Federal Register / Vol. 79, No. 25 / Thursday, February 6, 2014 / Rules and Regulations 7077 

Executive Order 13175 (65 FR 67249, 

November 9, 2000), because the SIP is 

not approved to apply in Indian country 

located in the state, and EPA notes that 

it will not impose substantial direct 

costs on tribal governments or preempt 

tribal law. 

The Congressional Review Act, 5 

U.S.C. 801 et seq., as added by the Small 

Business Regulatory Enforcement 

Fairness Act of 1996, generally provides 

that before a rule may take effect, the 

agency promulgating the rule must 

submit a rule report, which includes a 

copy of the rule, to each House of the 

Congress and to the Comptroller General 

of the United States. EPA will submit a 

report containing this action and other 

required information to the U.S. Senate, 

the U.S. House of Representatives, and 

the Comptroller General of the United 

States prior to publication of the rule in 

the Federal Register. A major rule 

cannot take effect until 60 days after it 

is published in the Federal Register. 

This action is not a ‘‘major rule’’ as 

defined by 5 U.S.C. 804(2). 

Under section 307(b)(1) of the Clean 

Air Act, petitions for judicial review of 

this action must be filed in the United 

States Court of Appeals for the 

appropriate circuit by April 7, 2014. 

Filing a petition for reconsideration by 

the Administrator of this final rule does 

not affect the finality of this action for 

the purposes of judicial review nor does 

it extend the time within which a 

petition for judicial review may be filed, 

and shall not postpone the effectiveness 

of such rule or action. This action may 

not be challenged later in proceedings to 

enforce its requirements. (See CAA 

section 307(b)(2).) 

List of Subjects in 40 CFR Part 52 

Environmental protection, Air 

pollution control, Carbon monoxide, 

Incorporation by reference, 

Intergovernmental relations, Lead, 

Nitrogen dioxide, Ozone, Particulate 

matter, Reporting and recordkeeping 

requirements, Sulfur oxides, Volatile 

organic compounds. 

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

Dated: December 4, 2013. 

Debra H. Thomas, 

Acting Regional Administrator, Region 8. 

40 CFR part 52 is amended to read as 

follows: 

PART 52—APPROVAL AND 

PROMULGATION OF 

IMPLEMENTATION PLANS 

■ 1. The authority citation for part 52 

continues to read as follows: 

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

Subpart TT—[AMENDED] 

■ 2. Section 52.2320 is amended by 

adding paragraph (c)(75) to read as 

follows: 

§ 52.2320 Identification of plan. 

* * * * * 

(c) * * * 

(75) On September 15, 2006, the 

Governor submitted revisions to the 

Utah State Implementation Plan (SIP) 

permitting rules. The September 15, 

2006 submittal contains new, amended 

and renumbered rules in Utah 

Administrative Code (UAC) Title R–307 

that pertain to the issuance of Utah air 

quality permits. EPA is approving the 

following rules or parts of rules from the 

September 15, 2006 submittal: R307– 

401–1 through 6; R307–401–8; R307– 

401–9 (except for paragraph (b) and the 

portions of paragraph (c) that reference 

paragraph (b)); R307–401–10 through 

11; R307–401–13; R307–401–17 through 

20; and R307–410–1 through 4. EPA is 

disapproving the following rules or 

parts of rules from the September 15, 

2006 submittal: R307–401–7; R307– 

401–9(b) and the portions of 9(c) that 

reference (9)(b); R307–401–12; and 

R307–410–5. EPA is limitedly 

approving and limitedly disapproving 

R307–410–6 from the September 15, 

2006 submittal—this means EPA is 

approving this rule because it will 

strengthen the SIP but is simultaneously 

disapproving it because it does not fully 

comply with applicable requirements. 

EPA is not acting on the revisions to 

UAC R307–101–2 because the revisions 

have been superseded by later revisions 

to the rule, which EPA approved at 

§ 52.2320(c)(67) (see 73 FR 51222). EPA 

is not acting on R307–401–14 through 

16 because EPA previously acted on 

such provisions (notice of final 

rulemaking signed October 19, 2012). 

(i) Incorporation by reference. 

(A) Title R307 of the Utah 

Administrative Code, Environmental 

Quality, Air Quality, Rule R307–401, 

Permits: New and Modified Sources, 

Rule R307–401–1, Purpose; Rule R307– 

401–2, Definitions; Rule R307–401–3, 

Applicability; Rule R307–401–4, 

General Requirements; Rule R307–401– 

5, Notice of Intent; Rule R307–401–6, 

Review Period; Rule R307–401–8, 

Approval Order; R307–401–9, Small 

Source Exemption except for R307–401– 

9(1)(b) and the phrase ‘‘or (b)’’ in R307– 

401–9(1)(c); Rule R307–401–10, Source 

Category Exemptions; Rule R307–401– 

11, Replacement-in-Kind Equipment; 

Rule R307–401–13, Plantwide 

Applicability Limits; Rule R307–401–17, 

Temporary Relocation; Rule R307–401– 

18, Eighteen Month Review; Rule R307– 

401–19, Analysis of Alternatives; and 

Rule R307–401–20, Relaxation of 

Limitations. Title R307 of the Utah 

Administrative Code, Environmental 

Quality, Air Quality, Rule R307–410, 

Permits: Emissions Impact Analysis, 

Rule R307–410–1, Purpose; Rule R307– 

410–2, Definitions; Rule R307–410–3, 

Use of Dispersion Models; R307–410–4, 

Modeling of Criteria Pollutant Impacts 

in Attainment Areas; and R307–410–6, 

Stack Heights and Dispersion 

Techniques. Effective June 16, 2006, as 

published in the Utah State Bulletin on 

December 1, 2005, modified on April 1, 

2006, and July 15, 2006. Note: The July 

15, 2006 publication contains a 

typographical error in the title for Rule 

R307–410. 

[FR Doc. 2014–02080 Filed 2–5–14; 8:45 am] 

BILLING CODE 6560–50–P 

ENVIRONMENTAL PROTECTION 

AGENCY 

40 CFR Parts 1039, 1042, and 1068 

[EPA–HQ–OAR–2012–0102; FRL–9905–35– 

OAR] 

RIN 2060–AR48; 2127–AL31 

Nonroad Technical Amendments 

AGENCY: Environmental Protection 

Agency (EPA). 

ACTION: Final rule. 

SUMMARY: EPA is adopting amendments 

to the technical hardship provisions 

under the Transition Program for 

Equipment Manufacturers related to the 

Tier 4 standards for nonroad diesel 

engines, and to the replacement engine 

exemption generally applicable to new 

nonroad engines. These provisions may 

have minor impacts on the costs and 

emission reductions of the underlying 

regulatory programs amended in this 

action, though in most cases these are 

simple technical amendments. For those 

provisions that may have a minor 

impact on the costs or benefits of the 

amended regulatory program, any 

potential impacts would be small and 

we have not attempted to quantify the 

potential changes. 

DATES: This final rule is effective on 

March 10, 2014, except for 

§ 1039.625(m) which will be effective on 

February 6, 2014. 

FOR FURTHER INFORMATION CONTACT: 

Alan Stout, Environmental Protection 

Agency, Office of Transportation and 

Air Quality, Assessment and Standards 

Division, 2000 Traverwood Drive, Ann 

Arbor, Michigan 48105; telephone 

number: (734) 214–4805; email address: 

stout.alan@epa.gov. 


emcdonald on DSK67QTVN1PROD with RULES
7078 Federal Register / Vol. 79, No. 25 / Thursday, February 6, 2014 / Rules and Regulations 

SUPPLEMENTARY INFORMATION: 

This action affects companies that 

manufacture or remanufacture nonroad 

engines and equipment in the United States. Regulated categories and entities 

include the following: 

Category NAICS Code a Examples of potentially affected entities 

Industry ........................................................................................................... 333618 Manufacturers of new nonroad engines. 

Industry ........................................................................................................... 333111 Manufacturers of farm machinery. 

Industry ........................................................................................................... 333120 Manufacturers of construction equipment. 

Industry ........................................................................................................... 336611 Manufacturers of marine vessels. 

Industry ........................................................................................................... 811310 Engine repair, remanufacture, and maintenance. 

Note: a North American Industry Classification System (NAICS) 

This table is not intended to be 

exhaustive, but rather provides a guide 

for readers regarding entities likely 

covered by these rules. This table lists 

the types of entities that the agencies are 

aware may be regulated by this action. 

Other types of entities not listed in the 

table could also be regulated. To 

determine whether your activities are 

regulated by this action, you should 

carefully examine the applicability 

criteria in the referenced regulations. 

You may direct questions regarding the 

applicability of this action to the 

persons listed in the preceding FOR

FURTHER INFORMATION CONTACT section. 

I. Background 

EPA published a direct final rule on 

June 17, 2013, to amend various aspects 

of the regulations that apply for heavyduty highway engines and vehicles and 

for nonroad engines and equipment (78 

FR 36370). For most of those changes, 

we did not receive adverse comment 

and most of the amendments became 

effective as published. We received 

adverse comments on certain 

amendments, which led us to withdraw 

those regulatory changes in a notice 

published August 16, 2013 (78 FR 

49963). 

On the same day that we published 

the direct final rule, we published a 

companion proposed rule that included 

all the content of the direct final rule (78 

FR 36135). This final rule follows up on 

two broad areas from the proposed rule 

that were the subject of adverse 

comment—the replacement engine 

exemption for nonroad engines, and the 

technical hardship and related 

provisions for nonroad diesel engine 

and equipment manufacturers 

transitioning to Tier 4 compliance. 

II. Replacement Engine Exemption 

In 1996, EPA adopted a provision 

allowing manufacturers in limited 

circumstances to produce new engines 

for replacing failed engines that are 

exempt from the requirement to be 

certified to current emission standards 

(61 FR 58102, November 12, 1996). With 

this approach, manufacturers have been 

able to make new, exempt engines in 

cases where engines certified to current 

standards do not have the physical or 

performance characteristics needed to 

power equipment that was originally 

equipped with an older engine. Without 

this provision, some equipment owners 

would have been forced to prematurely 

scrap otherwise working equipment 

(sometimes worth millions of dollars) 

because no engine meeting current 

emission standards could be adapted for 

installation within the space occupied 

by the original engine. 

EPA later amended the replacement 

engine exemption provisions to address 

complications related to producing 

partially complete engines for 

replacement purposes and to address 

the need to produce and sell 

replacement engines such that they 

would be available to operators with a 

critical need to avoid extended 

downtime in the case of engine failure 

(73 FR 59034, October 8, 2008). These 

revisions allowed manufacturers to sell 

a limited number of new, exempt 

replacement engines without taking the 

steps that would otherwise be required 

to document the need for the exemption 

and to arrange for the proper disposition 

of the old engine. The amendments also 

included anti-circumvention provisions 

to clarify the overall purpose of the 

replacement engine exemption in an 

attempt to prevent manufacturers and 

operators from using exempted engines 

in ways that were unnecessary and/or 

detrimental to the environment. 

In the June 2013 direct final rule and 

companion proposed rule, EPA 

amended these provisions to remove the 

overly restrictive anti-circumvention 

provisions and replaced them with a 

variety of more specific conditions and 

requirements that were intended to 

more effectively ensure that the 

exemption would be used appropriately. 

We received adverse comment on some 

of the most recent amendments in 

§ 1068.240(b). Based on these 

comments, we withdrew all the 

amendments to § 1068.240(a) through 

(d), leaving intact the change to remove 

the anti-circumvention provisions in 

§ 1068.240(g), with the understanding 

that we would revisit all the intended 

changes from § 1068.240(a) through (d) 

in this subsequent final rule. 

EPA continues to believe that new, 

exempt replacement engines should be 

used only in cases where a currently 

certified engine cannot practically be 

installed to power the old equipment. 

EPA believes the proposed regulatory 

language in § 1068.240 serves this 

purpose without the unintended 

consequences described above 

associated with the anti-circumvention 

provisions. EPA expects manufacturers 

and operators following the regulations 

to continue to use the exemption 

provisions appropriately and not for the 

purpose of circumventing the emission 

standards. EPA is adding language to 

explicitly limit this provision to 

equipment that has been in service 40 

years or less (at the point of installation) 

so that manufacturers and operators do 

not use this provision to keep older 

dirtier equipment in operation beyond 

its normal lifetime by continually using 

new, exempt engines to replace old 

engines. EPA has adopted a similar 

restriction for stationary engines under 

40 CFR 60.4210(i), except that the 

maximum equipment age is 15 years for 

stationary engines. EPA will continue to 

monitor compliance with the amended 

exemption provisions and will consider 

any appropriate changes to the 

regulation in the future to ensure that 

the exemption is properly used toward 

this purpose. This 40-year limit does not 

apply for marine diesel engines, since 

those engines are subject to separate 

replacement engine provisions. 

We included a 25-year limit in the 

proposed rule, but four commenters 

weighed in on this age limit. The 

California Air Resources Board stated 

that it did not oppose the proposal and 

appreciated the intent of the provision 

to ensure against older technology 

engines being available indefinitely. 

However, CARB did not believe it was 

necessary to incorporate the limit into 


emcdonald on DSK67QTVN1PROD with RULES
Federal Register / Vol. 79, No. 25 / Thursday, February 6, 2014 / Rules and Regulations 7079 

1Response to Comments from North American 

Repower Regarding Engine Core Recovery.’’ EPA 

memo to Docket EPA–HQ–OAR–2012–0102 from 

Alan Stout, January 10, 2014. 

the California program because the 

state’s in-use programs are expected to 

require fleet modernization for most 

nonroad applications well in advance of 

the proposed 25 year cut-off. The 

Northeast States for Coordinated In-Use 

Management supported the 25-year 

limit as a reasonable measure to address 

circumvention concerns. The National 

Groundwater Association objected to 

the 25-year limit, noting that their 

members have thousands of powered 

drilling units with an expected lifetime 

of 50 years or more. They stated that 

limiting access to the replacement 

engine exemption and thereby requiring 

operators to prematurely buy expensive 

new equipment would cause significant 

economic hardship. They acknowledged 

that a 40-year limit for groundwater 

drilling applications would be more 

appropriate. Case New Holland also 

described the potential for significant 

adverse impacts if the 25-year limit 

were applied to agricultural equipment; 

they favored simply removing the age 

specification but also stated that 

changing to a 40-year limit would 

provide substantial relief. As a result, 

we are replacing the proposed 25-year 

limit with a 40-year limit. 

The ‘‘tracked option’’ specified in 

§ 1068.240(b) also includes an 

additional step to qualify for the 

replacement engine exemption for 

equipment not experiencing premature 

engine failure. In particular, 

manufacturers would need to make a 

determination that the replacement 

engine is designed with the greatest 

degree of emission control that is 

available for the particular application 

(i.e., ‘‘cleanest available’’). For example, 

consider an engine being replaced that 

was built before the Tier 1 standards 

started to apply and that engines of its 

power category are currently subject to 

Tier 4 standards. In addition to the 

exemption provision requiring the 

manufacturer to determine that a Tier 4 

engine does not have the necessary 

physical or performance characteristics, 

the manufacturer must also consider 

whether any Tier 1, Tier 2, or Tier 3 

engines are being produced with the 

appropriate physical and performance 

characteristics for replacing the old 

engine. If a Tier 3 engine is available 

with the appropriate physical and 

performance characteristics for a given 

installation, Tier 1 and Tier 2 engines 

emitting at levels above the Tier 3 

standards would not qualify for an 

exemption for that equipment. This 

requirement to use the cleanest 

available engine fits with the intent of 

the amendments facilitating voluntary 

incentive programs involving 

replacement engine upgrades toward the 

goal of reducing emissions from in-use 

equipment, but without imposing a 

requirement that would involve new 

technology development or impractical 

equipment design changes. A provision 

similar to this has already been in place 

for marine diesel engines in § 1042.615. 

In the case of equipment experiencing 

premature engine failure, we will 

continue to apply the simpler 

requirement that the replacement engine 

must meet emission standards that are 

the same as or better than the standards 

that applied to the old engine. We 

received no adverse comment on this 

provision. 

We are also revising the provisions 

related to the disposition of the old 

engine in § 1068.240(b). The engine 

manufacturer making the exempt new 

replacement engine must take 

possession of the old engine or confirm 

that it has been destroyed. Although this 

is not a new requirement, we are 

including an additional new provision 

to explicitly allow the re-use of the old 

engine block, but to limit such re-use. 

Specifically, to be re-introduced into 

U.S. commerce, the old engine must 

either meet current emission standards 

or qualify for an exemption as if it were 

a new engine. For example, the old 

engine could be re-used as a 

replacement engine for a different piece 

of equipment under certain 

circumstances. Under this approach, an 

engine made with a used engine block 

and any mix of new or used additional 

parts would be treated in a consistent 

way. For example, the recycled 

replacement engine would be subject to 

all the demonstrations and 

documentation requirements of 

§ 1068.240(b), or it could alternatively 

count toward the engine manufacturer’s 

allowance to produce a limited number 

of exempt replacement engines under 

§ 1068.240(c). For engines covered by 

the ‘‘tracked option’’ under 

§ 1068.240(b) that are not re-introduced 

into U.S. commerce, the engine 

manufacturer making the new exempt 

engine must destroy the old engine or 

confirm that it has been destroyed. We 

note that destroying an engine means 

altering it so it can never be used again 

in any form as a working engine. 

However, we believe manufacturers will 

rarely choose to destroy an engine that 

could be remanufactured as a 

replacement engine under § 1068.240. 

North American Repower provided 

comments describing their objection to 

the amendments related to the 

disposition of the engines being 

replaced. Their comments focused 

primarily on their desire for a steady 

source of old engine blocks to supply 

their remanufacturing activities. 

However, their objection seems to be 

directed at the existing restriction rather 

than the proposed flexibility regarding 

the disposition of engine cores. The 

existing requirement for the engine 

manufacturer to take possession of the 

old engine (or confirm that it was 

destroyed) has never allowed replaced 

engines under the ‘‘tracked option’’ in 

§ 1068.240(b) to be reused by other 

parties. This restriction was put in place 

in the past because the ‘‘tracked option’’ 

does not limit the number of exempt 

replacement engines a manufacturer 

may produce. Thus, it is important to 

restrict the re-use of these replaced 

engines so this option cannot be used to 

significantly increase the number of 

older-technology engines in use. To the 

extent that the provision in question has 

any impact on the availability of these 

engine cores, it can only make them 

more available. The revised regulations 

explicitly allow for re-use of the 

replaced engines if they are modified to 

meet current emission standards, or if 

they qualify for exemptions that apply 

for new engines. For example, a 

manufacturer taking possession of a 

replaced engine may remanufacture that 

engine in a certified configuration, or 

they may sell it as an exempt 

replacement engine if they take the 

steps and meet the conditions that apply 

under § 1068.240. The manufacturer 

may also sell the engine core to another 

remanufacturing company under the 

provisions of § 1068.262; such a 

transaction was not specifically 

authorized under the previous 

regulation. Additionally, we note that 

these provisions do not limit the ability 

of remanufacturing companies to 

recover engine cores from scrapped 

equipment or from engines replaced by 

used engines. Because of limits on 

producing exempt new replacement 

engines, it is likely that the number of 

these other engines will typically be 

much higher than the number of engines 

replaced with new exempt replacement 

engines under § 1068.240(b) in any 

given year. We are finalizing these 

provisions as proposed. Note that a 

more detailed discussion of North 

American Repower’s comments can be 

found in the docket for this 

rulemaking.1

EPA is also adding some clarification 

to the replacement engine regulations to 

address questions that have arisen, as 

well as making the following changes 

that did not receive adverse comment: 


emcdonald on DSK67QTVN1PROD with RULES
7080 Federal Register / Vol. 79, No. 25 / Thursday, February 6, 2014 / Rules and Regulations 

• Revising the labeling requirements 

to account for the possibility of using a 

new replacement engine to replace a 

previously exempted replacement 

engine. To the extent that the revised 

label statement differs from that 

specified by California ARB, we would 

expect to approve an adjusted statement 

that allows for a single, 50-state label 

under § 1068.201(c). 

• Adjusting the reporting deadline for 

untracked replacement engines under 

§ 1068.240(c). This change would allow 

manufacturers some time after the end 

of the calendar year to make the 

determinations and to take the required 

steps to fulfill the tracking requirements 

for replacement engines under 

§ 1068.240(b). Any engines for which 

these steps and determinations are 

incomplete by the deadline for the 

report would need to be counted as 

untracked replacement engines. Further, 

to account for prevailing practices and 

typical timelines for replacement 

engines, we are moving back the 

deadline for this annual report from 

February 15 to March 31. 

• Adding language to allow 

manufacturers to redesignate their 

exempt replacement engines before 

submitting the annual report. The 

regulation already specifies that it is 

acceptable to qualify for a tracked 

exemption under § 1068.240(b), even if 

that wasn’t the original plan, as long as 

all the applicable conditions and 

requirements are met. We are adding 

language to allow the converse as well. 

Specifically, if manufacturers plan to 

use a tracked exemption, but find in the 

end that they don’t want to deal with 

the limitations on what can be done 

with the old engine (or if any of the 

other conditions or requirements are not 

met), they may count that as an 

untracked exemption for that reporting 

period. 

• Revising § 1068.240(c)(1) to specify 

that manufacturers may base sales limits 

for the untracked option on total U.S. 

production of certified and exempted 

engines together (including stationary 

engines). 

• Clarifying that the provisions in 

§ 1068.240(d) related to partially 

complete engines also apply for 

‘‘current-tier’’ replacement engines 

exempted under § 1068.240(e). 

• Adding a statement to § 1042.615 

for marine diesel engines to clarify our 

pre-determination that certified Tier 4 

engines do not have the appropriate 

physical and performance 

characteristics for replacing older nonTier 4 engines in marine vessels. This 

policy was established in our final rule 

from June 30, 2008 (see 73 FR 37157). 

III. Nonroad Diesel Engine Technical 

Hardship Program 

EPA adopted Tier 4 standards for 

nonroad diesel engines under 40 CFR 

part 1039 in 2004 (69 FR 38958, June 29, 

2004). To meet these standards, engine 

manufacturers are pursuing 

development of advanced technologies, 

including new approaches for exhaust 

aftertreatment. Equipment 

manufacturers will need to modify their 

equipment designs to accommodate 

these new engine technologies and the 

corresponding changes to engine 

operating parameters (such as operating 

temperatures and heat rejection rates). 

To provide flexibility for equipment 

manufacturers in their efforts to respond 

to these engine design changes, the Tier 

4 standards included the Transition 

Program for Equipment Manufacturers. 

Flexibilities allowed under this program 

include delaying compliance for smallvolume equipment models for several 

years or using allowances in the first 

year to manage the transition to the Tier 

4 engines. While a certain number of 

allowances are available to all 

companies, the regulation provides 

additional relief for nonroad diesel 

equipment manufacturers under certain 

limited circumstances we refer to as 

‘‘technical hardship’’. EPA is amending 

this technical hardship program to 

facilitate EPA granting exemptions to 

address certain hardship circumstances 

that were not contemplated when the 

original 2004 final rule was published. 

The Transition Program for 

Equipment Manufacturers is intended to 

allow nonroad equipment 

manufacturers wide discretion to 

manage their product development 

timeline. Equipment manufacturers may 

comply either based on a percent of 

their production (generally for highvolume manufacturers, as described in 

§ 1039.625(b)(1)), or based on a 

maximum number of exempted pieces 

of equipment (generally for low-volume 

manufacturers, as described in 

§ 1039.625(b)(2)). At the same time, the 

regulations include at § 1039.625(m) an 

acknowledgement that equipment 

manufacturers might face a wide range 

of circumstances, including cases where 

engine manufacturers might be late in 

providing compliant engines to 

nonintegrated equipment 

manufacturers, such that the specified 

allowances are insufficient to avoid a 

disruption in the equipment 

manufacturer’s production schedule. 

The technical hardship provision at 

§ 1039.625(m) allows EPA to make a 

judgment that an equipment 

manufacturer that buys engines from 

another company, through no fault of its 

own, needs additional allowances to 

manage the transition to Tier 4 

products. The regulation as originally 

adopted specifies a maximum allowance 

of 150 percent of a manufacturer’s 

annual production (relative to 

§ 1039.625(b)(1)), or a total of 1,100 

allowances (relative to § 1039.625(b)(2)). 

The regulation also allows for economic 

hardship provisions under § 1068.255; 

however, that eligibility depends on 

manufacturers showing that their 

solvency is in jeopardy without relief. 

Economic hardship therefore serves as a 

flexibility provision of last resort. 

As the compliance dates for the Tier 

4 standards approach, equipment 

manufacturers have described scenarios 

where the technical hardship provisions 

are too restrictive for EPA to address 

their circumstances. For example, 

engine manufacturers have in some 

cases delayed delivery of Tier 4 engines 

until six or even twelve months after the 

Tier 4 standards start to apply, which is 

forcing equipment manufacturers to use 

up all their allowances under 

§ 1039.625(b) in the first year of the new 

standards. Some equipment 

manufacturers have expressed the 

concern that engine manufacturers in 

some cases have chosen to take 

advantage of these program allowances 

for their own benefit, even though they 

were intended to provide relief to 

equipment manufacturers. Not only 

have there been cases in which engine 

manufacturers did not have certain 

engines ready for production when 

required by the standards, but there 

have also been cases in which engine 

manufactures had not provided 

prototype engines or even dimensional 

drawings for certain engine models for 

equipment manufacturers to use to 

redesign their equipment. Whether or 

not this is the result of engine 

manufacturers acting in bad faith, it 

seems clear that this questionable 

planning by engine manufacturers has 

created the potential for significant 

hardship to some equipment 

manufacturers. Although at this point 

the maximum number of additional 

allowances available for EPA to grant 

under § 1039.625(m) would cover a 

good portion of the second year of the 

Tier 4 standards, we now understand 

that this too may be inadequate to allow 

equipment manufacturers to respond to 

the engine manufacturers’ very late 

deliveries of compliant engines. 

In these cases, the maximum 

allowable relief under § 1039.625(m) 

may be insufficient to allow equipment 

manufacturers to transition to meeting 

Tier 4 requirements without disrupting 

their ability to continue producing their 

equipment models. There have also 


emcdonald on DSK67QTVN1PROD with RULES
Federal Register / Vol. 79, No. 25 / Thursday, February 6, 2014 / Rules and Regulations 7081 

been cases where a company would 

meet the criteria to qualify for 

consideration for technical hardship 

under § 1039.625(m) except that the 

regulation disallowed technical 

hardship relief for all engines above 560 

kW and provided only limited relief for 

engines above 37 kW. The regulation 

also provided only limited relief for 

companies that are not small businesses. 

In these cases, no additional relief was 

available under § 1039.625(m), which 

again would leave equipment 

manufacturers unable to continue 

producing their equipment models. To 

address these circumstances, we 

proposed to amend the Transition 

Program for Equipment Manufacturers 

in three ways to address these concerns. 

First, we proposed to remove some of 

the qualifying criteria so that any nonvertically integrated equipment 

manufacturer may apply for technical 

hardship relief under § 1039.625(m) for 

any size engine, rather than limiting the 

technical hardship relief to small 

businesses and to engines within certain 

power categories. We believe it is more 

appropriate to rely on our discretion to 

evaluate each hardship application on 

its merits rather than automatically 

precluding hardship relief based on 

certain characteristics of the engine or 

the company. If hardship relief is not 

appropriate because of an engine’s 

power rating or a company’s size or 

financial standing, we would not 

approve such a request. 

Second, we initially removed the 

maximum number of allowances we can 

approve under § 1039.625(m). We also 

removed the deadlines for exercising 

those additional allowances. 

Specifically, we adjusted the provision 

for additional small-volume allowances 

under § 1039.625(b)(2) and (m)(4) by 

specifying that we may waive the 

annual limits on the number of 

allowances instead of or in addition to 

granting additional hardship 

allowances. We did this because there 

may be times when manufacturers only 

need approval to use up their regular 

allowances at a faster pace than the 

regulations originally allowed. 

In response to these amendments, we 

received adverse comments from the 

California Air Resources Board and the 

Manufacturers of Emission Controls 

Association. They expressed concern 

about EPA allowing itself unlimited 

discretion in the total number of 

allowances we may grant to provide 

relief to manufacturers that qualified for 

technical hardship under § 1039.625(m). 

They also objected to the proposed 

approach, expressing a concern that we 

would be putting ourselves in a position 

to substantially undermine the expected 

emission reductions from the Tier 4 

program. Therefore, in this final rule we 

are only increasing the maximum 

number of percent-of-production 

hardship allowances EPA may grant 

from 70 to 200 percent, and the 

maximum number of and small-volume 

hardship allowances from 400 to 2,000 

units. 

Third, we initially removed all 

limitations for the higher FEL caps 

under § 1039.104(g). However, the 

California Air Resources Board and the 

Manufacturers of Emission Controls 

questioned the need for the revision and 

argued that allowing more engines with 

higher FELs would cause higher 

emissions where engines were 

operating, even though the net impact 

would be emissions-neutral due to the 

use of emissions credits. Subsequent to 

these comments, John Deere provided 

supplemental comments describing 

their product development efforts for 

engines in the 19–56 kW power 

category. They explained why the 

original limit on the higher FEL cap 

flexibility was not sufficient for them to 

complete their development and 

implementation of Tier 4 technologies 

in time. 

To address the environmental 

concerns expressed while also 

accommodating the technology 

development needs that were explained, 

we are adopting revised the limits on 

the higher FEL caps, but isolated that to 

the 19–56 kW power category. 

Specifically, we are increasing this 

limitation for higher FEL caps from 20 

to 40 percent annually, and from 40 to 

80 percent over the specified four-year 

period. This expanded flexibility 

addresses similar technological 

readiness circumstances, as described in 

this section for transitioning to the Tier 

4 standards. However, with this 

amendment there would be no net 

environmental impact since 

manufacturers would need to produce 

low-emission engines that generate 

emission credits to offset the additional 

credits used by transition engines 

certified to higher FELs. 

We are also revising § 1039.104(g) to 

specify that the Temporary Compliance 

Adjustment Factor is the same whether 

an engine is subject to NOX + NMHC 

standards or NOX-only standards. This 

revision also addresses Tier 3 carry-over 

engines that would need to certify to the 

alternate FEL caps after the Tier 4 final 

standards take effect. 

Finally, we are republishing 

§ 1039.625(e)(3), which was 

inadvertently omitted in the withdrawal 

notice without the last sentence, which 

describes the alternative standards that 

apply for engines below 56 kW and 

engines above 560 kW. 

Section 553(d) of the Administrative 

Procedure Act (APA), 5 U.S.C. chapter 

5, generally provides that rules may not 

take effect earlier than 30 days after they 

are published in the Federal Register. 

APA section 553(d) excepts from this 

provision any action that grants or 

recognizes an exemption or relieves a 

restriction. Since the provisions 

expanding the technical hardship relief 

in § 1039.625(m) increase access to an 

exemption from emission standards, 

EPA is making the revisions to 

§ 1039.625(m) effective immediately 

upon publication. The expanded 

technical hardship provisions do not set 

new requirements, but rather create a 

streamlined path by which equipment 

manufacturers unable to install 

compliant Tier 4 engines may install 

previous-tier engines that they could not 

otherwise install without this final rule. 

Thus, the expanded technical hardship 

provisions of § 1039.625(m) 

promulgated in this final rule are 

effective on February 6, 2014. 

IV. Statutory and Executive Order 

Reviews 

A. Executive Order 12866: Regulatory 

Planning and Review and Executive 

Order 13563: Improving Regulation and 

Regulatory Review 

This action is not a ‘‘significant 

regulatory action’’ under the terms of 

Executive Order 12866 (58 FR 51735, 

October 4, 1993) and is therefore not 

subject to review under Executive 

Orders 12866 and 13563 (76 FR 3821, 

January 21, 2011). These provisions may 

have minor impacts on the costs and 

emission reductions of the underlying 

regulatory programs amended in this 

action. Where there may be a minor 

impact on the costs or benefits of the 

amended regulatory program, any 

potential impacts would be small and 

we have not attempted to quantify the 

potential changes. As such, a regulatory 

impact evaluation or analysis is 

unnecessary. EPA also does not expect 

this rule to have substantial 

Congressional or public interest. 

B. Paperwork Reduction Act 

This action does not impose any new 

information collection burden. The 

regulatory changes include changes to 

the way we implement the emission 

standards or exemption provisions to 

reduce burden or to streamline 

administrative procedures. However, 

the Office of Management and Budget 

(OMB) has previously approved the 

information collection requirements 

contained in the existing regulations at 


emcdonald on DSK67QTVN1PROD with RULES
7082 Federal Register / Vol. 79, No. 25 / Thursday, February 6, 2014 / Rules and Regulations 

40 CFR parts 1039 and 1068 under the 

provisions of the Paperwork Reduction 

Act, 44 U.S.C. 3501 et seq. and has 

assigned OMB Control Numbers 2060– 

0287 and 2060–0460. The OMB control 

numbers for EPA’s regulations in title 40 

of the Code of Federal Regulations are 

listed in 40 CFR part 9. 

C. Regulatory Flexibility Act 

The Regulatory Flexibility Act (RFA) 

as amended by the Small Business 

Regulatory Enforcement Fairness Act of 

1996 (Pub. L. 104–121, 110 Stat. 857), 

generally requires an agency to prepare 

a regulatory flexibility analysis of any 

rule subject to notice and comment 

rulemaking requirements under the 

Administrative Procedure Act or any 

other statute unless the agency certifies 

that the rule will not have a significant 

economic impact on a substantial 

number of small entities. Small entities 

include small businesses, small 

organizations, and small governmental 

jurisdictions. 

For purposes of assessing the impacts 

of this rule on small entities, small 

entity is defined as: (1) A small business 

as defined by Small Business 

Administration regulations at 13 CFR 

121.201; (2) a small governmental 

jurisdiction that is a government of a 

city, county, town, school district or 

special district with a population of less 

than 50,000; and (3) a small 

organization that is any not-for-profit 

enterprise which is independently 

owned and operated and is not 

dominant in its field. 

After considering the economic 

impacts of these rules on small entities, 

we concluded that this action will not 

have a significant economic impact on 

a substantial number of small entities. 

This final rule allows for greater 

flexibility and reduced burden for 

manufacturers and remanufacturers. 

There are no costs and therefore no 

regulatory burden associated with this 

rule. We have therefore concluded that 

this rule will not increase regulatory 

burden for affected small entities. 

D. Unfunded Mandates Reform Act 

This action contains no Federal 

mandates under the provisions of Title 

II of the Unfunded Mandates Reform 

Act of 1995 (UMRA), 2 U.S.C. 1531– 

1538 for State, local, or tribal 

governments or the private sector. The 

action imposes no enforceable duty on 

any State, local or tribal governments or 

the private sector. Therefore, this action 

is not subject to the requirements of 

sections 202 or 205 of the UMRA. 

This action is also not subject to the 

requirements of section 203 of UMRA 

because it contains no regulatory 

requirements that might significantly or 

uniquely affect small governments. 

E. Executive Order 13132: Federalism 

This action does not have federalism 

implications. It will not have substantial 

direct effects on the States, on the 

relationship between the national 

government and the States, or on the 

distribution of power and 

responsibilities among the various 

levels of government, as specified in 

Executive Order 13132. Thus, Executive 

Order 13132 does not apply to this 

action. 

F. Executive Order 13175: Consultation 

and Coordination With Indian Tribal 

Governments 

This action does not have tribal 

implications, as specified in Executive 

Order 13175 (65 FR 67249, November 9, 

2000). Tribal governments would be 

affected only to the extent they purchase 

and use regulated vehicles. Thus, 

Executive Order 13175 does not apply 

to this action. 

G. Executive Order 13045: Protection of 

Children From Environmental Health 

and Safety Risks 

This action is not subject to Executive 

Order 13045 (62 FR 19885, April 23, 

1997) because it is not economically 

significant as defined in Executive 

Order 12866, and because EPA does not 

believe the environmental health or 

safety risks addressed by this action 

present a disproportionate risk to 

children. Any potential environmental 

health or safety impacts of this final rule 

would be very small. 

H. Executive Order 13211: Actions That 

Significantly Affect Energy Supply, 

Distribution, or Use 

This action is not subject to Executive 

Order 13211 (66 FR 28355 (May 22, 

2001)), because it is not a significant 

regulatory action under Executive Order 

12866. 

I. National Technology Transfer 

Advancement Act 

Section 12(d) of the National 

Technology Transfer and Advancement 

Act of 1995 (‘‘NTTAA’’), Public Law 

104–113, 12(d) (15 U.S.C. 272 note) 

directs EPA to use voluntary consensus 

standards in its regulatory activities 

unless to do so would be inconsistent 

with applicable law or otherwise 

impractical. Voluntary consensus 

standards are technical standards (e.g., 

materials specifications, test methods, 

sampling procedures, and business 

practices) that are developed or adopted 

by voluntary consensus standards 

bodies. NTTAA directs EPA to provide 

Congress, through OMB, explanations 

when the Agency decides not to use 

available and applicable voluntary 

consensus standards. 

This action does not involve 

application of new technical standards. 

Therefore, EPA did not consider the use 

of any voluntary consensus standards. 

J. Executive Order 12898: Federal 

Actions To Address Environmental 

Justice in Minority Populations and 

Low-Income Populations 

Executive Order 12898 (59 FR 7629, 

February 16, 1994) establishes federal 

executive policy on environmental 

justice. Its main provision directs 

federal agencies, to the greatest extent 

practicable and permitted by law, to 

make environmental justice part of their 

mission by identifying and addressing, 

as appropriate, disproportionately high 

and adverse human health or 

environmental effects of their programs, 

policies, and activities on minority 

populations and low-income 

populations in the United States. 

EPA has determined that this final 

rule will not have disproportionately 

high and adverse human health or 

environmental effects on minority or 

low-income populations because it 

merely makes minor revisions to 

existing regulatory programs. 

K. Congressional Review Act 

The Congressional Review Act, 5 

U.S.C. 801 et seq., as added by the Small 

Business Regulatory Enforcement 

Fairness Act of 1996, generally provides 

that before a rule may take effect, the 

agency promulgating the rule must 

submit a rule report, which includes a 

copy of the rule, to each House of the 

Congress and to the Comptroller General 

of the United States. EPA will submit a 

report containing this rule and other 

required information to the U.S. Senate, 

the U.S. House of Representatives, and 

the Comptroller General of the United 

States prior to publication of the rule in 

the Federal Register. A Major rule 

cannot take effect until 60 days after it 

is published in the Federal Register. 

This action is not a ‘‘major rule’’ as 

defined by 5 U.S.C. 804(2). The changes 

to § 1039.625(m) are effective on 

February 6, 2014. All other provisions 

in this rule are effective on March 10, 

2014. 

V. Statutory Authority 

Statutory authority for the vehicle 

controls is found in Clean Air Act 

section 213 (which authorizes standards 

for emissions of pollutants from new 

nonroad engines which emissions cause 

or contribute to air pollution which may 

reasonably be anticipated to endanger 


emcdonald on DSK67QTVN1PROD with RULES
Federal Register / Vol. 79, No. 25 / Thursday, February 6, 2014 / Rules and Regulations 7083 

public health or welfare), sections 203– 

209, 216, and 301 (42 U.S.C. 7522, 7523, 

7524, 7525, 7541, 7542, 7543, 7547, 

7550, and 7601). 

List of Subjects 

40 CFR Part 1039 

Environmental protection, 

Administrative practice and procedure, 

Air pollution control, Confidential 

business information, Imports, Labeling, 

Penalties, Reporting and recordkeeping 

requirements, Warranties. 

40 CFR Part 1042 

Environmental protection, 

Administrative practice and procedure, 

Air pollution control, Confidential 

business information, Imports, Labeling, 

Penalties, Vessels, Reporting and 

recordkeeping requirements, 

Warranties. 

40 CFR Part 1068 

Environmental protection, 

Administrative practice and procedure, 

Confidential business information, 

Imports, Motor vehicle pollution, 

Penalties, Reporting and recordkeeping 

requirements, Warranties. 

Dated: January 28, 2014. 

Gina McCarthy, 

Administrator. 

For the reasons set forth in the 

preamble, the Environmental Protection 

Agency is amending title 40, chapter I 

of the Code of Federal Regulations as 

follows: 

PART 1039—CONTROL OF EMISSIONS 

FROM NEW AND IN-USE NONROAD 

COMPRESSION-IGNITION ENGINES 

■ 1. The authority citation for part 1039 

continues to read as follows: 

Authority: 42 U.S.C. 7401–7671q. 

Subpart B—[Amended] 

■ 2. Section 1039.104 is amended by 

revising paragraph (g) to read as follows: 

§ 1039.104 Are there interim provisions 

that apply only for a limited time? 

* * * * * 

(g) Alternate FEL caps. You may 

certify engines to the FEL caps in Table 

1 of this section instead of the otherwise 

applicable FEL caps in § 1039.101(d)(1), 

§ 1039.102(e), or § 1039.102(g)(2) for the 

indicated model years, subject to the 

following provisions: 

(1) The provisions of this paragraph 

(g) apply for limited numbers of engines 

as specified in this paragraph (g)(1). If 

you certify an engine under an alternate 

FEL cap in this paragraph (g) for any 

pollutant, count it toward the allowed 

percentage of engines certified to the 

alternate FEL caps. 

(i) Except as specified in paragraph 

(g)(1)(ii) of this section, the number of 

engines certified to the FEL caps in 

Table 1 of this section must not exceed 

20 percent in any single model year in 

each power category, and the sum of 

percentages over the 4-year period must 

not exceed a total of 40 percent in each 

power category. 

(ii) For the 19–56 kW power category, 

the number of engines certified to the 

FEL caps in Table 1 of this section must 

not exceed 40 percent in any single 

model year, and the sum of percentages 

over the 4-year period must not exceed 

a total of 80 percent. 

(2) If your engine is not certified to 

transient emission standards under the 

provisions of § 1039.102(a)(1)(iii), you 

must adjust your FEL upward by a 

temporary compliance adjustment factor 

(TCAF) before calculating your negative 

emission credits under § 1039.705, as 

follows: 

(i) The temporary compliance 

adjustment factor for NOX and for NOX

+ NMHC is 1.1. 

(ii) The temporary compliance 

adjustment factor for PM is 1.5. 

(iii) The adjusted FEL (FELadj) for 

calculating emission credits is 

determined from the steady-state FEL 

(FELss) using the following equation: 

FELadj = (FELss) × (TCAF) 

(iv) The unadjusted FEL (FELss) 

applies for all purposes other than 

credit calculation. 

(3) These alternate FEL caps may not 

be used for phase-in engines. 

(4) Do not apply TCAFs to gaseous 

emissions for phase-out engines that 

you certify to the same numerical 

standards (and FELs if the engines are 

certified using ABT) for gaseous 

pollutants as you certified under the 

Tier 3 requirements of 40 CFR part 89. 

TABLE 1 OF § 1039.104—ALTERNATE FEL CAPS

Maximum engine power PM FEL cap, 

g/kW-hr 

Model years 

for the 

alternate PM 

FEL cap 

NOX FEL cap, 

g/kW-hr 1

Model years 

for the 

alternate NOX

FEL cap 

19 ≤ kW < 56 ................................................................................................... 0.30 2 2012–2015 ........................ ........................

56 ≤ kW < 130 3 ............................................................................................... 0.30 2012–2015 3.8 4 2012–2015 

130 ≤ kW ≤ 560 ............................................................................................... 0.20 2011–2014 3.8 5 2011–2014 

kW > 560 6 ....................................................................................................... 0.10 2015–2018 3.5 2015–2018 

1The FEL cap for engines demonstrating compliance with a NOX + NMHC standard is equal to the previously applicable NOX + NMHC standard specified in 40 CFR 89.112 (generally the Tier 3 standards). 2For manufacturers certifying engines under Option #1 of Table 3 of § 1039.102, these alternate FEL caps apply to all 19–56 kW engines for 

model years from 2013 through 2016 instead of the years indicated in this table. For manufacturers certifying engines under Option #2 of Table 3 

of § 1039.102, these alternate FEL caps do not apply to 19–37 kW engines except in model years 2013 to 2015. 3For engines below 75 kW, the FEL caps are 0.40 g/kW-hr for PM emissions and 4.4 g/kW-hr for NOX emissions. 4For manufacturers certifying engines in this power category using a percentage phase-in/phase-out approach instead of the alternate NOX

standards of § 1039.102(e)(1), the alternate NOX FEL cap in the table applies only in the 2014–2015 model years if certifying under 

§ 1039.102(d)(1), and only in the 2015 model year if certifying under § 1039.102(d)(2). 5For manufacturers certifying engines in this power category using the percentage phase-in/phase-out approach instead of the alternate NOX

standard of § 1039.102(e)(2), the alternate NOX FEL cap in the table applies only for the 2014 model year. 6For engines above 560 kW, the provision for alternate NOX FEL caps is limited to generator-set engines. 

(5) You may certify engines under this 

paragraph (g) in any model year 

provided for in Table 1 of this section 

without regard to whether or not the 

engine family’s FEL is at or below the 

otherwise applicable FEL cap. For 

example, a 200 kW engine certified to 

the NOX + NMHC standard of 

§ 1039.102(e)(3) with an FEL equal to 

the FEL cap of 2.8 g/kW-hr may 

nevertheless be certified under this 

paragraph (g). 

(6) For engines you produce under 

this paragraph (g) after the Tier 4 final 

standards take effect, you may certify 

based on a NOX + NMHC FEL as 

described in Table 1 of this section. 

Calculate emission credits for these 


emcdonald on DSK67QTVN1PROD with RULES
7084 Federal Register / Vol. 79, No. 25 / Thursday, February 6, 2014 / Rules and Regulations 

engines relative to the applicable NOX

standard in § 1039.101 or § 1039.102, 

plus 0.1 g/kW-hr. 

* * * * * 

Subpart G—[Amended] 

■ 3. Section 1039.625 is amended by 

revising paragraphs (e)(3) and (m) to 

read as follows: 

§ 1039.625 What requirements apply under 

the program for equipment-manufacturer 

flexibility? 

* * * * * 

(e) * * * 

(3) In all other cases, engines at or 

above 56 kW and at or below 560 kW 

must meet the appropriate Tier 3 

standards described in 40 CFR 89.112. 

Engines below 56 kW and engines above 

560 kW must meet the appropriate Tier 

2 standards described in 40 CFR 89.112. 

* * * * * 

(m) Additional exemptions for 

technical or engineering hardship. You 

may request additional engine 

allowances under paragraph (b) of this 

section; however, you may use these 

extra allowances only for those 

equipment models for which you, or an 

affiliated company, do not also produce 

the engine. Additional allowances 

under this paragraph (m) must be used 

within the specified seven-year period. 

After considering the circumstances, we 

may permit you to introduce into U.S. 

commerce equipment with such engines 

that do not comply with Tier 4 emission 

standards, as follows: 

(1) We may approve additional 

exemptions if extreme and unusual 

circumstances that are clearly outside 

your control and that could not have 

been avoided with reasonable discretion 

have resulted in technical or 

engineering problems that prevent you 

from meeting the requirements of this 

part. You must show that you exercised 

prudent planning and have taken all 

reasonable steps to minimize the scope 

of your request for additional 

allowances. 

(2) To apply for exemptions under 

this paragraph (m), send the Designated 

Compliance Officer a written request as 

soon as possible before you are in 

violation. In your request, include the 

following information: 

(i) Describe your process for designing 

equipment. 

(ii) Describe how you normally work 

cooperatively or concurrently with your 

engine supplier to design products. 

(iii) Describe the engineering or 

technical problems causing you to 

request the exemption and explain why 

you have not been able to solve them. 

Describe the extreme and unusual 

circumstances that led to these 

problems and explain how they were 

unavoidable. 

(iv) Describe any information or 

products you received from your engine 

supplier related to equipment design— 

such as written specifications, 

performance data, or prototype 

engines—and when you received it. 

(v) Compare the design processes of 

the equipment model for which you 

need additional exemptions and that for 

other models for which you do not need 

additional exemptions. Explain the 

technical differences that justify your 

request. 

(vi) Describe your efforts to find and 

use other compliant engines, or 

otherwise explain why none is 

available. 

(vii) Describe the steps you have taken 

to minimize the scope of your request. 

(viii) Include other relevant 

information. You must give us other 

relevant information if we ask for it. 

(ix) Estimate the increased percent of 

production you need for each 

equipment model covered by your 

request, as described in paragraph 

(m)(3) of this section. Estimate the 

increased number of allowances you 

need for each equipment model covered 

by your request, as described in 

paragraph (m)(4) of this section. 

(3) We may approve your request to 

increase the allowances under 

paragraph (b)(1) of this section, subject 

to the following limitations: 

(i) You must use up the allowances 

under paragraph (b)(1) of this section 

before using any additional allowances 

under this paragraph (m). 

(ii) The additional allowances under 

this paragraph (m)(3) may not exceed 

200 percent for each power category. 

(iii) You may use these additional 

allowances only for the specific 

equipment models covered by your 

request. 

(4) We may approve your request to 

increase the small-volume allowances 

under paragraph (b)(2) of this section, 

subject to the following limitations: 

(i) You are eligible for additional 

allowances under this paragraph (m)(4) 

only if you do not use the provisions of 

paragraph (m)(3) of this section to 

obtain additional allowances within a 

given power category. 

(ii) You must use up the allowances 

under paragraph (b)(2) of this section 

before using any additional allowances 

under this paragraph (m). 

(iii) The additional allowances under 

this paragraph (m)(4) may not exceed 

2,000 units. 

(iv) We may approve additional 

allowances in the form of waiving the 

annual limits specified in paragraph 

(b)(2) of this section instead of or in 

addition to increasing the total number 

of allowances under this paragraph 

(m)(4). 

(v) If we increase the total number of 

allowances, you may use these 

allowances only for the specific 

equipment models covered by your 

request. 

PART 1042—CONTROL OF EMISSIONS 

FROM NEW AND IN-USE MARINE 

COMPRESSION-IGNITION ENGINES 

AND VESSELS 

■ 4. The authority citation for part 1042 

continues to read as follows: 

Authority: 42 U.S.C. 7401–7671q. 

Subpart G—[Amended] 

■ 5. Section 1042.615 is amended as 

follows: 

■ a. By revising the introductory text 

and paragraphs (a) introductory text and 

(a)(1). 

■ b. By redesignating paragraphs (b) 

through (d) as paragraphs (c) through 

(e). 

■ c. By adding a new paragraph (b). 

§ 1042.615 Replacement engine 

exemption. 

For Category 1 and Category 2 

replacement engines, the provisions of 

40 CFR 1068.240 apply except as 

described in this section. In unusual 

circumstances, you may ask us to allow 

you to apply these provisions for a new 

Category 3 engine. 

(a) This paragraph (a) applies instead 

of the provisions of 40 CFR 

1068.240(b)(2). The prohibitions in 40 

CFR 1068.101(a)(1) do not apply to a 

new replacement engine if all the 

following conditions are met: 

(1) You use good engineering 

judgment to determine that no engine 

certified to the current requirements of 

this part is produced by any 

manufacturer with the appropriate 

physical or performance characteristics 

to repower the vessel. We have 

determined that engines certified to Tier 

4 standards do not have the appropriate 

physical or performance characteristics 

to replace uncertified engines or engines 

certified to emission standards that are 

less stringent than the Tier 4 standards. 

* * * * * 

(b) The 40-year limit specified in 40 

CFR 1068.240(a) does not apply for 

engines subject to this part 1042. You 

may accordingly omit the statement on 

the permanent labels specified in 40 

CFR 1068.240 describing this limitation. 

* * * * * 


emcdonald on DSK67QTVN1PROD with RULES
Federal Register / Vol. 79, No. 25 / Thursday, February 6, 2014 / Rules and Regulations 7085 

PART 1068—GENERAL COMPLIANCE 

PROVISIONS FOR HIGHWAY, 

STATIONARY, AND NONROAD 

PROGRAMS 

■ 6. The authority citation for part 1068 

continues to read as follows: 

Authority: 42 U.S.C. 7401–7671q. 

Subpart C—[Amended] 

■ 7. Section 1068.240 is revised to read 

as follows: 

§ 1068.240 What are the provisions for 

exempting new replacement engines? 

The prohibitions in § 1068.101(a)(1) 

do not apply to a new engine if it is 

exempt under this section as a 

replacement engine. For purposes of 

this section, a replacement engine is a 

new engine that is used to replace an 

engine that has already been placed into 

service (whether the previous engine is 

replaced in whole or in part with a new 

engine). 

(a) General provisions. You are 

eligible for the exemption for new 

replacement engines only if you are a 

certificate holder. Note that this 

exemption does not apply for 

locomotives (40 CFR 1033.601) and that 

unique provisions apply to marine 

compression-ignition engines (40 CFR 

1042.615). 

(1) Paragraphs (b), (c), and (d) of this 

section describe different approaches for 

exempting new replacement engines 

where the engines are specially built to 

correspond to an engine model from an 

earlier model year that was subject to 

less stringent standards than those that 

apply for current production (or is no 

longer covered by a certificate of 

conformity). You must comply with the 

requirements of paragraph (b) of this 

section for any number of replacement 

engines you produce in excess of what 

we allow under paragraph (c) of this 

section. You must designate engines you 

produce under this section as tracked 

engines under paragraph (b) of this 

section or untracked engines under 

paragraph (c) of this section by the 

deadline for the report specified in 

paragraph (c)(3) of this section. 

(2) Paragraph (e) of this section 

describes a simpler approach for 

exempting partially complete new 

replacement engines that are built under 

a certificate of conformity that is valid 

for producing engines for the current 

model year. 

(3) For all the different approaches 

described in paragraphs (b) through (e) 

of this section, the exemption applies 

only for equipment that is 40 years old 

or less at the time of installation. 

(b) Previous-tier replacement engines 

with tracking. You may produce any 

number of new engines to replace an 

engine already placed into service in a 

piece of equipment, as follows: 

(1) The engine being replaced must 

have been either not originally subject 

to emission standards or originally 

subject to less stringent emission 

standards than those that apply to a new 

engine meeting current standards. The 

provisions of this paragraph (b) also 

apply for engines that were originally 

certified to the same standards that 

apply for the current model year if you 

no longer have a certificate of 

conformity to continue producing that 

engine configuration. 

(2) The following requirements and 

conditions apply for engines exempted 

under this paragraph (b): 

(i) You must determine that you do 

not produce an engine certified to meet 

current requirements that has the 

appropriate physical or performance 

characteristics to repower the 

equipment. If the engine being replaced 

was made by a different company, you 

must make this determination also for 

engines produced by this other 

company. 

(ii) In the case of premature engine 

failure, if the old engine was subject to 

emission standards, you must make the 

new replacement engine in a 

configuration identical in all material 

respects to the old engine and meet the 

requirements of § 1068.265. You may 

alternatively make the new replacement 

engine in a configuration identical in all 

material respects to another certified 

engine of the same or later model year 

as long as the engine is not certified 

with a family emission limit higher than 

that of the old engine. 

(iii) For cases not involving premature 

engine failure, you must make a 

separate determination for your own 

product line addressing every tier of 

emission standards that is more 

stringent than the emission standards 

for the engine being replaced. For 

example, if the engine being replaced 

was built before the Tier 1 standards 

started to apply and engines of that 

power category are currently subject to 

Tier 3 standards, you must also consider 

whether any Tier 1 or Tier 2 engines 

that you produce have the appropriate 

physical and performance 

characteristics for replacing the old 

engine; if you produce a Tier 2 engine 

with the appropriate physical and 

performance characteristics, you must 

use it as the replacement engine. 

(iv) You must keep records to 

document your basis for making the 

determinations in paragraphs (b)(2)(i) 

and (iii) of this section. 

(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. 

(4) If the old engine was subject to 

emission standards, the replacement 

engine must meet the appropriate 

emission standards as specified in 

§ 1068.265. This generally means you 

must make the new replacement engine 

in a previously certified configuration. 

(5) Except as specified in paragraph 

(d) of this section, you must add a 

permanent label, consistent with 

§ 1068.45, with your corporate name 

and trademark and the following 

additional information: 

(i) Add the following statement if the 

new engine may only be used to replace 

an engine that was not subject to any 

emission standards under this chapter: 

THIS REPLACEMENT ENGINE IS EXEMPT 

UNDER 40 CFR 1068.240. SELLING OR 

INSTALLING THIS ENGINE FOR ANY 

PURPOSE OTHER THAN TO REPLACE AN 

UNREGULATED ENGINE MAY BE A 

VIOLATION OF FEDERAL LAW SUBJECT 

TO CIVIL PENALTY. THIS ENGINE MAY 

NOT BE INSTALLED IN EQUIPMENT THAT 

IS MORE THAN 40 YEARS OLD AT THE 

TIME OF INSTALLATION. 

(ii) Add the following statement if the 

new engine may replace an engine that 

was subject to emission standards: 

THIS ENGINE COMPLIES WITH U.S. EPA 

EMISSION REQUIREMENTS FOR [Identify 

the appropriate emission standards (by 

model year, tier, or emission levels) for the 

replaced engine] ENGINES UNDER 40 CFR 

1068.240. SELLING OR INSTALLING THIS 

ENGINE FOR ANY PURPOSE OTHER THAN 

TO REPLACE A [Identify the appropriate 

emission standards for the replaced engine, 

by model year(s), tier(s), or emission levels)] 

ENGINE MAY BE A VIOLATION OF 

FEDERAL LAW SUBJECT TO CIVIL 

PENALTY. THIS ENGINE MAY NOT BE 

INSTALLED IN EQUIPMENT THAT IS 

MORE THAN 40 YEARS OLD AT THE TIME 

OF INSTALLATION. 

(6) Engines exempt under this 

paragraph (b) may not be introduced 

into U.S. commerce before you make the 

determinations under paragraph (b)(2) 

of this section, except as specified in 

this paragraph (b)(6). We may waive this 

restriction for engines excluded under 

paragraph (c)(5) of this section that you 

ship to a distributor. Where we waive 

this restriction, you must take steps to 

ensure that the engine is installed 

consistent with the requirements of this 

paragraph (b). For example, at a 

minimum you must report to us 


emcdonald on DSK67QTVN1PROD with RULES
7086 Federal Register / Vol. 79, No. 25 / Thursday, February 6, 2014 / Rules and Regulations 

annually whether engines we allowed 

you to ship to a distributor under this 

paragraph (b)(6) have been placed into 

service or remain in inventory. After an 

engine is placed into service, your 

report must describe how the engine 

was installed consistent with the 

requirements of this paragraph (b). Send 

these reports to the Designated 

Compliance Officer by the deadlines we 

specify. 

(c) Previous-tier replacement engines 

without tracking. You may produce a 

limited number of new replacement 

engines that are not from a currently 

certified engine family under the 

provisions of this paragraph (c). If you 

produce new engines under this 

paragraph (c) to replace engines subject 

to emission standards, the new 

replacement engine must be in a 

configuration identical in all material 

respects to the old engine and meet the 

requirements of § 1068.265. You may 

make the new replacement engine in a 

configuration identical in all material 

respects to another certified engine of 

the same or later model year as long as 

the engine is not certified with a family 

emission limit higher than that of the 

old engine. The provisions of this 

paragraph (c) also apply for engines that 

were originally certified to the same 

standards that apply for the current 

model year if you no longer have a 

certificate of conformity to continue 

producing that engine configuration. 

This would apply, for example, for 

engine configurations that were certified 

in an earlier model year but are no 

longer covered by a certificate of 

conformity. The following provisions 

apply to engines exempted under this 

paragraph (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 

parent or subsidiary companies and 

those from any other companies you 

license to produce engines for you. 

(2) Count every exempted new 

replacement engine from your total 

U.S.-directed production volume that 

you produce in a given calendar year 

under this paragraph (c), including 

partially complete engines, except for 

the following: 

(i) Engines built to specifications for 

an earlier model year under paragraph 

(b) of this section. 

(ii) Partially complete engines 

exempted under paragraph (e) of this 

section. 

(3) Send the Designated Compliance 

Officer a report by March 31 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. You may include this 

information in production reports 

required under the standard-setting part. 

(4) Add a permanent label as specified 

in paragraph (b)(5) of this section. For 

partially complete engines, you may 

alternatively add a permanent or 

removable label as specified in 

paragraph (d) of this section. 

(5) You may not use the provisions of 

this paragraph (c) for any engines in the 

following engine categories or 

subcategories: 

(i) Land-based nonroad compressionignition engines we regulate under 40 

CFR part 1039 with a per-cylinder 

displacement at or above 7.0 liters. 

(ii) Marine compression-ignition 

engines we regulate under 40 CFR part 

1042 with a per-cylinder displacement 

at or above 7.0 liters. 

(iii) Locomotive engines we regulate 

under 40 CFR part 1033. 

(d) Partially complete engines. The 

following requirements apply if you 

ship a partially complete replacement 

engine under this section: 

(1) Provide instructions specifying 

how to complete the engine assembly 

such that the resulting engine conforms 

to the applicable certificate of 

conformity or the specifications of 

§ 1068.265. Where a partially complete 

engine can be built into multiple 

different configurations, you must be 

able to identify all the engine models 

and model years for which the partially 

complete engine may properly be used 

for replacement purposes. Your 

instructions must make clear how the 

final assembler can determine which 

configurations are appropriate for the 

engine they receive. 

(2) You must label the engine as 

follows: 

(i) If you have a reasonable basis to 

believe that the fully assembled engine 

will include the original emission 

control information label, you may add 

a removable label to the engine with 

your corporate name and trademark and 

the statement: ‘‘This replacement engine 

is exempt under 40 CFR 1068.240.’’ This 

would generally apply if all the engine 

models that are compatible with the 

replacement engine were covered by a 

certificate of conformity and they were 

labeled in a position on the engine or 

equipment that is not included as part 

of the partially complete engine being 

shipped for replacement purposes. 

Removable labels must meet the 

requirements specified in § 1068.45. 

(ii) If you do not qualify for using a 

removable label in paragraph (d)(1) 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 

partially complete engines you produce 

from a current line of certified engines 

or vehicles. This applies for enginebased and equipment-based standards 

as follows: 

(1) Where engine-based standards 

apply, you may introduce into U.S. 

commerce short blocks or other partially 

complete engines from a currently 

certified engine family as replacement 

components for in-use equipment 

powered by engines you originally 

produced. You must be able to identify 

all the engine models and model years 


emcdonald on DSK67QTVN1PROD with RULES
Federal Register / Vol. 79, No. 25 / Thursday, February 6, 2014 / Rules and Regulations 7087 

for which the partially complete engine 

may properly be used for replacement 

purposes. 

(2) Where equipment-based standards 

apply, you may introduce into U.S. 

commerce engines that are identical to 

engines covered by a current certificate 

of conformity by demonstrating 

compliance with currently applicable 

standards where the engines will be 

installed as replacement engines. These 

engines might be fully assembled, but 

we would consider them to be partially 

complete engines because they are not 

yet installed in the equipment. 

(f) Emission credits. Replacement 

engines exempted under this section 

may not generate or use emission credits 

under the standard-setting part nor be 

part of any associated credit 

calculations. 

TABLE 1 TO § 1068.240—ENGINE CATEGORIES AND SUBCATEGORIES FOR NEW REPLACEMENT ENGINES EXEMPTED

WITHOUT TRACKING

Engine category Standard-setting part 1 Engine subcategories 

Highway CI .................................................................................. 40 CFR part 86 ................................................ disp. < 0.6 L/cyl. 

0.6 ≤ disp. < 1.2 L/cyl. 

disp. ≥ 1.2 L/cyl. 

Nonroad CI, Stationary CI, and Marine CI ................................. 40 CFR part 1039, or 40 CFR part 1042 ........ disp. < 0.6 L/cyl. 

0.6 ≤ disp. < 1.2 L/cyl. 

1.2 ≤ disp. < 2.5 L/cyl. 

2.5 ≤ disp. < 7.0 L/cyl. 

Marine SI ..................................................................................... 40 CFR part 1045 ............................................ outboard. 

personal watercraft. 

Large SI, Stationary SI, and Marine SI (sterndrive/inboard 

only).

40 CFR part 1048 or 40 CFR part 1045 ......... all engines. 

Recreational vehicles .................................................................. 40 CFR part 1051 ............................................ off-highway motorcycle. 

all-terrain vehicle. 

snowmobile. 

Small SI and Stationary SI ......................................................... 40 CFR part 1054 ............................................ handheld. 

Class I. 

Class II. 

1 Include an engine as being subject to the identified standard-setting part if it will eventually be subject to emission standards under that part. 

For example, if you certify marine compression-ignition engines under part 94, count those as if they were already subject to part 1042. 

[FR Doc. 2014–02612 Filed 2–5–14; 8:45 am] 

BILLING CODE 6560–50–P 

DEPARTMENT OF HOMELAND 

SECURITY 

Federal Emergency Management 

Agency 

44 CFR Part 64 

[Docket ID FEMA–2013–0002; Internal 

Agency Docket No. FEMA–8319] 

Suspension of Community Eligibility 

AGENCY: Federal Emergency 

Management Agency, DHS. 

ACTION: Final rule. 

SUMMARY: This rule identifies 

communities where the sale of flood 

insurance has been authorized under 

the National Flood Insurance Program 

(NFIP) that are scheduled for 

suspension on the effective dates listed 

within this rule because of 

noncompliance with the floodplain 

management requirements of the 

program. If the Federal Emergency 

Management Agency (FEMA) receives 

documentation that the community has 

adopted the required floodplain 

management measures prior to the 

effective suspension date given in this 

rule, the suspension will not occur and 

a notice of this will be provided by 

publication in the Federal Register on a 

subsequent date. Also, information 

identifying the current participation 

status of a community can be obtained 

from FEMA’s Community Status Book 

(CSB). The CSB is available at http://

www.fema.gov/fema/csb.shtm. 

DATES: Effective Dates: The effective 

date of each community’s scheduled 

suspension is the third date (‘‘Susp.’’) 

listed in the third column of the 

following tables. 

FOR FURTHER INFORMATION CONTACT: If 

you want to determine whether a 

particular community was suspended 

on the suspension date or for further 

information, contact David Stearrett, 

Federal Insurance and Mitigation 

Administration, Federal Emergency 

Management Agency, 500 C Street SW., 

Washington, DC 20472, (202) 646–2953. 

SUPPLEMENTARY INFORMATION: The NFIP 

enables property owners to purchase 

Federal flood insurance that is not 

otherwise generally available from 

private insurers. In return, communities 

agree to adopt and administer local 

floodplain management measures aimed 

at protecting lives and new construction 

from future flooding. Section 1315 of 

the National Flood Insurance Act of 

1968, as amended, 42 U.S.C. 4022, 

prohibits the sale of NFIP flood 

insurance unless an appropriate public 

body adopts adequate floodplain 

management measures with effective 

enforcement measures. The 

communities listed in this document no 

longer meet that statutory requirement 

for compliance with program 

regulations, 44 CFR Part 59. 

Accordingly, the communities will be 

suspended on the effective date in the 

third column. As of that date, flood 

insurance will no longer be available in 

the community. We recognize that some 

of these communities may adopt and 

submit the required documentation of 

legally enforceable floodplain 

management measures after this rule is 

published but prior to the actual 

suspension date. These communities 

will not be suspended and will continue 

to be eligible for the sale of NFIP flood 

insurance. A notice withdrawing the 

suspension of such communities will be 

published in the Federal Register. 

In addition, FEMA publishes a Flood 

Insurance Rate Map (FIRM) that 

identifies the Special Flood Hazard 

Areas (SFHAs) in these communities. 

The date of the FIRM, if one has been 

published, is indicated in the fourth 

column of the table. No direct Federal 

financial assistance (except assistance 

pursuant to the Robert T. Stafford 

Disaster Relief and Emergency 

Assistance Act not in connection with a 

flood) may be provided for construction 


emcdonald on DSK67QTVN1PROD with RULES