cylinder displacement below 2.5 liters, if new emission standards start
to apply in a given year, we would consider an engine not to be covered
by a certificate of conformity for the preceding model year if the
engine is not assembled in a compliant configuration within 30 days
after the end of the model year for that engine family. (Note: an
engine is considered ``in a compliant configuration'' without being
fully assembled if Sec.  1068.260(a) or (b) authorizes shipment of the
engine without certain components.) For example, in the case where new
standards apply in the 2010 model year, and your normal production
period is based on the calendar year, you must complete the assembly of
all your 2009 model year engines before January 31, 2010, or an earlier
date consistent with your normal production and inventory practices.
For engines with per-cylinder displacement at or above 2.5 liters, this

time may not exceed 60 days. Note that for the purposes of this
paragraph (g), an engine shipped under Sec.  1068.261 is deemed to be a
complete engine. Note also that Sec.  1068.245 allows flexibility for
additional time in unusual circumstances. Note finally that disassembly
of complete engines and reassembly (such as for shipment) does not
affect the determination of model year; the provisions of this
paragraph (g) apply based on the date on which initial assembly is
complete.
    (h) This paragraph (h) describes the effect of suspending,
revoking, or voiding a certificate of conformity. See the definitions
of ``suspend,'' ``revoke,'' and ``void'' in Sec.  1068.30. Engines/
equipment produced at a time when the otherwise applicable certificate
of conformity has been suspended or revoked are not covered by a
certificate of conformity. Where a certificate of conformity is void,
all engines/equipment produced under that certificate of conformity are
not and were not covered by a certificate of conformity. In cases of
suspension, engines/equipment will be covered by a certificate only if
they are produced after the certificate is reinstated or a new
certificate is issued. In cases of revocation and voiding, engines/
equipment will be covered by a certificate only if they are produced
after we issue a new certificate. 42 U.S.C. 7522(a)(1) and Sec.
1068.101(a)(1) prohibit selling, offering for sale, introducing into
commerce, delivering for introduction into commerce, and importing
engines/equipment that are not covered by a certificate of conformity,
and they prohibit anyone from causing another to violate these
prohibitions.
    (i) You may transfer a certificate to another entity only in the
following cases:
    (1) You may transfer a certificate to a parent company, including a
parent company that purchases your company after we have issued your
certificate.
    (2) You may transfer a certificate to a subsidiary including a
subsidiary you purchase after we have issued your certificate.
    (3) You may transfer a certificate to a subsidiary of your parent
company.

0
332. Section 1068.105 is amended by revising paragraphs (a) and (c)(2)
to read as follows:

Sec.  1068.105  What other provisions apply to me specifically if I
manufacture equipment needing certified engines?

* * * * *
    (a) Transitioning to new engine-based standards. If new engine-
based emission standards apply in a given model year, your equipment
produced in that calendar year (or later) must have engines that are
certified to the new standards, except that you may continue to use up
normal inventories of engines that were built before the date of the
new or changed standards. For purposes of this paragraph (a), normal
inventory applies for engines you possess and engines from your engine
supplier's normal inventory. (Note: this paragraph (a) does not apply
in the case of new remanufacturing standards.) We may require you and
your engine suppliers to provide us routine production and/or inventory
records that document your normal practices for the preceding eight
years. For example, if you have records documenting that your normal
inventory practice is to keep on hand a one-month supply of engines
based on your upcoming production schedules, and a new tier of
standards starts to apply for the 2015 model year, you may order
engines consistent with your normal inventory requirements late in the
engine manufacturer's 2014 model year and install those engines in your
equipment consistent with your normal production schedule. Also, if
your model year starts before the end of the calendar year preceding
new standards, you may use engines from the previous model year for
those units you completely assemble before January 1 of the year that
new standards apply. If emission standards for the engine do not change
in a given model year, you may continue to install engines from the
previous model year without restriction (or any earlier model year for
which the same standards apply). You may not circumvent the provisions
of Sec.  1068.101(a)(1) by stockpiling engines that were built before
new or changed standards take effect. Similarly, you may not circumvent
the provisions of Sec.  1068.101(a)(1) by knowingly installing engines
that were stockpiled by engine suppliers in violation of Sec.
1068.103(f). Note that this allowance does not apply for equipment
subject to equipment-based standards. See 40 CFR 1060.601 for similar
provisions that apply for equipment subject to evaporative emission
standards. Note that the standard-setting part may impose further
restrictions on using up inventories of engines from an earlier model
year under this paragraph (a).
* * * * *
    (c) * * *
    (2) Permanently attach the duplicate label to your equipment by
securing it to a part needed for normal operation and not normally
requiring replacement. Make sure an average person can easily read it.
Note that attaching an inaccurate duplicate label may be a violation of
Sec.  1068.101(b)(7).
* * * * *

0
333. Section 1068.110 is amended by revising the section heading and
paragraph (d) to read as follows:

Sec.  1068.110  Other provisions for engines/equipment in service.

* * * * *
    (d) Defeat devices. We may test components, engines, and equipment
to investigate potential defeat devices. We may also require the
manufacturer to do this testing. If we choose to investigate one of
your designs, we may require you to show us that a component is not a
defeat device, and that an engine/equipment does not have a defeat
device. To do this, you may have to share with us information regarding
test programs, engineering evaluations, design specifications,
calibrations, on-board computer algorithms, and design strategies. It
is a violation of the Clean Air Act for anyone to make, install or use
defeat devices as described in Sec.  1068.101(b)(2) and the standard-
setting part.
* * * * *

0
334. Section 1068.115 is amended by revising the section heading to
read as follows:

Sec.  1068.115  What are manufacturers' emission-related warranty
requirements?

* * * * *

0
335. Section 1068.120 is amended by revising the section heading and
paragraph (f) to read as follows:

Sec.  1068.120  Requirements for rebuilding engines.

* * * * *
    (f) A rebuilt engine or other used engine may replace a certified
engine in a piece of equipment only if the engine was built and/or
rebuilt to a certified configuration meeting equivalent or more
stringent emission standards. Note that a certified configuration would
generally include more than one model year. A rebuilt engine being
installed that is from the same model year or a newer model year than
the engine being replaced meets this requirement. The following
examples illustrate the provisions of this paragraph (f):
    (1) In most cases, you may use a rebuilt Tier 2 engine to replace a
Tier 1 engine or another Tier 2 engine.
    (2) You may use a rebuilt Tier 1 engine to replace a Tier 2 engine
if the two engines differ only with respect to model year or other
characteristics unrelated to emissions since such engines would be
considered to be in the same configuration. This may occur if the Tier
1 engine had emission levels

below the Tier 2 standards or if the Tier 2 engine was certified with a
Family Emission Limit for calculating emission credits.
    (3) You may use a rebuilt engine that originally met the Tier 1
standards without certification, as provided under Sec.  1068.265, to
replace a certified Tier 1 engine. This may occur for engines produced
under a Transition Program for Equipment Manufacturers such as that
described in 40 CFR 1039.625.
    (4) You may never replace a certified engine with an engine rebuilt
to a configuration that does not meet EPA emission standards. Note
that, for purposes of this paragraph (f)(4), a configuration is
considered to meet EPA emission standards if it was previously
certified or was otherwise shown to meet emission standards (see Sec.
1068.265).
    (5) The standard-setting part may apply further restrictions to
situations involving installation of used engines to repower equipment.
For example, see 40 CFR part 1037 for provisions that apply for glider
vehicles.
* * * * *

0
336. Section 1068.125 is amended by revising paragraph (b) introductory
text to read as follows:

Sec.  1068.125  What happens if I violate the regulations?

* * * * *
    (b) Administrative penalties. Instead of bringing a civil action,
we may assess administrative penalties if the total is less than
$356,312 against you individually. This maximum penalty may be greater
if the Administrator and the Attorney General jointly determine that a
greater administrative penalty assessment is appropriate, or if the
limit is adjusted under 40 CFR part 19. No court may review this
determination. Before we assess an administrative penalty, you may ask
for a hearing as described in subpart G of this part. The Administrator
may compromise or remit, with or without conditions, any administrative
penalty that may be imposed under this section.
* * * * *

Subpart C--Exemptions and Exclusions

0
337. Section 1068.201 is amended by revising the section heading,
introductory text, and paragraphs (a) and (c) to read as follows:

Sec.  1068.201  General exemption and exclusion provisions.

    We may exempt new engines/equipment from some or all of the
prohibited acts or requirements of this part under provisions described
in this subpart. We may exempt nonroad engines/equipment already placed
in service in the United States from the prohibition in Sec.
1068.101(b)(1) if the exemption for nonroad engines/equipment used
solely for competition applies (see Sec.  1068.235). In addition, see
Sec.  1068.1 and the standard-setting parts to determine if other
engines/equipment are excluded from some or all of the regulations in
this chapter.
    (a) This subpart identifies which engines/equipment qualify for
exemptions and what information we need. We may require more
information.
* * * * *
    (c) If you use an exemption under this subpart, we may require you
to add a permanent or removable label to your exempted engines/
equipment. You may ask us to modify these labeling requirements if it
is appropriate for your engine/equipment.
* * * * *

0
338. Section 1068.210 is amended by revising the section heading and
paragraph (e) to read as follows:

Sec.  1068.210  Exempting test engines/equipment.

* * * * *
    (e) If we approve your request for a testing exemption, we will
send you a letter or a memorandum describing the basis and scope of the
exemption. It will also include any necessary terms and conditions,
which normally require you to do the following:
    (1) Stay within the scope of the exemption.
    (2) Create and maintain adequate records that we may inspect.
    (3) Add a permanent label to all engines/equipment exempted under
this section, consistent with Sec.  1068.45, with at least the
following items:
    (i) The label heading ``EMISSION CONTROL INFORMATION''.
    (ii) Your corporate name and trademark.
    (iii) Engine displacement, family identification, and model year of
the engine/equipment (as applicable), or whom to contact for further
information.
    (iv) The statement: ``THIS [engine, equipment, vehicle, etc.] IS
EXEMPT UNDER 40 CFR 1068.210 OR 1068.215 FROM EMISSION STANDARDS AND
RELATED REQUIREMENTS.''
    (4) Tell us when the test program is finished.
    (5) Tell us the final disposition of the engines/equipment.

0
339. Section 1068.215 is amended by revising the section heading and
paragraphs (a) and (c)(3)(iv) to read as follows:

Sec.  1068.215  Exempting manufacturer-owned engines/equipment.

    (a) You are eligible for this exemption for manufacturer-owned
engines/equipment only if you are a certificate holder. Any engine for
which you meet all applicable requirements under this section is exempt
without request.
* * * * *
    (c) * * *
    (3) * * *
    (iv) The statement: ``THIS [engine, equipment, vehicle, etc.] IS
EXEMPT UNDER 40 CFR 1068.210 OR 1068.215 FROM EMISSION STANDARDS AND
RELATED REQUIREMENTS.''

0
340. Section 1068.220 is revised to read as follows:

Sec.  1068.220  Exempting display engines/equipment.

    (a) Anyone may request an exemption for display engines/equipment.
    (b) Nonconforming display engines/equipment will be exempted if
they are used only for displays in the interest of a business or the
general public. This exemption does not apply to engines/equipment
displayed for private use, private collections, or any other purpose we
determine is inappropriate for a display exemption.
    (c) You may operate the exempted engine/equipment, but only if we
approve specific operation that is part of the display, or is necessary
for the display (possibly including operation that is indirectly
necessary for the display). We may consider any relevant factor in our
approval process, including the extent of the operation, the overall
emission impact, and whether the engine/equipment meets emission
requirements of another country.
    (d) You may sell or lease the exempted engine/equipment only with
our advance approval.
    (e) To use this exemption, you must add a permanent label to all
engines/equipment exempted under this section, consistent with Sec.
1068.45, with at least the following items:
    (1) The label heading ``EMISSION CONTROL INFORMATION''.
    (2) Your corporate name and trademark.
    (3) Engine displacement, family identification, and model year of
the engine/equipment (as applicable), or whom to contact for further
information.
    (4) The statement: ``THIS [engine, equipment, vehicle, etc.] IS
EXEMPT UNDER 40 CFR 1068.220 FROM EMISSION STANDARDS AND RELATED
REQUIREMENTS.''
    (f) We may set other conditions for approval of this exemption.

0
341. Section 1068.225 is revised to read as follows:

Sec.  1068.225  Exempting engines/equipment for national security.

    The standards and requirements of the standard-setting part and the
prohibitions in Sec.  1068.101(a)(1) and (b) do not apply to engines
exempted under this section.
    (a) An engine/equipment is exempt without a request if it will be
owned by an agency of the Federal Government responsible for national
defense and it meets at least one of the following criteria:
    (1) An engine is automatically exempt in cases where the equipment
in which it will be installed has armor, permanently attached weaponry,
or other substantial features typical of military combat. Similarly,
equipment subject to equipment-based standards is automatically exempt
if it has any of these same features.
    (2) In the case of marine vessels with compression-ignition
engines, an engine is automatically exempt if the vessel in which it
will be installed has specialized electronic warfare systems, unique
stealth performance requirements, or unique combat maneuverability
requirements.
    (3) Gas turbine engines installed in marine vessels are
automatically exempt.
    (4) An engine/equipment is automatically exempt if it would need
sulfur-sensitive technology to comply with emission standards, and it
is intended to be used in areas outside the United States where ultra
low-sulfur fuel is unavailable.
    (b) For the circumstances described in paragraphs (a)(1) and (2) of
this section, an engine/equipment is also exempt without a request if
it will be used, but not owned, by an agency of the Federal Government
responsible for national defense.
    (c) Manufacturers may produce and ship engines/equipment under an
automatic exemption as described in paragraph (a) or (b) of this
section if they receive a written request for such engines/equipment
from the appropriate federal agency.
    (d) Manufacturers may request a national security exemption for
engines/equipment not meeting the conditions of paragraphs (a) and (b)
of this section as long as the request is endorsed by an agency of the
Federal Government responsible for national defense. In your request,
explain why you need the exemption.
    (e) Add a permanent label to all engines/equipment exempted under
this section, consistent with Sec.  1068.45, with at least the
following items:
    (1) The label heading ``EMISSION CONTROL INFORMATION''.
    (2) Your corporate name and trademark.
    (3) Engine displacement, family identification, and model year of
the engine/equipment (as applicable), or whom to contact for further
information.
    (4) The statement: ``THIS [engine, equipment, vehicle, etc.] HAS AN
EXEMPTION FOR NATIONAL SECURITY UNDER 40 CFR 1068.225.''

0
342. Section 1068.230 is amended by revising the section heading and
paragraphs (b) and (c) to read as follows:

Sec.  1068.230  Exempting engines/equipment for export.

* * * * *
    (b) Engines/equipment exported to a country not covered by
paragraph (a) of this section are exempt from the prohibited acts in
this part without a request. If you produce exempt engines/equipment
for export and any of them are sold or offered for sale to an ultimate
purchaser in the United States, the exemption is automatically void for
those engines/equipment, except as specified in Sec.  1068.201(i). You
may operate engines/equipment in the United States only as needed to
prepare and deliver them for export.
    (c) Except as specified in paragraph (d) of this section, label
exempted engines/equipment (including shipping containers if the label
on the engine/equipment will be obscured by the container) with a label
showing that they are not certified for sale or use in the United
States. This label may be permanent or removable. See Sec.  1068.45 for
provisions related to the use of removable labels and applying labels
to containers without labeling individual engines/equipment. The label
must include your corporate name and trademark and the following
statement: ``THIS [engine, equipment, vehicle, etc.] IS SOLELY FOR
EXPORT AND IS THEREFORE EXEMPT UNDER 40 CFR 1068.230 FROM U.S. EMISSION
STANDARDS AND RELATED REQUIREMENTS.''
* * * * *

0
343. Section 1068.235 is revised to read as follows:

Sec.  1068.235  Exempting nonroad engines/equipment used solely for
competition.

    The following provisions apply for nonroad engines/equipment, but
not for motor vehicles or for stationary applications:
    (a) New nonroad engines/equipment you produce that are used solely
for competition are excluded from emission standards. We may exempt
(rather than exclude) new nonroad engines/equipment you produce that
you intend to be used solely for competition, where we determine that
such engines/equipment are unlikely to be used contrary to your intent.
See the standard-setting parts for specific provisions where
applicable. Note that the definitions in the standard-setting part may
deem uncertified engines/equipment to be new upon importation.
    (b) If you modify any nonroad engines/equipment after they have
been placed into service in the United States so they will be used
solely for competition, they are exempt without request. This exemption
applies only to the prohibitions in Sec.  1068.101(b)(1) and (2) and
are valid only as long as the engine/equipment is used solely for
competition. You may not use the provisions of this paragraph (b) to
circumvent the requirements that apply to the sale of new competition
engines under the standard-setting part.
    (c) If you modify any nonroad engines/equipment under paragraph (b)
of this section, you must destroy the original emission labels. If you
loan, lease, sell, or give any of these engines/equipment to someone
else, you must tell the new owner (or operator, if applicable) in
writing that they may be used only for competition.

0
344. Section 1068.240 is amended by revising the section heading and
paragraphs (b)(3), (c)(1), (c)(3), (d)(2)(ii), and (e) introductory
text to read as follows:

Sec.  1068.240  Exempting new replacement engines.

* * * * *
    (b) * * *
    (3) An old engine block replaced by a new engine exempted under
this paragraph (b) may be reintroduced into U.S. commerce as part of an
engine that meets either the current standards for new engines, the
provisions for new replacement engines in this section, or another
valid exemption. Otherwise, you must destroy the old engine block (or
confirm that it has been destroyed), or export the engine block without
its emission label.
* * * * *
    (c) * * *
    (1) You may produce a limited number of replacement engines under
this paragraph (c) representing 0.5 percent of your annual production
volumes for each category and subcategory of engines identified in
Table 1 to this section (1.0 percent through 2013). Calculate this
number by multiplying your annual U.S.-directed production volume by
0.005 (or 0.01

through 2013) and rounding to the nearest whole number. Determine the
appropriate production volume by identifying the highest total annual
U.S.-directed production volume of engines from the previous three
model years for all your certified engines from each category or
subcategory identified in Table 1 to this section, as applicable. In
unusual circumstances, you may ask us to base your production limits on
U.S.-directed production volume for a model year more than three years
prior. You may include stationary engines and exempted engines as part
of your U.S.-directed production volume. Include U.S.-directed engines
produced by any affiliated companies and those from any other companies
you license to produce engines for you.
* * * * *
    (3) Send the Designated Compliance Officer a report by September 30
of the year following any year in which you produced exempted
replacement engines under this paragraph (c). In your report include
the total number of replacement engines you produce under this
paragraph (c) for each category or subcategory, as appropriate, and the
corresponding total production volumes determined under paragraph
(c)(1) of this section. If you send us a report under this paragraph
(c)(3), you must also include the total number of replacement engines
you produced under paragraphs (b), (d), and (e) of this section
(including any replacement marine engines subject to reporting under 40
CFR 1042.615). Count exempt engines as tracked under paragraph (b) of
this section only if you meet all the requirements and conditions that
apply under paragraph (b) of this section by the due date for the
annual report. You may include the information required under this
paragraph (c)(3) in production reports required under the standard-
setting part.
* * * * *
    (d) * * *
    (2) * * *
    (ii) If you do not qualify for using a removable label in paragraph
(d)(2)(i) of this section, you must add a permanent label in a readily
visible location, though it may be obscured after installation in a
piece of equipment. Include on the permanent label your corporate name
and trademark, the engine's part number (or other identifying
information), and the statement: ``THIS REPLACEMENT ENGINE IS EXEMPT
UNDER 40 CFR 1068.240. THIS ENGINE MAY NOT BE INSTALLED IN EQUIPMENT
THAT IS MORE THAN 40 YEARS OLD AT THE TIME OF INSTALLATION.'' If there
is not enough space for this statement, you may alternatively add:
``REPLACEMENT'' or ``SERVICE ENGINE.'' For purposes of this paragraph
(d)(2), engine part numbers permanently stamped or engraved on the
engine are considered to be included on the label.
    (e) Partially complete current-tier replacement engines. The
provisions of paragraph (d) of this section apply for engines you
produce from a current line of certified engines or vehicles if you
ship them as partially complete engines for replacement purposes. This
applies for engine-based and equipment-based standards as follows:
* * * * *

0
345. Section 1068.245 is amended by revising the section heading and
paragraph (g)(4) to read as follows:

Sec.  1068.245  Temporary provisions addressing hardship due to unusual
circumstances.

* * * * *
    (g) * * *
    (4) A statement describing the engine's status as an exempted
engine:
    (i) If the engine/equipment does not meet any emission standards,
add the following statement: ``THIS [engine, equipment, vehicle, etc.]
IS EXEMPT UNDER 40 CFR 1068.245 FROM EMISSION STANDARDS AND RELATED
REQUIREMENTS.''
    (ii) If the engines/equipment meet alternate emission standards as
a condition of an exemption under this section, we may specify a
different statement to identify the alternate emission standards.

0
346. Section 1068.250 is amended by revising the section heading and
paragraphs (c) introductory text and (k)(4) and removing and reserving
paragraph (h).
    The revisions read as follows:

Sec.  1068.250  Extending compliance deadlines for small businesses
under hardship.

* * * * *
    (c) Send the Designated Compliance Officer a written request for an
extension as soon as possible before you are in violation. In your
request, show that all the following conditions and requirements apply:
* * * * *
    (k) * * *
    (4) A statement describing the engine's status as an exempted
engine:
    (i) If the engine/equipment does not meet any emission standards,
add the following statement:``THIS [engine, equipment, vehicle, etc.]
IS EXEMPT UNDER 40 CFR 1068.250 FROM EMISSION STANDARDS AND RELATED
REQUIREMENTS.''
    (ii) If the engine/equipment meets alternate emission standards as
a condition of an exemption under this section, we may specify a
different statement to identify the alternate emission standards.

0
347. Section 1068.255 is amended by revising the section heading and
paragraph (a) introductory text to read as follows:

Sec.  1068.255  Exempting engines and fuel-system components for
hardship for equipment manufacturers and secondary engine
manufacturers.

* * * * *
    (a) Equipment exemption. As an equipment manufacturer, you may ask
for approval to produce exempted equipment for up to 12 months. We will
generally limit this to a single interval up to 12 months in the first
year that new or revised emission standards apply. Exemptions under
this section are not limited to small businesses. Send the Designated
Compliance Officer a written request for an exemption before you are in
violation. In your request, you must show you are not at fault for the
impending violation and that you would face serious economic hardship
if we do not grant the exemption. This exemption is not available under
this paragraph (a) if you manufacture the engine or fuel-system
components you need for your own equipment, or if complying engines or
fuel-system components are available from other manufacturers that
could be used in your equipment, unless we allow it elsewhere in this
chapter. We may impose other conditions, including provisions to use
products meeting less stringent emission standards or to recover the
lost environmental benefit. In determining whether to grant the
exemptions, we will consider all relevant factors, including the
following:
* * * * *

0
348. Section 1068.260 is revised to read as follows:

Sec.  1068.260  General provisions for selling or shipping engines that
are not yet in their certified configuration.

    Except as specified in paragraph (e) of this section, all new
engines in the United States are presumed to be subject to the
prohibitions of Sec.  1068.101, which generally require that all new
engines be in a certified configuration before being sold, offered for
sale, or introduced or delivered into commerce in the United States or
imported into the United States. All emission-related components
generally need to be installed on an

engine for such an engine to be in its certified configuration. This
section specifies clarifications and exemptions related to these
requirements for engines. Except for paragraph (c) of this section, the
provisions of this section generally apply for engine-based standards
but not for equipment-based exhaust emission standards.
    (a) The provisions of this paragraph (a) apply for emission-related
components that cannot practically be assembled before shipment because
they depend on equipment design parameters.
    (1) You do not need an exemption to ship an engine that does not
include installation or assembly of certain emission-related components
if those components are shipped along with the engine. For example, you
may generally ship aftertreatment devices along with engines rather
than installing them on the engine before shipment. We may require you
to describe how you plan to use this provision.
    (2) You may ask us at the time of certification for an exemption to
allow you to ship your engines without emission-related components. If
we allow this, we may specify conditions that we determine are needed
to ensure that shipping the engine without such components will not
result in the engine being operated outside of its certified
configuration. You must identify unshipped parts by specific part
numbers if they cannot be properly characterized by performance
specification. For example, electronic control units, turbochargers,
and EGR coolers must generally be identified by part number. Parts that
we believe can be properly characterized by performance specification
include air filters, noncatalyzed mufflers, and charge air coolers. See
paragraph (d) of this section for additional provisions that apply in
certain circumstances.
    (b) You do not need an exemption to ship engines without specific
components if they are not emission-related components identified in
Appendix I of this part. For example, you may generally ship engines
without the following parts:
    (1) Radiators needed to cool the engine.
    (2) Exhaust piping between the engine and an aftertreatment device,
between two aftertreatment devices, or downstream of the last
aftertreatment device.
    (c) If you are a certificate holder, partially complete engines/
equipment shipped between two of your facilities are exempt, subject to
the provisions of this paragraph (c), as long as you maintain ownership
and control of the engines/equipment until they reach their
destination. We may also allow this where you do not maintain actual
ownership and control of the engines/equipment (such as hiring a
shipping company to transport the engines) but only if you demonstrate
that the engines/equipment will be transported only according to your
specifications. See Sec.  1068.261(b) for the provisions that apply
instead of this paragraph (c) for the special case of integrated
manufacturers using the delegated-assembly exemption. Notify us of your
intent to use this exemption in your application for certification, if
applicable. Your exemption is effective when we grant your certificate.
You may alternatively request an exemption in a separate submission;
for example, this would be necessary if you will not be the certificate
holder for the engines in question. We may require you to take specific
steps to ensure that such engines/equipment are in a certified
configuration before reaching the ultimate purchaser. Note that since
this is a temporary exemption, it does not allow you to sell or
otherwise distribute to ultimate purchasers an engine/equipment in an
uncertified configuration with respect to exhaust emissions. Note also
that the exempted engine/equipment remains new and subject to emission
standards (see definition of ``exempted'' in Sec.  1068.30) until its
title is transferred to the ultimate purchaser or it otherwise ceases
to be new.
    (d) See Sec.  1068.261 for delegated-assembly provisions in which
certificate-holding manufacturers ship engines that are not yet
equipped with certain emission-related components. See Sec.  1068.262
for provisions related to manufacturers shipping partially complete
engines for which a secondary engine manufacturer holds the certificate
of conformity.
    (e) Engines used in hobby vehicles are not presumed to be engines
subject to the prohibitions of Sec.  1068.101. Hobby vehicles are
reduced-scale models of vehicles that are not capable of transporting a
person. Some gas turbine engines are subject to the prohibitions of
Sec.  1068.101, but we do not presume that all gas turbine engines are
subject to these prohibitions. Other engines that do not have a valid
certificate of conformity or exemption when sold, offered for sale, or
introduced or delivered into commerce in the United States or imported
into the United States are presumed to be engines subject to the
prohibitions of Sec.  1068.101 unless we determine that such engines
are excluded from the prohibitions of Sec.  1068.101.
    (f) While we presume that new non-hobby engines are subject to the
prohibitions of Sec.  1068.101, we may determine that a specific engine
is not subject to these prohibitions based on information you provide
or other information that is available to us. For example, the
provisions of this part 1068 and the standard-setting parts provide for
exemptions in certain circumstances. Also, some engines may be subject
to separate prohibitions under subchapter C instead of the prohibitions
of Sec.  1068.101.

0
349. Section 1068.261 is amended by revising the section heading and
paragraph (a) to read as follows:

Sec.  1068.261   Delegated assembly and other provisions related to
engines not yet in the certified configuration.

* * * * *
    (a) Shipping an engine separately from an aftertreatment component
that you have specified as part of its certified configuration will not
be a violation of the prohibitions in Sec.  1068.101(a)(1) subject to
the provisions in this section. We may also require that you apply some
or all of the provisions of this section for other components if we
determine it is necessary to ensure that shipping the engine without
such components will not result in the engine being operated outside of
its certified configuration. In making this determination, we will
consider the importance of the component for controlling emissions and
the likelihood that equipment manufacturers will have an incentive to
disregard your emission-related installation instructions based on any
relevant factors, such as the cost of the component and any real or
perceived expectation of a negative impact on engine or equipment
performance.
* * * * *

0
350. Section 1068.262 is revised to read as follows:

Sec.  1068.262  Shipment of engines to secondary engine manufacturers.

    This section specifies how manufacturers may introduce into U.S.
commerce partially complete engines that have an exemption or a
certificate of conformity held by a secondary engine manufacturer and
are not yet in a certified configuration. See the standard-setting part
to determine whether and how the provisions of this section apply.
(Note: See Sec.  1068.261 for provisions related to manufacturers
introducing into U.S. commerce partially complete engines for which
they hold the certificate of conformity.) This exemption is temporary
as

described in paragraph (g) of this section.
    (a) The provisions of this section generally apply where the
secondary engine manufacturer has substantial control over the design
and assembly of emission controls. In unusual circumstances we may
allow other secondary engine manufacturers to use these provisions. In
determining whether a manufacturer has substantial control over the
design and assembly of emission controls, we would consider the degree
to which the secondary engine manufacturer would be able to ensure that
the engine will conform to the regulations in its final configuration.
Such secondary engine manufacturers may finish assembly of partially
complete engines in the following cases:
    (1) You obtain an engine that is not fully assembled with the
intent to manufacture a complete engine.
    (2) You obtain an engine with the intent to modify it before it
reaches the ultimate purchaser.
    (3) You obtain an engine with the intent to install it in equipment
that will be subject to equipment-based standards.
    (b) Manufacturers may introduce into U.S. commerce partially
complete engines as described in this section if they have a written
request for such engines from a secondary engine manufacturer that has
certified the engine and will finish the engine assembly. The written
request must include a statement that the secondary engine manufacturer
has a certificate of conformity for the engine and identify a valid
engine family name associated with each engine model ordered (or the
basis for an exemption if applicable, as specified in paragraph (e) of
this section). The original engine manufacturer must apply a removable
label meeting the requirements of Sec.  1068.45 that identifies the
corporate name of the original manufacturer and states that the engine
is exempt under the provisions of Sec.  1068.262. The name of the
certifying manufacturer must also be on the label or, alternatively, on
the bill of lading that accompanies the engines during shipment. The
original engine manufacturer may not apply a permanent emission control
information label identifying the engine's eventual status as a
certified engine.
    (c) If you are the secondary engine manufacturer and you will hold
the certificate, you must include the following information in your
application for certification:
    (1) Identify the original engine manufacturer of the partially
complete engine or of the complete engine you will modify.
    (2) Describe briefly how and where final assembly will be
completed. Specify how you have the ability to ensure that the engines
will conform to the regulations in their final configuration. (Note:
Paragraph (a) of this section prohibits using the provisions of this
section unless you have substantial control over the design and
assembly of emission controls.)
    (3) State unconditionally that you will not distribute the engines
without conforming to all applicable regulations.
    (d) If you are a secondary engine manufacturer and you are already
a certificate holder for other families, you may receive shipment of
partially complete engines after you apply for a certificate of
conformity but before the certificate's effective date. In this case,
all the provisions of Sec.  1068.103(c)(1) through (3) apply. This
exemption allows the original manufacturer to ship engines after you
have applied for a certificate of conformity. Manufacturers may
introduce into U.S. commerce partially complete engines as described in
this paragraph (d) if they have a written request for such engines from
a secondary engine manufacturer stating that the application for
certification has been submitted (instead of the information we specify
in paragraph (b) of this section). We may set additional conditions
under this paragraph (d) to prevent circumvention of regulatory
requirements. Consistent with Sec.  1068.103(c), we may also revoke an
exemption under this paragraph (d) if we have reason to believe that
the application for certification will not be approved or that the
engines will otherwise not reach a certified configuration before
reaching the ultimate purchaser. This may require that you export the
engines.
    (e) The provisions of this section also apply for shipping
partially complete engines if the engine is covered by a valid
exemption and there is no valid engine family name that could be used
to represent the engine model. Unless we approve otherwise in advance,
you may do this only when shipping engines to secondary engine
manufacturers that are certificate holders. In this case, the secondary
engine manufacturer must identify the regulatory cite identifying the
applicable exemption instead of a valid engine family name when
ordering engines from the original engine manufacturer.
    (f) If secondary engine manufacturers determine after receiving an
engine under this section that the engine will not be covered by a
certificate or exemption as planned, they may ask us to allow for
shipment of the engines back to the original engine manufacturer or to
another secondary engine manufacturer. This might occur in the case of
an incorrect shipment or excess inventory. We may modify the provisions
of this section as appropriate to address these cases.
    (g) Both original and secondary engine manufacturers must keep the
records described in this section for at least five years, including
the written request for engines and the bill of lading for each
shipment (if applicable). The written request is deemed to be a
submission to EPA and is thus subject to the reporting requirements of
Sec.  1068.101(a)(2).
    (h) These provisions are intended only to allow secondary engine
manufacturers to obtain or transport engines in the specific
circumstances identified in this section so any exemption under this
section expires when the engine reaches the point of final assembly
identified in paragraph (c)(2) of this section.
    (i) For purposes of this section, an allowance to introduce
partially complete engines into U.S. commerce includes a conditional
allowance to sell, introduce, or deliver such engines into commerce in
the United States or import them into the United States. It does not
include a general allowance to offer such partially complete engines
for sale because this exemption is intended to apply only for cases in
which the certificate holder already has an arrangement to purchase the
engines from the original engine manufacturer. This exemption does not
allow the original engine manufacturer to subsequently offer the
engines for sale to a different manufacturer who will hold the
certificate unless that second manufacturer has also complied with the
requirements of this part. The exemption does not apply for any
individual engines that are not labeled as specified in this section or
which are shipped to someone who is not a certificate holder.
    (j) We may suspend, revoke, or void an exemption under this
section, as follows:
    (1) We may suspend or revoke your exemption if you fail to meet the
requirements of this section. We may suspend or revoke an exemption
related to a specific secondary engine manufacturer if that
manufacturer sells engines that are in not in a certified configuration
in violation of the regulations. We may disallow this exemption for
future shipments to the affected secondary engine manufacturer or set
additional conditions to ensure that engines will be assembled in the
certified configuration.

    (2) We may void an exemption for all the affected engines if you
intentionally submit false or incomplete information or fail to keep
and provide to EPA the records required by this section.
    (3) The exemption is void for an engine that is shipped to a
company that is not a certificate holder or for an engine that is
shipped to a secondary engine manufacturer that is not in compliance
with the requirements of this section.
    (4) The secondary engine manufacturer may be liable for causing a
prohibited act if voiding the exemption is due to its own actions.
    (k) No exemption is needed to import equipment that does not
include an engine. No exemption from exhaust emission standards is
available under this section for equipment subject to equipment-based
standards if the engine has been installed.

0
351. Section 1068.265 is amended by revising the section heading to
read as follows:

Sec.  1068.265  Provisions for engines/equipment conditionally exempted
from certification.

* * * * *

Subpart D--Imports

0
352. Section 1068.301 is amended by revising the section heading and
paragraphs (b) and (d) and adding paragraph (e) to read as follows:

Sec.  1068.301  General provisions for importing engines/equipment.

* * * * *
    (b) In general, engines/equipment that you import must be covered
by a certificate of conformity unless they were built before emission
standards started to apply. This subpart describes the limited cases
where we allow importation of exempt or excluded engines/equipment. If
an engine has an exemption from exhaust emission standards, this allows
you to import the equipment under the same exemption.
* * * * *
    (d) Complete the appropriate EPA declaration before importing any
engines or equipment. These forms may be submitted and stored
electronically and are available on the Internet at http://www.epa.gov/OTAQ/imports/ or by phone at<PHONE_NUMBER>. Importers must keep these
records for five years and make them available promptly upon request.
    (e) The standard-setting part may define uncertified engines/
equipment to be ``new'' upon importation, whether or not they have
already been placed into service. This may affect how the provisions of
this subpart apply for your engines/equipment. (See the definition of
``new'' and other relevant terms in the standard-setting part.)

0
353. Section 1068.305 is amended by revising paragraphs (b)(1) and (2)
to read as follows:

Sec.  1068.305  How do I get an exemption or exclusion for imported
engines/equipment?

* * * * *
    (b) * * *
    (1) Give your name, address, and telephone number.
    (2) Give the engine/equipment owner's name, address, and telephone
number.
* * * * *

0
354. Section 1068.310 is amended by revising the section heading and
paragraph (a) to read as follows:

Sec.  1068.310  Exclusions for imported engines/equipment.

* * * * *
    (a) Nonroad engines/equipment used solely for competition. Nonroad
engines/equipment that you demonstrate will be used solely for
competition are excluded from the restrictions on imports in Sec.
1068.301(b), but only if they are properly labeled. See the standard-
setting part for provisions related to this demonstration that may
apply. Section 1068.101(b)(4) prohibits anyone from using these
excluded engines/equipment for purposes other than competition. We may
waive the labeling requirement or allow a removable label for engines/
equipment that are being temporarily imported for one or more specific
competition events.
* * * * *

0
355. Section 1068.315 is amended by revising the section heading and
paragraph (i) to read as follows:

Sec.  1068.315  Permanent exemptions for imported engines/equipment.

* * * * *
    (i) Ancient engine/equipment exemption. If you are not the original
engine/equipment manufacturer, you may import nonconforming engines/
equipment that are subject to a standard-setting part and were first
manufactured at least 21 years earlier, as long as they are still
substantially in their original configurations.

0
356. Section 1068.325 is amended by revising the section heading,
introductory text, and paragraphs (a), (c), (d), and (j)(5) to read as
follows:

Sec.  1068.325  Temporary exemptions for imported engines/equipment.

    You may import engines/equipment under certain temporary
exemptions, subject to the conditions in this section. We may ask U.S.
Customs and Border Protection to require a specific bond amount to make
sure you comply with the requirements of this subpart. You may not sell
or lease one of these engines/equipment while it is in the United
States except as specified in this section or Sec.  1068.201(i). You
must eventually export the engine/equipment as we describe in this
section unless it conforms to a certificate of conformity or it
qualifies for one of the permanent exemptions in Sec.  1068.315 or the
standard-setting part.
    (a) Exemption for repairs or alterations. You may temporarily
import nonconforming engines/equipment under bond solely for repair or
alteration, subject to our advance approval as described in paragraph
(j) of this section. You may operate the engine/equipment in the United
States only as necessary to repair it, alter it, or ship it to or from
the service location. Export the engine/equipment directly after
servicing is complete, or confirm that it has been destroyed.
* * * * *
    (c) Display exemption. You may temporarily import nonconforming
engines/equipment under bond for display if you follow the requirements
of Sec.  1068.220, subject to our advance approval as described in
paragraph (j) of this section. This exemption expires one year after
you import the engine/equipment, unless we approve your request for an
extension. The engine/equipment must be exported (or destroyed) by the
time the exemption expires or directly after the display concludes,
whichever comes first.
    (d) Export exemption. You may temporarily import nonconforming
engines/equipment to export them, as described in Sec.  1068.230. Label
the engine/equipment as described in Sec.  1068.230. You may sell or
lease the engines/equipment for operation outside the United States
consistent with the provisions of Sec.  1068.230.
* * * * *
    (j) * * *
    (5) Acknowledge that EPA enforcement officers may conduct
inspections or testing as allowed under the Clean Air Act.
* * * * *

0
357. Section 1068.335 is amended by revising the section heading to
read as follows:

Sec.  1068.335  Penalties for violations.

* * * * *

0
358. Section 1068.360 is amended by revising the section heading and
paragraph (b) to read as follows:

Sec.  1068.360  Restrictions for assigning a model year to imported
engines and equipment.

* * * * *
    (b) This paragraph (b) applies for the importation of engines and
equipment that have not been placed into service, where the importation
occurs in any calendar year that is more than one year after the named
model year of the engine or equipment when emission control
requirements applying to current engines are different than for engines
or equipment in the named model year, unless they are imported under
special provisions for Independent Commercial Importers as allowed
under the standard-setting part. Regardless of what other provisions of
this subchapter U specify for the model year of the engine or
equipment, such engines and equipment are deemed to have an applicable
model year no more than one year earlier than the calendar year in
which they are imported. For example, a new engine identified as a 2007
model-year product that is imported on January 31, 2010 will be treated
as a 2009 model-year engine; the same engine will be treated as a 2010
model-year engine if it is imported any time in calendar year 2011.
* * * * *

Subpart E--Selective Enforcement Auditing

0
359. Section 1068.401 is revised to read as follows:

Sec.  1068.401  What is a selective enforcement audit?

    (a) We may conduct or require you as a certificate holder to
conduct emission tests on production engines/equipment in a selective
enforcement audit. This requirement is independent of any requirement
for you to routinely test production-line engines/equipment. Where
there are multiple entities meeting the definition of manufacturer, we
may require manufacturers other than the certificate holder to conduct
or participate in the audit as necessary. For products subject to
equipment-based standards, but tested using engine-based test
procedures, this subpart applies to the engines and/or the equipment,
as applicable. Otherwise this subpart applies to engines for products
subject to engine-based standards and to equipment for products subject
to equipment-based standards.
    (b) If we send you a signed test order, you must follow its
directions and the provisions of this subpart. We may tell you where to
test the engines/equipment. This may be where you produce the engines/
equipment or any other emission testing facility. You are responsible
for all testing costs whether the testing is conducted at your facility
or another facility.
    (c) If we select one or more of your families for a selective
enforcement audit, we will send the test order to the person who signed
the application for certification or we will deliver it in person.
    (d) If we do not select a testing facility, notify the Designated
Compliance Officer within one working day of receiving the test order
where you will test your engines/equipment.
    (e) You must do everything we require in the audit without delay.
We may suspend or revoke your certificate of conformity for the
affected engine families if you do not fulfill your obligations under
this subpart.

0
360. Section 1068.405 is amended by revising paragraph (a)(1) to read
as follows:

Sec.  1068.405  What is in a test order?

    (a) * * *
    (1) The family we have identified for testing. We may also specify
individual configurations.
* * * * *

0
361. Section 1068.415 is amended by revising paragraphs (c) and (d) to
read as follows:

Sec.  1068.415  How do I test my engines/equipment?

* * * * *
    (c) Test at least two engines/equipment in each 24-hour period
(including void tests). However, for engines with maximum engine power
above 560 kW, you may test one engine per 24-hour period. If you
request and justify it, we may approve a lower testing rate.
    (d) For exhaust emissions, accumulate service on test engines/
equipment at a minimum rate of 6 hours per engine or piece of equipment
during each 24-hour period; however, service accumulation to stabilize
an engine's emission levels may not take longer than eight days. The
first 24-hour period for service accumulation begins when you finish
preparing an engine or piece of equipment for testing. The minimum
service accumulation rate does not apply on weekends or holidays. We
may approve a longer stabilization period or a lower service
accumulation rate if you request and justify it. We may require you to
accumulate hours more rapidly than the minimum rate, as appropriate.
Plan your service accumulation to allow testing at the rate specified
in paragraph (c) of this section. Select operation for accumulating
operating hours on your test engines/equipment to represent normal in-
use operation for the family.
* * * * *

0
362. Section 1068.420 is amended by revising paragraphs (b) and (e) to
read as follows:

Sec.  1068.420  How do I know when my engine family fails an SEA?

* * * * *
    (b) Continue testing engines/equipment until you reach a pass
decision for all pollutants or a fail decision for one pollutant, as
described in paragraph (c) of this section.
* * * * *
    (e) If you reach a pass decision for one pollutant, but need to
continue testing for another pollutant, we will not use these later
test results for the pollutant with the pass decision as part of the
SEA.
* * * * *

0
363. Section 1068.425 is amended by revising paragraph (b) to read as
follows:

Sec.  1068.425  What happens if one of my production-line engines/
equipment exceeds the emission standards?

* * * * *
    (b) You may ask for a hearing relative to the suspended certificate
of conformity for the failing engine/equipment as specified in subpart
G of this part.

0
364. Section 1068.430 is amended by revising paragraph (c) to read as
follows:

Sec.  1068.430  What happens if a family fails an SEA?

* * * * *
    (c) You may ask for a hearing as described in subpart G of this
part up to 15 days after we suspend the certificate for a family. If we
agree that we used erroneous information in deciding to suspend the
certificate before a hearing is held, we will reinstate the
certificate.

0
365. Section 1068.450 is amended by revising paragraph (b) to read as
follows:

Sec.  1068.450  What records must I send to EPA?

* * * * *
    (b) We may ask you to add information to your written report, so we
can determine whether your new engines/equipment conform to the
requirements of this subpart.
* * * * *

Subpart F--Reporting Defects and Recalling Engines/Equipment

0
366. Section 1068.501 is amended by revising paragraphs (a)(1)(iv),
(a)(8), and (b)(1)(iii) to read as follows:

Sec.  1068.501  How do I report emission-related defects?

* * * * *
    (a) * * *
    (1) * * *
    (iv) Any other component whose failure would commonly increase
emissions of any regulated pollutant without significantly degrading
engine/equipment performance.
* * * * *
    (8) Send all reports required by this section to the Designated
Compliance Officer.
* * * * *
    (b) * * *
    (1) * * *
    (iii) You receive any other information for which good engineering
judgment would indicate the component or system may be defective, such
as information from dealers, field-service personnel, equipment
manufacturers, hotline complaints, in-use testing, or engine diagnostic
systems.
* * * * *

0
367. Section 1068.505 is amended by revising paragraphs (a), (c), and
(g) to read as follows:

Sec.  1068.505  How does the recall program work?

    (a) If we make a determination that a substantial number of
properly maintained and used engines/equipment within a given class or
category do not conform to the regulations of this chapter during their
useful life, you must submit a plan to remedy the nonconformity of your
engines/equipment. We will notify you of our determination in writing.
Our notice will identify the class or category of engines/equipment
affected and describe how we reached our conclusion. If this happens,
you must meet the requirements and follow the instructions in this
subpart. You must remedy at your expense all engines/equipment that
experienced the nonconformity during the useful life in spite of being
properly maintained and used, as described in Sec.  1068.510(a)(7),
regardless of their age or extent of service accumulation at the time
of repair. You may not transfer this expense to a dealer (or equipment
manufacturer for engine-based standards) through a franchise or other
agreement.
* * * * *
    (c) Unless we withdraw the determination of noncompliance, you must
respond to it by sending a remedial plan to the Designated Compliance
Officer. We will designate a date by which you must send us the
remedial plan; the designated date will be no sooner than 45 days after
we notify you, and no sooner than 30 days after a hearing.
* * * * *
    (g) For purposes of recall, ``owner'' means someone who owns an
engine or piece of equipment affected by a remedial plan.

0
368. Section 1068.510 is amended by revising paragraphs (a)(6), (b),
and (h) to read as follows:

Sec.  1068.510  How do I prepare and apply my remedial plan?

    (a) * * *
    (6) How you will notify owners; include a copy of any notification
letters.
* * * * *
    (b) We may require you to add information if it is needed to
evaluate your remedial plan.
* * * * *
    (h) Begin notifying owners within 15 days after we approve your
remedial plan. If we hold a hearing, but do not change our position
about the noncompliance, you must begin notifying owners within 60 days
after we complete the hearing unless we specify a later deadline.

0
369. Section 1068.515 is amended by revising paragraphs (a) and (c) to
read as follows:

Sec.  1068.515  How do I mark or label repaired engines/equipment?

    (a) Attach a label to engines/equipment you repair under the
remedial plan. At your discretion, you may label or mark engines/
equipment you inspect but do not repair. Designate the specific recall
campaign on the label.
* * * * *
    (c) Identify the facility where you repaired or inspected the
engine/equipment on the label, or keep records of this information for
each vehicle and give it to us if we ask for it.
* * * * *

0
370. Section 1068.520 is amended by revising paragraph (b) to read as
follows:

Sec.  1068.520   How do I notify affected owners?

* * * * *
    (b) We may require you to add information to your notice or to send
more notices if we determine this is reasonable and necessary to ensure
an effective recall.
* * * * *

0
371. Section 1068.530 is amended by revising the introductory text to
read as follows:

Sec.  1068.530  What records must I keep?

    We may review your records at any time so it is important that you
keep required information readily available. Keep records associated
with your recall campaign for five years after you send the last report
we require under Sec.  1068.525(b). Organize and maintain your records
as described in this section.
* * * * *

0
372. Subpart G is revised to read as follows:
Subpart G--Hearings
Sec.
1068.601 Overview.
1068.610 Request for hearing--suspending, revoking, or voiding a
certificate of conformity.
1068.615 Request for hearing--denied application for certification,
automatically suspended certificate, and determinations related to
certification.
1068.620 Request for hearing--recall.
1068.625 Request for hearing--nonconformance penalties.
1068.650 Procedures for informal hearings.

Subpart G--Hearings

Sec.  1068.601  Overview.

    The regulations of this chapter involve numerous provisions that
may result in EPA making a decision or judgment that you may consider
adverse to your interests and that either limits your business
activities or requires you to pay penalties. As specified in the
regulations in this chapter, this might involve an opportunity for an
informal hearing or a formal hearing that follows specific procedures
and is directed by a Presiding Officer. The regulations in this chapter
generally specify when we would hold a hearing. In limited
circumstances, we may grant a request for a hearing related to adverse
decisions regarding regulatory provisions for which we do not
specifically describe the possibility of asking for a hearing.
    (a) If you request a hearing regarding our decision to assess
administrative penalties under Sec.  1068.125, we will hold a formal
hearing according to the provisions of 40 CFR 22.1 through 22.32 and
22.34.
    (b) For other issues where the regulation allows for a hearing in
response to an adverse decision, you may request an informal hearing as
described in Sec.  1068.650. Sections 1068.610 through 1068.625
describe when and how to request an informal hearing under various
circumstances.
    (c) The time limits we specify are calendar days and include
weekends and holidays, except that a deadline falling on a Saturday,
Sunday, or a

federal holiday is understood to move to the next business day. Your
filing will be considered timely based on the following criteria
relative to the specified deadline:
    (1) The postmarked date for items sent by U.S. mail must be on or
before the specified date.
    (2) The ship date for items sent from any location within the
United States by commercial carriers must be on or before the specified
date.
    (3) Items sent by mail or courier from outside the United States
must be received by the specified date.
    (4) The time and date stamp on an email message must be at or
before 5:00 p.m. on the specified date (in either the source or
destination time zone).
    (5) The time and date stamp on faxed pages must be at or before
5:00 p.m. on the specified date (in either the source or destination
time zone).
    (6) Hand-delivered items must be received by the appropriate
personnel by 3:00 p.m. on the specified date.
    (d) See the standard-setting part for additional information. If
the standard-setting part specifies any provisions that are contrary to
those described in this subpart, the provisions of the standard-setting
part apply instead of those described in this subpart.

Sec.  1068.610  Request for hearing--suspending, revoking, or voiding a
certificate of conformity.

    (a) You may request an informal hearing as described in Sec.
1068.650 if you disagree with our decision to suspend, revoke, or void
a certificate of conformity.
    (b) If you request a hearing regarding the outcome of a testing
regimen with established evaluation criteria, such as selective
enforcement audits or routine production-line testing, we will hold a
hearing limited to the following issues that are relevant to your
circumstances:
    (1) Whether tests were conducted in accordance with applicable
regulations.
    (2) Whether test equipment was properly calibrated and functioning.
    (3) Whether specified sampling procedures were followed to select
engines/equipment for testing.
    (4) Whether there is a basis for determining that the problems
identified do not apply for engines/equipment produced at plants other
than the one from which engines/equipment were selected for testing.
    (c) You must send your hearing request in writing to the Designated
Compliance Officer no later than 30 days after we notify you of our
decision to suspend, revoke, or void your certificate, or by some later
deadline we specify. If the deadline passes, we may nevertheless grant
you a hearing at our discretion.
    (d) Your hearing request must include the following information:
    (1) Identify the classes or categories of engines/equipment that
will be the subject of the hearing.
    (2) State briefly which issues you will raise at the hearing for
each affected class or category of engines/equipment.
    (3) Specify why you believe the hearing will conclude in your favor
for each of the issues you will raise.
    (4) Summarize the evidence supporting your position on each of the
issues you will raise and include any supporting data.
    (e) We will approve your request for an informal hearing if we find
that your request raises a substantial factual issue in the decision we
made that, if addressed differently, could alter the outcome of that
decision.

Sec.  1068.615  Request for hearing--denied application for
certification, automatically suspended certificate, and determinations
related to certification.

    (a) You may request an informal hearing as described in Sec.
1068.650 if we deny your application for a certificate of conformity,
if your certificate of conformity is automatically suspended under the
regulations, or if you disagree with determinations we make as part of
the certification process. For example, you might disagree with our
determinations regarding adjustable parameters under Sec.  1068.50 or
regarding your good engineering judgment under Sec.  1068.5.
    (b) You must send your hearing request in writing to the Designated
Compliance Officer no later than 30 days after we notify you of our
decision, or by some later deadline we specify. If the specified
deadline passes, we may nevertheless grant you a hearing at our
discretion.
    (c) Your hearing request must include the information specified in
Sec.  1068.610(d).
    (d) We will approve your request for an informal hearing if we find
that your request raises a substantial factual issue in the decision we
made that, if addressed differently, could alter the outcome of that
decision.

Sec.  1068.620  Request for hearing--recall.

    (a) You may request an informal hearing as described in Sec.
1068.650 if you disagree with our decision to order a recall.
    (b) You must send your hearing request in writing to the Designated
Compliance Officer no later than 45 days after we notify you of our
decision, or by some later deadline we specify. If the specified
deadline passes, we may nevertheless grant you a hearing at our
discretion.
    (c) Your hearing request must include the information specified in
Sec.  1068.610(d).
    (d) We will approve your request for an informal hearing if we find
that your request raises a substantial factual issue in the decision we
made that, if addressed differently, could alter the outcome of that
decision.

Sec.  1068.625  Request for hearing--nonconformance penalties.

    (a) You may request an informal hearing as described in Sec.
1068.650 if you disagree with our determination of compliance level or
penalty calculation or both. The hearing will address only whether the
compliance level or penalty was determined in accordance with the
regulations.
    (b) Send a request for a hearing in writing to the Designated
Compliance Officer within the following time frame, as applicable:
    (1) No later than 15 days after we notify you that we have approved
a nonconformance penalty under this subpart if the compliance level is
in the allowable range of nonconformity.
    (2) No later than 15 days after completion of the Production
Compliance Audit if the compliance level exceeds the upper limit.
    (3) No later than 15 days after we notify you of an adverse
decision for all other cases.
    (c) If you miss the specified deadline in paragraph (b) of this
section, we may nevertheless grant youa hearing at our discretion.
    (d) Your hearing request must include the information specified in
Sec.  1068.610(d).
    (e) We will approve your request for an informal hearing if we find
that your request raises a substantial factual issue in the decision we
made that, if addressed differently, could alter the outcome of that
decision.

Sec.  1068.650  Procedures for informal hearings.

    (a) The following provisions apply for arranging the hearing:
    (1) After granting your request for an informal hearing, we will
designate a Presiding Officer for the hearing.
    (2) The Presiding Officer will select the time and place for the
hearing. The hearing must be held as soon as practicable for all
parties involved.
    (3) The Presiding Officer may require that all argument and
presentation of evidence be concluded by a certain date after
commencement of the hearing.
    (b) The Presiding Officer will establish a paper or electronic
hearing

record, which may be made available for inspection. The hearing record
includes, but is not limited to, the following materials:
    (1) All documents relating to the application for certification,
including the certificate of conformity itself, if applicable.
    (2) Your request for a hearing and the accompanying supporting
data.
    (3) Correspondence and other data relevant to the hearing.
    (4) The Presiding Officer's written decision regarding the subject
of the hearing, together with any accompanying material.
    (c) You may appear in person or you may be represented by counsel
or by any other representative you designate.
    (d) The Presiding Officer may arrange for a prehearing conference,
either in response to a request from any party or at his or her own
discretion. The Presiding Officer will select the time and place for
the prehearing conference. The Presiding Officer will summarize the
results of the conference and include the written summary as part of
the record. The prehearing conference may involve consideration of the
following items:
    (1) Simplification of the issues.
    (2) Stipulations, admissions of fact, and the introduction of
documents.
    (3) Limitation of the number of expert witnesses.
    (4) Possibility of reaching an agreement to resolve any or all of
the issues in dispute.
    (5) Any other matters that may aid in expeditiously and
successfully concluding the hearing.
    (e) Hearings will be conducted as follows:
    (1) The Presiding Officer will conduct informal hearings in an
orderly and expeditious manner. The parties may offer oral or written
evidence; however, the Presiding Officer may exclude evidence that is
irrelevant, immaterial, or repetitious.
    (2) Witnesses will not be required to testify under oath; however,
the Presiding Officer must make clear that 18 U.S.C. 1001 specifies
civil and criminal penalties for knowingly making false statements or
representations or using false documents in any matter within the
jurisdiction of EPA or any other department or agency of the United
States.
    (3) Any witness may be examined or cross-examined by the Presiding
Officer, by you, or by any other parties.
    (4) Written transcripts must be made for all hearings. Anyone may
purchase copies of transcripts from the reporter.
    (f) The Presiding Officer will make a final decision with written
findings, conclusions and supporting rationale on all the substantial
factual issues presented in the record. The findings, conclusions, and
written decision must be provided to the parties and made a part of the
record.

0
373. Appendix I to part 1068 is amended by revising paragraph IV to
read as follows:

Appendix I to Part 1068--Emission-Related Components

* * * * *
    IV. Emission-related components also include any other part
whose primary purpose is to reduce emissions or whose failure would
commonly increase emissions without significantly degrading engine/
equipment performance.

Department of Transportation

National Highway Traffic Safety Administration

49 CFR Chapter V

    In consideration of the foregoing, under the authority of 49 U.S.C.
322, 5 U.S.C. 552, 49 U.S.C. 30166, 49 U.S.C. 30167, 49 U.S.C. 32307,
49 U.S.C. 32505, 49 U.S.C. 32708, 49 U.S.C. 32910, 49 U.S.C. 33116, 49
U.S.C. 32901, 49 U.S.C. 32902, 49 U.S.C. 30101, 49 U.S.C. 32905, 49
U.S.C. 32906, and delegation of authority at 49 CFR 1.95, NHTSA amends
49 CFR chapter V as follows:

PART 523--VEHICLE CLASSIFICATION

0
374. Revise the authority citation for part 523 to read as follows:

    Authority: 49 U.S.C. 32901; delegation of authority at 49 CFR
1.95.

0
375. Revise Sec.  523.2 to read as follows:

Sec.  523.2   Definitions.

    As used in this part:
    Ambulance has the meaning given in 40 CFR 86.1803.
    Approach angle means the smallest angle, in a plane side view of an
automobile, formed by the level surface on which the automobile is
standing and a line tangent to the front tire static loaded radius arc
and touching the underside of the automobile forward of the front tire.
    Axle clearance means the vertical distance from the level surface
on which an automobile is standing to the lowest point on the axle
differential of the automobile.
    Base tire (for passenger automobiles, light trucks, and medium duty
passenger vehicles) means the tire size specified as standard equipment
by the manufacturer on each unique combination of a vehicle's footprint
and model type. Standard equipment is defined in 40 CFR 86.1803.
    Basic vehicle frontal area is used as defined in 40 CFR 86.1803 for
passenger automobiles, light trucks, medium duty passenger vehicles and
Class 2b through 3 pickup trucks and vans. For heavy-duty tracts and
vocational vehicles, it has the meaning given in 40 CFR 1037.801.
    Breakover angle means the supplement of the largest angle, in the
plan side view of an automobile that can be formed by two lines tangent
to the front and rear static loaded radii arcs and intersecting at a
point on the underside of the automobile.
    Bus has the meaning given in 49 CFR 571.3.
    Cab-complete vehicle means a vehicle that is first sold as an
incomplete vehicle that substantially includes the vehicle cab section
as defined in 40 CFR 1037.801. For example, vehicles known commercially
as chassis-cabs, cab-chassis, box-deletes, bed-deletes, and cut-away
vans are considered cab-complete vehicles. A cab includes a steering
column and a passenger compartment. Note that a vehicle lacking some
components of the cab is a cab-complete vehicle if it substantially
includes the cab.
    Cargo-carrying volume means the luggage capacity or cargo volume
index, as appropriate, and as those terms are defined in 40 CFR
600.315-08, in the case of automobiles to which either of these terms
apply. With respect to automobiles to which neither of these terms
apply, ``cargo-carrying volume'' means the total volume in cubic feet,
rounded to the nearest 0.1 cubic feet, of either an automobile's
enclosed nonseating space that is intended primarily for carrying cargo
and is not accessible from the passenger compartment, or the space
intended primarily for carrying cargo bounded in the front by a
vertical plane that is perpendicular to the longitudinal centerline of
the automobile and passes through the rearmost point on the rearmost
seat and elsewhere by the automobile's interior surfaces.
    Class 2b vehicles are vehicles with a gross vehicle weight rating
(GVWR) ranging from 8,501 to 10,000 pounds.
    Class 3 through Class 8 vehicles are vehicles with a gross vehicle
weight rating (GVWR) of 10,001 pounds or more as defined in 49 CFR
565.15.
    Coach bus has the meaning given in 40 CFR 1037.801.
    Commercial medium- and heavy-duty on-highway vehicle means an on-
highway vehicle with a gross vehicle weight rating of 10,000 pounds or
more as defined in 49 U.S.C. 32901(a)(7).

    Complete vehicle has the meaning given to completed vehicle as
defined in 49 CFR 567.3.
    Concrete mixer has the meaning given in 40 CFR 1037.801.
    Curb weight has the meaning given in 49 CFR 571.3.
    Dedicated vehicle has the same meaning as dedicated automobile as
defined in 49 U.S.C. 32901(a)(8).
    Departure angle means the smallest angle, in a plane side view of
an automobile, formed by the level surface on which the automobile is
standing and a line tangent to the rear tire static loaded radius arc
and touching the underside of the automobile rearward of the rear tire.
    Dual-fueled vehicle (multi-fuel, or flexible-fuel vehicle) has the
same meaning as dual fueled automobile as defined in 49 U.S.C.
32901(a)(9).
    Electric vehicle means a vehicle that does not include an engine,
and is powered solely by an external source of electricity and/or solar
power. Note that this does not include electric hybrid or fuel-cell
vehicles that use a chemical fuel such as gasoline, diesel fuel, or
hydrogen. Electric vehicles may also be referred to as all-electric
vehicles to distinguish them from hybrid vehicles.
    Emergency vehicle means one of the following:
    (1) For passenger cars, light trucks and medium duty passenger
vehicles, emergency vehicle has the meaning given in 49 U.S.C.
32902(e).
    (2) For heavy-duty vehicles, emergency vehicle has the meaning
given in 40 CFR 1037.801.
    Engine code has the meaning given in 40 CFR 86.1803.
    Final stage manufacturer has the meaning given in 49 CFR 567.3.
    Fire truck has the meaning given in 40 CFR 86.1803.
    Footprint is defined as the product of track width (measured in
inches, calculated as the average of front and rear track widths, and
rounded to the nearest tenth of an inch) times wheelbase (measured in
inches and rounded to the nearest tenth of an inch), divided by 144 and
then rounded to the nearest tenth of a square foot. For purposes of
this definition, track width is the lateral distance between the
centerlines of the base tires at ground, including the camber angle.
For purposes of this definition, wheelbase is the longitudinal distance
between front and rear wheel centerlines.
    Full-size pickup truck means a light truck or medium duty passenger
vehicle that meets the requirements specified in 40 CFR 86.1866-12(e).
    Gross axle weight rating (GAWR) has the meaning given in 49 CFR
571.3.
    Gross combination weight rating (GCWR) has the meaning given in 49
CFR 571.3.
    Gross vehicle weight rating (GVWR) has the meaning given in 49 CFR
571.3.
    Heavy-duty engine means any engine used for (or for which the
engine manufacturer could reasonably expect to be used for) motive
power in a heavy-duty vehicle. For purposes of this definition in this
part, the term ``engine'' includes internal combustion engines and
other devices that convert chemical fuel into motive power. For
example, a fuel cell and motor used in a heavy-duty vehicle is a heavy-
duty engine. Heavy duty-engines include those engines subject to the
standards in 49 CFR part 535.
    Heavy-duty vehicle means a vehicle as defined in Sec.  523.6.
    Hitch means a device attached to the chassis of a vehicle for
towing.
    Incomplete vehicle has the meaning given in 49 CFR 567.3.
    Light truck means a non-passenger automobile meeting the criteria
in Sec.  523.5.
    Manufacturer has the meaning given in 49 U.S.C. 32901(a)(14).
    Medium duty passenger vehicle means a vehicle which would satisfy
the criteria in Sec.  523.5 (relating to light trucks) but for its
gross vehicle weight rating or its curb weight, which is rated at more
than 8,500 lbs GVWR or has a vehicle curb weight of more than 6,000
pounds or has a basic vehicle frontal area in excess of 45 square feet,
and which is designed primarily to transport passengers, but does not
include a vehicle that--
    (1) Is an ``incomplete vehicle'' ' as defined in this subpart; or
    (2) Has a seating capacity of more than 12 persons; or
    (3) Is designed for more than 9 persons in seating rearward of the
driver's seat; or
    (4) Is equipped with an open cargo area (for example, a pick-up
truck box or bed) of 72.0 inches in interior length or more. A covered
box not readily accessible from the passenger compartment will be
considered an open cargo area for purposes of this definition.
    Mild hybrid gasoline-electric vehicle means a vehicle as defined by
EPA in 40 CFR 86.1866-12(e).
    Motor home has the meaning given in 49 CFR 571.3.
    Motor vehicle has the meaning given in 49 U.S.C. 30102.
    Passenger-carrying volume means the sum of the front seat volume
and, if any, rear seat volume, as defined in 40 CFR 600.315-08, in the
case of automobiles to which that term applies. With respect to
automobiles to which that term does not apply, ``passenger-carrying
volume'' means the sum in cubic feet, rounded to the nearest 0.1 cubic
feet, of the volume of a vehicle's front seat and seats to the rear of
the front seat, as applicable, calculated as follows with the head
room, shoulder room, and leg room dimensions determined in accordance
with the procedures outlined in Society of Automotive Engineers
Recommended Practice J1100, Motor Vehicle Dimensions (Report of Human
Factors Engineering Committee, Society of Automotive Engineers,
approved November 2009).
    (1) For front seat volume, divide 1,728 into the product of the
following SAE dimensions, measured in inches to the nearest 0.1 inches,
and round the quotient to the nearest 0.001 cubic feet.
    (i) H61-Effective head room--front.
    (ii) W3-Shoulder room--front.
    (iii) L34-Maximum effective leg room-accelerator.
    (2) For the volume of seats to the rear of the front seat, divide
1,728 into the product of the following SAE dimensions, measured in
inches to the nearest 0.1 inches, and rounded the quotient to the
nearest 0.001 cubic feet.
    (i) H63-Effective head room--second.
    (ii) W4-Shoulder room--second.
    (iii) L51-Minimum effective leg room--second.
    Pickup truck means a non-passenger automobile which has a passenger
compartment and an open cargo area (bed).
    Pintle hooks means a type of towing hitch that uses a tow ring
configuration to secure to a hook or a ball combination for the purpose
of towing.
    Recreational vehicle or RV means a motor vehicle equipped with
living space and amenities found in a motor home.
    Refuse hauler has the meaning given in 40 CFR 1037.801.
    Running clearance means the distance from the surface on which an
automobile is standing to the lowest point on the automobile, excluding
unsprung weight.
    School bus has the meaning given in 49 CFR 571.3.
    Static loaded radius arc means a portion of a circle whose center
is the center of a standard tire-rim combination of an automobile and
whose radius is the distance from that center to the level surface on
which the automobile is standing, measured with the automobile at curb
weight, the wheel parallel to the vehicle's longitudinal centerline,
and the tire inflated to the manufacturer's recommended pressure.

    Strong hybrid gasoline-electric vehicle means a vehicle as defined
by EPA in 40 CFR 86.1866-12(e).
    Temporary living quarters means a space in the interior of an
automobile in which people may temporarily live and which includes
sleeping surfaces, such as beds, and household conveniences, such as a
sink, stove, refrigerator, or toilet.
    Transmission class has the meaning given in 40 CFR 600.002.
    Tranmission configuration has the meaning given in 40 CFR 600.002.
    Transmission type has the meaning given in 40 CFR 86.1803.
    Truck tractor has the meaning given in 49 CFR 571.3 and 49 CFR
535.5(c). This includes most heavy-duty vehicles specifically designed
for the primary purpose of pulling trailers, but does not include
vehicles designed to carry other loads. For purposes of this definition
``other loads'' would not include loads carried in the cab, sleeper
compartment, or toolboxes. Examples of vehicles that are similar to
tractors but that are not tractors under this part include dromedary
tractors, automobile haulers, straight trucks with trailers hitches,
and tow trucks.
    Van means a vehicle with a body that fully encloses the driver and
a cargo carrying or work performing compartment. The distance from the
leading edge of the windshield to the foremost body section of vans is
typically shorter than that of pickup trucks and sport utility
vehicles.
    Vocational tractor means a tractor that is classified as a
vocational vehicle according to 40 CFR 1037.630
    Vocational vehicle (or heavy-duty vocational vehicle) has the
meaning given in Sec.  523.8 and 49 CFR 535.5(b). This includes any
vehicle that is equipped for a particular industry, trade or occupation
such as construction, heavy hauling, mining, logging, oil fields,
refuse and includes vehicles such as school buses, motorcoaches and
RVs.
    Work truck means a vehicle that is rated at more than 8,500 pounds
and less than or equal to 10,000 pounds gross vehicle weight, and is
not a medium-duty passenger vehicle as defined in 49 U.S.C.
32901(a)(19).

0
376. Revise Sec.  523.6 to read as follows:

Sec.  523.6   Heavy-duty vehicle.

    (a) A heavy-duty vehicle is any commercial medium or heavy-duty on-
highway vehicle or a work truck, as defined in 49 U.S.C. 32901(a)(7)
and (19). For the purpose of this section, heavy-duty vehicles are
divided into four regulatory categories as follows:
    (1) Heavy-duty pickup trucks and vans;
    (2) Heavy-duty vocational vehicles;
    (3) Truck tractors with a GVWR above 26,000 pounds; and
    (4) Heavy-duty trailers.
    (b) The heavy-duty vehicle classification does not include vehicles
excluded as specified in 49 CFR 535.3.

0
377. Revise Sec.  523.7 to read as follows:

Sec.  523.7   Heavy-duty pickup trucks and vans.

    (a) Heavy-duty pickup trucks and vans are pickup trucks and vans
with a gross vehicle weight rating between 8,501 pounds and 14,000
pounds (Class 2b through 3 vehicles) manufactured as complete vehicles
by a single or final stage manufacturer or manufactured as incomplete
vehicles as designated by a manufacturer. See references in 40 CFR
86.1801-12, 40 CFR 86.1819-17, 40 CFR 1037.150, and 49 CFR 535.5(a).
    (b) Heavy duty vehicles above 14,000 pounds GVWR may be optionally
certified as heavy-duty pickup trucks and vans and comply with fuel
consumption standards in 49 CFR 535.5(a), if properly included in a
test group with similar vehicles at or below 14,000 pounds GVWR. Fuel
consumption standards apply to these vehicles as if they were Class 3
heavy-duty vehicles. The work factor for these vehicles may not be
greater than the largest work factor that applies for vehicles in the
test group that are at or below 14,000 pounds GVWR (see 40 CFR 86.1819-
14).
    (c) Incomplete heavy-duty vehicles at or below 14,000 pounds GVWR
may be optionally certified as heavy-duty pickup trucks and vans and
comply with to the fuel consumption standards in 49 CFR 535.5(a).

0
378. Add Sec.  523.10 to read as follows:

Sec.  523.10   Heavy-duty trailers.

    (a) A trailer means a motor vehicle with or without motive power,
designed for carrying cargo and for being drawn by another motor
vehicle as defined in 49 CFR 571.3. For the purpose of this part,
heavy-duty trailers include only those trailers designed to be drawn by
a truck tractor excluding non-box trailers other than flatbed trailer,
tanker trailers and container chassis and those that are coupled to
vehicles exclusively by pintle hooks or hitches instead of a fifth
wheel. Heavy-duty trailers may be divided into different types and
categories as follows:
    (1) Box vans are trailers with enclosed cargo space that is
permanently attached to the chassis, with fixed sides, nose, and roof.
Tank trailers are not box vans.
    (2) Box van with front-mounted HVAC systems are refrigerated vans.
Note that this includes systems that provide cooling, heating, or both.
All other box vans are dry vans.
    (3) Trailers that are not box vans are non-box trailers. Note that
the standards for non-box trailers in 49 CFR 535.5(e)(2) apply only to
flatbed trailers, tank trailers, and container chassis.
    (4) Box van with a length greater than 50 feet are long box vans.
Other box vans are short box vans.
    (5) The following types of equipment are not trailers:
    (i) Containers that are not permanently mounted on chassis.
    (ii) Dollies used to connect tandem trailers.
    (iii) Equipment that serves similar purposes but are not intended
to be pulled by a tractor.
    (b) Heavy-duty trailers do not include trailers excluded in 49 CFR
535.3.

PART 534--RIGHTS AND RESPONSIBILITIES OF MANUFACTURERS IN THE
CONTEXT OF CHANGES IN CORPORATE RELATIONSHIPS

0
379. Revise the authority citation for part 534 to read as follows:

    Authority: 49 U.S.C. 32901; delegation of authority at 49 CFR
1.95.

0
380. Add Sec.  534.8 to read as follows:

Sec.  534.8  Shared corporate relationships.

    (a) Vehicles and engines built by multiple manufacturers can share
responsibility for complying with fuel consumption standards in 49 CFR
part 535, by following the EPA requirements in 40 CFR 1037.620 and by
sending a joint agreement between the parties to EPA and NHTSA before
submitting any certificates of conformity for the applicable vehicles
or engines in accordance with 40 CFR part 1036, subpart C, and 40 CFR
part 1037, subpart C.
    (1) Each joint agreement must--
    (i) Define how each manufacturer shares responsibility for the
planned vehicles or engines.
    (ii) Specify which manufacturer(s) will be responsible for the EPA
certificates of conformity;
    (iii) Describe the planned vehicles and engines in terms of the
model types, production volumes, and model years (if known);
    (iv) Describe which manufacturer(s) have engineering and design
control and sale distribution ownership over the vehicles and/or
engines; and
    (v) Include signatures from all parties involved in the shared
corporate relationship.
    (2) After defining the shared relationship between the
manufacturers, any contractual changes must be

notified to EPA and NHTSA before the next model year's production of
the applicable vehicles or engines begins.
    (3) Multiple manufacturers must designate the same shared
responsibility for complying with fuel consumption standards as
selected for GHG standards unless otherwise allowed by EPA and NHTSA.
    (b) NHTSA and EPA reserve the right to reject the joint agreement.

0
381. Revise part 535 to read as follows:

PART 535 MEDIUM-AND HEAVY-DUTY VEHICLE FUEL EFFICIENCY PROGRAM

Sec.
535.1 Scope.
535.2 Purpose.
535.3 Applicability.
535.4 Definitions.
535.5 Standards.
535.6 Measurement and calculation procedures.
535.7 Averaging, banking, and trading (ABT) credit program.
535.8 Reporting and recordkeeping requirements.
535.9 Enforcement approach.
535.10 How do manufacturers comply with fuel consumption standards?

    Authority:  49 U.S.C. 32902 and 30101; delegation of authority
at 49 CFR 1.95.

Sec.  535.1  Scope.

    This part establishes fuel consumption standards pursuant to 49
U.S.C. 32902(k) for work trucks and commercial medium- and heavy-duty
on-highway vehicles, including trailers (hereafter referenced as heavy-
duty vehicles), and engines manufactured for sale in the United States.
This part establishes a credit program manufacturers may use to comply
with standards and requirements for manufacturers to provide reports to
the National Highway Traffic Safety Administration regarding their
efforts to reduce the fuel consumption of heavy-duty vehicles and
engines.

Sec.  535.2  Purpose.

    The purpose of this part is to reduce the fuel consumption of new
heavy-duty vehicles and engines by establishing maximum levels for fuel
consumption standards while providing a flexible credit program to
assist manufacturers in complying with standards.

Sec.  535.3  Applicability.

    (a) This part applies to manufacturers that produce complete and
incomplete heavy-duty vehicles as defined in 49 CFR part 523, and to
the manufacturers of all heavy-duty engines manufactured for use in the
applicable vehicles for each given model year.
    (b) This part also applies to alterers, final stage manufacturers,
and intermediate manufacturers producing vehicles and engines or
assembling motor vehicles or motor vehicle equipment under special
conditions. Manufacturers comply with this part by following the
special conditions in 40 CFR 1037.620, 1037.621, and 1037.622 in which
EPA allows manufacturer to:
    (1) Share responsibility for the vehicles they produce.
Manufacturers sharing responsibility for complying with emissions and
fuel consumption standards must submit to the agencies a joint
agreement as specified in 49 CFR 534.8(a);
    (2) Have certificate holders sell or ship vehicles that are missing
certain emission-related components to be installed by secondary
vehicle manufacturers;
    (3) Ship partially complete vehicles to secondary manufacturers;
    (4) Build electric vehicles; and
    (5) Build alternative fueled vehicles from all types of heavy duty
engine conversions. The conversion manufacturer must:
    (i) Install alternative fuel conversion systems into vehicles
acquired from vehicle manufacturers prior to first retail sale or prior
to the vehicle's introduction into interstate commerce.
    (ii) Be designated by the vehicle manufacturer and EPA to be the
certificate holder.
    (iii) Omit alternative fueled vehicles from compliance with vehicle
fuel consumption standards, if--
    (A) Excluded from EPA emissions standards; and
    (B) A reasonable technical basis exist that the modified vehicle
continues to meet emissions and fuel consumption vehicle standards.
    (c) Vehicle and engine manufacturers that must comply with this
part include manufacturers required to have approved certificates of
conformity from EPA as specified in 40 CFR parts 86, 1036, and 1037.
    (d) The following heavy-duty vehicles and engines are excluded from
the requirements of this part:
    (1) Vehicles and engines manufactured prior to January 1, 2014,
unless certified early under NHTSA's voluntary provisions in Sec.
535.5.
    (2) Medium-duty passenger vehicles and other vehicles subject to
the light-duty corporate average fuel economy standards in 49 CFR parts
531 and 533.
    (3) Recreational vehicles, including motor homes manufactured
before January 1, 2021, except those produced by manufacturers
voluntarily complying with NHTSA's early vocational standards for model
years 2013 through 2020.
    (4) Aircraft vehicles meeting the definition of ``motor vehicle''.
For example, this would include certain convertible aircraft that can
be adjusted to operate on public roads.
    (5) Heavy-duty trailers as defined in 49 CFR 523.10 meeting one or
more of the following criteria are excluded from trailer standards in
Sec.  535.5(e):
    (i) Trailers with four or more axles and trailers less than 35 feet
long with three axles (i.e., trailers intended for hauling very heavy
loads).
    (ii) Trailers intended for temporary or permanent residence, office
space, or other work space, such as campers, mobile homes, and carnival
trailers.
    (iii) Trailers with a gap of at least 120 inches between adjacent
axle centerlines. In the case of adjustable axle spacing, this refers
to the closest possible axle positioning.
    (iv) Trailers built before January 1, 2021, except those trailers
built by manufacturers after January 1, 2018, and voluntarily complying
with NHTSA's early trailer standards for model years 2018 through 2020.
    (v) Note that the definition of ``heavy-duty trailer'' in 49 CFR
523.10 excludes equipment that serves similar purposes but are not
intended to be pulled by a tractor. This exclusion applies to such
equipment whether or not they are known commercially as trailers. For
example, any equipment pulled by a heavy-duty vehicle with a pintle
hook or hitch instead of a fifth wheel does not qualify as a trailer
under this part.
    (6) Engines installed in heavy-duty vehicles that are not used to
propel vehicles. Note, this includes engines used to indirectly propel
vehicles (such as electrical generator engines that power to batteries
for propulsion).
    (7) The provisions of this part do not apply to engines that are
not internal combustion engines. For example, the provisions of this
part do not apply to fuel cells. Note that gas turbine engines are
internal combustion engines.
    (e) The following heavy-duty vehicles and engines are exempted from
the requirements of this part:
    (1) Off-road vehicles. Vehicle manufacturers producing vehicles
intended for off-road may exempt vehicles without requesting approval
from the agencies subject to the criteria in Sec.  535.5(b)(9)(i) and
40 CFR 1037.631(a). If unusual circumstances exist and a manufacturer
is uncertain as to whether its vehicles qualify, the manufacturer
should ask for a preliminary determination from the agencies before
submitting its application for certification in

accordance with 40 CFR 1037.205 for the applicable vehicles. Send the
request with supporting information to EPA and the agencies will
coordinate in making a preliminary determination as specified in 40 CFR
1037.210. These decisions are considered to be preliminary approvals
and subject to final review and approval.
    (2) Small business manufacturers. (i) For Phase 1, small business
manufacturers are exempted from the vehicle and engine standards of
Sec.  535.5, but must comply with the reporting requirements of Sec.
535.8(g).
    (ii) For Phase 2, fuel consumption standards apply on a delayed
schedule for manufacturers meeting the small business criteria
specified in 13 CFR 121.201 and in 40 CFR 86.1819-14(k)(5), 40 CFR
1036.150, and 40 CFR 1037.150. Qualifying manufacturers of truck
tractors, vocational vehicles, heavy duty pickups and vans, and engines
are not subject to the fuel consumption standards for vehicles built
before January 1, 2022 and engines (such as those engines built by
small alternative fuel engine converters) with a date of manufacturer
on or after November 14, 2011 and before January 1, 2022. Qualifying
manufacturers may choose to voluntarily comply early.
    (iii) Small business manufacturers producing vehicles and engines
that run on any fuel other than gasoline, E85, or diesel fuel meeting
the criteria specified in 13 CFR 121.201 and in 40 CFR 86.1819-
14(k)(5), 40 CFR 1036.150, and 40 CFR 1037.150 may delay complying with
every new mandatory standard under this part by one model year.
    (3) Transitional allowances for trailers. Through model year 2026,
trailer manufacturers may calculate a number of trailers that are
exempt from the fuel consumption standards of this part. Calculate the
number of exempt box vans in a given model year by multiplying the
manufacturer's total U.S.-directed production volume of certified box
vans by 0.20 and rounding to the nearest whole number; however, in no
case may the number of exempted box vans be greater than 350 units in
any given model year. Repeat this calculation to determine the number
of non-box trailers, up to 250 annual units, that are exempt from
standards and certification requirements. Manufacturers perform the
calculation based on their projected production volumes in the first
year that standards apply; in later years, use actual production
volumes from the preceding model year. Manufacturers must include these
calculated values and the production volumes of exempt trailers in
their annual production reports required under Sec.  535.8(g)(12).
    (4) Engines for specialty vehicles. Engines certified to the
alternative standards specified in 40 CFR 86.007-11 and 86.008-10 for
use in specialty vehicles as described in 40 CFR 1037.605. Compliance
with the vehicle provisions in 40 CFR 1037.605 satisfies compliance for
NHTSA under this part.
    (f) For model year 2021 and later, vocational vehicle manufacturers
building custom chassis vehicles (e.g. emergency vehicles) may be
exempted from standards in Sec.  535.5(b)(4) and may comply with
alternative fuel consumption standards as specified in Sec.
535.5(b)(6). Manufacturers complying with alternative fuel consumption
standards in Sec.  535.5(b)(6) are restricted in using fuel consumption
credits as specified in Sec.  535.7(c).
    (g) The fuel consumption standards in some cases apply differently
for spark-ignition and compression-ignition engines or vehicles as
specified in 40 CFR parts 1036 and 1037. Engine requirements are
similarly differentiated by engine type and by primary intended service
class, as described in 40 CFR 1036.140.
    (h) NHTSA may exclude or exempt vehicles and engines under special
conditions allowed by EPA in accordance with 40 CFR parts 85, 86, 1036,
1037, 1039, and 1068. Manufacturers should consult the agencies if
uncertain how to apply any EPA provision under the NHTSA fuel
consumption program. It is recommend that manufacturers seek
clarification before producing a vehicle. Upon notification by EPA of a
fraudulent use of an exemption, NHTSA reserves that right to suspend or
revoke any exemption or exclusion.
    (i) In cases where there are differences between the application of
this part and the corresponding EPA program regarding whether a vehicle
is regulated or not (such as due to differences in applicability
resulting from differing agency definitions, etc.), manufacturers
should contact the agencies to identify these vehicles and assess the
applicability of the agencies' standards. The agencies will provide
guidance on how the vehicles can comply. Manufacturers are required to
identify these vehicles in their final reports submitted in accordance
with Sec.  535.8.

Sec.  535.4  Definitions.

    The terms manufacture and manufacturer are used as defined in
section 501 of the Act and the terms commercial medium-duty and heavy-
duty on highway vehicle, fuel and work truck are used as defined in 49
U.S.C. 32901. See 49 CFR 523.2 for general definitions related to
NHTSA's fuel efficiency programs.
    Act means the Motor Vehicle Information and Cost Savings Act, as
amended by Pub. L. 94-163 and 96-425.
    Administrator means the Administrator of the National Highway
Traffic Safety Administration (NHTSA) or the Administrator's delegate.
    Advanced technology means vehicle technology under this fuel
consumption program in Sec. Sec.  535.6 and 535.7 and by EPA under 40
CFR 86.1819-14(d)(7), 1036.615, or 1037.615.
    Alterers means a manufacturer that modifies an altered vehicle as
defined in 49 CFR 567.3
    Alternative fuel conversion has the meaning given for clean
alternative fuel conversion in 40 CFR 85.502.
    A to B testing has the meaning given in 40 CFR 1037.801.
    Automated manual transmission has the meaning given in 40 CFR
1037.801.
    Automatic tire inflation system has the meaning given in 40 CFR
1037.801.
    Automatic transmission (AT) has the meaning given in 40 CFR
1037.801.
    Auxiliary power unit has the meaning given in 40 CFR 1037.801.
    Averaging set means, a set of engines or vehicles in which fuel
consumption credits may be exchanged. Credits generated by one engine
or vehicle family may only be used by other respective engine or
vehicle families in the same averaging set as specified in Sec.  535.7
. Note that an averaging set may comprise more than one regulatory
subcategory. The averaging sets for this HD program are defined as
follows:
    (1) Heavy-duty pickup trucks and vans.
    (2) Light heavy-duty (LHD) vehicles.
    (3) Medium heavy-duty (MHD) vehicles.
    (4) Heavy heavy-duty (HHD) vehicles.
    (5) Light heavy-duty engines subject to compression-ignition
standards.
    (6) Medium heavy-duty engines subject to compression-ignition
standards.
    (7) Heavy heavy-duty engines subject to compression-ignition
standards.
    (8) Engines subject to spark-ignition standards.
    (9) Long trailers.
    (10) Short trailers.
    (11) Vehicle types certifying to optional custom chassis standards
as specified in Sec.  535.5(b)(6) form separate averaging sets for each
vehicle type as specified in Sec.  535.7(c).
    Axle ratio or Drive axle ratio, ka has the meaning given
in 40 CFR 1037.801.
    Basic vehicle frontal area has the meaning given in 40 CFR
1037.801.
    Cab-complete vehicle has the meaning given in 49 CFR 523.2.

    Carryover has the meaning given in 40 CFR 1037.801.
    Certificate holder means the manufacturer who holds the certificate
of conformity for the vehicle or engine and that assigns the model year
based on the date when its manufacturing operations are completed
relative to its annual model year period.
    Certificate of Conformity means an approval document granted by EPA
to a manufacturer that submits an application for a vehicle or engine
emissions family in 40 CFR 1036.205 and 1037.205. A certificate of
conformity is valid from the indicated effective date until December 31
of the model year for which it is issued. The certificate must be
renewed annually for any vehicle a manufacturer continues to produce.
    Certification has the meaning given in 40 CFR 1037.801.
    Certified emission level has the meaning given in 40 CFR 1036.801.
    Chassis-cab means the incomplete part of a vehicle that includes a
frame, a completed occupant compartment and that requires only the
addition of cargo-carrying, work-performing, or load-bearing components
to perform its intended functions.
    Chief Counsel means the NHTSA Chief Counsel, or his or her
designee.
    Class means relating to GVWR classes for vehicles other than
trailers, as follows:
    (1) Class 2b vehicles are vehicles with a gross vehicle weight
rating (GVWR) ranging from 8,501 to 10,000 pounds.
    (2) Class 3 through Class 8 vehicles are vehicles with a gross
vehicle weight rating (GVWR) of 10,001 pounds or more as defined in 49
CFR 565.15.
    Complete sister vehicle is a complete vehicle of the same
configuration as a cab-complete vehicle.
    Complete vehicle has the meaning given in 49 CFR part 523.
    Compression-ignition (CI) means relating to a type of
reciprocating, internal-combustion engine, such as a diesel engine,
that is not a spark-ignition engine. Note, in accordance with 40 CFR
1036.1, gas turbine engines and other engines not meeting the
definition of compression-ignition are deemed to be compression-
ignition engines for complying with fuel consumption standards.
    Configuration means a subclassification within a test group for
passenger cars, light trucks and medium-duty passenger vehicles and
heavy-duty pickup trucks and vans which is based on basic engine,
engine code, transmission type and gear ratios, and final drive ratio.
    Container chassis trailer has the same meaning as container chassis
in 40 CFR 1037.801.
    Curb weight has the meaning given in 40 CFR 86.1803.
    Custom chassis vehicle means a vocational vehicle that is a motor
home, school bus, refuse hauler, concrete mixer, emergency vehicle,
mixed-use vehicle or other buses that are not school buses or motor
coaches. These vehicle types are defined in 49 CFR 523.3. A ``mixed-use
vehicle'' is one that meets at least one of the criteria specified in
40 CFR 1037.631(a)(1) or at least one of the criteria in 40 CFR
1037.631(a)(2), but not both.
    Date of manufacture means the date on which the certifying vehicle
manufacturer completes its manufacturing operations, except as follows:
    (1) Where the certificate holder is an engine manufacturer that
does not manufacture the complete or incomplete vehicle, the date of
manufacture of the vehicle is based on the date assembly of the vehicle
is completed.
    (2) EPA and NHTSA may approve an alternate date of manufacture
based on the date on which the certifying (or primary) vehicle
manufacturer completes assembly at the place of main assembly,
consistent with the provisions of 40 CFR 1037.601 and 49 CFR 567.4.
    (3) A vehicle manufacturer that completes assembly of a vehicle at
two or more facilities may ask to use as the month and year of
manufacture, for that vehicle, the month and year in which
manufacturing is completed at the place of main assembly, consistent
with provisions of 49 CFR 567.4, as the model year. Note that such
staged assembly is subject to the provisions of 40 CFR 1068.260(c).
NHTSA's allowance of this provision is effective when EPA approves the
manufacturer's certificates of conformity for these vehicles.
    Day cab has the meaning given in 40 CFR 1037.801.
    Drayage tractor has the meaning given in 40 CFR 1037.801.
    Dual-clutch transmission (DCT) means a transmission has the meaning
given in 40 CFR 1037.801.
    Dual-fuel has the meaning given in 40 CFR 1037.801.
    Electric vehicle has the meaning given in 40 CFR 1037.801.
    Emergency vehicle means a vehicle that meets one of the criteria in
40 CFR 1037.801.
    Engine family has the meaning given in 40 CFR 1036.230.
Manufacturers designate families in accordance with EPA provisions and
may not choose different families between the NHTSA and EPA programs.
    Excluded means a vehicle or engine manufacturer or component is not
required to comply with any aspects with the NHTSA fuel consumption
program.
    Exempted means a vehicle or engine manufacturer or component is not
required to comply with certain provisions of the NHTSA fuel
consumption program.
    Family certification level (FCL) has the meaning given in 40 CFR
1036.801.
    Family emission limit (FEL) has the meaning given in 40 CFR
1037.801.
    Final drive ratio has the meaning given in 40 CFR 1037.801.
    Final-stage manufacturer has the meaning given in 49 CFR 567.3 and
includes secondary vehicle manufacturers as defined in 40 CFR 1037.801.
    Flatbed trailer has the meaning given in 40 CFR 1037.801.
    Fleet in this part means all the heavy-duty vehicles or engines
within each of the regulatory sub-categories that are manufactured by a
manufacturer in a particular model year and that are subject to fuel
consumption standards under Sec.  535.5.
    Fleet average fuel consumption is the calculated average fuel
consumption performance value for a manufacturer's fleet derived from
the production weighted fuel consumption values of the unique vehicle
configurations within each vehicle model type that makes up that
manufacturer's vehicle fleet in a given model year. In this part, the
fleet average fuel consumption value is determined for each
manufacturer's fleet of heavy-duty pickup trucks and vans.
    Fleet average fuel consumption standard is the actual average fuel
consumption standard for a manufacturer's fleet derived from the
production weighted fuel consumption standards of each unique vehicle
configuration, based on payload, tow capacity and drive configuration
(2, 4 or all-wheel drive), of the model types that makes up that
manufacturer's vehicle fleet in a given model year. In this part, the
fleet average fuel consumption standard is determined for each
manufacturer's fleet of heavy-duty pickup trucks and vans.
    Fuel cell means an electrochemical cell that produces electricity
via the non-combustion reaction of a consumable fuel, typically
hydrogen.
    Fuel cell electric vehicle means a motor vehicle propelled solely
by an electric motor where energy for the motor is supplied by a fuel
cell.

    Fuel efficiency means the amount of work performed for each gallon
of fuel consumed.
    Gaseous fuel has the meaning given in 40 CFR 1037.801.
    Greenhouse gas Emissions Model (GEM) has the meaning given in 40
CFR 1037.801.
    Gross axle weight rating (GAWR) has the meaning given in 49 CFR
571.3.
    Gross combination weight rating (GCWR) has the meaning given in 49
CFR 571.3.
    Gross vehicle weight rating (GVWR) has the meaning given in 49 CFR
571.3.
    Good engineering judgment has the meaning given in 40 CFR 1068.30.
See 40 CFR 1068.5 for the administrative process used to evaluate good
engineering judgment.
    Heavy-duty off-road vehicle means a heavy-duty vocational vehicle
or vocational tractor that is intended for off-road use.
    Heavy-duty vehicle has the meaning given in 49 CFR part 523.
    Heavy-haul tractor has the meaning given in 40 CFR 1037.801.
    Heavy heavy-duty (HHD) vehicle has the meaning given in vehicle
service class.
    Hybrid engine or hybrid powertrain means an engine or powertrain
that includes energy storage features other than a conventional battery
system or conventional flywheel. Supplemental electrical batteries and
hydraulic accumulators are examples of hybrid energy storage systems.
Note that certain provisions in this part treat hybrid engines and
powertrains intended for vehicles that include regenerative braking
different than those intended for vehicles that do not include
regenerative braking.
    Hybrid vehicle means a vehicle that includes energy storage
features (other than a conventional battery system or conventional
flywheel) in addition to an internal combustion engine or other engine
using consumable chemical fuel. Supplemental electrical batteries and
hydraulic accumulators are examples of hybrid energy storage systems
Note that certain provisions in this part treat hybrid vehicles that
include regenerative braking different than those that do not include
regenerative braking.
    Idle operation has the meaning given in 40 CFR 1037.801.
    Incomplete vehicle has the meaning given in 49 CFR part 523. For
the purpose of this regulation, a manufacturer may request EPA and
NHTSA to allow the certification of a vehicle as an incomplete vehicle
if it manufactures the engine and sells the unassembled chassis
components, provided it does not produce and sell the body components
necessary to complete the vehicle.
    Innovative technology means technology certified under Sec.  535.7
and by EPA under 40 CFR 86.1819-14(d)(13), 1036.610, and 1037.610 in
the Phase 1 program.
    Intermediate manufacturer has the meaning given in 49 CFR 567.3.
    Light heavy-duty (LHD) vehicle has the meaning given in vehicle
service class.
    Liquefied petroleum gas (LPG) has the meaning given in 40 CFR
1036.801.
    Low rolling resistance tire means a tire on a vocational vehicle
with a tire rolling resistance level (TRRL) of 7.7 kg/metric ton or
lower, a steer tire on a tractor with a TRRL of 7.7 kg/metric ton or
lower, or a drive tire on a tractor with a TRRL of 8.1 kg/metric ton or
lower.
    Manual transmission (MT) has the meaning given in 40 CFR 1037.801.
    Medium heavy-duty (MHD) vehicle has the meaning given in vehicle
service class.
    Model type has the meaning given in 40 CFR 600.002.
    Model year as it applies to vehicles means:
    (1) For tractors and vocational vehicles with a date of manufacture
on or after January 1, 2021, the vehicle's model year is the calendar
year corresponding to the date of manufacture; however, the vehicle's
model year may be designated to be the year before the calendar year
corresponding to the date of manufacture if the engine's model year is
also from an earlier year. Note that subparagraph (2) of this
definition limits the extent to which vehicle manufacturers may install
engines built in earlier calendar years. Note that 40 CFR
1037.601(a)(2) limits the extent to which vehicle manufacturers may
install engines built in earlier calendar years.
    (2) For trailers and for Phase 1 tractors and vocational vehicles
with a date of manufacture before January 1, 2021, model year means the
manufacturer's annual new model production period, except as restricted
under this definition. It must include January 1 of the calendar year
for which the model year is named, may not begin before January 2 of
the previous calendar year, and it must end by December 31 of the named
calendar year. The model year may be set to match the calendar year
corresponding to the date of manufacture.
    (i) The manufacturer who holds the certificate of conformity for
the vehicle must assign the model year based on the date when its
manufacturing operations are completed relative to its annual model
year period. In unusual circumstances where completion of your assembly
is delayed, we may allow you to assign a model year one year earlier,
provided it does not affect which regulatory requirements will apply.
    (ii) Unless a vehicle is being shipped to a secondary manufacturer
that will hold the certificate of conformity, the model year must be
assigned prior to introduction of the vehicle into U.S. commerce. The
certifying manufacturer must redesignate the model year if it does not
complete its manufacturing operations within the originally identified
model year. A vehicle introduced into U.S. commerce without a model
year is deemed to have a model year equal to the calendar year of its
introduction into U.S. commerce unless the certifying manufacturer
assigns a later date.
    Model year as it applies to engines means the manufacturer's annual
new model production period, except as restricted under this
definition. It must include January 1 of the calendar year for which
the model year is named, may not begin before January 2 of the previous
calendar year, and it must end by December 31 of the named calendar
year. Manufacturers may not adjust model years to circumvent or delay
compliance with emission standards or to avoid the obligation to
certify annually.
    Natural gas has the meaning given in 40 CFR 1036.801. Vehicles that
use a pilot-ignited natural gas engine (which uses a small diesel fuel
ignition system), are still considered natural gas vehicles.
    NHTSA Enforcement means the NHTSA Associate Administrator for
Enforcement, or his or her designee.
    Neutral coasting has the meaning given in 40 CFR 1037.801.
    Off-cycle technology means technology certified under Sec.  535.7
and by EPA under 40 CFR 86.1819-14(d)(13), 1036.610, and 1037.610 in
the Phase 2 program.
    Party means the person alleged to have committed a violation of
Sec.  535.9, and includes manufacturers of vehicles and manufacturers
of engines.
    Payload means in this part the resultant of subtracting the curb
weight from the gross vehicle weight rating.
    Petroleum has the meaning given in 40 CFR 1037.801.
    Phase 1 means the joint NHTSA and EPA program established in 2011
for fuel efficiency standards and greenhouse gas emissions standards
regulating medium- and heavy-duty engines and vehicles. See Sec.  535.5
for the specific model years that standards apply to vehicles and
engines.

    Phase 2 means the joint NHTSA and EPA program established in 2016
for fuel efficiency standards and greenhouse gas emissions standards
regulating medium- and heavy-duty vehicles including trailers, and
engines. See Sec.  535.5 for the specific model years that standards
apply to vehicles and engines.
    Pickup truck has the meaning given in 49 CFR part 523.
    Plug-in hybrid electric vehicle (PHEV) means a hybrid electric
vehicle that has the capability to charge the battery or batteries used
for vehicle propulsion from an off-vehicle electric source, such that
the off-vehicle source cannot be connected to the vehicle while the
vehicle is in motion.
    Power take-off (PTO) means a secondary engine shaft or other system
on a vehicle that provides substantial auxiliary power for purposes
unrelated to vehicle propulsion or normal vehicle accessories such as
air conditioning, power steering, and basic electrical accessories. A
typical PTO uses a secondary shaft on the engine to transmit power to a
hydraulic pump that powers auxiliary equipment such as a boom on a
bucket truck.
    Powertrain family has the meaning given in 40 CFR 1037.231.
Manufacturers choosing to perform powertrain testing as specified in 40
CFR 1037.550, divide product lines into powertrain families that are
expected to have similar fuel consumptions and CO2 emission
characteristics throughout the useful life.
    Preliminary approval means approval granted by an authorized EPA
representative prior to submission of an application for certification,
consistent with the provisions of 40 CFR 1037.210. For requirements
involving NHTSA, EPA will ensure decisions are jointly made and will
convey the decision to the manufacturer.
    Primary intended service class has the same meaning for engines as
specified in 40 CFR 1036.140. Manufacturers must identify a single
primary intended service class for each engine family that best
describes vehicles for which it designs and markets the engine, as
follows:
    (1) Divide compression-ignition engines into primary intended
service classes based on the following engine and vehicle
characteristics:
    (i) Light heavy-duty ``LHD'' engines usually are not designed for
rebuild and do not have cylinder liners. Vehicle body types in this
group might include any heavy-duty vehicle built from a light-duty
truck chassis, van trucks, multi-stop vans, and some straight trucks
with a single rear axle. Typical applications would include personal
transportation, light-load commercial delivery, passenger service,
agriculture, and construction. The GVWR of these vehicles is normally
below 19,500 pounds.
    (ii) Medium heavy-duty ``MHD'' engines may be designed for rebuild
and may have cylinder liners. Vehicle body types in this group would
typically include school buses, straight trucks with single rear axles,
city tractors, and a variety of special purpose vehicles such as small
dump trucks, and refuse trucks. Typical applications would include
commercial short haul and intra-city delivery and pickup. Engines in
this group are normally used in vehicles whose GVWR ranges from 19,500
to 33,000 pounds.
    (iii) Heavy heavy-duty ``HHD'' engines are designed for multiple
rebuilds and have cylinder liners. Vehicles in this group are normally
tractors, trucks, straight trucks with dual rear axles, and buses used
in inter-city, long-haul applications. These vehicles normally exceed
33,000 pounds GVWR.
    (2) Divide spark-ignition engines into primary intended service
classes as follows:
    (i) Spark-ignition engines that are best characterized by paragraph
(1)(i) or (ii) of this definition are in a separate ``spark-ignition''
primary intended service class.
    (ii) Spark-ignition engines that are best characterized by
paragraph (1)(iii) of this definition share a primary intended service
class with compression-ignition heavy heavy-duty engines. Gasoline-
fueled engines are presumed not to be characterized by paragraph
(1)(iii) of this definition; for example, vehicle manufacturers may
install some number of gasoline-fueled engines in Class 8 trucks
without causing the engine manufacturer to consider those to be heavy
heavy-duty engines.
    (iii) References to ``spark-ignition standards'' in this part
relate only to the spark-ignition engines identified in paragraph
(b)(1) of this section. References to ``compression-ignition
standards'' in this part relate to compression-ignition engines, to
spark-ignition engines optionally certified to standards that apply to
compression-ignition engines, and to all engines identified under
paragraph (b)(2) of this section as heavy heavy-duty engines.
    Rechargeable Energy Storage System (RESS) means the component(s) of
a hybrid engine or vehicle that store recovered energy for later use,
such as the battery system in a electric hybrid vehicle.
    Refuse hauler has the meaning given in 40 CFR 1037.801.
    Regional has the meaning relating to the Regional duty cycle as
specified in 40 CFR 1037.510.
    Regulatory category means each of the four types of heavy-duty
vehicles defined in 49 CFR 523.6 and the heavy-duty engines used in
these heavy-duty vehicles.
    Regulatory subcategory means the sub-groups in each regulatory
category to which mandatory fuel consumption standards and requirements
apply as specified in 40 CFR 1036.230 and 1037.230 and are defined as
follows:
    (1) Heavy-duty pick-up trucks and vans.
    (2) Vocational vehicle subcategories have 18 separate vehicle
service classes as shown in Tables 1 and 2 below and include vocational
tractors. Table 1 includes vehicles complying with Phase 1 standards.
Phase 2 vehicles are included in Table 2 which have separate
subcategories to account for engine characteristics, GVWR, and the
selection of duty cycle for vocational vehicles as specified in 40 CFR
1037.510; vehicles may additionally fall into one of the subcategories
defined by the custom-chassis standards in Sec.  535.5(b)(6) and 40
1037.105(h). Manufacturers using the alternate standards in Sec.
535.5(b)(6) and 40 CFR 1037.105(h) should treat each vehicle type as a
separate vehicle subcategory.

            Table 1--Phase 1 Vocational Vehicle Subcategories
------------------------------------------------------------------------

-------------------------------------------------------------------------
Vocational LHD vehicles.
Vocational MHD vehicles.
Vocational HHD vehicles.
------------------------------------------------------------------------

                                Table 2--Phase 2 Vocational Vehicle Subcategories
----------------------------------------------------------------------------------------------------------------
             Engine type               Vocational LHD vehicles  Vocational MHD vehicles  Vocational HHD vehicles
----------------------------------------------------------------------------------------------------------------