Document ID: EPA-HQ-OAR-2007-0652-0002
Agency: epa
Document Type: Proposed Rule
Title: Nonroad Diesel Technical Amendments and Tier 3 Technical Relief Provision
Posted Date: 2007-09-18T04:00Z

[Federal Register: September 18, 2007 (Volume 72, Number 180)]
[Proposed Rules]               
[Page 53204-53211]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr18se07-27]                         

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Parts 9, 89, and 1039

[EPA-HQ-OAR-2007-0652; FRL-8467-1]
RIN 2060-AO37

 
Nonroad Diesel Technical Amendments and Tier 3 Technical Relief 
Provision

AGENCY: Environmental Protection Agency (EPA).

ACTION: Notice of proposed rulemaking.

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SUMMARY: In this proposed rulemaking, EPA is making certain technical 
corrections to the rules establishing emission standards for nonroad 
diesel engines. In addition, we are amending those rules to provide 
nonroad diesel equipment manufacturers with a production technical 
relief provision for Tier 3 equipment which is similar to the technical 
relief provision already available for Tier 4 equipment. Like the Tier 
4 provisions, the new Tier 3 technical relief provision deals with a 
situation where an equipment manufacturer which is not vertically 
integrated with its engine supplier is

[[Page 53205]]

unable to complete redesign of the equipment within the time required 
by rule (here, the Tier 3 rule). To be eligible, the equipment 
manufacturer must show both that its inability to furnish a compliant 
equipment design is due to the engine supplier, and that the equipment 
manufacturer has exhausted other flexibilities already provided by the 
Tier 3 rule. Unlike the Tier 4 technical relief provision, however, the 
Tier 3 Technical flexibility will apply up to a maximum of an 
additional 50% of production beyond the original 80% provided by the 
Tier 3 production flexibility provision. In addition, each grant of 
Tier 3 technical relief is associated with the likelihood of earlier 
use of Tier 4 nonroad diesel engines. The rule thus provides that for 
each one percent of use of Tier 3 technical relief, some percentage of 
the automatic Tier 4 production flexibility for the same engine power 
category, and some percentage of potential Tier 4 technical relief, is 
no longer available. The percentage varies based on the type of engine 
for which Tier 3 technical relief is granted, the largest Tier 4 
``penalty'' being associated with use of the

DATES:  Written comments must be received by October 18, 2007. Request 
for a public hearing must be received by October 3, 2007. If EPA 
receives adverse comment, we will publish a timely withdrawal in the 
Federal Register informing the public that the rule will not take 
effect. If we receive a request for a public hearing, we will publish 
information related to the timing and location of the hearing and the 
timing of a new deadline for public comments.

ADDRESSES: Submit your comments, identified by Docket ID No. EPA-HQ-
OAR-2007-0652, by one of the following methods:
     Federal eRulemaking Portal: http://http://http://www
.regulations.gov. Follow the on-line instructions for submitting 
comments.
     E-mail: a-and-r-Docket@epa.gov.
     Fax: (202) 566-9744.
     Mail: U.S. Environmental Protection Agency, EPA Docket 
Center (EPA/DC), Air and Radiation Docket, Mail Code 2822T, 1200 
Pennsylvania Avenue, NW., Washington, DC 20460. Deliveries are only 
accepted during the Docket's normal hours of operation from 8:30 a.m. 
to 4:30 p.m. Eastern Standard Time (EST), Monday through Friday, except 
on government holidays. If your Docket requires the submission of 
multiple copies, please insert the following here:
    [rtrif] Please include a total of copies.
    [rtrif] If the comment involves an ICR that will be submitted to 
OMB for review and approval under 5 CFR 1320.11, then you must also 
include the following language pursuant to 1320.11(a): ``In addition, 
please mail a copy of your comments on the information collection 
provisions to the Office of Information and Regulatory Affairs, Office 
of Management and Budget (OMB), Attn: Desk Officer for EPA, 725 17th 
St. NW., Washington, DC 20503.''
     Hand Delivery: EPA Docket Center (Air Docket), U.S. 
Environmental Protection Agency, EPA West Building, 1301 Constitution 
Avenue, NW., Room: 3334, Mail Code 2822T, Washington, DC. Such 
deliveries are only accepted during the Docket's normal hours of 
operation from 8:30 a.m. to 4:30 p.m. Eastern Standard Time (EST), 
Monday through Friday, except on government holidays, and special 
arrangements should be made for deliveries of boxed information.
    Instructions: Direct your comments to Docket ID No. EPA-HQ-OAR-
2007-0652. EPA's policy is that all comments received will be included 
in the public docket without change and may be made available online at 
http://www.regulations.gov, including any personal information 

provided, unless the comment includes information claimed to be 
Confidential Business Information (CBI) or other information whose 
disclosure is restricted by statute. Do not submit information that you 
consider to be CBI or otherwise protected through http://www.regulations.gov or e-mail. The http://www.regulations.gov website 

is an ``anonymous access'' systems, which means EPA will not know your 
identity or contact information unless you provide it in the body of 
your comment. If you send an e-mail comment directly to EPA without 
going through http://www.regulations.gov your e-mail address will be 

automatically captured and included as part of the comment that is 
placed in the public docket and made available on the Internet. If you 
submit an electronic comment, EPA recommends that you include your name 
and other contact information in the body of your comment and with any 
disk or CD-ROM you submit. If EPA cannot read your comment due to 
technical difficulties and cannot contact you for clarification, EPA 
may not be able to consider your comment. Electronic files should avoid 
the use of special characters, any form of encryption, and be free of 
any defects or viruses. For additional information about EPA's public 
docket visit the EPA Docket Center homepage at http://www.epa.gov/epahome/dockets.htm
.

    Public Hearing: If a public hearing is held, it will be held at 10 
a.m. on October 18, 2007 at the EPA NVFEL Office Building, 2000 
Traverwood Drive Ann Arbor, MI, or at an alternate site nearby. Persons 
interested in presenting oral testimony must contact Zuimdie Guerra, 
Environmental Protection Agency, Office of Transportation and Air 
Quality, Assessment and Standards Division, 2000 Traverwood Drive Ann 
Arbor, MI 48105; e-mail guerra.zuimdie@epa.gov; telephone (734) 214-
4387; fax number (734) 214-4050, no later than October 15, 2007.
    Persons interested in attending the public hearing must also call 
Zuimdie Guerra to verify the time, date, and location of the hearing. 
If no one contacts Zuimdie Guerra by October 15, 2007 with a request to 
present oral testimony at the hearing, the hearing will be cancel.
    Docket: All documents in the docket are listed in the http://www.regulations.gov
 index. Although listed in the index, some 

information is not publicly available, e.g., CBI or other information 
whose disclosure is restricted by statute. Certain other material, such 
as copyrighted material, will be publicly available only in hard copy. 
Publicly available docket materials are available either electronically 
in http://www.regulations.gov or in hard copy at the EPA Docket Center 

(EPA/DC), Air Docket, Public Reading Room, Room 3334, EPA West 
Building, 1301 Constitution Avenue, NW., Washington, DC. The EPA Docket 
Center Public Reading Room is open from 8:30 a.m. to 4:30 p.m. Eastern 
Standard Time (EST), Monday through Friday, except on government 
holidays. You can reach the Air Docket by telephone at (202) 566-1742 
and by facsimile at (202) 566-9744. You may be charged a reasonable fee 
for photocopying docket materials, as provided in 40 CFR part 2.

FOR FURTHER INFORMATION CONTACT: Zuimdie Guerra, Environmental 
Protection Agency, Office of Transportation and Air Quality, Assessment 
and Standards Division, 2000 Traverwood Drive Ann Arbor, MI 48105; e-
mail address guerra.zuimdie@epa.gov; telephone (734) 214-4387; fax 
number (734) 214-4050.

SUPPLEMENTARY INFORMATION: 

I. General Information

A. Background

    In the ``Rules and Regulations'' section of this Federal Register, 
we are making these revisions as a direct final rule without prior 
proposal because we

[[Page 53206]]

view these revisions as noncontroversial and anticipate no adverse 
comment.
    We have explained our reasons for these revisions in the preamble 
to the direct final rule. If we receive no adverse comment, we will not 
take further action on this proposed rule. If we receive adverse 
comment on the rule, or on one or more distinct actions in the rule, we 
will withdraw the direct final rule, or the portions of the rule 
receiving adverse comment. We will address all public comments in a 
subsequent final rule based on this proposed rule. We will not 
institute a second comment period on this action. Any parties 
interested in commenting must do so at this time.

B. Does This Action Apply to Me?

    This action will affect companies that manufacture and certify 
nonroad equipment powered by diesel engines in the United States.

------------------------------------------------------------------------
                                NAICS code     Examples of potentially
           Category                \a\            affected entities
------------------------------------------------------------------------
U.S. Industry................       333111  Farm Machinery and Equipment
                                             Manufacturing.
U.S. Industry................       333112  Lawn and Garden Tractor and
                                             Home Lawn and Garden
                                             Equipment Manufacturing.
U.S. Industry................       333131  Mining Machinery and
                                             Equipment Manufacturing.
U.S. Industry................       333132  Oil and Gas Field Machinery
                                             and Equipment
                                             Manufacturing.
Industry.....................        33341  Ventilation, Heating, Air-
                                             Conditioning, and
                                             Commercial Refrigeration
                                             Equipment Manufacturing.
Industry.....................        33361  Engine, Turbine, and Power
                                             Transmission Equipment
                                             Manufacturing.
U.S. Industry................       333911  Pump and Pumping Equipment
                                             Manufacturing.
U.S. Industry................       333912  Air and Gas Compressor
                                             Manufacturing.
Industry.....................        33392  Material Handling Equipment
                                             Manufacturing.
U.S. Industry................       333924  Industrial Truck, Tractor,
                                             Trailer, and Stacker
                                             Machinery Manufacturing.
U.S. Industry................       333991  Power-Driven Handtool
                                             Manufacturing.
U.S. Industry................       333992  Welding and Soldering
                                             Equipment Manufacturing.
------------------------------------------------------------------------
\a\ North American Industry Classification System (NAICS).

    To determine whether particular activities may be affected by this 
action, you should carefully examine the regulations. You may direct 
questions regarding the applicability of this action as noted in FOR 
FURTHER INFORMATION CONTACT.

C. What Should I Consider as I Prepare My Comments for EPA?

    1. Submitting CBI. Do not submit this information to EPA through 
http://www.regulations.gov or e-mail. Clearly mark the part or all of 

the information that you claim to be CBI. For CBI information in a disk 
or CD ROM that you mail to EPA, mark the outside of the disk or CD ROM 
as CBI and then identify electronically within the disk or CD ROM the 
specific information that is claimed as CBI). In addition to one 
complete version of the comment that includes information claimed as 
CBI, a copy of the comment that does not contain the information 
claimed as CBI must be submitted for inclusion in the public docket. 
Information so marked will not be disclosed except in accordance with 
procedures set forth in 40 CFR part 2.
    2. Tips for Preparing Your Comments. When submitting comments, 
remember to:
    i. Identify the rulemaking by docket number and other identifying 
information (subject heading, Federal Register date and page number).
    ii. Follow directions--The agency may ask you to respond to 
specific questions or organize comments by referencing a Code of 
Federal Regulations (CFR) part or section number.
    iii. Explain why you agree or disagree; suggest alternatives and 
substitute language for your requested changes.
    iv. Describe any assumptions and provide any technical information 
and/or data that you used.
    v. If you estimate potential costs or burdens, explain how you 
arrived at your estimate in sufficient detail to allow for it to be 
reproduced.
    vi. Provide specific examples to illustrate your concerns, and 
suggest alternatives.
    vii. Explain your views as clearly as possible, avoiding the use of 
profanity or personal threats.
    viii. Make sure to submit your comments by the comment period 
deadline identified.

D. How Can I Get Copies of This Document and Send Comments?

    See the direct final rule EPA has published in the ``Rules and 
Regulations'' section of today's Federal Register for information about 
accessing these documents. The direct final rule also includes detailed 
instructions for sending comments to EPA.

II. Summary of Rule

    A. EPA is making the following technical amendments to correct a 
variety of regulatory provisions in the regulations establishing 
emission standards for nonroad diesel engines:
     40 CFR 9.1: Adding the approved information collection for 
nonroad diesel engines to the summary table in 40 CFR part 9.
     40 CFR 89.1: Correcting a typographical error.
     40 CFR 89.101: Adding a provision to allow manufacturers 
to start using the provisions already adopted for Tier 4 engines in the 
time that Tier 2 or Tier 3 standards continue to apply. We would allow 
this only to the extent that it does not affect our ability to ensure 
that manufacturers fully comply with applicable requirements.
     40 CFR 89.102: Clarifying the legal status for equipment 
using engines exempted from current standards under the Transition 
Program for Equipment Manufacturers. The original language does not 
clearly exempt the equipment from the otherwise applicable prohibition 
in Sec.  89.1003, which would be necessary for this whole program.
     40 CFR 89.102: Clarifying the limitation of allowances 
based on engine families. Since these engines are not certified, we 
clarify that this term relates to the characteristics described for 
certifying engines in Sec.  89.116.
     40 CFR 89.102: Technical relief provision; discussion 
below in part B.
     40 CFR 89.108: Adding a provision for engines to be 
adjusted outside the normal range of parameter adjustment for 
applications involving landfill or wellhead gas. We have already 
adopted this in 40 CFR part 1039 for Tier 4 engines, so this change 
simply allows manufacturers to implement this provision earlier.
     40 CFR 89.115: Requiring manufacturers to name an agent 
for service in the United States. This simply allows us to ensure that 
we will have a person in the United States who is able to speak for the 
company and receive communication regarding any aspect of

[[Page 53207]]

our effort to certify engines and oversee compliance of certified 
products.
     40 CFR 89.205: Clarifying provisions in the nonroad diesel 
engine averaging, banking, and trading (ABT) program. The text change 
is to clarify that these credits are considered to be Tier 2 credits.
     40 CFR 89.601: Requiring importers to complete the EPA 
declaration form before importing engines, and to keep the forms for 
five years. This amendment simply restates the provisions that are 
already in place for the U.S. Customs and Border Patrol at 19 CFR 
12.74.
     40 CFR 89.611: Defining the initial dates for implementing 
emission standards for nonroad diesel engines below 37 kW. This 
corrects an earlier oversight in the definition of the scope of the 
exemption for importing engines that were built before emission 
standards started to apply.
     40 CFR 1039.102: Clarifying provisions in the nonroad 
diesel engine averaging, banking, and trading (ABT) program.
     40 CFR 1039.104: Clarifying provisions in the nonroad 
diesel engine averaging, banking, and trading (ABT) program. The change 
corrects an inconsistency with the existing regulatory text that 
effectively prevents the use of credit-using Tier 3 engines in the 
initial years of Tier 4 in certain situations.
     40 CFR 1039.115: Specifying that crankcase requirements 
apply throughout an engine's useful life. Without this clarifying 
language, it is not clear how long this requirement applies, or whether 
it ever expires. We are also clarifying that the requirements of this 
section do not apply to engines that are subject to part 1039 
requirements, but have been exempted from the emission standards for 
any reason.
     40 CFR 1039.125: Correcting an inadvertant reference to 
nonroad equipment, which should refer instead to nonroad engines as is 
clear from the context.
     40 CFR 1039.135: Adding clarifying language to describe 
when an engine's emission control information label is so obscured as 
to require the equipment manufacturer to apply a separate duplicate 
label. To be consistent with all other programs for nonroad engines, we 
specify that a label that is visible during normal maintenance is not 
obscured. We are also adding a specification that manufacturers keep 
records of the engine families for which they send duplicate labels.
     40 CFR 1039.205: Requiring submission of emission results 
for each test mode if manufacturers conduct discrete-mode testing. This 
does not apply for ramped-modal testing. These measurements would be 
submitted for demonstrating compliance with not-to-exceed standards, so 
this should not include any additional testing or reporting burden.
     40 CFR 1039.205: Requiring manufacturers to name an agent 
for service in the United States, as described above for Sec.  89.115.
     40 CFR 1039.205: Requiring that manufacturers make good-
faith estimates of projected production volumes.
     40 CFR 1039.210: Clarifying EPA's role in preliminary 
approvals to describe that we generally would not reverse a decision 
without new information supporting a different decision.
     40 CFR 1039.225: Revising the language to avoid using the 
term ``new nonroad engine,'' since that defined term is not appropriate 
for this section.
     40 CFR 1039.235: Clarifying that carryover of emission 
data is possible for engine families that have engine changes in a new 
model year, as long there are no changes that might affect emissions.
     40 CFR 1039.245: Removing a regulatory provision that was 
inadvertently included in two separate paragraphs.
     40 CFR 1039.255: Narrowing the scope of recordkeeping that 
would subject an engine manufacturer to an action that could result in 
the certificate of conformity being revoked or voided, consistent with 
the similar provisions in our other nonroad engine programs.
     40 CFR 1039.501: Clarifying the emission standards to 
which specific test procedures apply.
     40 CFR 1039.505: Clarifying that cycle statistics for 
discrete-mode testing should be based on a calculation for each mode 
rather than the sequence of modes.
     40 CFR 1039.605 and 40 CFR 1039.610: Amending the 
regulatory language to address a variety of legal and technical 
clarifications.
     40 CFR 1039.625: Amending the regulatory language to 
specify the proper engine power lower bound.
     40 CFR 1039.705: Amending the description for calculating 
emission credits to clarify the steps in making the calculation.
     40 CFR 1039.730: Revising the description of emission 
credit calculations to clarify that manufacturers need consider only 
those families that generate or use emission credits. The emission 
credit program described in this subpart for these engines is not based 
on fleet-average compliance.
     40 CFR 1039.735: Clarifying the recordkeeping provisions 
related to emission credits and adding a requirement to keep records as 
long as the banked credits are considered valid for demonstrating 
compliance with emission standards.
     40 CFR 1039.801: Correcting various definitions to be 
consistent with more recent rulemakings that used somewhat different 
wording.
     40 CFR 1039.810: Removing the incorporation by reference 
for the document that defines our rounding conventions, since we are 
already relying on the same reference established in 40 CFR part 1065.
     40 CFR 1039.825: Adding a new section to summarize the 
information collection requirements in part 1039.
    B. This rulemaking also provides nonroad diesel equipment 
manufacturers that are not vertically integrated with engine suppliers 
with a production technical relief provision for Tier 3 equipment, 
modeled on the comparable provision for Tier 4 equipment found in 40 
CFR section 1039.625 (m).
    Only equipment manufacturers who do not make the engines used in 
the equipment for which technical relief is sought are eligible to 
apply for technical relief under this provision (since the engine 
production and equipment production segments of integrated entities 
would necessarily be in contact and therefore not experience the type 
of unexpected redesign changes which could warrant technical relief). 
This applies exclusively to equipment manufacturers as described in 
section 1039.626. Engine manufacturers and importers thus may not 
request this relief.
    The Tier 4 nonroad diesel rule applies both to diesel engine 
manufacturers and to equipment manufacturers who install engines made 
by engine manufacturers. Equipment manufacturers are ultimately 
responsible for producing non-road applications which comply with the 
rule's standards by the rule's compliance date. However, there can be 
circumstances when equipment manufacturers, through no fault of their 
own, receive engines from their suppliers too late to meet compliance 
dates. Although the Tier 4 rule contains a number of equipment 
manufacturer flexibility provisions which apply automatically (i.e. 
without any showing of need or any requirement to obtain EPA approval), 
we were convinced that some additional flexibility was needed to cover 
circumstances where (a) an equipment manufacturer has exhausted

[[Page 53208]]

its automatic flexibilities, and (b) it demonstrates to EPA that it 
cannot comply with the rule because, through no fault of its own, the 
engine manufacturer failed to deliver a compliant engine to the 
equipment manufacturer in sufficient time. The provision is also to be 
used only as a last resort, so an equipment manufacturer is eligible 
for relief under the provision only after it exhausts all other 
flexibility provisions and implementation options. This provision 
(which we call ``technical relief'' \1\) is explained in the Tier 4 
nonroad preamble at 69 FR 3900739-008 (June 29, 2004), and (as noted) 
is codified at section 1039.625 (m).
---------------------------------------------------------------------------

    \1\ The Tier 4 rule uses the phrase `technical or engineering 
hardship' to describe this provision, and today's rule uses that 
same language.
---------------------------------------------------------------------------

    The same issue can arise for producers of Tier 3 nonroad diesel 
equipment, but the Tier 3 rule does not contain the technical relief 
provision. This rule essentially adds the same technical relief 
provision to the Tier 3 rule, for the same reasons EPA adopted it in 
Tier 4.
    Tier 3 equipment manufacturers may need this technical relief to 
address challenges that may occur as engine manufacturers choose to 
implement technical changes for Tier 3. If an engine manufacturer 
changes their plan late in the design implementation process, an 
equipment company with unique or complicated equipment designs could 
face challenges with their internal redesign process. If the equipment 
manufacturer has already used its other flexibilities, there thus may 
still be circumstances warranting technical relief for Tier 3 
equipment.
    There are two principal differences between the Tier 3 technical 
relief provision, and the existing provision in Tier 4. The first is 
that the dirtier the substitute engine used if technical relief is 
granted for Tier 3 equipment, the more Tier 4 flexibilities (both 
automatically available flexibilities and potential technical relief) 
the equipment manufacturer must give up (further details are explained 
below). This encourages earlier use of Tier 4 engines (the cleanest), 
and ensures that the net emission reductions from Tier 3 and Tier 4 
engines remain the greatest achievable, as required by section 213 of 
the Act. Another difference between the Tier 3 and Tier 4 technical 
relief provisions is that for the Tier 3 program, relief is limited to 
50% of one year's production volume for each power category (as opposed 
to 70% under Tier 4). This allows for the transitional nature of this 
program to be realized, while limiting the potential for abuse beyond 
the need to facilitate a transition to cleaner engines.
    However, for the most part, the Tier 3 technical provision mirrors 
that in Tier 4. As with the parallel provision in Tier 4, this 
technical relief provision provides a case-by-case exemption granted by 
EPA to an equipment manufacturer after evaluating the equipment 
manufacturer's application. Any engine produced utilizing this relief 
must be appropriately labeled to avoid the introduction into commerce 
of engines that are not in compliance. A clearly visible label thus 
must be provided which indicates the regulatory flexibility under which 
these engines are being produced. The provision applies to equipment 
that would otherwise be required to use engines certified to the Tier 3 
standard (i.e. model year 2006 to 2008 equipment with 37 to 560 kW 
nonroad diesel engines). The equipment manufacturer would have the 
burden of demonstrating existence of an extreme technical or 
engineering hardship condition that is outside its control, i.e. is 
essentially due to conduct of the (nonintegrated) engine supplier and 
therefore out of the equipment manufacturer's control. The equipment 
manufacturer must also demonstrate that it has exercised reasonable due 
diligence to try to avoid being in the situation.
    In order to meet these criteria, the equipment manufacturer needs 
to provide to EPA documentation, or a written explanation, addressing 
the following issues:
     Documentation of the technical or engineering problem that 
was unsolvable within the lead time provided by the Tier 3 rule.
     A description of the normal design cycle between the 
engine manufacturer and the equipment manufacturer and why that process 
did not work in this instance.
     All information (such as written specifications, 
performance data, prototype engines) received by the equipment 
manufacturer from the engine manufacturer.
     Comparison of the design process for the equipment model 
for which the exemption is requested versus those for which the 
exemption is not needed.
     A description of efforts the equipment maker has made to 
find other compliant engines for the model.
     Documentation that existing flexibilities will be fully 
utilized before the need for technical relief.
    EPA would then decide on a case by case basis what percentage, if 
any, of additional relief (i.e. relief above and beyond that afforded 
by the automatic percent of production flexibility) would be provided.
    Applicability of the Tier 3 technical relief provision is 
restricted to:
     Up to a maximum of an additional 50% beyond original 80% 
automatic per cent of production technical flexibility (a change from 
Tier 4, as noted above).
     Full allowance is limited to the first two (2) years of 
Tier 3.
     Phased-in by power category.
     The Tier 3 automatic flexibility provisions continue to 
apply for their original seven years or until fully consumed.
     Applies to 56 to 560 kW categories only for the percent of 
production and only available between 37 to 75 kW for the small volume.
    A significant feature of this Tier 3 technical relief provision, 
which has no counterpart in the Tier 4 provision, is that for every 1% 
of the equipment production using this relief provision in the Tier 3 
timeframe (i.e. equipment that uses engines not conforming to the Tier 
3 standard in the Tier 3 timeframe), a percentage of the (automatic) 
production equipment flexibility allowance for Tier 4 is sacrificed 
from the comparable Tier 4 power category (i.e. this per cent of the 
otherwise automatic flexibility is no longer available), and an 
additional 1% is sacrificed from any potential Tier 4 technical relief 
that the Agency may grant for that power category. Please see Table 1. 
In other words, to utilize the Tier 3 technical relief, the equipment 
manufacturer must give up some amount of its otherwise automatic Tier 4 
flexibility and some portion of its potential Tier 4 technical relief. 
The Tier 4 percent of production sacrifice is based on the percentage 
of earlier Tier (e.g. Tier 1 or 2) engines utilized in place of Tier 3 
engines. Grant of Tier 3 technical relief thus would be linked to 
earlier use of Tier 4 engines.

[[Page 53209]]

                                        Table 1.--Technical Relief Usage
                                                  [In percent]
----------------------------------------------------------------------------------------------------------------
                                       Offsetting deductions required for use of one percent of Tier 3 technical
    Use of percent of production                                        relief
allowances by equipment manufacturer ---------------------------------------------------------------------------
   during implementation of Tier 2        Tier 4 percent of production
               program                              allowance                      Tier 4 technical relief
----------------------------------------------------------------------------------------------------------------
 0-20                                 0                                     1
20-40                                 1                                     1
40-60                                 2                                     1
60-80                                 3                                     1
----------------------------------------------------------------------------------------------------------------

    For example, if you used 45 percent of your production flexibility 
for equipment using Tier 2 engines of a given power category (i.e. if 
in the Tier 2 timeframe you used 45% of the total 80% percent of 
production flexibility for that power category), you must forfeit 2 
percent of the (automatic) production flexibility for Tier 4 engines of 
that power category for every 1 percent technical relief EPA grants for 
Tier 3 equipment using engines of that power category. You must also 
forfeit 1 percent of any potential technical relief which could be 
granted for Tier 4 engines (i.e. for equipment using Tier 4 engines) 
for every 1 percent technical relief exemption EPA grants for Tier 3 
engines. If you use the Tier 3 technical relief allowances for 5 
percent of your equipment for two years, you have used a total 
allowance of 10 percent. Therefore, as shown in Table 1, you must 
forfeit a total of 20 percent of production flexibility for Tier 4 
engines plus 10 percent of any technical relief which could be granted 
for Tier 4 engines.
    The technical relief will be further adjusted based on the sales 
volume by power category. Because the Tier 3 and Tier 4 rules have 
different power category ranges, today's rule specifies which power 
categories in Tier 4 correspond to those in Tier 3 for purposes of this 
rule. The Tier 3 power categories of 37kW to 75kW and 75kW to 130kW 
correspond to the Tier 4 power category of 56kW to 130kW. For the Tier 
3 equipment in the 37 to 75kW category, you must only use the sales 
volume for equipment that uses engines with a rated power greater than 
56kW. For example, if you have a Tier 3 piece of equipment that uses a 
40 kW engine, the sales of the equipment are counted in the Tier 4 
power category of 19kW to 56kW. If you have a Tier 3 piece of equipment 
that uses a 60kW engine, the sales of the equipment are counted in the 
Tier 4 power category of 56kW to 130kW. The Tier 3 power categories of 
130kW to 225kW, 225kW to 450kW and 450kW to 560kW correspond to the 
Tier 4 power category of 130kW to 560kW. You will need to sum the sales 
of the Tier 3 power categories that correspond to the Tier 4 power 
category. Please see Table 2. If EPA grants technical relief, the sum 
of all the Tier 3 units that are so exempted are divided by the sum of 
all the Tier 3 units sold in the corresponding Tier 4 power category to 
determine the percentage of Tier 4 equipments affected.

                       Table 2.--Power Categories
------------------------------------------------------------------------
           Tier 3 power category                Tier 4 power category
------------------------------------------------------------------------
37kW to 75kW *............................  19kW to 56kW.
37kW to 75kW **, 75kW to 130kW............  56kW to 130kW.
130kW to 225kW, 225kW to 450kW, 450kW to    130kW to 560kW
 560kW..
------------------------------------------------------------------------
* Applies only to use of engines rated between 37kW and 56kW by small
  volume equipment manufacturers.
** Includes only equipment that uses engines with a rated power greater
  than 56kW.

    For example, if you produce 50 units using Tier 3 technical relief 
in the range of 130kW to 225kW, and you produce 50 units using Tier 3 
technical relief in the range of 225 to 450kW, and no units are 
produced in the 450kW to 560kW range, and your overall sales volume for 
the power ranges of 130kW to 560kW in Tier 3 is 400 units, the amount 
of Tier 3 technical relief used is 100/400 or 25 percent. Because you 
forfeit 1 percent of your Tier 4 technical relief for every 1 percent 
of Tier 3 technical relief used (see Table 1 above), then you will lose 
25 percent of your (potential) Tier 4 technical relief in the 130kW to 
560kW power range category. If you used 45 percent of your production 
flexibility for Tier 2 engines, you must forfeit 2 percent of 
production flexibility for Tier 4 engines for every 1 percent of Tier 3 
technical relief. Therefore, you will forfeit 50 percent of your Tier 4 
production allowance in the 130kW to 560kW power range category.
    Because the technical relief provision was not originally included 
in the Tier 3 program, we believe it is important to maintain the 
emission benefits of the Tier 3 rule by requiring a consistent emission 
trade-off with Tier 4. EPA has already found that the greatest 
emissions reduction achievable industry-wide for Tier 3 and Tier 4 do 
not include Tier 3 technical relief plus all of the other Tier 3 and 
Tier 4 flexibilities. The requirement that certain otherwise-available 
Tier 4 flexibilities be foregone is designed to ensure protection of 
the environment, prevent abuse, and encourage earlier introduction of 
Tier 4 technology. Most basically, as noted above, the linkage is 
designed to assure that the Tier 3 and Tier 4 rules, in combination, 
continue to result in the greatest emissions reduction achievable 
industry-wide, as required by section 213(a) of the Act.
    The technical relief for small volume equipment manufacturers is 
similar to the equipment manufacturer technical relief with the 
distinction that it applies to small volume equipment manufacturers. 
The following criteria for small volume apply:
     100 unit cap.
     Small volume technical relief is only available to the 37 
to 56 kW range and the 56 to 75 kW range.

III. Statutory and Executive Order Reviews

A. Executive Order 12866: Regulatory Planning and Review

    This action is not a ``significant regulatory action'' under the 
terms of Executive Order (EO) 12866 (58 FR 51735, October 4, 1993) and 
is therefore not subject to review under the EO.

B. Paperwork Reduction Act

    This action does not impose an information collection burden under 
the provisions of the Paperwork Reduction Act, 44 U.S.C. 3501 et seq. 
The Agency believes this action does not impose information collection 
burden because this rulemaking only provides a production technical 
relief provision for nonroad equipment manufactures.
    Burden means the total time, effort, or financial resources 
expended by persons to generate, maintain, retain, or disclose or 
provide information to or for a Federal agency. This includes the time 
needed to review instructions; develop, acquire, install, and utilize 
technology and systems for the purposes of

[[Page 53210]]

collecting, validating, and verifying information, processing and 
maintaining information, and disclosing and providing information; 
adjust the existing ways to comply with any previously applicable 
instructions and requirements; train personnel to be able to respond to 
a collection of information; search data sources; complete and review 
the collection of information; and transmit or otherwise disclose the 
information.
    An agency may not conduct or sponsor, and a person is not required 
to respond to a collection of information unless it displays a 
currently valid OMB control number. The OMB control numbers for EPA's 
regulations in 40 CFR are listed in 40 CFR part 9.

C. Regulatory Flexibility Act

    Today's proposed rule is not subject to the Regulatory Flexibility 
Act (RFA), which generally requires an agency to prepare a regulatory 
flexibility analysis for any rule that will have a significant economic 
impact on a substantial number of small entities. The RFA applies only 
to rules subject to notice and comment rulemaking requirements under 
the Administrative Procedure Act (APA) or any other statute. Although 
the rule is subject to the APA, the Agency has invoked the ``good 
cause'' exemption under 5 U.S.C. 553(b), therefore it is not subject to 
the notice and comment requirement.

D. Unfunded Mandates Reform Act

    Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Public 
Law 104-4, establishes requirements for Federal agencies to assess the 
effects of their regulatory actions on State, local, and tribal 
governments and the private sector. Under section 202 of the UMRA, EPA 
generally must prepare a written statement, including a cost-benefit 
analysis, for proposed and final rules with ``Federal mandates'' that 
may result in expenditures to State, local, and tribal governments, in 
the aggregate, or to the private sector, of $100 million or more in any 
one year. Before promulgating an EPA rule for which a written statement 
is needed, section 205 of the UMRA generally requires EPA to identify 
and consider a reasonable number of regulatory alternatives and adopt 
the least costly, most cost-effective or least burdensome alternative 
that achieves the objectives of the rule. The provisions of section 205 
do not apply when they are inconsistent with applicable law. Moreover, 
section 205 allows EPA to adopt an alternative other than the least 
costly, most cost-effective or least burdensome alternative if the 
Administrator publishes with the final rule an explanation why that 
alternative was not adopted. Before EPA establishes any regulatory 
requirements that may significantly or uniquely affect small 
governments, including tribal governments, it must have developed under 
section 203 of the UMRA a small government agency plan. The plan must 
provide for notifying potentially affected small governments, enabling 
officials of affected small governments to have meaningful and timely 
input in the development of EPA regulatory proposals with significant 
Federal intergovernmental mandates, and informing, educating, and 
advising small governments on compliance with the regulatory 
requirements. Today's final rule contains no Federal mandates for 
State, local, or Tribal governments or the private sector. The rule 
imposes no new expenditure or enforceable duty on any State, local or 
Tribal governments or the private sector, and EPA has determined that 
this rule contains no regulatory requirements that might significantly 
or uniquely affect small governments.

E. Executive Order 13132: Federalism

    Executive Order 13132, entitled ``Federalism'' (64 FR 43255, August 
10, 1999), requires EPA to develop an accountable process to ensure 
``meaningful and timely input by State and local officials in the 
development of regulatory policies that have federalism implications.'' 
``Policies that have federalism implications'' is defined in the 
Executive Order to include regulations that have ``substantial direct 
effects on the States, on the relationship between the national 
government and the States, or on the distribution of power and 
responsibilities among the various levels of government.''
    This proposed rule does not have federalism implications. It will 
not have substantial direct effects on the States, on the relationship 
between the national government and the States, or on the distribution 
of power and responsibilities among the various levels of government, 
as specified in Executive Order 13132. This rulemaking affects only 
nonroad equipment manufacturers providing them a production technical 
relief provision. Thus, Executive Order 13132 does not apply to this 
rule.

F. Executive Order 13175: Consultation and Coordination With Indian 
Tribal Governments

    Executive Order 13175, entitled ``Consultation and Coordination 
with Indian Tribal Governments'' (65 FR 67249, November 9, 2000), 
requires EPA to develop an accountable process to ensure ``meaningful 
and timely input by tribal officials in the development of regulatory 
policies that have tribal implications.'' This proposed rule does not 
have tribal implications, as specified in Executive Order 13175. This 
rulemaking affects only nonroad equipment manufacturers providing them 
a production technical relief provision. Thus, Executive Order 13175 
does not apply to this rule.

G. Executive Order 13045: Protection of Children From Environmental 
Health and Safety Risks

    Executive Order 13045, ``Protection of Children from Environmental 
Health Risks and Safety Risks'' (62 FR 19885, April 23, 1997) applies 
to any rule that (1) is determined to be ``economically significant'' 
as defined under Executive Order 12866, and (2) concerns an 
environmental health or safety risk that EPA has reason to believe may 
have a disproportionate effect on children. If the regulatory action 
meets both criteria, Section 5-501 of the Order directs the Agency to 
evaluate the environmental health or safety effects of the planned rule 
on children, and explain why the planned regulation is preferable to 
other potentially effective and reasonably feasible alternatives 
considered by the Agency.
    This rule is not subject to the Executive Order because it is not 
economically significant, and does not involve decisions on 
environmental health or safety risks that may disproportionately affect 
children.

H. Executive Order 13211: Actions That Significantly Affect Energy 
Supply, Distribution, or Use

    This rule is not subject to Executive Order 13211, ``Actions 
Concerning Regulations That Significantly Affect Energy Supply, 
Distribution, or Use'' (66 FR 28355 (May 22, 2001)) because it is not a 
significant regulatory action under Executive Order 12866.

I. National Technology Transfer and Advancement Act

    Section 12(d) of the National Technology Transfer and Advancement 
Act of 1995 (``NTTAA''), Public Law No. 104-113, 12(d) (15 U.S.C. 272 
note) directs EPA to use voluntary consensus standards in its 
regulatory activities unless to do so would be inconsistent with 
applicable law or otherwise impractical. Voluntary consensus standards 
are technical standards (e.g., materials specifications, test methods, 
sampling procedures, and business practices) that are developed or 
adopted by voluntary consensus standards bodies. The NTTAA directs EPA 
to

[[Page 53211]]

provide Congress, through OMB, explanations when the Agency decides not 
to use available and applicable voluntary consensus standards.
    This proposed rulemaking does not involve technical standards. 
Therefore, EPA is not considering the use of any voluntary consensus 
standards.

J. Executive Order 12898: Federal Actions To Address Environmental 
Justice in Minority Populations and Low-Income Populations

    Executive Order (EO) 12898 (59 FR 7629 (Feb. 16, 1994)) establishes 
federal executive policy on environmental justice. Its main provision 
directs federal agencies, to the greatest extent practicable and 
permitted by law, to make environmental justice part of their mission 
by identifying and addressing, as appropriate, disproportionately high 
and adverse human health or environmental effects of their programs, 
policies, and activities on minority populations and low-income 
populations in the United States.
    EPA has determined that this proposed rule will not have 
disproportionately high and adverse human health or environmental 
effects on minority or low-income populations because it does not 
affect the level of protection provided to human health or the 
environment. The technical amendments on this rule do not relax the 
control measures on sources regulated by the rule and therefore will 
not cause emissions increases from these sources. The technical relief 
for the Tier 3 timeframe seeks to compensate for any emissions impact 
by encouraging earlier use of Tier 4 engines requiring the equipment 
manufacturer to give up specific Tier 4 flexibilities.

K. Statutory Authority

    The statutory authority for this action comes from section 202 of 
the Clean Air Act as amended (42 U.S.C. 7521). This action is a 
rulemaking subject to the provisions of Clean Air Act section 307(d). 
See 42 U.S.C. 7607(d).

List of Subjects

40 CFR Part 9

    Environmental protection, Administrative practice and procedure, 
Confidential business information, Imports, Labeling, Motor vehicle 
pollution, Reporting and recordkeeping requirements, Research, Vessels, 
Warranties.

40 CFR Part 89

    Environmental protection, Administrative practice and procedure, 
Confidential business information, Imports, Labeling, Motor vehicle 
pollution, Reporting and recordkeeping requirements, Research, Vessels, 
Warranties.

40 CFR Part 1039

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

    Dated: September 6, 2007.
Stephen L. Johnson,
Administrator.
 [FR Doc. E7-18163 Filed 9-17-07; 8:45 am]

BILLING CODE 6560-50-P