2. What Are the Significant Limitations of the Benefit Cost Analysis? Every benefit cost analysis examining the potential effects of a change in environmental protection requirements is limited to some extent by data gaps, limitations in model capabilities ( such as geographic coverage), and uncertainties in the underlying scientific and economic studies used to configure the benefit and cost models. Deficiencies in the scientific literature often result in the inability to estimate quantitative changes in health and environmental effects, such as potential increases in premature mortality associated with increased exposure to carbon monoxide. Deficiencies in the economics literature often result in the inability to assign economic values even to those health and environmental outcomes which can be quantified. While these general uncertainties in the underlying scientific and economics literatures, which can cause the valuations to be higher or lower, are discussed in detail in the Final Regulatory Support Document and its supporting documents and references, the key uncertainties which have a bearing on the results of the benefit cost analysis of this final rule include the following:   The exclusion of potentially significant benefit categories ( such as health and ecological benefits of reduction in hazardous air pollutants emissions and ozone; improvements in visibility);   Errors in measurement and projection for variables such as population growth;   Uncertainties in the estimation of future year emissions inventories and air quality;   Uncertainties associated with the transfer of the results of the HD Engine/ Diesel Fuel analysis to this program, especially regarding the assumption of similarity in geographic distribution between emissions and human populations and years of analysis; 93   Variability in the estimated relationships of health and welfare effects to changes in pollutant concentrations;   Uncertainties in exposure estimation;   Uncertainties in applying willingness to pay estimates from National Park and Forest visitors to U. S. recreational participants and uncertainties in average number of activity days per year; and   Uncertainties associated with the effect of potential future actions to limit emissions. Despite these uncertainties, we believe the benefit cost analysis provides a reasonable indication of the expected economic benefits of the final rulemaking in future years under a set of assumptions. One key area of uncertainty is the value of a statistical life ( VSL) for reductions in mortality risk. The adoption of a value for the projected reduction in the risk of premature mortality is the subject of continuing discussion within the economic and public policy analysis community. In accordance with the independent Science Advisory Board advice, 94 we use the value of a statistical life ( VSL) for risk reductions in mortality in our primary estimate. Alternative calculations of adjustment for age and other factors are presented in the RIA for the HD Engine/ Diesel Fuel rule and in the RSD for this rule. The presentation of the other alternative calculations for certain endpoints seeks to demonstrate how much the overall benefit estimate might vary based on the value EPA has given to a parameter ( which has uncertainty associated with it) underlying the estimates for human health and environmental effect incidence and the economic valuation of those effects. These alternative calculations represent conditions that might occur; however, EPA has selected the best values supported by current scientific literature for use in the primary estimate. The primary estimate is the source for our benefits transfer technique. Even with our efforts to fully disclose the uncertainty in our estimate, our uncertainty presentation method does not provide a definitive or complete picture of the true range of monetized benefits estimates. The set of alternative calculations is only representative of those benefits that we were able to quantify and monetize.

3. What Are the benefits In the Years Leading Up to 2030? The final rule has various cost and emission related components, as described earlier in this section. These components would begin at various times and in some cases would phase in over time. This means that during the early years of the program there would not be a consistent match between cost and benefits, especially where the full vehicle cost would be incurred at the time of vehicle purchase, while the fuel savings along with the emission reductions and benefits resulting from all these costs would occur throughout the lifetime of the vehicle. Because of this inconsistency and our desire to more appropriately match the costs and emission reductions of our program, our analysis uses a future year ( 2030) when the fleet is nearly fully turned over. In the years before 2030, the benefits from the final rule will be less than those estimated here, because the compliant vehicle fleet will not be fully phased in, and the overall U. S. population would be smaller. Annualized costs, on the other hand, reach nearly their full value within a few years of program initiation ( once all phase ins are completed). Thus, a benefit cost ratio computed for the earlier years of the program would be expected to be lower than a ratio based on our 2030 analysis when the fleet has fully turned over. The stream of costs and the limited set of quantified benefits over time are presented in the Final VerDate 0ct< 31> 2002 17: 09 Nov 07, 2002 Jkt 200001 PO 00000 Frm 00087 Fmt 4701 Sfmt 4700 E:\ FR\ FM\ 08NOR2. SGM 08NOR2 68328 Federal Register / Vol. 67, No. 217 / Friday, November 8, 2002 / Rules and Regulations 95 Based upon recent preliminary findings by the Health Effects Institute, the concentration response functions used to estimate reductions in hospital admissions may over or underestimate the true concentration response relationship. See Letter from Dan Greenberg, President, Health Effects Institute, May 30, 2002, attached to letter from Dr. Hopke, dated August 8, 2002. Docket A   2000   01, Document IV   A   145. 96 Our estimate also incorporates significant reductions in 27,000 fewer cases of lower respiratory symptoms, and 26,600 fewer cases of upper respiratory symptoms in asthmatic children each year. In addition, we estimate that this final rule will reduce 23,400 incidents of asthma attacks each year in asthmatics of all ages from reduced exposure to particles. Additional incidents would be avoided from reduced ozone exposures. Asthma is the most prevalent chronic disease among children and currently affects over seven percent of children under 18 years of age. Regulatory Support Document. On the other hand, since the estimated benefits are more than 40 times the costs ( excluding fuel savings) in 2030, the emission reduction and cost trends suggest that it is likely that annual benefits would exceed costs from a time early in the life of the program.

4. What Were the Results of the Benefit Cost Analysis? The benefit cost analysis for the final rule reflects a single year picture of the yearly benefits and costs expected to be realized once the standards have been fully implemented and non compliant vehicles have all been retired. Table IX. E   1 presents EPA's primary estimate of the benefits of the rule, both the estimated reductions in incidences and the estimated economic value of those incidence reductions. In interpreting the results, it is important to keep in mind the limited set of effects we are able to monetize. Specifically, the table lists the avoided PM related incidences of health effects and the estimated economic value of those avoided incidences. 95 We present estimates for the reductions for the Large SI category only. As the table indicates, we estimate that the final rule will reduce premature mortality associated with fine PM by around 1,000 incidences per year, produce about 600 fewer cases of chronic bronchitis, and result in significant reductions in minor restricted activity days ( with an estimated 1 million fewer cases). 96 TABLE IX. E   1.   EPA PRIMARY ESTIMATE OF THE ANNUAL QUANTIFIED AND MONETIZED BENEFITS ASSOCIATED WITH IMPROVED PM AIR QUALITY RESULTING FROM THE LARGE SI/ RECREATIONAL VEHICLE RULE IN 2030 a PM related endpoint Avoided incidence a, c ( cases/ year) Monetary benefits a, d ( millions 2002 $)

Premature mortality a, b ( adults, ages 30 and over) ........................................................................ 1,000 .......................... $ 7,510 Chronic bronchitis .......................................................................................................................... 640 ............................. $ 280 Hospital Admissions from Respiratory Causes g ........................................................................... 300 ............................. <$ 10 Hospital Admissions from Cardiovascular Causes g ...................................................................... 300 ............................. <$ 10 Emergency Room Visits for Asthma .............................................................................................. 300 ............................. <$ 1 Acute bronchitis ( children, ages 8   12) .......................................................................................... 2,200 .......................... <$ 1 Upper respiratory symptoms ( asthmatic children, ages 9   11) ...................................................... 20,600 ........................ <$ 1 Lower respiratory symptoms ( children, ages 7   14) ...................................................................... 23,700 ........................ <$ 1 Asthma attacks ( asthmatics, all ages) a ......................................................................................... 20,600 ........................ <$ 1 Work loss days ( adults, ages 18   65) ............................................................................................ 181,300 ...................... $ 20 Minor restricted activity days ( adults, ages 18   65) ( adjusted to exclude asthma attacks) a ........ 944,400 ...................... $ 50 Other health effects e ...................................................................................................................... U1+ U2+ U3+ U4 ............. B1+ B2+ B3+ B4 Monetized Total f ..................................................................................................................... ..................................... $ 7,880 + B a Ozone related benefits are not included, thus underestimating national benefits. Relative to PM related benefits, ozone benefits have typically accounted for only a small portion of total benefits. However, ozone reductions can have a significant impact on asthma attacks in asthma sufferers as well as contributing to reductions in the overall number of minor restricted activity days. b The value we are transferring assumes that some of the incidences of premature mortality related to PM exposures occur in a distributed fashion over the five years following exposure, and it embeds an annual three percent discount rate to the value of premature mortality occurring in years after our analysis year. c Incidences are rounded to the nearest 100. d Dollar values are rounded to the nearest 10 million. Monetary benefits account for growth in real GDP per capita through 2030. e The Ui are the incidences and the Bi are the values for the unquantified category i. A detailed listing of unquantified PM, ozone, CO, and HC related health and welfare effects is provided in Table IX   E. 2. Many of the HC emitted from these vehicles are also hazardous air pollutants listed in the Clean Air Act. f B is equal to the sum of all unmonetized categories, i. e., Ba+ B1+ B2+ * * * + Bn. g Based upon recent preliminary findings by the Health Effects Institute, the concentration response functions used to estimate reductions in hospital admissions may over or under estimate the true concentration response relationship.

Total monetized benefits are driven primarily by the reduction in premature fatalities each year, which account for over 80 percent of total benefits. This table also indicates with a `` B'' those additional health and environmental benefits which could not be expressed in quantitative incidence and/ or economic value terms. A full listing of the benefit categories that could not be quantified or monetized in our estimate are provided in Table IX. E   2. The final rule may also provide some visibility improvements in Class I areas and near where people live, work, and recreate. A full appreciation of the overall economic consequences of the final standards requires consideration of all benefits and costs expected to result from the new standards, not just those benefits and costs which could be expressed here in dollar terms. TABLE IX. E   2.   ADDITIONAL, NONMONETIZED BENEFITS OF THE LARGE SI/ RECREATIONAL VEHICLE STANDARDS Pollutant Unquantified effects Ozone Health Premature mortality. a Increased airway responsiveness to stimuli. Inflammation in the lung. Chronic respiratory damage. Premature aging of the lungs.

VerDate 0ct< 31> 2002 17: 09 Nov 07, 2002 Jkt 200001 PO 00000 Frm 00088 Fmt 4701 Sfmt 4700 E:\ FR\ FM\ 08NOR2. SGM 08NOR2 68329 Federal Register / Vol. 67, No. 217 / Friday, November 8, 2002 / Rules and Regulations TABLE IX. E   2.   ADDITIONAL, NONMONETIZED BENEFITS OF THE LARGE SI/ RECREATIONAL VEHICLE STANDARDS   Continued Pollutant Unquantified effects Acute inflammation and respiratory cell damage. Increased susceptibility to respiratory infection. Non asthma respiratory emergency room visits. Increased school absence rates Ozone Welfare Decreased yields for commercial forests ( for example Western US). Decreased yields for fruits and vegetables. Decreased yields for noncommercial crops. Damage to urban ornamental plants. Impacts on recreational demand from damaged forest aesthetics. Damage to ecosystem functions PM Health ...... Infant mortality. Low birth weight. Changes in pulmonary function Chronic respiratory diseases other than chronic bronchitis Cardiac endpoints. Morphological changes. Altered host defense mechanisms Cancer. Non asthma respiratory emergency room visits PM Welfare .... Visibility in Class I areas. Residential and recreational visibility in non Class I areas. Soiling and materials damage Damage to ecosystem functions Nitrogen and Sulfate Deposition Welfare Impacts of acidic sulfate and nitrate deposition on commercial forests Impacts of acidic deposition to commercial freshwater fishing. Impacts of acidic deposition to recreation in terrestrial ecosystems. Reduced existence values for currently healthy ecosystems Impacts of nitrogen deposition on commercial fishing, agriculture, and forests. TABLE IX. E   2.   ADDITIONAL, NONMONETIZED BENEFITS OF THE LARGE SI/ RECREATIONAL VEHICLE STANDARDS   Continued Pollutant Unquantified effects Impacts of nitrogen deposition on recreation in estuarine ecosystems. Damage to ecosystem functions CO Health ...... Premature mortalitya. Behavioral effects. Hospital admissions   respiratory cardiovascular, and other. Other cardiovascular effects Developmental effects. Decreased time to onset of angina. Non asthma respiratory ER visits HC Health b .... Cancer ( benzene, 1,3 butadiene formaldehyde, acetaldehyde Anemia ( benzene). Disruption of production of blood components ( benzene). Reduction in the number of blood platelets ( benzene). Excessive bone marrow formation ( benzene). Depression of lymphocyte counts ( benzene) Reproductive and developmental effects ( 1,3 butadiene Irritation of eyes and mucus membranes ( formaldehyde). Respiratory irritation ( formaldehyde). Asthma attacks in asthmatics ( formaldehyde). Asthma like symptoms in non asthmatics ( formaldehyde). Irritation of the eyes, skin, and respiratory tract ( acetaldehyde). Upper respiratory tract irritation and congestion ( acrolein) TABLE IX. E   2.   ADDITIONAL, NONMONETIZED BENEFITS OF THE LARGE SI/ RECREATIONAL VEHICLE STANDARDS   Continued Pollutant Unquantified effects HC Welfare .... Direct toxic effects to animals Bioaccumulation in the food chain. Damage to ecosystem function a Premature mortality associated with ozone and carbon monoxide is not separately included in this analysis. In this analysis, we assume that the ACS/ Krewski, et al. C   R function for premature mortality captures both PM mortality benefits and any mortality benefits associated with other air pollutants. A copy of Krewski, et al., can be found in Docket A   99   06, Document No. IV   G   75. b Many of the key hydrocarbons related to this rule are also hazardous air pollutants listed in the Clean Air Act.

In summary, EPA's primary estimate of the benefits of the final rule is approximately $ 7.8 billion in 2030. This estimate accounts for growth in real gross domestic product ( GDP) per capita between the present and 2030. The estimated social cost ( measured as changes in consumer and producer surplus) in 2030 to implement the final rule from Table IX. D   1 above is $ 217 million ( 2001$). The net social gain, considering fuel efficiency, is $ 554 million. The monetized benefits are approximately $ 7.8 billion, and EPA believes there is considerable value to the public of the benefits it could not monetize. The net benefit that can be monetized is $ 8.4 billion. Therefore, implementation of the final rule is expected to provide society with a net gain in social welfare based on economic efficiency criteria. Table IX. E   3 summarizes the costs, benefits, and net benefits. The net present value of the future benefits have been calculated using a 3% discount rate over the 2002 to 2030 time frame. The net present value of the social gains is $ 4,899 million and the net present value of the total annual benefits is $ 77,177 million + B. Consequently, the net present value of the monetized net benefits of this program is $ 82,076 million. If a discount rate of 7% is used, the values above change to $ 2,393 million for social gains and $ 40,070 million + B for total benefits, giving a total of $ 42,463 million.

TABLE IX. E   3.   2030 ANNUAL MONETIZED COSTS, BENEFITS, AND NET BENEFITS FOR THE FINAL RULE Millions of 2001 $ a Social Gains f ..................................................................................................................................................... $ 550 VerDate 0ct< 31> 2002 17: 09 Nov 07, 2002 Jkt 200001 PO 00000 Frm 00089 Fmt 4701 Sfmt 4700 E:\ FR\ FM\ 08NOR2. SGM 08NOR2 68330 Federal Register / Vol. 67, No. 217 / Friday, November 8, 2002 / Rules and Regulations TABLE IX. E   3.   2030 ANNUAL MONETIZED COSTS, BENEFITS, AND NET BENEFITS FOR THE FINAL RULE   Continued Millions of 2001 $ a Monetized PM related benefits b, c ...................................................................................................................... $ 7,880 + BPM Monetized Ozone related benefits b, d ................................................................................................................. Not monetized ( BOzone) HC related benefits ............................................................................................................................................ Not monetized ( BHC) CO related benefits ............................................................................................................................................ Not monetized ( BCO) Total annual benefits .......................................................................................................................................... $ 7,880 + BPM + BOzone + BHC + BCO Monetized net benefits e ..................................................................................................................................... $ 8,430 + B a For this section, all costs and benefits are rounded to the nearest 10 million. Thus, figures presented in this chapter may not exactly equal benefit and cost numbers presented in earlier sections of the chapter. b Not all possible benefits or disbenefits are quantified and monetized in this analysis. Potential benefit categories that have not been quantified and monetized are listed in Table IX   E. 2. Unmonetized PM and ozone related benefits are indicated by BPM. and BOzone, respectively. c Based upon recent preliminary findings by the Health Effects Institute, the concentration response functions used to estimate reductions in hospital admissions may over or under estimate the true concentration response relationship. d There are substantial uncertainties associated with the benefit estimates presented here, as compared to other EPA analyses that are supported by specific modeling. This analysis used a benefits transfer technique described in the RSD. e B is equal to the sum of all unmonetized benefits, including those associated with PM, ozone, CO, and HC. f The social gains are equal to the fuel savings minus the combined loss in consumer and producer surplus.

X. Public Participation A wide variety of interested parties participated in the rulemaking process that culminates with this final rule. This process provided several opportunities for public comment over a period of more than two years. An Advance Notice of Proposed Rulemaking ( 65 FR 76797, December 7, 2000) announced our intent to address emissions from these engines. Comments received during this period were considered in the development of the proposal and are discussed in that document. These comments included information received from small businesses as a part of the inter agency Small Business Advocacy Review Panel process which was completed before we published the proposal and is described below under the discussion of the Regulatory Flexibility Act. The formal comment period and public hearing associated with the proposal provided another opportunity for public input. We have also met with a variety of stakeholders at various points in the process, including state and environmental organizations, engine manufacturers, and equipment manufacturers. We have prepared a detailed Summary and Analysis of Comments document, which describes the comments we received on the proposal and our response to each of these comments. The Summary and Analysis of Comments is available in the docket for this rule and on the Office of Transportation and Air Quality internet home page at http:// www. epa. gov/ otaq/ .

XI. Statutory and Executive Order Reviews A. Executive Order 12866: Regulatory Planning and Review Under Executive Order 12866 ( 58 FR 51735, October 4, 1993), the Agency must determine whether the regulatory action is `` significant'' and therefore subject to review by the Office of Management and Budget ( OMB) and the requirements of this Executive Order. The Executive Order defines a `` significant regulatory action'' as any regulatory action that is likely to result in a rule that may:   Have an annual effect on the economy of $ 100 million or more or adversely affect in a material way the economy, a sector of the economy, productivity, competition, jobs, the environment, public health or safety, or State, Local, or Tribal governments or communities;   Create a serious inconsistency or otherwise interfere with an action taken or planned by another agency;   Materially alter the budgetary impact of entitlements, grants, user fees, or loan programs, or the rights and obligations of recipients thereof; or   Raise novel legal or policy issues arising out of legal mandates, the President's priorities, or the principles set forth in the Executive Order. A Final Regulatory Support Document has been prepared and is available in the docket for this rulemaking and at the internet address listed under ADDRESSES above. This action was submitted to the Office of Management and Budget for review under Executive Order 12866. Annual initial costs of this rulemaking are estimated to be over $ 100 million per year but this is offset by operating cost savings of over $ 400 million dollars per year. Even so, this rule is considered economically significant. Written comments from OMB and responses from EPA to OMB comments are in the public docket for this rulemaking.

B. Paperwork Reduction Act The information collection requirements ( ICR) in this rule will be submitted for approval to the Office of Management and Budget ( OMB) under the Paperwork Reduction Act, 44 U. S. C. 3501 et seq. The Agency may not conduct or sponsor an information collection, and a person is not required to respond to a request for information, unless the information collection request displays a currently valid OMB control number. The OMB control numbers for EPA's regulations are listed in 40 CFR part 9 and 48 CFR chapter 15. The reporting requirements in this final rule do not apply until the Office of Management has approved them. We will publish a document in the Federal Register announcing that the information collection requirements are approved.

C. Regulatory Flexibility Act ( RFA), as Amended by the Small Business Regulatory Enforcement Fairness Act of 1996 ( SBREFA), 5 U. S. C. 601 et seq.

EPA has determined that it is not necessary to prepare a regulatory flexibility analysis in connection with this final rule. EPA has also determined that this rule will not have a significant economic impact on a substantial number of small entities. For purposes of assessing the impacts of this final rule on small entities, a small entity is defined as: ( 1) A small business that meet the definition for business based on SBA size standards; ( 2) a small governmental jurisdiction that is a government of a city, county, town, school district or special district with a population of less than 50,000; and ( 3) a small organization that is any not for profit enterprise which is independently owned and operated and is not dominant in its field. This rulemaking will affect only the small businesses. In accordance with section 609 of the RFA, EPA conducted an outreach to small entities and convened a Small VerDate 0ct< 31> 2002 17: 09 Nov 07, 2002 Jkt 200001 PO 00000 Frm 00090 Fmt 4701 Sfmt 4700 E:\ FR\ FM\ 08NOR2. SGM 08NOR2 68331 Federal Register / Vol. 67, No. 217 / Friday, November 8, 2002 / Rules and Regulations 97 59 FR 31306 ( July 17, 1994). Business Advocacy Review ( SBAR) Panel prior to proposing this rule, to obtain advice and recommendations of representatives of the small entities that potentially would be subject to the rule's requirements. Through the Panel process, we gathered advice and recommendations from small entity representatives who would be affected by the provisions in the rule relating to large SI engines and land based recreational vehicles, and published the results in a Final Panel Report, dated July 17, 2001. EPA had previously convened a separate Panel for marine engines and vessels. This panel also produced a report, dated August 25, 1999. We also prepared an Initial Regulatory Flexibility Analysis ( IRFA) in accordance with section 603 of the Regulatory Flexibility Act. The IRFA is found in chapter 8 of the Draft Regulatory Support Document. Both Panel reports and the IRFA have been placed in the docket for this rulemaking ( Public Docket A   2000   01, items II   A   85, II   F   22, and III   B   01). EPA proposed the majority of the Panel recommendations, and took comments on these and other recommendations. The information we received during this rulemaking process indicated that fewer small entities would be significantly impacted by the rule than we had originally estimated. During the SBAR Panel process, a concern was raised that importers would have limited access to certified models for import. We received no comments regarding this concern and believe that the supply of four stroke engines for ATVs and off highway motorcycles will continue to increase. As a result, we believe all these companies should be able to find manufacturers that are able to supply them with compliant engines. These importers incur no development costs, and they are not involved in adding emission control hardware or other variable costs to provide a finished product to market. We also expect that the vehicles they import would have fuel tanks and hoses that comply with the permeation standards. However, even if this were not the case, the additional two or three dollars that it would cost to make them compliant with the permeation standards is trifling in comparison with the normal selling price for these vehicles. They should therefore expect to buy and sell their products with the normal markup to cover their costs and profit. As noted below, we expect all 21 known smallbusiness importers to face compliance costs of less than one percent of their revenues. Thus, EPA has determined that this final rule will not have a significant economic impact on a substantial number of small entities. We also made some changes as a result of comments received on the proposal that we believe will further reduce the level of impact to small entities directly regulated by the rule. These can be found below in Section 5, `` Steps Taken to Minimize the Impact on Small Entities.'' Although this final rule will not have a significant impact on a substantial number of small entities, EPA has prepared a Small Business Flexibility Analysis that examines the impact of the rule on small entities, along with regulatory alternatives that could reduce that impact. This analysis would meet the requirements for a Final Regulatory Flexibility Analysis ( FRFA), had that analysis been required. The Small Business Flexibility Analysis can be found in Chapter 8 of the Final Regulatory Support Document, which is available for review in the docket and is summarized below. The key elements of our Small Business Flexibility Analysis include:   The need for, and objectives of, the rule.   The significant issues raised by public comments, a summary of the Agency's assessment of those issues, and a statement of any changes made to the proposed rule as a result of those comments.   The types and number of small entities to which the rule will apply.   The reporting, record keeping and other compliance requirement of the rule.   The steps taken to minimize the impact of the rule on small entities, consistent with the stated objectives of the applicable statute. A fuller discussion of each of these elements can be found in the Small Business Flexibility Analysis ( Chapter 8 of the Final Regulatory Support Document).

1. The Need for and Objectives of This Rule EPA began a study of emissions from new and existing nonroad engines, equipment, and vehicles in 1991. In 1994, EPA finalized its finding that nonroad engines as a whole `` are significant contributors to ozone or carbon monoxide concentrations'' in more than one ozone or carbon monoxide nonattainment area. 97 Clean Air Act section 213 ( a)( 3) then requires EPA to establish standards for all classes and categories of new nonroad engines that cause or contribute to ozone or CO concentrations in more than one ozone or CO nonattainment area that achieve the greatest degree of emissions reductions achievable taking cost and other factors into account. Since the finding in 1994, EPA has been engaged in the process of establishing programs to control emissions from nonroad engines used in many different applications. Nonroad categories already regulated include:   Land based compression ignition ( CI) engines ( such as farm and construction equipment),   Small land based spark ignition ( SI) engines ( such as lawn and garden equipment and string trimmers),   Marine engines ( outboards, personal watercraft, commercial marine diesel, marine diesel engines under 37 kW),   Locomotive engines. EPA issued an Advance Notice of Proposed Rulemaking ( ANPRM) on December 7, 2000, and a Notice of Proposed Rulemaking ( NPRM) on September 14, 2001, which continued the process of establishing standards for nonroad engines and vehicles, with proposed new emission standards for recreational marine diesel engines, recreational vehicles, and other nonroad spark ignition engines over 19 kW. This final rule includes emission standards and related requirements for these vehicles and engines that are consistent with the requirements of the Act.

2. Summary of Significant Issues Raised by Public Comments We received comments from engine and equipment manufacturers and consumers, both during the SBAR Panel process and during the comment period after we issued the proposal. Smallvolume engine and equipment manufacturers commented on the financial hardships they would face in complying with the proposed regulations. Most requested that we consider hardship provisions, primarily an exemption from or a delay in the implementation of the proposed standards, or certain flexibilities in the certification process. Due to the wide variety of engines, vehicles, and equipment covered by this rulemaking, we decided that a variety of provisions were needed to address the concerns of the small entities involved. Changes to the proposal as a result of comments from small entity representatives or others are noted below in Section 5 for each of the sectors affected by this rule. The NPRM proposed only exhaust emission controls for recreational vehicles. However, several commenters raised the issue of control of evaporative VerDate 0ct< 31> 2002 17: 09 Nov 07, 2002 Jkt 200001 PO 00000 Frm 00091 Fmt 4701 Sfmt 4700 E:\ FR\ FM\ 08NOR2. SGM 08NOR2 68332 Federal Register / Vol. 67, No. 217 / Friday, November 8, 2002 / Rules and Regulations emissions related to permeation from fuel tanks and fuel hoses. They maintained that our obligations under section 213 of the Clean Air Act included control of permeation emissions, and pointed to work done by the California ARB on emissions from plastic fuel tanks and rubber fuel line hoses, as well as from portable plastic fuel containers. Our own investigation into hydrocarbon emissions related to permeation of fuel tanks and fuel hoses from recreational land based and marine applications also supported the concerns raised by the commenters. Therefore, on May 1, 2002, we published a notice in the Federal Register reopening the comment period and requesting comment on possible approaches to regulating permeation emissions from recreational vehicles. The notice also included the expected costs and emission reductions resulting from these approaches. Commenters were given thirty days from May 1, 2002 to provide comments on the notice. We received comments from several affected businesses, including at least one small entity. These comments have been addressed in this final rulemaking, including several changes made to the provisions as a result of the comments.

c. Numbers and Types of Small Entities Affected The following table provides an overview of the primary SBA small business categories potentially affected by this regulation.

TABLE XI. C   1: PRIMARY SBA SMALL BUSINESS CATEGORIES POTENTIALLY AFFECTED BY THIS REGULATION Industry NAICSa Codes Defined by SBA as a small business if: b Motorcycles and motorcycle parts manufacturers ........................................................................................ 336991 < 500 employees. Snowmobile and ATV manufacturers ........................................................................................................... 336999 < 500 employees. Independent Commercial Importers of Vehicles and parts .......................................................................... 421110 < 100 employees. Nonroad SI engines ...................................................................................................................................... 333618 < 1,000 employees. Internal Combustion Engines ....................................................................................................................... 333618 < 1,000 employees. Boat Building and Repairing ......................................................................................................................... 336612 < 500 employees. Fuel Tank Manufacturers .............................................................................................................................. 336211 < 1,000 employees.

a North American Industry Classification System b According to SBA's regulations ( 13 CFR part 121), businesses with no more than the listed number of employees or dollars in annual receipts are considered `` small entities'' for purposes of a regulatory flexibility analysis.

The small entities directly regulated by this rule are the following: a. Recreational Vehicles ( ATVs, snowmobiles, and off highway motorcycles). The ATV sector has the broadest assortment of manufacturers. There are seven large companies representing over 95 percent of total domestic ATV sales. The remaining 5 percent come from small manufacturers or importers, who tend to import inexpensive, youth oriented ATVs from China and other Asian nations. We have identified 21 small companies that offer off highway motorcycles, ATVs, or both products. Annual unit sales for these companies can range from a few hundred to several thousand units per year. There are three small businesses manufacturing off highway motorcycles in the U. S. Two of these make only competition models, so do not need to certify their products under this regulation. The remaining off highway motorcycle manufacturer already offers engines that should be meeting the new emission standards, especially under our provisions allowing design based certification. There is one small business manufacturing two separate youth ATV models. This company already uses four stroke engines. Also, the standards are based on emissions per watt hour, which are less costly to meet for models with smalldisplacement engines. As a result, we expect both of these manufacturers to face compliance costs less than one percent of their revenues. We expect all 21 small business importers to face compliance costs less than one percent of their revenues. These companies incur no development costs and they are not involved in adding emission control hardware or other variable costs to provide a finished product to market. As a result, they should expect to buy and sell their products with the normal mark up to cover their costs and profit. During the SBAR Panel process, the concern was raised that importers might have limited access to certified models for import. We received no comments confirming this concern and believe that the supply of four stroke engines for ATVs and offhighway motorcycles will continue to increase; as a result all these companies should be able to find manufacturers that are able to supply compliant engines into the U. S. market. We further believe that compliance with the permeation standards will not place a significant burden on either the small manufacturers or on the importers. We have estimated the incremental cost of compliance for ATVs and off highway motorcycles at roughly three dollars per vehicle. This estimate includes shipping, and is based on buying the necessary lowpermeability hoses and surface treatment for the fuel tanks from outside suppliers. Thus, no capital outlays are required, and the increase in vehicle cost is insignificant, so that it can easily be passed along to the ultimate consumer. However, to ensure that these requirements do not adversely affect small manufacturers, we are implementing, where they are applicable to permeation, the same flexibility options we proposed for the exhaust emission standards. Based on available industry information, four major manufacturers account for over 99 percent of all domestic snowmobile sales. The remaining one percent comes from very small manufacturers who tend to specialize in unique and highperformance designs. One potential manufacturer is not a small business, but hopes to produce snowmobiles within the next year. Most of these manufacturers build less than 50 units per year. We have identified three small manufacturers of snowmobiles who are still in business ( of five originally identified). Two of these companies specialize in high performance versions of standard recreational snowmobile types ( i. e., travel and mountain sleds). The other manufacturer produces a unique design, which is a small scooterlike snowmobile designed to be ridden standing up. This manufacturer provided no response to repeated outreach efforts to determine potential economic effects of the final rule, but could be expected to use production engines certified to the Small SI standards. There are thus three small businesses currently producing snowmobiles for VerDate 0ct< 31> 2002 17: 09 Nov 07, 2002 Jkt 200001 PO 00000 Frm 00092 Fmt 4701 Sfmt 4700 E:\ FR\ FM\ 08NOR2. SGM 08NOR2 68333 Federal Register / Vol. 67, No. 217 / Friday, November 8, 2002 / Rules and Regulations the U. S. market. One of these currently makes a mix of two stroke and fourstroke models and will likely rely on the provision allowing separate standards for certain manufacturers to produce low emitting engines with a streamlined development effort. Estimated compliance costs for this company are less than one percent of revenues. Costs for the company producing the standup snowmobile should also be less than one percent. The third manufacturer sells a single snowmobile model in addition to a sizable business of supplying aftermarket parts for snowmobiles from other manufacturers. We don't have revenue information for the whole company, but with such low sales volumes, we estimate that this company's compliance costs could reach 4   10 percent of annual snowmobile revenues. Control of permeation emissions was not part of the SBAR Panel process. We received comments from one small snowmobile manufacturer who stated that it would experience additional hardship due to the permeation standards, because they do not have the sales volume to install the barrier treatment for fuel tanks in house. They also commented that if shipping and processing of fuel tanks took 3   4 months, it would be difficult for a small business to tie up funds for so long. However, we believe that the permeation control requirements should be relatively easy for small businesses to meet, given the relatively low costs involved ($ 5 to $ 7 per sled, based on outside vendor costs). This is insignificant in comparison to the cost of the high end sleds that this company produces and should not materially affect the company's cash flow. We also believe it is not necessary, or costeffective for a small entity to make the capital investments for in house treatment facilities. Low permeation fuel hoses are available from vendors today, and we would expect that surface treatment would be applied through an outside company, rather than installing a treatment facility in house. In any event, to make sure that these requirements do not adversely affect small manufacturers, we are implementing, where they are applicable to permeation, the same flexibility options we proposed for the exhaust emission standards. b. Marine Vessels. Marine vessels include the boat, engine, and fuel system. Exhaust emission controls including NTE requirements, as addressed in the August 29, 1999 and July 17, 2001 SBAR Panel Reports, may affect the engine manufacturers and may affect boat builders. We have determined that at least 16 companies manufacture marine diesel engines for recreational vessels. Nearly 75 percent of diesel engines sales for recreational vessels in 2000 can be attributed to three large companies. Six of the 16 identified companies are considered small businesses as defined by SBA. Based on sales estimates for 2000, these six companies represent approximately 4 percent of recreational marine diesel engine sales. The remaining companies each comprise between two and seven percent of sales for 2000. We are thus aware of six small businesses producing marine diesel engines that may be considered recreational. Three of these companies produce both commercial and recreational models without significant differences, so we expect them to meet the standards in this final rule with little more than the administrative expenses associated with including recreational models in their commercial engine families. High performance recreational marine diesel engines already include technologies that help control NOX emissions, so our cost estimates include relatively modest development costs to add new technologies. Moreover, the smallbusiness provisions allowing substantial additional lead time provide an opportunity for these companies to spread development and certification costs over several years. As a result, we expect one small business to have compliance costs approaching one percent and one to have compliance costs between 1 and 3 percent. One very small business could have compliance costs of about four percent of annual revenues. c. Large Spark ignition Engines. We are aware of two manufacturers of Large SI engines qualifying as small businesses. One of these companies plans to produce engines that meet the standards adopted by California ARB in 2004, with the possible exception of one engine family. The other company is attempting to restart the production of engines from another failed company. This company did not exist during the SBAR Panel process associated with this rule. The established company will face relatively small compliance costs as a result of this rule, since Californiacompliant engines will need only a small amount of additional development effort to meet long term standards. These costs should be less than one percent of revenues. The start up company faces significant development costs, though much of this effort is required to improve the engine enough to sustain a market presence as other manufacturers continue to make improvements to competitive engines. Under the hardship provisions, we expect the start up company to spread compliance costs over several years to reduce the impact of emission standards. We nevertheless estimate that the compliance costs associated with meeting EPA emission standards are about 5 percent of revenues. Since this manufacturer is operating in a niche market, with customers providing public comments citing the need for these engines, we expect that most of the increased cost of production will be recovered by increased revenues. d. Result for all Small Entities. For this regulation as a whole, we expect 32 small businesses to have total compliance costs less than 1 percent of their annual revenues. We estimate that one company will have compliance costs between 1 and 3 percent of revenues. Three companies will likely have compliance costs exceeding 3 percent of revenues, but at least one will likely be able to benefit from the relief provisions outlined below. These estimates include the costs for compliance with the permeation standards.

4. Reporting, Record Keeping, and Compliance Requirements For any emission control program, we need assurance that the regulated engines will meet the standards. Historically, EPA programs have assigned manufacturers the responsibility to provide these assurances. This final rule includes testing, reporting, and record keeping requirements. Testing requirements for some manufacturers include certification ( including deterioration testing) and production line testing. Reporting and record keeping requirements include test data and technical data on the engines, including defect reporting.

5. Steps Taken To Minimize the Impact on Small Entities The two SBAR Panels considered a variety of provisions to reduce the burden of complying with new emission standards and related requirements. Some of these provisions ( such as emission credit programs) would apply to all companies, while others would be targeted at the unique circumstances faced by small businesses. A complete discussion of the regulatory alternatives recommended by the Panels can be found in the Final Panel Reports. Summaries of the Panels' recommended alternatives for each of the sectors VerDate 0ct< 31> 2002 17: 09 Nov 07, 2002 Jkt 200001 PO 00000 Frm 00093 Fmt 4701 Sfmt 4700 E:\ FR\ FM\ 08NOR2. SGM 08NOR2 68334 Federal Register / Vol. 67, No. 217 / Friday, November 8, 2002 / Rules and Regulations subject to this action can also be found in their respective sections of the preamble. The following Panel recommendations are being finalized by the Agency, except for a few items as noted below:

( A) Related Federal Rules The Panel recommended that EPA continue to consult with the CPSC in developing the rule to better understand the scope of the Commission's regulations as they may relate to the competition exemption.

( B) Regulatory Flexibility Alternatives The Panel recommended that EPA consider and seek comments on a wide range of alternatives, including the flexibility options described below. As noted above, we issued a subsequent Federal Register notice dated May 1, 2002 ( 67 FR 21613), seeking comment on applying permeation control standards for fuel tanks and fuel hoses used on recreational vehicles. The flexibilities listed below for recreational vehicles would generally also apply to those controls, which would effectively extend the panel recommendations to the permeation controls as well.

( 1) Large SI Engines The Panel recommended that EPA propose several possible provisions to address concerns that the new EPA standards could potentially place small businesses at a competitive disadvantage to larger entities in the industry. These provisions are described below. ( a) Using Certification and Emission Standards From Other EPA Programs. The Panel made several recommendations for this provision. First, the Panel recommended that EPA temporarily expand this arrangement to allow small numbers of constant speed engines up to 2.5 liters ( up to 30kW) to be certified to the Small SI standards. Second, the Panel further recommended that EPA seek comment on the appropriateness of limiting the sales level of 300. Third, the Panel recommended that EPA request comment on the anticipated cap of 30 kW on the special treatment provisions outlined above, or whether a higher cap on power rating is appropriate. Finally, the Panel recommended that EPA propose to allow small volume manufacturers producing engines up to 30kW to certify to the Small SI standards during the first 3 model years of the program. Thereafter, the standards and test procedures which could apply to other companies at the start of the program would apply to small businesses. We are not adopting this provision and are instead relying on the hardship provisions in the final rule, which will allow us to accomplish the objective of the proposed provision with more flexibility. ( b) Delay of Emission Standards. The Panel recommended that EPA propose to delay the applicability of the longterm standards to small volume manufacturers for three years beyond the date at which they would generally apply to accommodate the possibility that small companies need to undertake further design work to adequately optimize their designs and to allow them to recover the costs associated with the near term emission standards. We are also folding this provision into the scope of the hardship provision, but have decided to increase the delay to up to four years, depending on the nature of the hardship involved. ( c) Production Line Testing. The Panel made several recommendations for this provision. First, the Panel recommended that EPA adopt provisions allowing more flexibility than is available under the California Large SI program or other EPA programs in general to address the concern that production line testing is another area where small volume manufacturers typically face a difficult testing burden. Second, the Panel recommended that EPA allow small volume manufacturers to have a reduced testing rate if they have consistently good test results from testing production line engines. Finally, the Panel recommended that EPA allow small volume manufacturers to use alternative low cost testing options to show that production line engines meet emission standards. ( d) Deterioration Factors. The Panel recommended that EPA allow smallvolume manufacturers to develop deterioration factors based on available emission measurements and good engineering judgment. ( e) Hardship Provision. The Panel recommended that EPA propose two types of hardship provisions for Large SI engines. First the Panel recommended that EPA allow small businesses to petition EPA for up to three years of additional lead time to comply with the standards. Second, the Panel recommended that EPA allow small businesses to apply for hardship relief if circumstances outside their control cause the failure to comply ( such as a supply contract broken by a parts supplier) and if the failure to sell the subject engines would have a major impact on the company's solvency. ( 2) Off Highway Motorcycles and ATVs The NPRM for this rule discussed several flexibility options for small businesses manufacturing recreational vehicles, based on the SBAR Panel process. When we reopened the comment period on May 1, 2002 to request comment on possible approaches to regulating permeation emissions from recreational vehicles, we did not specifically discuss small business issues. However, it is our intent that these provisions carry over to permeation controls as well. The Panel made the following recommendations for this subcategory: ( a) General Recommendations. ( 1) The Panel recommended that EPA propose to apply the flexibilities described below to engines produced or imported by small entities with combined offhighway motorcycle and ATV annual sales of less than 5,000 units per model year. ( 2) The Panel recommended that EPA request comment on the appropriateness of the 5,000 unit per model year threshold. ( 3) The Panel recommended that EPA request comment on allowing small entities with sales in excess of 5,000 units to certify using the flexible approaches described below for a number of engines equal to their 2000 or 2001 sales level. ( 4) The Panel recommended that EPA describe and seek comment on the effect of the standards on these entities, including a request for any data and/ or related studies to estimate the extent to which sales of their products are likely to be reduced as a result of changes in product price that are attributable to the emission standards. ( 5) The Panel recommended that, in the final rule, EPA assess any information received in response to this request for purposes of informing the final rule decision making process on whether additional flexibility ( beyond that considered in this report) is warranted. ( b) Additional Lead Time To Meet Emission Standards. First, the Panel recommended that EPA propose at least a two year delay, but seek comment on whether a larger time period is appropriate given the costs of compliance for small businesses and the relationship between importers and their suppliers. Second, the Panel recommended that EPA provide additional time for small volume manufacturers to revise their manufacturing process, and would allow importers to change their supply chain to acquire complying products. Third, the Panel recommended that EPA VerDate 0ct< 31> 2002 17: 09 Nov 07, 2002 Jkt 200001 PO 00000 Frm 00094 Fmt 4701 Sfmt 4700 E:\ FR\ FM\ 08NOR2. SGM 08NOR2 68335 Federal Register / Vol. 67, No. 217 / Friday, November 8, 2002 / Rules and Regulations request comment on the appropriate length for a delay ( lead time). ( c) Design Certification. The Panel recommended that EPA propose to permit small entities to use designbased certification. The Panel also recommended that EPA work with the small entity representatives and other members of the industry to develop appropriate criteria for such designbased certification. ( d) Broaden Engine Families. The Panel recommended that EPA request comment on engine family flexibility and conducting design based certification emissions testing. ( e) Production Line Testing Waiver. The Panel recommended that EPA propose to provide small manufacturers and small importers a waiver from manufacturer production line testing. The Panel also recommended that EPA request comment on whether limits or the scope of this waiver are appropriate. ( f) Use of Assigned Deterioration Factors During Certification. The Panel recommended that EPA propose to provide small business with the option to use assigned deterioration factors. ( g) Using Certification and Emission Standards from Other EPA Programs. The Panel recommended that EPA propose to provide small business with this flexibility through the fifth year of the program and request comment on which of the already established standards and programs are believed to be a useful certification option for the small businesses. ( h) Averaging, Banking, and Trading. The Panel recommended that EPA propose to provide small business with the same averaging, banking, and trading program flexibilities that would apply for large manufacturers and request comment on how the provisions could be enhanced for small business to make them more useful. ( i) Hardship Provisions. The Panel recommended that EPA propose two types of hardship program for offhighway motorcycles and ATVs: First, EPA should allow small manufacturers and small importers to petition EPA for limited additional lead time to comply with the standards. Second, EPA should allow small manufacturers and small importers to apply for hardship relief if circumstances outside their control cause the failure to comply ( such as a supply contract broken by a parts supplier) and if failure to sell the subject engines or vehicles would have a major impact on the company's solvency. The Panel also recommended that EPA propose both aspects of the hardship provisions for small offhighway motorcycle and ATV manufacturers and importers and seek comment on the implementation provisions.

( 3) Marine Vessels ( a) Delay Standards for Five Years. The Panel recommended that EPA delay the standards for five years for small businesses. ( b) Design Based Certification. The Panel recommended that EPA allow manufacturers to certify by design and to be able use this to generate credits under this approach. The Panel also recommended that EPA provide adequately detailed design specifications and associated emission levels for several technology options that could be used to certify. Although we proposed this approach, we were unable to specify any technology options for diesel engines that could be used for design based certification. We requested comment on such designs and received no comment. Therefore, we are not finalizing a design based certification option. However, we are finalizing the engine dresser provisions and expanding these provisions to include water cooled turbocharging. This will allow some engines to be exempt from the standards based on design. ( c) Broadly Defined Product Certification Families. The Panel recommended that EPA take comment on the need for broadly defined emission families and how these families should be defined. ( d) Hardship Provisions. The Panel recommended that EPA propose two types of hardship programs for marine engine manufacturers, boat builders and fuel tank manufacturers: First, that we should allow small businesses to petition us for additional lead time to comply with the standards. Second, EPA should allow small businesses to apply for hardship relief if circumstances outside their control cause the failure to comply ( such as a supply contract broken by a parts supplier) and if the failure to sell the subject fuel tanks or boats would have a major impact on the company's solvency. The Panel also recommended that EPA work with small manufacturers to develop these criteria and how they would be used. ( e) Burden Reduction Approaches Designed for Small Marinizers of Marine Engines With Respect to NTE Provisions. The Panel recommended that EPA specifically include NTE in a design based approach.

( 4) Snowmobiles As noted above, permeation standards were not part of the original NPRM for this rule, which incorporated recommendations from the SBAR Panel process. When we reopened the comment period on May 1, 2002 to request comment on possible approaches to regulating permeation emissions from recreational vehicles, which would apply to snowmobiles as well as to off highway motorcycles and ATVs, we did not specifically discuss small business issues. However, it is our intent that the proposed flexibilities for exhaust emissions carry over to permeation controls for all three vehicle categories, to the extent that they are applicable. ( a) Delay of Emission Standards. The Panel recommended that EPA propose to delay the standards for small snowmobile manufacturers by two years from the date at which other manufacturers would be required to comply. The Panel also recommended that EPA propose that the emission standards for small snowmobile manufacturers be phased in over an additional two year ( four years to fully implement the standard). Thus, the 2006 Phase 1 standards would be phased in at 50/ 100 percent in 2008/ 2009, the Phase 2 standards would be phased in at 50/ 100 percent in 2012/ 2013, and the Phase 3 standards would be phased in at 50/ 100 percent in 2014/ 2015. ( b) Design Based Certification. The Panel recommended that EPA take comment on how design based certification could be applied to small snowmobile manufacturers, and that EPA work with the small entities in the design and implementation of this concept. ( c) Broader Engine Families. The Panel recommended that EPA propose a provision for small snowmobile manufactures that would use relaxed criteria for what constitutes an engine or vehicle family. ( d) Elimination of Production Line Testing Requirements. The Panel recommended that EPA propose that small snowmobile manufacturers not be subject to production line testing requirements. ( e) Use of Assigned DF During Certification. The Panel recommended that EPA propose to allow small snowmobile manufacturers to elect to use deterioration factors determined by EPA to demonstrate end of useful life emission levels, thus reducing development/ testing burdens, rather than performing a durability demonstration for each engine family as part of the certification testing requirement. ( f) Using Certification and Emission Standards From Other EPA Programs. The Panel recommended that EPA VerDate 0ct< 31> 2002 17: 09 Nov 07, 2002 Jkt 200001 PO 00000 Frm 00095 Fmt 4701 Sfmt 4700 E:\ FR\ FM\ 08NOR2. SGM 08NOR2 68336 Federal Register / Vol. 67, No. 217 / Friday, November 8, 2002 / Rules and Regulations propose to provide small business with the flexibility to use an engine certified to another EPA program without recertifying it in its new application provided that the manufacturer does not alter the engine in such a way as to cause it to exceed the emission standards it was originally certified to meet. ( g) Averaging, Banking and Trading. The Panel recommended that EPA propose an averaging, banking and trading program for snowmobiles, and seek comment on additional flexibilities related to emission credits that should be considered for small snowmobile manufacturers. ( h) Hardship Provisions. The Panel recommended that EPA propose two types of hardship programs for small snowmobile manufacturers. First, EPA should allow small snowmobile manufacturers to petition EPA for additional lead time to comply with the standards. Second, EPA should allow small snowmobile manufacturers to apply for hardship relief if circumstances outside their control cause the failure to comply ( such as a supply contract broken by a parts supplier) and if failure to sell the subject engines or vehicles would have a major impact on the company's solvency. ( i) Unique Snowmobile Engines. The Panel recommended that EPA seek comment on an additional provision, which would allow a small snowmobile manufacturer to petition EPA for relaxed standards for one or more engine families. The Panel also recommended that EPA allow a provision for EPA to set an alternative standard at a level between the prescribed standard and the baseline level until the engine family is retired or modified in such a way as to increase emission and for the provision to be extended for up to 300 engines per year per manufacturer would assure it is sufficiently available for those manufacturers for whom the need is greatest. However, we received comment that the limit of 300 is too restrictive to be of much assistance to small businesses. Based on this comment we are adopting a limit for this provision of 600 snowmobiles per year. Finally, the Panel recommended that EPA seek comment on initial and deadline dates for the submission of such petitions. We received no comments in this area, but for clarity have decided to require at least nine months lead time by the petitioner.

( 5) Conclusion In summary, considering both exhaust emission and permeation regulations, we have found that only three small entities are likely to be impacted by more than 3 percent of their sales, and the degree of impact is likely to be further reduced by the flexibilities that are being finalized in this rulemaking. Therefore, this final rule will not have a significant economic impact on a substantial number of small entities.

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

E. Executive Order 13132: Federalism Executive Order 13132, entitled `` Federalism'' ( 64 FR 43255, August 10, 1999), requires EPA to develop an accountable process to ensure `` meaningful and timely input by State and local officials in the development of regulatory policies that have federalism implications.'' `` Policies that have federalism implications'' are defined in the Executive Order to include regulations that have `` substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.'' Under Section 6 of Executive Order 13132, EPA may not issue a regulation that has federalism implications, that imposes substantial direct compliance costs, and that is not required by statute, unless the Federal government provides the funds necessary to pay the direct compliance costs incurred by State and local governments, or EPA consults with State and local officials early in the process of developing the regulation. EPA also may not issue a regulation that has federalism implications and that preempts State law, unless the Agency consults with State and local officials early in the process of developing the regulation. Section 4 of the Executive Order contains additional requirements for rules that preempt State or local law, even if those rules do not have federalism implications ( i. e., the rules will not have substantial direct effects on the States, on the relationship between the national government and the states, or on the distribution of power and responsibilities among the various levels of government). Those requirements include providing all affected State and local officials notice and an opportunity for appropriate participation in the development of the regulation. If the preemption is not based on express or implied statutory authority, EPA also must consult, to the extent practicable, with appropriate State and local officials regarding the conflict between State law and Federally protected interests within the agency's area of regulatory responsibility.

VerDate 0ct< 31> 2002 17: 09 Nov 07, 2002 Jkt 200001 PO 00000 Frm 00096 Fmt 4701 Sfmt 4700 E:\ FR\ FM\ 08NOR2. SGM 08NOR2 68337 Federal Register / Vol. 67, No. 217 / Friday, November 8, 2002 / Rules and Regulations This rule does not have federalism implications. It will not have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government, as specified in Executive Order 13132. Although Section 6 of Executive Order 13132 does not apply to this rule, EPA did consult with representatives of various State and local governments in developing this rule. EPA has also consulted representatives from STAPPA/ ALAPCO, which represents state and local air pollution officials.

F. Executive Order 13175: Consultation and Coordination With Indian Tribal Governments Executive Order 13175, entitled `` Consultation and Coordination with Indian Tribal Governments'' ( 65 FR 67249, November 6, 2000), requires EPA to develop an accountable process to ensure `` meaningful and timely input by tribal officials in the development of regulatory policies that have tribal implications.'' `` Policies that have tribal implications'' is defined in the Executive Order to include regulations that have `` substantial direct effects on one or more Indian tribes, on the relationship between the Federal government and the Indian tribes, or on the distribution of power and responsibilities between the Federal government and Indian tribes.'' This rule does not have tribal implications. It will not have substantial direct effects on tribal governments, on the relationship between the Federal government and Indian tribes, or on the distribution of power and responsibilities between the Federal government and Indian tribes, as specified in Executive Order 13175. The emission standards and other related requirements for private businesses in this rule have national applicability and therefore do not uniquely affect the communities of Indian Tribal Governments. Further, no circumstances specific to such communities exist that would cause an impact on these communities beyond those discussed in the other sections of this rule. Thus, Executive Order 13175 does not apply to this rule.

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

H. Executive Order 13211: Actions That Significantly Affect Energy Supply, Distribution, or Use This rule is not a `` significant energy action'' as defined in Executive Order 13211, `` Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use'' ( 66 FR 28355 ( May 22, 2001)) because it is not likely to have a significant adverse effect on the supply, distribution or use of energy. The aim to reduce emissions from certain nonroad engines and have no effect on fuel formulation, distribution, or use. Generally, the final rule leads to reduced fuel usage due to the improvements in engine based emission control technologies.

I. National Technology Transfer and Advancement Act Section 12( d) of the National Technology Transfer and Advancement Act of 1995 (`` NTTAA''), Public Law 104   113, section 12( d) ( 15 U. S. C. 272 note) directs EPA to use voluntary consensus standards in its regulatory activities unless doing so would be inconsistent with applicable law or otherwise impractical. Voluntary consensus standards are technical standards ( such as materials specifications, test methods, sampling procedures, and business practices) that are developed or adopted by voluntary consensus standards bodies. NTTAA directs EPA to provide Congress, through OMB, explanations when the Agency decides not to use available and applicable voluntary consensus standards. This rule involves technical standards. The following paragraphs describe how we specify testing procedures for engines subject to this rule. The International Organization for Standardization ( ISO) has a voluntary consensus standard that can be used to test Large SI engines. However, the current version of that standard ( ISO 8178) is applicable only for steady state testing, not for transient testing. As described in the Final Regulatory Support Document, transient testing is an important part of the emissioncontrol program for these engines. We are therefore not adopting the ISO procedures in this rulemaking. Underwriters Laboratories ( UL) has adopted voluntary consensus standards for forklifts that are relevant to the new requirements for Large SI engines. UL sets a maximum temperature specification for gasoline and, for forklifts used in certain applications, defines requirements to avoid venting from gasoline fuel tanks. We are adopting a different temperature limit, because the maximum temperature specified by UL does not prevent fuel boiling. We are adopting separate measures to address venting of gasoline vapors, because of UL's provisions to allow venting with an orifice up to 1.78 mm ( 0.070 inches). We believe forklifts with such a vent would have unnecessarily high evaporative emissions. If the UL standard is revised to address these technical concerns, it would be appropriate to reference the UL standard in our regulations. An additional concern relates to the fact that the UL requirements apply only to forklifts ( and not all forklifts in the case of the restriction on vapor venting). EPA regulations would therefore need to, at a minimum, extend any published UL standards to other engines and equipment to which the UL standards would otherwise not apply. The Gas Processors Association has adopted standards with fuel specifications for liquefied petroleum gas. However, there is no existing regulations requiring suppliers to meet these specifications. Comments received on the rule indicate a high level of concern that in use fuel quality does not meet the published voluntary standards, so we are not relying on these fuel specifications to define fuels for certification testing. We are adopting requirements to test off highway motorcycles and all terrain vehicles with the Federal Test Procedure, a chassis based transient test. There is no voluntary consensus VerDate 0ct< 31> 2002 17: 09 Nov 07, 2002 Jkt 200001 PO 00000 Frm 00097 Fmt 4701 Sfmt 4700 E:\ FR\ FM\ 08NOR2. SGM 08NOR2 68338 Federal Register / Vol. 67, No. 217 / Friday, November 8, 2002 / Rules and Regulations standard that would adequately address engine or vehicle operation for suitable emission measurement. Furthermore, we are interested in pursuing an enginebased test procedure for all terrain vehicles. We intend to develop a new duty cycle for this, because there is no acceptable engine duty cycle today that would adequately represent the way these engines operate. For snowmobiles, we are adopting test procedures based on work that has been published, but not yet adopted as a voluntary consensus standard. For recreational marine diesel engines, we are adopting the same test procedures that we have established for commercial marine diesel engines ( with a new duty cycle appropriate for recreational applications). We are again adopting these procedures in place of the ISO 8178 standard that would apply to these engines. We believe that ISO 8178 relies too heavily on reference testing conditions. Because our test procedures need to represent in use operation typical of operation in the field, they must be based on a range of ambient conditions. We determined that the ISO procedures are not broadly usable in their current form, and therefore should not be adopted by reference. We remain hopeful that future ISO test procedures will be developed that are usable and accurate for the broad range of testing needed, and that such procedures could then be adopted. We expect that any such development of revised test procedures will be done in accordance with ISO procedures and in a balanced and transparent manner that includes the involvement of all interested parties, including industry, U. S. EPA, foreign government organizations, state governments, and environmental groups. In so doing, we believe that the resulting procedures would be `` global'' test procedures that can facilitate the free flow of international commerce for these products.

J. Congressional Review Act The Congressional Review Act, 5 U. S. C. 801 et seq., as added by the Small Business Regulatory Enforcement Fairness Act of 1996, generally provides that before a rule may take effect, the agency promulgating the rule must submit a rule report, which includes a copy of the rule, to each House of the Congress and to the Comptroller General of the United States. EPA will submit a report containing this rule and other required information to the U. S. Senate, the U. S. House of Representatives, and the Comptroller General of the United States prior to publication of the rule in the Federal Register. This rule is a `` major rule'' as defined by 5 U. S. C. 804( 2).

K. Plain Language This document follows the guidelines of the June 1, 1998 Executive Memorandum on Plain Language in Government Writing. To read the text of the regulations, it is also important to understand the organization of the Code of Federal Regulations ( CFR). The CFR uses the following organizational names and conventions. Title 40   Protection of the Environment Chapter I   Environmental Protection Agency Subchapter C   Air Programs. This contains parts 50 to 99, where the Office of Air and Radiation has usually placed emission standards for motor vehicle and nonroad engines. Subchapter U   Air Programs Supplement. This contains parts 1000 to 1299, where we intend to place regulations for air programs in future rulemakings. Part 1048   Control of Emissions from New, Large, Nonrecreational, Nonroad Spark ignition Engines. Most of the provisions in this part apply only to engine manufacturers. Part 1051   Control of Emissions from Recreational Engines and Vehicles. Most of the provisions in this part apply only to vehicle manufacturers. Part 1065   General Test Procedures for Engine Testing. Provisions of this part apply to anyone who tests engines to show that they meet emission standards. Part 1068   General Compliance Provisions for Engine Programs. Provisions of this part apply to everyone. Each part in the CFR has several subparts, sections, and paragraphs. The following illustration shows how these fit together.

Part 1048 Subpart A Section 1048.1 ( a) ( b) ( 1) ( 2) ( i) ( ii)

A cross reference to § 1048.1( b) in this illustration would refer to the parent paragraph ( b) and all its subordinate paragraphs. A reference to § 1048.1( b) introductory text'' would refer only to the single, parent paragraph ( b). List of Subjects 40 CFR Part 89 Environmental protection, Administrative practice and procedure, Confidential business information, Imports, Labeling, Motor vehicle pollution, Reporting and recordkeeping requirements, Research, Vessels, Warranties.

40 CFR Part 90 Environmental protection, Administrative practice and procedure, Air pollution control, Confidential business information, Imports, Labeling, Reporting and recordkeeping requirements, Research, Warranties.

40 CFR Part 91 Environmental protection, Administrative practice and procedure, Air pollution control, Confidential business information, Imports, Labeling, Penalties, Reporting and recordkeeping requirements, Warranties.

40 CFR Part 94 Environmental protection, Administrative practice and procedure, Air pollution control, Confidential business information, Imports, Penalties, Reporting and recordkeeping requirements, Vessels, Warranties.

40 CFR Part 1048 Environmental protection, Administrative practice and procedure, Air pollution control, Confidential business information, Imports, Incorporation by reference, Labeling, Penalties, Reporting and recordkeeping requirements, Research, Warranties.

40 CFR Part 1051 Environmental protection, Administrative practice and procedure, Air pollution control, Confidential business information, Imports, Incorporation by reference, Labeling, Penalties, Reporting and recordkeeping requirements, Warranties.

40 CFR Part 1065 Environmental protection, Administrative practice and procedure, Incorporation by reference, Reporting and recordkeeping requirements, Research.

40 CFR Part 1068 Environmental protection, Administrative practice and procedure, Confidential business information, Imports, Motor vehicle pollution, Penalties, Reporting and recordkeeping requirements, Warranties.

VerDate 0ct< 31> 2002 17: 09 Nov 07, 2002 Jkt 200001 PO 00000 Frm 00098 Fmt 4701 Sfmt 4700 E:\ FR\ FM\ 08NOR2. SGM 08NOR2 68339 Federal Register / Vol. 67, No. 217 / Friday, November 8, 2002 / Rules and Regulations Dated: September 13, 2002. Christine Todd Whitman, Administrator.

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

PART 89   CONTROL OF EMISSIONS FROM NEW AND IN USE NONROAD COMPRESSION IGNITION ENGINES 1. The authority for part 89 continues to read as follows:

Authority: 42 U. S. C. 7521, 7522, 7523, 7524, 7525, 7541, 7542, 7543, 7545, 7547, 7549, 7550, and 7601( a).

Subpart A   [ Amended]

2. Section 89.2 is amended by adding definitions for `` Aircraft'', `` Sparkignition and `` United States'' in alphabetic order and revising the definition of `` Compression ignition'' to read as follows:

§ 89.2 Definitions.

* * * * * Aircraft means any vehicle capable of sustained air travel above treetop heights. * * * * * Compression ignition means relating to a type of reciprocating, internalcombustion engine that is not a sparkignition engine. * * * * * Spark ignition means relating to a gasoline fueled engine or other engines 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. * * * * * United States means the States, the District of Columbia, the Commonwealth of Puerto Rico, the Commonwealth of the Northern Mariana Islands, Guam, American Samoa, the U. S. Virgin Islands, and the Trust Territory of the Pacific Islands. * * * * *

Subpart B   [ Amended]

3. Section 89.106 is amended by revising paragraph ( b) read as follows:

§ 89.106 Prohibited controls.

* * * * * ( b) You may not design your engines with emission control devices, systems, or elements of design that cause or contribute to an unreasonable risk to public health, welfare, or safety while operating. For example, this would apply if the engine emits a noxious or toxic substance it would otherwise not emit that contributes to such an unreasonable risk.

PART 90   CONTROL OF EMISSIONS FROM NONROAD SPARK IGNITION ENGINES AT OR BELOW 19 KILOWATTS 4. The heading to part 90 is revised to read as set forth above. 5. The authority for part 90 continues to read as follows:

Authority: 42 U. S. C. 7521, 7522, 7523, 7524, 7525, 7541, 7542, 7543, 7547, 7549, 7550, and 7601( a).

Subpart A   [ Amended]

6. Section 90.1 is revised to read as follows:

§ 90.1 Applicability.

( a) This part applies to new nonroad spark ignition engines and vehicles with gross power output at or below 19 kilowatts ( kW) used for any purpose, unless we exclude them under paragraph ( d) of this section. ( b) This part also applies to engines with a gross power output above 19 kW if the manufacturer uses the provisions of 40 CFR 1048.615 or 1051.145( a)( 3) to exempt them from the requirements of 40 CFR part 1048 or 1051, respectively. Compliance with the provisions of this part is a required condition of those exemptions. ( c) [ Reserved] ( d) The following nonroad engines and vehicles are not subject to the provisions of this part: ( 1) Engines certified to meet the requirements of 40 CFR part 1051 ( e. g., engines used in snowmobiles). This part nevertheless applies to engines used in recreational vehicles if the manufacturer uses the provisions of 40 CFR 1051.145( a)( 3) to exempt them from the requirements of 40 CFR part 1051. Compliance with the provisions of this part is a required condition of that exemption. ( 2) Engines used in highway motorcycles. See 40 CFR part 86, subpart E. ( 3) Propulsion marine engines. See 40 CFR part 91. This part applies with respect to auxiliary marine engines. ( 4) Engines used in aircraft. See 40 CFR part 87. ( 5) Engines certified to meet the requirements of 40 CFR part 1048. ( 6) Hobby engines. ( 7) Engines that are used exclusively in emergency and rescue equipment where no certified engines are available to power the equipment safely and practically, but not including generators, alternators, compressors or pumps used to provide remote power to a rescue tool. The equipment manufacturer bears the responsibility to ascertain on an annual basis and maintain documentation available to the Administrator that no appropriate certified engine is available from any source. ( e) Engines subject to the provisions of this subpart are also subject to the provisions found in subparts B through N of this part, except that Subparts C, H, M and N of this part apply only to Phase 2 engines as defined in this subpart. ( f) Certain text in this part is identified as pertaining to Phase 1 or Phase 2 engines. Such text pertains only to engines of the specified Phase. If no indication of Phase is given, the text pertains to all engines, regardless of Phase. 7. Section 90.2 is amended by adding a new paragraph ( c) to read as follows:

§ 90.2 Effective dates.

* * * * * ( c) Notwithstanding paragraphs ( a) and ( b) of this section, engines used in recreational vehicles with engine rated speed greater than or equal to 5,000 rpm and with no installed speed governor are not subject to the provisions of this part through the 2005 model year. Starting with the 2006 model year, all the requirements of this part apply to engines used in these vehicles if they are not included in the scope of 40 CFR part 1051. 8. Section 90.3 is amended by adding definitions for `` Aircraft'', `` Hobby engines'', `` Marine engine'', `` Marine vessel'', `` Recreational'', and `` United States'' in alphabetical order, to read as follows:

§ 90.3 Definitions.

* * * * * Aircraft means any vehicle capable of sustained air travel above treetop heights. * * * * * Hobby engines means engines used in reduced scale models of vehicles that are not capable of transporting a person ( for example, model airplanes). Marine engine means an engine that someone installs or intends to install on a marine 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.

VerDate 0ct< 31> 2002 17: 09 Nov 07, 2002 Jkt 200001 PO 00000 Frm 00099 Fmt 4701 Sfmt 4700 E:\ FR\ FM\ 08NOR2. SGM 08NOR2 68340 Federal Register / Vol. 67, No. 217 / Friday, November 8, 2002 / Rules and Regulations Marine vessel means a vehicle that is capable of operation in water but is not capable of operation out of water. Amphibious vehicles are not marine vessels. * * * * * Recreational means, for purposes of this part, relating to a vehicle intended by the vehicle manufacturer to be operated primarily for pleasure. * * * * * United States means the States, the District of Columbia, the Commonwealth of Puerto Rico, the Commonwealth of the Northern Mariana Islands, Guam, American Samoa, the U. S. Virgin Islands, and the Trust Territory of the Pacific Islands. * * * * *

Subpart B   [ Amended]

9. Section 90.103 is amended by redesignating paragraph ( a)( 2)( v) as paragraph ( a)( 2)( vi) and adding a new paragraph ( a)( 2)( v) to read as follows:

§ 90.103 Exhaust emission standards. ( a)* * * ( 2)* * * ( v) The engine must be used in a recreational application, with a combined total vehicle dry weight under 20 kilograms; * * * * * 10. Section 90.110 is amended by revising paragraph ( b) to read as follows: § 90.110 Requirement of certification   prohibited controls.

* * * * * ( b) You may not design your engines with emission control devices, systems, or elements of design that cause or contribute to an unreasonable risk to public health, welfare, or safety while operating. For example, this would apply if the engine emits a noxious or toxic substance it would otherwise not emit that contributes to such an unreasonable risk.

PART 91   CONTROL OF EMISSIONS FROM MARINE SPARK   IGNITION ENGINES 11. The authority for part 91 continues to read as follows:

Authority: 42 U. S. C. 7521, 7522, 7523, 7524, 7525, 7541, 7542, 7543, 7547, 7549, 7550, and 7601( a).

Subpart A   [ Amended]

12. Section 91.3 is amended by adding the definition for `` United States'' in alphabetical order to read as follows:

§ 91.3 Definitions.

* * * * * United States means the States, the District of Columbia, the Commonwealth of Puerto Rico, the Commonwealth of the Northern Mariana Islands, Guam, American Samoa, the U. S. Virgin Islands, and the Trust Territory of the Pacific Islands. * * * * *

Subpart B   [ Amended]

13. Section 91.110 is amended by revising paragraph ( b) to read as follows:

§ 91.110 Requirement of certification   prohibited controls.

* * * * * ( b) You may not design your engines with emission control devices, systems, or elements of design that cause or contribute to an unreasonable risk to public health, welfare, or safety while operating. For example, this would apply if the engine emits a noxious or toxic substance it would otherwise not emit that contributes to such an unreasonable risk.

Subpart E   [ Amended]

14. Section 91.419 is amended in paragraph ( b) by revising the equations for MHCexh and Mexh to read as follows:

§ 91.419 Raw emission sampling calculations.

* * * * * ( b) * * * MHCexh = 12.01 + 1.008 × a * * * * *

M K)

28 ( 1 exh = × + × + × + × + × + ×

+ ×             ×               M WHC WCO WCO WNO WH WHC WCO WCO WNO WH K HC x x exh 10 28 01 10 44 1 10 46 01 10 2 016 10 18 01 1 01 100 10 10 100 10 6 2 2 2 6 2 2 4 2 4 2 2 . .

. . . (

. )

* * * * *

Subpart G   [ Amended]

15. Appendix A to Subpart G of part 91 is amended by revising Table 1 to read as follows:

Appendix A to Subpart G of Part 91   Sampling Plans for Selective Enforcement Auditing of Marine Engines TABLE 1.   SAMPLING PLAN CODE LETTER Annual engine family sales Code letter 20   50 ..................................... AA1 TABLE 1.   SAMPLING PLAN CODE LETTER   Continued Annual engine family sales Code letter 20   99 ..................................... A1 100   299 ................................. B 300   499 ................................. C 500 or greater ........................ D 1 A manufacturer may optionally use either the sampling plan for code letter `` AA'' or sampling plan for code letter `` A'' for Selective Enforcement Audits of engine families with annual sales between 20 and 50 engines. Additional the manufacturers may switch between these plans during the audit.

* * * * * Subpart I   [ Amended]

16. Section 91.803 is amended by revising paragraph ( a) to read as follows:

§ 91.803 Manufacturer in use testing program.

( a) EPA shall annually identify engine families and those configurations within families which the manufacturers must then subject to in use testing. For each model year, EPA may identify the following number of engine families for testing, based on the number of the manufacturer's engine families to which this subpart is applicable produced in that model year:

VerDate 0ct< 31> 2002 17: 09 Nov 07, 2002 Jkt 200001 PO 00000 Frm 00100 Fmt 4701 Sfmt 4700 E:\ FR\ FM\ 08NOR2. SGM 08NOR2 ER08NO02.001</ MATH> 68341 Federal Register / Vol. 67, No. 217 / Friday, November 8, 2002 / Rules and Regulations ( 1) For manufactures with three or fewer engine families, EPA may identify a single engine family. ( 2) For manufacturers with four or more engine families, EPA may identify a number of engine families that is no greater than twenty five percent of the number of engine families to which this subpart is applicable that are produced by the manufacturer in that model year. * * * * *

PART 94   CONTROL OF EMISSIONS FROM MARINE COMPRESSIONIGNITION ENGINES 17. The heading to part 94 is revised to read as set forth above. 18. The authority citation for part 94 continues to read as follows:

Authority: 42 U. S. C. 7522, 7523, 7524, 7525, 7541, 7542, 7543, 7545, 7547, 7549, 7550 and 7601( a).

Subpart A   [ Amended]

19. Section 94.1 is revised to read as follows:

§ 94.1 Applicability. ( a) Except as noted in paragraphs ( b) and ( c) of this section, the provisions of this part apply to manufacturers ( including post manufacture marinizers and dressers), rebuilders, owners and operators of: ( 1) Marine engines that are compression ignition engines manufactured ( or that otherwise become new) on or after January 1, 2004; ( 2) Marine vessels manufactured ( or that otherwise become new) on or after January 1, 2004 and which include a compression ignition marine engine. ( b) Notwithstanding the provision of paragraph ( c) of this section, the requirements and prohibitions of this part do not apply to three types of marine engines: ( 1) Category 3 marine engines; ( 2) Marine engines with rated power below 37 kW; or ( 3) Marine engines on foreign vessels. ( c) The provisions of Subpart L of this part apply to everyone with respect to the engines identified in paragraph ( a) of this section. 20. Section 94.2 is amended by revising paragraph ( b) introductory text, removing the definition for `` Commercial marine engine'', revising definitions for `` Compression ignition'', `` Designated officer'', `` Passenger'', `` Recreational marine engine'', `` Recreational vessel'', and `` United States'', and adding new definitions for `` Commercial'', `` Small volume boat builder'', `` Small volume manufacturer'', and `` Spark ignition'' in alphabetical order to read as follows: § 94.2 Definitions.

* * * * * ( b) As used in this part, all terms not defined in this section shall have the meaning given them in the Act: * * * * * Commercial means relating to an engine or vessel that is not a recreational marine engine or a recreational vessel. * * * * * Compression ignition means relating to an engine that is not a spark ignition engine. * * * * * Designated Officer means the Manager, Engine Programs Group ( 6403   J), U. S. Environmental Protection Agency, 1200 Pennsylvania Ave., Washington, DC 20460. * * * * * Passenger has the meaning given by 46 U. S. C. 2101 ( 21) and ( 21a). In the context of commercial vessels, this generally means that a passenger is a person that pays to be on the vessel. * * * * * Recreational marine engine means a Category 1 propulsion marine engine that is intended by the manufacturer to be installed on a recreational vessel, and which is permanently labeled as follows: `` THIS ENGINE IS CATEGORIZED AS A RECREATIONAL MARINE ENGINE UNDER 40 CFR PART 94. INSTALLATION OF THIS ENGINE IN ANY NONRECREATIONAL VESSEL IS A VIOLATION OF FEDERAL LAW SUBJECT TO CIVIL PENALTY.''. Recreational vessel has the meaning given in 46 U. S. C. 2101 ( 25), but excludes `` passenger vessels'' and `` small passenger vessels'' as defined by 46 U. S. C. 2101 ( 22) and ( 35) and excludes vessels used solely for competition. In general, for this part, `` recreational vessel'' means a vessel that is intended by the vessel manufacturer to be operated primarily for pleasure or leased, rented or chartered to another for the latter's pleasure, excluding the following vessels: ( 1) Vessels of less than 100 gross tons that carry more than 6 passengers ( as defined in this section). ( 2) Vessels of 100 gross tons or more that carry one or more passengers ( as defined in this section). ( 3) Vessels used solely for competition. * * * * * Small volume boat builder means a boat manufacturer with fewer than 500 employees and with annual U. S. directed production of fewer than 100 boats. For manufacturers owned by a parent company, these limits apply to the combined production and number of employees of the parent company and all its subsidiaries. Small volume manufacturer means a manufacturer with annual U. S. directed production of fewer than 1,000 internal combustion engines ( marine and nonmarine). For manufacturers owned by a parent company, the limit applies to the production of the parent company and all its subsidiaries. Spark ignition means relating to a gasoline fueled engine or other engines 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. * * * * * United States means the States, the District of Columbia, the Commonwealth of Puerto Rico, the Commonwealth of the Northern Mariana Islands, Guam, American Samoa, the U. S. Virgin Islands, and the Trust Territory of the Pacific Islands. * * * * * 21. Section 94.7 is amended by revising paragraphs ( c), ( d), and ( e) to read as follows:

§ 94.7 General standards and requirements.

* * * * * ( c) You may not design your engines with emission control devices, systems, or elements of design that cause or contribute to an unreasonable risk to public health, welfare, or safety while operating. For example, this would apply if the engine emits a noxious or toxic substance it would otherwise not emit that contributes to such an unreasonable risk. ( d) All engines subject to the emission standards of this part shall be equipped with a connection in the engine exhaust system that is located downstream of the engine and before any point at which the exhaust contacts water ( or any other cooling/ scrubbing medium) for the temporary attachment of gaseous and/ or particulate emission sampling equipment. This connection shall be internally threaded with standard pipe threads of a size not larger than one half inch, and shall be closed by a pipe plug when not in use. Equivalent connections are allowed. Engine manufacturers may comply with this requirement by providing vessel manufacturers with clear instructions explaining how to meet this requirement, and noting in the instructions that failure to comply may VerDate 0ct< 31> 2002 17: 09 Nov 07, 2002 Jkt 200001 PO 00000 Frm 00101 Fmt 4701 Sfmt 4700 E:\ FR\ FM\ 08NOR2. SGM 08NOR2 68342 Federal Register / Vol. 67, No. 217 / Friday, November 8, 2002 / Rules and Regulations invalidate a certificate and subject the vessel manufacturer to federal penalties. ( e) Electronically controlled engines subject to the emission standards of this part shall broadcast on engine's controller area networks engine torque ( as percent of maximum torque at that speed) and engine speed. 22. Section 94.8 is amended by revising paragraphs ( a), ( e), ( f) introductory text, and ( f)( 1) to read as follows: § 94.8 Exhaust emission standards.

( a) Exhaust emissions from marine compression ignition engines shall not exceed the applicable exhaust emission standards contained in Table A   1 as follows:

TABLE A   1.   PRIMARY TIER 2 EXHAUST EMISSION STANDARDS ( G/ KW HR)

Engine size liters/ cylinder, rated power Category Model yeara THC+ NOX g/ kW hr CO g/ kW hr PM g/ kWhr Disp. < 0.9 and .......................................................................... power   37 kW .......................................................................... Category 1, Commercial ......... 2005 7.5 5.0 0.40 Category 1, Recreational ........ 2007 7.5 5.0 0.40 0.9   disp. < 1.2 ........................................................................ All power levels ......................................................................... Category 1, Commercial ......... 2004 7.2 5.0 0.30 Category 1, Recreational ........ 2006 7.2 5.0 0.30 1.2   disp. < 2.5 ........................................................................ All power levels ......................................................................... Category 1, Commercial ......... 2004 7.2 5.0 0.20 Category 1, Recreational ........ 2006 7.2 5.0 0.20 2.5   disp. < 5.0 ........................................................................ All power levels ......................................................................... Category 1, Commercial ......... 2007 7.2 5.0 0.20 Category 1, Recreational ........ 2009 7.2 5.0 0.20 5.0   disp. < 15.0 ...................................................................... All power levels ......................................................................... Category 2 .............................. 2007 7.8 5.0 0.27 15.0   disp. < 20.0 .................................................................... Power < 3300 kW ...................................................................... Category 2 .............................. 2007 8.7 5.0 0.50 15.0   disp. < 20.0 .................................................................... Power < 3300 kW ...................................................................... Category 2 .............................. 2007 9.8 5.0 0.50 20.0   disp. < 25.0 .................................................................... All power levels ......................................................................... Category 2 .............................. 2009 9.8 5.0 0.50 25.0   disp. < 30.0 .................................................................... All power levels ......................................................................... Category 2 .............................. 2007 11.0 5.0 0.50 a The dates listed indicate the model years for which the specified standards start.

* * * * * ( e) Exhaust emissions from propulsion engines subject to the standards ( or FELs) in paragraph ( a), ( c), or ( f) of this section shall not exceed: ( 1) Commercial marine engines. ( i) 1.20 times the applicable standards ( or FELs) when tested in accordance with the supplemental test procedures specified in § 94.106 at loads greater than or equal to 45 percent of the maximum power at rated speed or 1.50 times the applicable standards ( or FELs) at loads less than 45 percent of the maximum power at rated speed. ( ii) As an option, the manufacturer may choose to comply with limits of 1.25 times the applicable standards ( or FELs) when tested over the whole power range in accordance with the supplemental test procedures specified in § 94.106, instead of the limits in paragraph ( e)( 1)( i) of this section. ( 2) Recreational marine engines. ( i) 1.20 times the applicable standards ( or FELs) when tested in accordance with the supplemental test procedures specified in § 94.106 at loads greater than or equal to 45 percent of the maximum power at rated speed and speeds less than 95 percent of maximum test speed, or 1.50 times the applicable standards ( or FELs) at loads less than 45 percent of the maximum power at rated speed, or 1.50 times the applicable standards ( or FELs) at any loads for speeds greater than or equal to 95 percent of the maximum test speed. ( ii) As an option, the manufacturer may choose to comply with limits of 1.25 times the applicable standards ( or FELs) when tested over the whole power range in accordance with the supplemental test procedures specified in § 94.106, instead of the limits in paragraph ( e)( 2)( i) of this section. ( f) The following defines the requirements for low emitting Blue Sky Series engines: ( 1) Voluntary standards. Engines may be designated `` Blue Sky Series'' engines through the 2012 model year by meeting the voluntary standards listed in Table A   2, which apply to all certification and in use testing, as follows:

TABLE A   2.   VOLUNTARY EMISSION STANDARDS ( G/ KW HR)

Rated brake power ( kW) THC+ NOX PM Power   37 kW, and displ.< 0.9 ................................................................................................................................ 4.0 0.24 0.9  displ.< 1.2 .......................................................................................................................................................... 4.0 0.18 1.2  displ.< 2.5 .......................................................................................................................................................... 4.0 0.12 2.5  displ.< 5 ............................................................................................................................................................. 5.0 0.12 5  displ.< 15 .............................................................................................................................................................. 5.0 0.16 15   disp.< 20, and power < 3300 kW ..................................................................................................................... 5.2 0.30 15   disp.< 20, and power   3300 kW ..................................................................................................................... 5.9 0.30 20   disp.< 25 ........................................................................................................................................................... 5.9 0.30 25   disp.< 30 ........................................................................................................................................................... 6.6 0.30 VerDate 0ct< 31> 2002 17: 09 Nov 07, 2002 Jkt 200001 PO 00000 Frm 00102 Fmt 4701 Sfmt 4700 E:\ FR\ FM\ 08NOR2. SGM 08NOR2 68343 Federal Register / Vol. 67, No. 217 / Friday, November 8, 2002 / Rules and Regulations * * * * * 23. Section 94.9 is amended by revising paragraphs ( a) introductory text and ( a)( 1) to read as follows:

§ 94.9 Compliance with emission standards.

( a) The general standards and requirements in § 94.7 and the emission standards in § 94.8 apply to each new engine throughout its useful life period. The useful life is specified both in years and in hours of operation, and ends when either of the values ( hours of operation or years) is exceeded. ( 1) The minimum useful life is: ( i) 10 years or 1,000 hours of operation for recreational Category 1 engines; ( i) 10 years or 10,000 hours of operation for commercial Category 1 engines; ( iii) 10 years or 20,000 hours of operation for Category 2 engines. * * * * * 24. Section 94.12 is amended by revising the introductory text and paragraphs ( a), ( b)( 1), and ( e) and adding new paragraphs ( f) and ( g) to read as follows:

§ 94.12 Interim provisions.

This section contains provisions that apply for a limited number of calendar years or model years. These provisions apply instead of the other provisions of this part. ( a) Compliance date of standards. Certain companies may delay compliance with emission standards. Companies wishing to take advantage of this provision must inform the Designated Officer of their intent to do so in writing before the date that compliance with the standards would otherwise be mandatory. ( 1) Post manufacture marinizers may elect to delay the model year of the Tier 2 standards for commercial engines as specified in § 94.8 by one year for each engine family. ( 2) Small volume manufacturers may elect to delay the model year of the Tier 2 standards for recreational engines as specified in § 94.8 by five years for each engine family. ( b) Early banking of emission credits. ( 1) A manufacturer may optionally certify engines manufactured before the date the Tier 2 standards take effect to earn emission credits under the averaging, banking, and trading program. Such optionally certified engines are subject to all provisions relating to mandatory certification and enforcement described in this part. Manufacturers may begin earning credits for recreational engines on December 9, 2002. * * * * * ( e) Compliance date of NTE requirements ( 1) Notwithstanding the other provisions of this part, the requirements of § 94.8( e) for commercial marine engines start with 2010 model year engines for postmanufacture marinizers and 2007 model year engines for all other engine manufacturers. ( 2) Notwithstanding the other provisions of this part, the requirements of § 94.8( e) for recreational marine engines start with 2012 model year engines for post manufacture marinizers and 2009 model year engines for all other engine manufacturers. ( f) Flexibility for small volume boat builders. Notwithstanding the other provisions of this part, manufacturers may sell uncertified recreational engines to small volume boat builders during the first five years for which the emission standards in § 94.8 apply, subject to the following provisions: ( 1) The U. S. directed production volume of boats from any small volume boat builder using uncertified engines during the total five year period may not exceed 80 percent of the manufacturer's average annual production for the three years prior to the general applicability of the recreational engine standards in § 94.8, except as allowed in paragraph ( f)( 2) of this section. ( 2) Small volume boat builders may exceed the production limits in paragraph ( f)( 1) of this section, provided they do not exceed 20 boats during the five year period or 10 boats in any single calendar year. This does not apply to boats powered by engines with displacement greater than 2.5 liters per cylinder. ( 3) Small volume boat builders must keep records of all the boats and engines produced under this paragraph ( f), including boat and engine model numbers, serial numbers, and dates of manufacture. Records must also include information verifying compliance with the limits in paragraph ( f)( 1) or ( f)( 2) of this section. Keep these records until at least two full years after you no longer use the provisions in this paragraph ( f). ( 4) Manufacturers must add a permanent, legible label, written in block letters in English, to a readily visible part of each engine exempted under this paragraph ( f). This label must include at least the following items: ( i) The label heading `` EMISSION CONTROL INFORMATION''. ( ii) Your corporate name and trademark. ( iii) Engine displacement ( in liters), rated power, and model year of the engine or whom to contact for further information. ( iv) The statement `` THIS ENGINE IS EXEMPT UNDER 40 CFR 94.12( f) FROM EMISSION STANDARDS AND RELATED REQUIREMENTS.''. ( g) Flexibility for engines over 560kW. Notwithstanding the other provisions of this part, manufacturers may choose to delay certification of marine engines with less than 2.5 liters per cylinder and rated power above 560 kW, that are derived from a land based nonroad engine with a rated power greater than 560 kW, if they do all of the following: ( 1) Certify all of their applicable marine engines with less than 2.5 liters per cylinder and rated power above 560 kW to a NOX standard of 6.4 g/ kW hr for model years 2008 through 2012. ( 2) Notify EPA in writing before 2004 of their intent to use this provision. This notification must include a signed statement certifying that the manufacturer will comply with all the provisions of this paragraph ( g). ( 3) Add a permanent, legible label, written in block letters in English, to a readily visible part of each engine exempted under this paragraph ( f). This label must include at least the following items: ( i) The label heading `` EMISSION CONTROL INFORMATION''. ( ii) Your corporate name and trademark. ( iii) Engine displacement ( in liters), rated power, and model year of the engine or whom to contact for further information. ( iv) The statement `` THIS ENGINE IS EXEMPT UNDER 40 CFR 94.12( g) FROM EMISSION STANDARDS AND RELATED REQUIREMENTS.''.

Subpart B   [ Amended]

25. Section 94.104 is amended by redesignating paragraph ( c) as paragraph ( d) and adding a new paragraph ( c) to read as follows:

§ 94.104 Test procedures for Category 2 marine engines.

* * * * * ( c) Conduct testing at ambient temperatures from 13 ° C to 30 ° C. * * * * * 26. Section 94.105 is amended by revising paragraph ( b) text preceding Table B   1, revising ``#'' to read `` ± ' ' in footnotes 1 and 2 in the tables in paragraphs ( b), ( c)( 1), ( c)( 2), and ( d)( 1), and adding a new paragraph ( e) to read as follows:

§ 94.105 Duty cycles.

* * * * * ( b) General cycle. Propulsion engines that are used with ( or intended to be VerDate 0ct< 31> 2002 17: 09 Nov 07, 2002 Jkt 200001 PO 00000 Frm 00103 Fmt 4701 Sfmt 4700 E:\ FR\ FM\ 08NOR2. SGM 08NOR2 68344 Federal Register / Vol. 67, No. 217 / Friday, November 8, 2002 / Rules and Regulations used with) fixed pitch propellers, and any other engines for which the other duty cycles of this section do not apply, shall be tested using the duty cycle described in the following Table B   1: * * * * * ( e) Recreational. For the purpose of determining compliance with the emission standards of § 94.8, recreational engines shall be tested using the duty cycle described in Table B   5, which follows:

TABLE B   5.   RECREATIONAL MARINE DUTY CYCLE Mode No. Engine speed( 1)

( percent of maximum test speed) Percent of maximum test power( 2) Minimum time in mode ( minutes) Weighting factors 1 ....................................................................................................................... 100 100 5.0 0.08 2 ....................................................................................................................... 91 75 5.0 0.13 3 ....................................................................................................................... 80 50 5.0 0.17 4 ....................................................................................................................... 63 25 5.0 0.32 5 ....................................................................................................................... idle 0 5.0 0.30 1 Engine speed: ± 2 percent of point. 2 Power: ± 2 percent of engine maximum value.

27. Section 94.106 is amended by revising paragraphs ( b) introductory text, ( b)( 1) introductory text, ( b)( 2) introductory text, ( b)( 3) introductory text, and ( b)( 4) and adding a new paragraph ( b)( 5) to read as follows:

§ 94.106 Supplemental test procedures.

* * * * * ( b) The specified Not to Exceed Zones for marine engines are defined as follows. These Not to Exceed Zones apply, unless a modified zone is established under paragraph ( c) of this section. ( 1) For commercial Category 1 engines certified using the duty cycle specified in § 94.105( b), the Not to Exceed zones are defined as follows: * * * * * ( 2) For Category 2 engines certified using the duty cycle specified in § 94.105( b), the Not to Exceed zones are defined as follows: * * * * * ( 3) For engines certified using the duty cycle specified in § 94.105( c)( 2), the Not to Exceed zones are defined as follows: * * * * * ( 4) For engines certified using the duty cycle specified in § 94.105( c)( 1), the Not to Exceed zone is defined as any load greater than or equal to 25 percent of maximum power at rated speed, and any speed at which the engine operates in use. ( 5) For recreational marine engines certified using the duty cycle specified in § 94.105( e), the Not to Exceed zones are defined as follows: ( i) The Not to Exceed zone is the region between the curves power = 1.15 × SPD2 and power = 0.85 × SPD4, excluding all operation below 25% of maximum power at rated speed and excluding all operation below 63% of maximum test speed. ( ii) This zone is divided into three subzones, one below 45% of maximum power at maximum test speed; one above 95% of maximum test speed; and a third area including all of the remaining area of the NTE zone. ( iii) SPD in paragraph ( b)( 5)( i) of this section refers to percent of maximum test speed. ( iv) See Figure B   4 for an illustration of this Not to Exceed zone as follows:

BILLING CODE 6560   50   P VerDate 0ct< 31> 2002 17: 09 Nov 07, 2002 Jkt 200001 PO 00000 Frm 00104 Fmt 4701 Sfmt 4700 E:\ FR\ FM\ 08NOR2. SGM 08NOR2 68345 Federal Register / Vol. 67, No. 217 / Friday, November 8, 2002 / Rules and Regulations BILLING CODE 6560   50   C 28. Section 94.108 is amended in paragraph ( a)( 1) by revising footnote 1 in Table B   5 to read as follows: § 94.108 Test fuels.

( a) * * * ( 1) * * *

TABLE B   5.   FEDERAL TEST FUEL SPECIFICATIONS * * * * * * *

1 All ASTM procedures in this table have been incorporated by reference. See § 94.5. * * * * * * *

VerDate 0ct< 31> 2002 17: 09 Nov 07, 2002 Jkt 200001 PO 00000 Frm 00105 Fmt 4701 Sfmt 4700 E:\ FR\ FM\ 08NOR2. SGM 08NOR2 ER08NO02.003</ GPH> 68346 Federal Register / Vol. 67, No. 217 / Friday, November 8, 2002 / Rules and Regulations * * * * *

Subpart C   [ Amended]

29. Section 94.203 is amended by revising paragraphs ( d)( 14) and ( d)( 16) to read as follows:

§ 94.203 Application for certification.

* * * * * ( d) * * * ( 14) A statement that all the engines included in the engine family comply with the Not To Exceed standards specified in § 94.8( e) when operated under all conditions which may reasonably be expected to be encountered in normal operation and use; the manufacturer also must provide a detailed description of all testing, engineering analyses, and other information which provides the basis for this statement. * * * * * ( 16) A statement indicating duty cycle and application of the engine ( e. g., used to propel planing vessels, use to propel vessels with variable pitch propellers, constant speed auxiliary, recreational, etc.). * * * * * 30. Section 94.204 is amended by removing `` and'' at the end of paragraph ( b)( 9), adding ``; and'' at the end of paragraph ( b)( 10), adding a new paragraph ( b)( 11), and revising paragraph ( e) to read as follows:

§ 94.204 Designation of engine families.

* * * * * ( b) * * * ( 11) Class ( commercial or recreational). * * * * * ( e) Upon request by the manufacturer, the Administrator may allow engines that would be required to be grouped into separate engine families based on the criteria in paragraph ( b) or ( c) of this section to be grouped into a single engine family if the manufacturer demonstrates that the engines will have similar emission characteristics; however, recreational and commercial engines may not be grouped in the same engine family. This request must be accompanied by emission information supporting the appropriateness of such combined engine families. 31. Section 94.209 is revised to read as follows:

§ 94.209 Special provisions for postmanufacture marinizers and small volume manufacturers. ( a) Broader engine families. Instead of the requirements of § 94.204, an engine family may consist of any engines subject to the same emission standards. This does not change any of the requirements of this part for showing that an engine family meets emission standards. To be eligible to use the provisions of this paragraph ( a), the manufacturer must demonstrate one of the following: ( 1) It is a post manufacture marinizer and that the base engines used for modification have a valid certificate of conformity issued under 40 CFR part 89 or 40 CFR part 92 or the heavy duty engine provisions of 40 CFR part 86. ( 2) It is a small volume manufacturer. ( b) Hardship relief. Post manufacture marinizers, small volume manufacturers, and small volume boat builders may take any of the otherwise prohibited actions identified in § 94.1103( a)( 1) if approved in advance by the Administrator, subject to the following requirements: ( 1) Application for relief must be submitted to the Designated Officer in writing prior to the earliest date in which the applying manufacturer would be in violation of § 94.1103. The manufacturer must submit evidence showing that the requirements for approval have been met. ( 2) The conditions causing the impending violation must not be substantially the fault of the applying manufacturer. ( 3) The conditions causing the impending violation must jeopardize the solvency of the applying manufacturer if relief is not granted. ( 4) The applying manufacturer must demonstrate that no other allowances under this part will be available to avoid the impending violation. ( 5) Any relief may not exceed one year beyond the date relief is granted. ( 6) The Administrator may impose other conditions on the granting of relief including provisions to recover the lost environmental benefit. ( 7) The manufacturer must add a permanent, legible label, written in block letters in English, to a readily visible part of each engine exempted under this paragraph ( b). This label must include at least the following items: ( i) The label heading `` EMISSION CONTROL INFORMATION''. ( ii) Your corporate name and trademark. ( iii) Engine displacement ( in liters), rated power, and model year of the engine or whom to contact for further information. ( iv) The statement `` THIS ENGINE IS EXEMPT UNDER 40 CFR 94.209( b) FROM EMISSION STANDARDS AND RELATED REQUIREMENTS.''. ( c) Extension of deadlines. Smallvolume manufacturers may use the provisions of 40 CFR 1068.250 to ask for an extension of a deadline to meet emission standards. We may require that you use available base engines that have been certified to emission standards for land based engines until you are able to produce engines certified to the requirements of this part. 32. Section 94.212 is amended by revising paragraph ( b)( 10) to read as follows:

§ 94.212 Labeling.

* * * * * ( b) Engine labels. * * * ( 10) The application for which the engine family is certified. ( For example: constant speed auxiliary, variable speed propulsion engines used with fixedpitch propellers, recreational, etc.) * * * * * 33. Section 94.218 is amended by adding a new paragraph ( d)( 2)( iv) to read as follows:

§ 94.218 Deterioration factor determination.

* * * * * ( d) * * * ( 2) * * * ( iv) Assigned deterioration factors. Small volume manufacturers may use deterioration factors established by EPA.

Subpart D   [ Amended]

34. Section 94.304 is amended by revising paragraph ( k) to read as follows:

§ 94.304 Compliance requirements.

* * * * * ( k) The following provisions limit credit exchanges between different types of engines: ( 1) Credits generated by Category 1 engine families may be used for compliance by Category 1 or Category 2 engine families. Credits generated from Category 1 engine families for use by Category 2 engine families must be discounted by 25 percent. ( 2) Credits generated by Category 2 engine families may be used for compliance only by Category 2 engine families. ( 3) Credits may not be exchanged between recreational and commercial engines. * * * * *

Subpart F   [ Amended]

35. Section 94.501 is amended by revising paragraph ( a) to read as follows:

§ 94.501 Applicability.

( a) The requirements of this subpart are applicable to manufacturers of engines subject to the provisions of VerDate 0ct< 31> 2002 17: 09 Nov 07, 2002 Jkt 200001 PO 00000 Frm 00106 Fmt 4701 Sfmt 4700 E:\ FR\ FM\ 08NOR2. SGM 08NOR2 68347 Federal Register / Vol. 67, No. 217 / Friday, November 8, 2002 / Rules and Regulations Subpart A of this part, excluding smallvolume manufacturers. * * * * * 36. Section 94.503 is amended by adding a new paragraph ( d) to read as follows:

§ 94.503 General requirements.

* * * * * ( d) If you certify an engine family with carryover emission data, as described in § 94.206( c), and these equivalent engine families consistently pass the production line testing requirements over the preceding twoyear 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.

Subpart J   [ Amended]