines. The hydrogen-to-carbon ratio of the equivalent hydrocarbon is
1.85:1.
    Ultimate purchaser means, with respect to any new vessel or new
marine propulsion engine, the first person who in good faith purchases
such new vessel or new engine for purposes other than resale.
    Under-cowl fuel line means a fuel line that is entirely contained
within the cowl of an outboard engine. This does not include a fuel
line that crosses through the cowl housing.
    United States has the meaning given in 40 CFR 1068.30.
    Upcoming model year for an engine family means the model year after
the one currently in production.
    U.S.-directed production volume means the number of engine units,
subject to the requirements of this part, produced by a manufacturer
for which the manufacturer has a reasonable assurance that sale was or
will be made to ultimate purchasers in the United States.
    Useful life means the period during which a vehicle is required to
comply with all applicable emission standards, specified as a given
number of hours of operation or calendar years, whichever comes first.
It is the period during which an engine is required to comply with all
applicable emission standards. See Sec. Sec.  1045.103(e), 1045.105(e),
and 1045.112. If an engine has no hour meter, the specified number of
hours does not limit the period during which an in-use engine is
required to comply with emission standards unless the degree of service
accumulation can be verified separately.
    Variable-speed engine means an engine that is not a constant-speed
engine.
    Vessel means marine vessel.
    Void has the meaning given in 40 CFR 1068.30. In general this means
to invalidate a certificate or an exemption both retroactively and
prospectively.
    Volatile liquid fuel means any fuel other than diesel or biodiesel
that is a liquid at atmospheric pressure and has a Reid Vapor Pressure
higher than 2.0 pounds per square inch.
    We (us, our) means the Administrator of the Environmental
Protection Agency and any authorized representatives.
    Wide-open throttle means maximum throttle opening. Unless this is
specified at a given speed, it refers to maximum throttle opening at
maximum speed. For electronically controlled or other

engines with multiple possible fueling rates, wide-open throttle also
means the maximum fueling rate at maximum throttle opening under test
conditions.

Sec.  1045.805  What symbols, acronyms, and abbreviations does this
part use?

    The following symbols, acronyms, and abbreviations apply to this
part:
ABT Averaging, banking, and trading.
AECD Auxiliary emission control device.
CFR Code of Federal Regulations.
CH4 methane.
CO carbon monoxide.
CO2 carbon dioxide.
EPA Environmental Protection Agency.
FEL Family Emission Limit.
g gram.
HC hydrocarbon.
hr hour.
kPa kilopascals.
kW kilowatt.
m meter.
N2O nitrous oxide.
NARA National Archives and Records Administration.
NMHC nonmethane hydrocarbons.
NOX oxides of nitrogen (NO and NO2).
NTE not-to-exceed
psig pounds per square inch of gauge pressure.
RPM revolutions per minute.
SAE Society of Automotive Engineers.
THC total hydrocarbon.
THCE total hydrocarbon equivalent.
U.S.C. United States Code.

Sec.  1045.810  What materials does this part reference?

    Documents listed in this section have been incorporated by
reference into this part. The Director of the Federal Register approved
the incorporation by reference as prescribed in 5 U.S.C. 552(a) and 1
CFR part 51. Anyone may inspect copies at the U.S. EPA, Air and
Radiation Docket and Information Center, 1301 Constitution Ave., NW.,
Room B102, EPA West Building, Washington, DC 20460 or at the National
Archives and Records Administration (NARA). For information on the
availability of this material at NARA, call<PHONE_NUMBER>, or go to:
http://www.archives.gov/federal_register/code_of_federal_
regulations/ibr_locations.html.
    (a) SAE material. Table 1 to this section lists material from the
Society of Automotive Engineers that we have incorporated by reference.
The first column lists the number and name of the material. The second
column lists the sections of this part where we reference it. Anyone
may purchase copies of these materials from the Society of Automotive
Engineers, 400 Commonwealth Drive, Warrendale, PA 15096 or http://
www.sae.org. Table 1 follows:

                Table 1 to Sec.   1045.810--SAE Materials
------------------------------------------------------------------------
                                                              Part 1045
                  Document number and name                    reference
------------------------------------------------------------------------
SAE J1939-05, Marine Stern Drive and Inboard Spark-Ignition     1045.110
 Engine On-Board Diagnostics Implementation Guide, February
 2008......................................................
------------------------------------------------------------------------

    (b) [Reserved]

Sec.  1045.815  What provisions apply to confidential information?

    (a) Clearly show what you consider confidential by marking,
circling, bracketing, stamping, or some other method.
    (b) We will store your confidential information as described in 40
CFR part 2. Also, we will disclose it only as specified in 40 CFR part
2. This applies both to any information you send us and to any
information we collect from inspections, audits, or other site visits.
    (c) If you send us a second copy without the confidential
information, we will assume it contains nothing confidential whenever
we need to release information from it.
    (d) If you send us information without claiming it is confidential,
we may make it available to the public without further notice to you,
as described in 40 CFR 2.204.

Sec.  1045.820  How do I request a hearing?

    (a) You may request a hearing under certain circumstances as
described elsewhere in this part. To do this, you must file a written
request, including a description of your objection and any supporting
data, within 30 days after we make a decision.
    (b) For a hearing you request under the provisions of this part, we
will approve your request if we find that your request raises a
substantial factual issue.
    (c) If we agree to hold a hearing, we will use the procedures
specified in 40 CFR part 1068, subpart G.

Sec.  1045.825  What reporting and recordkeeping requirements apply
under this part?

    Under the Paperwork Reduction Act (44 U.S.C. 3501 et seq.), the
Office of Management and Budget approves the reporting and
recordkeeping specified in the applicable regulations. The following
items illustrate the kind of reporting and recordkeeping we require for
engines and vessels regulated under this part:
    (a) We specify the following requirements related to engine and
vessel certification in this part 1045:
    (1) In Sec.  1045.20 we require vessel manufacturers to label their
vessels if they are relying on component certification.
    (2) In Sec.  1045.135 we require engine manufacturers to keep
certain records related to duplicate labels sent to vessel
manufacturers.
    (3) In Sec.  1045.145 we include various reporting and
recordkeeping requirements related to interim provisions.
    (4) In subpart C of this part we identify a wide range of
information required to certify engines.
    (5) In Sec. Sec.  1045.345 and 1045.350 we specify certain records
related to production-line testing.
    (6) In Sec. Sec.  1045.420 and 1045.425 we specify certain records
related to in-use testing.
    (7) In subpart G of this part we identify several reporting and
recordkeeping items for making demonstrations and getting approval
related to various special compliance provisions.
    (8) In Sec. Sec.  1045.725, 1045.730, and 1045.735 we specify
certain records related to averaging, banking, and trading.
    (b) We specify the following requirements related to vessel or
component certification in 40 CFR part 1060:
    (1) In 40 CFR 1060.20 we give an overview of principles for
reporting information.
    (2) In 40 CFR part 1060, subpart C, we identify a wide range of
information required to certify products.
    (3) In 40 CFR 1060.301 we require manufacturers to make engines or
vessels available for our testing if we make such a request.
    (4) In 40 CFR 1060.505 we specify information needs for
establishing various changes to published test procedures.
    (c) We specify the following requirements related to testing in 40
CFR part 1065:
    (1) In 40 CFR 1065.2 we give an overview of principles for
reporting information.
    (2) In 40 CFR 1065.10 and 1065.12 we specify information needs for
establishing various changes to published test procedures.
    (3) In 40 CFR 1065.25 we establish basic guidelines for storing
test information.
    (4) In 40 CFR 1065.695 we identify data that may be appropriate for
collecting during testing of in-use engines using portable analyzers.

    (d) We specify the following requirements related to the general
compliance provisions in 40 CFR part 1068:
    (1) In 40 CFR 1068.5 we establish a process for evaluating good
engineering judgment related to testing and certification.
    (2) In 40 CFR 1068.25 we describe general provisions related to
sending and keeping information.
    (3) In 40 CFR 1068.27 we require manufacturers to make engines
available for our testing or inspection if we make such a request.
    (4) In 40 CFR 1068.105 we require vessel manufacturers to keep
certain records related to duplicate labels from engine manufacturers.
    (5) In 40 CFR 1068.120 we specify recordkeeping related to
rebuilding engines.
    (6) In 40 CFR part 1068, subpart C, we identify several reporting
and recordkeeping items for making demonstrations and getting approval
related to various exemptions.
    (7) In 40 CFR part 1068, subpart D, we identify several reporting
and recordkeeping items for making demonstrations and getting approval
related to importing engines.
    (8) In 40 CFR 1068.450 and 1068.455 we specify certain records
related to testing production-line engines in a selective enforcement
audit.
    (9) In 40 CFR 1068.501 we specify certain records related to
investigating and reporting emission-related defects.
    (10) In 40 CFR 1068.525 and 1068.530 we specify certain records
related to recalling nonconforming engines.

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

    (a) The following standards apply to outboard and personal
watercraft engines produced before the model years specified in
Sec.  1045.1 (since the end of the phase-in period specified in 40
CFR 91.104):
    (1) For engines at or below 4.3 kW, the HC+NOX
standard is 81.00 g/kW-hr.
    (2) For engines above 4.3 kW, the following HC+NOX
standard applies:

STD = 6.00 + 0.250 [middot] (151 + 557/P\0.9\)

Where:

STD = The HC+NOX emission standard, in g/kW-hr.
P = The average power of an engine family, in kW.

    (b) See 40 CFR 91.104 for standards that applied to outboard and
personal watercraft engines during the phase-in period.

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

    (a) The following duty cycle applies for discrete-mode testing:

----------------------------------------------------------------------------------------------------------------
                                                                                Torque         Weighting
                 E4 Mode No.                            Engine speed\1\           (percent) \2\       factors
----------------------------------------------------------------------------------------------------------------
1............................................  Maximum test speed..............            100              0.06
2............................................  80%.............................             71.6            0.14
3............................................  60%.............................             46.5            0.15
4............................................  40%.............................             25.3            0.25
5............................................  Warm idle.......................              0              0.40
----------------------------------------------------------------------------------------------------------------
\1\ Speed terms are defined in 40 CFR part 1065. Percent speed values are relative to maximum test speed.
\2\ Except as noted in Sec.   1045.505, the percent torque is relative to maximum torque at maximum test speed.

    (b) The following duty cycle applies for ramped-modal testing:

----------------------------------------------------------------------------------------------------------------
                                        Time in mode
               RMC Mode                   (seconds)       Engine speed \1,2\         Torque (percent) \2,3\
----------------------------------------------------------------------------------------------------------------
1a Steady-state......................             225  Idle...................  0
1b Transition........................              20  Linear transition......  Linear transition
2a Steady-state......................              63  Maximum test speed.....  100
2b Transition........................              20  Linear transition......  Linear transition
*3a Steady-state.....................             271  40%....................  25.3%
3b Transition........................              20  Linear transition......  Linear transition
4a Steady-state......................             151  80%....................  71.6%
4b Transition........................              20  Linear transition......  Linear transition
5a Steady-state......................             161  60%....................  46.5%
5b Transition........................              20  Linear transition......  Linear transition
6 Steady-state.......................             229  Warm idle..............  0
----------------------------------------------------------------------------------------------------------------
\1\ Speed terms are defined in 40 CFR part 1065. Percent speed values are relative to maximum test speed.
\2\ Advance from one mode to the next within a 20-second transition phase. During the transition phase, command
  linear progressions of speed and torque from the speed setting and torque setting of the current mode to the
  speed setting and torque setting of the next mode.
\3\ Except as noted in Sec.   1045.505, the percent torque is relative to maximum torque at maximum test speed.

PART 1048--CONTROL OF EMISSIONS FROM NEW, LARGE NONROAD SPARK-
IGNITION ENGINES

0
99. The authority citation for part 1048 continues to read as follows:

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

Subpart A--[Amended]

0
100. Section 1048.1 is amended by revising paragraph (d) to read as
follows:

Sec.  1048.1  Does this part apply to me?

* * * * *
    (d) In certain cases, the regulations in this part 1048 apply to
engines with maximum engine power at or below 19 kW that would
otherwise be covered by 40 CFR part 90 or 1054. See 40 CFR 90.913 or
1054.615 for provisions related to this allowance.

0
101. A new Sec.  1048.2 is added to read as follows:

Sec.  1048.2  Who is responsible for compliance?

    The regulations in this part 1048 contain provisions that affect
both engine manufacturers and others. However, the requirements of this
part

are generally addressed to the engine manufacturer. The term ``you''
generally means the engine manufacturer, as defined in Sec.  1048.801,
especially for issues related to certification (including production-
line testing, reporting, etc.).

0
102. Section 1048.5 is amended by revising paragraph (b) and adding
paragraph (c) to read as follows:

Sec.  1048.5  Which engines are excluded from this part's requirements?

* * * * *
    (b) Propulsion marine engines. See 40 CFR parts 91 and 1045. This
part applies with respect to auxiliary marine engines.
    (c) Engines that are certified to meet the requirements of 40 CFR
parts 92 or 1033 (locomotive engines), or are otherwise subject to 40
CFR parts 92 or 1033.

0
103. Section 1048.10 is amended by revising the introductory text to
read as follows:

Sec.  1048.10  How is this part organized?

    This part 1048 is divided into the following subparts:
* * * * *

0
104. Section 1048.15 is amended as follows:
0
a. By revising the section heading.
0
b. By redesignating paragraphs (a) through (c) as paragraphs (b)
through (d), respectively.
0
c. By adding a new paragraph (a).

Sec.  1048.15  Do any other regulation parts apply to me?

    (a) Part 1060 of this chapter describes standards and procedures
for controlling evaporative emissions from engines fueled by gasoline
or other volatile liquid fuels and the associated fuel systems. These
requirements apply to engine manufacturers as specified in this part
1048. Part 1060 applies optionally for equipment manufacturers and
fuel-tank manufacturers for certifying their products.
* * * * *

Subpart B--[Amended]

0
105. Section 1048.101 is amended to read as follows:
0
a. By adding paragraph (a)(2)(iv).
0
b. By removing paragraph (a)(4).
0
c. By revising paragraphs (e)(1), (e)(2), and (e)(3).
0
d. By revising paragraphs (f) and (h) to read as follows:

Sec.  1048.101  What exhaust emission standards must my engines meet?

* * * * *
    (a) * * *
    (2) * * *
    (iv) Constant-speed engines and severe-duty engines.
* * * * *
    (e) * * *
    (1) Natural gas-fueled engines: NMHC emissions.
    (2) Alcohol-fueled engines: THCE emissions.
    (3) Other engines: THC emissions.
    (f) Small engines. Certain engines with total displacement at or
below 1000 cc may comply with the requirements of 40 CFR part 90 or
1054 instead of complying with the requirements of this part, as
described in Sec.  1048.615.
* * * * *
    (h) Applicability for testing. The duty-cycle emission standards in
this subpart apply to all testing performed according to the procedures
in Sec. Sec.  1048.505 and 1048.510, including certification,
production-line, and in-use testing. The field-testing standards apply
for all testing performed according to the procedures of subpart F of
this part.

0
106. Section 1048.105 is revised to read as follows:

Sec.  1048.105  What evaporative emission standards and requirements
apply?

    Starting in the 2007 model year, new engines that run on a volatile
liquid fuel (such as gasoline) must meet the emission standards of this
section over a useful life of five years, except as specified in
paragraph (f) of this section. Note that Sec.  1048.245 allows you to
use design-based certification instead of generating new emission data.
    (a) Fuel line permeation. For nonmetallic fuel lines, you must
specify and use products that meet the Category 1 specifications for
permeation in SAE J2260 (incorporated by reference in Sec.  1048.810).
    (b) [Reserved]
    (c) Diurnal emissions. Evaporative hydrocarbon emissions may not
exceed 0.2 grams per gallon of fuel tank capacity when measured using
the test procedures specified in Sec.  1048.501. Diurnal emission
controls must continue to function during engine operation.
    (d) Running loss. Liquid fuel in the fuel tank may not reach
boiling during continuous engine operation in the final installation at
an ambient temperature of 30 [deg]C. Note that gasoline with a Reid
vapor pressure of 62 kPa (9 psi) begins to boil at about 53 [deg]C at
atmospheric pressure, and at about 60 [deg]C for fuel tanks that hold
pressure as described in Sec.  1048.245(e)(1)(i).
    (e) Installation. If other companies install your engines in their
equipment, you may introduce your engines into U.S. commerce without
meeting all the requirements in this section. However, you must give
equipment manufacturers any appropriate instructions so that fully
assembled equipment will meet all the requirements in this section, as
described in Sec.  1048.130. Your instructions may specify that
equipment manufacturers may alternatively use other fuel-system
components that have been certified under 40 CFR part 1060. Introducing
equipment into U.S. commerce without meeting all the requirements of
this section violates 40 CFR 1068.101(a)(1).
    (f) Motor vehicles and marine vessels. Motor vehicles and marine
vessels may contain engines subject to the exhaust emission standards
in this part 1048. Evaporative emission standards apply to these
products as follows:
    (1) Marine vessels using spark-ignition engines are subject to the
requirements of 40 CFR part 1045. The vessels are not required to
comply with the evaporative emission standards and related requirements
of this part 1048.
    (2) Motor vehicles are subject to the requirements of 40 CFR part
86. They are not required to comply with the evaporative emission
standards and related requirements of this part 1048.

0
107. Section 1048.110 is amended by adding introductory text and
revising paragraphs (b) introductory text, (c), (d), and (g)
introductory text to read as follows:

Sec.  1048.110  How must my engines diagnose malfunctions?

    The following engine-diagnostic requirements apply for engines
equipped with three-way catalysts and closed-loop control of air-fuel
ratios:
* * * * *
    (b) Use a malfunction-indicator light (MIL). The MIL must be
readily visible to the operator; it may be any color except red. When
the MIL goes on, it must display ``Check Engine,'' ``Service Engine
Soon,'' or a similar message that we approve. You may use sound in
addition to the light signal. The MIL must go on under each of the
following circumstances:
* * * * *
    (c) Control when the MIL can go out. If the MIL goes on to show a
malfunction or system error, it must remain on during all later engine
operation until servicing corrects the malfunction. If the engine is
not serviced, but the malfunction or system error does not recur for
three consecutive engine starts during which the malfunctioning system
is evaluated and found to be working properly, the MIL may stay off
during later engine operation.

[[Continued on page 59233]]

]

[[pp. 59233-59282]] Control of Emissions From Nonroad Spark-Ignition Engines and
Equipment

[[Continued from page 59232]]

    (d) Store trouble codes in computer memory. Record and store in
computer memory any diagnostic trouble codes showing a malfunction that
should illuminate the MIL. The stored codes must identify the
malfunctioning system or component as uniquely as possible. Make these
codes available through the data link connector as described in
paragraph (g) of this section. You may store codes for conditions that
do not turn on the MIL. The system must store a separate code to show
when the diagnostic system is disabled.
* * * * *
    (g) Follow standard references for formats, codes, and connections.
Follow conventions defined in 40 CFR 1045.110 or in the following
documents (incorporated by reference in Sec.  1048.810) or ask us to
approve using updated versions of (or variations from) these documents:
* * * * *

0
108. Section 1048.115 is amended by revising the section heading,
introductory text, and paragraph (e) to read as follows:

Sec.  1048.115  What other requirements apply?

    Engines that are required to meet the emission standards of this
part must meet the following requirements:
* * * * *
    (e) Adjustable parameters. Engines that have adjustable parameters
must meet all the requirements of this part for any adjustment in the
physically adjustable range. An operating parameter is not considered
adjustable if you permanently seal it or if it is not normally
accessible using ordinary tools. We may require that you set adjustable
parameters to any specification within the adjustable range during any
testing, including certification testing, production-line testing, or
in-use testing.
* * * * *

0
109. Section 1048.120 is amended by revising paragraph (c) to read as
follows:

Sec.  1048.120  What emission-related warranty requirements apply to
me?

* * * * *
    (c) Components covered. The emission-related warranty covers all
your components whose failure would increase an engine's emissions of
any regulated pollutant, including components listed in 40 CFR part
1068, Appendix I, and components from any other system you develop to
control emissions. The emission-related warranty covers these
components even if another company produces the component for you. Your
emission-related warranty does not cover components whose failure would
not increase an engine's emissions of any regulated pollutant.
* * * * *

0
110. Section 1048.125 is amended by revising paragraphs (a)(1)(iii) and
(d) to read as follows:

Sec.  1048.125  What maintenance instructions must I give to buyers?

* * * * *
    (a) * * *
    (1) * * *
    (iii) You provide the maintenance free of charge and clearly say so
in your maintenance instructions.
* * * * *
    (d) Noncritical emission-related maintenance. Subject to the
provisions of this paragraph (d), you may schedule any amount of
emission-related inspection or maintenance that is not covered by
paragraph (a) of this section (i.e., maintenance that is neither
explicitly identified as critical emission-related maintenance, nor
that we approve as critical emission-related maintenance). Noncritical
emission-related maintenance generally includes changing spark plugs,
re-seating valves, or any other emission-related maintenance on the
components we specify in 40 CFR part 1068, Appendix I that is not
covered in paragraph (a) of this section. You must state in the owners
manual that these steps are not necessary to keep the emission-related
warranty valid. If operators fail to do this maintenance, this does not
allow you to disqualify those engines from in-use testing or deny a
warranty claim. Do not take these inspection or maintenance steps
during service accumulation on your emission-data engines.
* * * * *

0
111. Section 1048.135 is amended by revising paragraphs (c) and (f) to
read as follows:

Sec.  1048.135  How must I label and identify the engines I produce?

* * * * *
    (c) The label must--
    (1) Include the heading ``EMISSION CONTROL INFORMATION''.
    (2) Include your full corporate name and trademark. You may
identify another company and use its trademark instead of yours if you
comply with the provisions of Sec.  1048.635.
    (3) Include EPA's standardized designation for the engine family
(and subfamily, where applicable).
    (4) State the engine's displacement (in liters); however, you may
omit this from the label if all the engines in the engine family have
the same per-cylinder displacement and total displacement.
    (5) State the date of manufacture [DAY (optional), MONTH, and
YEAR]; however, you may omit this from the label if you stamp, engrave,
or otherwise permanently identify it elsewhere on the engine, in which
case you must also describe in your application for certification where
you will identify the date on the engine.
    (6) Identify the emission control system. Use terms and
abbreviations as described in 40 CFR 1068.45. You may omit this
information from the label if there is not enough room for it and you
put it in the owners manual instead.
    (7) State: ``THIS ENGINE IS CERTIFIED TO OPERATE ON [specify
operating fuel or fuels].''
    (8) Identify any requirements for fuel and lubricants. You may omit
this information from the label if there is not enough room for it and
you put it in the owners manual instead.
    (9) List specifications and adjustments for engine tuneups; show
the proper position for the transmission during tuneup and state which
accessories should be operating. You may omit this information from the
label if there is not enough room for it and you put it in the owners
manual instead.
    (10) State the useful life for your engine family if it has a
longer useful life under Sec.  1048.101(g)(1) or a shortened useful
life under Sec.  1048.101(g)(2).
    (11) Identify the emission standards to which you have certified
the engine (in g/kW-hr).
    (12) Include one of the following compliance statements:
    (i) For engines that may be used in nonroad or stationary
equipment, state: ``THIS ENGINE COMPLIES WITH U.S. EPA REGULATIONS FOR
[MODEL YEAR] NONROAD AND STATIONARY ENGINES.''
    (ii) For engines that will be used only in nonroad equipment,
state: ``THIS ENGINE COMPLIES WITH U.S. EPA REGULATIONS FOR [MODEL
YEAR] NONROAD ENGINES.''
    (iii) For engines that will be used only in stationary equipment,
state: ``THIS ENGINE COMPLIES WITH U.S. EPA REGULATIONS FOR [MODEL
YEAR] STATIONARY ENGINES.''
    (13) Include any of the following additional statements for special
situations if they apply to your engines:
    (i) If your engines are certified only for constant-speed
operation, state: ``USE IN CONSTANT-SPEED APPLICATIONS ONLY.''
    (ii) If your engines are certified only for variable-speed
operation, state: ``USE

IN VARIABLE-SPEED APPLICATIONS ONLY.''
    (iii) If your engines are certified only for high-load engines,
state: ``THIS ENGINE IS NOT INTENDED FOR OPERATION AT LESS THAN 75
PERCENT OF FULL LOAD.''
    (iv) If you certify your engines under Sec.  1048.101(d), and show
in your application for certification that in-use engines will
experience infrequent high-load operation, state: ``THIS ENGINE IS NOT
INTENDED FOR OPERATION AT MORE THAN PERCENT OF FULL LOAD.'' Specify the
appropriate percentage of full load based on the nature of the engine
protection. You may add other statements to discourage operation in
engine-protection modes.
    (v) If your engines are certified to the voluntary standards in
Sec.  1048.140, state: ``BLUE SKY SERIES'' and identify the standard to
which you certify the engines.
* * * * *
    (f) If you obscure the engine label while installing the engine in
the equipment such that the label cannot be read during normal
maintenance, you must place a duplicate label on the equipment. If
others install your engine in their equipment in a way that obscures
the engine label, we require them to add a duplicate label on the
equipment (see 40 CFR 1068.105); in that case, give them the number of
duplicate labels they request and keep the following records for at
least five years:
    (1) Written documentation of the request from the equipment
manufacturer.
    (2) The number of duplicate labels you send for each engine family
and the date you sent them.

0
112. Section 1048.140 is revised to read as follows:

Sec.  1048.140  What are the provisions for certifying Blue Sky Series
engines?

    This section defines voluntary standards for a recognized level of
superior emission control for engines designated as ``Blue Sky Series''
engines. If you certify an engine family under this section, it is
subject to all the requirements of this part as if these voluntary
standards were mandatory. To receive a certificate of conformity as
``Blue Sky Series,'' you must certify to one of the sets of exhaust
emission standards in the following table:

Table 1 of Sec.   1048.140--Standards for Blue Sky Series Engines (g/kW-
                                   hr)
------------------------------------------------------------------------
   Standards for steady-state and         Standards for field-testing
     transient test  procedures                   procedures
------------------------------------------------------------------------
      HC+NOX               CO              HC+NOX              CO
------------------------------------------------------------------------
       0.80               4.4                1.10               6.6
       0.60               4.4                0.84               6.6
       0.40               4.4                0.56               6.6
       0.20               4.4                0.28               6.6
       0.10               4.4                0.14               6.6
------------------------------------------------------------------------

0
113. Section 1048.145 is amended by adding paragraphs (j) and (k) to
read as follows:

Sec.  1048.145  What provisions apply only for a limited time?

* * * * *
    (j) Delayed compliance with labeling requirements. Before the 2010
model year, you may omit the dates of manufacture from the emission
control information label as specified in Sec.  1048.135(c)(5) if you
keep those records and provide them to us upon request.
    (k) Delayed compliance with fuel tank permeation requirements.
Before the 2010 model year, you may omit the permeation-related
requirements related to plastic fuel tanks in Sec.  1048.245(e)(1)(i)
and Sec.  1048.501(e).

Subpart C--[Amended]

0
114. Section 1048.201 is amended by revising paragraph (a) to read as
follows:

Sec.  1048.201  What are the general requirements for obtaining a
certificate of conformity?

    (a) You must send us a separate application for a certificate of
conformity for each engine family. A certificate of conformity is valid
starting with the indicated effective date, but it is not valid for any
production after December 31 of the model year for which it is issued.
No certificate will be issued after December 31 of the model year.
* * * * *

0
115. Section 1048.205 is amended as follows:
0
a. By revising paragraph (p)(1).
0
b. By revising paragraph (q).
0
c. By revising paragraph (r) introductory text.
0
d. By revising paragraph (s).
0
e. By revising paragraph (y).
0
f. By revising paragraph (aa).

Sec.  1048.205  What must I include in my application?

* * * * *
    (p) * * *
    (1) Present exhaust emission data for HC, NOX, and CO on
an emission-data engine to show your engines meet the applicable duty-
cycle emission standards we specify in Sec.  1048.101. Show emission
figures before and after applying deterioration factors for each
engine. Include emission results for each mode if you do discrete-mode
testing under Sec.  1048.505. Include test data for each type of fuel
from 40 CFR part 1065, subpart H, on which you intend for engines in
the engine family to operate (for example, gasoline, liquefied
petroleum gas, methanol, or natural gas). If we specify more than one
grade of any fuel type (for example, a summer grade and winter grade of
gasoline), you need to submit test data only for one grade unless the
regulations of this part specify otherwise for your engine. Note that
Sec.  1048.235 allows you to submit an application in certain cases
without new emission data.
* * * * *
    (q) State that all the engines in the engine family comply with the
field-testing emission standards we specify in Sec.  1048.101(c) for
all normal operation and use when tested as specified in Sec.
1048.515. Describe any relevant testing, engineering analysis, or other
information in sufficient detail to support your statement.
    (r) For engines not subject to transient testing requirements in
Sec.  148.101(a), include information showing how your emission
controls will function during normal in-use transient operation. For
example, this might include the following:
* * * * *
    (s) Report all test results, including those from invalid tests or
from any other tests, whether or not they were conducted according to
the test procedures of subpart F of this part. If you measure
CO2, report those emission levels (in g/kW-hr). We may ask
you to send other information to confirm that your tests were valid
under the requirements of this part and 40 CFR part 1065.
* * * * *
    (y) Include good-faith estimates of U.S.-directed production
volumes. Include a justification for the estimated production volumes
if they are substantially different than actual production volumes in
earlier years for similar models.
* * * * *
    (aa) Name an agent for service located in the United States.
Service on this agent constitutes service on you or any of your
officers or employees for any action by EPA or otherwise by the

United States related to the requirements of this part.

0
116. Section 1048.220 is amended by revising the introductory text and
paragraph (a) to read as follows:

Sec.  1048.220  How do I amend the maintenance instructions in my
application?

    You may amend your emission-related maintenance instructions after
you submit your application for certification as long as the amended
instructions remain consistent with the provisions of Sec.  1048.125.
You must send the Designated Compliance Officer a written request to
amend your application for certification for an engine family if you
want to change the emission-related maintenance instructions in a way
that could affect emissions. In your request, describe the proposed
changes to the maintenance instructions. If operators follow the
original maintenance instructions rather than the newly specified
maintenance, this does not allow you to disqualify those engines from
in-use testing or deny a warranty claim.
    (a) If you are decreasing, replacing, or eliminating any specified
maintenance, you may distribute the new maintenance instructions to
your customers 30 days after we receive your request, unless we
disapprove your request. This would generally include replacing one
maintenance step with another. We may approve a shorter time or waive
this requirement.
* * * * *

0
117. Section 1048.225 is revised to read as follows:

Sec.  1048.225  How do I amend my application for certification to
include new or modified engine configurations?

    Before we issue you a certificate of conformity, you may amend your
application to include new or modified engine configurations, subject
to the provisions of this section. After we have issued your
certificate of conformity, you may send us an amended application
requesting that we include new or modified engine configurations within
the scope of the certificate, subject to the provisions of this
section. You must amend your application if any changes occur with
respect to any information included in your application.
    (a) You must amend your application before you take any of the
following actions:
    (1) Add an engine configuration to an engine family. In this case,
the engine configuration added must be consistent with other engine
configurations in the engine family with respect to the criteria listed
in Sec.  1048.230.
    (2) Change an engine configuration already included in an engine
family in a way that may affect emissions, or change any of the
components you described in your application for certification. This
includes production and design changes that may affect emissions any
time during the engine's lifetime.
    (b) To amend your application for certification, send the
Designated Compliance Officer the following information:
    (1) Describe in detail the addition or change in the engine model
or configuration you intend to make.
    (2) Include engineering evaluations or data showing that the
amended engine family complies with all applicable requirements. You
may do this by showing that the original emission-data engine is still
appropriate for showing that the amended family complies with all
applicable requirements.
    (3) If the original emission-data engine for the engine family is
not appropriate to show compliance for the new or modified engine
configuration, include new test data showing that the new or modified
engine configuration meets the requirements of this part.
    (c) We may ask for more test data or engineering evaluations. You
must give us these within 30 days after we request them.
    (d) For engine families already covered by a certificate of
conformity, we will determine whether the existing certificate of
conformity covers your newly added or modified engine. You may ask for
a hearing if we deny your request (see Sec.  1048.820).
    (e) For engine families already covered by a certificate of
conformity, you may start producing the new or modified engine
configuration anytime after you send us your amended application and
before we make a decision under paragraph (d) of this section. However,
if we determine that the affected engines do not meet applicable
requirements, we will notify you to cease production of the engines and
may require you to recall the engines at no expense to the owner.
Choosing to produce engines under this paragraph (e) is deemed to be
consent to recall all engines that we determine do not meet applicable
emission standards or other requirements and to remedy the
nonconformity at no expense to the owner. If you do not provide
information required under paragraph (c) of this section within 30 days
after we request it, you must stop producing the new or modified
engines.

0
118. Section 1048.230 is amended by revising paragraphs (a), (b)(3),
and (d) and removing paragraph (b)(7) to read as follows:

Sec.  1048.230  How do I select engine families?

    (a) For purposes of certification, divide your product line into
families of engines that are expected to have similar emission
characteristics throughout the useful life as described in this
section. Your engine family is limited to a single model year.
    (b) * * *
    (3) Configuration of the fuel system (for example, fuel-injected
vs. carbureted gasoline engines).
* * * * *
    (d) In unusual circumstances, you may group engines that are not
identical with respect to the things listed in paragraph (b) of this
section in the same engine family if you show that their emission
characteristics during the useful life will be similar.
* * * * *

0
119. Section 1048.235 is amended by revising paragraphs (a), (c)(4),
(d) introductory text, (d)(1), and (e) to read as follows:

Sec.  1048.235  What emission testing must I perform for my application
for a certificate of conformity?

* * * * *
    (a) Test your emission-data engines using the procedures and
equipment specified in subpart F of this part.
* * * * *
    (c) * * *
    (4) Before we test one of your engines, we may calibrate it within
normal production tolerances for anything we do not consider an
adjustable parameter. For example, this would apply where we determine
that an engine parameter is not an adjustable parameter (as defined in
Sec.  1048.801) but that it is subject to production variability.
    (d) You may ask to use carryover emission data from a previous
model year instead of doing new tests, but only if all the following
are true:
    (1) The engine family from the previous model year differs from the
current engine family only with respect to model year or other
characteristics unrelated to emissions. You may also ask to add a
configuration subject to Sec.  1048.225.
* * * * *
    (e) We may require you to test another engine of the same or
different configuration in addition to the engine tested under
paragraph (b) of this section.
* * * * *

0
120. Section 1048.240 is amended by revising paragraphs (a), (b), and
(c) to read as follows:

Sec.  1048.240  How do I demonstrate that my engine family complies
with exhaust emission standards?

    (a) For purposes of certification, your engine family is considered
in compliance with the applicable numerical emission standards in Sec.
1048.101(a) and (b) if all emission-data engines representing that
family have test results showing deteriorated emission levels at or
below these standards. This includes all test points over the course of
the durability demonstration.
    (b) Your engine family is deemed not to comply if any emission-data
engine representing that family has test results showing a deteriorated
emission level for any pollutant that is above an applicable emission
standard from Sec.  1048.101. This includes all test points over the
course of the durability demonstration.
    (c) To compare emission levels from the emission-data engine with
the applicable emission standards, apply deterioration factors to the
measured emission levels for each pollutant. Specify the deterioration
factors based on emission measurements using four significant figures,
consistent with good engineering judgment. For example, your
deterioration factors must take into account any available data from
in-use testing with similar engines (see subpart E of this part).
Small-volume engine manufacturers may use assigned deterioration
factors that we establish. In addition, anyone may use assigned
deterioration factors for engine families with a projected U.S.-
directed production volume at or below 300 engines. Apply deterioration
factors as follows:
    (1) Multiplicative deterioration factor. Except as specified in
paragraph (c)(2) of this section, use a multiplicative deterioration
factor for exhaust emissions. A multiplicative deterioration factor is
the ratio of exhaust emissions at the end of useful life to exhaust
emissions at the low-hour test point. Adjust the official emission
results for each tested engine at the selected test point by
multiplying the measured emissions by the deterioration factor. If the
factor is less than one, use one.
    (2) Additive deterioration factor. Use an additive deterioration
factor for exhaust emissions if engines do not use aftertreatment
technology. Also, you may use an additive deterioration factor for
exhaust emissions for a particular pollutant if all the emission-data
engines in the engine family have low-hour emission levels at or below
0.3 g/kW-hr for HC+NOX or 0.5 g/kW-hr for CO, unless a
multiplicative deterioration factor is more appropriate. For example,
you should use a multiplicative deterioration factor if emission
increases are best represented by the ratio of exhaust emissions at the
end of the useful life to exhaust emissions at the low-hour test point.
An additive deterioration factor is the difference between exhaust
emissions at the end of useful life and exhaust emissions at the low-
hour test point. Adjust the official emission results for each tested
engine at the selected test point by adding the factor to the measured
emissions. If the factor is less than zero, use zero.
* * * * *
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121. Section 1048.245 is amended by revising paragraphs (c) and (e) to
read as follows:

Sec.  1048.245  How do I demonstrate that my engine family complies
with evaporative emission standards?

* * * * *
    (c) Use good engineering judgment to develop a test plan to
establish deterioration factors to show how much emissions increase at
the end of the useful life.
* * * * *
    (e) You may demonstrate that your engine family complies with the
evaporative emission standards by demonstrating that you use the
following control technologies:
    (1) For certification to the standards specified in Sec.
1048.105(a)(1), with the following technologies:
    (i) Use a tethered or self-closing gas cap on a fuel tank that
stays sealed up to a positive pressure of 24.5 kPa (3.5 psig); however,
they may contain air inlets that open when there is a vacuum pressure
inside the tank. Nonmetal fuel tanks must also use one of the
qualifying designs for controlling permeation emissions specified in 40
CFR 1060.240.
    (ii) [Reserved]
    (2) For certification to the standards specified in Sec.
1048.105(a)(3), demonstrating that you use design features to prevent
fuel boiling under all normal operation. If you install engines in
equipment, you may do this using fuel temperature data measured during
normal operation. Otherwise, you may do this by including appropriate
information in your emission-related installation instructions.
    (3) We may establish additional options for design-based
certification where we find that new test data demonstrate that a
technology will ensure compliance with the emission standards in this
section
0
122. Section 1048.250 is amended as follows:
0
a. By removing paragraph (d).
0
b. By redesignating paragraphs (a) through (c) as paragraphs (b)
through (d), respectively.
0
c. By adding a new paragraph (a).
0
d. By revising the newly redesignated paragraph (c).

Sec.  1048.250  What records must I keep and make available to EPA?

    (a) Send the Designated Compliance Officer information related to
your U.S.-directed production volumes as described in Sec.  1048.345.
In addition, within 45 days after the end of the model year, you must
send us a report describing information about engines you produced
during the model year as follows:
    (1) State the total production volume for each engine family that
is not subject to reporting under Sec.  1048.345.
    (2) State the total production volume for any engine family for
which you produce engines after completing the reports required in
Sec.  1048.345.
    (3) For production volumes you report under this paragraph (a),
identify whether or not the figures include California sales. Include a
separate count of production volumes for California sales if those
figures are available.
* * * * *
    (c) Keep data from routine emission tests (such as test cell
temperatures and relative humidity readings) for one year after we
issue the associated certificate of conformity. Keep all other
information specified in this section for eight years after we issue
your certificate.
* * * * *

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123. Section 1048.255 is amended by revising the section heading and
paragraph (d) to read as follows:

Sec.  1048.255  What decisions may EPA make regarding my certificate of
conformity?

* * * * *
    (d) We may void your certificate if you do not keep the records we
require or do not give us information as required under this part or
the Act.
* * * * *

Subpart D--[Amended]

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124. Section 1048.301 is revised to read as follows:

Sec.  1048.301  When must I test my production-line engines?

    (a) If you produce engines that are subject to the requirements of
this part,

you must test them as described in this subpart, except as follows:
    (1) [Reserved]
    (2) We may exempt engine families with a projected U.S.-directed
production volume below 150 units from routine testing under this
subpart. Request this exemption in your application for certification
and include your basis for projecting a production volume below 150
units. We will approve your request if we agree that you have made
good-faith estimates of your production volumes. Your exemption is
approved when we grant your certificate. You must promptly notify us if
your actual production exceeds 150 units during the model year. If you
exceed the production limit or if there is evidence of a nonconformity,
we may require you to test production-line engines under this subpart,
or under 40 CFR part 1068, subpart E, even if we have approved an
exemption under this paragraph (a)(2).
    (b) We may suspend or revoke your certificate of conformity for
certain engine families if your production-line engines do not meet the
requirements of this part or you do not fulfill your obligations under
this subpart (see Sec. Sec.  1048.325 and 1048.340).
    (c) Other regulatory provisions authorize us to suspend, revoke, or
void your certificate of conformity, or order recalls for engine
families, without regard to whether they have passed these production-
line testing requirements. The requirements of this subpart do not
affect our ability to do selective enforcement audits, as described in
part 1068 of this chapter. Individual engines in families that pass
these production-line testing requirements must also conform to all
applicable regulations of this part and part 1068 of this chapter.
    (d) You may use alternate programs for testing production-line
engines in the following circumstances:
    (1) You may use analyzers and sampling systems that meet the field-
testing requirements of 40 CFR part 1065, subpart J, but not the
otherwise applicable requirements in 40 CFR part 1065 for laboratory
testing, to demonstrate compliance with duty-cycle emission standards
if you double the minimum sampling rate specified in Sec.  1048.310(b).
Use measured test results to determine whether engines comply with
applicable standards without applying a measurement allowance. This
alternate program does not require prior approval but we may disallow
use of this option where we determine that use of field-grade equipment
would prevent you from being able to demonstrate that your engines are
being produced to conform to the specifications in your application for
certification.
    (2) You may ask to use another alternate program for testing
production-line engines. In your request, you must show us that the
alternate program gives equal assurance that your products meet the
requirements of this part. We may waive some or all of this subpart's
requirements if we approve your alternate approach. For example, in
certain circumstances you may be able to give us equal assurance that
your products meet the requirements of this part by using less rigorous
measurement methods if you offset that by increasing the number of test
engines.
    (e) If you certify an engine family with carryover emission data,
as described in Sec.  1048.235(d), and these equivalent engine families
consistently pass the production-line testing requirements over the
preceding two-year period, you may ask for a reduced testing rate for
further production-line testing for that family. The minimum testing
rate is one engine per engine family. If we reduce your testing rate,
we may limit our approval to any number of model years. In determining
whether to approve your request, we may consider the number of engines
that have failed the emission tests.
    (f) We may ask you to make a reasonable number of production-line
engines available for a reasonable time so we can test or inspect them
for compliance with the requirements of this part.

0
125. Section 1048.305 is amended by adding introductory text and
revising paragraphs (a), (d), and (g) to read as follows:

Sec.  1048.305  How must I prepare and test my production-line engines?

    This section describes how to prepare and test production-line
engines. You must assemble the test engine in a way that represents the
assembly procedures for other engines in the engine family. You must
ask us to approve any deviations from your normal assembly procedures
for other production engines in the engine family.
    (a) Test procedures. Test your production-line engines using either
the steady-state or transient testing procedures specified in subpart F
of this part to show you meet the duty-cycle emission standards in
subpart B of this part. The field-testing standards apply for this
testing, but you need not do additional testing to show that
production-line engines meet the field-testing standards.
* * * * *
    (d) Setting adjustable parameters. Before any test, we may require
you to adjust any adjustable parameter to any setting within its
physically adjustable range.
    (1) We may require you to adjust idle speed outside the physically
adjustable range as needed, but only until the engine has stabilized
emission levels (see paragraph (e) of this section). We may ask you for
information needed to establish an alternate minimum idle speed.
    (2) We may specify adjustments within the physically adjustable
range by considering their effect on emission levels. We may also
consider how likely it is that someone will make such an adjustment
with in-use equipment.
* * * * *
    (g) Retesting after invalid tests. You may retest an engine if you
determine an emission test is invalid under subpart F of this part.
Explain in your written report reasons for invalidating any test and
the emission results from all tests. If we determine that you
improperly invalidated a test, we may require you to ask for our
approval for future testing before substituting results of the new
tests for invalid ones.

0
126. Section 1048.310 is amended as follows:
0
a. By revising paragraph (a).
0
b. By revising paragraph (c) introductory text.
0
c. By revising paragraph (c)(2).
0
d. By revising paragraph (f).
0
e. By revising paragraph (g).
0
f. By revising paragraph (h).

Sec.  1048.310  How must I select engines for production-line testing?

    (a) Use test results from two engines each quarter to calculate the
required sample size for the model year for each engine family.
* * * * *
    (c) Calculate the required sample size for each engine family.
Separately calculate this figure for HC+NOX and CO. The
required sample size is the greater of these calculated values. Use the
following equation:
[GRAPHIC] [TIFF OMITTED] TR08OC08.091

Where:

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

x = Mean of emission test results of the sample.
STD = Emission standard.
* * * * *
    (2) Calculate the standard deviation, [sigma], for the test sample
using the following formula:

Where:
[GRAPHIC] [TIFF OMITTED] TR08OC08.092

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

* * * * *
    (f) Distribute the remaining tests evenly throughout the rest of
the year. You may need to adjust your schedule for selecting engines if
the required sample size changes. If your scheduled quarterly testing
for the remainder of the model year is sufficient to meet the
calculated sample size, you may wait until the next quarter to do
additional testing. Continue to randomly select engines from each
engine family.
    (g) Continue testing until one of the following things happens:
    (1) After completing the minimum number of tests required in
paragraph (b) of this section, the number of tests completed in an
engine family, n, is greater than the required sample size, N, and the
sample mean, x, is less than or equal to the emission standard. For
example, if N = 5.1 after the fifth test, the sample-size calculation
does not allow you to stop testing.
    (2) The engine family does not comply according to Sec.  1048.315.
    (3) You test 30 engines from the engine family.
    (4) You test one percent of your projected annual U.S.-directed
production volume for the engine family, rounded to the nearest whole
number. Do not count an engine under this paragraph (g)(4) if it fails
to meet an applicable emission standard. You may stop testing after you
test one percent of your production volume even if you have not tested
the number of engines specified in paragraph (b) of this section. For
example, if projected volume is 475 engines, test two engines in each
of the first two quarters and one engine in the third quarter to
fulfill your testing requirements under this section for that engine
family.
    (5) You choose to declare that the engine family does not comply
with the requirements of this subpart.
    (h) If the sample-size calculation allows you to stop testing for
one pollutant but not another, you must continue measuring emission
levels of all pollutants for any additional tests required under this
section. However, you need not continue making the calculations
specified in this subpart for the pollutant for which testing is not
required. This paragraph (h) does not affect the number of tests
required under this section, the required calculations in Sec.
1048.315, or the remedial steps required under Sec.  1048.320.
* * * * *

0
127. Section 1048.315 is amended by revising paragraphs (a) and (b) to
read as follows:

Sec.  1048.315  How do I know when my engine family fails the
production-line testing requirements?

* * * * *
    (a) Calculate your test results as follows:
    (1) Initial and final test results. Calculate and round the test
results for each engine. If you do several tests on an engine,
calculate the initial results for each test, then add all the test