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(1) You may disregard this section if regeneration does not significantly affect emission levels for an engine family (or configuration) or if it is not practical to identify when regeneration occurs. If you do not use adjustment factors under this section, your engines must meet emission standards for all testing, without regard to regeneration.
(2) If your engines use aftertreatment technology with extremely infrequent regeneration and you are unable to apply the provisions of this section, you may ask us to approve an alternate methodology to account for regeneration events.
(b) Calculating average adjustment factors. Calculate the average adjustment factor (EFA) based on the following equation:
EFA = (F)(EFH) + (1-F)(EFL)
Where:
F = the frequency of the regeneration event in terms of the fraction of tests during which the regeneration occurs.
EFH = measured emissions from a test segment in which the regeneration occurs.
EFL = measured emissions from a test segment in which the regeneration does not occur.
(c) Applying adjustment factors. Apply adjustment factors based on whether regeneration occurs during the test run. You must be able to identify regeneration in a way that is readily apparent during all testing.
(1) If regeneration does not occur during a test segment, add an upward adjustment factor to the measured emission rate. Determine the upward adjustment factor (UAF) using the following equation:
UAF = EFA - EFL
(2) If regeneration occurs or starts to occur during a test segment, subtract a downward adjustment factor from the measured emission rate. Determine the downward adjustment factor (DAF) using the following equation:
DAF = EFH - EFA
(d) Sample calculation. If EFL is 0.10 g/kW-hr, EFH is 0.50 g/kW-hr, and F is 0.1 (the regeneration occurs once for each ten tests), then:
EFA = (0.1)(0.5 g/kW-hr) + (1.0 - 0.1)(0.1 g/kW-hr) = 0.14 g/kW-hr.
UAF = 0.14 g/kW-hr - 0.10 g/kW-hr = 0.04 g/kW-hr.
DAF = 0.50 g/kW-hr - 0.14 g/kW-hr = 0.36 g/kW-hr.
Subpart G—Special Compliance Provisions
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§ 1039.601 What compliance provisions apply to these engines?
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Engine and equipment manufacturers, as well as owners, operators, and rebuilders of engines subject to the requirements of this part, and all other persons, must observe the provisions of this part, the requirements and prohibitions in 40 CFR part 1068, and the provisions of the Act.
§ 1039.605 What provisions apply to engines certified under the motor-vehicle program?
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(a) General provisions. If you are an engine manufacturer, this section allows you to introduce new nonroad engines into commerce if they are already certified to the requirements that apply to compression-ignition engines under 40 CFR parts 85 and 86. If you comply with all the provisions of this section, we consider the certificate issued under 40 CFR part 86 for each engine to also be a valid certificate of conformity under this part 1039 for its model year, without a separate application for certification under the requirements of this part 1039. See §1039.610 for similar provisions that apply to engines certified to chassis-based standards for motor vehicles.
(b) Equipment-manufacturer provisions. If you are not an engine manufacturer, you may produce nonroad equipment using motor-vehicle engines under this section as long as the engine has been properly labeled as specified in paragraph (d)(5) of this section and you do not make any of the changes described in paragraph (d)(2) of this section. You must also add the fuel-inlet label we specify in §1039.135(e). If you modify the motor-vehicle engine in any of the ways described in paragraph (d)(2) of this section, we will consider you a manufacturer of a new nonroad engine. Such engine modifications prevent you from using the provisions of this section.
(c) Liability. Engines for which you meet the requirements of this section are exempt from all the requirements and prohibitions of this part, except for those specified in this section. Engines exempted under this section must meet all the applicable requirements from 40 CFR parts 85 and 86. This paragraph (c) applies to engine manufacturers, equipment manufacturers who use these engines, and all other persons as if these engines were used in a motor vehicle. The prohibited acts of §1068.101(a)(1) apply to these new engines and equipment; however, we consider the certificate issued under 40 CFR part 86 for each engine to also be a valid certificate of conformity under this part 1039 for its model year. If we make a determination that these engines do not conform to the regulations during their useful life, we may require you to recall them under 40 CFR part 85 or 40 CFR 1068.505.
(d) Specific requirements. If you are an engine manufacturer and meet all the following criteria and requirements regarding your new nonroad engine, the engine is eligible for an exemption under this section:
(1) Your engine must be covered by a valid certificate of conformity issued under 40 CFR part 86.
(2) You must not make any changes to the certified engine that could reasonably be expected to increase its exhaust emissions for any pollutant, or its evaporative emissions if it is subject to evaporative-emission standards. For example, if you make any of the following changes to one of these engines, you do not qualify for this exemption:
(i) Change any fuel system parameters from the certified configuration.
(ii) Change, remove, or fail to properly install any other component, element of design, or calibration specified in the engine manufacturer's application for certification. This includes aftertreatment devices and all related components.
(iii) Modify or design the engine cooling system so that temperatures or heat rejection rates are outside the original engine manufacturer's specified ranges.
(3) You must show that fewer than 50 percent of the engine model's total sales for the model year, from all companies, are used in nonroad applications, as follows:
(i) If you are the original manufacturer of the engine, base this showing on your sales information.
(ii) In all other cases, you must get the original manufacturer of the engine to confirm this based on its sales information.
(4) You must ensure that the engine has the label we require under 40 CFR part 86.
(5) You must add a permanent supplemental label to the engine in a position where it will remain clearly visible after installation in the equipment. In the supplemental label, do the following:
(i) Include the heading: “NONROAD ENGINE EMISSION CONTROL INFORMATION”.
(ii) Include your full corporate name and trademark. You may instead include the full corporate name and trademark of another company you choose to designate.
(iii) State: “THIS ENGINE WAS ADAPTED FOR NONROAD USE WITHOUT AFFECTING ITS EMISSION CONTROLS. THE EMISSION-CONTROL SYSTEM DEPENDS ON THE USE OF FUEL MEETING SPECIFICATIONS THAT APPLY FOR MOTOR-VEHICLE APPLICATIONS. OPERATING THE ENGINE ON OTHER FUELS MAY BE A VIOLATION OF FEDERAL LAW.”.
(iv) State the date you finished modifying the engine (month and year), if applicable.
(6) The original and supplemental labels must be readily visible after the engine is installed in the equipment or, if the equipment obscures the engine's emission control information label, the equipment manufacturer must attach duplicate labels, as described in 40 CFR 1068.105.
(7) You must make sure that nonroad equipment produced under this section will have the fueling label we specify in §1039.135(c)(9)(i).
(8) Send the Designated Compliance Officer a signed letter by the end of each calendar year (or less often if we tell you) with all the following information:
(i) Identify your full corporate name, address, and telephone number.
(ii) List the engine models you expect to produce under this exemption in the coming year.
(iii) State: “We produce each listed engine model for nonroad application without making any changes that could increase its certified emission levels, as described in 40 CFR 1039.605.”.
(e) Failure to comply. If your engines do not meet the criteria listed in paragraph (d) of this section, they will be subject to the standards, requirements, and prohibitions of this part 1039 and the certificate issued under 40 CFR part 86 will not be deemed to also be a certificate issued under this part 1039. Introducing these engines into commerce without a valid exemption or certificate of conformity under this part violates the prohibitions in 40 CFR 1068.101(a)(1).
(f) Data submission. We may require you to send us emission test data on any applicable nonroad duty cycles.
(g) Participation in averaging, banking and trading. Engines adapted for nonroad use under this section may not generate or use emission credits under this part 1039. These engines may generate credits under the ABT provisions in 40 CFR part 86. These engines must use emission credits under 40 CFR part 86 if they are certified to an FEL that exceeds an applicable standard under 40 CFR part 86.
[69 FR 39213, June 29, 2004, as amended at 70 FR 40463, July 13, 2005]
§ 1039.610 What provisions apply to vehicles certified under the motor-vehicle program?
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(a) General provisions. If you are a motor-vehicle manufacturer, this section allows you to introduce new nonroad engines or equipment into commerce if the vehicle is already certified to the requirements that apply under 40 CFR parts 85 and 86. If you comply with all of the provisions of this section, we consider the certificate issued under 40 CFR part 86 for each motor vehicle to also be a valid certificate of conformity for the engine under this part 1039 for its model year, without a separate application for certification under the requirements of this part 1039. See §1039.605 for similar provisions that apply to motor-vehicle engines produced for nonroad equipment.
(b) Equipment-manufacturer provisions. If you are not an engine manufacturer, you may produce nonroad equipment from motor vehicles under this section as long as the equipment has the labels specified in paragraph (d)(5) of this section and you do not make any of the changes described in paragraph (d)(2) of this section. You must also add the fuel-inlet label we specify in §1039.135(e). If you modify the motor vehicle or its engine in any of the ways described in paragraph (d)(2) of this section, we will consider you a manufacturer of a new nonroad engine. Such modifications prevent you from using the provisions of this section.
(c) Liability. Engines, vehicles, and equipment for which you meet the requirements of this section are exempt from all the requirements and prohibitions of this part, except for those specified in this section. Engines exempted under this section must meet all the applicable requirements from 40 CFR parts 85 and 86. This applies to engine manufacturers, equipment manufacturers, and all other persons as if the nonroad equipment were motor vehicles. The prohibited acts of §1068.101(a)(1) apply to these new pieces of equipment; however, we consider the certificate issued under 40 CFR part 86 for each motor vehicle to also be a valid certificate of conformity for the engine under this part 1039 for its model year. If we make a determination that these engines, vehicles, or equipment do not conform to the regulations during their useful life, we may require you to recall them under 40 CFR part 86 or 40 CFR 1068.505.
(d) Specific requirements. If you are a motor-vehicle manufacturer and meet all the following criteria and requirements regarding your new nonroad equipment and its engine, the engine is eligible for an exemption under this section:
(1) Your equipment must be covered by a valid certificate of conformity as a motor vehicle issued under 40 CFR part 86.
(2) You must not make any changes to the certified vehicle that we could reasonably expect to increase its exhaust emissions for any pollutant, or its evaporative emissions if it is subject to evaporative-emission standards. For example, if you make any of the following changes, you do not qualify for this exemption:
(i) Change any fuel system parameters from the certified configuration.
(ii) Change, remove, or fail to properly install any other component, element of design, or calibration specified in the vehicle manufacturer's application for certification. This includes aftertreatment devices and all related components.
(iii) Modify or design the engine cooling system so that temperatures or heat rejection rates are outside the original vehicle manufacturer's specified ranges.
(iv) Add more than 500 pounds to the curb weight of the originally certified motor vehicle.
(3) You must show that fewer than 50 percent of the total sales as a motor vehicle or a piece of nonroad equipment, from all companies, are used in nonroad applications, as follows:
(i) If you are the original manufacturer of the vehicle, base this showing on your sales information.
(ii) In all other cases, you must get the original manufacturer of the vehicle to confirm this based on their sales information.
(4) The equipment must have the vehicle emission control information and fuel labels we require under 40 CFR 86.007–35.
(5) You must add a permanent supplemental label to the equipment in a position where it will remain clearly visible. In the supplemental label, do the following:
(i) Include the heading: “NONROAD ENGINE EMISSION CONTROL INFORMATION”.
(ii) Include your full corporate name and trademark. You may instead include the full corporate name and trademark of another company you choose to designate.
(iii) State: “THIS VEHICLE WAS ADAPTED FOR NONROAD USE WITHOUT AFFECTING ITS EMISSION CONTROLS. THE EMISSION-CONTROL SYSTEM DEPENDS ON THE USE OF FUEL MEETING SPECIFICATIONS THAT APPLY FOR MOTOR-VEHICLE APPLICATIONS. OPERATING THE ENGINE ON OTHER FUELS MAY BE A VIOLATION OF FEDERAL LAW.”.
(iv) State the date you finished modifying the vehicle (month and year), if applicable.
(6) The original and supplemental labels must be readily visible in the fully assembled equipment.
(7) Send the Designated Compliance Officer a signed letter by the end of each calendar year (or less often if we tell you) with all the following information:
(i) Identify your full corporate name, address, and telephone number.
(ii) List the equipment models you expect to produce under this exemption in the coming year.
(iii) State: “We produce each listed engine or equipment model for nonroad application without making any changes that could increase its certified emission levels, as described in 40 CFR 1039.610.”.
(e) Failure to comply. If your engines, vehicles, or equipment do not meet the criteria listed in paragraph (d) of this section, the engines will be subject to the standards, requirements, and prohibitions of this part 1039, and the certificate issued under 40 CFR part 86 will not be deemed to also be a certificate issued under this part 1039. Introducing these engines into commerce without a valid exemption or certificate of conformity under this part violates the prohibitions in 40 CFR 1068.101(a)(1).
(f) Data submission. We may require you to send us emission test data on any applicable nonroad duty cycles.
(g) Participation in averaging, banking and trading. Vehicles adapted for nonroad use under this section may not generate or use emission credits under this part 1039. These vehicles may generate credits under the ABT provisions in 40 CFR part 86. These vehicles must be included in the calculation of the applicable fleet average in 40 CFR part 86.
[69 FR 39213, June 29, 2004, as amended at 70 FR 40463, July 13, 2005]
§ 1039.615 What special provisions apply to engines using noncommercial fuels?
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In §1039.115(e), we generally require that engines meet emission standards for any adjustment within the full range of any adjustable parameters. For engines that use noncommercial fuels significantly different than the specified test fuel of the same type, you may ask to use the parameter-adjustment provisions of this section instead of those in §1039.115(e). Engines certified under this section must be in a separate engine family.
(a) If we approve your request, the following provisions apply:
(1) You must certify the engine using the test fuel specified in §1039.501.
(2) You may produce the engine without limits or stops that keep the engine adjusted within the certified range.
(3) You must specify in-use adjustments different than the adjustable settings appropriate for the specified test fuel, consistent with the provisions of paragraph (b)(1) of this section.
(b) To produce engines under this section, you must do the following:
(1) Specify in-use adjustments needed so the engine's level of emission control for each regulated pollutant is equivalent to that from the certified configuration.
(2) Add the following information to the emission control information label specified in §1039.135:
(i) Include instructions describing how to adjust the engine to operate in a way that maintains the effectiveness of the emission-control system.
(ii) State: “THIS ENGINE IS CERTIFIED TO OPERATE IN APPLICATIONS USING NONCOMMERCIAL FUEL. MALADJUSTMENT OF THE ENGINE IS A VIOLATION OF FEDERAL LAW SUBJECT TO CIVIL PENALTY.”.
(3) Keep records to document the destinations and quantities of engines produced under this section.
§ 1039.620 What are the provisions for exempting engines used solely for competition?
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The provisions of this section apply for new engines built on or after January 1, 2006.
(a) Equipment manufacturers may use uncertified engines if the vehicles or equipment in which they are installed will be used solely for competition.
(b) The definition of nonroad engine in 40 CFR 1068.30 excludes engines used solely for competition. These engines are not required to comply with this part 1039 or 40 CFR part 89, but 40 CFR 1068.101 prohibits the use of competition engines for noncompetition purposes.
(c) We consider a vehicle or piece of equipment to be one that will be used solely for competition if it has features that are not easily removed that would make its use other than in competition unsafe, impractical, or highly unlikely.
(d) As an engine manufacturer, your engine is exempt without our prior approval if you have a written request for an exempted engine from the equipment manufacturer showing the basis for believing that the equipment will be used solely for competition. You must permanently label engines exempted under this section to clearly indicate that they are to be used solely for competition. Failure to properly label an engine will void the exemption.
(e) We may discontinue an exemption under this section if we find that engines are not used solely for competition.
§ 1039.625 What requirements apply under the program for equipment-manufacturer flexibility?
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The provisions of this section allow equipment manufacturers to produce equipment with engines that are subject to less stringent emission standards after the Tier 4 emission standards begin to apply. To be eligible to use these provisions, you must follow all the instructions in this section. See 40 CFR 89.102(d) and (e) for provisions that apply to equipment produced while Tier 1, Tier 2, or Tier 3 standards apply. See §1039.626 for requirements that apply specifically to companies that manufacture equipment outside the United States and to companies that import such equipment without manufacturing it. Engines and equipment you produce under this section are exempt from the prohibitions in 40 CFR 1068.101(a)(1), subject to the provisions of this section.
(a) General. If you are an equipment manufacturer, you may introduce into commerce in the United States limited numbers of nonroad equipment with engines exempted under this section. You may use the exemptions in this section only if you have primary responsibility for designing and manufacturing equipment and your manufacturing procedures include installing some engines in this equipment. Consider all U.S.-directed equipment sales in showing that you meet the requirements of this section, including those from any parent or subsidiary companies and those from any other companies you license to produce equipment for you. If you produce a type of equipment that has more than one engine, count each engine separately. These provisions are available over the following periods:
(1) These provisions are available for the years shown in the following table, except as provided in paragraph (a)(2) of this section:
Table 1 of § 1039.625_General Availability of Allowances
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Power category Calendar years
------------------------------------------------------------------------
kW < 19............................................ 2008-2014
19 [le] kW < 56.................................... 2008-2014
56 [le] kW < 130................................... 2012-2018
130 [le] kW [le] 560.................................. 2011-2017
kW > 560........................................... 2011-2017
------------------------------------------------------------------------
(2) If you do not use any allowances in a power category before the earliest dates shown in the following table, you may delay the start of the seven-year period for using allowances under this section as follows:
Table 2 of § 1039.625_Availability of Delayed Allowances
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Power category Calendar years
------------------------------------------------------------------------
kW < 19............................................ ................
19 [le] kW < 56.................................... 2012-2018
56 [le] kW < 130................................... 2014-2020
130 [le] kW [le] 560.................................. 2014-2020
kW > 560........................................... 2015-2021
------------------------------------------------------------------------
(b) Allowances. You may choose one of the following options for each power category to produce equipment with exempted engines under this section, except as allowed under §1039.627:
(1) Percent-of-production allowances. You may produce a certain number of units with exempted engines calculated using a percentage of your total sales within a power category relative to your total U.S.-directed production volume. The sum of these percentages within a power category during the seven-year period specified in paragraph (a) of this section may not exceed 80 percent, except as allowed under paragraph (b)(2) or (m) of this section.
(2) Small-volume allowances. You may determine an alternate allowance for a specific number of exempted engines under this section using one of the following approaches for your U.S.-directed production volumes:
(i) You may produce up to 700 units with exempted engines within a power category during the seven-year period specified in paragraph (a) of this section, with no more than 200 units in any single year within a power category, except as provided in paragraph (m) of this section. Engines within a power category that are exempted under this section must be from a single engine family within a given year.
(ii) For engines below 130 kW, you may produce up to 525 units with exempted engines within a power category during the seven-year period specified in paragraph (a) of this section, with no more than 150 units in any single year within a power category, except as provided in paragraph (m) of this section. For engines at or above 130 kW, you may produce up to 350 units with exempted engines within a power category during the seven-year period, with no more than 100 units in any single year within a power category. Exemptions under this paragraph (b)(2)(ii) may apply to engines from multiple engine families in a given year.
(c) Percentage calculation. Calculate for each calendar year the percentage of equipment with exempted engines from your total U.S.-directed production within a power category if you need to show that you meet the percent-of-production allowances in paragraph (b)(1) of this section.
(d) Inclusion of engines not subject to Tier 4 standards. The following provisions apply to engines that are not subject to Tier 4 standards:
(1) If you use the provisions of §1068.105(a) to use up your inventories of engines not certified to new emission standards, do not include these units in your count of equipment with exempted engines under paragraph (b) of this section. However, you may include these units in your count of total equipment you produce for the given year for the percentage calculation in paragraph (b)(1) of this section.
(2) If you install engines that are exempted from the Tier 4 standards for any reason, other than for equipment-manufacturer allowances under this section, do not include these units in your count of exempted engines under paragraph (b) of this section. However, you may include these units in your count of total equipment you produce for the given year for the percentage calculation in paragraph (b)(1) of this section. For example, if we grant a hardship exemption for the engine manufacturer, you may count these as compliant engines under this section. This paragraph (d)(2) applies only if the engine has a permanent label describing why it is exempted from the Tier 4 standards.
(3) Do not include equipment using model year 2008 or 2009 engines certified under the provisions of §1039.101(c) in your count of equipment using exempted engines. However, you may include these units in your count of total equipment you produce for the given year for the percentage calculation in paragraph (b)(1) of this section.
(4) You may start using the allowances under this section for engines that are not yet subject to Tier 4 standards, as long as the seven-year period for using allowances under the Tier 2 or Tier 3 program has expired (see 40 CFR 89.102(d)). Table 3 of this section shows the years for which this applies. To use these early allowances, you must use engines that meet the emission standards described in paragraph (e) of this section. You must also count these units or calculate these percentages as described in paragraph (c) of this section and apply them toward the total number or percentage of equipment with exempted engines we allow for the Tier 4 standards as described in paragraph (b) of this section. The maximum number of cumulative early allowances under this paragraph (d)(4) is 10 percent under the percent-of-production allowance or 100 units under the small-volume allowance. For example, if you produce 5 percent of your equipment with engines between 130 and 560 kW that use allowances under this paragraph (d)(4) in 2009, you may use up to an additional 5 percent of your allowances in 2010. If you use allowances for 5 percent of your equipment in both 2009 and 2010, your 80 percent allowance for 2011–2017 in the 130–560 kW power category decreases to 70 percent. Manufacturers using allowances under this paragraph (d)(4) must comply with the notification and reporting requirements specified in paragraph (g) of this section.
Table 3 of § 1039.625_Years for Early Allowances
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Maximum engine power Calendar years
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kW < 19............................................ 2007
19 [le] kW < 37.................................... 2006-2011
37 [le] kW < 56.................................... 2011
56 [le] kW < 75.................................... 2011
75 [le] kW < 130................................... 2010-2011
130 [le] kW < 225.................................. 2010
225 [le] kW < 450.................................. 2008-2010
450 [le] kW [le] 560.................................. 2009-2010
KW > 560........................................... ................
------------------------------------------------------------------------
(e) Standards. If you produce equipment with exempted engines under this section, the engines must meet emission standards at least as stringent as the following:
(1) If you are using the provisions of paragraph (d)(4) of this section, engines must meet the applicable Tier 1 emission standards described in §89.112.
(2) If you are using the provisions of paragraph (a)(2) of this section, engines must be certified under this part 1039 as follows:
------------------------------------------------------------------------
Must meet all
standards and
requirements
Engines in the following power category . . . that applied in
the following
model year . . .
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(i) 19 [le] kW < 56................................ 2008
(ii) 56 [le] kW < 130.............................. 2012
(iii) 130 [le] kW [le] 560............................ 2011
(iv) kW > 560...................................... 2011
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(3) In all other cases, engines at or above 37 kW and at or below 560 kW must meet the appropriate Tier 3 standards described in §89.112. Engines below 37 kW and engines above 560 kW must meet the appropriate Tier 2 standards described in §89.112.
(f) Equipment labeling. You must add a permanent label, written legibly in English, to the engine or another readily visible part of each piece of equipment you produce with exempted engines under this section. This label, which supplements the engine manufacturer's emission control information label, must include at least the following items:
(1) The label heading “EMISSION CONTROL INFORMATION”.
(2) Your corporate name and trademark.
(3) The calendar year in which the equipment is manufactured.
(4) The name, e-mail address, and phone number of a person to contact for further information.
(5) The following statement:
THIS EQUIPMENT [or identify the type of equipment] HAS AN ENGINE THAT MEETS U.S. EPA EMISSION STANDARDS UNDER 40 CFR 1039.625.
(g) Notification and reporting. You must notify us of your intent to use the provisions of this section and send us an annual report to verify that you are not exceeding the allowances, as follows:
(1) Before January 1 of the first year you intend to use the provisions of this section, send the Designated Compliance Officer and the Designated Enforcement Officer a written notice of your intent, including:
(i) Your company's name and address, and your parent company's name and address, if applicable.
(ii) Whom to contact for more information.
(iii) The calendar years in which you expect to use the exemption provisions of this section.
(iv) The name and address of the company that produces the engines you will be using for the equipment exempted under this section.
(v) Your best estimate of the number of units in each power category you will produce under this section and whether you intend to comply under paragraph (b)(1) or (b)(2) of this section.
(vi) The number of units in each power category you have sold in previous calendar years under 40 CFR 89.102(d).
(2) For each year that you use the provisions of this section, send the Designated Compliance Officer and the Designated Enforcement Officer a written report by March 31 of the following year. Include in your report the total number of engines you sold in the preceding year for each power category, based on actual U.S.-directed production information. Also identify the percentages of U.S.-directed production that correspond to the number of units in each power category and the cumulative numbers and percentages of units for all the units you have sold under this section for each power category. You may omit the percentage figures if you include in the report a statement that you will not be using the percent-of-production allowances in paragraph (b)(1) of this section.
(h) Recordkeeping. Keep the following records of all equipment with exempted engines you produce under this section for at least five full years after the final year in which allowances are available for each power category:
(1) The model number, serial number, and the date of manufacture for each engine and piece of equipment.
(2) The maximum power of each engine.
(3) The total number or percentage of equipment with exempted engines, as described in paragraph (b) of this section and all documentation supporting your calculation.
(4) The notifications and reports we require under paragraph (g) of this section.
(i) Enforcement. Producing more exempted engines or equipment than we allow under this section or installing engines that do not meet the emission standards of paragraph (e) of this section violates the prohibitions in 40 CFR 1068.101(a)(1). You must give us the records we require under this section if we ask for them (see 40 CFR 1068.101(a)(2)).
(j) Provisions for engine manufacturers. As an engine manufacturer, you may produce exempted engines as needed under this section. You do not have to request this exemption for your engines, but you must have written assurance from equipment manufacturers that they need a certain number of exempted engines under this section. Send us an annual report of the engines you produce under this section, as described in §1039.250(a). For engines produced under the provisions of paragraph (a)(2) of this section, you must certify the engines under this part 1039. For all other exempt engines, the engines must meet the emission standards in paragraph (e) of this section and you must meet all the requirements of 40 CFR 1068.265. If you show under 40 CFR 1068.265(c) that the engines are identical in all material respects to engines that you have previously certified to one or more FELs above the standards specified in paragraph (e) of this section, you must supply sufficient credits for these engines. Calculate these credits under subpart H of this part using the previously certified FELs and the alternate standards. You must meet the labeling requirements in 40 CFR 89.110, but add the following statement instead of the compliance statement in 40 CFR 89.110(b)(10):
THIS ENGINE MEETS U.S. EPA EMISSION STANDARDS UNDER 40 CFR 1039.625. SELLING OR INSTALLING THIS ENGINE FOR ANY PURPOSE OTHER THAN FOR THE EQUIPMENT FLEXIBILITY PROVISIONS OF 40 CFR 1039.625 MAY BE A VIOLATION OF FEDERAL LAW SUBJECT TO CIVIL PENALTY.
(k) Other exemptions. See 40 CFR 1068.255 for exemptions based on hardship for equipment manufacturers and secondary engine manufacturers.
(l) [Reserved]
(m) Additional exemptions for technical or engineering hardship. You may request additional engine allowances under paragraph (b)(1) of this section for 19–560 kW power categories or, if you are a small equipment manufacturer, under paragraph (b)(2) of this section for engines at or above 19 and below 37 kW. However, you may use these extra allowances only for those equipment models for which you, or an affiliated company, do not also produce the engine. After considering the circumstances, we may permit you to introduce into commerce equipment with such engines that do not comply with Tier 4 emission standards, as follows:
(1) We may approve additional exemptions if extreme and unusual circumstances that are clearly outside your control and that could not have been avoided with reasonable discretion have resulted in technical or engineering problems that prevent you from meeting the requirements of this part. You must show that you exercised prudent planning and have taken all reasonable steps to minimize the scope of your request for additional allowances.
(2) To apply for exemptions under this paragraph (m), send the Designated Compliance Officer and the Designated Enforcement Officer a written request as soon as possible before you are in violation. In your request, include the following information:
(i) Describe your process for designing equipment.
(ii) Describe how you normally work cooperatively or concurrently with your engine supplier to design products.
(iii) Describe the engineering or technical problems causing you to request the exemption and explain why you have not been able to solve them. Describe the extreme and unusual circumstances that led to these problems and explain how they were unavoidable.
(iv) Describe any information or products you received from your engine supplier related to equipment design—such as written specifications, performance data, or prototype engines—and when you received it.
(v) Compare the design processes of the equipment model for which you need additional exemptions and that for other models for which you do not need additional exemptions. Explain the technical differences that justify your request.
(vi) Describe your efforts to find and use other compliant engines, or otherwise explain why none is available.
(vii) Describe the steps you have taken to minimize the scope of your request.
(viii) Include other relevant information. You must give us other relevant information if we ask for it.
(ix) Estimate the increased percent of production you need for each equipment model covered by your request, as described in paragraph (m)(3) of this section. Estimate the increased number of allowances you need for each equipment model covered by your request, as described in paragraph (m)(4) of this section.
(3) We may approve your request to increase the allowances under paragraph (b)(1) of this section, subject to the following limitations:
(i) The additional allowances will not exceed 70 percent for each power category.
(ii) You must use up the allowances under paragraph (b)(1) of this section before using any additional allowance under this paragraph (m).
(iii) Any allowances we approve under this paragraph (m)(3) expire 24 months after the provisions of this section start for a given power category, as described in paragraph (a) of this section. You may use these allowances only for the specific equipment models covered by your request.
(4) We may approve your request to increase the allowances for the 19–56 kW power category under paragraph (b)(2) of this section, subject to the following limitations:
(i) You are eligible for additional allowances under this paragraph (m)(4) only if you are a small equipment manufacturer and you do not use the provisions of paragraph (m)(3) of this section to obtain additional allowances for the 19–56 kW power category.
(ii) You must use up all the available allowances for the 19–56 kW power category under paragraph (b)(2) of this section in a given year before using any additional allowances under this paragraph (m)(4).
(iii) Base your request only on equipment you produce with engines at or above 19 kW and below 37 kW. You may use any additional allowances only for equipment you produce with engines at or above 19 kW and below 37 kW.
(iv) The total allowances under either paragraph (b)(2)(i) or (ii) of this section for the 19–56 kW power category will not exceed 1,100 units.
(v) Any allowances we approve under this paragraph (m)(4) expire 36 months after the provisions of this section start for this power category, as described in paragraph (a) of this section. These additional allowances are not subject to the annual limits specified in paragraph (b)(2) of this section. You may use these allowances only for the specific equipment models covered by your request.
(5) For purposes of this paragraph (m), small equipment manufacturer means a small-business equipment manufacturer that had annual U.S.-directed production volume of equipment using nonroad diesel engines between 19 and 56 kW of no more than 3,000 units in 2002 and all earlier calendar years, and has 750 or fewer employees (500 or fewer employees for nonroad equipment manufacturers that produce no construction equipment or industrial trucks). For manufacturers owned by a parent company, the production limit applies to the production of the parent company and all its subsidiaries and the employee limit applies to the total number of employees of the parent company and all its subsidiaries.
[69 FR 39213, June 29, 2004, as amended at 70 FR 40464, July 13, 2005]
§ 1039.626 What special provisions apply to equipment imported under the equipment-manufacturer flexibility program?
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This section describes requirements that apply to equipment manufacturers using the provisions of §1039.625 for equipment produced outside the United States. Note that §1039.625 limits these provisions to equipment manufacturers that install some engines and have primary responsibility for designing and manufacturing equipment. Companies that import equipment into the United States without meeting these criteria are not eligible for these allowances. Such importers may import equipment with exempted engines only as described in paragraph (b) of this section.
(a) As a foreign equipment manufacturer, you or someone else may import equipment with exempted engines under this section if you comply with the provisions in §1039.625 and commit to the following:
(1) Give any EPA inspector or auditor complete and immediate access to inspect and audit, as follows:
(i) Inspections and audits may be announced or unannounced.
(ii) Inspections and audits may be by EPA employees or EPA contractors.
(iii) You must provide access to any location where—
(A) Any nonroad engine, equipment, or vehicle is produced or stored.
(B) Documents related to manufacturer operations are kept.
(C) Equipment, engines, or vehicles are tested or stored for testing.
(iv) You must provide any documents requested by an EPA inspector or auditor that are related to matters covered by the inspections or audit.
(v) EPA inspections and audits may include review and copying of any documents related to demonstrating compliance with the exemptions in §1039.625.
(vi) EPA inspections and audits may include inspection and evaluation of complete or incomplete equipment, engines, or vehicles, and interviewing employees.
(vii) You must make any of your employees available for interview by the EPA inspector or auditor, on request, within a reasonable time period.
(viii) You must provide English language translations of any documents to an EPA inspector or auditor, on request, within 10 working days.
(ix) You must provide English-language interpreters to accompany EPA inspectors and auditors, on request.
(2) Name an agent for service of process located in the District of Columbia. Service on this agent constitutes service on you or any of your officers or employees for any action by EPA or otherwise by the United States related to the requirements of this part.
(3) The forum for any civil or criminal enforcement action related to the provisions of this section for violations of the Clean Air Act or regulations promulgated thereunder shall be governed by the Clean Air Act.
(4) The substantive and procedural laws of the United States shall apply to any civil or criminal enforcement action against you or any of your officers or employees related to the provisions of this section.
(5) Provide the notification required by §1039.625(g). Include in the notice of intent in §1039.625(g)(1) a commitment to comply with the requirements and obligations of §1039.625 and this section. This commitment must be signed by the owner or president.
(6) You, your agents, officers, and employees must not seek to detain or to impose civil or criminal remedies against EPA inspectors or auditors, whether EPA employees or EPA contractors, for actions performed within the scope of EPA employment related to the provisions of this section.
(7) By submitting notification of your intent to use the provisions of §1039.625, producing and exporting for resale to the United States nonroad equipment under this section, or taking other actions to comply with the requirements of this part, you, your agents, officers, and employees, without exception, become subject to the full operation of the administrative and judicial enforcement powers and provisions of the United States as described in 28 U.S.C. 1605(a)(2), without limitation based on sovereign immunity, for conduct that violates the requirements applicable to you under this part 1039—including such conduct that violates 18 U.S.C. 1001, 42 U.S.C. 7413(c)(2), or other applicable provisions of the Clean Air Act'with respect to actions instituted against you and your agents, officers, and employees in any court or other tribunal in the United States.
(8) Any report or other document you submit to us must be in the English language, or include a complete translation in English.
(9) You must post a bond to cover any potential enforcement actions under the Clean Air Act before you or anyone else imports your equipment under this section, as follows:
(i) The value of the bond is based on the per-engine bond values shown in Table 1 of this section and on the highest number of engines in each power category you produce in any single calendar year under the provisions of §1039.625. For example, if you have projected U.S.-directed production volumes of 100 exempt engines in the 19–56 kW power category and 300 exempt engines in the 56–130 kW power category in 2013, the appropriate bond amount is $180,000. If your estimated or actual engine imports increase beyond the level appropriate for your current bond payment, you must post additional bond to reflect the increased sales within 90 days after you change your estimate or determine the actual sales. You may not decrease your bond.
(ii) You may meet the bond requirements of this section with any of the following methods:
(A) Get a bond from a third-party surety that is cited in the U.S. Department of Treasury Circular 570, “Companies Holding Certificates of Authority as Acceptable Sureties on Federal Bonds and as Acceptable Reinsuring Companies.” Maintain this bond for five years after the applicable allowance period expires, or five years after you use up all the available allowances under §1039.625, whichever comes first.
(B) Get the Designated Enforcement Officer to approve a waiver from the bonding requirement, as long as you can show that you have assets of an appropriate liquidity and value readily available in the United States.
(iii) If you forfeit some or all of your bond in an enforcement action, you must post any appropriate bond for continuing importation within 90 days after you forfeit the bond amount.
Table 1 of § 1039.626_Per-Engine Bond Values
------------------------------------------------------------------------
The per-engine
For engines with maximum engine power falling in the bond value is
following ranges . . . . . .
------------------------------------------------------------------------
kW < 19.............................................. $150
19 [le] kW < 56...................................... 300
56 [le] kW < 130..................................... 500
130 [le] kW < 225.................................... 1,000
225 [le] kW < 450.................................... 3,000
kW >= 450............................................... 8,000
------------------------------------------------------------------------
(iv) You will forfeit the proceeds of the bond posted under this paragraph (a)(9) if you need to satisfy any United States administrative final order or judicial judgment against you arising from your conduct in violation of this part 1039, including such conduct that violates 18 U.S.C. 1001, 42 U.S.C. 7413(c)(2), or other applicable provisions of the Clean Air Act.
(b) The provisions of this paragraph (b) apply to importers that do not install engines into equipment and do not have primary responsibility for designing and manufacturing equipment. Such importers may import equipment with engines exempted under §1039.625 only if each engine is exempted under an allowance provided to an equipment manufacturer meeting the requirements of §1039.625 and this section. You must notify us of your intent to use the provisions of this section and send us an annual report, as follows:
(1) Before January 1 of the first year you intend to use the provisions of this section, send the Designated Compliance Officer and the Designated Enforcement Officer a written notice of your intent, including:
(i) Your company's name and address, and your parent company's name and address, if applicable.
(ii) The name and address of the companies that produce the equipment and engines you will be importing under this section.
(iii) Your best estimate of the number of units in each power category you will import under this section in the upcoming calendar year, broken down by equipment manufacturer and power category. (continued)