14740 Federal Register / Vol. 62, No. 59 / Thursday, March 27, 1997 / Proposed Rules

1The California Regulations for 1995 and Later

Utility and Lawn and Garden Equipment Engines

were initially approved in December 1990, and

formally adopted in March 1992.

ENVIRONMENTAL PROTECTION

AGENCY

40 CFR Part 90

[FRL–5802–5]

Statements of Principles for Nonroad

Phase 2 Small Spark-Ignited Engines

AGENCY: Environmental Protection

Agency (EPA).

ACTION: Advance Notice of Proposed

Rulemaking (ANPRM).

SUMMARY: EPA is developing a second

phase of national air emission

regulations that affect small sparkignited (SI) engines used primarily in

lawn and garden equipment. EPA

expects the program to reduce combined

emissions of hydrocarbon (HC) and

oxides of nitrogen (NOX) from these

engines by an additional 30 to 40

percent beyond Phase 1 levels, in excess

of 100,000 tons of HC per year with

minimal changes in NOX. These

emission reductions will result in a

decrease in summertime ozone and a

corresponding health and welfare

benefit. In 1996 EPA and certain other

interested parties signed two different

Statements of Principles (SOPs) that

describe various aspects of the Phase 2

program that EPA will propose. One

SOP focuses on provisions that would

affect engines used in handheld

equipment such as leaf blowers, chain

saws, and trimmers. The second SOP

addresses provisions that would affect

engines used in nonhandheld

equipment such as lawnmowers and

generator sets. EPA is issuing this

ANPRM to: notify the public about the

availability of the two small SI nonroad

engine SOPs; request comment on the

SOPs, and; inform interested parties

about the forthcoming Phase 2 small SI

engine Notice of Proposed Rulemaking

(NPRM) which will be based in part on

the two SOPs.

DATES: EPA requests comment on this

ANPRM no later than April 28, 1997.

Should a commenter miss the requested

deadline, EPA will try to consider any

comments that it receives prior to

publication of the NPRM. There will

also be an opportunity for oral and

written comment after publication of the

NPRM.

ADDRESSES: Materials relevant to this

Notice are contained in EPA Air and

Radiation Docket No. A–96–55 and

Docket No. A–93–29, located at room

M–1500, Waterside Mall (ground floor),

U.S. Environmental Protection Agency,

401 M Street, SW., Washington, DC

20460. The docket may be inspected

from 8:00 a.m. until 5:30 p.m., Monday

through Friday. The docket may also be

reached by telephone at (202) 260–7548.

As provided in 40 CFR part 2, a

reasonable fee may be charged by EPA

for copying docket materials.

Comments on this document should

be sent to Public Docket A–96–55 at the

above address. EPA requests that a copy

of comments also be sent to Betsy

McCabe, U.S. EPA, Engine Programs

and Compliance Division, 2565

Plymouth Road, Ann Arbor, MI 48105.

FOR FURTHER INFORMATION CONTACT:

Betsy McCabe, U.S. EPA, Engine

Programs and Compliance Division,

2565 Plymouth Road, Ann Arbor, MI

48105. Telephone: (313) 668–4344.

Electronic mail:

mccabe.betsy@epamail.epa.gov

SUPPLEMENTARY INFORMATION:

I. Background and Purpose for this

Advance Notice

With this document EPA announces

the signing of two Statements of

Principles (SOPs). One SOP, signed in

May, 1996, focuses on provisions to be

proposed in a future Notice of Proposed

Rulemaking (NPRM) that would affect

new spark-ignited (SI) engines at or

below 19 kilowatts (25 horsepower)

used in handheld applications such as

trimmers, edgers, brush cutters, leaf

blowers, leaf vacuums, chain saws,

augers, and tillers. In developing this

handheld SOP, EPA, state, and industry

representatives reached agreement on

several elements of a Phase 2 program

to be proposed for these small handheld

SI engines. The second SOP, signed in

December, 1996, describes areas of

agreement between EPA and certain

industry representatives for a Phase 2

program to be proposed for small SI

engines used in nonhandheld

equipment such as lawnmowers,

generator sets, and riding mowers.

EPA anticipates issuing an NPRM,

based in part on these two SOPs, by the

Fall of 1997. The NPRM will be subject

to the full public process required by

section 307(d) of the Clean Air Act, as

amended, 42 U.S.C. 7607(d). By

announcing the availability of the

handheld and nonhandheld SOPs in

this Advance Notice, EPA hopes to

receive early comments and suggestions

which can inform the development of

the proposal and, ultimately, the final

regulations for Phase 2. Today’s

Advance Notice includes the text of the

handheld and nonhandheld SOPs as

appendices to this preamble.

II. Brief Background on Small SI

Engine Rulemakings

In July 1995, EPA issued the first

national program to reduce emissions

from small SI engines (60 FR 34582, July

3, 1995, codified at 40 CFR part 90).

This program, called ‘‘Phase 1,’’ takes

effect with model year 1997 and sets

emissions standards for ‘‘new’’ small SI

engines. The Phase 1 standards are

expected to result in a 32 percent

reduction in HC emissions from small SI

engines. The Phase 1 program was

developed through the notice and

comment rulemaking process, and the

regulations are similar in many respects

to California’s Tier I Regulation for 1995

and Later Utility and Lawn and Garden

Equipment Engines.1 While EPA was

developing the Phase 1 regulations, EPA

began working with certain interested

parties in a consultative process to

develop a comprehensive Phase 2

program that focusses on ensuring that

emissions reductions from small SI

engines are achieved ‘‘in-use.’’

In September 1993, a Negotiated

Rulemaking Advisory Committee was

formed to support EPA in developing a

practical approach to a comprehensive

regulatory program for Phase 2. This

committee, consisting of representatives

from industry, small business, state,

public health and environmental

groups, and EPA, met until February

1996, but did not reach consensus on an

Agreement in Principle or draft

regulatory language. However, the

regulatory negotiation process (Reg Neg)

produced substantial useful information

and provided EPA with input from

numerous key stakeholders which will

help the Agency develop the Phase 2

small SI engine regulatory program.

Subsequent to the conclusion of the Reg

Neg process, EPA continued working

with some of the parties to reach

agreement on how certain aspects of a

Phase 2 program would be addressed in

a future NPRM. As these discussions

proceeded, the involved parties worked

together to develop written documents,

Statements of Principles, which will

partly form the basis of the Phase 2

NPRM. The handheld SOP addresses

issues affecting engines used in

handheld equipment, and the

nonhandheld SOP addresses issues

affecting engines used in nonhandheld

equipment. Key features of the SOPs are

described briefly below. However, the

reader is advised to refer to the actual

SOP documents that follow for details

(see also section VII, ‘‘Obtaining Copies

of Documents’’). Issues not discussed in

the SOPs will be addressed in the Phase

2 NPRM.
Federal Register / Vol. 62, No. 59 / Thursday, March 27, 1997 / Proposed Rules 14741

2Air Quality Criteria Document for Ozone and

Related Photochemical Oxidants (External Review

Draft), EPA–600/AP–93/004a–c, February, 1995

(NTIS #: PB94–17–3127, –3135, –3143).

III. Brief Summary of the Handheld

SOP for Small SI Engines

Parties to the handheld SOP, signed

in May, 1996, include EPA; the Auger

and Power Equipment Manufacturers

Association (APEMA); the North

American Equipment Dealers

Association (NAEDA); the Portable

Power Equipment Manufacturers

Association (PPEMA); the State and

Territorial Air Pollution Program

Administrators/Association of Local Air

Pollution Control Officials (STAPPA/

ALAPCO); and the Wisconsin

Department of Natural Resources.

This SOP outlines elements for a

Phase 2 program to be proposed by EPA

for Class 3, 4, and 5 handheld small SI

engines at or below 19 kilowatts.

Handheld engines generally use 2-stroke

technology due to its high power to

weight ratio and its allowance for multipositional use. Because of these

characteristics, handheld engines are

used in equipment typically carried by

the operator, such as chainsaws,

trimmers, and blowers.

As described in the SOP, EPA plans

to propose Phase 2 emission standards

for emissions of HC+NOX and for carbon

monoxide (CO) from handheld engines

that are to be met over the lifetime of the

engine. These standards, if adopted,

would represent an estimated 30

percent reduction in HC+NOX exhaust

levels from these engines below Phase 1

levels.

The involved parties also agreed that

EPA would propose a provision for

phased-in effective dates based on a

percentage of production from model

year 2002 through model year 2005.

As described in the SOP, the

signatories agreed that a particulate

matter and toxics test program will be

conducted to collect and evaluate

information on emissions of these

pollutants from handheld sources.

The signatories also agreed that the

NPRM would include a voluntary

program that would allow

manufacturers to display a label or

symbol identifying handheld engines

that have HC+NOX certification levels

substantially below the Phase 2

standards.

The following elements of a

compliance program are reflected in the

SOP and will be described in the NPRM:

a certification program; a production

line testing program; and an in-use

testing program. The provisions in the

compliance program that EPA will

propose will help ensure that handheld

engines continue meeting the standards

for the life of the engine.

In addition, the SOP provides that

EPA intends to conduct a technology

review to assess whether any further

revisions to the emissions standards for

handheld engines would be appropriate.

IV. Brief Summary of the Nonhandheld

SOP for Small SI Engines

Parties to the nonhandheld SOP,

signed in December 1996, include EPA;

Briggs & Stratton Corporation; Kawasaki

Motors Corporation, U.S.A.; Kohler

Company; Kubota; Mitsubishi Engine

North America, Inc.; Onan Corporation;

Suzuki Motor Corporation; Tecumseh

Products Company; The Toro Company;

and Wis-Con Total Power Corporation.

This SOP outlines elements of a Phase

2 program to be proposed by EPA for

Class 1 and 2 nonhandheld small SI

engines at or below 19 kilowatts. Class

1 engines have displacements of less

than 225 cc and are typically used in

relatively inexpensive residential

applications such as walk-behind

lawnmowers and tillers. Most Class 1

engines use side-valve (SV) technology.

Class 2 engines have displacements

greater than or equal to 225 cc, and are

typically used in more expensive

commercial applications such as lawn

tractors, riding mowers and generator

sets.

As described in the nonhandheld

SOP, EPA plans to propose in the Phase

2 NPRM standards for HC + NOX and

CO emissions from nonhandheld

engines that are to be met over the

lifetime of the engine. These standards,

if adopted, would represent a 30 to 40

percent reduction in HC + NOX exhaust

emissions from these engines below

Phase 1 levels.

The signatories also agreed that EPA

would propose a provision for an

effective date of 2001 for Class 1

engines, and a phase-in between 2001

and 2005 for Class 2 engines. The

signatories expect that the emission

standards and effective dates contained

in the SOP would cause manufacturers

to shift their Class 2 engines to cleaner,

more durable technology, such as overhead valve (OHV) technology by 2005.

To help determine the consumer

acceptance and feasibility of applying

OHV technology to Class 1 engines, EPA

and certain manufacturers have entered

into separate Memoranda of

Understanding calling for an OHV

Demonstration Program to be

implemented by those manufacturers.

Readers who are interested in learning

more about the OHV Demonstration

Program should refer directly to the

Memoranda of Understanding (MOUs),

available electronically (see Obtaining

Copies of Documents section) and in the

public docket for this rulemaking.

As described in detail in the

nonhandheld SOP, EPA plans to

propose a comprehensive compliance

program for nonhandheld engines in the

Phase 2 NPRM. This program will be

designed to ensure that emission

benefits are achieved over the lifetime of

the engines while minimizing

manufacturers’ compliance burdens.

The Phase 2 compliance provisions in

the NPRM for nonhandheld engines will

include certification and production

line testing programs. In addition, the

proposed program will call for

manufacturers to conduct a field

durability and in-use emission

performance demonstration program for

OHV engines every four years.

The signatories also agreed to work

together to develop a voluntary Fuel

Spillage Reduction Program aimed at

educating consumers about the

significant contribution to air pollution

from spillage, and encouraging the

development and use of technology that

will reduce or eliminate spills by users.

V. Environmental Benefit Assessment

National Ambient Air Quality

Standards (NAAQS) have been set for

criteria pollutants which adversely

affect human health, vegetation,

materials, and visibility. The primary

criteria pollutant affected by this rule is

ozone. EPA has determined the

standards contained in this NPRM will

reduce HC emissions from sparkignition small engines with minimal

changes in NOX levels and help areas

come into compliance with the ozone

NAAQS. The following sections contain

a brief description of some of the health

effects associated with ozone, and the

importance of continuing to reduce HC

emissions. The NPRM for this rule will

contain a more detailed discussion of

the health and welfare benefits which

can be expected from this program.

A. Health Effects of Tropospheric Ozone

Ozone is a highly reactive chemical

compound which can affect both

biological tissues and man-made

materials. Ozone can affect human

pulmonary and respiratory health—

symptoms include chest pain, coughing,

and shortness of breath.2 Elevated ozone

levels can cause aggravation of preexisting respiratory conditions such as

asthma. Ozone can cause a reduction in

performance during exercise even in

healthy persons. In addition, ozone can

also cause alterations in pulmonary and

extrapulmonary (nervous system, blood,

liver, endocrine) function. The

oxidizing effect of ozone can irritate the
14742 Federal Register / Vol. 62, No. 59 / Thursday, March 27, 1997 / Proposed Rules

nose, mouth, and throat causing

coughing, choking, and eye irritation.

The presence of elevated levels of

ozone is of concern in rural areas as

well. Because of its high chemical

reactivity, ozone causes damage to

vegetation. Estimates based on

experimental studies of the major

commercial crops in the U.S. suggest

that ozone may be responsible for

significant agricultural crop yield losses.

In addition, ozone causes noticeable leaf

damage in many crops, which reduces

marketability and value. Finally, there is

evidence that exposures to ambient

levels of ozone which exist in many

parts of the country are also responsible

for forest and ecosystem damage. Such

damage may be exhibited as leaf

damage, reduced growth rate, and

increased susceptibility to insects,

disease, and other environmental

stresses and has been reported to occur

in areas that attain the current standard.

There are complexities associated with

evaluating such effects due to the wide

range of species and biological systems

introduce significant uncertainties.

B. Need for NOX and VOC Control

Photochemical modeling highlights

the fact that ozone pollution is a

regional problem, not simply a local or

state problem. Ozone itself and its

precursors are transported long

distances by winds and meteorological

events. Thus, achieving ozone

attainment for an area and thereby

protecting its citizens from ozonerelated health effects often depends on

the ozone and/or precursor emission

levels of upwind areas. Local stationary

source NOX and VOC controls will

assist nonattainment areas toward their

ozone reduction goals, but for many

areas with persistent ozone problems,

attainment of the ozone NAAQS will

require broader control strategies for

both NOX and VOC. As a result,

effective national ozone control requires

an integrated strategy which combines

cost-effective approaches in both the

mobile and stationary source arenas at

both the local and national levels.

Small spark-ignited engines represent

an important portion of the national HC

inventories. The program contained in

todays notice will result in important

reductions in HC (in excess of 100,000

tons HC/year) with little change in NOX

levels from small spark-ignited nonroad

engines. These meaningful HC

reductions will help to alleviate the

problems associated with ozone

formation in many nonattainment areas

throughout the country.

VI. Discussion of Issues

EPA seeks comments on the

provisions described in the handheld

and nonhandheld SOPs that are

summarized above and published in

their entirety along with this ANPRM.

In particular, the Agency requests

comment on some areas for which the

SOPs do not contain detailed

provisions, as discussed below.

A. Definitions of Commercial and

Residential

As discussed in the handheld SOP, at

the time of certification handheld

engine manufacturers would declare an

engine family to be ‘‘commercial’’ or

‘‘residential’’ based on the expected

useful life and intended application of

the engine. Comment is solicited on the

appropriate definitions of ‘‘commercial’’

and ‘‘residential.’’

B. Bench Aging Correlation Program

Both SOPs contain provisions for

bench aging programs as part of the

compliance programs that EPA will

propose for the Phase 2 NPRM. EPA

solicits suggestions on the ability of

bench aging to adequately demonstrate

deterioration of engines in the field. The

Agency also seeks comment on methods

for correlating bench-aged and fieldaged results. In addition, EPA requests

comment on whether there are certain

engine technologies that are more

suitable to bench aging than others. In

particular the Agency seeks information

on whether the bench aging certification

program for side valve engines is the

appropriate method for estimating

deterioration.

C. Deterioration Factors

The nonhandheld SOP signatories

agree to the goal of designing and

building engines that are emissions

durable over their actual useful lives.

Consequently, under the program

envisioned in the SOP the test results

from any of the new engine compliance

programs would be adjusted by

deterioration factors to estimate

emissions at the end of the engine’s life.

The nonhandheld SOP describes several

program elements that involve

establishment of deterioration factors

(DFs). As EPA further develops its Phase

2 program to propose in the NPRM, the

Agency requests comment on various

aspects of developing appropriate

deterioration factors. EPA seeks

additional data on which to base

assigned DFs in the Phase 2 proposal. In

addition, EPA seeks comment on the

types of data required for both assigned

and manufacturer-determined DFs for

the 500 and 1000 hour useful life

categories for Class 2 engines. The

Agency also seeks suggestions on the

appropriateness of establishing optional

assigned DFs for the 250 and 500 hour

useful life categories for Class 1. EPA

encourages interested parties to provide

comment, regarding Class 2 engines, on

the kind of data required to determine

the DFs, the methodology required to

determine the DFs, the amount of in-use

testing required to verify the DFs, and

the appropriateness of reserving

certification credits pending verification

of the DFs through in-use testing.

D. Averaging, Banking and Trading

(ABT)

The Signatories to the nonhandheld

SOP agree that an ABT program would

help ensure that the standards and

phase-in structure that EPA will

propose in the Phase 2 NPRM will be

cost-effective and technologically

feasible. Signatories to the handheld

SOP did not reach agreement on an ABT

program. EPA seeks comment on the

appropriateness of the ABT program

described in the nonhandheld SOP and

also on whether or not an ABT program

would be appropriate for the handheld

segment of the small SI industry. In

addition, EPA solicits comment on the

appropriateness of the provision

described in the nonhandheld SOP of

unlimited life for credits generated

under the Phase 2 program when used

for purposes of compliance with the

SOP nonhandheld standards that EPA

will propose in the Phase 2 NPRM.

E. Fuel Spillage Reduction Program

The nonhandheld SOP includes a

provision for the signatories to work

collaboratively and with other affected

parties to develop a voluntary fuel

spillage reduction program. It is

anticipated that this voluntary

partnership program would involve

EPA; engine manufacturers and

equipment manufacturers; and

potentially regional, state, and local air

pollution agencies; health and

environmental organizations; and other

interested parties. The strategies

involved in reducing fuel spillage

would include, but not be limited to:

• providing information and

reminders at public places where

refueling frequently occurs, where

equipment or fuel supplies are sold, and

similar places;

• providing education and training to

commercial operators of equipment, to

those persons who influence

individuals doing the refueling (such as

equipment sales staff or small engine

course instructors), and similar target

audiences;

• providing educational materials for

use in environmental education courses
Federal Register / Vol. 62, No. 59 / Thursday, March 27, 1997 / Proposed Rules 14743

or related programs targeting children

and youth;

• encouraging the development of

technology that will assist equipment

users in reducing spills and providing

recognition for implementing

technology developments that will

assist equipment users in reducing

spills.

EPA will develop this program in

greater detail as the proposed rule is

developed and finalized and encourages

those parties interested in participating

to contact the Agency.

The Agency believes it is appropriate

to develop and implement a program

unique to the small SI industry to

encourage public awareness and act as

an incentive for technology investments.

Every year, millions of gallons of

gasoline are lost during refueling. It is

estimated that the few ounces spilled

during refueling lawn and garden

equipment alone total about 17 million

gallons of gasoline, most of which

evaporates into the air to contribute to

the air pollution problem. To reduce

and prevent this pollution a variety of

measures will be needed, most

involving increased public awareness

and education.

The Agency seeks comment on this

possible voluntary partnership program,

appropriate strategies, appropriate target

audiences, and other matters pertinent

to establishing this program. EPA also

solicits comment on the feasibility and

appropriateness of expanding such a

program to the handheld side of the

industry.

F. Environmental Labeling Program

EPA will be developing an incentive

and recognition program to identify for

consumers those handheld engines

which emit HC+NOX levels

substantially below the Phase 2 levels.

This program would be voluntary.

Manufacturers who meet the program

qualifications and choose to participate

would be recognized for their efforts

and allowed to display a symbol (as yet

unidentified) on qualifying products

identifying them as cleaner engines.

As part of the public recognition

program, EPA will establish criteria for

the standards and the procedure

required to qualify for public

recognition. The specific details of the

incentive and recognition program will

be determined as the proposed rule is

developed and finalized. Some of the

matters which need to be considered

include, but are not limited to:

• emission level at which recognition

will be granted;

• single or multiple levels of

recognition provided (that is,

recognizing in a different manner or

with a different symbol, those who

comply at the minimum level of the

requirement from those products who

go beyond the minimum level);

• period of recognition;

• type of recognition;

• appropriate symbol and identifier

for this program;

• criteria for use of the symbol on the

product, packaging, or advertisements

for the engine;

• administrator and/or manager of the

program—EPA, independent third

party, combination, or some other

option;

• process for administration of the

program on ongoing basis.

EPA will propose an initial

framework for this program as part of

the NPRM.

The Agency believes it is appropriate

to develop and implement a program

unique to this industry as an incentive

for advanced technology investments.

EPA solicits comment on this possible

incentive and recognition program, the

applicable criteria, the type of

recognition accorded, the period of

recognition, and any other matters

pertinent to establishing this program.

While EPA is initially developing this

program for handheld engines which

emit below the Phase 2 levels, the

Agency solicits comment on the

feasibility and appropriateness of such a

program for nonhandheld engines,

including the applicable criteria, the

type of recognition accorded, and the

period of recognition. In addition, EPA

also solicits comments on the feasibility

and appropriateness of expanding such

a program to include similar equipment

not subject to the small SI engine

regulations (such as electric string

trimmers and mowers).

G. PM and Toxics Testing Program

The handheld SOP describes a

particulate matter (PM) and toxics test

program that EPA will propose as part

of the Phase 2 NPRM. The Agency

requests comment on the scope of the

program, the number of test engines,

and the types of pollutants to be tested.

In addition EPA seeks suggestions as to

who might best administer the test

program, how the program might be

administered, and the level of funding

needed to conduct such a program. EPA

also seeks comment on the time frame

for such a program, given the

consideration that such a program could

begin prior to implementation of the

Phase 2 program, since there are

handheld engines now available which

meet the standards described in the

handheld SOP which the Agency will

propose in the Phase 2 NPRM.

H. Cost Information on Field Ageing

EPA solicits information as to the

costs for manufacturers to field age

engines used in handheld and

nonhandheld equipment out to the end

of their regulatory useful lives as

described in the SOPs.

I. Impact on Equipment Manufacturers

As it works on developing the Phase

2 NPRM, EPA is trying to gain a better

understanding of various aspects of the

small SI equipment industry, and the

impacts that the Phase 2 program EPA

will propose would have on the

equipment industry. Consequently, the

Agency seeks any detailed information

regarding the impact of the program on

the equipment manufacturers. In

particular, the Agency seeks specific

information from nonhandheld

equipment manufacturers on the

number of production lines per

equipment type that will need to be

changed in order to incorporate engines

changing to OHV technology.

J. Fuel Consumption Data

In order to fully discuss the effects of

the Phase 2 program it will propose,

EPA seeks detailed data regarding fuel

consumption for both handheld and

nonhandheld Phase 1 and Phase 2

engines and the effects of various

technological changes and emission

reduction strategies on fuel

consumption.

VII. Public Participation

By September 30, 1997, EPA will

issue a Notice of Proposed Rulemaking

based in part on the SOPs for Phase 2

nonroad small SI engines. The Agency

is committed to a full and open

regulatory process and looks forward to

input from a wide range of interested

parties as the rulemaking process

develops. Opportunities for input will

include a formal public comment period

and a public hearing. EPA encourages

all interested parties to become involved

in this process as it develops.

With publication of this ANPRM, EPA

opens a 30 day comment period

regarding the content of this ANPRM

and the handheld and nonhandheld

SOPs (see DATES section above for close

of comment period). The Agency

strongly encourages comment on all

aspects of the SOPs. The most useful

comments are those supported by

appropriate and detailed rationales,

data, and analyses. In particular, EPA

requests comment on those issues

described in the Discussion of Issues

section. All comments, with the

exception of proprietary information,

should be submitted to the EPA Air

Docket No. A–96–55 by the date
14744 Federal Register / Vol. 62, No. 59 / Thursday, March 27, 1997 / Proposed Rules

specified above. The Agency will

consider all comments, and use them in

developing the NPRM.

Commenters who wish to submit

proprietary information for

consideration should clearly separate

such information from other comments

by (1) labeling proprietary information

‘‘Confidential Business Information’’

and (2) sending proprietary directly to

the contact person listed (see FOR

FURTHER INFORMATION CONTACT) and not

to the public docket. This will help

ensure that proprietary information is

not inadvertently placed in the docket.

If a commenter wants EPA to use a

submission of confidential information

as part of the basis for the NPRM or for

the final rule, then a nonconfidential

version of the document that

summarizes the key information or data

should be sent to the docket.

Information covered by a claim of

confidentiality will be disclosed by EPA

only to the extent allowed and in

accordance with the procedures set

forth in 40 CFR part 2. If no claim of

confidentiality accompanies the

submission when it is received by EPA,

it will be made available to the public

without further notice to the

commenter.

VIII. Obtaining Copies of Documents

This Advance Notice, both the

handheld and nonhandheld SOPs, and

the MOUs are available in hard copy

from the public docket. These

documents are also available

electronically from the EPA Internet site

and the Technology Transfer Network

(TTN).

A. Hard Copies From the Docket

Hard copies of this ANPRM, the

SOPs, and the MOUs may be obtained

from the EPA Air and Radiation public

docket as described in the ADDRESSES

section above.

B. Electronic Copies From Internet and

TTN

Electronic copies of this ANPRM, the

handheld and nonhandheld SOPs, and

the MOUs are available electronically

from the EPA internet site and via dialup modem on the Technology Transfer

Network (TTN), which is an electronic

bulletin board system (BBS) operated by

EPA’s Office of Air Quality Planning

and Standards. Both services are free of

charge, except for your existing cost of

internet connectivity or the cost of the

phone call to TTN. Users are able to

access and download files on their first

call using a personal computer and

modem per the following information.

Internet

World Wide Web: http://

www.epa.gov/OMSWWW

Gopher: gopher.epa.gov Follow

menus for: Offices/Air/OMS FTP:

ftp.epa.gov Change Directory to pub/

gopher/OMS

Technology Transfer Network (TTN)

TTN BBS: 919–541–5742 (1200–

14400 bps, no parity, 8 data bits, 1 stop

bit) Also accessible via Internet:

TELNET ttnbbs.rtpnc.epa.gov Voice

Helpline: 919–541–5384.

Off-line: Mondays from 8:00 AM to

12:00 noon EST.

A user who has not called TTN

previously will be required to answer

some basic informational questions for

registration purposes. After completing

the registration process, proceed

through the following menu choices

from the Top Menu to access

information on this rulemaking.

<T> GATEWAY TO TTN TECHNICAL

AREAS (Bulletin Boards)

<M> OMS—Mobile Sources Information

<K> Rulemaking and Reporting

<6> Non-Road

<2> Non-road Engines

At this point, the system will list all

available files in the chosen category in

reverse chronological order with brief

descriptions. To download a file, select

a transfer protocol that is supported by

the terminal software on your own

computer, then set your own software to

receive the file using that same protocol.

If unfamiliar with handling

compressed (i.e. ZIP’ed) files, go to the

TTN top menu, System Utilities

(Command: 1) for information and the

necessary program to download in order

to unZIP the files of interest after

downloading to your computer. After

getting the files you want onto your

computer, you can quit the TTN BBS

with the <G>oodbye command.

Please note that due to differences

between the software used to develop

the document and the software into

which the document may be

downloaded, changes in format, page

length, etc. may occur.

IX. Legal Authority

Authority to develop the small SI

program is granted to EPA by sections

213 and 301(a) of the Clean Air Act, as

amended (42 U.S.C. 7547, 7601(a)).

X. Unfunded Mandates Reform Act

Under Section 202 of the Unfunded

Mandates Reform Act of 1995

(’’UMRA’’), P.L. 104–4, EPA must

prepare a budgetary impact statement to

accompany any general notice of

proposed rulemaking or final rule that

includes a Federal mandate which may

result in estimated costs to State, local,

or tribal governments in the aggregate,

or to the private sector, of $100 million

or more. Under Section 205, for any rule

subject to Section 202 EPA generally

must select the least costly, most costeffective, or least burdensome

alternative that achieves the objectives

of the rule and is consistent with

statutory requirements. Under Section

203, before establishing any regulatory

requirements that may significantly or

uniquely affect small governments, EPA

must take steps to inform and advise

small governments of the requirements

and enable them to provide input.

EPA has determined that the

requirements of UMRA do not extend to

advance notices of proposed rulemaking

such as this ANPRM.

XI. Regulatory Flexibility

The Regulatory Flexibility Act (RFA)

is intended to assure that concerns

about small entities are adequately

considered during the development of

new regulations which affect them.

While the Regulatory Flexibility Act

does not require a formal analysis of

ANPRMs, pursuant to section 609(a) of

the RFA EPA has begun to consider how

small entities would be affected by the

potential new standards discussed in

the SOPs.

The nonroad small SI industry is

made up of a large number of engine

manufacturers, and a still larger number

of equipment manufacturers, many of

which do business internationally.

Some of these manufacturers may be

small businesses as defined by the RFA

and applicable regulations and thus may

be impacted by the Phase 2 standards

for handheld and nonhandheld engines.

EPA plans to minimize any adverse

impact on smaller nonroad small SI

engine and equipment manufacturers to

the extent possible consistent with the

law, and will work with representatives

of such entities as the formal proposal

is developed. EPA requests comment on

the impacts of the program outlined in

the SOPs on small entities. In particular,

EPA solicits advice and

recommendations on the following

issues:

(a) The number of small entities to

which the proposed rule as based on the

SOPs would apply;

(b) Projected reporting, record

keeping, and other compliance

requirements of the proposed rule as

based on the SOPs, including the classes

of small entities which would be subject

to the Phase 2 requirements and the

type of professional skills necessary for

preparation of the report or record;
Federal Register / Vol. 62, No. 59 / Thursday, March 27, 1997 / Proposed Rules 14745

(c) Other relevant Federal rules which

may duplicate, overlap or conflict with

the proposed rule as based on the SOPs;

and,

(d) Any significant alternatives to the

proposed rule as based on the SOPs

which would accomplish the stated

objectives of applicable statutes and

which would minimize any significant

economic impact of Phase 2 rules on

small entities.

XII. Administrative Designation and

Regulatory Analysis

Under Executive Order 12866 (58 FR

51735 (Oct. 4, 1993)), the Agency must

determine whether this regulatory

action is ‘‘significant’’ and therefore

subject to Office of Management and

Budget (OMB) review and the

requirements of the Executive Order.

The order defines ‘‘significant

regulatory action’’ as any regulatory

action (including an advanced notice of

proposed rulemaking) that is likely to

result in a rule that may:

(1) have an annual effect on the

economy of $100 million or more or

adversely affect in a material way the

economy, a sector of the economy,

productivity, competition, jobs, the

environment, public health or safety, or

State, local, or tribal governments or

communities;

(2) create a serious inconsistency or

otherwise interfere with an action taken

or planned by another agency;

(3) Materially alter the budgetary

impact of entitlements, grants, user fees,

or loan programs or the rights and

obligations of recipients thereof; or,

(4) Raise novel legal or policy issues

arising out of legal mandates, the

President’s priorities, or the principles

set forth in the Executive Order.

Although the Agency is uncertain at

this time of what the annual monetary

or material effect of a future Phase 2

rulemaking might be, EPA has reason to

estimate that such regulatory action

might result in an annual effect on the

economy of $100 million or more, or

adversely affect in a material way a

sector of the economy. EPA will further

address the requirements of Executive

Order 12886 in developing the proposed

and final Phase 2 rule.

This Advance Notice was submitted

to OMB for review as required by

Executive Order 12866. Any written

comments from OMB or other federal

agencies and any EPA written response

to OMB or other federal agency

comments are in the public docket for

this document.

List of Subjects in 40 CFR Part 90

Environmental protection,

Administrative practice and procedure,

Air pollution control, Motor vehicle

pollution, Reporting and recordkeeping

requirements.

Dated: March 19, 1997.

Carol M. Browner,

Administrator.

Appendix A to the Preamble—

Handheld Engines Statement of

Principles

Statement of Principles for the

Regulation of Exhaust Emissions From

Handheld Spark-Ignited Engines at or

Below 19 Kilowatts

Preface

The Environmental Protection Agency

(EPA) agrees to draft a preamble and

proposed rule that will include, to the

maximum extent possible, consistent

with EPAs legal obligations, the

agreements contained in this statement

of principles (SOP). This SOP applies to

new spark ignited engines at or below

19 kW for use in handheld applications.

The draft preamble and proposed rule

will form the basis of a notice of

proposed rulemaking (NPRM) for Phase

2 emission standards for all new

nonroad spark-ignition engines at or

below 19 kilowatts subject to the

exclusion and exemption provisions

contained herein. The signatories have

reached agreement on many of the basic

issues that will apply to handheld

engines in Phase 2, such as the

pollutants to be regulated, the emission

standards, phased in effective dates, and

a test program for certain non-regulated

pollutants. The signatories agree to

support a program that promotes

technological advancement of durable

engine and emission control technology.

The signatories agree that the program

should strive to produce verifiable

reductions in engine emissions over the

useful lives of the engines and that the

responsibility for verification testing is

most appropriately placed with the

manufacturers. Consequently, the

signatories have reached conceptual

agreement on issues such as production

line and in-use testing, and the

implementation of a technology review

designed to assess the appropriateness

of Phase 3 emission standards.

However, a significant number of

important, unresolved issues remain. To

the extent possible in the time

remaining prior to publication of the

NPRM, the parties will continue their

efforts to reach agreement on these

unresolved issues. All outstanding

issues will be addressed during the

rulemaking process. Each party to this

SOP, other than EPA, agrees not to file

negative comments on the NPRM as to

the agreed upon provisions included in

this SOP. If the NPRM includes the

agreements contained in this SOP, each

party to the SOP other than EPA agrees

to file a memorandum in the docket to

that effect and to acknowledge that it

participated in negotiating the SOP.

Each party, other than EPA, agrees not

to take any action to inhibit the

adoption in the final rule of the agreedupon provisions included in this SOP.

Each party, other than EPA, agrees not

to challenge in court the agreements in

this SOP which are included in a final

rule. If the final rule is challenged in

court, and if the final rule and preamble

include the agreements contained in

this SOP, each party, other than EPA,

agrees to file a memorandum informing

the court that it participated in

negotiating the agreements contained in

this SOP.

Statement of Principles

The signatories agree to the proposal

of a single Notice of Proposed

Rulemaking to regulate the exhaust

emissions of small spark ignited engines

at or below 19 kW. The emission

standard related provisions applicable

to small handheld engines (Effective

Dates, Engine Classifications, Emission

Standards, PM and Toxics Test Program,

Test Procedures, Voluntary Incentive

and Recognition Program, Certification:

Averaging, Banking and Trading) will be

based upon the items listed below. The

non-emission standard related

provisions of the proposed rule

(Definitions, Applicability, Certification

Program, Production Line Testing, InUse Program, Imports, Dealer

Responsibility, Technology Review/

Phase 3, and Tampering) shall be

identical for all engines subject to the

rule, to the extent possible and provided

modifications are not necessary due to

differences in emission standard related

provisions. Where such provisions are

proposed that will not be identical for

all engines, the signatories will be

consulted during development of any

such proposal and will have full

opportunity to comment after proposal.

Items not addressed in this SOP will be

developed during the rulemaking

process.

A. Definitions

The signatories agree that, to the

greatest extent possible, terms defined

in the Phase 1 rule shall have the same

meanings in the Phase 2 rule.

Additionally, the signatories agree to

define the following terms necessary to

implement provisions described in this

SOP.

In-use credit: An emission credit

derived from the difference between the

mean in-use emission results of a
14746 Federal Register / Vol. 62, No. 59 / Thursday, March 27, 1997 / Proposed Rules

regulated pollutant, or pair of pollutants

in the case of HC+NOX, and the

applicable emission standard.

Technology subgroup: A group of

engine families from one or more

manufacturers having similar size,

application, useful life and emission

control equipment; e.g., Class III,

residential, non-catalyst, two stroke,

engine used in generator set

applications.

B. Applicability

1. This statement of principles is

applicable to handheld equipment and

spark ignited engines used in handheld

products subject to the following

exclusions. These exclusions, to the

extent described in the Phase 1 rule,

apply as described in that rule.

a. Engines used to propel marine

vessels.

b. Engines used to propel any motor

vehicle as defined in section 216 of the

Clean Air Act including motorcycles.

c. Engines used to propel aircraft.

d. Engines used to propel recreational

vehicles.

e. Engines used solely for

competition.

f. Engines used exclusively in

emergency and rescue equipment where

no certified engines are available to

power the equipment safely and

practically.

g. Engines used to power stationary

sources regulated by a federal New

Source Performance Standard

promulgated under section 111 of the

Act.

h. Engines that are both: Used in

underground mining or in underground

mining equipment; AND are regulated

by the Mining Safety and Health

Administration (MSHA) in 30 CFR parts

7, 31, 32, 36, 56, 57, 70 and 75.

i. Engines produced for export.

2. Exemptions will be provided as in

the Phase 1 rule for uncertified engines

used for purposes of research,

investigations, demonstrations or

training.

3. Exemptions will also be provided

as appropriate for reasons of national

security. An automatic national security

exemption will be proposed, similar to

that in the marine SNPRM (61 FR 4618)

for nonroad engines and equipment that

exhibit combat features, i.e. armor and

or weaponry.

C. Effective Dates

The standards will be phased in on a

percentage of production basis as shown

below. The percentages listed below

represent the minimum percentage of an

individual manufacturer s total

production of nonexempt, nonexcluded

handheld engines (not percentage of

engine families) destined for U.S. use

that must be certified to all applicable

standards and comply with all

applicable related emission

requirements; e.g. labeling, warranty,

production line and in-use testing, etc.

TABLE 1.—PHASE IN PERCENTAGES

FOR ALL HANDHELD STANDARDS

Model year Production

(percent)

2002 .......................................... 20

2003 .......................................... 40

2004 .......................................... 70

2005 .......................................... 100

D. Engine Classifications

Engine classification will be based

upon engine displacement as in the

Phase 1 rule with Classes I and II being

reserved for nonhandheld engines.

TABLE 2.—HANDHELD ENGINE

CLASSIFICATIONS

Engine

class Application Displacement in cubicCM

III ....... Handheld Less than 20.

IV ....... Handheld Greater than or = 20,

less than 50.

V ........ Handheld Greater than 50.

E. Emission Standards

1. The percentages of engines listed in

Table 1 must meet the standards listed

in Table 3 for their useful lives. These

standards are predicated upon a

multiplicative deterioration factor (df) of

1.0 and useful lives of 50 hours for

residential handheld engines and 300

hours for commercial handheld engines.

Manufacturers will declare at the time

of certification whether an engine

family is ‘‘commercial’’ or ‘‘residential’’.

The definitions of ‘‘commercial’’ and

‘‘residential’’ will be determined in the

rulemaking process.

TABLE 3.—HC+NOX AND CO

STANDARDS FOR HANDHELD ENGINES

Engine class

HC +

NOX

(g/kW/hr)

CO

(g/kW/hr)

III ............................... 210 805

IV ............................... 172 805

V ................................ 116 603

2. Two-stroke engines used to power

snowthrowers will be subject to the

handheld standards at the

manufacturer’s option.

3. Engines used exclusively in

wintertime-only applications, such as

snowthrowers or ice augers, need not

certify to or comply with the HC+NOX

standard at the option of the

manufacturer.

4. A provision will be included to

provide relief to small volume

equipment manufacturers to permit the

use of Phase 1 engines for a certain

period of time when they can make a

showing that no certified Phase 2 engine

is available with suitable physical or

performance characteristics to power a

piece of equipment in production prior

to 2002.

F. PM and Toxics Test Program for Class

III, IV, and V Engines

The Phase 2 regulations adopted for

handheld engines pursuant to this SOP

will not establish small engine emission

standards for particulate matter or toxic

air contaminants listed under section

112(b) of the Clean Air Act. To evaluate

the levels of these pollutants from Phase

2 handheld engines, the signatories

agree that a particulate matter and toxics

test program will be conducted.

Elements of a PM and Toxics Test

Program for Class III, IV, and V engines

include:

(1) PPEMA, in cooperation with EPA,

commits to a test program to evaluate

and quantify emissions of particulate

matter and toxics including, but not

limited to: formaldehyde, acetaldehyde,

benzene, toluene, and 1,3 butadiene.

(2) Testing under this program will be

conducted on Phase 2 technology

handheld engines.

(3) Testing under this program will be

of sufficient magnitude to represent the

range of new basic technologies used to

comply with the Phase 2 small engine

standards. CARB test data may be used

where appropriate.

(4) No enforcement will be tied to this

testing program.

(5) Test data will be made available

promptly to EPA for distribution to

other interested parties.

(6) Testing will be conducted at EPA,

industry, and/or independent facilities.

G. Test Procedures

The 2-mode steady state Cycle C test

procedure will apply to all Class III, IV,

and V engines as it did in the Phase 1

rule except that the modal weighting

factors for the Phase 2 rule, will be 0.85

for Mode 1 (100% max. power) and 0.15

for Mode 2 (idle mode).

A large number of unresolved issues

regarding the Phase 2 test procedure

still exist. The issues include: testing

precision, calibration requirements, data

sampling requirements, long term data

storage, requirements for natural gas and

liquefied petroleum gas, and

requirements for ambient test cell

conditions. The signatories agree these
Federal Register / Vol. 62, No. 59 / Thursday, March 27, 1997 / Proposed Rules 14747

could be resolved during the rulemaking

process.

H. Certification Program

A simplified version of the Phase 1

Certification Program will be provided

to the extent possible and appropriate.

The following outlines the elements of

the program:

(1) Streamlined annual certification

application.

(2) Coordination with the California

Air Resources Board (CARB).

(3) Possible automation of submittal.

I. Production Line Testing

The signatories agree that an efficient,

flexible Production Line Testing (PLT)

program, designed to verify production

of complying engines is appropriate. At

the same time, the signatories recognize

that when clear compliance is shown for

a family, it is reasonable to reduce or

curtail testing. The basic components of

a PLT program are listed below.

Additional specific details of the PLT

program will be developed through the

rulemaking process.

(1) Self-auditing plan, covering all

engine families each model year in a

statistically valid manner.

(2) The Cumulative Sum (CumSum)

procedure will be proposed in the

NPRM. Alternate test schemes may be

proposed by industry. The signatories

agree it is desirable to avoid a

multiplicity of individual, diverse test

schemes, but recognize that there may

be situations where a single test scheme

is not appropriate for specific engine

families or companies.

(3) Manufacturers will randomly

select engines from each engine family

from the production line without regard

to engine configuration.

(4) California audit test data is

acceptable to be used as input into the

statistical scheme to determine

compliance for 50-state engine families.

(5) Production line testing will

employ the full Federal Test Procedure

(FTP). EPA will seek comments in the

NPRM on the appropriateness of

alternative test procedures that preserve

the enforceability of the PLT program.

(6) All exhaust pollutants for which

standards are promulgated in the Phase

2 rule will be tested and resultant test

data will be reported to EPA quarterly.

(7) If an engine family exceeds the test

program determinant of exceedance, the

manufacturer will provide appropriate

data to EPA within a certain number of

days. EPA will review the data and

other pertinent information and may

notify the manufacturer that it intends

to suspend or revoke the manufacturer’s

certificate of conformity in whole or in

part for that engine family.

(8) The suspension or revocation of a

certificate of conformity shall not occur

before thirty (30) days after notification

from EPA of its intent to suspend or

revoke. Hearing procedures by which a

manufacturer may contest the

suspension or revocation of a certificate

will be provided similar to those in the

Phase 1 Selective Enforcement Auditing

(SEA) regulations. The certificate is

automatically suspended with respect to

any individual engine that fails to

comply with applicable standards

during this testing process.

(9) During this thirty (30) day period

described in paragraph I 8 above, EPA

will maintain a dialogue and coordinate

with the manufacturer to facilitate the

approval of the required production line

change in order to eliminate the need to

halt production, if possible.

(10) EPA will approve or disapprove

the manufacturer’s production line

change within fifteen (15) days of

receipt. Disapproval of the

manufacturer’s production line change

could result in certificate suspension or

revocation, with hearing procedures as

described above. If EPA does not

respond to the manufacturer’s proposed

change within fifteen (15) days of

receipt, the proposed change will be

deemed acceptable to EPA.

(11) The manufacturer, in concert

with EPA, will then determine the

number of non-complying engines

which have been introduced into

commerce.

(12) EPA may conduct Selective

Enforcement Audits as a backstop ; for

example, when it receives evidence of

improper testing procedures or evidence

of a non-conformity that was not being

addressed in the normal Production

Line Testing process. Routine or random

SEAs shall not be a part of the final

program.

J. In-Use Program

1. In-Use Testing

The signatories agree that an efficient,

flexible testing program designed to

ensure and verify compliance of in-use

engines with applicable emission

standards is appropriate. The signatories

agree to establish an in-use testing

program with basic components as

follows. Additional specific details of

the program will be developed through

the rulemaking process:

(a) In-use testing will employ the full

Federal Test Procedure(FTP).

(b) All exhaust pollutants for which

standards are promulgated in the Phase

2 rule will be tested.

(c) EPA will select a portion of each

manufacturer’s engine families to be inuse tested each year (up to 25% of

families). Manufacturers may elect to

conduct testing of additional families,

and to test more frequently. Additional

in-use credits may be generated or

required from such testing.

(d) The in-use testing scheme will

employ a method to increase the

number of engines to be tested when

individual engine failures occur, up to

a maximum of ten engines per family

per year. Except for small volume

families, the minimum number(n) of

engines tested will be four.

(e) All in-use test results will be

reported electronically each quarter to

EPA. Reporting of data which suggests

an emission exceedance (mean ≤

standard) will occur within a certain

number of days of the last test.

(f) EPA will have the right to spot

check a manufacturer to evaluate testing

practices. EPA will provide reasonable

notice of such checks unless it has

evidence of improper test practices.

(g) EPA may conduct its own in-use

testing, including testing of properly

maintained consumer owned engines,

through the full useful life of the

engines for enforcement purposes.

(h) Bench aging of in-use engines will

be permitted only for technology

subgroups where correlation between

field aged and bench aged engines can

be shown (see J2).

2. Bench Aging Correlation

The signatories agree that bench aging

is an appropriate way to obtain in-use

emission data from small spark ignited

gasoline engines, provided that the

bench aging process can be shown

initially and periodically to correlate

with field aging. Consequently the

signatories agree to the basics of a bench

aging correlation strategy as follows.

Additional specific details will be

developed in the rulemaking.:

(a) An initial bench-aging/field-aging

correlation program will be conducted

by manufacturers under EPA guidance.

A portion of the field engines will be

aged in individual usage or fleets where

the manufacturer does not carry out or

exercise control over the engines

maintenance, or limit their usage such

that the engines are no longer used in

a way that is representative of typical

in-use engines.

(b) Emission testing will employ the

full Federal Test Procedure (FTP).

(c) All exhaust pollutants for which

standards are promulgated in the phase

2 rule will be measured for correlation

purposes.

(d) Engines will be aged to the full

regulatory useful life on the bench and

in the field except that commercial

engines may be aged to 75% of the full
14748 Federal Register / Vol. 62, No. 59 / Thursday, March 27, 1997 / Proposed Rules

regulatory useful life for correlation

testing purposes only.

(e) Correlation and sample sizes will

be determined as appropriate.

(f) Engine manufacturers will conduct

a correlation spot check program

periodically of each technology

subgroup to verify that emissions from

bench-aged engines correlate with

emissions from field-aged engines.

3. In-Use Credit Program

The signatories agree that reasonable

means must exist to address emission

exceedances of in-use engines,

including those exceedances of in-use

engines identified by Production Line

Testing, that: (1) provide an incentive to

manufacturers to build emissiondurable engines; (2) can be implemented

practically; (3) provide an incentive to

perform additional in-use testing; (4)

offset additional emissions that occur as

a result of the exceedance of the

standard; and (5) are not unduly

burdensome to the manufacturers. The

signatories agree that a mandatory recall

program does not meet these five

criteria, although a manufacturer may

conduct a voluntary recall in lieu of

remedying emission exceedances

through the in-use credit program or

alternative methods provided in this

SOP. The signatories believe that

successful implementation of the in-use

credit program and the other

alternatives described herein will

provide a comprehensive remedy to

address in-use emission exceedances so

that EPA will not, in practice, order

mandatory recall of Phase 2 certified

engines. Additional specific details of

the in-use credit program will be

developed during the rulemaking

process:

(a) In-use credits generated or

required will be based on an engine

family’s in-use emission level relative to

its applicable standard, as determined

from the In-use Testing Program.

(b) A multiplicative factor will be

used to adjust credits earned based on

sample size.

(c) In-use credits will be used at a

higher rate than the in-use credits were

generated.

(d) In-use credits will have an

unlimited life during the Phase 2

program.

(e) For credit computational purposes,

U.S. sales figures will be used.

(f) In-use credit banking and trading is

allowed, but trading may be limited

between categories of engines.

(g) All credit calculations indicating

surpluses and deficits will be reported

electronically at the conclusion of inuse testing for that model year.

(h) An appropriate in-use credit

formula will be developed in the

rulemaking to account for the different

power ratings of engines and the

different regulatory useful lives of

residential and commercial engines.

(i) In the case of in-use testing of

carry-over engine families, and in the

absence of other applicable test data, the

test results from one model year will be

assumed to apply to four years worth of

production: the model year tested, the

next model year and the two previous

model years. In-use credits will be

generated or required, as appropriate.

4. Alternative Methods to Address InUse Exceedances of Standards

The signatories agree that the primary

method for manufacturers to address inuse exceedances of standards will be

applying credits generated through the

in-use credit program. If the

manufacturer has insufficient in-use

credits, it should first investigate the

possibility of purchasing credits through

available sources. However, appropriate

alternative methods will be considered.

Manufacturers will be allowed to

implement all appropriate alternative

methods prior to EPA making a

determination of substantial

nonconformity. EPA will make a

determination of substantial

nonconformity only when use of in-use

credits and/or appropriate alternative

methods do not adequately address the

exceedance. Alternatives should meet

the following criteria:

(a) Alternatives must have a nexus to

the emission problem caused by the

subject engine family.

(b) The alternative must cost

substantially more than foregone

compliance costs and consider the time

value of foregone costs.

(c) Alternatives must offset at least

100% of the exceedance of the standard,

subject to the other listed criteria.

(d) Alternatives must consider the

degree of environmental harm caused by

the exceedance.

(e) Alternatives must consider the

time value of the foregone

environmental benefit resulting from the

exceedance.

(f) Alternatives will be subject to a

cost cap that will be established in the

rulemaking process.

(g) Alternatives may not include

measures the manufacturer planned to

undertake irrespective of the need to

address the exceedance.

(h) Alternatives must be able to be

implemented expeditiously and

completed in a reasonable time.

(i) Alternatives must not force the

manufacturer out of business.

(j) The implementation potential of an

alternative must be considered.

K. Imports

The Imports program will be similar

to the program for Phase 1. Essentially,

this program bars the importation of

uncertified, regulated small engines

except that a one-time personal use

exemption will permit the importation

of three non-conforming small engines

(or pieces of equipment containing such

engines) for personal use but not for

purposes of resale.

L. Voluntary Incentive and

Recognition Program for Handheld

Engines

A voluntary program will be created

to identify handheld engines that have

HC+NOX certification levels

substantially below the Phase 2

standards. Manufacturers who

participate in this program will be

allowed to display a symbol (yet to be

determined) on their products,

packaging, or advertisements indicating

that the engine qualifies for the

program. The signatories recognize that

further specific details of the program

need to be formulated, but they agree on

certain basic concepts of the program.

To qualify for the program, certified

engine emission levels must be a certain

percentage below the Phase 2 HC+NOX

standard. EPA and industry will agree

on the administration of the program. In

addition, manufacturers will receive a

waiver on production line testing if an

engine family achieves a certification

level a certain percentage or more below

the HC+NOX standard. The two

percentages referenced in this paragraph

may be different.

M. Certification: Averaging, Banking

and Trading (ABT)

No certification ABT program will be

created for handheld engines. In-use

credits generated in the in-use ABT

program are not applicable for use in

certification.

N. Dealer Responsibility

The signatories agree that, except as

noted in this paragraph, these

regulations will not impose any

obligation on the dealers or repair

facilities to bring into compliance any

products found to have been tampered,

nor will dealers or repair facilities be

required to report defects to EPA.

Dealers and repair facilities will be

prohibited from tampering or causing

tampering, but, are not prohibited from

working on tampered products. Dealers

and repair facilities will not be required

to restore products submitted to them

with tampered emission controls to

certified configurations unless the repair
Federal Register / Vol. 62, No. 59 / Thursday, March 27, 1997 / Proposed Rules 14749

1EPA is currently seeking appropriate changes to

a court order to conform to this SOP.

involves the component or system that

has been tampered. In that case, dealers

and repair facilities will be required to

restore the system to a certified and

properly functioning configuration but

will not be required to demonstrate that

the products comply with applicable

emission standards. In repairing or

replacing emission control parts and

systems, dealers and repair facilities

may use parts represented by their

manufacturers to be functionally

equivalent to original equipment (OE)

parts.

O. Technology Review/Phase 3

The signatories recognize that

technological advances and/or cost

reductions may occur after

promulgation of the Phase 2 rule that

could make greater, but still costeffective reductions feasible in

handheld emission levels. At the same

time, the signatories agree that industry

requires certainty and stability for its

business planning. Without such

certainty, industry would not commit to

the investment that these standards will

require, and without such certainty and

stability these investments might never

be recouped. EPA will commit to

conducting a technology review and

publishing a Notice of Proposed

Rulemaking in 2001 announcing any

intended amendments to the standard

levels or other program elements or

EPAs desire to maintain the existing

standards or program. The final

rulemaking will be completed by 2002

and, if Phase 3 standards are adopted,

they will be phased in on a percentage

basis and over a period of time similar

to Phase 2, beginning no earlier than

model year 2007. This schedule is

intended to provide a minimum five

year period between the implementation

of Phase 2 standards and the

implementation of any Phase 3

standards to aid manufacturers in

recouping their investments in Phase 2

technology.

P. Tampering

The signatories agree that the

tampering prohibitions from Phase 1

shall be adopted in Phase 2 except that

a provision will be added to permit the

removal, subject to approval by EPA, of

emission control devices or elements of

design that interfere with the safe and/

or practical use of emergency and rescue

equipment.

Appendix B to the Preamble—

Nonhandheld Engines Statement of

Principles

Small Nonhandheld Spark-Ignited

Nonroad Engine Statement of Principles

Members of the small (19 kilowatt and

below) nonhandheld spark-ignited (SI)

nonroad engine industry and the U.S.

Environmental Protection Agency (EPA)

(collectively, the Signatories) recognize

the significant contribution made by

small nonhandheld SI nonroad engines

to the emissions inventory that leads to

ozone concentrations in nonattainment

areas. This recognition prompted the

Signatories, along with State and

environmental organization

representatives, to work together to

quickly put into place a first phase of

regulations taking effect with the 1997

model year. The Phase 1 regulations

achieve significant reductions in ozoneforming pollutants from these engines

by setting emissions standards to

control hydrocarbons (HC) and oxides of

nitrogen (NOX).

Nevertheless, the Signatories

recognize that further control of HC and

NOX from these sources beyond the

Phase 1 levels is achievable through

technology that will be cost-effective

and feasible in future model years. They

also recognize the need for stability and

predictability to be designed into a

regulatory program that achieves these

additional reductions.

The Signatories also recognize that it

is important to maintain a strong and

competitive industrial base as EPA

implements its responsibilities to

protect public health and welfare and

the environment.

This Statement of Principles (‘‘SOP’’)

accomplishes both environmental and

business objectives, ensuring cleaner air

in a manner which is both realistic for

industry and responds to environmental

needs. The Signatories agree that the

aggressive package of emission

standards and implementation

schedules contained in this SOP

accomplishes the environmental benefit

of further significantly reducing in-use

emissions of ozone forming pollutants

from nonhandheld small SI nonroad

engines. The Signatories further agree

that the package of provisions contained

in this SOP reflects a clear, stable, longterm control program for this source

which will encourage industry to more

effectively incorporate environmental

objectives into their business planning.

With this SOP, the small

nonhandheld SI nonroad engine

industry has stepped forward to work as

a partner with EPA to bring about

cleaner air. States will see significant

additional reductions in the emission

inventory from these sources beyond

those achieved by the Phase 1 rule that

they can rely upon in meeting their

responsibilities to attain and maintain

the national ambient air quality

standard (NAAQS) for ozone.

Consumers will benefit from improved

engine technology, which in addition to

improving air quality will likely also

burn less fuel, require less maintenance,

be more reliable, and last longer.

This SOP outlines the joint

understanding of all Signatories that

will provide the basis for issuance by

EPA of an Advanced Notice of Proposed

Rulemaking (‘‘ANPRM’’) and a Notice of

Proposed Rulemaking (‘‘NPRM’’) which

would be consistent with the points

outlined in this document. EPA intends

to issue the ANPRM in early 1997, the

NPRM in the Fall of 1997, and to

promulgate a final rule by the Fall of

1998.1 Based on the currently available

information, the Signatories believe that

the standards contained in this SOP

represent the most stringent standards

achievable considering cost and other

appropriate factors in the time frame of

this Phase 2 program. However, this

SOP does not change the importance of

EPA demonstrating the need for the

standards described below and EPA’s

obligations to meet the criteria of the

Clean Air Act in finalizing any rule,

including complying with all applicable

rulemaking procedures.

1. Scope

This SOP addresses a Phase 2

program that will apply to Class 1 and

Class 2 nonhandheld SI nonroad

engines at or below 19 kilowatts (25

horsepower). These classes are

distinguished from each other primarily

in terms of engine size (displacement),

cost, and the applications in which they

are used.

Class 1 engines, which have

displacements of less than 225 cc, are

typically used in relatively inexpensive

applications such as walk-behind

lawnmowers, edgers and trimmers, and

other lawn care equipment. The vast

majority of Class 1 engines produced for

use in the United States use side-valve

(SV) technology.

Class 2 engines, which have

displacements greater than or equal to

225 cc, are typically used in more

expensive applications such as riding

mowers, lawn tractors, tillers, generator

sets, and many other applications. Class

2 engines are often used in commercial

applications and, as a result, tend to

have much higher hours of use annually

than Class 1 engines. Approximately
14750 Federal Register / Vol. 62, No. 59 / Thursday, March 27, 1997 / Proposed Rules

one third of the Class 2 engines sold in

the United States today utilize overhead valve (OHV) engine technology.

2. Technology Forcing and In-Use Goals

The two primary goals for the Phase

2 program for small nonhandheld SI

nonroad engines reflected in this SOP

are 1) a shift to cleaner, more emissions

durable technology as quickly as

feasible, considering cost and lead time

factors, and 2) assurance that emission

reductions are achieved in-use.

The Signatories acknowledge that the

program described here is intended to

meet the clean technology goal and

reflect a shift to clean more durable

technology on an aggressive schedule

by: 1) ensuring that manufacturers shift

their production of larger (Class 2)

nonhandheld engines completely to

over-head valve engine or comparably

clean and durable technology (referred

to herein as ‘‘OHV emissions

performance’’) by model year 2005, and

in the interim attain a 50 percent shift

to OHV emissions performance by

model year 2001, 2) establishing

standards for Class 1 engines that reflect

cost-effective controls on SV engine

technology, and 3) assessing the

environmental, marketplace and other

economic factors associated with highvolume OHV technology for smaller

(Class 1) nonhandheld engines through

an OHV demonstration program.

The Signatories further agree on the

principle that the emission benefits of

the program must be realized in-use. As

a result, this SOP contains provisions to

ensure that the engines produced by

manufacturers are emissions durable

over their useful lives while at the same

time using compliance mechanisms that

are not unduly burdensome.

3. Standards and Effective Dates

In order to achieve the goals described

in section 2 above, the Signatories agree

to the following provisions.

a. HC+NOX

The Signatories believe that the

standards and effective dates shown in

Table 1 below will achieve the

technology forcing goal described in

section 2 above.

TABLE 1.—HC+NOX STANDARDS AND MODEL YEAR EFFECT DATES

HC+NOX

NMHC+ NOX (optional standard for

natural gas fueled

engines only)

2001 2002 2003 2004 2005

g/kw-hr (g/bhp-hr) Assumed % of Sales

Class 1 .......................... 25.0 (18.7) ............... 23.0 (17.2) ............... 100

Class 2 .......................... 24.0 (18.0) ............... 22.1 (16.5) ............... 50 37.5 25 12.5 0

12.1 (9.0) ................. 11.3 (8.4) ................. 50 62.5 75 87.5 100

Note to table: The actual corporate average emission standards for Class 2 engines, based on the standards applicable at the 250 hour useful life category are, in g/kw-hr:

2001 2002 2003 2004 2005

18.0 16.6 15.0 13.6 12.1

A manufacturer’s actual corporate average could be different depending on its mix of 250, 500, and 1000 hour useful life engines.

The Class 1 level of 25 g/kw-hr is

expected to achieve meaningful

emission reductions from these engines

beyond what is required for the Phase

1 rule, while at the same time allowing

the continued use of SV engines in the

market for this class. The Signatories

agree to the importance of the OHV

Demonstration Program for Class 1 to

investigate the potential for increasing

penetration of OHV technology in Class

1 (see section 3(g) below).

For Class 2 engines there is a dual

standard: one based on SV technology

(which is expected to be phased-out),

and one based on OHV technology. The

OHV technology based standard (12.1 g/

kw-hr for 250 hour engines) would be

phased-in on a percentage of production

basis as shown in Table 1. The standard

is based on the projected capabilities of

emissions-optimized durable OHV

engines. The standard assumes an

assigned multiplicative deterioration

factor (DF) of 1.3 at 250 hours for OHV

engines. EPA will propose that

manufacturers would be allowed to

establish their own DFs for their full

product line within a useful life

category for the 500 and 1000 hour

useful life categories. The proposal will

address in a reasonable and practical

manner the kind of data required to

determine the DFs, the amount of in-use

testing required to verify the DFs, and

the appropriateness of reserving

certification credits pending verification

of the DFs through in-use testing.

During the rulemaking process EPA will

consider the appropriateness of

allowing manufacturers to establish

their own DFs for their full product line

within the first useful life category (250

hours).

Recognizing that manufacturers’

testing capacities may be substantially

constrained during the transition to

fully phased in standards,

manufacturers choosing to establish

their own DFs for the 500 and 1000 hour

Class 2 useful life categories may base

the DF on good engineering judgment,

demonstrated to the satisfaction of the

Administrator, provided that, in a

reasonable period after model year 2005,

the manufacturer shall verify their good

engineering judgement using

appropriate data. The proposal will

address in a reasonable and practical

manner the kind of data required to

verify the DFs. In the event that a DF

must be adjusted, the manufacturers

shall offset any emission shortfalls

resulting from a previous low DF. The

use of credits from either Class 1 or

Class 2 engines would be one means to

offset any such shortfalls.

The Signatories agree that one goal of

the SOP is to encourage manufacturers

to design and build engines that are

emissions durable over their actual

useful lives, and to encourage

manufacturers to voluntarily certify

their engines to longer useful life

categories when they are intended for

longer hours of operation in-use (See

section 3.b.). The Signatories recognize

that, depending on the emission

characteristics of an engine, at longer

useful life hours the emission standard

may be more difficult to meet. In

addition, it is the Signatories’ goal to

make sure the emission standards

encourage manufacturers to voluntarily

certify to longer useful lives those

engine designed to be operated and

durable for longer useful lives.
Federal Register / Vol. 62, No. 59 / Thursday, March 27, 1997 / Proposed Rules 14751

2 The proposed standards will be based on the

ratio of the assigned DFs for these longer useful life

engines at the longer time periods compared to the

1.3 assigned DF at the 250 hour useful life category

(e.g., 1.5/1.3×12.1=14.0).

3For example, the standard would be 14.0 g/kwhr if the DF was adjusted to be 1.5, whereas the

standard would be 11.2 g/kw-hr if the DF was

adjusted to be 1.2.

4A manufacturer’s actual corporate average could

be different depending on its mix of 250, 500, and

1000 hour useful life engines.

EPA will propose, based on available

data, optional assigned DFs for the 500

and 1000 hour useful life categories.

The proposed assigned DFs at the longer

useful life categories would not be lower

than 1.3. Furthermore, it is anticipated

that longer useful life engines would not

have an assigned DF greater than 1.5 at

1000 hours. Consequently, the

Signatories expect that the proposed

assigned DFs for longer useful life

engines would be between 1.3 and 1.5

at 1000 hours.

Finally, the Signatories agree that EPA

will propose HC+NOX standards

associated with longer useful hours to

reflect the proposed assigned DFs

discussed above.2 However, in no case

will the proposed standard be lower

than that associated with an assigned

DF of 1.3 or higher than that associated

with an assigned DF of 1.5.

If as a result of the field durability

demonstration program described under

section 4(d), EPA later determines that

the assigned DFs need to be adjusted,

then EPA would initiate a rulemaking to

adjust the DFs and the standards

accordingly.3 Any such rulemaking

would only apply prospectively and

would be undertaken only if data

suggest that measured DFs are

significantly different from the assigned

DFs as set forth in this SOP.

The engines for which the

manufacturer determines its own DFs

would be included in the field

durability demonstration program.

However, data from those engines

would not be included in determining

whether the assigned DFs need to be

adjusted under the field durability

program.

The Signatories acknowledge that it

may be appropriate to create a separate

engine class with different HC+NOX

standards for very small displacement

nonhandheld engines. To that end, EPA

will consider the need for such a class

as part of the rulemaking process.

b. Useful Life

The Signatories recognize that small

nonhandheld SI nonroad engines are

used in a wide range of applications

with annual and seasonal hourly use

varying from low in some residential

applications to high in some

commercial applications. The

Signatories further recognize that the

greater the use during the ozone season

of an engine the greater its importance

in terms of air quality impacts.

The Signatories agree to the

desirability of a mechanism that allows

manufacturers to select the useful life

category for a given engine application.

Selection of the useful life category

would be solely at the manufacturer’s

discretion, and the engine’s label and

averaging, banking and trading (ABT)

credit calculation would reflect the

manufacturer’s choice.

For the Phase 2 program, the useful

life categories for Class 1 and Class 2

engines would be as follows:

TABLE 2.—USEFUL LIFE CATEGORIES

(HOURS)

Category

C

Category

B

Category

A

Class 1 .............. 66 250 500

Class 2 .............. 250 500 1000

The useful life category corresponds

to the hours of operation to which the

engine is subject to applicable emissions

standards. For purposes of the engine

label, the useful life will be referred to

as the emissions compliance period.

The engine label will indicate that the

engine is built to conform with EPA

emissions regulations for the emissions

compliance period, in hours, selected by

the manufacturer (e.g., 250 hours).

As an option, the engine label will

indicate that the engine is built to

conform with EPA emissions

regulations for the emissions

compliance period, by category, selected

by the manufacturer (e.g., Category C).

The label will refer to the appropriate

owner’s manual for a description of the

emissions compliance period. As part of

this option, EPA will propose that

engine manufacturers demonstrate

during the certification process that

information explaining the meaning of

the category designation will be

provided to the ultimate purchaser.

c. CO

The Phase 1 carbon monoxide (CO)

standard for Class 1 and Class 2 engines

will remain in place for the Phase 2

program, but will be adjusted to 610 g/

kw-hr to reflect engine deterioration. In

addition, EPA will have authority to

waive the reporting requirement for CO

at the Administrator’s discretion.

d. Wintertime Products

The exemptions from the HC+NOX

standards contained in Phase 1 for

engines used only in wintertime

products would continue for Phase 2.

e. Certification Test Fuel

The Signatories agree that no changes

in the certification test fuel

specifications will be proposed from the

current Phase 1 requirements.

f. Averaging, Banking, and Trading

(ABT)

Compliance with the HC+NOX

standards above would be based upon a

corporate average with manufacturers

also having the ability to bank and trade

emission credits. The Signatories agree

that such an ABT program will help

assure that the aggressive schedule set

out above will be cost-effective and

technologically feasible.

Credit calculations would be based

upon sales weighted corporate average

emissions from a manufacturer’s

engines on an annual basis, using family

emission limits (FELs) and useful life

hours selected by the manufacturer.

While the Signatories believe that the

phase-in for percentage of production

shown in Table 1 for Class 2 engines

will occur, the flexibility provided

under the ABT program will allow some

variation from the expected percentage

of production phase-in. Regardless of

this variation, manufacturers of Class 2

engines certified to the 250 hour useful

life category would be required to

achieve a standard of 18.0 g/kw-hr, 16.6

g/kw-hr, 15.0 g/kw-hr, and 13.6 g/kw-hr

in model years 2001, 2002, 2003, and

2004, respectively, on a sales weighted

average across their Class 2 production,4

recognizing that through the ABT

program credits may be used to meet the

standard. EPA will propose rules

addressing the procedures and

requirements for determining the

number of engines that correspond to an

engine family and model year for

purposes of credit calculations. The

procedures and requirements will take

into account the unique characteristics

of the small nonhandheld SI nonroad

engine industry, and will be designed to

limit the burden of tracking engine

production and sales to no more than

the minimum needed to establish fair

and accurate credit accounting. In

addition, EPA will consider during the

rulemaking process the appropriateness

of using production-based instead of

sales-based accounting for credit

accounting purposes.

In order to assure that the ABT

program adequately encourages the

transition to cleaner, more durable

technology and that the ABT program

fulfills its intended function, cross class

averaging, banking, and trading will
14752 Federal Register / Vol. 62, No. 59 / Thursday, March 27, 1997 / Proposed Rules

only be allowed under two scenarios;

provided that the affected

manufacturer’s Class 2 engine

production is either all OHV technology

or it meets or exceeds the assumed OHV

emissions performance production

phase-in schedule for Class 2 engines in

Table 1. One scenario where cross class

ABT would be allowed is for credit

exchanges from credit generating Class

2 engines to credit using Class 1

engines. The other allowable scenario is

credit exchanges between Class 1 and

Class 2 engines to offset emission

shortfalls identified in to the programs

outlined in Section 4(c) below or as a

result of an adjustment to manufacturer

determined DFs as discussed in section

3(a).

In order to provide an incentive to

accelerate the introduction of cleaner

technologies, the Signatories agree that

the proposal will contain provisions for

generation of credits prior to the 2001

model year (i.e., early banking).

Manufacturers may begin to generate

such early credits two model years

before the standards set forth in this

SOP take effect. Early banking credits

may only be generated for engines

certified below the 12.1 g/kw-hr

HC+NOX emission level at the 250 hour

useful life category for Class 2 engines

(or the applicable standard for the 500

and 1000 hour useful life categories),

and below 16.0 g/kw-hr HC+NOX for

Class 1 engines. In addition, such early

credits could only be banked where a

manufacturer certifies and complies

with the 2001 standard for it’s entire

product line in a given class. Early

banking credits cannot be used to defer

the assumed OHV emissions

performance production phase-in

schedule for Class 2 engines in Table 1.

The Signatories further agree that

credits generated under the Phase 2

program will have an unlimited life

when used for purposes of compliance

with the standards specified in this

SOP. EPA will consider the appropriate

life of Phase 2 program credits in

connection with other regulatory

programs in which those credits could

be used.

g. Class 1 OHV Demonstration Program

The Signatories recognize the

important role SV engines currently

play in the Class 1 market and the

significant economic impediments to

the widespread introduction of higher

cost, cleaner technologies such as OHV

in this class. Nevertheless, the

Signatories also recognize the

desirability of investigating the potential

to reduce the cost and increase the

penetration of such technology in this

class in order to maximize achievable

emissions reductions from this industry.

As a result, in order to determine in

a meaningful way the potential for

increasing the penetration of cleaner,

more durable technology in Class 1,

EPA and certain manufacturers have

entered into Memoranda of

Understanding (MOUs) calling for an

OHV demonstration program. The Class

1 OHV demonstration program is

designed as an experiment to explore

the consumer acceptance and feasibility

of applying OHV technology to mass

production Class 1 engines. The

program would include a series of

reports to EPA on the level of success,

impediments encountered, market

response, costs, emission rates, etc.

4. Compliance Assurance

The Signatories agree on the principle

that the emission benefits of the Phase

2 program must be achieved over the

lifetime of the engines. However, the

Signatories also recognize the

importance of minimizing to the extent

possible the compliance burden

associated with this program.

The Signatories agree that reasonable

means must exist to address emission

exceedences identified in selective

enforcement audits (SEA) or production

line testing (PLT). These means should:

(1) provide an incentive to

manufacturers to build emissiondurable engines; (2) be practical to

implement; (3) provide an incentive to

perform accurate testing; (4) offset

additional emissions that occur as a

result of the exceedence of the

standards; and (5) not be unduly

burdensome to manufacturers. The

Signatories agree that a mandatory recall

program for Class 1 and 2 engines,

modeled on traditional on-highway

recall procedures, does not meet these

five criteria, given the non-integrated

nature of the nonhandheld outdoor

power equipment industry and the

consumer markets in which most of that

equipment is sold. The Signatories agree

that there are other, better means to

encourage compliance with emission

standards for these engines than

mandatory product recalls (as discussed

in section 4(c) below), and that the

efforts of the industry and EPA should

be devoted to assuring that engines will

comply with applicable standards inuse before they leave the production

facility and to taking any necessary

actions as quickly as possible to assure

good emission performance.

Consequently, the proposal will not

contain provisions for making

compliance determinations on the basis

of in-use testing or emission

performance.

The Signatories agree that the

combined package of provisions

contained in this SOP strikes the

appropriate balance between providing

assurance of in-use emission

performance and minimizing the burden

to industry.

a. Class 1 Certification

Certification for Class 1 engines with

SV technology or aftertreatment would

continue as under Phase 1, except that

certification engines would first be

bench-aged to the number of hours

selected as useful life (66, 250, or 500)

to determine compliance with the FEL.

A manufacturer could propose a

bench-aging schedule up to 48 months

prior to the start of a model year for the

engine family as projected by the

manufacturer. EPA would accept or

reject the proposed schedule within 90

days of submission. If EPA did not reject

the schedule within 90 days, the

manufacturer’s proposed schedule

would automatically be accepted.

Periodic correlation of bench-to-field

testing would be demonstrated by the

manufacturer. Such correlation would

be established by a simple method such

as determining the ratio of the

calculated mean emission levels of

bench-aged engines and field-aged

engines. During the first five years the

program correlation would be

demonstrated every two model years,

and every five model years thereafter

(e.g., 2001, 2003, 2005, 2010, etc.). Any

changes to the correlation ratio would

apply prospectively only with

appropriate lead time for the

manufacturers.

As an option, instead of testing

engines on the bench and demonstrating

correlation, manufacturers could choose

to test engines from the field with

accumulated hours corresponding to the

useful life category selected by the

manufacturer (‘‘field-aged

certification’’).

Certification for Class 1 OHV engines

would continue as under Phase 1,

except that a multiplicative assigned DF

would be applied to new engine levels

to determine compliance with the FEL

for the 66 hour useful life category

shown in Table 2. The Signatories agree

that the assigned DF for Class 1 OHV

engines will be 1.3 at 66 hours.

Manufacturers would be allowed to

establish their own DFs for their full

product line within a useful life

category for the 250 and 500 hour useful

life categories. The proposal will

address in a reasonable and practical

manner the kind of data required to

determine the DF, the amount of in-use

testing required to verify the DF, and the

appropriateness of reserving
Federal Register / Vol. 62, No. 59 / Thursday, March 27, 1997 / Proposed Rules 14753

certification credits pending verification

of the DF through in-use testing. During

the rulemaking process EPA will

consider the appropriateness of

allowing manufacturers to establish

their own DF for their full product line

within the first useful life category (66

hours). EPA will also consider the

appropriateness of establishing optional

assigned DFs for the 250 and 500 hour

useful life categories. Any adjustment to

the assigned DF would be made as set

forth in Section 3(a) above, however, in

the case of Class 1 engines the standard

would not be adjusted.

b. Class 2 Certification

Certification for Class 2 engines with

SV technology or aftertreatment would

continue as under Phase 1, except that

certification engines would first be

bench-aged to the number of hours

selected as the useful life (250, 500, or

1000) to determine compliance for

certification purposes. During the

transition to OHV emissions

performance engines, some flexibilities

to relieve testing burden would apply

(see section 5).

A manufacturer could propose a

bench-aging schedule up to 48 months

prior to the start of a model year for the

engine family as projected by the

manufacturer. EPA would accept or

reject the proposed schedule within 90

days of submission. If EPA did not reject

the schedule within 90 days, the

manufacturer’s proposed schedule

would automatically be accepted.

Periodic correlation of bench-to-field

testing would be demonstrated by the

manufacturer. Such correlation would

be established by a simple method such

as determining the ratio of the

calculated mean emission levels of

bench-aged engines and field-aged

engines. During the first five years the

program correlation would be

demonstrated every two model years,

and every five model years thereafter

(e.g., 2001, 2003, 2005, 2010, etc.). Any

changes to the correlation ratio would

apply prospectively only with

appropriate lead time for the

manufacturers.

As an option, instead of testing

engines on the bench and demonstrating

correlation, manufacturers could choose

to test engines from the field with

accumulated hours corresponding to the

useful life category selected by the

manufacturer (‘‘field-aged

certification’’).

Certification for Class 2 OHV engines

would continue as under Phase 1,

except that a multiplicative assigned DF

would be applied to new engine levels

to determine compliance with the FEL

for the 250 hour useful life category

shown in Table 2. The Signatories agree

that the assigned DF for Class 2 OHV

engines will be 1.3 at 250 hours.

Manufacturers would be allowed to

establish their own DFs for their full

product line within a useful life

category for the 500 and 1000 hour

useful life categories. The proposal will

address in a reasonable and practical

manner the kind of data required to

determine the DFs, the amount of in-use

testing required to verify the DFs, and

the appropriateness of reserving

certification credits pending verification

of the DFs through in-use testing.

During the rulemaking process EPA will

consider the appropriateness of

allowing manufacturers to establish

their own DFs for their full product line

within the first useful life category (250

hours). EPA will propose based on

available data optional assigned DFs for

the 500 and 1000 hour useful life

categories, as discussed in Section 3(a)

above. Any adjustment to the DF and

standard would be made as set forth in

Section 3(a) above.

c. Production Line Compliance

The Signatories agree that reasonable

testing to assure that production engines

meet standards is appropriate and that

two different approaches would be used

to monitor production line compliance.

Under the first approach, a

manufacturer would opt to conduct a

manufacturer run Production Line

Testing (PLT) program (including but

not necessarily limited to CumSum) for

all of their engine families. In this case,

the Signatories agree that the SEA

program would exist only for backstop

purposes where evidence of improper

testing or nonconformities not being

addressed by the manufacturer’s testing

program was obtained by EPA. The

Signatories agree that for manufacturers

who conduct a PLT program under this

approach, if an engine family fails its

production audit by exceeding its FEL,

the FEL for that family would be

adjusted to the new FEL indicated by

the production audit results for both

past and future production where

applicable. Similarly, if an engine

family passes its production audit by

achieving emissions below its FEL, the

FEL for that family can be adjusted to

the new FEL indicated by the

production audit results for future

production where applicable. Any

deficit in corporate-wide emissions

performance resulting from the FEL

change would need to be retired by the

end of the model year following the

model year in which the production

audit failure occurred on a one-for-one

basis. Any deficit in corporate-wide

emissions performance resulting from

the FEL change that is not retired by

that time can be retired in the following

two model years on a 1.2 to one basis.

This PLT program will permit the

manufacturer to perform additional

testing beyond the minimum required

by regulation. Any such additional test

data can be used to limit the number of

engines for which a manufacturer is

liable if there is a failure in the PLT

program.

A manufacturer must implement the

PLT approach for a minimum of three

consecutive model years and must

notify EPA a minimum of one complete

model year prior to the model year for

which they are requesting to opt out.

This timing restriction would not

preclude a manufacturer from

implementing appropriate changes to

the design or scope of the PLT program

from model year to model year.

Furthermore, they cannot be carrying a

negative credit balance at the time of

opting out. Where a manufacturer fails

the PLT audit for more than one engine

family in a model year and the number

of engines that are recertified to a new

FEL as a result of the failed PLT audit

exceeds 10 percent of the

manufacturer’s annual production, then

the remedies for noncompliance under

this option are no longer valid. Instead,

the provisions under the SEA approach

described below would apply.

Under the second approach, engines

in the Phase 2 program would be subject

to SEA as under the Phase 1 program.

This approach would apply to

manufacturers who do not conduct a

PLT program under the first approach.

The Signatories agree that appropriate

remedies need to be implemented for

failures of SEA resulting from testing

new (e.g. zero-hour) engines. Such

appropriate remedies must meet the

criteria set forth in the second paragraph

of Section 4 above. EPA is committed to

designing remedies that will both

preserve the environmental benefits of

this program and minimize the burden

on the industry. The proposal will

therefore preserve for EPA adequate

flexibility to address such failures on a

case-by-case basis, so that EPA and the

manufacturer may develop a response

that achieves the goals noted above.

Such a response might include, for

example, a combination of measures

such as mandatory PLT for appropriate

time periods and portions of

production, recertification of all or part

of an engine family, and generation of

credits to remedy the exceedences over

an appropriate period of time. As

discussed above in section 4, the

Signatories agree that a mandatory recall

program for Class 1 and 2 engines,

modeled on traditional on-highway
14754 Federal Register / Vol. 62, No. 59 / Thursday, March 27, 1997 / Proposed Rules

recall procedures, does not meet the

criteria for reasonable means to address

emission exceedences identified in SEA

or PLT programs, given the nonintegrated nature of the nonhandheld

outdoor power equipment industry and

the consumer markets in which most of

that equipment is sold. EPA will not

revoke or suspend a certificate where a

response that meets the goals noted

above is designed and implemented in

a timely manner (except in cases where

a manufacturer desires to obtain a new

certificate in which case the old

certificate would be suspended to avoid

the existence of two certificates for the

same family).

d. Field Durability and In-use Emission

Performance Demonstration Program for

OHV Engines

The Signatories agree to the necessity

of a Field Durability and In-use

Emission Performance Demonstration

Program to produce reliable data that

verifies that the conclusions in this

program with respect to the durability of

OHV engines are accurate. The data

collected under this program would be

designed to provide a representative

picture of actual in-use emissions,

including representative age (hours),

maintenance, and sales mix of engines

in the field. Manufacturers would test a

sufficient number of engines to be

statistically meaningful. Individual

manufacturers would supply test data to

EPA. However, the test program could

be jointly run on an industry-wide basis.

To the extent practical, engines will

be selected from residential customers

or professional users; however, the

Signatories recognize that engines also

will be selected from manufacturers

fleets, as long as the engines represent

typical in-use engines.

The Field Durability and In-use

Emission Performance Demonstration

Program would be conducted every four

years. The data from this program are

neither designed nor intended to be

used for compliance purposes.

The Signatories recognize that the test

programs covered under sections 4(a),

4(b) and 4(d) should be designed in a

way to minimize the overall burden on

the manufacturer while meeting the

goals of these provisions including a

reasonable cap where appropriate on the

overall level of testing required. The

Signatories further recognize that while

the maximum testing may be required in

the initial years of testing, EPA will

reduce the testing burden as appropriate

in subsequent years as the overall

database grows. To that end, the total

field engine test burden for the largest

manufacturers by sales volume for tests

required for these programs will not

exceed 96 field-aged engines in a four

year period or 24 field-aged engines in

a one year period. EPA will propose an

appropriate scaling of the field engine

test burden for smaller volume

manufacturers. It is intended that only

a representative sample of engine

families will be tested in the program

set forth in Section 4(d). EPA will have

the discretion to proportion the test

engines among the test programs

covered under Sections 4(a), 4(b) and

4(d). The Signatories also agree to

permit the Field Durability test program

to run over multiple years and to

provide for appropriate delays or

waivers from the requirements of the

bench correlation program in years

when a manufacturer also runs the field

durability program.

5. Manufacturer Flexibilities During the

Transition to OHV Emissions

Performance Engines

Recognizing that old technology will

be phased-out during the transition

period to clean durable OHV emissions

performance technology for Class 2, the

Signatories agree to certain flexibilities

to accommodate an orderly transition.

Manufacturers would be allowed to

bench-age Class 2 SV or aftertreatment

engines and to demonstrate compliance

with the FEL based on 120 hours of

testing during the transition period.

However, manufacturers would certify

to and use 250 hours for credit

calculation purposes.

6. Small Volume Provisions

The Signatories agree that for SV

Class 2 engine families with less than

1000 units produced for sale in the U.S.

can continue to meet the 24.0 g/kw-hr

standard in 2005 and subsequent model

years. With the 2005 model year,

however, this standard will become a

cap and these engines will be excluded

from the ABT credit calculations.

7. Fuel Spillage Reduction Program

The Signatories recognize the

contribution to air pollution from fuel

spillage and agree to work

collaboratively and with other affected

parties to develop a voluntary Fuel

Spillage Reduction Program which

provides information and education to a

variety of audiences and encourages the

development and use of technology that

will reduce spills by users.

8. Test Procedures and Other

Requirements

The signatories agree that the model

year definition will be the same as for

the Phase 1 rule, and the interpretation

of the model year definition for the

start-up of the Phase 1 program will also

exist for the start-up of the Phase 2

program in order to provide maximum

flexibility in the transition to Phase 2

standards.

The Signatories acknowledge that this

SOP does not address such issues as test

procedure or certain other issues

included in the existing Phase 1 Rule.

The Signatories acknowledge that any

changes not specifically set forth above

could adversely affect the manufacturers

ability to meet the standards and

effective dates in this SOP. EPA will

continue to review all aspects of the

Phase 1 regulatory program to determine

what areas, if any, need to be updated

to reflect experience gained during

Phase 1 or to implement the provisions

contained in this SOP. EPA does not

plan on proposing any changes in the

areas not addressed herein, or any

additional programs not consistent with

this SOP, such as evaporative emissions

standards, that would materially change

the stringency or cost of the Phase 2

regulatory program.

9. Stability

One of the key principles of this SOP

is to design a regulatory program that

provides industry with stability and

predictability, allowing it to make and

recoup the investments that will be

needed to achieve the emissions

reductions called for under this SOP.

EPA recognizes this level of investment,

and acknowledges the need for a

corresponding period of stability and

certainty.

10. Harmonization

The Signatories recognize the value

that harmonizing standards within the

United States would have on the cost of

producing engines and equipment and

support the goal of harmonization as

long as it does not undercut achieving

the air quality needs the standards are

designed to achieve, and the Signatories

will work with the California Air

Resources Board (ARB) to this end. The

Signatories will also coordinate and

consult with ARB in order to achieve

the maximum appropriate

harmonization of the elements of their

respective small SI engine regulatory

programs, including, for example, test

procedures, certification, and

compliance assurance, recognizing the

value for EPA, manufacturers and users

associated with harmonizing these

programs.

[FR Doc. 97–7626 Filed 3–26–97; 8:45 am]

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