[Federal Register Volume 67, Number 157 (Wednesday, August 14, 2002)]
[Proposed Rules]
[Pages 53050-53115]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 02-19437]



[[Page 53049]]

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Part II





Environmental Protection Agency





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40 CFR Parts 86, 90, 1045, 1051 and 1068



Control of Emissions From Spark-Ignition Marine Vessels and Highway 
Motorcycles; Proposed Rule

Federal Register / Vol. 67 , No. 157 / Wednesday, August 14, 2002 / 
Proposed Rules

[[Page 53050]]


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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Parts 86, 90, 1045, 1051, and 1068

[AMS-FRL-7253-8]
RIN 2060-AJ90


Control of Emissions From Spark-Ignition Marine Vessels and 
Highway Motorcycles

AGENCY: Environmental Protection Agency (EPA).

ACTION: Notice of proposed rulemaking.

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SUMMARY: In this action, we are proposing evaporative emissions 
standards for marine vessels that use spark-ignition engines (including 
sterndrive, inboard, and outboard engines and personal watercraft) and 
we discuss our plans to propose standards in the future regulating 
exhaust emissions from spark-ignition marine engines. This action also 
proposes new emission standards for highway motorcycles, including 
motorcycles of less than 50 cubic centimeters in displacement. This 
action is related to our proposal for emission standards for several 
sources that cause or contribute to air pollution. On October 5, 2001 
we published proposed standards for large spark-ignition engines such 
as those used in forklifts and airport tugs; recreational vehicles 
using spark-ignition engines such as off-highway motorcycles, all-
terrain vehicles, and snowmobiles; and recreational marine diesel 
engines.
    Nationwide, marine evaporative hydrocarbon (HC) emissions 
contribute to ozone, and motorcycles contribute to ozone, carbon 
monoxide (CO), and particulate matter (PM) nonattainment. These 
pollutants cause a range of adverse health effects, especially in terms 
of respiratory impairment and related illnesses. The proposed standards 
would help states achieve and maintain air quality standards. In 
addition, the proposed evaporative emission standards would help reduce 
acute exposure air toxics and the proposed motorcycle exhaust standards 
would help reduce exposure to CO, air toxics, and PM for operators and 
other people close to emission sources. They would also help address 
other environmental problems, such as visibility impairment in our 
national parks.
    We believe that manufacturers would be able to maintain or even 
improve the performance of their products in certain respects when 
producing engines and vessels meeting the proposed standards. In fact, 
we estimate that the evaporative emission standards would reduce fuel 
consumption by enough to offset any costs associated with the 
evaporative emission control technology. Overall, the gasoline fuel 
savings associated with the anticipated changes in technology resulting 
from the rule proposed in this notice are estimated to be about 31 
million gallons per year once the program is fully phased in (2030). 
The proposal also has several provisions to address the unique 
limitations of small-volume manufacturers.

DATES: Comments: Send written comments on this proposal by November 8, 
2002. See Section VII for more information about written comments.
    Hearings: We will hold a public hearing on September 17, 2002 
starting at 9:30 a.m. EDT. This hearing will focus on issues related to 
highway motorcycles. In addition, we will hold a public hearing on 
September 23, 2002 starting at 9:30 a.m. EDT. This hearing will focus 
on issues related to marine vessels. If you want to testify at a 
hearing, notify the contact person listed below at least ten days 
before the hearing. See Section VII for more information about public 
hearings.

ADDRESSES: Comments: You may send written comments in paper form or by 
e-mail. We must receive them by November 8, 2002. Send paper copies of 
written comments (in duplicate if possible) to the contact person 
listed below. You may also submit comments via e-mail to 
``MCNPRM@epa.gov.'' In your correspondence, refer to Docket A-2000-02.
    Hearings: We will hold a public hearing for issues related to 
highway motorcycles on September 17 at the Ypsilanti Marriott at Eagle 
Crest, Ypsilanti, Michigan (734-487-2000).
    We will host a public hearing for issues related to marine vessels 
on September 23 at the National Vehicle and Fuel Emission Laboratory, 
2000 Traverwood Dr., Ann Arbor, Michigan (734-214-4334). See Section 
VII, ``Public Participation'' below for more information on the comment 
procedure and public hearings.
    Docket: EPA's Air Docket makes materials related to this rulemaking 
available for review in Public Docket Nos. A-2000-01 and A-2000-02 at 
the following address: U.S. Environmental Protection Agency (EPA), Air 
Docket (6102), Room M-1500 (on the ground floor in Waterside Mall), 401 
M Street, SW., Washington, DC 20460 between 8 a.m. to 5:30 p.m., Monday 
through Friday, except on government holidays. You can reach the Air 
Docket by telephone at (202) 260-7548, and by facsimile (202) 260-4400. 
We may charge a reasonable fee for copying docket materials, as 
provided in 40 CFR part 2.

FOR FURTHER INFORMATION CONTACT: Margaret Borushko, U.S. EPA, National 
Vehicle and Fuels Emission Laboratory, 2000 Traverwood, Ann Arbor, MI 
48105; Telephone (734) 214-4334; FAX: (734) 214-4816; E-mail: 
borushko.margaret@epa.gov.

SUPPLEMENTARY INFORMATION:

Regulated Entities

    This proposed action would affect companies that manufacture or 
introduce into commerce any of the engines or vehicles that would be 
subject to the proposed standards. These include: Marine vessels with 
spark-ignition engines and highway motorcycles. This proposed action 
would also affect companies buying engines for installation in vessels 
and motorcycles. There are also proposed requirements that apply to 
those who rebuild any of the affected engines. Regulated categories and 
entities include:

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                                                                                     Examples of potentially
                   Category                       NAICS codes    SIC codes \b\         regulated entities
------------------------------------------------------\a\-------------------------------------------------------
Industry......................................  ..............            3732  Manufacturers of marine vessels.
Industry......................................          811310            7699  Engine repair and maintenance.
Industry......................................          336991  ..............  Motorcycles and motorcycle parts
                                                                                 manufacturers.
Industry......................................          421110  ..............  Independent Commercial Importers
                                                                                 of Vehicles and Parts.
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\a\ North American Industry Classification System (NAICS).
\b\ Standard Industrial Classification (SIC) system code.

    This list is not intended to be exhaustive, but rather provides a 
guide regarding entities likely to be regulated by this action. To 
determine whether particular activities may be regulated by this 
action, you should carefully

[[Page 53051]]

examine the proposed regulations. You may direct questions regarding 
the applicability of this action to the person listed in FOR FURTHER 
INFORMATION CONTACT.

Obtaining Electronic Copies of the Regulatory Documents

    The preamble, regulatory language, Draft Regulatory Support 
Document, and other rule documents are also available electronically 
from the EPA Internet Web site. This service is free of charge, except 
for any cost incurred for internet connectivity. The electronic version 
of this proposed rule is made available on the day of publication on 
the primary Web site listed below. The EPA Office of Transportation and 
Air Quality also publishes official Federal Register notices and 
related documents on the secondary Web site listed below.

1. http://www.epa.gov/docs/fedrgstr/EPA-AIR/ (either select desired 
date or use Search feature)
2. http://www.epa.gov/otaq/ (look in What's New or under the specific 
rulemaking topic)

    Please note that due to differences between the software used to 
develop the documents and the software into which the document may be 
downloaded, format changes may occur.

Table of Contents

I. Introduction
    A. Overview
    B. How Is this Document Organized?
    C. What Categories of Vessels and Vehicles are Covered in This 
Proposal?
    D. What Requirements Are We Proposing?
    E. Why Is EPA Taking This Action?
    F. Putting This Proposal into Perspective
II. Public Health and Welfare Effects of Emissions from Covered 
Engines
    A. Background
    B. What Are the Public Health and Welfare Effects Associated 
With Emissions From Nonroad Engines and Motorcycles Subject to the 
Proposed Standards?
    C. What Is the Inventory Contribution of These Sources?
III. Evaporative Emission Control from Boats
    A. Overview
    B. Boats/Fuel Systems Covered By This Proposal
    C. Proposed Evaporative Emission Requirements
    D. Demonstrating Compliance
    E. General Compliance Provisions
    F. Proposed Testing Requirements
    G. Special Compliance Provisions
    H. Technological Feasibility
IV. Sterndrive and Inboard Marine Engines
V. Highway Motorcycles
    A. Overview
    B. Motorcycles Covered by This Proposal
    C. Proposed Standards
    D. Special Compliance Provisions
    E. Technological Feasibility of the Standards
VI. Projected Impacts
    A. Environmental Impact
    B. Economic Impact
    C. Cost per Ton of Emissions Reduced
    D. Additional Benefits
VII. Public Participation
    A. How Do I Submit Comments?
    B. Will There Be a Public Hearing?
VII. Administrative Requirements
    A. Administrative Designation and Regulatory Analysis (Executive 
Order 12866)
    B. Regulatory Flexibility Act
    C. Paperwork Reduction Act
    D. Intergovernmental Relations
    E. National Technology Transfer and Advancement Act
    F. Protection of Children (Executive Order 13045)
    G. Federalism (Executive Order 13132)
    H. Energy Effects (Executive Order 13211)
    I. Plain Language

I. Introduction

A. Overview

    Air pollution is a serious threat to the health and well-being of 
millions of Americans and imposes a large burden on the U.S. economy. 
Ground-level ozone, carbon monoxide, and particulate matter are linked 
to potentially serious respiratory health problems, especially 
respiratory effects and environmental degradation, including visibility 
impairment in our precious national parks. Over the past quarter 
century, state and federal representatives have established emission-
control programs that significantly reduce emissions from individual 
sources. Many of these sources now pollute at only a small fraction of 
their pre-control rates. This proposal is part of a new effort that 
further addresses these air-pollution concerns by proposing national 
standards regulating emissions from several types of nonroad engines 
and vehicles that are currently unregulated by establishing standards 
for nonroad engines and vehicles, as required by Clean Air Act section 
213(a)(3). The first part of this effort was a proposal published on 
October 5, 2001 which included industrial spark-ignition engines such 
as those used in forklifts and airport tugs; recreational vehicles such 
as off-highway motorcycles, all-terrain vehicles, and snowmobiles; and 
recreational marine diesel engines.\1\
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    \1\ See 66 FR 51098.
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    This action, the second part, includes evaporative emission 
standards for marine vessels with spark-ignition engines and their fuel 
systems.\2\ In addition, we are proposing new emission standards for 
highway motorcycles. The proposed standards for motorcycles reflect the 
development of emission-control technology that has occurred since we 
last set standards for these engines in 1978. Including highway 
motorcycles in this proposal is also appropriate as we consider new 
emission standards for the counterpart off-highway motorcycle models.
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    \2\ Diesel-cycle engines, referred to simply as ``diesel 
engines'' in this document, may also be referred to as compression-
ignition (or CI) engines. These engines typically operate on diesel 
fuel, but other fuels may also be used. Otto-cycle engines (referred 
to here as spark-ignition or SI engines) typically operate on 
gasoline, liquefied petroleum gas, or natural gas.
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    Nationwide, the sources covered by this proposal are significant 
contributors to mobile-source air pollution. Marine evaporative 
emissions currently account for 1.3 percent of mobile-source 
hydrocarbon (HC) emissions, and highway motorcycles currently account 
for about 1.1 percent of mobile-source HC emissions, 0.4 percent of 
mobile-source carbon monoxide (CO) emissions, 0.1 percent of mobile-
source oxides of nitrogen (NOX) emissions, and 0.1 percent 
of mobile-source particulate matter (PM) emissions.\3\ The proposed 
standards would reduce exposure to these emissions and help avoid a 
range of adverse health effects associated with ambient ozone and PM 
levels, especially in terms of respiratory impairment and related 
illnesses. In addition, the proposed standards would help reduce acute 
exposure air toxics and PM for persons who operate or who work with or 
are otherwise active in close proximity to these sources. They would 
also help address other environmental problems associated with these 
sources, such as visibility impairment in our national parks and other 
wilderness areas where recreational vehicles and marine vessels are 
often used.
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    \3\ While we characterize emissions of hydrocarbons, this can be 
used as a surrogate for volatile organic compounds (VOC), which is 
broader group of compounds.
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    This proposal follows EPA's Advance Notice of Proposed Rulmaking 
(ANRPM) published on December 7, 2000 (65 FR 76797). In that Advance 
Notice, we provided an initial overview of possible regulatory 
strategies for nonroad vehicles and engines and invited early input to 
the process of developing standards. We received comments on the 
Advance Notice from a wide variety of stakeholders, including the 
engine industry, the equipment industry, various governmental bodies, 
environmental groups, and the general public. These comments are 
available for public viewing in Docket A-2000-01. The Advance Notice, 
the related comments, and other new information provide the framework 
for this proposal.

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B. How Is This Document Organized?

    This proposal covers both marine vessels and highway motorcycles 
and many readers may only be interested in one or the other of theses 
applications. We have attempted to organize the document in a way that 
allows each reader to focus on the application of particular interest. 
The Air Quality discussion in Section II is general in nature, however, 
and applies to the proposal as a whole.
    The next three sections contain our proposal for the marine vessels 
and highway motorcycles that are the subject of this action. Section 
III presents the proposed evaporative emission program for marine 
vessels using spark-ignition engines. Section IV discusses our 
intentions for controlling exhaust emissions from spark-ignition marine 
engines in the future. Section V contains our proposed highway 
motorcycle standards.
    Section VI summarizes the projected impacts and a discussion of the 
benefits of this proposal. Finally, Sections VII and VIII contain 
information about public participation, how we satisfied our 
administrative requirements, and the statutory provisions and legal 
authority for this proposal.
    The remainder of this Section I summarizes important background 
information about this proposal, including the engines covered, the 
proposed standards, and why we are proposing them.

C. What Categories of Vessels and Vehicles Are Covered in This 
Proposal?

1. Which Marine Vessels Are Covered in This Proposal?
    We are proposing evaporative emission requirements for marine 
vessels that use any kind of spark ignition (SI) engine, including 
boats using sterndrive, inboard, and outboard engines and personal 
watercraft. These vessels are currently unregulated for evaporative 
emissions. Although we are not proposing exhaust emission standards for 
SI marine, we discuss our intent for a future emission control program.
    This proposal covers new vessels that are used in the United 
States, whether they are made domestically or imported.\4\ A more 
detailed discussion of the meaning of the terms ``new,'' ``imported,'' 
as well as other terms that help define the scope of application of 
this proposal, is contained in Section III.B of this preamble.
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    \4\ For this proposal, we consider the United States to include 
the States, the District of Columbia, the Commonwealth of Puerto 
Rico, the Commonwealth of the Northern Mariana Islands, Guam, 
American Samoa, the U.S. Virgin Islands, and the Trust Territory of 
the Pacific Islands.
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2. Which Highway Vehicles Are Covered in This Proposal?
    We are proposing standards for new highway motorcycles, including 
those with engines with displacements of less than 50 cubic centimeters 
(cc). The federal emission standards for highway motorcycles were 
established over twenty years ago. Technology has advanced 
significantly over the last two decades, and many advancements are 
currently being used on highway motorcycles in California and elsewhere 
in the world. Despite these advancements, highway motorcycles currently 
produce more harmful emissions per mile than driving a car, or even a 
large SUV. (This discrepancy will become even larger when the Tier 2 
emissions standards for passenger cars and SUVs take effect starting in 
2004, when SUVs will have to meet the same set of standards as 
passenger cars.) Present technology already in use on highway 
motorcycles can be applied easily and cost-effectively to achieve 
additional improvements in emissions. California, which has separately 
regulated motorcycles, recently adopted more advanced emissions 
standards in several stages. New emission standards and test procedures 
have also been proposed or finalized internationally. Proposing more 
stringent standards nationwide will reduce emissions from these 
engines, which operate predominantly in warmer weather when ozone 
formation is a greater concern. In addition, we believe it is important 
to consider the emissions standards for highway motorcycles in the 
context of setting standards for off-highway motorcycles. Some degree 
of consistency between the standards for these related products may 
allow manufacturers to transfer technologies across product lines. (At 
the same time, we recognize that there are other factors which may 
argue for treating these categories differently.)

D. What Requirements Are We Proposing?

    Clean Air Act section 213 directs EPA to establish standards which 
achieve the greatest degree of emission reductions from nonroad engines 
and vehicles achievable through the application of technology that will 
be available, giving appropriate consideration to cost, noise, energy, 
and safety factors. Other requirements such as certification 
procedures, engine and vehicle labeling, and warranty requirements are 
necessary for implementing the proposed program in an effective way.
    For vessels that use spark-ignition marine engines, we are 
proposing emission standards, beginning in 2008, that would reduce 
evaporative hydrocarbon emissions by more than 80 percent. To meet 
these standards, manufacturers would need to design and produce fuel 
systems that prevent gasoline vapors from escaping. While we are not 
proposing exhaust emission standards for spark-ignition marine engines 
at this time, we are participating with California and industry 
representatives in a technology development program that is evaluating 
the feasibility of using catalyst controls on these engines. We 
considered setting emission standards for sterndrive and inboard marine 
engines in this rulemaking, but have decided not to pursue these 
standards at this time. We instead intend to propose exhaust emission 
standards for these engines after the results of this development 
program are available. We also intend at that time to review, and if 
appropriate, propose to update emission standards for outboard and 
personal watercraft engines based on the results of the ongoing 
catalyst test program.
    With respect to highway motorcycles, section 202(a)(3)(E) of the 
Clean Air Act states, in part: ``In any case in which such standards 
are promulgated for such emissions from motorcycles as a separate class 
or category, the Administrator, in promulgating such standards, shall 
consider the need to achieve equivalency of emission reductions between 
motorcycles and other motor vehicles to the maximum extent 
practicable.'' Given that it has been more than twenty years since the 
first (and only) federal emission regulations for motorcycles were 
implemented, we believe it is consistent with the Act to set new 
standards for highway motorcycles. Thus, for highway motorcycles we are 
proposing to harmonize with the California program, but with some 
additional flexibilities. This is a two-phase program that would result 
in reductions of HC+NOX of about 50 percent when fully 
phased in.

E. Why Is EPA Taking This Action?

    There are important public health and welfare reasons supporting 
the standards proposed in this document. As described in Section II, 
these sources contribute to air pollution which causes public health 
and welfare problems. Emissions from these engines contribute to ground 
level ozone and ambient CO and PM levels. Exposure to ground level 
ozone, CO, and PM can cause serious respiratory problems. These 
emissions also contribute to other serious

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environmental problems, including visibility impairment.

F. Putting This Proposal Into Perspective

    This proposal should be considered in the broader context of EPA's 
nonroad and highway vehicle emission-control programs; state-level 
programs, particularly in California; and international efforts. Each 
of these are described in more detail below.
1. EPA's Emission-Control Programs
    a. EPA's nonroad process. Clean Air Act section 213(a)(1) directs 
us to study emissions from nonroad engines and vehicles to determine, 
among other things, whether these emissions ``cause, or significantly 
contribute to, air pollution that may reasonably be anticipated to 
endanger public health or welfare.'' Section 213(a)(2) further required 
us to determine whether emissions of CO, VOC, and NOX from 
all nonroad engines significantly contribute to ozone or CO emissions 
in more than one nonattainment area. If we determine that emissions 
from all nonroad engines were significant contributors, section 
213(a)(3) then requires us to establish emission standards for classes 
or categories of new nonroad engines and vehicles that in our judgment 
cause or contribute to such pollution. We may also set emission 
standards under section 213(a)(4) regulating any other emissions from 
nonroad engines that we find contribute significantly to air pollution.
    We completed the Nonroad Engine and Vehicle Emission Study, 
required by Clean Air Act section 213(a)(1), in November 1991.\5\ On 
June 17, 1994, we made an affirmative determination under section 
213(a)(2) that nonroad emissions are significant contributors to ozone 
or CO in more than one nonattainment area. We also determined that 
these engines make a significant contribution to PM and smoke emissions 
that may reasonably be anticipated to endanger public health or 
welfare. In the same document, we set a first phase of emission 
standards (now referred to as Tier 1 standards) for land-based nonroad 
diesel engines rated at or above 37 kW. We recently added a more 
stringent set of Tier 2 and Tier 3 emission levels for new land-based 
nonroad diesel engines at or above 37 kW and adopted Tier 1 standards 
for land-based nonroad diesel engines less than 37 kW. Our other 
emission-control programs for nonroad engines are listed in Table I.F-
1. This proposal takes another step toward the comprehensive nonroad 
engine emission-control strategy envisioned in the Act by proposing an 
emission-control program for the remaining unregulated nonroad engines.
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    \5\ This study is avaialble in docket A-92-28.

                              Table I.F-1.--EPA's Nonroad Emission-Control Programs
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             Engine category                        Final rule                             Date
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Land-based diesel engines  37  56 FR 31306                    June 17, 1994.
 kW--Tier 1.
Spark-ignition engines 19 kW-- 60 FR 34581                    July 3, 1995.
 Phase 1.
Spark-ignition marine...................  61 FR 52088                    October 4, 1996.
Locomotives.............................  63 FR 18978                    April 16, 1998.
Land-based diesel engines--Tier 1 and     63 FR 56968                    October 23, 1998.
 Tier 2 for engines  37 kW--Tier 2 and
 Tier 3 for engines  37 kW.
Commercial marine diesel................  64 FR 73300                    December 29, 1999.
Spark-ignition engines 19 kW   64 FR 15208                    March 30, 1999.
 (Non-handheld)--Phase 2.
Spark-ignition engines 19 kW   65 FR 24268                    April 25, 2000.
 (Handheld)--Phase 2.
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    b. National standards for marine engines. In the October 1996 final 
rule for spark-ignition marine engines, we set standards only for 
outboard and personal watercraft engines. We decided not to finalize 
emission standards for sterndrive or inboard marine engines at that 
time. Uncontrolled emission levels from sterndrive and inboard marine 
engines were already significantly lower than the outboard and personal 
watercraft engines. We did, however, leave open the possibility of 
revisiting the need for emission standards for sterndrive and inboard 
engines in the future.
    c. National standards for highway motorcycles. National standards 
for highway motorcycles were first established in the 1978 model year. 
Interim standards were effective for the 1978 and 1979 model years, and 
final standards took effect with the 1980 model year. These standards 
remain in effect today, unchanged from more than two decades ago. These 
standards, which have resulted in the phase-out of two-stroke engines 
for highway motorcycles above 50cc displacement, achieved significant 
reductions in emissions. The level of technology required to meet these 
standards is widely considered to be comparable to the pre-catalyst 
technology in the automobile. However, for the past two decades, other 
agencies in Europe, Asia, and California have caused motorcycle 
emission controls to keep some pace with the available technology. It 
is clear that the impact of the current federal standards on technology 
was fully realized by the mid-1980's, and that the international and 
other efforts have been the recent driving factor in technology 
development for motorcycle emissions control.
2. State Initiatives
    Under Clean Air Act section 209, California has the authority to 
regulate emissions from new motor vehicles and new motor vehicle 
engines. California may also regulate emissions from nonroad engines, 
with the exception of new engines used in locomotives and new engines 
used in farm and construction equipment rated under 130 kW.\6\ So far, 
the California Air Resources Board (California ARB) has adopted 
requirements for four groups of nonroad engines: (1) Diesel- and Otto-
cycle small off-road engines rated under 19 kW; (2) new land-based 
nonroad diesel engines rated over 130 kW; (3) land-based nonroad 
recreational engines, including all-terrain vehicles, off-highway 
motorcycles, go-carts, and other similar vehicles; and (4) new nonroad 
SI engines rated over 19 kW. They have approved a voluntary 
registration and control program for existing portable equipment.
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    \6\ The Clean Air Act limits the role states may play in 
regulating emissions from new motor vehicles and nonroad engines. 
California is permitted to establish emission standards for new 
motor vehicles and most nonroad engines; other states may adopt 
California's programs (sections 209 and 177 of the Act). The Act 
specifies the power rating minimum in terms of horsepower for farm 
and construction equipment (175 hp = 130 kW).
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    Other states may adopt emission standards set by California ARB, 
but are otherwise preempted from setting

[[Page 53054]]

emission standards for new engines or vehicles. In contrast, there is 
generally no federal preemption of state initiatives related to the way 
individuals use individual engines or vehicles.
    a. SI Marine engines. California ARB developed exhaust emission 
standards for SI marine engines through two rulemakings. In 1998, they 
adopted standards for outboards and personal watercraft that have three 
stages. Beginning with the 2001 model year, manufacturers must meet the 
2006 EPA national averaging standard for engines sold in California. In 
addition, they require two more phases in 2004 and 2008 which reduce 
the standards an additional 20 and 60 percent, respectively, beyond the 
EPA standards.
    Last year, California ARB also adopted exhaust emission standards 
for sterndrive and inboard marine engines. These standards cap 
HC+NOX emissions at 15 g/kW-hr beginning in 2003. In 2007, 
45 percent of each manufacturer's product line must meet 5 g/kW-hr 
HC+NOX. This production fraction becomes 75 percent in 2008 
and 100 percent in 2009. Manufacturers will likely need to use 
catalytic converters to meet this standard.
    As part of the emission-control program for sterndrive and inboard 
marine engines, California ARB has committed to performing a review of 
emission-control technology in conjunction with the industry, U.S. 
Coast Guard, and EPA. They intend to hold a technology review in 2003, 
and if necessary, hold another technology review in 2005. The 
technology review will focus on applying catalytic control to marine 
engines operating in boats on the water. EPA is working with these 
groups to continue to assess technical concerns related to introducing 
catalysts on these marine engines.
    b. Highway motorcycles. Motorcycle emission standards in California 
were originally identical to the federal standards. However, California 
ARB has revised their standards several times to bring them to their 
current levels. In the 1982 model year the standards were modified to 
tighten the HC standard from 5.0 g/km to 1.0 or 1.4 g/km, depending 
upon engine displacement. California adopted an evaporative emission 
standard of 2.0 g/test for 1983 and later model year motorcycles, and 
later amended the regulations for 1988 and later model year 
motorcycles, resulting in standards of 1.0 g/km HC for engines under 
700cc and 1.4 g/km HC for 700cc and larger engines.
    In 1999 California ARB finalized new standards for Class III 
highway motorcycles that will take effect in two phases--``Tier 1'' 
standards starting with the 2004 model year, followed by ``Tier 
2''standards starting with the 2008 model year. The Tier 1 standard is 
1.4 g/km HC+NOX, and the Tier 2 standard is 0.8 g/km 
HC+NOX. The CO standard remains at 12.0 g/km.
3. Actions in Other Countries
    a. European action--Recreational Marine Engines. The European 
Commission has proposed emission standards for recreational marine 
engines, including both diesel and gasoline engines. These requirements 
would apply to all new engines sold in member countries. The numerical 
emission standards for SD/I marine engines, are shown in Table I.F-2. 
Table I.F-2 also presents average baseline emissions based on data that 
we have collected. These data are presented in Chapter 4 of the Draft 
Regulatory Support Document. We have received comment that we should 
apply these standards in the U.S., but the proposed European emission 
standards for SD/I marine engines may not result in a decrease in 
emissions, and based on emissions information we now have, would in 
some cases allow an increase in emissions from current designs of 
engines operated in the U.S.

    Table I.F-2.--Proposed European Emission Standards for Four-Stroke
                      Spark-Ignition Marine Engines
------------------------------------------------------------------------
                                            Emission         Baseline
               Pollutant                standard  (g/kW-  emissions  (g/
                                              hr)             kW-hr)
------------------------------------------------------------------------
NOX...................................             15.0              9.7
HC....................................           \a\7.2              5.8
CO....................................         \a\154             141
------------------------------------------------------------------------
\a\ For a 150 kW engine; decreases slightly with increasing engine power
  rating.

    b. Highway motorcycles. Under the auspices of the United Nations/
Economic Commission for Europe (UN/ECE) there is an ongoing effort to 
develop a global harmonized world motorcycle test cycle (WMTC). The 
objective of this work is to develop a scientifically supported test 
cycle that accurately represents the in-use driving characteristics of 
motorcycles. The United States is also a participating member of UN/
ECE. This is an ongoing process that EPA is actively participating in, 
but that will not likely result in an action until sometime in 2003 or 
2004. If an international test procedure is agreed upon by the 
participating nations, we plan to initiate a rulemaking process to 
propose adopting the global test cycle as part of the U.S. regulations.
    The European Union (EU) recently finalized a new phase of 
motorcycle standards, which will start in 2003, and are considering a 
second phase to start in 2006. The 2003 European standards are more 
stringent than the existing Federal standards, being somewhat 
comparable to the California Tier 1 standards taking effect in 2004. 
The standards being considered for 2006, along with a revised test 
cycle (as an interim cycle to bridge between the current EU cycle and a 
possible WMTC cycle in the future) are likely to be proposed soon by 
the EU. As of April 2002 the 2006 European standards and test cycle are 
being considered and debated by the European Parliament and the 
European Commission.
    Many other nations, particularly in southeast Asia where low-
displacement two-stroke motorcycles are ubiquitous, have established 
standards that could be considered quite stringent. Taiwan, in 
particular, is often noted for having some of the most stringent 
standards in the world, but India, China, Japan, and Thailand, are 
moving quickly towards controlling what is, in those nations, a 
significant contributor to air pollution problems.
4. Recently Proposed EPA Standards for Nonroad Engines
    This proposal is the second part of an effort to control emissions 
from nonroad engines that are currently unregulated and for updating 
Federal emissions standards for highway motorcycles. The first part of 
this effort was a proposal published on October 5, 2001 for emission 
control from large spark-ignition engines such as those used in 
forklifts and airport tugs; recreational

[[Page 53055]]

vehicles using spark-ignition engines such as off-highway motorcycles, 
all-terrain vehicles, and snowmobiles; and recreational marine diesel 
engines. The October 5, 2001 proposal includes general provisions in 
proposed 40 CFR part 1068 that address the applicability of nonroad 
engine standards, which could be relevant to commenters.
    With regard to Large SI engines, we proposed a two-phase program. 
The first phase of the standards, to go into effect in 2004, are the 
same as those recently adopted by the California Air Resources Board. 
In 2007, we propose to supplement these standards by setting limits 
that would require optimizing the same technologies but would be based 
on a transient test cycle. New requirements for evaporative emissions 
and engine diagnostics would also start in 2007.
    For recreational vehicles, we proposed emission standards for 
snowmobiles separately from off-highway motorcycles and all-terrain 
vehicles. For snowmobiles, we proposed a first phase of standards for 
HC and CO emissions based on the use of clean carburetion or 2-stroke 
electronic fuel injection (EFI) technology, and a second phase of 
emission standards for snowmobiles that would involve use of direct 
fuel injection 2-stroke and some 4-stroke technology. For off highway 
motorcycles and all-terrain vehicles, we proposed standards based 
mainly on moving these engines from 2-stroke to 4-stroke technology. In 
addition, we proposed a second phase of standards for all-terrain 
vehicles that could require some catalyst use.
    For marine diesel engines, we proposed to extend our commercial 
marine diesel engine standards to diesel engines used on recreational 
vessels. These standards would phase in beginning in 2006.

II. Public Health and Welfare Effects of Emissions From Covered 
Engines

A. Background

    This proposal contains regulatory strategies to control evaporative 
emissions from marine vessels that use spark ignition engines. Spark-
ignition marine vessels include vessels that use sterndrive and inboard 
engines as well as outboards and personal watercraft. Most of these 
vessels are recreational, but there are some commercial vessels that 
use spark-ignition engines as well. The standards we are proposing in 
this document for marine vessels may require changes to the fuel system 
or fuel tank. We are also proposing revised standards for highway 
motorcycles. The current HC and CO emission standards for highway 
motorcycles were set in 1978 and are based on 1970s technology. The 
proposed standards are harmonized to California's emission limits, but 
also include new requirements for under 50 cc motorcycles.
    Nationwide, marine vessels and on-highway motorcycles are an 
important source of mobile-source air pollution (see section II-C). We 
determined that marine vessels that use spark-ignition engines cause or 
contribute to ozone and carbon monoxide pollution in more than on 
nonattainment area in an action dated February 7, 1996 (61 FR 4600). 
These engines continue to contribute to these problems because they are 
primarily used in warm weather and therefore their HC, NOX, 
CO, and PM emissions contribute to ozone formation and ambient PM and 
CO levels, and because they are primarily used in marinas and 
commercial ports that are frequently located in nonattainment areas 
such as Chicago and New York. Evaporative emissions from marine vessels 
are also significant for similar reasons and because the emissions 
occur all the time rather than just when the engine is running. 
Similarly, on-highway motorcycles are typically used in warm, dry 
weather when their HC and NOX emissions are most likely to 
form ozone, thus adding to ground-level ozone levels and contributing 
to ozone nonattainment.
    We expect that implementation of the proposed standards would 
result in about a 50 percent reduction in HC emissions and 
NOX emissions from highway motorcycles in 2020. We expect 
that the proposed standards would result in about a 56 percent 
reduction in evaporative HC emissions from marine vessels using spark-
ignition engines in 2020 (see Section VI below for more details). These 
emission reductions would reduce ambient concentrations of ozone, and 
fine particles, which is a health concern and contributes to visibility 
impairment. The standards would also reduce personal exposure for 
people who operate or who work with or are otherwise in close proximity 
to these engines and vehicles. As summarized below and described more 
fully in the Draft Regulatory Support Document for this proposal, many 
types of hydrocarbons are air toxics. By reducing these emissions, the 
proposed standards would provide assistance to states facing ozone air 
quality problems, which can cause a range of adverse health effects, 
especially in terms of respiratory impairment and related illnesses. 
States are required to develop plans to address visibility impairment 
in national parks, and the reductions proposed in this rule would 
assist states in those efforts.

B. What Are the Public Health and Welfare Effects Associated With 
Emissions From Nonroad Engines and Motorcycles Subject to the Proposed 
Standards?

    Marine vessels that use spark-ignition engines and highway 
motorcycles generate emissions that contribute to ozone formation and 
ambient levels of PM, and air toxics. This section summarizes the 
general health effects of these pollutants. National inventory 
estimates are set out in Section II.C, and estimates of the expected 
impact of the proposed control programs are described in Section VI. 
Interested readers are encouraged to refer to the Draft Regulatory 
Support Document for this proposal for more in-depth discussions.
1. Health and Welfare Effects Associated with Ground Level Ozone and 
its Precursors
    Volatile organic compounds (VOC) and NOX are precursors 
in the photochemical reaction which forms tropospheric ozone. Ground-
level ozone, the main ingredient in smog, is formed by complex chemical 
reactions of VOCs and NOX in the presence of heat and 
sunlight. Hydrocarbons (HC) are a large subset of VOC, and to reduce 
mobile-source VOC levels we set maximum emissions limits for 
hydrocarbon and particulate matter emissions.
    A large body of evidence shows that ozone can cause harmful 
respiratory effects including chest pain, coughing, and shortness of 
breath, which affect people with compromised respiratory systems most 
severely. When inhaled, ozone can cause acute respiratory problems; 
aggravate asthma; cause significant temporary decreases in lung 
function of 15 to over 20 percent in some healthy adults; cause 
inflammation of lung tissue; produce changes in lung tissue and 
structure; may increase hospital admissions and emergency room visits; 
and impair the body's immune system defenses, making people more 
susceptible to respiratory illnesses. Children and outdoor workers are 
likely to be exposed to elevated ambient levels of ozone during 
exercise and, therefore, are at a greater risk of experiencing adverse 
health effects. Beyond its human health effects, ozone has been shown 
to injure plants, which has the effect of reducing crop yields and 
reducing productivity in forest ecosystems.

[[Page 53056]]

    There is strong and convincing evidence that exposure to ozone is 
associated with exacerbation of asthma-related symptoms. Increases in 
ozone concentrations in the air have been associated with increases in 
hospitalization for respiratory causes for individuals with asthma, 
worsening of symptoms, decrements in lung function, and increased 
medication use, and chronic exposure may cause permanent lung damage. 
The risk of suffering these effects is particularly high for children 
and for people with compromised respiratory systems.
    Ground level ozone today remains a pervasive pollution problem in 
the United States. In 1999, 90.8 million people (1990 census) lived in 
31 areas designated nonattainment under the 1-hour ozone NAAQS.\7\ This 
sharp decline from the 101 nonattainment areas originally identified 
under the Clean Air Act Amendments of 1990 demonstrates the 
effectiveness of the last decade's worth of emission-control programs. 
However, elevated ozone concentrations remain a serious public health 
concern throughout the nation.
---------------------------------------------------------------------------

    \7\ National Air Quality and Emissions Trends Report, 1999, EPA, 
2001, at Table A-19. This document is available at http://
www.epa.gov/oar/aqtrnd99/. The data from the Trends report are the 
most recent EPA air quality data that have been quality assured. A 
copy of this table can also be found in Docket No. A-2000-01, 
Document No. II-A-64.
---------------------------------------------------------------------------

    Over the last decade, declines in ozone levels were found mostly in 
urban areas, where emissions are heavily influenced by controls on 
mobile sources and their fuels. Twenty-three metropolitan areas have 
realized a decline in ozone levels since 1989, but at the same time 
ozone levels in 11 metropolitan areas with 7 million people have 
increased.\8\ Regionally, California and the Northeast have recorded 
significant reductions in peak ozone levels, while four other regions 
(the Mid-Atlantic, the Southeast, the Central and Pacific Northwest) 
have seen ozone levels increase.
---------------------------------------------------------------------------

    \8\ National Air Quality and Emissions Trends Report, 1998, 
March, 2000, at 28. This document is available at http://
www.epa.gov/oar/aqtrnd98/. The data from the Trends report are the 
most recent EPA air quality data that have been quality assured. A 
copy of this table can also be found in Docket No. A-2000-01, 
Document No. II-A.-63.
---------------------------------------------------------------------------

    The highest ambient concentrations are currently found in suburban 
areas, consistent with downwind transport of emissions from urban 
centers. Concentrations in rural areas have risen to the levels 
previously found only in cities. Particularly relevant to this 
proposal, ozone levels at 17 of our National Parks have increased, and 
in 1998, ozone levels in two parks, Shenandoah National Park and the 
Great Smoky Mountains National Park, were 30 to 40 percent higher than 
the ozone NAAQS over part of the last decade.\9\
---------------------------------------------------------------------------

    \9\ National Air Quality and Emissions Trends Report, 1998, 
March, 2000, at 32. This document is available at http://
www.epa.gov/oar/aqtrnd98/. The data from the trends report are the 
most recent EPA air quality data that have been quality assured. A 
copy of this table can also be found in Docket No. A-2000-01, 
Document No. II-A-63.
---------------------------------------------------------------------------

    To estimate future ozone levels, we refer to the modeling performed 
in conjunction with the final rule for our most recent heavy-duty 
highway engine and fuel standards.\10\ We performed ozone air quality 
modeling for the entire Eastern U.S. covering metropolitan areas from 
Texas to the Northeast.\11\ This ozone air quality model was based upon 
the same modeling system as was used in the Tier 2 air quality 
analysis, with the addition of updated inventory estimates for 2007 and 
2030. The results of this modeling were examined for those 37 areas in 
the East for which EPA's modeling predicted exceedances in 2007, 2020, 
and/or 2030 and the current 1-hour design values are above the standard 
or within 10 percent of the standard. This photochemical ozone modeling 
for 2020 predicts exceedances of the 1-hour ozone standard in 32 areas 
with a total of 89 million people (1999 census) after accounting for 
light- and heavy-duty on-highway control programs.\12\ We expect the 
NOX and HC control strategies contained in this proposal for 
marine vessels that use spark-ignition engines and highway motorcycles 
will further assist state efforts already underway to attain and 
maintain the 1-hour ozone standard.
---------------------------------------------------------------------------

    \10\ Additional information about this modeling can be found in 
our Regulatory Impact Analysis: Heavy-Duty Engine and Vehicle 
Standards and Highway Diesel Fuel Sulfur Contro Requirements, 
document EPA420-R-00-026, December 2000. This document is available 
at http://www.epa.gov/otaq/diesel.htm#documents and in Docket No. 1-
2000-01, Document No. II-A-13.
    \11\ We also performed ozone air quality modeling for the 
western United States but, as described further in the air quality 
technical support document, model predictions were well below 
corresponding ambient concentrations for out heavy-duty engine 
standards and fuel sulfur control rulemaking. Because of poor model 
performance for this region of the country, the results of the 
Western ozone modeling were not relied on for that rule.
    \12\ Regulatory Impact Analysis: Heavy-Duty Engine and Vehicle 
Standards and Highway Diesel Fuel Sulfur Control Requirements, US 
EPA, EPA420-R-00-026, December 2000, at II-14, Table II.A-2. Docket 
No. A-2000-01, Document Number II-A-13. This document is also 
available at http://www.epa.gpa.gov/otaq/diesel/htm#documents.
---------------------------------------------------------------------------

    In addition to the health effects described above, there exists a 
large body of scientific literature that shows that harmful effects can 
occur from sustained levels of ozone exposure much lower than 0.125 
ppm.\13\ Studies of prolonged exposures, those lasting about 7 hours, 
show health effects from prolonged and repeated exposures at moderate 
levels of exertion to ozone concentrations as low as 0.08 ppm. The 
health effects at these levels of exposure include transient pulmonary 
function responses, transient respiratory symptoms, effects on exercise 
performance, increased airway responsiveness, increased susceptibility 
to respiratory infection, increased hospital and emergency room visits, 
and transient pulmonary respiratory inflammation.
---------------------------------------------------------------------------

    \13\ Additional information about theses studies can be found in 
Chapter 2 of ``Regulatory Impact Analysis: Heavy-Duty Engine and 
Vehicle Standards and Highway Diesel Fuel Sulfur Control 
Requirements,'' December 2000, EPA420-R-00-026. Docket No. A-2000-
01, Document Number II-A-13. This document is also available at 
http://www.epa.gov/otaq/diesel.htm#documents.
---------------------------------------------------------------------------

    Prolonged and repeated ozone concentrations at these levels are 
common in areas throughout the country, and are found both in areas 
that are exceeding, and areas that are not exceeding, the 1-hour ozone 
standard. Areas with these high concentrations are more widespread than 
those in nonattainment for that 1-hour ozone standard. Monitoring data 
indicates that 334 counties in 33 states exceeded these levels in 1997-
99.\14\ The Agency's most recent photochemical ozone modeling forecast 
that 111 million people are predicted to live in areas that are at risk 
of exceeding these moderate ozone levels for prolonged periods of time 
in 2020 after accounting for expected inventory reductions due to 
controls on light- and heavy-duty on-highway vehicles.\15\
---------------------------------------------------------------------------

    \14\ A copy of this data can be found in Air Docket A-2000-01, 
Document No. II-A-80.
    \15\ Memorandum to Docket A-99-06 from Eric Ginsburg, EPA, 
``Summary of Model-Adjusted Ambient Concentrations for Certain 
Levels of Ground-Level Ozone over Prolonger Periods,'' November 22, 
2000, at Table C, Control Scenario--2020 Populations In Eastern 
Metropolitan Counties with Predicted Daily 8-Hour Ozone greater than 
or equal to 0.080 ppm. Docket A-2000-01, Document Number II-B-13.
---------------------------------------------------------------------------

2. Health and Welfare Effects Associated With Particulate Matter
    Highway motorcycles contribute to ambient particulate matter 
through direct emissions of particulate matter in the exhaust. Both 
marine vessels and highway motorcycles contribute to indirect formation 
of PM through their emissions of organic carbon, especially HC. Organic 
carbon accounts for between 27 and 36 percent of fine particle mass 
depending on the area of the country.

[[Page 53057]]

    Particulate matter represents a broad class of chemically and 
physically diverse substances. It can be principally characterized as 
discrete particles that exist in the condensed (liquid or solid) phase 
spanning several orders of magnitude in size. All particles equal to 
and less than 10 microns are called PM10. Fine particles can 
be generally defined as those particles with an aerodynamic diameter of 
2.5 microns or less (also known as PM2.5), and coarse 
fraction particles are those particles with an aerodynamic diameter 
greater than 2.5 microns, but equal to or less than a nominal 10 
microns.
    Particulate matter, like ozone, has been linked to a range of 
serious respiratory health problems. Scientific studies suggest a 
likely causal role of ambient particulate matter (which is attributable 
to several of sources including mobile sources) in contributing to a 
series of health effects. The key health effects categories associated 
with ambient particulate matter include premature mortality, 
aggravation of respiratory and cardiovascular disease (as indicated by 
increased hospital admissions and emergency room visits, school 
absences, work loss days, and restricted activity days), aggravated 
asthma, acute respiratory symptoms, including aggravated coughing and 
difficult or painful breathing, chronic bronchitis, and decreased lung 
function that can be experienced as shortness of breath. Observable 
human noncancer health effects associated with exposure to diesel PM 
include some of the same health effects reported for ambient PM such as 
respiratory symptoms (cough, labored breathing, chest tightness, 
wheezing), and chronic respiratory disease (cough, phlegm, chronic 
bronchitis and suggestive evidence for decreases in pulmonary 
function). Symptoms of immunological effects such as wheezing and 
increased allergenicity are also seen. Epidemiology studies have found 
an association between exposure to fine particles and such health 
effects as premature mortality or hospital admissions for 
cardiopulmonary disease.
    PM also causes adverse impacts to the environment. Fine PM is the 
major cause of reduced visibility in parts of the United States, 
including many of our national parks. Other environmental impacts occur 
when particles deposit onto soils, plants, water or materials. For 
example, particles containing nitrogen and sulphur that deposit on to 
land or water bodies may change the nutrient balance and acidity of 
those environments. Finally, PM causes soiling and erosion damage to 
materials, including culturally important objects such as carved 
monuments and statues. It promotes and accelerates the corrosion of 
metals, degrades paints, and deteriorates building materials such as 
concrete and limestone.
    The NAAQS for PM10 were established in 1987. The most 
recent PM10 monitoring data indicate that 14 designated 
PM10 nonattainment areas with a projected population of 23 
million violated the PM10 NAAQS in the period 1997-99. In 
addition, there are 25 unclassifiable areas that have recently recorded 
ambient concentrations of PM10 above the PM10 
NAAQS.\16\
---------------------------------------------------------------------------

    \16\ EPA adopted a policy in 1996 that allows areas with 
PM10 exceedances that are attributable to natural events 
to retain their designation as unclassifiable if the State is taking 
all reasonable measures to safeguard public health regardless of the 
sources of PM10 emissions.
---------------------------------------------------------------------------

    Current 1999 PM2.5 monitored values, which cover about a 
third of the nation's counties, indicate that at least 40 million 
people live in areas where long-term ambient fine particulate matter 
levels are at or above 16 g/m3 (37 percent of the 
population in the areas with monitors).\17\ According to our national 
modeled predictions, there were a total of 76 million people (1996 
population) living in areas with modeled annual average 
PM2.5 concentrations at or above 16 g/m3 
(29 percent of the population).\18\ This 16 g/m3 
threshold is the low end of the range of long term average 
PM2.5 concentrations in cities where statistically 
significant associations were found with serious health effects, 
including premature mortality.\19\
---------------------------------------------------------------------------

    \17\ Memorandum to Docket A-99-06 from Eric O. Ginsburg, Senior 
Program Advisor, ``Summary of 1999 Ambient Concentrations of Fine 
Particulate Matter,'' November 15, 2000. Air Docket A-2000-01, 
Docket No. II-B-12. For information regarding estimates for future 
PM2.5 levels, See information about the Regulatory Model 
System for Aerosols and Deposition (REMSAD) and our modeling 
protocols, which can be found in the Regulatory Impact Analysis: 
Heavy-Duty Engine and Vehicle Standards and Highway Diesel Fuel 
Sulfur Controls Requirements, document EPA 420-R-00-026, December 
2000. Docket No. A-2000-01, Document No. A-II-13. This document is 
also available at http://www.epa.gov/otaq/diesel.htm#documents. Also 
see Technical Memorandum, EPA Air Docket A-99-06, Eric O. Ginsburg, 
Senior Program Advisor, Emissions Monitoring and Analysis Division, 
OAQPs, Summary of Absolute Modeled and Model-Adjusted Estimates of 
Fine Particulate Matter for Selected Years, December 6, 2000, Table 
P-2. Docket Number 2000-01, Document Number II-B-14.
    \18\ Memorandum to Docket A-99-06 from Eric O. Ginsburg, Senior 
Program Advisor, ``Summary of Absolute Modeled and Model-Adjusted 
Estimates of Fine Particulate Matter for Selected Years,'' December 
6, 2000. Air Docket A-2000-01, Docket No. II-B-14.
    \19\ EPA (1996) Review of the National Ambient Air Quality 
Standards for Particulate Matter: Policy Assessment of Scientific 
and Technical Information OAQPS Staff Paper. EPA-452/R-96-013. 
Docket Number A-99-06, Documents Nos. II-A-18, 19, 20, and 23. The 
particulate matter air quality criteria documents are also available 
at http://www.epa.gov/ncea/partmatt.htm.
---------------------------------------------------------------------------

    We expect the PM reductions that result from control strategies 
contained in this proposal will further assist state efforts already 
underway to attain and maintain the PM NAAQS.
3. Health Effects Associated with Air Toxics
    In addition to the human health and welfare impacts described 
above, emissions from the engines covered by this proposal also contain 
several Mobile Source Air Toxics, including benzene, 1,3-butadiene, 
formaldehyde, acetaldehyde, and acrolein.\20\ The health effects of 
these air toxics are described in more detail in Chapter 1 of the Draft 
Regulatory Support Document for this rule. Additional information can 
also be found in the Technical Support Document for our final Mobile 
Source Air Toxics rule.\21\ The hydrocarbon controls contained in this 
proposal are expected to reduce exposure to air toxics and therefore 
may help reduce the impact of these engines on cancer and noncancer 
health effects.
---------------------------------------------------------------------------

    \20\ EPA recently finalized a list of 21 Mobile Source Air 
Toxics, including VOCS, metals, and diesel particulate matter and 
diesel exhaust organic gases (collectively DPM+DEOG). 66 FR 17230, 
March 29, 2001.
    \21\ See our Mobile Source Air Toxics final rulemaking, 66 FR 
17230, March 29, 2001, and the Technical Support Document for that 
rulemaking. Docket No. A-2000-01, Documents Nos. II-A-42 and II-A-
30.
---------------------------------------------------------------------------

C. What Is the Inventory Contribution of These Sources?

    The spark-ignition marine vessels and highway motorcycles that 
would be subject to the proposed standards contribute to the national 
inventories of pollutants that are associated with the health and 
public welfare effects described in Section II.B. To estimate nonroad 
engine and vehicle emission contributions, we used the latest version 
of our NONROAD emissions model. This model computes nationwide, state, 
and county emission levels for a wide variety of nonroad engines, and 
uses information on emission rates, operating data, and population to 
determine annual emission levels of various pollutants. Emission 
estimates for highway motorcycles were developed using information on 
the certification levels of current motorcycles and updated information 
on motorcycle use provided by the motorcycle industry. A more detailed 
description of the modeling and our estimation methodology can be found 
in the

[[Page 53058]]

Chapter 6 of the Draft Regulatory Support Document.
    Baseline emission inventory estimates for the year 2000 for the 
marine vessels and highway motorcycles covered by this proposal are 
summarized in Table II.C-1. This table shows the relative contributions 
of the different mobile-source categories to the overall national 
mobile-source inventory. Of the total emissions from mobile sources, 
evaporative emissions from spark-ignition marine vessels contribute 
about 1.3 percent of HC. Highway motorcycles contribute about 1.1 
percent, 0.1 percent, 0.4 percent, and 0.1 percent of HC, 
NOX, CO, and PM emissions, respectively, in the year 2000.
    Our draft emission projections for 2020 for the spark-ignition 
marine vessels and highway motorcycles that would be subject to the 
proposed standards show that emissions from these categories are 
expected to increase over time if left uncontrolled. The projections 
for 2020 are summarized in Table II.C-2 and indicate that the 
evaporative emissions from marine vessel are expected to contribute 1.8 
percent of mobile source HC, and motorcycles are expected to contribute 
2.3 percent, 0.2 percent, 0.6 percent, and 0.1 percent of mobile source 
HC, NOX, CO, and PM emissions in the year 2020. Population 
growth and the effects of other regulatory control programs are 
factored into these projections.

                                   Table II.C-1.--Modeled Annual Emission Levels for Mobile-Source Categories in 2000
                                                                  [Thousand short tons]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                        NOX                         HC                         CO                         PM
                                            ------------------------------------------------------------------------------------------------------------
                  Category                                 Percent of                 Percent of                 Percent of                  Percent of
                                                 Tons        mobile         Tons        mobile         Tons        mobile         Tons         mobile
                                                             source                     source                     source                      source
--------------------------------------------------------------------------------------------------------------------------------------------------------
Highway Motorcycles........................            8           0.1           35           0.5          331           0.4           0.4           0.1
Marine SI Evaporative......................            0           0.0          108           1.3            0           0.0           0             0.0
                                            ============================================================================================================
Marine SI Exhaust..........................           32           0.2          708           9.6        2,144           2.8          38             5.4
Nonroad Industrial SI > 19 kW..............          306           2.3          247           3.2        2,294           3.0           1.6           0.2
Recreational SI............................           13           0.1          737           9.6        2,572           3.3           5.7           0.8
Recreation Marine CI.......................           24           0.2            1           0.0            4           0.0           1             0.1
Nonroad SI  19 kW..........................          106           0.8        1,460          19.1       18,359          23.6          50             7.2
Nonroad CI.................................        2,625          19.5          316           4.1        1,217           1.6         253            36.2
Commercial Marine CI.......................          977           7.3           30           0.4          129           0.2          41             5.9
Locomotive.................................        1,192           8.9           47           0.6          119           0.2          30             4.3
                                            ============================================================================================================
Total Nonroad..............................        5,275          39          3,646          48         26,838          35           420            60
Total Highway..............................        7,981          59          3,811          50         49,813          64           240            34
Aircraft...................................          178           1            183           2          1,017           1            39             6
                                            ------------------------------------------------------------------------------------------------------------
Total Mobile Sources.......................       13,434         100          7,640         100         77,668         100           699           100
                                            ============================================================================================================
Total Man-Made Sources.....................       24,538  ............       18,586  ............       99,747  ............       3,095    ............
Mobile Source percent of Total Man-Made              55%  ............          41%  ............          78%  ............         23%    ............
 Sources...................................
--------------------------------------------------------------------------------------------------------------------------------------------------------


                                   Table II.C-2.--Modeled Annual Emission Levels for Mobile-Source Categories in 2020
                                                                  [Thousand short tons]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                        NOX                         HC                         CO                         PM
                                            ------------------------------------------------------------------------------------------------------------
                  Category                                 Percent of                 Percent of                 Percent of                  Percent of
                                                 Tons        mobile         Tons        mobile         Tons        mobile         Tons         mobile
                                                             source                     source                     source                      source
--------------------------------------------------------------------------------------------------------------------------------------------------------
Highway Motorcycles........................           14           0.2           58           0.9          572           0.6           0.8           0.1
Marine SI Evaporative......................            0           0.0          114           1.8            0           0.0           0             0.0
                                            ============================================================================================================
Marine SI Exhaust..........................           58           0.9          284           4.6        1,985           2.2          28             4.4
Nonroad Industrial SI > 19 kW..............          486           7.8          348           5.6        2,991           3.3           2.4           0.4
Recreational SI............................           27           0.4        1,706          27.7        5,407           3.3           7.5           1.2

[[Page 53059]]

 
Recreation Marine CI.......................           39           0.6            1           0.0            6           0.0           1.5           0.2
Nonroad SI  19 kW..........................          106           1.7          986          16.0       27,352          30.5          77            12.2
Nonroad CI.................................        1,791          28.8          142           2.3        1,462           1.6         261            41.3
Commercial Marine CI.......................          819          13.2           35           0.6          160           0.2          46             7.3
Locomotive.................................          611           9.8           35           0.6          119           0.1          21             3.3
                                            ============================================================================================================
Total Nonroad..............................        3,937          63          3,651          59         39,482          44           444            70
Total Highway..............................        2,050          33          2,276          37         48,906          54           145            23
Aircraft...................................          232           4            238           4          1,387           2            43             7
                                            ------------------------------------------------------------------------------------------------------------
Total Mobile Sources.......................        6,219         100          6,165         100         89,775         100           632           100
                                            ============================================================================================================
Total Man-Made Sources.....................       16,195  ............       16,234  ............      113,443  ............       3,016
Mobile Source percent of Total Man-Made              38%  ............          38%  ............          79%  ............         21%    ............
 Sources...................................
--------------------------------------------------------------------------------------------------------------------------------------------------------

III. Evaporative Emission Control From Boats

A. Overview

    Evaporative emissions refer to hydrocarbons released into the 
atmosphere when gasoline, or other volatile fuels, evaporate from a 
fuel system. These emissions come from four primary mechanisms: hot 
soak, diurnal heating, vapor displacement during refueling, and 
permeation from tanks and hoses. Hot soak emissions occur when fuel 
evaporates from hot engine surfaces such as parts of the carburetor as 
a result of engine operation. These are minimal on fuel-injected 
engines. Control of hot soak emissions involves the engine manufacturer 
rather than the tank manufacturer.
    Currently, most fuel tanks in boats are vented to atmosphere 
through vent hoses. Diurnal emissions, which represent about 20 percent 
of the evaporative emissions from boats, occur as the fuel in the tank 
and fuel lines heats up due to increases in ambient temperature. As the 
fuel heats, it forms hydrocarbon vapor which is vented to the 
atmosphere. Refueling emissions are vapors that are displaced from the 
fuel tank to the atmosphere when fuel is dispensed into the tank and 
only represent a small portion of the total evaporative emissions. 
Permeation refers to when fuel penetrates the material used in the fuel 
system and is most common through plastic fuel tanks and rubber hoses. 
This permeation makes up the majority of the evaporative emissions from 
fuel tanks and hoses. Table III.A-1 presents our national estimates of 
the evaporative hydrocarbon emissions from boats using spark-ignition 
engines for 2000.

Table III.A-1.--Estimated Evaporative Emissions From Tanks/Hoses in 2000
------------------------------------------------------------------------
                Evaporative emission component                 HC [tons]
------------------------------------------------------------------------
Diurnal breathing losses.....................................     22,700
Permeation through the fuel tank.............................     26,600
Permeation through hoses.....................................     43,200
Refueling vapor displacement.................................      6,700
Hot Soak.....................................................        260
                                                              ----------
    Total evaporative emissions..............................    100,000
------------------------------------------------------------------------

    This section describes the new provisions proposed for 40 CFR part 
1045, which would apply only to boat manufacturers and fuel system 
component manufacturers. This section also discusses proposed test 
equipment and procedures (for anyone who tests fuel tanks and hoses to 
show they meet emission standards) and proposed general compliance 
provisions (for boat manufacturers, fuel system component 
manufacturers, operators, repairers, and others).
    We are proposing performance standards intended to reduce 
permeation and diurnal evaporative emissions from boats using spark-
ignition engines. The proposed standards, which would apply to new 
boats starting in 2008, are nominally based on manufacturers reducing 
these sources of evaporative emissions by about 80 percent overall. 
Because of the many small businesses that manufacture boats and fuel 
tanks, we are proposing a flexible compliance program that is intended 
to help minimize the burden of meeting the proposed requirements.
    Based on a database maintained by the U.S. Coast Guard, we estimate 
that there are nearly 1,700 boat builders producing boats that use 
engines for propulsion. At least 1,200 of these boat builders install 
gasoline-fueled engines and would therefore be subject to the 
evaporative emission-control program discussed below. Our understanding 
is that more than 90 percent of the boat builders identified so far 
would be considered small businesses as defined by the Small Business 
Administration for SIC code 3732. Some of these boat builders construct 
their own fuel tanks either out of aluminum or fiberglass reinforced 
plastic. However, the majority of fuel tanks used by boat builders are 
purchased from fuel tank manufacturers.
    We have determined that fuel tank manufacturers sell approximately 
550,000 fuel tanks per year for gasoline storage on boats. The market 
is divided into manufacturers that produce plastic tanks and 
manufacturers that produce aluminum tanks. We have identified

[[Page 53060]]

nine companies that make plastic marine fuel tanks with total sales of 
approximately 440,000 units per year. Of these plastic tanks, about 20 
percent are portable while the rest are installed. We have determined 
that there are at least five companies that make aluminum marine fuel 
tanks with total sales of approximately 110,000 units per year. All but 
one of the fuel tank manufacturers that we have identified are small 
businesses as defined by the Small Business Administration for SIC Code 
3713.
    Our understanding is that there are four primary manufacturers of 
marine hose used in fuel supply lines and venting. At least two of 
these four manufacturers produce hoses for other transportation sources 
as well and already supply low permeation hoses that would meet our 
proposed standards. Only one U.S. manufacturer of fill neck hose has 
been identified. The rest is shipped from overseas.

B. Boats/Fuel Systems Covered by This Proposal

    Generally speaking, this proposed rule would cover the fuel systems 
of all new marine vessels with spark-ignition (SI) engines. We include 
boats and fuel systems that are used in the United States, whether they 
are made domestically or imported.
    In the ANPRM, we discussed exhaust and evaporative emissions from 
boats using only sterndrive or inboard engines. As discussed later in 
Section IV, we are not proposing exhaust emission standards for these 
engines at this time. We are, however, proposing to expand the scope of 
the evaporative emission standards discussed in the ANPRM, because we 
see no significant technological differences between fuel tanks and 
hoses used for sterndrive or inboard engines and those used for other 
SI marine engines. In fact, fuel tank and hose manufacturers often sell 
their products without knowing what type of marine engine will be used 
with it.
1. Why Does This Apply Only to Marine Vessels Using Spark-Ignition 
Engines?
    Spark-ignition marine engines generally use gasoline fuel while 
compression-ignition marine engines generally use diesel fuel. We are 
proposing evaporative emission standards only for boats using spark-
ignition engines because diesel fuel has low volatility and, therefore, 
does not evaporate readily. In fact, the evaporative emissions from 
boats using diesel fuel are already significantly lower than standards 
we are proposing for boats using spark-ignition marine engines.
2. Would the Proposed Standards Apply to All Vessels Using SI Engines 
or Only to New Vessels?
    The scope of this proposal is broadly set by Clean Air Act section 
213(a)(3), which instructs us to set emission standards for new nonroad 
engines and new nonroad vehicles. Generally speaking, the proposed rule 
is intended to cover all new vessels. Once the emission standards apply 
to these vessels, individuals or companies must get a certificate of 
conformity from us before selling them in the United States. This 
includes importation and any other means of introducing engines and 
vehicles into commerce. The certificate of conformity (and 
corresponding label) provide assurance that manufacturers have met 
their obligation to make engines that meet emission standards over the 
useful life we specify in the regulations.
3. How Do I Know if My Vessel Is New?
    We are proposing to define ``new'' consistent with previous rules. 
Under the proposed definition, a vessel is considered new until its 
title has been transferred to the ultimate purchaser or the vessel has 
been placed into service. Imported vessels would also be considered to 
be new.
4. When Would Imported Vessels Need to Meet the Proposed Emission 
Standards?
    The proposed emissions standards would apply to all new vessels in 
the United States. According to Clean Air Act section 216, ``new'' 
includes vessels that are imported by any person, whether freshly 
manufactured or used. All vessels imported for introduction into 
commerce would need an EPA-issued certificate of conformity to clear 
customs, with limited exemptions (as described below).
    Any marine vessel built after these emission standards take effect 
and subsequently imported into the U.S. would be a new vessel for the 
purpose of the regulations proposed in this document. This means it 
would need to comply with the applicable emission standards. For 
example, a marine vessel manufactured in a foreign country in 2004, 
then imported into the United States in 2008, would be considered 
``new.'' This provision is important to prevent manufacturers from 
avoiding emission standards by building vessels abroad, transferring 
their title, and then importing them as used vessels.
5. Would the Proposed Standards Apply to Exported Vessels?
    Vessels intended for export would generally not be subject to the 
requirements of the proposed emission-control program. However, vessels 
that are exported and subsequently re-imported into the United States 
would need to be certified.
6. Are There Any New Vessels That Would Not Be Covered?
    We are proposing to extend our basic nonroad exemptions to the 
engines and vehicles covered by this proposal. These include the 
testing exemption, the manufacturer-owned exemption, the display 
exemption, and the national security exemption. These exemptions are 
described in more detail under Section III.E.3. In addition, the Clean 
Air Act does not consider vessels used solely for competition to be 
nonroad vehicles, so they are exempt from meeting the proposed emission 
standards.

C. Proposed Evaporative Emission Requirements

    Our general goal in designing the proposed standards is to develop 
a program that will achieve significant emission reductions. The 
standards are designed to ``achieve the greatest degree of emission 
reduction achievable through the application of technology the 
Administrator determines will be available for the engines or vehicles 
to which such standards apply, giving appropriate consideration to the 
cost of applying such technology within the period of time available to 
manufacturers and to noise, energy, and safety factors associated with 
the application of such technology.'' Section 213(a)(3) of the Clean 
Air Act also instructs us to first consider standards equivalent in 
stringency to standards for comparable motor vehicles or engines (if 
any) regulated under section 202, taking into consideration 
technological feasibility, costs, and other factors.
1. What are the Proposed Evaporative Emission Standards?
    We are proposing to require reductions in diurnal emissions, fuel 
tank permeation, and fuel system hose permeation from new vessels 
beginning in 2008. The proposed standards are presented in Table III.C-
1 and represent more than a 25 percent reduction in diurnal emissions 
and a 95 percent reduction in permeation from both plastic fuel tanks 
and from hoses. Section III.F.1 presents the test procedures associated 
with these proposed standards. Test temperatures

[[Page 53061]]

are presented in Table III.C-1 because they represent an important 
parameter in defining the emission levels. The proposed fuel tank 
venting and permeation standards are based on the total capacity of the 
fuel tank as described below. The proposed hose permeation standards 
are based on the inside surface area of the hose. We are not proposing 
standards for hot soak and refueling emissions, as described above, at 
this time.

                                 Table III. C-1.--Proposed Evaporative Standards
----------------------------------------------------------------------------------------------------------------
                                           Proposed emission
    Evaporative emission component             standard                          Test temperature
----------------------------------------------------------------------------------------------------------------
Diurnal Venting......................  1.1 g/gallon/day........  22.2-35.6 deg.C (72-96 deg.F)
Fuel tank permeation.................  0.08 g/gallon/day.......  40 deg.C (104 deg.F)
Hose permeation......................  5 g/m\2\/day............  23 deg.C (73 deg.F)
                                       (15 g/m\2\/day with 15%
                                        methanol blend).
----------------------------------------------------------------------------------------------------------------

    The proposed emission standards are based on our evaluation of 
several fuel system technologies (described in Section III.H) which 
vary in cost and in efficiency. The proposed implementation date gives 
manufacturers about five years to comply after we expect to issue final 
standards . As discussed in more detail in Section III.H.1, this would 
help minimize costs by allowing fuel tank manufacturers time to 
implement controls in their tanks as designs normally turnover as 
opposed to forcing turnover premature to normal business practice. 
There are a multiplicity of tank sizes and shapes produced every year 
and the cost and efficiency of the available emission-control 
technologies will vary with these different configurations. In 
determining the proposed standards, we considered costs and focused on 
straightforward approaches that could potentially be used by all 
businesses. As discussed in Section H.3, we believe that the approaches 
in this proposal would comply with U.S. Coast Guard safety requirements 
for fuel systems. Given all this, in the 2008 time frame, we believe an 
average reduction of at least 80 percent in total evaporative emissions 
from new boats can be achieved, considering the availability and cost 
of technology, lead time, noise, energy and safety. We request comment 
on the proposed standards and implementation dates, on the units used 
for the fuel tank permeation standards (i.e. g/gallon/day versus g/
m\2\/day), and on the certification provisions discussed below. We are 
also interested in comments regarding the cost of implementing the 
proposed standards. Commenters are encouraged to provide specific data 
when possible.
2. Will Averaging, Banking and Trading Be Allowed Across a 
Manufacturer's Product Line?
    An emission-credit program is an important factor we take into 
consideration in setting emission standards that are appropriate under 
Clean Air Act section 213. An emission-credit program can reduce the 
cost and improve the technological feasibility of achieving standards, 
helping to ensure the attainment of the standards earlier than would 
otherwise be possible. Manufacturers gain flexibility in product 
planning and the opportunity for a more cost-effective introduction of 
product lines meeting a new standard. Emission-credit programs also 
create an incentive for the early introduction of new technology, which 
would allow certain vessels to be used to evaluate new technology. This 
can provide valuable information to manufacturers on the technology 
before they apply it throughout their product line. This early 
introduction of lower-emitting technology improves the feasibility of 
achieving the standards and can provide valuable information for use in 
other regulatory programs that may benefit from similar technologies.
    Emission-credit programs may involve averaging, banking, and 
trading (ABT). Averaging allows a manufacturer to certify one or more 
products at an emission level less stringent than the applicable 
emission standard, as long as the increased emissions are offset by 
products certified to a level more stringent than the applicable 
standard. The over-complying products generate credits that can be used 
by the under-complying products. Compliance is determined on a total 
mass emissions basis to account for differences in production volume 
and tank sizes among emission families. The average of all emissions 
for a particular manufacturer's production must be at or below that 
level of the applicable emission standard. Early banking allows a 
manufacturer to certify early and generate credits for modifying their 
fuel system to the 2008 compliance strategy. In 2008 and later, the 
banking program would allow a manufacturer to generate credits and 
retain them for future use. Trading involves the sale of banked credits 
from one company to another.
    We believe there is a variety of technology options that could be 
used to meet the proposed standards for diurnal emissions. By using 
different combinations of these technologies, manufacturers will be 
able to produce products that achieve a range of emission reductions. 
However, certain technologies may be more appropriate for different 
applications. In some cases, manufacturers may need flexibility in 
applying the emission-control technology to their products. For this 
reason, we are proposing that the 1.1 g/gallon/day diurnal emission 
standard be based a corporate average of a manufacturer's total 
production. To meet this average level, manufacturers would be able to 
divide their fuel tanks into different emission families and certify 
each of their emission families to a different Family Emissions Level 
(FEL). The FELs would then be weighted by sales volume and fuel tank 
capacity to determine the average level across a manufacturer's total 
production. An additional benefit of a corporate average approach is 
that it provides an incentive for developing new technology that can be 
used to achieve even larger emission reductions.
    Participation in the ABT program would be voluntary. Any 
manufacturer could choose to certify each of its evaporative emission 
control families at levels which would meet the 1.1 g/gallon/day 
proposed standard and would then comply with the average by default. 
Some manufacturers may choose this approach as the could see it as less 
complicated to implement.
    The following is an example of how the proposed averaging program 
for diurnal emissions could give a boat manufacturer flexibility in its 
production. Suppose a boat builder was selling 10 boats, three with 
100-gallon fuel tanks and seven with 50-gallon fuel tanks. In this 
case, the boat builder constructs its own fuel tanks believes that an 
open-vent configuration without any emission control is necessary for 
the vessel application using the 100 gallon tanks. However, the 
manufacturer is able to use closed-vent fuel tanks with a 2.0 psi 
pressure relief valve in the

[[Page 53062]]

smaller fuel tanks. Using the design certification levels described in 
Section III..F.3, the 100 gallon fuel tanks would have an FEL of 1.5 g/
gallon/day and the 50 gallon fuel tanks would have an FEL of 0.7 g/
gallon/day. The manufacturer would generate debits for the three boats 
with 100 gallon fuel tanks using the following equation:

Debits = (1.5 g/gallon-1.1 g/gallon)  x  3 tanks  x  100 gallon/tank = 
120 g

The manufacturer would need to use credits to cover these debits. The 
boats certified using a closed vent with a 2.0 psi pressure relief 
valve in this example would generate the following credits:

Credits = (1.1 g/gallon-0.7 g/gallon)  x  7 tanks  x  50 gallon/tank = 
140 g

    Because the credits are larger than the debits in this example, the 
boat builder would meet the proposed corporate average standard by 
certifying these ten boats.
    We also propose to allow manufacturers to bank and trade emission 
credits. We are proposing that emission credits generated under this 
program have no expiration, with no discounting applied. The credits 
would belong to the entity that certifies the fuel tank. In the above 
example, the manufacturer would have 20 grams of credits (140 g-120 g = 
20 g) that it could bank, either for trading or for later model year 
averaging.
    Beginning in 2004, we propose to allow early banking for diurnal 
evaporative emissions. Under this program, manufacturers generate early 
credits in 2004 through 2007 for adding new evaporative emission 
control technology which would reduce diurnal emissions. These credits 
could be banked and then used in 2008 and later. As a precaution 
against creating an opportunity for windfall credits to be generated 
from fuel systems already below the average baseline level we would 
only allow credits to be generated below the proposed standard.
    The following is an example of how early emission credits could be 
generated. In this example, a boat builder sells 20 boats in the 2004 
to 2007 time period, each with a 50 gallon fuel tank. If this boat 
builder decided to sell one boat per year with a sealed tank and a 1.5 
psi pressure relief valve (0.9 g/gallon/test), the boat builder would 
be able to generate emission credits using the following equation:

Credits = (1.1 g/gallon-0.9 g/gallon/test)  x  4 tanks  x  50 gallon/
tank = 40 g

Over this time period, the boat builder would not generate any emission 
debits. Therefore, the boat builder would have 40 grams of credits that 
it could use in 2008 and later. We request comment on the proposed ABT 
program for diurnal emissions.

    We are supportive of the concept of ABT in general. An ABT program 
can reduce cost and improve technological feasibility, and provide 
manufacturers with additional product planning flexibility. This allows 
EPA to consider emissions standards with the most appropriate level of 
stringency and lead time, as well as providing an incentive for the 
early introduction of new technology. However, while we are open to the 
idea of including the program in the rule, we are not at this time 
proposing to allow ABT for meeting the proposed fuel tank and hose 
permeation standards. In preliminary discussions, manufacturers 
indicated a desire to meet requirements directly rather than using an 
ABT concept. From EPA's perspective including an ABT program in the 
rule creates a long-term administrative burden that is not worth taking 
on if the industry does not intend to take advantage of the 
flexibility. While we believe that all fuel tanks and fuel hoses can 
meet the proposed permeation standards using straight forward 
technology as discussed in Section III.H, industry may find value in an 
early banking program, especially for fuel tanks. Under this concept, 
industry could certify some tanks early in exchange for time to delay 
some tanks. This could potentially be done on a one-on-one basis, or 
perhaps on a volumetric exchange basis. In addition, we do not preclude 
the value of an averaging and trading program as a compliance 
flexibility to meet the proposed permeation standards which represent a 
95 percent reduction in permeation. We request comment on whether we 
should adopt an ABT program for hose and fuel tank permeation 
emissions.
3. Would These Standards Apply to Portable Fuel Tanks as Well?
    For personal watercraft and most boats using SD/I or large outboard 
engines, the fuel tanks are permanently mounted in the vessel. However, 
small boats using outboard engines may have portable fuel tanks that 
can be removed from the boat and stored elsewhere. Because these fuel 
tanks are not sold as part of a boat, we would not require boat 
builders that use only portable fuel tanks to certify to the proposed 
evaporative emission standards described above for fuel tanks. The fuel 
tank manufacturer would have to certify to the fuel tank diurnal and 
permeation standards. For this purpose, we would consider a portable 
fuel tank to be one that is not permanently mounted on the boat, has a 
handle, and has no more than 12 gallons of fuel capacity.
    Portable fuel tanks generally have a quick-connect that is used to 
detach the fuel line between the engine and tank. Once the fuel line is 
detached, this quick-connect will close. In addition, these tanks 
generally have a valve that either closes automatically when the tank 
is disconnected from the engine or a valve that can be closed by the 
user which will prevent vapors from escaping from the tank when it is 
stored.
    We propose to allow design-based certification of portable fuel 
tanks to the diurnal emission standard based on the criteria that they 
seal automatically when the tank is disconnected from the engine and 
that they meet the proposed fuel tank permeation standard. We believe 
that the diurnal emissions from a typical portable fuel tank would be 
well below the proposed standard provided that it is sealed when not in 
use. Because the emission control depends on user practices, (such as 
disconnecting the tank after use) we propose not allowing any credits 
to be generated for diurnal emissions. We request comment on allowing 
design-based certification of portable fuel tanks that have valves that 
must be closed by the user.
4. Is EPA Proposing Voluntary ``Blue Sky'' Emissions Standards?
    Several state and environmental groups and manufacturers of 
emissions controls have supported our efforts to develop incentive 
programs to encourage the use of emission control technologies that go 
beyond federal emission standards. In the final rule for land-based 
nonroad diesel engines, we included a program of voluntary standards 
for low-emitting engines, referring to these as ``Blue Sky Series'' 
engines (63 FR 56967, October 23, 1998). Since then, we have included 
similar programs in several of our other nonroad rules. The general 
purposes of such programs are to provide incentives to manufacturers to 
produce clean products as well as create market choices and 
opportunities for environmental information for consumers regarding 
such products. The voluntary aspects of these programs, which in part 
provides an incentive for manufacturers willing to certify their 
products to more stringent standards than necessary, is an important 
part of the overall application of ``Blue Sky Series'' programs.
    We are proposing a voluntary Blue Sky Series standard for diurnal 
emissions from marine fuel tanks. Under this proposal we are targeting

[[Page 53063]]

close to a 95-percent reduction in diurnal evaporative emissions beyond 
the proposed mandatory diurnal emission standards as a qualifying level 
for Blue Sky fuel tanks. The proposed Blue Sky standard is 0.1 g/
gallon/day, which, as discussed in Section III.F.3, could be met 
through the use of technologies such as a low permeation bladder fuel 
tank.
    Creating a voluntary standard for low diurnal emissions will be an 
important step in advancing emission control technology. While these 
are voluntary standards, they become binding on tanks produced under 
that certificate once a manufacturer chooses to participate. EPA 
certification will therefore provide protection against false claims of 
environmentally beneficial products. A manufacturer choosing to certify 
a fuel tank under this approach must comply with all the proposed 
certification requirements including useful life, warranty, and other 
general compliance provisions. This program would become effective when 
we finalize this rule.
    For the program to be most effective, however, incentives should 
also be in place to motivate the production and sale of lower emitting 
fuel tanks. We solicit ideas that could encourage the creation and use 
of these incentive programs by users and state and local governments. 
We believe it is important that such incentive programs lead to a net 
benefit to the environment; therefore, we are proposing that fuel tanks 
with the Blue Sky designation not generate extra ABT credits for 
demonstrating compliance with this proposed standard. We also request 
comment on additional measures we could take to encourage development 
and introduction of low emission control technology. Finally, we 
request comment on the Blue Sky approach in general as it would apply 
to marine fuel tanks.
5. What Is Consumer-Choice Labeling?
    California ARB has recently proposed consumer/environmental label 
requirements for outboard and personal watercraft engines. Under this 
approach, manufacturers would label their engines or vehicles based on 
their certified emission level. California has proposed three different 
labels to differentiate varying degrees of emission control--one for 
meeting the EPA 2006 standard, one for being 20 percent lower, and one 
for being 65 percent below. More detail on this concept is provided in 
the docket.\22\
---------------------------------------------------------------------------

    \22\ ``Public Hearing to Consider Amendments to the Spark-
Ignition Marine Engine Regulations,'' Mail Out #MSC 99-15, June 22, 
1999 (Docket A-2000-01, Document II-A-27).
---------------------------------------------------------------------------

    We are considering a similar approach to labeling the vessels 
subject to this proposal. This would apply especially to consumer 
products. Consumer-choice labeling would give people the opportunity to 
consider varying emission levels as a factor in choosing specific 
models. This may also give the manufacturer an incentive to produce 
more of their cleaner models. A difficulty in designing a labeling 
program is in creating a scheme that communicates information clearly 
and simply to consumers. Also, some are concerned that other 
organizations could use the labeling provisions to mandate certain 
levels of emission control, rather than relying on consumer choice as a 
market-based incentive. We request comment on this approach for marine 
vessels.

D. Demonstrating Compliance

1. How Would I Certify My Products?
    We are proposing to apply our emission standards to vessels, but 
allow certification of fuel tanks and hoses separately. For both cases, 
we are proposing a certification process similar to our existing 
program for other mobile sources. In the existing program, 
manufacturers test representative prototype designs and submit the 
emission data along with other information to EPA in an application for 
a Certificate of Conformity. As discussed in Section III.F.3, we are 
proposing to allow manufacturers to certify based on either design (for 
which there is data) or emissions testing. If we approve the 
application, then the manufacturer's Certificate of Conformity allows 
the manufacturer to produce and sell the vessels or fuel systems 
described in the application in the U.S.
    We are proposing that manufacturers certify their vessels, fuel 
tanks, or hoses by grouping them into emission families. Under this 
approach, vessels, fuel tanks, or hoses systems expected to have 
similar emission characteristics would be classified in the same 
emission family. The emission family definition is fundamental to the 
certification process and to a large degree determines the amount of 
testing required for certification. To address a manufacturer's unique 
product mix, we may approve using broader or narrower emission 
families.
    Once an emission family is certified, we would require every 
vessel, fuel tank, or hose a manufacturer produces from the emission 
family to have a label with basic identifying information. The proposed 
regulation text details the proposed requirements for design and 
content of the labels. We request comment on this approach.
2. Who Will be Responsible for Certifying the Vessel or Fuel System?
    Every boat powered by a spark-ignition marine engine and every 
portable fuel tank would have to be covered by an emissions certificate 
(or separate certificates for fuel tanks and hoses). The proposed 
regulations require that compliance to the emission standards must be 
demonstrated before the sale of the boat (or tank, in the case of 
portable fuel tanks). However, to allow additional flexibility in 
complying with standards, we propose to allow tank and hose 
manufacturers to certify their product lines separately. Therefore, if 
a boat builder were to use certified fuel tanks and hoses, the boat 
builder could rely on the tank and hose manufacturers' certificates. 
The boat builder would only need to state that they are using 
components that, combined, will meet the proposed standard and properly 
install the fuel system. We request comment on this approach.
3. How Long Would My Vessel or Fuel System Have To Comply?
    Manufacturers would be required to build vessels that meet the 
emission standards over each vessel's useful life. The useful life we 
adopt by regulation is intended to reflect the period during which 
vessels are designed to properly function without being remanufactured. 
We propose a regulatory useful life of ten years for marine evaporative 
emission control. This is consistent with the regulatory useful life 
for outboard marine engines. We use the same useful life based on the 
belief that engines and boats are intended to have the same design 
life. We request comment on the proposed useful life requirement.
4. What Warranty Requirements Apply to Certified Vessels and Fuel 
Systems?
    Consistent with our current emission-control programs, we are 
proposing that manufacturers provide a design and defect warranty 
covering emission-related components. For marine vessels, we propose 
that the fuel systems be warranted for five years for the emission 
related components. The proposed regulations would require that the 
warranty period must be longer than this minimum period we specify if 
the manufacturer offers a longer warranty for the fuel system or any of 
its components; this includes extended warranties on the fuel system or 
any of its components that are available for an extra price. See the 
proposed regulation

[[Page 53064]]

language for a description of which components are emission-related. We 
request comment on whether the warranty provisions should apply only to 
the certificate holder or to all manufacturers of the fuel system 
components used by the certificate holder.
    If an operator makes a valid warranty claim for an emission-related 
component during the warranty period, the manufacturer is generally 
obligated to replace the component at no charge to the operator. The 
manufacturer may deny warranty claims if the operator failed to do 
prescribed maintenance that contributed to the warranty claim.
    We are also proposing a defect reporting requirement that applies 
separate from the emission-related warranty (see Section III.E.6). In 
general, defect reporting applies when a manufacturer discovers a 
pattern of component failures, whether that information comes from 
warranty claims, voluntary investigation of product quality, or other 
sources. We request comment on the proposed warranty and defect 
reporting requirements.

E. General Compliance Provisions

    This section describes a wide range of compliance provisions that 
would apply to marine vessels (or fuel tanks or hoses as appropriate) 
and are the same as those recently proposed for the nonroad engines 
September 2001 (see 66 FR 51098). Several of these provisions apply not 
only to manufacturers, but also to operators, and others.
    The following discussion of the general compliance provisions 
reflects the organization of the proposed regulatory text. For ease of 
reference, the subpart designations are provided. We request comment on 
all these provisions.
1. Miscellaneous Provisions (Part 1068, Subpart A)
    This proposed regulation contains some general provisions, 
including general applicability and the definitions that apply to 40 
CFR part 1068. Other provisions concern good engineering judgment, how 
we would handle confidential information; how the EPA Administrator 
delegates decision-making authority; and when we may inspect a 
manufacturer's facilities, vessels, or records.
    The process of testing for evaporative emissions (or certifying 
based on design) and preparing an application for certification 
requires the manufacturer to make a variety of judgments. Section 
1068.5 of the proposed regulations describes the methodology we propose 
to use to evaluate concerns related to manufacturers' use of good 
engineering judgment in cases where the manufacturer has such 
discretion. If we find a problem in these areas, we would take into 
account the degree to which any error in judgment was deliberate or in 
bad faith. This subpart is consistent with provisions in the final rule 
for light-duty highway vehicles and commercial marine diesel engines.
2. Prohibited Acts and Related Requirements (Part 1068, Subpart B)
    The proposed provisions in this subpart lay out a set of 
prohibitions for manufacturers and operators to ensure that vessels 
comply with the emission standards. These provisions are summarized 
below, but readers are encouraged to review the proposed regulatory 
text. These provisions are intended to help ensure that each new vessel 
or portable tank sold or otherwise entered into commerce in the United 
States is certified to the relevant standards.
    a. General prohibitions (Sec. 1068.100). This proposed regulation 
contains several prohibitions consistent with the Clean Air Act. Under 
this proposal, no one may sell a vessel or portable fuel tank in the 
United States without a valid certificate of conformity issued by EPA, 
deny us access to relevant records, or keep us from entering a facility 
to test or inspect vessels or fuel system components. In addition, no 
one may remove or disable a device or design element that may affect an 
vessel's emission levels, or manufacture any device that will make 
emission controls ineffective, which we would consider tampering. We 
have generally applied the existing policies developed for tampering 
with highway engines and vehicles to nonroad engines.\23\ Other 
proposed prohibitions reinforce manufacturers' obligations to meet 
various certification requirements. We would also prohibit selling 
parts that prevent emission-control systems from working properly. 
Finally, for vessels that are excluded for certain applications (i.e. 
solely for competition), we would generally prohibit using these 
vessels in other applications.
---------------------------------------------------------------------------

    \23\ ``Interim Tampering Enforcement Policy,'' EPA memorandum 
from Norman D. Shulter, Office of General Counsel, June 25, 1974 
(Docket A-2000-01; document II-B20).
---------------------------------------------------------------------------

    These proposed prohibitions are the same as those that apply to 
other applications we have regulated in previous rules. Each prohibited 
act has a corresponding maximum penalty as specified in Clean Air Act 
section 205. As provided for in the Federal Civil Penalties Inflation 
Adjustment Act of 1990, Pub. L. 10-410, these maximum penalties are in 
1970 dollars and should be periodically adjusted by regulation to 
account for inflation. The current penalty amount for each violation is 
$27,500.\24\
---------------------------------------------------------------------------

    \24\ EPA acted to adjust the maximum penalty amount in 1996 (61 
FR 69364, December 31, 1996). See also 40 CFR part 19.
---------------------------------------------------------------------------

    b. In-service systems (Sec. 1068.110). The proposed regulations 
would prevent manufacturers from requiring owners to use any certain 
brand of aftermarket parts and give the manufacturer responsibility for 
servicing related to emissions warranty, leaving the responsibility for 
all other maintenance with the owner. This proposed regulation would 
also reserve our right to do testing (or require testing) to 
investigate potential defeat devices, as authorized by the Act.
3. Exemptions (Part 1068, Subpart C)
    We are proposing to include several exemptions for certain specific 
situations. Most of these are consistent with previous rules. We 
highlight the new or different proposed provisions in the following 
paragraphs. In general, exempted vessels would need to comply with the 
requirements only in the sections related to the exemption. Note that 
additional restrictions could apply to importing exempted vessels (see 
Section III.E.4). Also, we are also proposing that we may require 
manufacturers (or importers) to add a permanent label describing that 
the vessel or fuel system component is exempt from emission standards 
for a specific purpose. In addition to helping us enforce emission 
standards, this would help ensure that imported vessels clear U.S. 
Customs without difficulty.
    a. Testing. Anyone would be allowed to request an exemption for 
vessels or fuel system components used only for research or other 
investigative purposes.
    b. Manufacturer-owned vessels and fuel systems. Vessels and fuel 
system components that are used by manufacturers for development or 
marketing purposes could be exempted from regulation if they are 
maintained in the manufacturers' possession and are not used for any 
revenue-generating service. They would no longer be exempt if they were 
later offered for sale.
    c. Display vessels or fuel systems. Boat builders and fuel system 
component manufacturers would get an exemption if the vessels or fuel 
systems are for display only. They would no longer be exempt if they 
were later offered for sale.

[[Page 53065]]

    d. National security. Manufacturers could receive an exemption for 
vessels or portable fuel tanks they can show are needed by an agency of 
the federal government responsible for national defense. For cases 
where the vessels will not be used on combat applications, the 
manufacturer would have to request the exemption with the endorsement 
of the procuring government agency.
    e. Exported vessels. Vessels and portable fuel tanks that will be 
exported to countries that don't have the same emission standards as 
those that apply in the United States would be exempted without need 
for a request. This exemption would not be available if the destination 
country has the same emission standards as those in the United States.
    f. Competition vessels. New vessels that are used solely for 
competition are excluded from regulations applicable to nonroad 
equipment. For purposes of our certification requirements, a 
manufacturer would receive an exemption if it can show that it produces 
the vessel specifically for use solely in competition. In addition, 
vessels that have been modified for use in competition would be exempt 
from the prohibition against tampering described above (without need 
for request). The literal meaning of the term ``used solely for 
competition'' would apply for these modifications. We would therefore 
not allow the vessel to be used for anything other than competition 
once it has been modified. This also applies to someone who would later 
buy the vessel, so we would require the person modifying the vessel to 
remove or deface the original label and inform a subsequent buyer in 
writing of the conditions of the exemption. The exemption would no 
longer apply.
4. Imports (Part 1068, Subpart D)
    In general, the same certification requirements would apply to 
vessels whether they are produced in the U.S. or are imported. This 
proposed regulation also includes some additional provisions that would 
apply if someone wants to import an exempted or excluded vessel. For 
example, the importer would need written approval from us to import any 
exempted vessel; this is true even if an exemption for the same reason 
doesn't require approval for vessels produced in the U.S.
    All the proposed exemptions described above for new vessels would 
also apply to importation, though some of these apply only on a 
temporary basis. If we approve a temporary exemption, it would be 
available only for a defined period and could require the importer to 
post bond while the vessel is in the U.S. There are several additional 
proposed exemptions that would apply only to imported vessels.

--Identical configuration: This would be a permanent exemption to allow 
individuals to import vessels that were designed and produced to meet 
applicable emission standards. These vessels may not have the emission 
label only because they were not intended for sale in the United 
States.
--Repairs or alterations: This would be a temporary exemption to allow 
companies to repair or modify vessels.
--Diplomatic or military: This would be a temporary exemption to allow 
diplomatic or military personnel to use uncertified vessels during 
their term of service in the U.S.

    We request comment on all the proposed exemptions for domestically 
produced and imported vessels.
5. Selective Enforcement Audit (Part 1068, Subpart E)
    Clean Air Act section 206(b) gives us the authority and discretion 
in any program with vehicle or engine emission standards to do 
selective enforcement auditing of production vessels and fuel systems. 
The proposed regulation text describes the audit procedures in greater 
detail. We intend generally to rely on inspecting manufacturers' 
designs to ensure they comply with emission standards. However, we 
would reserve our right to do selective enforcement auditing if we have 
reason to question the emission testing conducted or data reported by 
the manufacturer.
6. Defect Reporting and Recall (Part 1068, Subpart F)
    We are proposing provisions for defect reporting. Specifically, we 
are proposing that manufacturers tell us when they learn of a defect 
occurring 25 times or more for emission families with annual sales up 
to 10,000 units. This threshold of defects would increase 
proportionately for larger families. While these thresholds would 
depend on sales, counting defects would not be limited to a single 
emission family. For example, if a manufacturer learns that operators 
reported 25 cases of problems with a limiting orifice from three 
different low-volume models spread over five years, that would trigger 
the need to file a defect report. This information could come from 
warranty claims, customer complaints, product performance surveys, or 
anywhere else. The proposed regulation language in Sec. 1068.501 also 
provides information on the thresholds for triggering a further 
investigation for where a defect report is more likely to be necessary. 
We request comment on the proposed defect reporting provisions.
    Under Clean Air Act section 207, if we determine that a substantial 
number of vessels, fuel tanks, or hoses within an emission family, 
although properly used and maintained, do not conform to the 
appropriate emission standards, the manufacturer will be required to 
remedy the problem and conduct a recall of the noncomplying emission 
family. However, we also recognize the practical difficulty in 
implementing an effective recall program for marine vessels. It would 
likely be difficult to properly identify all the affected owners. The 
response rate for affected owners or operators to an emission-related 
recall notice is also a critical issue to consider. We recognize that 
in some cases, recalling noncomplying marine vessels may not achieve 
sufficient environmental protection, so our intent is to generally 
allow manufacturers to nominate alternative remedial measures to 
address most potential noncompliance situations. We expect that 
successful implementation of appropriate alternative remediation would 
obviate the need for us to make findings of substantial nonconformity 
under section 207 of the Act. We would consider alternatives nominated 
by a manufacturer based on the following criteria; the alternatives 
should--
    (1) Represent a new initiative that the manufacturer was not 
otherwise planning to perform at that time, with a clear connection to 
the emission problem demonstrated by the emission family in question;
    (2) Cost more than foregone compliance costs and consider the time 
value of the foregone compliance costs and the foregone environmental 
benefit of the emission family;
    (3) Offset at least 100 percent of the emission exceedance relative 
to that required to meet emission standards; and
    (4) Be possible to implement effectively and expeditiously and to 
complete in a reasonable time.
    These criteria would guide us in evaluating projects to determine 
whether their nature and burden is appropriate to remedy the 
environmental impact of the nonconformity. However, in no way would the 
consideration of such a provision diminish our statutory authority to 
direct a recall if that is deemed the best course of action. We request 
comment on this approach to addressing the Clean Air Act provisions 
related to recall. In addition, we request comment on the proposed 
requirement

[[Page 53066]]

to keep recall-related records until three years after a manufacturer 
completes all responsibilities under a recall order.
7. Public Hearings (Part 1068, Subpart G)
    According to this regulation, manufacturers would have the 
opportunity to challenge our decision to suspend, revoke, or void an 
emission family's certificate. This also applies to our decision to 
reject the manufacturer's use of good engineering judgment (see 
Sec. 1068.5). Part 1068, subpart G describes the proposed procedures 
for a public hearing to resolve such a dispute.

F. Proposed Testing Requirements

    In order to obtain a certificate allowing sale of products meeting 
EPA emission standards, manufacturers generally must show compliance 
with such standards through emission testing. 40 CFR part 86 details 
specifications for test equipment and procedures that apply to highway 
vehicle evaporative emission testing. We propose to base the SI marine 
evaporative emission test procedures on this part. However, we propose 
to modify this test procedure somewhat to more accurately reflect the 
anticipated technology for meeting the evaporative emission standards 
proposed in this rule. We are also proposing design-based certification 
as an alternative to performing specific testing.
1. What Are the Proposed Test Procedures for Measuring Diurnal 
Emissions?
    We propose that the evaporative emission test will be 
representative of ambient temperatures ranging from 22 deg. C to 
36 deg. C (72 deg. F to 96 deg. F). Emissions would be measured in a 
Sealed Housing for Evaporative
    Determination (SHED) over a 72-hour period. The fuel tank would be 
set up in the SHED and sealed except for the vent(s). The fuel tank 
would be set up in the SHED with all hoses, seals, and other components 
attached. The fuel tank would be filled completely and drained to 40-
percent capacity with 9 RVP test fuel and soaked with an open vent 
until the fuel reached 22 deg. C.\25\ Immediately after the fuel 
reaches this temperature, the SHED would be purged, and the diurnal 
temperature cycling would begin. The temperature cycle is actually 
three repeats of a 
24-hour diurnal trace and is described in Chapter 4 of the Draft 
Regulatory Support Document. During the test a minimum of 5 mph wind 
speed would be simulated using a fan. The final 
g/gallon/day result is based on the highest mass emission rate from 
these three 24-hour cycles, divided by the fuel tank capacity. Fuel 
tank capacity refers the maximum amount of fuel in the tank under in-
use conditions.
---------------------------------------------------------------------------

    \25\ Reid Vapor Pressure (psi). This is a measure of the 
volatility of the fuel. 9 RVP represents a typical summertime fuel 
in northern states.
---------------------------------------------------------------------------

    These proposed test procedures are designed to simulate near worst 
case conditions for a typical boat. We believe that typical in-use fuel 
tanks will rarely be exposed to a temperature cycle larger than 
24 deg.F in a single day. However, in special applications where the 
fuel tank is exposed to direct sunlight, the tank temperature can 
change much more than 24 deg.F over the course of a single day. 
Therefore, we are proposing that special test procedures that simulate 
the radiant effect of sunlight be used to test fuel tanks that will be 
exposed to direct sunlight. We would not require this for exposed fuel 
tanks that are shielded from the sun.
    This diurnal cycle is consistent with the test requirements in 40 
CFR part 86 for highway vehicles. However, the test procedure for 
highway vehicles includes engine operation and hot soaks.\26\ One 
purpose of the engine operation is to purge the charcoal canister that 
collects evaporative emissions in highway applications. However, we are 
excluding engine operation from the evaporative test procedures for 
boats using SI marine engines because we do not anticipate the use of 
charcoal canisters in these applications. Another purpose of running 
the engine and the purpose of the hot soaks is to measure evaporative 
emissions due to the heating of the engine and exhaust system. However, 
this would significantly increase the difficulty of the SHED testing 
due to the large size of most boats. Because most boats are operated 
only 50 hours per year, these running loss and hot soak emissions are 
considerably smaller than diurnal and permeation emissions. In 
addition, most of the emission-control strategies that could be used to 
meet the proposed standards would also reduce running loss and hot soak 
emissions. We request comment on the proposed test procedures for 
determining evaporative emissions from boats using SI marine engines.
---------------------------------------------------------------------------

    \26\ Hot soak emissions are those caused by residual heat in the 
engine and exhaust system immediately after the engine is shut down. 
Running loss emissions are those caused by engine and exhaust heat 
while the engine is operating.
---------------------------------------------------------------------------

2. What Are the Proposed Test Procedures for Measuring Permeation 
Emissions?
    a. Fuel tanks. We propose that tank permeation be based on a test 
procedure consistent with the Coast Guard requirements in 33 CFR 
183.620. Specifically, the rate of permeation from the tank will be 
measured at 40 deg.C using the same test fuel as for the diurnal 
testing. We request comment on using 40 deg.C as the test temperature 
or if 23 deg.C should be used to be consistent with the hose testing. 
Our understanding is that 40 deg.C represents higher temperatures that 
may be seen in an engine compartment during operation while 23 deg.C 
represents typical ambient conditions. If a lower test temperature were 
used, the standards would need to be adjusted appropriately. Based on 
data presented in Chapter 4 of the draft RSD, the standards would have 
to be reduced on the order of 50 percent for every 10 deg.C reduction 
in test temperature. We also request comment on using ASTM Fuel ``C'' 
and a 15% methanol blend to be consistent with the hose permeation test 
procedures or on using 10% ethanol consistent with on-highway 
evaporative emission testing. The tank would have to be filled and 
soaked for a minimum of 60 days to ensure that permeation emissions are 
accurately reflected in the test procedure. The tank would be sealed 
during testing, and care would have to be made that the environment in 
which the tank was tested was continuously purged of vapor to prevent 
the saturation of vapor with hydrocarbons around the outside of the 
tank. Permeation would be measured through weight loss in the tank or 
using equivalent procedures.
    We also request comment on whether we should require specific 
durability test procedures for fuel tanks. Such durability tests could 
include pressure vacuum cycle testing, slosh testing, and temperature 
cycling. Information on these tests is included in the docket.\27\
---------------------------------------------------------------------------

    \27\ Draft SAE Information Report J1769, ``Test Protocol for 
Evalution of Long Term Permeation Barrier Durability on Non-Metallic 
Fuel Tanks,'' (Docket A-2000-01, document IV-A-24).
---------------------------------------------------------------------------

    b. Hoses. We propose to use the current practices for measuring 
permeation from marine hoses that are specified in SAE J 1527. Under 
this procedure, the hose is tested at 23 deg.C with both ASTM Fuel 
``C'' (50% toluene, 50% isooctane) and with a blend on fuel ``C'' with 
15% methanol. SAE J 1527 sets permeation limits for hose of 100 g/
m2/day for fuel C and 300 g/m2/day for the 15% 
methanol blend. Consistent with this relationship, we propose to allow 
the permeation rate to

[[Page 53067]]

be three times higher than the proposed standard for fuel C when the 
hose is tested on the 15% methanol blend. Because permeation rates 
double, roughly, with every 10 deg.C increase in temperature, the test 
procedure has a large effect on emissions measured for a given hose 
material. In addition, the temperature effects may be greater for some 
materials than for others. For low permeation non-metal fuel lines used 
in automotive applications, the current practices are specified in SAE 
J 2260 and SAE J 1737. Under these test procedures, the hose permeation 
is measured at 60 deg.C with an 85%-15% blend of fuel ``C'' and 
methanol. We request comment on using the higher test temperature in 
the automotive test procedure. We also request comment on requiring 
testing using a 10% ethanol blend consistent with on-highway 
evaporative emission testing.
3. Could I Certify Based on Engineering Design Rather Than Through 
Testing?
    We recognize that performing SHED testing could be cost-prohibitive 
for many fuel tank manufacturers or boat builders. In addition, many of 
the technologies that can be used to reduce evaporative emissions are 
straightforward design strategies. For these reasons, we propose that 
manufacturers have the option of certifying to the diurnal evaporative 
emission requirements based on fuel system designs, as described in the 
proposed regulations. Test data would be required to certify fuel tanks 
and hoses to the proposed permeation standards. However, we would allow 
carryover of test data from year to year for a given emission control 
design. We believe the cost of testing tanks and hose designs for 
permeation would be considerably lower than running variable 
temperature diurnal testing. In addition, the data could be carried 
over from year to year, and there is a good possibility that the broad 
emission family concepts under consideration could lead to minimum 
testing. For instance, a hose manufacturer could test its hose design 
once, and all the boat builders who use this hose could incorporate 
this data in their certification applications.
    We are proposing design based certification to the tank permeation 
standard for one case. We would consider an aluminum fuel tank to meet 
the design criteria for a low permeation fuel tank. However, we would 
not consider this design to be any more effective than a low permeation 
fuel tank for the purposes of any sort of credit program. Although 
aluminum is impermeable, seals and gaskets used on the fuel tank may 
not be. The design criteria for the seals and gaskets would be that 
either they would not have a total exposed surface area exceeding 1000 
mm2, or the seals and gaskets would have to be made of a 
material with a permeation rate of 10 g/m2/day or less at 
23 deg.C.
    The rest of this section discusses designs that we propose to be 
acceptable for design-based certification to the proposed diurnal 
emission standard. The emission data we used to develop these proposed 
design options are presented in Chapter 4 of the Draft Regulatory 
Support Document. Additional testing may help us more precisely set the 
appropriate emission levels associated with each design. Manufacturers 
wanting to use designs other than those we discuss here would have to 
perform the above test procedures for their design. However, once a new 
design is proven, we could add this new design to the list of designs 
for this certification flexibility and assign it to the appropriate 
averaging bin. For example, if several manufacturers were to pool their 
resources to test a diurnal emission control strategy and submit this 
data to EPA, we would consider this particular strategy and emission 
level as a new design level for design based certification. We request 
comment on the concept of design-based certification and on the 
technologies and associated emission levels discussed below. Section 
III.H.3 presents a more detailed description of what each of these 
technologies are and how they can be used to reduce evaporative 
emissions.
    We have identified several technologies for reducing diurnal 
emissions from marine fuel tanks. The design levels proposed below 
represent our understanding of the effectiveness of various emission 
control technologies over the proposed test procedure. Table III.F.1 
summarizes design-based emission levels associated with several 
emission control strategies. These control strategies are discussed in 
more detail after the table. Manufacturers would be required to submit 
information demonstrating that the components they use would be durable 
over the useful life of the vessel. For tanks that allow pressure 
build-up, a low-pressure vacuum-relief valve would also be necessary 
for the engine to be able to draw fuel during operation. Also, in the 
cases where anti-siphon valves are used with these designs, the anti-
siphon system would have to be designed such that fuel could not spill 
out through this valve when the system is under pressure.

  Table III.F-1.--Emission Levels for Design Based Certification to the
                   Proposed Diurnal Emission Standard
------------------------------------------------------------------------
     Emission level  [g/gallon/day]                 Technology
------------------------------------------------------------------------
1.5....................................  Baseline (open vent with a
                                          normal length vent hose).
1.3....................................  Near zero pressure limited flow
                                          orifice and insulation (R-
                                          value 15), or
                                          closed vent, 0.5 psi relief
                                          valve.
1.1*...................................  Closed vent, 1.0 psi relief
                                          valve.
0.9....................................  Closed vent, 1.5 psi relief
                                          valve.
0.7....................................  Closed vent, 2.0 psi relief
                                          valve.
0.5....................................  Closed vent, 0.5 psi relief
                                          valve with a volume
                                          compensating air bag.
0.1....................................  Bladder fuel tank.
------------------------------------------------------------------------
* Proposed average standard for diurnal emissions.

    1.5 g/gal/test: Typical fuel tanks used in boats currently have an 
open vent to the atmosphere through a vent hose. This vent is intended 
to prevent pressure from building up in the fuel tank. This 
uncontrolled fuel tank configuration would be considered to be at this 
level based on the data presented in Chapter 4 of the Draft RSD.
    1.3 g/gal/test: The design criteria for this level would be a fuel 
tank with a near zero pressure limited flow orifice and insulation. The 
limited flow orifice would be defined as having a maximum cross-
sectional area defined by the following equation: Area [mm2] 
= 0.04 x fuel tank capacity [gallons]. For example, a 20 gallon tank 
would need an orifice with no more than a 1 mm diameter. This size 
orifice is sufficient to limit diffusion of hydrocarbons without 
causing significant pressure to build in the fuel tank. The design 
criteria for the insulation would be to use insulation having at least 
an R-value of 15 (see section III.H.3.b).
    1.3 g/gal/test: An alternative design criterion for this level 
would be a sealed fuel tank with a pressure-relief valve that would 
open at a pressure of 0.5 psi.
    1.1 g/gal/test: The design criterion for this level would be a 
sealed fuel tank with a pressure-relief valve that would open at a 
pressure of 1.0 psi.
    0.9 g/gal/test: The design criterion for this level would be a 
sealed fuel tank with a pressure-relief valve that would open at a 
pressure of 1.5 psi.
    0.7 g/gal/test: The design criterion for this level would be a 
sealed fuel tank

[[Page 53068]]

with a pressure-relief valve that would open at a pressure of 2.0 psi.
    0.5 g/gal/test: The design criterion for this level would be a 
volume-compensating air bag used in conjunction with a 0.5 psi 
pressure-relief valve if the bag is designed to fill 25 percent of the 
fuel tank capacity when inflated. This bag would have no leaks to the 
fuel tank and would be constructed out of a non permeable material.
    0.1 g/gal/test: The design criterion for this level would be to use 
a bladder tank. The bladder would have to be sealed and built of low 
permeable material. This bladder would collapse as fuel was drawn out 
of it and expand when refueled thereby eliminating the vapor space 
needed for diurnal vapor generation.

G. Special Compliance Provisions

    The scope of this proposal includes many boat and fuel tank 
manufacturers that have not been subject to our regulations or 
certification process. Many of these manufacturers are small businesses 
for which a typical regulatory program may be burdensome. This section 
describes the proposed special compliance provisions designed to 
address this concern. As described in Section VIII.B, the report of the 
Small Business Advocacy Review Panel addresses the concerns of small 
manufacturers of gasoline fuel tanks for marine applications and small 
boat builders that use these tanks.
    To identify representatives of small businesses for this process, 
we used the definitions provided by the Small Business Administration 
for fuel tank manufacturers and boat builders (less than 500 
employees). Twelve small businesses agreed to serve as small-entity 
representatives. These companies represented a cross-section of both 
gasoline and diesel engine marinizers, as well as boat builders.
    In this industry sector, we believe some of the burden reduction 
approaches presented in the Panel Report should be applied to all 
businesses. All of the marine fuel tank manufacturers except for one 
qualify as small businesses. We believe the purpose of these options is 
to reduce the potential burden on companies for which fixed costs 
cannot be distributed over a large product line. For this reason, we 
often times also consider the production volume when making decisions 
regarding flexibilities. The one fuel tank manufacturer not qualifying 
as a small business still has low production volumes of marine fuel 
tanks, thus we believe some flexibilities should be made available to 
this manufacturer as well.
    Three of the five burden reduction approaches discussed in the 
Panel
    Report are design-based certification, allowance to use emission 
credits with design-based certification, and a 5-year lead time with 
early banking. As discussed above, we are proposing these approaches 
for all manufacturers certifying marine fuel tanks to the proposed 
evaporative emission standards. This section discusses the other two 
approaches in the Panel Report and how we propose to apply them to the 
marine industry.
1. Broadly Defined Product Certification Families
    To certify to the evaporative emission standards, we propose that 
manufacturers would have to classify their vessels, fuel tanks, or 
hoses in emission families based on having similar emission 
characteristics. We would expect to differentiate families by fuel 
type, diurnal control technology, and the tank and hose material/
treatment. The manufacturer would then certify each of these 
evaporative emission families. The purpose of emission families has 
traditionally been to reduce testing burden by allowing a family to be 
certified based on the test results from its highest-emitting member.
    For highway evaporative emission requirements, each manufacturer 
divides its products into several evaporative emission families based 
on characteristics of the fuel system. These characteristics include: 
fuel type, charcoal canister type and capabilities, seals, valves, 
hoses, and tank material. The manufacturer then has to certify each of 
these evaporative emission families. Unlike highway vehicles, 
evaporative emission controls for marine vessels are not likely to rely 
on charcoal canisters as a control technology. Furthermore, most or all 
SI marine engines will use gasoline and most manufacturers do not make 
both plastic and aluminum fuel tanks. Most manufacturers will therefore 
have very few emission families and it will be unlikely that emission 
families could be much broader than discussed here. In addition, 
broadening emission families may not reduce compliance burden, 
considering the proposed design-based certification approach. However, 
we request comment on whether there are reasonable ways to broaden 
these engine families, and whether or not small businesses would 
benefit from any such broadened definitions.
2. Hardship Provisions for Small Businesses Producing Marine Fuel Tanks
    There are two types of hardship provisions. The first type of 
hardship program would allow small businesses to petition EPA for 
additional lead time (e.g., up to 3 years) to comply with the 
standards. A small manufacturer would have to make the case that it has 
taken all possible business, technical, and economic steps to comply 
but the burden of compliance costs would have a significant impact on 
the company's solvency. A manufacturer would be required to provide a 
compliance plan detailing when and how it would achieve compliance with 
the standards.
    Hardship relief could include requirements for interim emission 
reductions and/or purchase and use of emission credits. The length of 
the hardship relief decided during review of the hardship application 
would be up to one year, with the potential to extend the relief as 
needed. The second hardship program would allow companies to apply for 
hardship relief if circumstances outside their control cause the 
failure to comply (i.e., supply contract broken by parts supplier) and 
if the failure to sell the subject vessels would have a major impact on 
the company's solvency. See the proposed regulatory text in 40 CFR 
1068.240 and 1068.241 for additional details.

H. Technological Feasibility

    We believe there are several strategies that manufacturers can use 
to meet our proposed evaporative emission standards. We have collected 
and will continue to collect emission test data on a wide range of 
evaporative emission control technology. The design-based certification 
levels discussed above are based on this test data and we may amend the 
list of approved designs and emission levels as more data become 
available.
1. Implementation Schedule
    There are several strategies available to reduce evaporative 
emissions (diurnal and permeation) from marine fuel tanks. Some of 
these may require changes to the tank design, structure, and material 
that would cause a change in the molds used to make the plastic tanks. 
These molds need to be replaced periodically as part of normal 
manufacturing practices. Small manufacturers using rotational molding 
to produce plastic fuel tanks have commented that the molds covering 
the majority of their production line have about a five-year life 
before replacement. However, for the low-

[[Page 53069]]

production fuel tanks, they may use their molds for 10 to 15 years. 
They have stated that their costs would be greatly reduced if they 
could turn over fuel tank molds in a manner more consistent with their 
current business practice, rather than doing so solely in response to 
an evaporative control requirement.
    We recognize that tank manufacturers and boat builders will need 
time to choose and implement the evaporative emission control 
strategies that work best for them. We believe the implementation date 
of 2008, coupled with the option for early banking, provides sufficient 
lead time beyond the anticipated publication of the final rule. This 5-
year lead time is consistent with the general turnover schedule of most 
molds used in plastic fuel tank production. We request comment whether 
there are small entities whose product line is dominated by tanks for 
which the molds are turned over at a slower rate.
    Surface treatments to reduce tank permeation are widely used today 
in other container applications and the technology and production 
facilities needed to conduct this process exist. While there is 
definitely value in an organized approach to compliance on the part of 
the manufacturers, the lead time requirement is largely driven by 
modifications needed to comply with the diurnal requirements. EPA 
requests comment on the feasibility of implementing the tank permeation 
requirement in 2006 or 2007.
    Low permeation marine hose is used today on some vessels that is 
close to meeting the proposed standards. In addition, the development 
time for new hose designs is on the order of 1-2 years. Therefore, we 
request comment on whether an earlier implementation date for the 
proposed permeation standards for marine hoses would be appropriate. We 
are proposing an implementation date for hose permeation standards of 
2008, consistent with the fuel tank standards, because hose fitting 
modifications may be required which could affect tank design. 
Manufacturers have commented that low permeation hoses require special 
connection fittings with better tolerances than seen on many fittings 
today. Automotive fuel lines also already exist that meet the proposed 
permeation standards. However, manufacturers have raised concerns with 
the cost of applying these less flexible fuel lines in marine 
applications. In any case, using these automotive fuel lines would 
probably also require fitting changes. EPA requests comment on the 
feasibility of implementing the hose permeation requirement in 2006 or 
2007.
2. Standard Levels
    We tested several diurnal emission-control strategies using the 
procedures discussed in VI.D.1. Based on this testing we believe there 
are several emission-control technologies that could be used to 
significantly reduce diurnal emissions. Also, we have identified 
several strategies for reducing permeation emissions from fuel tanks 
and hoses. We recognize that some of these technologies may be more 
desirable than others for some manufacturers, and we recognize that 
different strategies for equal emission reductions may be better for 
different applications. Specific examples of technology that could be 
used to meet the proposed standards would be fuel tank with a 1 psi 
valve in the vent, a fluorinated plastic fuel tank, and hose 
constructed with a thermoplastic barrier. We present several other 
technological approaches below.
3. Technological Approaches
    We believe several emission-control technologies can be used to 
reduce evaporative emissions from marine fuel tanks. In addition, there 
are a few technologies that are used in other applications that may not 
be as effective here. The advantages and disadvantages of various 
emission-control strategies are discussed below. Chapter 4 of the Draft 
Regulatory Support Document presents more detail on these technologies 
and Chapter 5 provides information on the estimated costs.
    a. Closed fuel vent with pressure relief. Evaporative emissions are 
formed when the fuel heats up, evaporates, and passes through the vent 
into the atmosphere. By closing that vent, evaporative emissions are 
prevented from escaping. However, as vapor is generated, pressure 
builds up in fuel tank. Once the fuel cools back down, the pressure 
subsides.
    The U.S Coast Guard safety regulations (33 CFR part 183) require 
that fuel tanks be able to withstand pressure up to 3 psi and must be 
able to pass a pressure-impulse test which cycles the tank from 0 to 3 
psi 25,000 times. The Coast Guard also requires that these fuel tanks 
be vented such that the pressure in the tank in-use never exceeds 80 
percent of the pressure that the tank is designed to withstand without 
leaking. The American Boat and Yacht Council makes the additional 
recommendation that the vent line should have a minimum inner diameter 
of \7/16\ inch (H-24.13). However, these recommended practices also 
note that ``there may be EPA or state regulations that limit the 
discharge of hydrocarbon emissions into the atmosphere from gasoline 
fuel systems. The latest version of these regulations should be 
consulted.''
    To prevent pressure from building too high, we first considered a 2 
psi pressure-relief valve. This is a typical automotive rating and is 
within the Coast Guard requirements. With this valve, vapors would be 
retained in the tank until 2 psi of pressure is built up in the tank 
due to heating of the fuel. Once the tank pressure reached 2 psi, just 
enough of the vapor would be vented to the atmosphere to maintain 2 psi 
of pressure.
    As the fuel cooled, the pressure would decrease. We estimate that 
this would achieve about a 55-percent reduction in evaporative 
emissions over the proposed test procedure. A 1 psi valve would achieve 
a reduction of about half of this over the proposed test procedure. 
However, in use, this reduction could be much greater because the test 
procedure is designed to represent a hotter than average day. On a more 
mild day there could be less pressure buildup in the tank and the valve 
may not even need to open.
    As discussed in Chapter 4 of the draft RSD, we tested fuel tanks 
for diurnal emissions with pressure relief valves ranging from 0.4 to 
2.2 psi.
    With the use of a sealed system, a low-pressure vacuum-relief valve 
would also be necessary so air could be drawn into the tank to replace 
fuel drawn from the tank when the engine is running.
    Manufacturers of plastic fuel tanks have expressed concern that 
their tanks are not designed to operate under pressure. For instance, 
although they will not leak at 3 psi, rotationally molded fuel tanks 
with large flat surfaces could begin deforming at pressures as low as 
0.5 psi. At higher pressures, the deformation would be greater. This 
deformation would affect how the tank is mounted in the boat. Also, 
fuel tank manufacturers commented that some of the fittings or valves 
used today may not work properly under even 2 psi of pressure. Finally, 
they commented that backup pressure-relief valves would be necessary 
for safety.
    We believe that, with enough lead time, fuel tank manufacturers 
will be able to redesign their fuel tanks to be more resistant to 
deformation under pressure. By reducing the size of flat areas on the 
tank through adding contours to the tank, or by increasing the 
thickness of the tank walls, the fuel tanks can be designed to resist 
deformation under pressure. Portable

[[Page 53070]]

plastic fuel tanks are generally sealed without any pressure relief and 
are designed to withstand any pressure that may occur under these 
conditions. We also believe that if certain fittings and valves cannot 
withstand pressure today, they can be designed to do so. In addition, 
we are proposing a standard which can be met with a 1 psi valve which 
we believe would require significantly less modification to current 
tanks than designing for 3 psi of pressure. In developing this level we 
considered first 2.0 psi valves which is consistent with on-highway 
fuel tanks and is below the Coast Guard tank pressure requirement. 
However, we proposed a standard based on a 1.0 psi pressure relief 
valve to give manufacturers some margin to minimize fuel tank 
deflection under pressure. Although we do not consider this to be a 
feasibility issue, we recognize that if the tank were to deflect too 
much in-use that either the fuel tank compartment would have to be 
enlarged to accommodate this expansion or a smaller fuel tank would 
need to be used. We request comment on this issue.
    Below, we discuss strategies that could be used in conjunction with 
a sealed system to minimize the build-up of pressure in the fuel tank. 
Such technologies are insulation, volume-compensating air bags, and 
bladder fuel tanks. With the use of these technologies, the same 
emission reductions could be achieved with a pressure-relief valve set 
to allow lower vent pressures. Finally the structure of the proposed 
standards gives manufacturers the flexibility to meet the emission 
limits without building up pressure in the fuel tank.
    b. Limited flow orifice. An alternative to using a pressure-relief 
valve to hold vapors in the fuel tank would be to use a limited-flow 
orifice. This would essentially be a plug in the vent line with a pin 
hole in it that would be small enough to limit vapor flow out of the 
fuel tank. However, the orifice size may be so small that there would 
be a risk of fouling. In addition, an orifice designed for a maximum of 
2 psi under worst-case conditions may not be very effective at lower 
temperatures. We tested a 17-gallon tank with a 75-micron diameter 
limited-flow orifice over the proposed diurnal test procedure and saw 
close to a 25 percent reduction in diurnal emissions. The peak pressure 
in this test was 1.6 psi.
    c. Insulated fuel tank. Another option we evaluated was insulating 
either the fuel tank or the compartment around the fuel tank. Rather 
than capturing the vapors in the fuel tank, we minimize the fuel 
heating, which therefore minimizes the vapor generation. This could be 
used in conjunction with a limited-flow orifice to reduce the loss of 
vapor through the vent line due to diffusion. Our test data suggest 
that a 50-percent reduction in emissions over the proposed test 
procedure can be achieved using insulation with an R-value of 15.\28\ 
However, it should be noted that today's fuel tanks, when installed in 
boats, have some amount of ``inherent insulation.'' This is especially 
true for boats that remain in the water. This inherent insulation is 
considered in our baseline emission factors. Additional control could 
be achieved with the use of a pressure-relief valve coupled with an 
insulated tank. Note that an insulated tank could maintain the same 
emission control while using a pressure-relief valve that allowed lower 
peak pressures, compared with a tank that was not insulated.
---------------------------------------------------------------------------

    \28\ R-value measures resistance to heat flow and is defined in 
16 CFR 460.5.
---------------------------------------------------------------------------

    The method of insulation would have to be consistent with U.S. 
Coast Guard fuel system requirements. These requirements regulate the 
resistance to fuels, oils and other chemicals, water adsorption, 
compressive strength, and density of foam used to encase fuel tanks. In 
addition, the Coast Guard requirements protect against corrosion of 
metal fuel tanks due to foam pulling away from the fuel tank causing 
water to be trapped or from improper drainage. There are several 
methods that could be used to insulate the fuel tank while maintaining 
safe practices. These methods include an insulation barrier within the 
walls of the fuel tank, insulating the compartment that the tank is in 
rather than the tank itself, and foaming the tank in place by filling 
the entire compartment the tank is in. The Coast Guard requirements and 
potential insulation strategies are discussed further in Chapter 3 of 
the Draft Regulatory Support Document.
    d. Volume-compensating air bag. Another concept for minimizing 
pressure in a sealed fuel tank is through the use of a volume-
compensating air bag. The purpose of the bag is to fill up the vapor 
space in the fuel tank above the fuel. By minimizing the vapor space, 
the equilibrium concentration of fuel vapors occupies a smaller volume, 
resulting in a smaller mass of vapors. As the equilibrium vapor 
concentration increases with increasing temperature, the vapor space 
expands, which forces air out of the bag through the vent to 
atmosphere. Because the bag volume decreases to compensate for the 
expanding vapor space, total pressure inside the fuel tank stays very 
close to atmospheric pressure.\29\ Once the fuel tank cools as ambient 
temperature goes down, the resulting vacuum in the fuel tank will make 
the bag expand again by drawing air from the surrounding ambient. Our 
test results showed that pressure could be kept below 0.8 psi using a 
bag with a capacity equal to 25 percent of the fuel tank capacity. 
Therefore, the use of a volume-compensating air bag could allow a 
manufacturer to reduce the pressure limit on its relief valve.
---------------------------------------------------------------------------

    \29\ The Ideal Gas Law states that pressure and volume are 
inversely related. By increasing the volume of the vapor space, the 
pressure can be held constant.
---------------------------------------------------------------------------

    We are still investigating materials that would be the most 
appropriate for the construction of these bags. The bags would have to 
hold up in a fuel tank for several years and resist permeation, while 
at the same time being light and flexible. One such material we are 
considering is fluorosilicon fiber. Also, the bag would have to be 
positioned to avoid interfering with other fuel system components such 
as the fuel pick-up or catching on any sharp edges in the fuel tank. We 
estimate that this would be more expensive than using a pressure relief 
valve with some reinforcement of the fuel tank for pressure; however, 
it is also more effective at emission control and would minimize 
pressure in the fuel tank.
    e. Bladder fuel tank. Probably the most effective technology for 
reducing diurnal emissions from marine fuel tanks is through the use of 
a collapsible fuel bladder. In this concept, a low permeation bladder 
is installed in the fuel tank to hold the fuel. As fuel is drawn from 
the bladder, the vacuum created collapses the bladder. Therefore, there 
is no vapor space and no pressure build up from fuel heating. Because 
the bladder is sealed, there would be no vapors vented to atmosphere. 
This option could also significantly reduce emissions during refueling 
that would normally result from dispensed fuel displacing vapor in the 
fuel tank. We have received comments that this would be cost-
prohibitive because it could increase costs from 30 to 100 percent 
depending on tank size. However, bladder fuel tanks have positive 
safety implications as well and are already sold by at least one 
manufacturer to meet market demand in niche applications.
    f. Charcoal canister. The primary evaporative emission-control 
device used in automotive applications is a charcoal canister. With 
this technology, vapor generated in the tank is vented through a 
charcoal canister. The

[[Page 53071]]

activated charcoal collects and stores the hydrocarbons. Once the 
engine is running, purged air is drawn through the canister and the 
hydrocarbons are burned in the engine. These charcoal canisters 
generally are about a liter in size and have the capacity to store 
three days of vapor over the test procedure conditions. This technology 
does not appear to be attractive for marine fuel tanks because boats 
may sit for weeks at a time without the engine running. Once the 
canister is saturated, it provides no emission control.
    g. Floating fuel and vapor separator. Another concept used in some 
stationary engine applications is a floating fuel and vapor separator. 
Generally small, impermeable plastic balls are floated in the fuel 
tank. The purpose of these balls is to provide a barrier between the 
surface of the fuel and the vapor space. However, this strategy does 
not appear to be effective for marine fuel tanks. Because of the motion 
of the boat, the fuel sloshes and the barrier would be continuously 
broken. Even small movements in the fuel could cause the balls to 
rotate and transfer fuel to the vapor space. In addition, the unique 
geometry of many fuel tanks could cause the balls to collect in one 
area of the tank.
    h. Low permeability fuel tanks. We estimate that more than a 
quarter of the evaporative emissions from boats with plastic fuel tanks 
come from permeation through the walls of the fuel tanks. In highway 
applications, non-permeable plastic fuel tanks are produced by blow 
molding a layer of ethylene vinyl alcohol or nylon between two layers 
of polyethylene. However, blow molding has high fixed costs and 
therefore requires high production volumes to be cost effective. For 
this reason, this manufacturing technique is generally only used for 
portable fuel tanks which are generally produced in higher volumes. For 
these tanks, however, multi-layer fuel tank construction may be an 
inexpensive and effective approach to controlling permeation emissions
    Manufacturers of rotationally molded plastic fuel tanks generally 
have low production volumes and have commented that they could not 
produce their tanks with competitive pricing in any other way. 
Currently, they use cross-link polyethylene which is a low density 
material that has relatively high rate of permeation. One material that 
could be used as a low permeation alternative in the rotational molding 
process is nylon. The use of nylon in the construction of these fuel 
tanks would reduce permeation by more than 95 percent when compared to 
cross-link polyethylene such as is used today.
    Another type of barrier technology for fuel tanks would be to treat 
the surfaces of a plastic fuel tanks with fluorine. The fluorination 
process causes a chemical reaction where exposed hydrogen atoms are 
replaced by larger fluorine atoms which a barrier on surface of the 
fuel tank. In this process, fuel tanks are be stacked in a steel 
container. The container is then be voided of air and flooded with 
fluorine gas. By pulling a vacuum in the container, the fluorine gas is 
forced into every crevice in the fuel tanks. As a result of this 
process, both the inside and outside surfaces of the fuel tank would be 
treated. As an alternative, for tanks that are blow molded, the inside 
surface of the fuel tank can be exposed to fluorine during the blow 
molding process. A similar barrier strategy is called sulfonation where 
sulfur trioxide is used to create the barrier by reacting with the 
exposed polyethylene to form sufonic acid groups on the surface. Either 
of these processes can be used to reduce gasoline permeation by more 
than 95 percent. Achieving reductions at this level repeatedly would 
require tanks with consistent material quality, amount, and composition 
including pigments and any additive packages. This would enable process 
and efficiency optimization and consistency in the effectiveness of 
surface treatment processes.
    Over the first month or so of use, polyethylene fuel tanks can 
expand by as much as three percent due to saturation of the plastic 
with fuel. Manufacturers have raised the concern that this hydrocarbon 
expansion could affect the effectiveness of surface treatments like 
fluorination or sulfonation. We believe that this will not have a 
significant effect on the effectiveness of these surface treatments. 
The California Air Resources Board has performed extensive permeation 
testing on portable fuel containers with and without these surface 
treatments. Prior to the permeation testing, the tanks were prepared by 
first performing a durability procedure where the fuel container is 
cycled a minimum of 1000 times between 5 psi and -1 psi. In addition, 
the fuel containers are soaked with fuel for a minimum of four weeks 
prior to testing. Their test data, presented in Chapter 4 of the draft 
RSD, show that fluorination and sulfonation are still effective after 
this durability testing.
    The U.S. Coast Guard has raised the issue that any process applied 
to marine fuel tanks to reduce permeation would also need to pass Coast 
Guard flame resistance requirements. We are not aware of any reason 
that a fluorination or sulfonation surface treatment would affect the 
flame resistance of a marine fuel tank. Since this issue was raised, we 
contracted to have a fluorinated fuel tank tested. This tank passed the 
U.S. Coast Guard flame resistance test.
    Also, about a third of marine fuel tanks used today are made of 
aluminum. Hydrocarbons do not permeate through aluminum.
    We request comment on the low-permeable materials and strategies 
discussed above, and other options that are available, for use in 
marine fuel tanks and on their cost and effectiveness.
    i. Low permeability hoses. We also estimate that permeation through 
fuel and vapor hoses make up more 40 percent of the evaporative 
emissions from boats. This fraction is higher for boats using aluminum 
fuel tanks, because they are inherently low in tank permeation 
emissions. By replacing rubber hoses with low permeability hoses, 
evaporative emissions through the fuel supply and vent hoses can be 
reduced by more than 95 percent.
    Marine fuel hoses are designated as either Type A or B and 
eitherClass 1 or 2.\30\ Type A hose passes the U.S. Coast Guard fire 
test while Type B represents hose that has not passed this test. Class 
1 hose is intended for fuel feed lines where the hose is normally in 
contact with fuel and has a permeation limit of 100 g/m2/day at 
23 deg.C. Class 2 hose is intended for vent lines and fuel fill necks 
where fuel is not continuously in contact with the hose and has a 
permeation limit of 300 g/m2/day at 23 deg.C. In general practice, most 
boat builders use Class 1 hose for vent lines as well as fuel lines to 
prevent having to carry two hose types. However, most fuel fill necks, 
which have a much larger diameter and are constructed differently, are 
Class 2 hose. Marine hose with permeation rates of less than one tenth 
of the Class 1 permeation limit is also used by some boat builders 
today for fuel and vent lines. Given sufficient lead time, we believe 
that hose manufacturers can modify their designs to use thicker 
barriers or lower permeating materials to further reduce the permeation 
rates from this hose.
---------------------------------------------------------------------------

    \30\ Society of Automotive Engineers Surface Vehicle Standard, 
``Marine Fuel Hoses,'' SAE J 1527 (Docket A-2000-01; document IV-A-
19).
---------------------------------------------------------------------------

    Low permeability fuel supply and vent hoses produced today are 
generally constructed in one of two ways: either with a low 
permeability layer or by using a low permeability rubber blend. One 
hose design, already used in some marine applications, uses a

[[Page 53072]]

thermoplastic layer between two rubber layers to control permeation. 
This thermoplastic barrier may either be nylon or ethyl vinyl acetate. 
In automotive applications, other barrier materials are used such as 
fluoroelastomers and fluoroplastics such as Teflon . An added 
benefit of low permeability lines is that some fluoropolymers can be 
made to conduct electricity and therefore can prevent the buildup of 
static charges. Currently, fuel fill necks used in marine applications 
generally are not made with barrier layers and permeate more than fuel 
supply lines. However, hoses are produced for chemical applications by 
the same companies, using the same process, that include barrier 
layers. This same production methodology could be used for marine fuel 
hoses. Also, EPA also expects low permeability fill neck hoses to be 
used in automotive applications in the 2004 as a result of the Tier 2 
motor vehicle evaporative emission standards.
    An alternative approach to reducing the permeability of marine 
hoses would be fluorination. This process would be performed in a 
manner similar to discussed above for fuel tanks.
    Fuel lines used to meet the proposed standards would also have to 
meet Coast Guard specifications in 33 CFR 183 which include a flame 
resistance test. Although the automotive standard, SAE J 2260, does not 
specifically include a flame resistance test like that included in the 
Coast Guard specifications, manufacturers generally design (and test) 
their hoses to be flame resistant.
4. Summary
    EPA believes that the proposed standards for evaporative emissions 
from boats using spark-ignition marine engines reasonably reflect what 
manufacturers can achieve through the application of available 
technology. Marine fuel tank manufacturers and boat builders will need 
to use the five years of lead time to select, design, and produce 
evaporative emission-control strategies that will work best for their 
product line. We expect that meeting these requirements will pose a 
challenge, but one that is feasible taking into consideration the 
availability and cost of technology, lead time, noise, energy, and 
safety. The role of these factors is presented in detail in Chapters 3 
and 4 of the draft RSD.
    We believe there are several options that can be used to reduce 
diurnal emissions from marine fuel tanks. This, coupled with the 
proposed emission-credit program for diurnal emissions, gives 
manufacturers flexibility in how they choose to comply with the 
proposed standards. We believe the most likely approach meeting the 
proposed emission diurnal standard will be for manufacturers to use a 
closed vent with a 1 psi pressure relief valve. Although we evaluated 
several technologies that have the potential to achieve larger emission 
reductions, we believe that more stringent standards are not 
appropriate at this time. This industry is primarily made up of small 
manufacturers and would likely need more time to develop technology 
options for further emission control. In addition, there are a wide 
range of fuel tank designs and applications in the recreational marine 
market, and the technologies discussed above may not be appropriate for 
all applications. Given these issues, and U.S. Coast Guard 
requirements, we believe that the flexibility given in the proposed 
diurnal requirements is appropriate.
    The proposed permeation standards are based on the effective 
application of low permeable materials or surface treatments. This is 
essentially a step change in technology; therefore, we believe that 
even if we were to propose a less stringent permeation standard, these 
technology options would likely still be used. In addition, this 
technology is relatively inexpensive and can achieve meaningful 
emission reductions. The proposed standards are expected to achieve a 
95 percent reduction in permeation emissions from marine fuel tanks and 
hoses. We believe that more stringent standards could result in 
significantly more expensive materials without large additional 
emission reduction. We request comment on our proposed permeation 
emission standards.

IV. Sterndrive and Inboard Marine Engines

    This section describes our current thinking regarding exhaust 
emissions from sterndrive and inboard marine engines (SD/I). We are not 
proposing SD/I exhaust emission standards at this time. We are 
investigating whether the application of catalysts on marine engines 
could be a cost-effective way to control emissions. We believe, that 
setting catalyst-forcing standards now would be premature, given the 
open issues related to catalyst use in the marine environment. However, 
we are continuing our efforts to develop and demonstrate catalytic 
control on SD/I marine engines in the laboratory and in-use, and will 
place new information in the docket when it is available. In fact, we 
intend to follow with another rulemaking in the future that will 
address exhaust emissions from SD/I engines once we have collected more 
information. We intend to include outboards and personal watercraft in 
this rulemaking as well.
    There are three primary approaches that we believe could be used to 
reduce exhaust emissions from sterndrive and inboard marine engines. 
The first is through lower emission calibration of the engine, 
especially through the use of electronic fuel injection. This could be 
implemented quickly, but would only result in small emission 
reductions. The second approach would be through the use of exhaust gas 
recirculation (EGR) which could be used to get a 40 to 50-percent 
reduction in NOX. Although this would be feasible, it would 
not be nearly as effective at controlling emissions as the third 
approach of using catalytic control. We believe catalytic control could 
be used to achieve much larger emission reductions than either of the 
first two approaches; therefore, we intend to implement catalyst-based 
standards as soon as we believe it is feasible. We believe we can 
implement these stringent standards sooner if we do not set an interim 
standard based on EGR. Manufacturers have raised concerns that if they 
were to focus on designing for an EGR-based standard, it would divert 
resources needed for catalyst development.
    We are in the process of resolving technical issues with the use of 
catalysts in a marine environment. Ongoing testing has shown promising 
results; we believe that, in the near future, continued efforts will 
resolve the remaining issues raised by the marine industry and by Coast 
Guard. One issue is that operation in the marine environment could 
result in unique durability problems for catalysts. Another issue to be 
addressed in developing this technology is ensuring that salt water 
does not reach the catalyst so that salt does not accumulate on the 
catalyst and reduce its efficiency. A third issue is addressing any 
potential safety concerns.
    As discussed in Section I.F, California ARB has recently put into 
place HC+NOX exhaust emission standards for SD/I marine 
engines. These standards include a cap on baseline emission levels in 
2003 followed by catalyst-forcing standards (5 g/kW-hr 
HC+NOX) phased in from 2007 through 2009. These standards 
are contingent on technology reviews in 2003 and 2005. ARB and industry 
have agreed on a catalyst development program for marine engines over 
the next several years. We will participate in and monitor catalyst 
development efforts for marine engines over the next few years.
    Since the ANPRM, we have collected laboratory emission data on a 
SD/I

[[Page 53073]]

marine engine through a joint effort with ARB, engine marinizers, and 
Southwest Research Institute.\31\ We collected baseline emission data 
as well as emission data from closed-loop control, exhaust gas 
recirculation, and several catalyst concepts. This work included 
catalyst packaging strategies designed to prevent water reversion to 
the catalyst. With the combination of closed-loop electronic control 
and EGR, we saw a reduction of 22 percent HC+NOX and 39 
percent CO from baseline. A catalyst was placed in a stock riser 
extension which resulted in a 74-percent reduction in HC+NOX 
and 46-percent reduction in CO from baseline. Other catalyst 
configurations were also tested with varying emissions reductions 
depending on their design.
---------------------------------------------------------------------------

    \31\ Carroll, J., White, J., ``Marine Gasoline Engine Testing,'' 
Prepared by Southwest Research Institute for the Environmental 
Protection Agency and the California Air Resources Board, EPA 
Contract 68-C-98-169, WA 2-11, September 2001 (Docket A-2000-01; 
document IV-A-91).
---------------------------------------------------------------------------

    In the testing discussed above, the 74 percent reduction in 
HC+NOX was achieved using a two catalysts with a combined 
volume of less than 1.5 liters on a SD/I engine with a 7.4 liter total 
engine displacement. SD/I marine engines sold today generally range 
from 3.0 to 8.1 liters of total cylinder displacement. A smaller engine 
would need less catalyst volume for the same emissions reduction. 
Further information on the emission reductions associated with SD/I 
emission control strategies and associated costs will be included in 
future rulemaking documents.
    As discussed above, we are working with the marine industry, ARB, 
and Coast Guard on technology assessment of catalytic converters on 
sterndrive and inboard marine engines. However, we do not believe this 
technology has been sufficiently demonstrated for us to set national 
standards based on implementation of catalyst technology at this time. 
We will also need to consider other factors such as cost and energy 
impacts in determining appropriate levels of standards.
    As we work towards low emission marine engines through catalyst 
technology for SD/I we also intend to investigate this technology for 
use on outboards and personal watercraft (OB/PWC). We believe many of 
the same issues with applying catalysts to SD/I marine engines also 
apply to OB/PWC marine engines. In addition, the annual emissions 
contribution of OB/PWC marine is several times larger than the 
contribution from SD/I marine engines so there is the potential for 
significant additional reductions from OB/PWC. Therefore, we intend to 
look into the feasibility and cost effectiveness of applying catalytic 
control to outboards and personal watercraft as well.
    Manufacturers have argued that the development effort required for 
EGR may detract resources from catalyst development. We are sensitive 
to this issue and are not proposing EGR-based standards at this time as 
it could ultimately slow industry's ability to meet catalyst-based 
standards. Clearly, the greatest potential for emission reductions is 
through the use of catalysts and we wish to implement standards as soon 
as feasible. However, if it were to become apparent that catalysts 
would not be feasible for SI marine engines in the time frame of the 
California ARB technology reviews, we would contemplate proposal of a 
standard based on EGR. EGR has been used in automotive applications for 
decades and we believe there are no significant technical hurdles for 
applying this inexpensive technology to marine engines. Although 
current marine engines do not generally have a port for exhaust gas 
recirculation, the electronic fuel injection systems are capable of 
controlling an EGR valve and control feedback loop. Given enough lead 
time, we believe manufacturers could apply this technology effectively 
on SI marine engines.
    We request comment on the feasibility of applying electronic fuel 
injection, exhaust gas recirculation, catalysts, or other technology 
that could be used to reduce emissions from SI marine engines. We also 
request comment on the costs and corresponding potential emission 
reductions from using these technologies, as well as any potential 
effects on engine performance, safety, and durability.

V. Highway Motorcycles

    We are proposing revised exhaust emission standards for highway 
motorcycles. This section includes background material, a description 
of the proposed standards and other important provisions, and a 
discussion of the technological feasibility of the proposed standards.

A. Overview

    In general, we are proposing to harmonize the federal exhaust 
emission standards for all classes of motorcycles with those of the 
California program, but on a delayed schedule relative to 
implementation in California. For Class I and Class II motorcycles, 
this would mean meeting exhaust emission standards that apply today in 
California. For Class III motorcycles, this would mean meeting the two 
tiers of exhaust emission standards that California ARB has put in 
place for future model years. The existing federal CO standard of 12.0 
g/km would remain unchanged. The process by which manufacturers certify 
their motorcycles, the test procedures, the driving cycle, and other 
elements of the federal program would also remain unchanged. We are 
also proposing standards for the currently unregulated category of 
motorcycles with engines of less than 50cc displacement.
1. What Are Highway Motorcycles and Who Makes Them?
    Motorcycles come in a variety of two- and three-wheeled 
configurations and styles. For the most part, however, they are two-
wheeled, self-powered vehicles. EPA regulations currently define a 
motorcycle as ``any motor vehicle with a headlight, taillight, and 
stoplight and having: two wheels, or three wheels and a curb mass less 
than or equal to 793 kilograms (1749 pounds)'' (See 40 CFR 86.402-98). 
Both EPA and California regulations sub-divide highway motorcycles into 
classes based on engine displacement. Table V.A-1 below shows how these 
classes are defined.

                    Table V.A-1.--Motorcycle Classes
------------------------------------------------------------------------
                                          Engine displacement  (cubic
          Motorcycle class                       centimeters)
------------------------------------------------------------------------
Class I.............................  50*-169
Class II............................  170-279
Class III...........................  280 and greater
------------------------------------------------------------------------
* This proposal would extend Class I to include 50cc.

    It is important to note that this definition excludes off-highway 
motorcycles from the regulatory definition of motorcycle. This is 
because the term ``motor vehicle,'' as used in the Act, applies only to 
vehicles ``designed for transporting persons or property on a street or 
highway'' (CAA section 216). In addition, EPA has promulgated 
regulations, in 40 CFR 85.1703, that elaborate on the Act's definition 
of motor vehicles and set forth three criteria, which, if any one is 
met, would cause a vehicle not to be considered a motor vehicle under 
the regulations, and therefore not subject to requirements applicable 
to motor vehicles. These criteria are:
    (1) The vehicle cannot exceed a maximum speed of 25 miles per hour 
over a level paved surface; or
    (2) The vehicle lacks features customarily associated with safe and 
practical street or highway use, including such things as a reverse 
gear (except motorcycles), a differential, or

[[Page 53074]]

safety features required by state and/or Federal law; or
    (3) The vehicle exhibits features which render its use on a street 
or highway unsafe, impractical, or highly unlikely, including tracked 
road contact means, an inordinate size, or features ordinarily 
associated with military combat or tactical vehicles such as armor and/
or weaponry.
    Thus, vehicles not meeting the criteria noted above are not covered 
by the proposed emission standard for motorcycles, because they fail to 
meet the definition of motor vehicle in the Clean Air Act and in 40 CFR 
85.1703. Vehicles that are not considered to be a motor vehicle under 
these statutory and regulatory provisions are generally considered 
under the Clean Air Act to be nonroad vehicles. In an earlier proposal, 
we discussed proposed emission standards for nonroad recreational 
vehicles, a category which includes off-highway motorcycles (66 FR 
51098, October 5, 2001). Also falling into the nonroad definition 
category are the mopeds and scooters that do not meet the definition of 
``motor vehicle,'' i.e., the smaller cousins of the mopeds and scooters 
that are currently considered highway motorcycles and certified as 
Class I motorcycles. In other words, if a moped or scooter or similar 
``motorbike'' cannot exceed 25 miles per hour, it is not considered a 
motor vehicle, but it is instead categorized as a nonroad recreational 
vehicle and would be subject to the emission standards recently 
proposed for off-highway motorcycles.
    Furthermore, vehicles that otherwise meet the motorcycle definition 
(i.e., are highway motorcycles as opposed to off-highway motorcycles) 
but have engine displacements less than 50 cubic centimeters (cc) 
(generally, youth motorcycles, most mopeds, and some motor scooters) 
are currently not required to meet EPA standards. Also currently 
excluded are motorcycles which, ``with an 80 kg (176 lb) driver, * * * 
cannot: (1) Start from a dead stop using only the engine; or (2) Exceed 
a maximum speed of 40 km/h (25 mph) on level paved surfaces'' (e.g., 
some mopeds). Most scooters and mopeds have very small engine 
displacements and are typically used as short-distance commuting 
vehicles. Motorcycles with larger engine displacement are more 
typically used for recreation (racing or touring) and may travel long 
distances.
    The currently regulated highway category includes motorcycles 
termed
    ``dual-use'' or ``dual-sport,'' meaning that their designs 
incorporate features that enable them to be competent for both street 
and nonroad use. Dual-sport motorcycles generally can be described as 
street-legal dirt bikes, since they often bear a closer resemblance in 
terms of design features and engines to true off-highway motorcycles 
than to highway cruisers, touring, or sport bikes. These dual-sport 
motorcycles tend to fall in Class I or Class II.
    The larger displacement Class III motorcycles are by far the most 
common motorcycles in the current U.S. market. Of the 175 engine 2002 
families certified as of January 2002 by manufacturers for sale in the 
U.S., 151 fall in the Class III category, representing more than 93 
percent of projected sales. Most of these are quite far from the bottom 
limit of Class III motorcycles (280cc); more than three-quarters of 
projected 2002 highway motorcycle sales are above 700cc, with engine 
displacements exceeding 1000cc for the most powerful ``superbikes,'' 
large cruisers, and touring bikes. The average displacement of all 
certified engine families is about 980cc, and the average displacement 
of certified Class III engine families is above 1100cc. The sales-
weighted average displacement of 2002 highway motorcycles is about 
1100cc. Class I and Class II motorcycles, which together make up less 
than seven percent of projected 2002 sales and only 24 out of 175 
certified 2002 engine families, consist mostly of dual-sport bikes, 
scooters, and entry-level sportbikes and cruisers.
    According to the Motorcycle Industry Council, in 1998 there were 
about 5.4 million highway motorcycles in use in the United States 
(565,000 of these were dual-sport). Total sales in 1999 of highway 
motorcycles was estimated to be about 387,000, or about 69 percent of 
motorcycle sales. About 15,000 of these were dual-sport 
motorcycles.\32\ Recent figures for the 2000 calendar year show that 
retail sales approached 438,000 highway motorcycles, about 19,000 of 
which were dual-sport bikes.\33\
---------------------------------------------------------------------------

    \32\ ``2000 Motorcycle Statistical Annual'', Motorcycle Industry 
Council (Docket A-2000-01; document II-D-192).
    \33\ DealerNews, volume 37, no. 2, February 2001 (Docket A-2000-
01; document II-D-190).
---------------------------------------------------------------------------

    Six companies account for about 95 percent of all motorcycles sold 
(Honda, Harley Davidson, Yamaha, Kawasaki, Suzuki, and BMW). All of 
these companies except Harley-Davidson and BMW also manufacture off-
highway motorcycles and ATVs for the U.S. market. Harley-Davidson is 
the only company of these six that is manufacturing highway motorcycles 
in the U.S. for the domestic market. Dozens of other companies make up 
the remaining five percent. Many of these are small U.S. companies 
manufacturing anywhere from a few dozen to a few thousand motorcycles, 
although importers and U.S. affiliates of larger international 
companies also contribute to the remaining five percent. See the draft 
Regulatory Support Document for more information regarding the makeup 
of the industry.
    As of the 2002 model year, all highway motorcycles with engines 
greater than 50cc displacement are powered by four-stroke engines. 
(Prior to the 2002 model year, Kawasaki was certifying a 100cc two-
stroke dual-sport motorcycle to the federal emission standards.) In the 
scooter and moped segment with engines under 50cc displacement, two-
stroke engines have traditionally outnumbered four-strokes, although 
that appears to be changing. In particular, Honda is now marketing a 
2002 49cc four-stroke scooter. Of the several dozen manufacturers in 
the under 50cc market, about a third are offering four-stroke engines. 
Therefore, as of the 2002 model year, it appears that about one third 
of the sales of scooters and mopeds under 50cc are powered by four-
stroke engines.
2. What Is the History of Emission Regulations for Highway Motorcycles?
    Emissions from highway motorcycles have been regulated for more 
than 20 years. While the federal requirements have remained unchanged 
since the initial standards were adopted more than 20 years ago, 
regulations in California, Europe, and many nations around the world 
have been periodically updated to reflect the availability of 
technology and the need for additional emission reductions.
    a. EPA regulations. In 1977 EPA issued a Final Rule (42 FR 1126, 
Jan. 5, 1977), which established interim exhaust emission standards 
effective for the 1978 and 1979 model years and ultimate standards 
effective starting with the 1980 model year. The interim standards 
ranged from 5.0 to 14.0 g/km HC depending on engine displacement, while 
the CO standard of 17.0 g/km applied to all motorcycles. The standards 
and requirements effective for 1980 and later model year motorcycles, 
which do not include NOX emission standards, remain in 
effect today. While the final standards did not differ based on engine 
displacement, the useful life over which these standards must be met 
ranged from 12,000 km (7,456 miles) for Class I motorcycles to 30,000 
km (18,641 miles) for Class III motorcycles. Crankcase emissions from 
motorcycles have also been prohibited since 1980. There are no current 
federal standards for evaporative emissions from

[[Page 53075]]

motorcycles. The current federal standards are shown in Table V.A-2.

Table V.A-2.--Current Federal Exhaust Emission Standards for Motorcycles
------------------------------------------------------------------------
                                                       HC  (g/   CO  (g/
                     Engine size                         km)       km)
------------------------------------------------------------------------
All.................................................       5.0      12.0
------------------------------------------------------------------------

    b. California ARB regulations. Motorcycle exhaust emission 
standards in California were originally identical to the federal 
standards that applied to 1978 through 1981 model year motorcycles. The 
definitions of motorcycle classes used by California ARB continue to be 
identical to the federal definitions. However, California ARB has 
revised its standards several times in bringing them to their current 
levels (see Table V.A-3). In the 1982 model year the standards were 
modified to tighten the HC standard from 5.0 g/km to 1.0 or 1.4 g/km, 
depending on engine displacement. California adopted an evaporative 
emission standard of 2.0 g/test for all three motorcycle classes for 
1983 and later model year motorcycles. California later amended the 
regulations for 1988 and later model year motorcycles to further lower 
emissions and to make the compliance program more flexible for 
manufacturers. The 1988 and later standards could be met on a 
corporate-average basis, and the Class III bikes were split into two 
separate categories: 280 cc to 699 cc and 700 cc and greater. These are 
the standards that apply in California now. Like the federal standards, 
there are currently no limits on NOX emissions for highway 
motorcycles in California. Under the corporate-average scheme, no 
individual engine family is allowed to exceed a cap of 2.5 g/km HC. 
Like the federal program, California also prohibits crankcase 
emissions.

  Table V.A-3.--Current California Highway Motorcycle Exhaust Emission
                                Standards
------------------------------------------------------------------------
                                                       HC  (g/   CO  (g/
                  Engine size (cc)                       km)       km)
------------------------------------------------------------------------
50-279..............................................       1.0      12.0
280-699.............................................       1.0      12.0
700 and above.......................................       1.4      12.0
------------------------------------------------------------------------

    In November 1999, California ARB adopted new exhaust emission 
standards for Class III motorcycles that would take effect in two 
phases--Tier 1 standards starting with the 2004 model year, followed by 
Tier 2 standards starting with the 2008 model year (see Table V.A-4). 
Existing California standards for Class I and Class II motorcycles, 
which have been in place since 1982, remain unchanged, as does their 
evaporative emissions standard. As with the current standards in 
California, manufacturers will be able to meet the requirements on a 
corporate-average basis. Perhaps most significantly, California ARB's 
Tier 1 and Tier 2 standards control NOX emissions for the 
first time by establishing a combined HC+NOX standard. 
California ARB made no changes to the CO emission standard, which 
remains at 12.0 g/km, equivalent to the existing federal standard. In 
addition, California ARB is providing an incentive program to encourage 
the introduction of Tier 2 motorcycles before the 2008 model year. This 
incentive program allows the accumulation of emission credits that 
manufacturers can use to meet the 2008 standards. Like the federal 
program, these standards will also apply to dual-sport motorcycles.

       Table V.A-4.--Tier 1 and Tier 2 California Class III Highway Motorcycle Exhaust Emission Standards
----------------------------------------------------------------------------------------------------------------
                                                                                         HC+NOX (g/
                  Model year                              Engine displacement               km)       CO (g/km)
----------------------------------------------------------------------------------------------------------------
2004 through 2007 (Tier 1)....................  280 cc and greater....................          1.4         12.0
2008 and subsequent (Tier 2)..................  280 cc and greater....................          0.8         12.0
----------------------------------------------------------------------------------------------------------------

    California ARB also adopted a new definition of small-volume 
manufacturer that will take effect with the 2008 model year. Currently 
and through the 2003 model year, all manufacturers must meet the 
standards, regardless of production volume. Small-volume manufacturers, 
defined in California ARB's recent action as a manufacturer with 
California sales of combined Class I, Class II, and Class III 
motorcycles not greater than 300 units annually, do not have to meet 
the new standards until the 2008 model year, at which point the Tier 1 
standard applies. California ARB intends to evaluate whether the Tier 2 
standard should be applied to small-volume manufacturers in the 
future.\34\
---------------------------------------------------------------------------

    \34\ California ARB, October 23, 1998 ``Proposed Amendments to 
the California On-Road Motorcycle Regulation'' Staff Report: Initial 
Statement of Reasons (Docket A-2000-01; document II-D-12).
---------------------------------------------------------------------------

    c. International regulations. The European Commission (EC) recently 
finalized a new phase of motorcycle standards, which will start in 
2003, and the EC intends a second phase to start in 2006. Whereas the 
current European standards make a distinction between two-stroke and 
four-stroke engines, the proposed standards would apply to all 
motorcycles regardless of engine type. The 2003 standards would require 
emissions to be below the values shown in Table V.A-5, as measured over 
the European ECE-40 test cycle.\35\ The standards considered for 2006 
are still in a draft form and have not yet been officially proposed, 
but the expectation is that they will be considerably more stringent. 
In addition to taking another step in reducing motorcycle emissions, 
the 2006 standards may incorporate an improved motorcycle test cycle, 
as noted below. The standards in the following table apply to 
motorcycles of less than 50cc (e.g., scooters and mopeds) only if the 
motorcycle can exceed 45 kilometers per hour (28 miles per hour). 
Starting in 2002 motorcycles of less than 50cc that cannot exceed 45 
kilometers per hour (28 miles per hour) are subject to a new 
HC+NOX standard of 1.2 grams per kilometer and a CO standard 
of 1.0 gram per kilometer.
---------------------------------------------------------------------------

    \35\ The ECE-40 cycle is used by several countries around the 
world for motorcycle emission testing. It has its origins in 
passenger car driving, being derived from the European ECE-15 
passenger car cycle. The speed-time trace is simply a combination of 
straight lines, resulting in a ``modal'' cycle, rather than the 
transient nature of the U.S. Federal Test Procedure (FTP).

   Table V.A-5.--European Commission 2003 Motorcycle Exhaust Emission
                                Standards
------------------------------------------------------------------------
       HC (g/km)                CO (g/km)               NOX (g/km)
------------------------------------------------------------------------
             1.2                      5.5                     0.3
------------------------------------------------------------------------

    Many other nations around the world, particularly in South Asia 
where two-stroke mostly small displacement motorcycles can be a 
majority of the vehicle population, have also recently improved their 
emission standards or are headed that way in the next several years. 
For example, Taiwan has adopted an HC+NOX standard of 1.0 
gram per

[[Page 53076]]

kilometer for all two-strokes starting in 2003 (as tested on the 
European ECE-40 test cycle). (Four-stroke motorcycle engines will have 
to meet at standard of 2.0 grams per kilometer.) India has proposed a 
standard for all motorcycles of 1.3 grams per kilometer 
HC+NOX in 2003 and 1.0 grams per kilometer HC+NOX 
in 2005 (as tested on the Indian Drive Cycle, or IDC).\36\ China has 
adopted the European standards described above, implementing them in 
2004, a year later than Europe.
---------------------------------------------------------------------------

    \36\ The IDC, although not a transient cycle like the FTP, 
appears to be the only cycle currently in use that is based on 
actual measurements of motorcycles in use.
---------------------------------------------------------------------------

    d. Test cycle. In the ANPRM we requested comment on the adequacy of 
the current test cycle (the Federal Test Procedure, or FTP) for 
representing the highway motorcycle operation. We suggested that the 
existing US06 test cycle (more aggressive accelerations and higher 
speeds than the FTP) or another more representative test cycle might be 
appropriate for highway motorcycles. In addition, we noted the effort 
underway under the auspices of the United Nations/Economic Commission 
for Europe (UN/ECE) to develop a global harmonized world motorcycle 
test cycle (WMTC), and requested comment on adopting such a test cycle. 
The objective of the WMTC project is to develop a scientifically 
supported test cycle that accurately represents the in-use driving 
characteristics of highway motorcycles. The advantages of such a test 
cycle are numerous. First, the industry could have a single test cycle 
to meet emission standards in many countries (the process recognizes 
that nations will have differing emission standards due the varying 
air-pollution concerns). Second, the test cycle could potentially be 
better than the existing FTP in that it intends to better represent how 
a wide range of riders drive their motorcycles.
    Similar comments were submitted on this issue by the Motorcycle 
Industry Council (MIC) and by Harley-Davidson Motor Company. In general 
MIC and Harley-Davidson stated that while pursuing a global emissions 
test procedure for motorcycles makes good business sense, the timing of 
the ongoing international process is not consistent with the current 
EPA rulemaking to establish new motorcycle standards.
    At this time we are not proposing any modifications to the highway 
motorcycle test cycle. We continue to be involved in the WMTC process 
and are hopeful that a test cycle meeting the stated objectives can be 
agreed on by the international participants. Although a draft test 
cycle has been developed, several issues remain unresolved and it will 
likely be a couple of years before a new cycle can be issued as a 
global technical regulation under the process established by a 1998 
international agreement. Under that process, if a test cycle is brought 
to a vote and the United States votes in the affirmative, we will then 
be committed to initiating a rulemaking that may lead to a proposal to 
adopt the new test cycle. We request comment on the best way to 
transition to a new global test cycle in the future, should that time 
come. Among the many options we could consider are: an immediate 
transition; a phasing in of the new cycle and a phasing out of the FTP; 
or a phasing in of the new cycle while maintaining the FTP as an option 
for a specified number of years.
    e. Consumer modifications. Many motorcycle owners personalize their 
motorcycles in a variety of ways. This is one of the aspects of 
motorcycle ownership that is appealing to a large number of motorcycle 
owners, and they take their freedom to customize their bikes very 
seriously. However, there are some forms of customization that are not 
legal under the provisions of Clean Air Act section 203(a), which 
states that it is illegal: ``for any person to remove or render 
inoperative any device or element of design installed on or in a motor 
vehicle or motor vehicle engine in compliance with regulations under 
this title ... after such sale and delivery to the ultimate purchaser* 
* *''
    In other words, under current law, owners of motor vehicles \37\ 
cannot legally make modifications that cause the emissions to exceed 
the applicable emissions standards, and they cannot remove or disable 
emission-control devices installed by the manufacturer.\38\
---------------------------------------------------------------------------

    \37\ A motorcycle is a ``motor vehicle'' as defined under 
section 216 of the Clean Air Act, which states that ``[t]he motor 
vehicle' means any self-propelled vehicle designed for transporting 
persons or property on a street or highway.''
    \38\ See Mobile Source Enforcement Memorandum No. 1A, Interim 
Tampering Enforcemetn Policy, Office of Enforcement and General 
Council, June 25, 1974 (Docket A-2000-01; document IV-A-27). (http:/
/www.epa.gov/oeca/aed/comp/hcomp.html)
---------------------------------------------------------------------------

    We use the term ``tampering'' to refer specifically to actions that 
are illegal under Clean Air Act section 203; the term, and the 
prohibition, do not apply generally to the wide range of actions that a 
motorcycle enthusiast can take to personalize his or her motorcycle, 
but only to actions that remove or disable emission control devices or 
cause the emissions to exceed the standards. We know, from anecdotal 
reports and from some data collected from in-use motorcycles, that a 
portion of the motorcycle riding population has removed, replaced, or 
modified the original equipment on their motorcycles. This 
customization can include changes that can be detrimental (or, in some 
cases, possibly beneficial) to the motorcycle's emission levels. The 
ANPRM sought comments and data that could better help us understand the 
nature of the issue, such that our proposal could be made with the best 
understanding possible of current consumer practices. We did not intend 
to suggest that we would be revising the existing tampering 
restrictions to prohibit many of the things that motorcycle owners are 
now doing legally.
    The proposed emissions standards, if adopted by EPA, would not 
change this ``tampering'' prohibition, which has been in place for more 
than 20 years. Owners would still be free generally to customize their 
motorcycles in any way, as long as they do not disable emission 
controls or cause the motorcycle to exceed the emission standards.
    They would also be free, as they are now, to perform routine 
maintenance on their motorcycles to restore or maintain the motorcycle 
engine and related components in their original condition and 
configuration.
    This proposal would increase the number of motorcycle models 
employing emission reduction technologies such as sequential fuel 
injection, pulse air injection, and catalytic converters. We request 
comment on the impact, if any, that these technologies could have on 
the difficulty and/or cost of routine maintenance or other legal 
modifications performed by or for the consumer. As discussed below and 
in the draft RSD, we do not anticipate detrimental impacts to the 
performance ch aracteristics of motorcycles that will meet the proposed 
emission standards. We request comment and supporting data on potential 
performance impacts (positive and negative) of these technologies.

B. Motorcycles Covered by This Proposal

    Highway, or ``street-legal,'' motorcycles are covered by the 
proposal described in this section. EPA regulations currently define a 
``motorcycle'' as ``any motor vehicle with a headlight, taillight, and 
stoplight and having: two wheels, or three wheels and a curb mass less 
than or equal to 793 kilograms (1749 pounds).'' (See 40 CFR 86.402-98). 
This definition would continue to apply; therefore, the term 
``motorcycle'' would continue to refer only to highway motorcycles. In

[[Page 53077]]

addition, these ``motorcycles'' that are currently subject to emissions 
standards would be subject to the proposed standards. However, we are 
also proposing to modify the regulations to include some motorcycles 
that are currently excluded from the emission regulations, as described 
below.
    EPA regulations currently exclude motorcycles (i.e., motor vehicles 
that meet the definition of ``motorcycle'' stated above) from the 
emission standards requirements based on several criteria laid out in 
40 CFR 86.401-97. First, motorcycles are excluded if they have an 
engine displacement of less than 50cc. Second, a motorcycle is excluded 
if, with an 80 kg (176 lb) driver, it cannot start from a dead stop 
using only the engine or exceed 40 kph (25 mph) on a level paved 
surface. These provisions have the effect of excluding many mopeds, 
youth motorcycles, and some scooters from having to comply with any 
emission standards requirements. As discussed above, motorcycle-like 
vehicles that cannot exceed 25 miles per hour are not considered motor 
vehicles, and thus would be regulated under the nonroad recreational 
vehicle standards proposed earlier this year (66 FR 51098, October 5, 
2001).
    Highway motorcycles with engine displacements less than 50cc are 
generally most mopeds, as well as some motor scooters (``scooters,'' or 
sometimes, ``motorbikes''). Many of these vehicles are powered by 49cc 
two-stroke engines, although four-stroke engines are becoming more 
popular. Honda, for example, will no longer be marketing any two-stroke 
street-use motorcycles as of the 2003 model year; everything, including 
their 49cc scooter, will be powered by a four-stroke engine. We are 
proposing to revise two aspects of the regulations such that we would 
require most of these currently excluded vehicles to meet emission 
standards in the future. First, the general exclusion for motorcycles 
under 50cc would be changed such that no motorcycles would be excluded 
from the emission standards on the basis of engine displacement alone. 
Second, the definition of Class I motorcycles would be revised to 
accommodate motorcycles under 50cc (i.e., a Class I motorcycle would be 
defined as a motorcycle with an engine displacement of less than 
170cc). The standards that would apply to these vehicles are described 
in the following section. It is important to note that the motorcycle-
like vehicles under 50cc that cannot be defined as a motor vehicle 
(e.g., one that can't exceed 25 mph), continue to be excluded from 
these standards; they would, however, be covered by the recently 
proposed standards for nonroad recreational vehicles (66 FR 51098, 
October 5, 2001). We request comment on our proposed regulation of this 
previously unregulated category of motorcycle.
    The cost per ton of controlling emissions from motorcycles with 
less than 50cc displacement engines is higher than for the proposed 
standards for larger motorcycles. However, the scooters and mopeds are 
very likely to be operated exclusively within populated urban areas. 
Scooters and mopeds, by virtue of their limited speeds, are not 
appropriate for use on highways; these small two-wheelers are often 
purchased for limited commuting within large urban areas or college 
campuses. Thus, it is likely that the air quality benefits of 
controlling emissions from these engines would be greater than 
indicated by the cost per ton comparison alone. We request comments on 
the merits of applying standards to these vehicles.
    Parties have raised concerns regarding the potential for losses in 
environmental benefits from the highway use of off-highway motorcycles. 
Because the standards are different today (off-highway motorcycles do 
not currently have emissions standards) and would be somewhat different 
under our proposed standards, emissions reductions potentially could be 
lost if consumers purchased off-highway motorcycles for highway use on 
a widespread basis. State requirements vary considerably and in some 
states it may be difficult to meet requirements by modifying an off-
highway motorcycle, while in others it may require only a few minor 
modifications. We request comment on current practices and the 
potential for this to occur in the future. We also request comment on 
steps we could reasonably take to address air pollution concerns 
associated with highway use of off-highway motorcycles.

C . Proposed Standards

1. What Are the Proposed Standards and Compliance Dates?
    In general, we are proposing to harmonize the federal exhaust 
emission standards for all classes of motorcycles with those of the 
California program, but on a delayed schedule relative to 
implementation in California. (The exception would be motorcycles with 
engines of less than 50cc displacement, which are not currently 
regulated by California, for which we are also proposing standards.) 
For Class I and Class II motorcycles as currently defined, this would 
mean meeting exhaust emission standards that apply now in California 
(and have applied since 1982). For Class III motorcycles, this would 
mean meeting the two tiers of exhaust emission standards that 
California ARB has put in place for future model years. The existing 
federal CO standard of 12.0 g/km would remain unchanged. The process by 
which manufacturers certify their motorcycles, the test procedures, the 
driving cycle, and other elements of the federal program would remain 
unchanged.
    In the development of this proposal following the publication of 
the ANPRM we considered several regulatory alternatives. These 
included: no revision to the standards, harmonization with one of the 
``tiers'' of California standards (current, 2004 Tier-1, 2008 Tier-2), 
more stringent standards than those in place in California, or possibly 
different implementation timing. We also considered various 
alternatives designed to reduce the burden on small manufacturers 
(these are presented in section VII.B on the Regulatory Flexibility 
Act).
    After considering comments on the ANPRM, we believe that the 
standards should be revised. The existing Federal standards were 
established more than twenty years ago, and it is clear that emission 
control technology has advanced a great deal in that time. California 
has continued to revise their standards to maintain some contact with 
current technology, and manufacturers have generally (but not 
uniformly) responded by producing motorcycles for sale nationwide that 
meet the more stringent California standards. Thus, in large part the 
existing federal standards has been superseded because of the 
preponderance of manufacturers that have responded in this way. Those 
arguing against new emission standards often cite the fact that 
motorcycles are typically far cleaner than the existing federal 
standards require. Although we agree, we see this fact as a reason for 
improving emission standards and as evidence that the current federal 
standards are out of touch with the reality of today's technology.
    We believe it is most appropriate at this time to propose 
harmonizing with the California exhaust emission standards, as opposed 
to other options discussed in the ANPRM. For example, the 
dissimilarities between on- and off-highway motorcycles do not 
encourage a one-size-fits-all approach for all motorcycles (this 
opinion is supported by a significant number of those who commented on 
the ANPRM). Off-highway motorcycles are powered predominantly by two-
stroke engines, whereas highway motorcycles are all powered by four-
stroke engines as of the

[[Page 53078]]

2002 model year. On- and off-highway motorcycle engines also lie at 
vastly different ends of the size spectrum. The average highway 
motorcycle sold today has a displacement of nearly 1000cc, whereas 
almost 90 percent of off-highway motorcycle engines have an engine 
displacement of less than 350cc. In addition, on- and off-highway 
motorcycles are used in very different ways; finding a set of standards 
and a test procedure that adequately represents the typical range of 
operation for both types would therefore be extremely challenging. On-
highway motorcycle manufacturers have commented that, to the extent the 
standards are revised, harmonization with California, rather than a 
distinctly different set of standards, is preferable because it 
eliminates the possibility of needing two distinct product lines for 
California and Federal regulations.\39\
---------------------------------------------------------------------------

    \39\ See comments on the ANPRM from Harley-Davidson and the 
Motorcycle Industry Council, available in the public docket for 
review (Docket A-2000-01; document II-D-48).
---------------------------------------------------------------------------

    Delaying implementation of the California standards on a nationwide 
basis by two years would provide an opportunity for manufacturers to 
gain some experience with the technology needed to meet the new 
standards. Two years provides time for technology optimization and cost 
reduction. Providing a longer delay could potentially provide the 
option of a further decrease in the level of the emission standards, 
given that the technological feasibility of the California standards 
has been adequately demonstrated (at least one manufacturer is already 
selling a motorcycle meeting the 2008 California standards). However, 
this would be a tradeoff against a more timely introduction of the new 
standards.
    We also evaluated whether the federal motorcycle program should 
incorporate averaging provisions, as the California program does. Given 
the desire of most manufacturers to manufacture a motorcycle for 
nationwide sale, such a program without averaging would not be 
desirable because it would not provide the flexibility needed to meet 
the California and federal requirements together and could have at 
least potentially led to a somewhat less stringent Federal standard. 
Therefore, we are proposing to provide an averaging program comparable 
to California's.
    EPA uses the term ``useful life'' to describe the period (usually 
years and/or miles) over which the manufacturer must demonstrate the 
effectiveness of the emission control system. For example, the ``useful 
life'' of current passenger cars is 10 years or 100,000 miles, 
whichever first occurs. It does not mean that a vehicle is no longer 
useful or that the vehicle must be scrapped or turned in once these 
limits are reached. The term has no effect on the owners' ability to 
ride their motorcycles for as long as they want. In the ANPRM we 
requested comment on whether the current definitions of useful life for 
the three motorcycle classes remains appropriate, given that these 
definitions were established more than 20 years ago. For example, we 
question whether, given that the average distance traveled per year for 
highway motorcycles is around 4,200 km (2,600 miles), the useful life 
for Class III motorcycles of 30,000 km (18,680 miles) is really 
appropriate. A typical motorcycle would reach the useful life mileage 
in about seven years at that rate. Based on data received from an 
industry trade group, we estimated an average operating life of 12.5 
years for on-highway motorcycles. We request comment on extending the 
useful life by up to 10,000 km (6,200 miles) to reflect a value more 
consistent with actual use.
    a. Class I and Class II motorcycles. We are proposing that Class I 
and Class II motorcycles would have to meet the current California ARB 
exhaust emission standards on a nationwide basis starting with the 2006 
model year. These standards, which have been in place in California 
since 1982, are 1.0 g/km HC and 12.0 g/km CO, as measured on the 
existing Federal Test Procedure (FTP) for motorcycles.
    In addition to applying to motorcycles currently in Class I and 
Class II (i.e., those over 50cc), we are also proposing that these 
standards apply to those motorcycles encompassed by the proposed 
revised Class I definition, which would include the previously-excluded 
engines under 50cc, as described above. As discussed in further detail 
below, we are considering ways of including Class I and Class II 
motorcycles in the overall emissions averaging program, and request 
comment on this issue.
    Class I motorcycles as currently defined are currently tested on a 
version of the Federal Test Procedure (FTP) that has lower top speeds 
and reduced acceleration rates relative to the FTP that is used for 
Class II and III motorcycles. The Class I FTP has a top speed of just 
under 60 km/hr, or around 37 mph, whereas the Class II/III FTP has a 
top speed of just over 90 km/hr, or just above 55 mph. By proposing to 
define motorcycles with engine displacements of less than 50cc as Class 
I motorcycles, these ``new'' Class I motorcycles would likewise be 
tested on the Class I FTP. We believe that this use of this test cycle 
is feasible and appropriate for the new Class I motorcycles (many are 
advertised with a top speed in the range of 40-50 mph). We request 
comment on the feasibility of the proposed test cycle for motorcycles 
with engine displacements of less than 50cc; in particular, we request 
comment on whether experience in meeting existing European or Asian 
requirements provides any insight on this issue. We request comment on 
alternative test cycles and certification options, including whether 
the cycle required for low-speed, small-displacement scooters and 
mopeds in Europe should be used or allowed by EPA.
    Despite the fact that virtually all Class I and Class II 
motorcycles already meet and certify to these standards,\40\ we are 
proposing nationwide implementation in 2006 for two reasons. First, 
there are those motorcycles under 50cc that require some lead time to 
meet new standards. Second, any averaging provisions, if finalized, 
that would provide flexibility in meeting the Class I and Class II 
standards would not be useful until the 2006 model year, when some 
exchange of emission credits between the three motorcycle classes may 
be allowed (see the request for comment on averaging flexibilities for 
Classes I and II in section C.2 below). Nevertheless, we request 
comment on the 2006 implementation date, and whether it should be 
earlier for the current Class I and II motorcycles, given that all 2002 
motorcycles in these classes are already certified at emission levels 
that would meet the proposed standards. For example, we could implement 
standards for the over 50cc motorcycles in 2004 and for those under 
50cc in 2006.
---------------------------------------------------------------------------

    \40\ Based on analysis of motorcycle emissions certification 
data.
---------------------------------------------------------------------------

    We recognize, as discussed in detail below, that the U.S. is a 
small market for scooters and mopeds with engine displacements of under 
50cc, and that many of the factors that are currently driving 
technology development are actions by the governments in the major 
world markets for these types of two-wheelers. A U.S. attempt to drive 
technology to achieve emission limits more stringent or sooner than 
those applicable in the largest scooter markets (South Asia, Europe) 
might result in some manufacturers choosing to withdraw from the U.S. 
market, rather than develop specific technologies to address U.S. 
requirements. (This appeared to occur in the mid-to late-1980's when 
new California standards,

[[Page 53079]]

combined with fairly active advertising by Honda, drove the European 
manufacturers from the U.S. market.) For the Class I motorcycles under 
50cc, we therefore request comment on the cost and technology that 
would be associated with standards within a range of 1.0 to 2.0 grams 
per kilometer HC (or HC+NOX). We believe that, in view of 
the standards that apply or will soon apply in many of the major 
scooter markets around the world (see Table V.A-6), that a standard in 
this range is similar to standards in other countries and would allow 
the use of similar technologies for U.S. standards. Standards in this 
range would be intended to allow the U.S. to be more certain that we 
would receive the same scooters being marketed in the rest of major 
scooter markets.

     Table V.A-6.--Summary of Current and Future Worldwide Emission Standards for Motorcycles Less Than 50cc
                                                  Displacement
----------------------------------------------------------------------------------------------------------------
            Country                 HC         CO        NOX       HC+NOX       Test cycle            Notes
----------------------------------------------------------------------------------------------------------------
European Union................  .........       6.0   .........        3.0  ECE R47             Current
                                                                                                 (``Euro1'').
                                .........       1.0   .........        1.2  ECE R47             2002
                                                                                                (``Euro 2'').
Switzerland...................       0.5        0.5        0.1   .........  ECE R47             Current.
India.........................  .........       2.0   .........        2.0  India Drive (IDC)   Current.
                                .........       1.3   .........        1.3  India Drive (IDC)   2003
                                                                                                Proposed.
                                .........       1.0   .........        1.0  India Drive (IDC)   2005
                                                                                                Proposed.
China.........................  .........       6.0   .........        3.0  ECE R47             Current.
                                .........       1.0   .........        1.2  ECE R47             2005.
Japan.........................       5.26      14.4        0.14  .........  ISO 6460            Current
                                                                                                2-stroke.
                                     2.93      20.0        0.51  .........  ISO 6460            Current
                                                                                                4-stroke.
Korea.........................       4.0        8.0        0.1   .........  ECE R47             Current.
Singapore.....................       5.0       12.0   .........  .........  FTP                 Current.
Taiwan........................  .........       3.5        2.0   .........  ECE R47             Current.
                                .........       7.0   .........        1.0  ECE R47             2003
                                                                                                2-stroke.
                                .........       7.0   .........        2.0  ECE R47             2003
                                                                                                4-stroke.
Thailand......................       3.0        4.5   .........  .........  ECE R40             Current.
----------------------------------------------------------------------------------------------------------------

    b. Class III Motorcycles. We are proposing to harmonize the federal 
Class III motorcycle standards with the exhaust emission standards of 
the recently finalized California program. Specifically, we propose to 
adopt the Tier 1 standard of 1.4 g/km HC+NOX starting in the 
2006 model year, and the Tier 2 standard of 0.8 g/km starting in the 
2010 model year. Because both HC and NOX are ozone 
precursors, this new standard would better reduce ozone than an HC-only 
standard. Implementation on a nationwide basis would therefore take 
place starting two model years after implementation of identical 
exhaust emission standards in California, ensuring that manufacturers 
have adequate lead time to plan for these new standards. As described 
below in further detail, these standards can be met on a corporate-
average basis.
    As noted earlier, California ARB plans a technology progress review 
in 2006 to evaluate manufacturers' progress in meeting the Tier 2 
standards. We plan to participate in that review and work with 
California ARB, intending to make any appropriate adjustments to the 
standards or implementation schedule if warranted. For example, if 
California ARB determines in the review process that the standards are 
achievable, but in 2010 rather than 2008, we could follow with a 
rulemaking that would consider appropriate adjustment to the federal 
requirements.
2. Could I Average, Bank, or Trade Emission Credits?
    To provide flexibility in meeting the standards, we are proposing 
to adopt an emission-credit program comparable to the existing 
California ARB regulations, and requesting comment on some additional 
flexibility relative to California ARB's program that could be included 
in our proposed program. There is currently no federal emission-credit 
program for highway motorcycles. As proposed, the program allows 
manufacturers to meet the standards on a fleet-average basis (i.e., an 
averaging program).
    Under the emission-credit program, manufacturers would be able to 
balance the certified HC+NOX emissions of their Class III 
motorcycles so that the sales-weighted HC+NOX emissions 
level meets the applicable standard. This means that some engine 
families may have HC+NOX emissions below the standards, 
while others have HC+NOX emissions higher than the 
standards. For enforcement purposes, manufacturers are required to 
specify a certification limit, or ``Family Emission Limit'' for each 
engine family. For example, one of a manufacturer's Class III engine 
families could be certified at 1.7 g/km HC+NOX; this would 
be allowable under the California regulations if the sales-weighted 
average of all the manufacturer's engine families met the applicable 
1.4 or 0.8 g/km HC+NOX standard.
    As discussed below, EPA is proposing early credits provisions where 
credits may be banked prior to the beginning of the program. In several 
other emissions control programs, EPA allows manufacturers to bank 
credits after the start of the program for future use, or trade them to 
another manufacturer. In general, EPA has been supportive of these 
additional flexibilities and sees the potential for added value here as 
a means to reduce cost and provide additional compliance flexibility as 
needed * * * California's current program, however, does not contain 
banking (except for early banking) and trading provisions and 
manufacturers have not shown an interest in such provisions. 
Harmonization with California has been the overarching concern. Banking 
and trading provisions

[[Page 53080]]

that are out-of-step with the California program may have little use 
because manufacturers plan on carrying over their California products 
nationwide. In addition, such provisions complicate the certification 
and compliance protocols because EPA must set up systems for tracking 
credits and these systems must be established even if the use of the 
credit provisions is unlikely.
    Because EPA believes banking and trading provisions would 
complicate the program, EPA is requesting comment on them rather than 
proposing them. EPA requests comment on an approach where manufacturers 
would establish HC+NOX family emissions limits (FELs) that 
are either below the standard, for generating credits, or above the 
standard, for using credits. These FELs, in effect, become the standard 
for the individual family. This would be similar in nature to the 
program for heavy-duty engines (see 40 CFR 86.004-15), but without 
transient conversion factors. Those commenting in support of credit 
banking and trading are encouraged to also provide detailed comments on 
any related provisions which would need to be considered in 
establishing the program for generating and using credits such as 
credit life, discounts (if any), cross displacement class trading 
issues, etc.
    To maintain equity, California ARB adopted a cap on Family Emission 
Limits of 2.5 g/km HC for all individual engine families under the 
existing emission-credit program (i.e., for Class III motorcycles). 
Because the 2.5 g/km HC-only standard was in effect in California 
before the emission-credit program was adopted, the 2.5 g/km cap 
continues to prevent manufacturers from selling motorcycles with 
emissions higher than the previous standard. Based on this reasoning, 
we are proposing a similar cap. However, because the current federal 
standard is 5.0 g/km, we are proposing an emissions cap on individual 
engine families of 5.0 g/km HC+NOX. This will provide the 
added benefit of enabling manufacturers to retain some of the federally 
certified engine families that might otherwise have had some difficulty 
meeting the somewhat lower cap specified by California. Manufacturers 
producing these higher-emitting models would need to offset these 
emissions with other models certified below the standard.
    To provide additional flexibility for manufacturers, we are 
requesting comment on the possible benefits of incorporating Class I 
and Class II motorcycles into the averaging program described above. 
This could be done in various ways. One option would be to define the 
proposed Class I and Class II HC-only standard of 1.0 g/km as an 
averaging standard, either within each class or for Class I and Class 
II combined. However, we believe this option would be of limited use, 
given the small number of engine families in these motorcycle classes. 
A second option would be to develop a credit program similar to that in 
place for the California Low-Emission Vehicle Program. Under this type 
of program, for example, credits accumulated by Class III motorcycles 
could be used to offset ``debits'' accumulated in one or both of the 
other classes. Credits would be accumulated by having a sales-weighted 
fleet-average value of the class below the applicable standard, while 
debits would result from having a class fleet-average value above the 
standard. A third option would be to allow the certification of Class I 
and II motorcycles to the Class III ``averaging set.'' In other words, 
under this option the combined sales-weighted fleet average of Class I, 
II, and III motorcycles would, at the manufacturer's option, be 
certified to the Tier 1 and Tier 2 fleet average HC+NOX 
standards. We request comment on the value of provisions of this 
nature, and on the advantages and disadvantages of each of these basic 
approaches. We also request comment on whether there are any 
adaptations of this averaging program that would improve the 
flexibility for small volume manufacturers.
    To encourage early compliance, we are also proposing incentives in 
the emission-credit program similar to those in place in California, 
with timing adjusted due to the differing federal implementation 
schedule. We believe such incentives will encourage manufacturers to 
introduce Tier 2 motorcycles nationwide earlier than required by this 
proposal. In addition, we believe some manufacturers can reduce 
emissions even further than required by the Tier 2 standard; we would 
like to encourage the early introduction of these very low-emission 
vehicles. This proposal would provide incentives for early compliance 
by assigning specific multiplier factors based on how early a 
manufacturer produces a Tier 2 motorcycle and a motorcycle certified at 
0.4 g/km HC+NOX; these multipliers are shown in Table V.C-1.
    Because we expect the Tier 2 technologies to become more widespread 
as 2010 approaches, the multipliers decrease linearly in value from 
2006 until 2010, when the early compliance incentive would no longer 
have any value (i.e., the multiplier has a value of 1.0) and the 
program would terminate. As shown in Table V.C-1, each unit of early 
Tier 2 motorcycles (those certified at 0.8 g/km HC+NOX) 
would count as Y motorcycles at 0.8 g/km HC+NOX for purposes 
of corporate averaging in 2010, where Y is 1.5 for those motorcycles 
sold during model years (MY) 2003 through 2006, 1.375 for those sold in 
MY 2007, 1.250 for those sold in MY 2008, and 1.125 for those sold in 
MY 2009. A similar set of multipliers is shown in Table V.C-1 for pre-
MY 2010 motorcycles certified even lower at 0.4 g/km HC+NOX.

    Table V.C-1.--Multipliers to Encourage Early Compliance With the
                   Proposed Tier 2 Standard and Beyond
------------------------------------------------------------------------
                                                     Multiplier (Y) for
                                                       use in MY 2010
                                                    corporate averaging*
                 Model year sold                  ----------------------
                                                               Certified
                                                   Early tier  at 0.4 g/
                                                        2      km HC+NOX
------------------------------------------------------------------------
2003 through 2006................................       1.5          3.0
2007.............................................       1.375        2.5
2008.............................................       1.250        2.0
2009.............................................       1.125       1.5
------------------------------------------------------------------------
* Early Tier 2 motorcycles and motorcycles certified to 0.4 g/km are
  counted cumulatively toward the MY 2010 corporate average.

    In 2010 and later model years the program would become a basic 
averaging program, where each manufacturer would have to meet the 
applicable HC+NOX standard on a fleet-average basis. See the 
proposed regulations at Sec. 86.449.
3. Is EPA Proposing Blue Sky Standards for These Engines?
    We are not proposing Blue Sky Standards for motorcycles at this 
time. Under the proposed averaging program there is an incentive to 
produce very clean motorcycles early, but it is of limited duration. 
However, several possible approaches could include a Blue Sky program, 
such as the ones discussed for marine evaporative emissions earlier in 
this document. For example, a Blue Sky standard could be set at the 0.4 
g/km HC+NOX level used under the proposed averaging program. 
We request comment on whether a Blue Sky program is desirable for 
motorcycles, and what standards would be appropriate for such a 
program.
4. Do These Standards Apply to Alternative-Fueled Engines?
    The proposed emission standards would apply to all motorcycles, 
regardless of fuel. Although the federal numerical emission standards 
have not

[[Page 53081]]

been updated in more than twenty years, the regulations were revised 
twice in the 1990's to apply the standards to certain alternative-
fueled motorcycles. In 1990 the emission standards became applicable to 
methanol-fueled motorcycles (see 54 FR 14539, Apr. 11, 1989), and in 
1997 the standards became applicable to natural gas-fueled and 
liquified petroleum gas-fueled motorcycles (see 59 FR 48512, Sept. 21, 
1994).
    We propose to apply the emission standards for highway motorcycles, 
regardless of fuel. This would have the effect of including any 
motorcycles that operate on diesel fuel. We do not believe the 
provisions in this proposal create any unique issues for motorcycles 
powered by alternative fuels. However, we request comment on whether 
there are unique aspects to motorcycles fueled with these alternative 
fuels (if there are any such motorcycles) that would make the proposed 
standards particularly challenging or infeasible.
5. Should Highway and Off-Highway Regulations Be Integrated?
    We recognize that many motorcycle manufacturers produce both on- 
and off-highway motorcycles and are interested in receiving comment on 
integrating the two sets of requirements into a single part of the 
regulations. Currently, EPA regulations for highway motorcycles are in 
40 CFR part 86, while the proposed regulations for recreational 
vehicles and engines are in 40 CFR part 1051. Given that the proposed 
requirements for off-highway motorcycles and ATVs would duplicate many 
of the requirements that apply to highway motorcycles (such as test 
procedures and certification protocol), it may be appropriate to 
integrate the highway motorcycle requirements with the recreational 
vehicle requirements in part 1051. This may help manufacturers with 
both on- and off-highway products by eliminating differing or 
inconsistent paperwork or testing requirements for the different 
products. We request comment on the value of centralizing the 
requirements in this way.
6. Is EPA Proposing Production Line Testing Requirements for Highway 
Motorcycles?
    Production line testing requirements have never been required for 
highway motorcycles, but we are seeking comment on them as part of this 
proposal. However, we recognize that production-line testing may serve 
as a valuable tool to ensure that newly assembled engines control 
emissions at least as well as the prototype models used for 
certification. We believe testing highway motorcycles from the 
production line would add little additional burden and could easily be 
incorporated into the existing production-line quality checks that most 
manufacturers routinely perform. In fact, some nonroad engine 
manufacturers use emission measurements as part of their standard 
quality-control protocol at the assembly line to ensure proper engine 
functioning. Also, we would waive testing requirements for 
manufacturers with consistently good emission results. We request 
comment on extending to highway motorcycles the production-line testing 
requirements recently proposed for nonroad engines and vehicles (66 FR 
51098). If such requirements were extended to highway motorcycles, we 
request comment on the impact of such requirements on smaller 
manufacturers and whether such requirements should apply to small 
manufacturers (i.e., those with less than 3,000 annual unit sales). In 
the absence of production line testing we are not likely to allow post-
certification changes to be made to the Family Emission Limits (FELs) 
applicable to a given engine family under the emissions averaging 
program.
7. What Test Fuel Is Specified for Emission Testing of Motorcycles?
    The specifications for gasoline to be used by the EPA and by 
manufacturers for emission testing can be found in 40 CFR 86.513-94. 
These regulations also specify that the fuel used for vehicle service 
accumulation shall be ``representative of commercial fuels and engine 
lubricants which will be generally available through retail outlets.'' 
During the last twenty years of regulation of motorcycle emissions, the 
fuel specifications for motorcycle testing have been essentially 
identical to those for automotive testing. However, on February 10, 
2000, EPA issued a final rule entitled ``Tier 2 Motor Vehicle Emissions 
Standards and Gasoline Sulfur Control Requirements'' (65 FR 6697, Feb. 
10, 2000). In addition to finalizing a single set of emission standards 
that will apply to all passenger cars, light trucks, and larger 
passenger vehicles (e.g., large SUVs), the rule requires the 
introduction of low-sulfur gasoline nationwide. To provide consistency 
with the fuels that will be in the marketplace, the rule amended the 
test fuel specifications, effective starting in 2004 when the new 
standards will take effect. The principal change that was made was a 
reduction in the allowable levels of sulfur in the test fuel, from a 
maximum of 0.10 percent by weight to a range of 0.0015 to 0.008 percent 
by weight.
    Given that low-sulfur fuel will be the existing fuel in the 
marketplace when our proposed program would take effect (and therefore 
required for service accumulation), we propose to amend the motorcycle 
test fuel to reflect the true nature of the fuels available in the 
marketplace. Doing so would remove the possibility that a test could be 
conducted with an unrealistically high level of sulfur in the fuel.
8. Highway Motorcycle Evaporative Emissions
    In addition to California's exhaust emission standards, California 
ARB has also established evaporative emission standards for highway 
motorcycles. These standards took effect with the 1983 model year for 
Class I and II motorcycles, and the 1984 model year for Class III 
motorcycles. An initial evaporative emission standard that applied for 
two model years was set at 6.0 grams of hydrocarbons per test. 
Following two model years at this level, the standard was reduced to a 
more stringent 2.0 grams of hydrocarbons per test for all motorcycle 
classes. This is the currently applicable standard, and it was not 
changed during California's recent revisions to their motorcycle 
exhaust emission standards.
    We believe that it is not necessary at this time to propose 
adopting broad evaporative emission standards such as California's. The 
fuel tanks are generally small, resulting in diurnal and refueling 
emissions that we expect to be proportionately low. The use rates of 
motorcycles is likewise low, and we expect that hot soak emissions will 
be low as well. California has unique air quality concerns that may 
prompt the State to pursue and select emissions controls that we may 
find unnecessary for a national program. However, our investigation 
into the hydrocarbon emissions related to permeation of fuel tanks and 
fuel hoses with respect to marine applications has raised a new 
emissions concern that has a broad reach across many different vehicle 
types. Permeation of fuel tanks and hoses is one of four components of 
a vehicle's evaporative emissions. The other three primary evaporative 
components are: hot soak emissions, which occur when fuel evaporates 
from hot engine surfaces; diurnal emissions, which occur when fuel in 
tanks and hoses heats up in response to increases in ambient 
temperature; and refueling emissions, which occur when fuel vapors are 
displaced from the tank during refueling. As described in section III, 
the permeation emissions

[[Page 53082]]

from boats outweigh other evaporative emissions significantly; in fact, 
permeation from tanks and hoses results in more emissions than the 
other three types of evaporative emissions combined. Given this, we are 
assessing other vehicle types, including highway motorcycles, off-road 
motorcycles, and all-terrain vehicles, that may use fuel tanks or hoses 
with less-than-optimal control of permeation emissions. The fact that 
the fuel tanks in these types of vehicles are generally small does not 
significantly affect the importance of these emissions; it is the fact 
that permeation is occurring every hour of every day when there is fuel 
in the tank that results in the significance of emissions related to 
permeation.
    Section III.H of this preamble, as well as the Draft Regulatory 
Support Document, detail some of the technological strategies that may 
be employed to reduce fuel permeation. The application of several of 
these technologies to highway motorcycles appears to be relatively 
straightforward, with little cost and essentially no adverse 
performance or aesthetic impacts. These technologies, which are already 
available and which appear to be relatively inexpensive, could reduce 
permeation of tanks and hoses by 95 percent or more. In addition, the 
control technology may pay for itself in many instances due to positive 
fuel consumption impacts.
    We request comment on finalizing standards that would require low 
permeability fuel tanks on highway motorcycles, starting with the 2006 
model year. We would presume that the metal fuel tanks that equip most 
highway motorcycles would already meet the low permeability 
requirement, and thus, there would be no need for any fuel tank design 
or material changes on the vast majority of highway motorcycles. 
However, many if not all of the dual-sport motorcycles are equipped 
with plastic fuel tanks, as are some motorcycles in the sport or super-
sport categories. These motorcycles, under the type of regulation that 
we are requesting comment on, would have to employ metal tanks or 
plastic fuel tanks using one of the barrier technologies (e.g., a 
fluorination or sulfonation treatment) described in section III.H to 
meet the standards. We expect that any standards finalized would be 
similar in design to those proposed regarding fuel tank permeation for 
marine engines, as discussed earlier in this preamble.
    Retail sales data from Dealernews for the 2001 calendar year 
indicates that sales of motorcycles in the sport category amounted to 
just over 20 percent of total highway motorcycle sales, and dual-sport 
motorcycles were a much smaller 4 percent of the total. We may then 
conservatively estimate that approximately 25 percent of current 
motorcycles now have plastic tanks that would need upgrading. This is a 
conservative estimate for two reasons: (1) Some of these motorcycles 
are probably using metal tanks; and (2) it is highly likely that some 
of the existing plastic tanks have already been upgraded with a barrier 
treatment in order to meet the California evaporative emission 
requirements. We are interested in collecting more information 
regarding the degree to which plastic fuel tanks are used on highway 
motorcycles, and, to the extent they are, what if any measures have 
been taken by manufacturers to reduce permeation emissions.
    Highway motorcycle fuel tanks range in capacity from just over one 
gallon on some small scooters to about 7.5 gallons on some large 
touring and sport touring motorcycles. Most of the sport and super-
sport motorcycles appear to have fuel tanks that fall generally in the 
range of 4 to 6 gallons, while dual-sport motorcycles may be slightly 
smaller on average, perhaps typically in the 3 to 5 gallon range. If we 
select 5 gallons as a conservative estimate of the average size of the 
fuel tanks for those types of motorcycles most likely to have to employ 
one of the fuel tank barrier technologies, the additional cost per tank 
(assuming fluorination treatment) is estimated to be about $3.25 (see 
section 5.2.1 of the Draft Regulatory Support Document). We estimate 
that shipping, handling, and overhead costs would be an additional 
$0.85, resulting in a total average cost of about $4.10. Therefore, the 
average industry-wide price increase that would be associated with a 
requirement of this nature would be about $1.00.
    We also request comment on promulgating standards that would 
require the use of low permeability fuel hoses on all highway 
motorcycles, starting in the 2006 model year. Like low permeation fuel 
tanks, it is very likely that some manufacturers have already addressed 
permeation from the fuel hoses on some of their product line due to the 
California evaporative emission requirements. However, we will 
conservatively estimate that no current motorcycles are equipped with 
fuel hoses that significantly reduce or eliminate permeation. The cost 
of a fuel line with low permeation properties is estimated to be about 
$1.30 per foot (see section 5.2.1 of the Draft Regulatory Support 
Document). Highway motorcycles are estimated to have about one to two 
feet of fuel line on average; thus, using the average cost and a fuel 
line length of 18 inches, we estimate an average industry-wide price 
increase associated with a low permeation fuel line requirement to be 
about $2.00 per motorcycle. We therefore estimate that the total 
increased cost per motorcycle that would result from requiring low 
permeation fuel tanks and fuel hoses would be about $3.00. We are 
interested in collecting more information regarding fuel hoses 
currently used on highway motorcycles, in particular regarding the 
typical length, the material, and the permeation properties.
    We request comment on the form these standards would take (e.g., 
whether there should be absolute numerical limits or percentage 
reduction requirements, if we determined they were appropriate.) We 
also request comment on implementing requirements such as those 
described above by allowing the manufacturer to submit a statement at 
the time of certification that the fuel tanks and hoses used on their 
products meet standards, specified materials, or construction 
requirements based on testing results. For example, a manufacturer 
using plastic fuel tanks could state that the engine family at issue is 
equipped with a fuel tank with a low permeability barrier treatment 
such as fluorination. Fuel hoses could be certified as being 
manufactured in compliance with certain accepted SAE specifications. 
These certification statements could be done on an engine family basis, 
or possibly a blanket statement could cover a manufacturer's entire 
product line. EPA expects that 95 percent reductions over uncontrolled 
emission levels for permeation are achievable for plastic fuel tanks. 
These reductions imply a tank permeability standard of about 0.024 g/
gal/day for fuel tanks. For fuel hoses, we would consider the proposed 
standards for marine hoses of 5 grams per square meter per day. We 
request comment on these and other options that would enable regulation 
and enforcement of low permeability requirements.
    As was discussed earlier regarding marine evaporative emissions, 
California ARB and EPA have conducted permeation testing with regard to 
evaporative emissions from HDPE plastic tanks. There are 8 data points 
for tanks of 3.9 to 7.5 gallons capacity. The permeation rates varied 
from 0.2 to1.0 grams per gallon per day with an average value of 0.75 
g/gal/day. This data was based on tests with an average temperature of 
about 29 deg.C. As discussed in Chapter 4 of the draft RSD, temperature 
has a first order effect on the rate of permeation. Roughly,

[[Page 53083]]

permeation doubles with every 10 deg.C increase in temperature. For the 
5 gallon tank discussed above, at 23 deg.C, the average emission rate 
is about 0.50 g/gal/day or 2.5 g/day.
    For the purposes of this analysis we assumed a fuel hose with an 
inside diameter of about 1cm (\3/8\ inch) and a permeation rate of 550 
grams per square meter per day at 23 deg.C. This permeation rate is 
based on the SAE J30 requirement for R7 fuel hose, the type of hose 
found on a small sample of motorcycles we examined. For the 18 inch 
hose mentioned above this yields an emission rate of 7.5 g/day.
    Combining the average emission rates determined for the fuel tanks 
and fuel hoses above and adjusting for the 25 percent of tanks that 
would be affected by permeation standards yields a daily average 
emission rate of 8.1 g/day (7.5 g/day + (0.25 x 2.5 g/day)). The total 
combined tank and hose emission rate for those motorcycles that we 
estimate will require fuel tank treatments (25 percent of motorcycles) 
is 9.9 g/day (7.5 g/day + 2.5 g/day).
    Table V.C-2 presents national totals for permeation emissions from 
motorcycles. These permeation estimates are based on the emission rates 
discussed above and population, turnover, and temperature projections 
discussed in Chapter 6 of the draft RSD.

   Table V.C-2.--Projected Motorcycle Permeation Hydrocarbon Emissions
                              [short tons]
------------------------------------------------------------------------
             Calendar year                Baseline   Control   Reduction
------------------------------------------------------------------------
2005...................................     14,600     14,600          0
2010...................................     16,900     10,800      6,100
2015...................................     19,200      6,010     13,200
2020...................................     21,500      1,950     19,600
2030...................................     26,200        317     25,900
------------------------------------------------------------------------

    The average lifetime of a typical motorcycle is estimated to be 
about 12.5 years. Permeation control techniques can reduce emissions by 
95 percent for tanks and more than 99 percent for hoses. Multiplying 
this efficiency and these emission rates by 12.5 years and discounting 
at 7 percent yields lifetime per motorcycle emission reductions of 
0.0013 tons for the fuel tank, 0.017 tons for the fuel hose, and 0.019 
tons on average overall. In turn, using the cost estimates above, these 
emission reductions yield HC cost per ton values of $794 for the 5 
gallon tank, $112 for the fuel hose, and $160 for the average overall.
    Because evaporative emissions are composed of otherwise useable 
fuel that is lost to the atmosphere, measures that reduce evaporative 
emissions can result in potentially significant fuel savings. For a 
motorcycle with a 5 gallon fuel tank, we estimate that the low 
permeability measures discussed in this section could save 9.6 gallons 
over the 12.5 year average operating lifetime, which translates to a 
discounted lifetime savings of $6.75 at an average fuel price of $1.10 
per gallon. Combining this savings with an estimated cost per 
motorcycle of $3.00 results in a discounted lifetime savings per 
motorcycle of $3.75. The cost per ton of the evaporative emission 
reductions described above is $160; however, if the fuel savings are 
included, the estimated cost per ton is actually -$203. This means that 
the fuel savings are larger than the cost of using low permeation 
technology.

D. Special Compliance Provisions

    While the highway motorcycle market is dominated by large 
companies, there are over 30 small businesses manufacturing these 
products. They are active in both the federal and California markets. 
California has been much more active than EPA in setting new 
requirements for highway motorcycles, and indeed, the California 
requirements have driven the technology demands and timing for highway 
motorcycle emission controls. We have developed our special compliance 
provisions partly in response to the technology, timing, and scope of 
the requirements that apply to the small businesses in California's 
program. The provisions discussed below would reduce the economic 
burden on small businesses, allowing harmonization with California 
requirements in a phased, but timely manner.
    We propose that the flexibilities described below will be available 
for small entities with highway motorcycle annual sales of fewer than 
3,000 units per model year (combined Class I, II, and III motorcycles) 
and fewer than 500 employees. These provisions are appropriate because 
of the significant research and development resources may be necessary 
to meet the proposed emission standards. These provisions would reduce 
the burden while ensuring the vast majority of the program is 
implemented to ensure timely emission reductions. We also understand 
that many small highway motorcycle manufacturers market ``classic'' and 
``custom'' motorcycles, often with a ``retro'' appearance, that tends 
to make the addition of new technologies a uniquely resource-intensive 
prospect.
1. Delay of Proposed Standards
    We propose to delay compliance with the Tier 1 standard of 1.4 g/km 
HC+NOX until the 2008 model year for small-volume 
manufacturers. We are proposing a Tier 1 standard beginning in the 2006 
model year for highway motorcycles. Small manufacturers are required to 
meet the Tier 1 standard in 2008 in California. Given that the 
California requirements apply in 2008 for small businesses, we seek 
comment on whether additional time is needed for small businesses to 
comply with the federal program.
    The current California regulations do not require small 
manufacturers to comply with the Tier 2 standard of 0.8 g/km 
HC+NOX. The California Air Resources Board found that the 
Tier 2 standard represents a significant technological challenge and is 
a potentially infeasible limit for these small manufacturers. We share 
the California ARB's concern regarding this issue. As noted above, many 
of these manufacturers market a specialty product with a ``retro'' 
simplicity that may not easily lend itself to the addition of advanced 
technologies like catalysts. However, the ARB has acknowledged that, in 
the course of their progress review planned for 2006, they will revisit 
their small-manufacturer provisions. Therefore, we plan to participate 
with the ARB in the 2006 progress review as these provisions are 
revisited, and delay making decisions on the applicability to small 
businesses of Tier 2 or other revisions to the federal regulations that 
are appropriate following the review.
2. Broader Engine Families
    Small businesses have met EPA certification requirements since 
1978. Nonetheless, certifying motorcycles to revised emission standards 
has cost and lead time implications. Relaxing the criteria for what 
constitutes an engine or vehicle family could potentially allow small 
businesses to put all of their models into one vehicle or engine family 
(or more) for certification purposes. Manufacturers would then certify 
their engines using the ``worst case'' configuration within the family. 
This is currently allowed under the existing regulations for small-
volume highway motorcycle manufacturers. We propose that these 
provisions remain in place.
3. Exemption From Production Line Testing
    There is currently no mandatory production line testing requirement 
for highway motorcycles. The current

[[Page 53084]]

regulations allow us to request production vehicles from any certifying 
manufacturer for testing. We are proposing no changes to these existing 
provisions at this time.
4. Averaging, Banking, and Trading
    An emission-credit program allows a manufacturer to produce and 
sell engines and vehicles that exceed the applicable emission 
standards, as long as the excess emissions are offset by the production 
of engines and vehicles emitting at levels below the standards. The 
sales-weighted average of a manufacturer's total production for a given 
model year must meet the standards. An emission-credit program 
typically also allows a manufacturer to bank credits for use in future 
model years, as well as buy credits from, or sell credits to, other 
manufacturers. Emission-credit programs are generally made available to 
all manufacturers, though special provisions for small businesses could 
be created to increase flexibility. We therefore propose an emission-
credit program for highway motorcycles similar to that discussed above 
in V.C.2. for all motorcycle manufacturers.
    For the reasons described in section V.C.2., we are not proposing 
post implementation emissions credits banking and trading provisions, 
but are requesting comment on them. This is not consistent with the 
Panel's recommendations for small entities. We request comment on the 
usefulness of banking and trading for small entities. For additional 
information on this subject, commenters may review a report prepared 
for the Small Business Administration on credits programs, ``Emissions 
Trading for Small Business'', for ideas on how such programs could be 
useful for small entities.\41\
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    \41\ ``Emissions Trading for Small Businesses'', Final Report, 
Jack Faucett Associates, March 2002, http://www.sba.gov/advo/
research/rs216tot.pdf (Docket A-2000-01; document IV-A-26).
---------------------------------------------------------------------------

5. Hardship Provisions
    We are proposing two types of provisions to address unusual 
hardship circumstances for motorcycle manufacturers. The first type of 
hardship program would allow small businesses to petition EPA for 
additional lead time (e.g., up to 3 years) to comply with the 
standards. A small manufacturer would have to make the case that it has 
taken all possible business, technical, and economic steps to comply 
but the burden of compliance costs would have a significant impact on 
the company's solvency. A manufacturer would be required to provide a 
compliance plan detailing when and how it would achieve compliance with 
the standards. Hardship relief could include requirements for interim 
emission reductions and/or purchase and use of emission credits. The 
length of the hardship relief decided during review of the hardship 
application would be up to one year, with the potential to extend the 
relief as needed. The second hardship program would allow companies to 
apply for hardship relief if circumstances outside their control cause 
the failure to comply (i.e., supply contract broken by parts supplier) 
and if the failure to sell the subject engines would have a major 
impact on the company's solvency. See the proposed regulatory text in 
40 CFR 1068.240 and 1068.241 for additional details.
    In light of the California requirements, which do not include 
hardship provisions, we request comment on this alternative.
6. Reduced Certification Data Submittal and Testing Requirements
    Current regulations allow significant flexibility for certification 
by manufacturers projecting sales below 10,000 units of combined Class 
I, II, and III motorcycles. For example, a qualifying manufacturer must 
submit an application for certification with a statement that their 
vehicles have been tested and, on the basis of the tests, conform to 
the applicable emission standards. The manufacturer retains adequate 
emission test data, for example, but need not submit it. Qualifying 
manufacturers also need not complete the detailed durability testing 
required in the regulations. We are proposing no changes to these 
existing provisions.
7. Nonconformance Penalties
    Clean Air Act section 206(g) (42 U.S.C. 7525(g)), allows EPA to 
issue
    a certificate of conformity for heavy-duty engines or for highway 
motorcycles that exceed an applicable section 202(a) emissions 
standard, but do not exceed an upper limit associated with that 
standard, if the manufacturer pays a nonconformance penalty established 
by rulemaking. Congress adopted section 206(g) in the Clean Air Act 
Amendments of 1977 as a response to perceived problems with technology-
forcing heavy-duty engine emissions standards. If strict standards were 
maintained, then some manufacturers, ``technological laggards,'' might 
be unable to comply initially and would be forced out of the 
marketplace. Nonconformance penalties were intended to remedy this 
potential problem. The laggards would have a temporary alternative that 
would permit them to sell their engines or vehicles by payment of a 
penalty. There are three criteria for determining the eligibility of 
emission standards for nonconformance penalties in any given model 
year. First, the emission standard in question must become more 
difficult to meet, either by becoming more stringent itself or by its 
interaction with another emission standard that has become more 
stringent. Second, substantial work must be required to meet the 
emission standard. We consider ``substantial work'' to mean the 
application of technology not previously used in that vehicle or engine 
class/ subclass, or a significant modification of existing technology, 
to bring that vehicle/engine into compliance. We do not consider minor 
modifications or calibration changes to be classified as substantial 
work. Third, it must be likely that a company will become a 
technological laggard. A technological laggard is defined as a 
manufacturer who cannot meet a particular emission standard due to 
technological (not economic) difficulties and who, in the absence of 
nonconformance penalties, might be forced from the marketplace.
    Nonconformance penalties have been offered on occasion as a 
compliance option for several heavy-duty engine emission standards, but 
they have never been offered for highway motorcycles. However, as noted 
above, the Clean Air Act provides us with the authority to provide 
nonconformance penalties for highway motorcycles if they can be 
justified. While we do not currently believe that the three criteria 
established by rulemaking could be satisfied with respect to the Tier 1 
standard (the ``substantial work'' criterion may not be applicable), 
there is a greater possibility that the criteria could be satisfied 
with respect to the Tier 2 standard. We request comment on whether the 
three criteria noted above could apply to the Tier 1 or Tier 2 
standard, and if so, whether nonconformance penalties should be 
considered as an option. Typically, however, it is impossible at the 
time of a rulemaking to make the finding that a technological laggard 
has emerged with respect to a standard taking effect well into the 
future. For example, the proposed program would provide eight years of 
lead time to meet the Tier 2 standard, and making a judgment in this 
rulemaking regarding the existence of a technological laggard is 
impossible. It would be likely, for example, that we revisit this issue 
in the context of California ARB's 2006 progress review, or even later. 
However,

[[Page 53085]]

we request comment nevertheless on whether nonconformance penalties 
would be a desirable option, should conditions develop that warrant 
them. We also request comment on, given the availability of the 
hardship provisions described above, whether non-conformance penalties 
would potentially be needed.

E. Technological Feasibility of the Standards

1. Class I and Class II Motorcycles Between 50 and 180cc
    As noted above, we are proposing to adopt the current California 
standards for Class I and Class II motorcycles. These standards have 
been in place in California since 1982. The question of whether or not 
these standards are technically feasible has been answered in the 
affirmative, since 21 of the 22 EPA-certified 2001 model year 
motorcycle engine families in these classes are already certified to 
these standards, and all 24 of the 2002 model year engine families meet 
these standards. These 24 engine families are all powered by four-
stroke engines, with a variety of emission controls applied, including 
basic engine modifications on almost all engine families, secondary air 
injection on three engine families, and a two-way oxidation catalyst on 
one engine family.
    In past model years, but not in the 2002 model year, an engine 
family that does not meet the California standards had certified to the 
existing federal standards and not sold in California. It was a 100cc 
dual-sport motorcycle powered by a two-stroke engine, with an HC 
certification level of 3.9 g/km. This motorcycle no longer appears to 
be available as of the 2002 model year. Adopting the California 
standards for these motorcycle classes could preclude this motorcycle 
or others like it from being certified and sold federally, unless the 
federal program includes additional flexibility relative to the 
California program. As discussed above, we are proposing that the HC 
standard for Class I and Class II motorcycles be an averaging standard, 
in a departure from California's treatment of these motorcycle classes. 
This in itself could be of limited use given the low number of Class I 
and Class II engine families, but, as discussed in Section V.C.2 above, 
we are also proposing to allow credits accumulated by certifying Class 
III engine families to a level lower than the standard to be used to 
offset Class I or Class II engine families certified to levels above 
the fleet-average standard.\42\
---------------------------------------------------------------------------

    \42\ The manufacturer taht had certified this two-stroke for 
highway use has typically certified 4-5 other Class I or II engine 
families; therefore, a basic averaging program could enable them to 
continue to market their two-stroke dual-sport. However, other 
manufacturers may not have adequate additional engine families in 
these classes, making a basic average standard less useful to them.
---------------------------------------------------------------------------

2. Class I Motorcycles Under 50cc
    As we have described earlier we are proposing to apply the current 
California standard for Class I motorcycles to motorcycles with 
displacements of less than 50cc (e.g., most motor scooters). These 
motorcycles are currently not subject to regulation by the U.S. EPA or 
by the State of California. They are, however, subject to emission 
standards in Europe and much of the rest of the world. Historically 
these motorcycles have been powered by 2-stroke engines, but a trend 
appears to be developing that would result in most of these being 
replaced by 4-stroke engines or possibly by advanced technology 2-
stroke engines, in some cases with catalysts.
    The 4-stroke engine is capable of meeting our proposed standards. 
Class I motorcycles above 50cc are already meeting it, most of them 
employing nothing more than a 4-stroke engine. For example, the 
existing Class I scooters certify at levels ranging from 0.4 to 0.8 
grams per kilometer HC. All of these achieve the standards with 4-
stroke engine designs, and only one incorporates additional technology 
(a catalyst). These engines range from 80 to 151cc in displacement, 
indicating that a smaller engine should encounter few problems meeting 
the proposed standards.
    In order to meet more stringent standards being implemented 
worldwide, manufacturers are developing and implementing a variety of 
options. Honda, perhaps the largest seller of scooters in the U.S., has 
entirely eliminated 2-stroke engines from their scooter product lines 
as of the 2002 model year. They continue to offer a 50cc model, but 
with a 4-stroke engine. Both of Aprilia's 49cc scooters available in 
the U.S. have incorporated electronic direct injection technology, 
which, in the case of one model, enables it to meet the ``Euro-2'' 
standards of 1.2 grams per kilometer HC and 0.3 grams per kilometer 
NOX, without use of a catalytic converter.\43\ Piaggio, 
while currently selling a 49cc basic 2-stroke scooter in the U.S., 
expects to begin production of a direct injection version in 2002, and 
a 4-stroke 50cc scooter is also in development. Numerous 49cc models 
marketed by Piaggio in Europe are available either as a 4-stroke or a 
2-stroke with a catalyst. Piaggio, also an engine manufacturer and 
seller, is already offering a 50cc 4-stroke engine to its customers for 
incorporation into scooters.
---------------------------------------------------------------------------

    \43\ Aprilia webstie, http://www.apriliausa.com/ridezone/ing/
models/scarabeo50dt/moto.htm. Available in the public docket for 
review.
---------------------------------------------------------------------------

    The U.S. represents a very small portion of the market for small 
motorcycles and scooters. There are few, if any, manufacturers that 
develop a small-displacement motorcycle exclusively for the U.S. 
market; the domestic sales volumes do not appear large enough at this 
time to support an industry of this kind. The Italian company Piaggio 
(maker of the Vespa scooters), for example, sold about as many scooters 
worldwide in 2000 (about 480,000) as the entire volume of highway 
motorcycles of all sizes sold in the U.S. in that year. U.S. sales of 
Vespas in 2000 amounted to about 4800. The largest scooter markets 
today are in South Asia and Europe, where millions are sold annually. 
In Taiwan alone almost 800,000 motorcycles were sold domestically. More 
than one third of these were powered by 2-stroke engines. Two- and 
three-wheelers constitute a large portion of the transportation sector 
in Asia, and in some urban areas these vehicles--many of them powered 
by 2-stroke engines--can approach 75 percent of the vehicle population. 
According to a World Bank report, two-stroke gasoline engine vehicles 
are estimated to account for about 60 percent of the total vehicle 
fleet in South Asia.\44\
---------------------------------------------------------------------------

    \44\ Improving Urban Air Quality in South Asia by Reducing 
Emissions from Two-Stroke Engine Vehicles. Masami Kojima, Carter 
Brandon, and Jitendra Shah. December 2000. Prepared for the World 
Bank. Available in the public docket for review (Docket A-2000-01; 
document II-D-191), or on the internet at: http://www.worldbank.org/
html/fpd/esmpa/publication/airquality.html.
---------------------------------------------------------------------------

    Many nations are now realizing that the popularity of these 
vehicles and the high density of these vehicles in urban areas are 
contributing to severe air quality problems. As a consequence, some of 
the larger small motorcycle markets in Asia and India are now placing 
these vehicles under fairly strict regulation. It is clear that actions 
in these nations will move the emission control technology on small 
motorcycles, including those under 50cc, in a positive direction. For 
example, according to the World Bank report, as of 2000 catalytic 
converters are installed in all new two-stroke engine motorcycles in 
India, and 2003 standards in Taiwan will effectively ban new two-
strokes with emission

[[Page 53086]]

standards so stringent that only a four-stroke engine is capable of 
meeting them.
    Given the emerging international picture regarding emission 
standards for scooters, we believe that scooter manufacturers will be 
producing scooters of less than 50cc displacement that meet our 
proposed standards well in advance of the 2006 model year, the first 
year we propose to subject this category of motorcycle to U.S. emission 
standards. We would expect that small entities that import scooters 
into the U.S. from the larger scooter markets would be able to import 
complying vehicles. We request comment on this assessment.
    There are other numerous factors in the international arena that 
may affect the product offerings in the less than 50cc market segment. 
For example, the European Union recently changed the requirements 
regarding insurance and helmet use for under 50cc scooters and mopeds. 
Previously, the insurance discounts and lack of helmet requirements in 
Europe provided two relatively strong incentives to purchasers to 
consider a 49cc scooter. Recently, however, the provisions were changed 
such that helmets are now required and the insurance costs are 
comparable to larger motorcycles. The result was a drop of about 30% in 
European sales of 49cc scooters in 2001 due to customers perceiving 
little benefit from a 49cc scooter relative to a larger displacement 
engine.
3. Class III motorcycles
    a. Tier 1 standards. In the short term, the proposed Tier 1 
HC+NOX standard of 1.4 g/km HC+NOX reflects the 
goal of achieving emission reductions that could be met with reasonably 
available control technologies, primarily involving engine 
modifications rather than catalytic converters. As noted earlier, we 
are proposing that this standard be effective for the 2006 model year. 
Based on current certification data, a number of existing engine 
families already comply with this standard or would need relatively 
simple modifications to comply. In other cases, the manufacturers will 
need to use control technologies that are available but are not yet 
used on their particular vehicles (e.g., electronic fuel injection to 
replace carburetors, changes to cam lobes/timing, etc.). For the most 
part, manufacturers will not need to use advanced technologies such as 
close-coupled, closed-loop three way catalysts.
    While manufacturers will use various means to meet the Tier 1 
standard, there are four basic types of existing, non-catalyst-based, 
emission-control systems available to manufacturers. The most important 
of these is the use of secondary pulse-air injection. Other engine 
modifications and systems include more precise fuel control, better 
fuel atomization and delivery, and reduced engine-out emission levels 
from engine changes. The combinations of low-emission technologies 
ultimately chosen by motorcycle manufacturers are dependent on the 
engine-out emission levels of the vehicle, the effectiveness of the 
prior emission-control system, and individual manufacturer preferences.
    Secondary pulse-air injection, as demonstrated on current 
motorcycles, is applied using a passive system (i.e., no air pump 
involved) that takes advantage of the flow of gases (``pulse'') in the 
exhaust pipes to draw in fresh air that further combusts unburned 
hydrocarbons in the exhaust. Engine modifications include a variety of 
techniques designed to improve fuel delivery or atomization; promote 
``swirl'' (horizontal currents) and ``tumble'' (vertical currents); 
maintain tight control on air-to-fuel (A/F) ratios; stabilize 
combustion (especially in lean A/F mixtures); optimize valve timing; 
and retard ignition timing.
    Secondary pulse air injection involves the introduction of fresh 
air into the exhaust pipe immediately after the gases exist the engine. 
The extra air causes further combustion to occur, thereby controlling 
more of the hydrocarbons that escape the combustion chamber. This type 
of system is relatively inexpensive and uncomplicated because it does 
not require an air pump; air is drawn into the exhaust through a one-
way reed valve due to the pulses of negative pressure inside the 
exhaust pipe. Secondary pulse-air injection is one of the most 
effective non-catalytic emission-control technologies; compared to 
engines without the system, reductions of 10 to 40 percent for HC are 
possible with pulse-air injection. Sixty-five of the 151 2001 model 
year Class III engine families certified for sale in the U.S employ 
secondary pulse-air injection to help meet the current California 
standards. We anticipate that most of the remaining engine families 
will use this technique to help meet the Tier 1 and Tier 2 standards.
    Improving fuel delivery and atomization primarily involves the 
replacement of carburetors, currently used on most motorcycles, with 
more precise fuel injection systems. There are several types of fuel 
injection systems and components manufacturers can choose. The most 
likely type of fuel injection manufacturers will choose to help meet 
the Tier 1 standard is sequential multi-point fuel injection (SFI).
    Unlike conventional multi-point fuel injection systems that deliver 
fuel continuously or to paired injectors at the same time, sequential 
fuel injection can deliver fuel precisely when needed by each cylinder. 
With less than optimum fuel injection timing, fuel puddling and intake-
manifold wall wetting can occur, both of which hinder complete 
combustion. Use of sequential-fuel-injection systems help especially in 
reducing cold start emissions when fuel puddling and wall wetting are 
more likely to occur and emissions are highest.
    Motorcycle manufacturers are already beginning to use sequential 
fuel injection (SFI). Of the 152 Class III motorcycle engine families 
certified for sale this year, 36 employ SFI systems. We anticipate 
increased applications of this or similar fuel injection systems to 
achieve the more precise fuel delivery needed to help meet the Tier 1 
and Tier 2 standards.
    In addition to the techniques mentioned above, various engine 
modifications can be made to improve emission levels. Emission 
performance can be improved, for example, by reducing crevice volumes 
in the combustion chamber. Unburned fuel can be trapped momentarily in 
crevice volumes before being subsequently released. Since trapped and 
re-released fuel can increase engine-out emissions, the elimination of 
crevice volumes would be beneficial to emission performance. To reduce 
crevice volumes, manufacturers can evaluate the feasibility of 
designing engines with pistons that have reduced, top ``land heights'' 
(the distance between the top of the piston and the first ring).
    Lubrication oil which leaks into the combustion chamber also has a 
detrimental effect on emission performance since the heavier 
hydrocarbons in oil do not oxidize as readily as those in gasoline and 
some components in lubricating oil may tend to foul the catalyst and 
reduce its effectiveness. Also, oil in the combustion chamber may trap 
HC and later release the HC unburned. To reduce oil consumption, 
manufacturers can tighten the tolerances and improve the surface finish 
on cylinders and pistons, piston ring design and materials, and exhaust 
valve stem seals to prevent excessive leakage of lubricating oil into 
the combustion chamber.
    Increasing valve overlap is another engine modification that can 
help reduce emissions. This technique helps

[[Page 53087]]

reduce NOX generation in the combustion chamber by 
essentially providing passive exhaust gas recirculation (EGR). When the 
engine is undergoing its pumping cycle, small amounts of combusted 
gases flow past the intake valve at the start of the intake cycle. This 
creates what is essentially a passive EGR flow, which is then either 
drawn back into the cylinder or into another cylinder through the 
intake manifold during the intake stroke. These combusted gases, when 
combined with the fresh air/fuel mixture in the cylinder, help reduce 
peak combustion temperatures and NOX levels. This technique 
can be effected by making changes to cam timing and intake manifold 
design to optimize NOX reduction while minimizing impacts to 
HC emissions.
    Secondary pulse-air injection and engine modifications already play 
important parts in reducing emission levels; we expect increased uses 
of these techniques to help meet the Tier 1 standard. Direct evidence 
of the extent these technologies can help manufacturers meet the Tier 1 
standard can be found in EPA's highway motorcycle certification 
database. This database is comprised of publicly-available 
certification emission levels as well as some confidential data 
reported by the manufacturers pursuant to existing motorcycle emission 
certification requirements.
    We do not expect any of these possible changes to adversely affect 
performance. Indeed, the transition to some of these technologies 
(e.g., advanced fuel injection) would be expected to improve 
performance, fuel economy, and reliability. A direct comparison of 
several motorcycle models in the EPA certification database between the 
``California'' model (where one is offered; it is the exception rather 
than the rule that a manufacturer offers a separate engine system for 
California) and the model sold in the rest of the U.S. reveals no 
change in the performance characteristics in the database (e.g., rated 
horsepower, torque). We request comment on the impact these anticipated 
changes might have on performance-related factors.
    b. Tier 2 standards. In the long term, the proposed Tier 2 
HC+NOX standard of 0.8 g/km would ensure that manufacturers 
will continue to develop and improve emission control technologies. We 
are proposing the Tier 2 standard to be effective by the 2010 model 
year. We believe this standard is technologically feasible, though it 
will present some challenges for manufacturers. Several manufacturers 
are, however, already using some of the technologies that will be 
needed to meet this standard. In addition, our proposed implementation 
time frame gives manufacturers two years of experience in meeting this 
standard in California before having to meet it on a nationwide basis. 
At least one manufacturer already uses closed-loop, three-way catalysts 
on several of its product lines. One manufacturer has already certified 
a large touring motorcycle to the Tier 2 standards for sale in 
California. Depending on assumptions regarding NOX levels, 
other manufacturers have products currently in the market with emission 
levels close to the Tier 2 standards using two-way catalysts, fuel 
injection, secondary pulse-air injection, and other engine 
modifications. The current average HC certification level for Class III 
motorcycles is just under 1.0 g/km, with a number of motorcycles from a 
variety of manufacturers at levels of 0.5 g/km or lower. We expect that 
the proposed eight years of lead time prior to meeting these standards 
on a nationwide basis would allow manufacturers to optimize these and 
other technologies to meet the Tier 2 standard.
    To meet the proposed Tier 2 standard for HC+NOX, 
manufacturers would likely use more advanced engine modifications and 
secondary air injection. Specifically, we believe manufacturers would 
use computer-controlled secondary pulse-air injection (i.e., the 
injection valve would be connected to a computer-controlled solenoid). 
In addition to these systems, manufacturers would probably need to use 
catalytic converters on some motorcycles to meet the proposed Tier 2 
standards. There are two types of catalytic converters currently in 
use: two-way catalysts (which control only HC and CO) and three-way 
catalysts (which control HC, CO, and NOX). Under the 
proposed Tier 2 standard, manufacturers would need to minimize levels 
of both HC and NOX. Therefore, to the extent catalysts are 
used, manufacturers would likely use a three-way catalyst in addition 
to engine modifications and computer-controlled, secondary pulse-air 
injection.
    As discussed previously, improving fuel control and delivery 
provides emission benefits by helping to reduce engine-out emissions 
and minimizing the exhaust variability which the catalytic converter 
experiences. One method for improving fuel control is to provide 
enhanced feedback to the computer-controlled fuel injection system 
through the use of heated oxygen sensors. Heated oxygen sensors (HO2S) 
are located in the exhaust manifold to monitor the amount of oxygen in 
the exhaust stream and provide feedback to the electronic control 
module (ECM). These sensors allow the fuel control system to maintain a 
tighter band around the stoichiometric A/F ratio than conventional 
oxygen sensors (O2S). In this way, HO2S assist vehicles in achieving 
precise control of the A/F ratio and thereby enhance the overall 
emissions performance of the engine. At least one manufacturer is 
currently using this technology on several 2001 engine families.
    In order to further improve fuel control, some motorcycles with 
electronic controls may utilize software algorithms to perform 
individual cylinder fuel control. While dual oxygen sensor systems are 
capable of maintaining A/F ratios within a narrow range, some 
manufacturers may desire even more precise control to meet their 
performance needs. On typical applications, fuel control is modified 
whenever the O2S determines that the combined A/F of all cylinders in 
the engine or engine bank is ``too far'' from stoichiometric. The 
needed fuel modifications (i.e., inject more or less fuel) are then 
applied to all cylinders simultaneously. Although this fuel control 
method will maintain the ``bulk'' A/F for the entire engine or engine 
bank around stoichiometric, it would not be capable of correcting for 
individual cylinder A/F deviations that can result from differences in 
manufacturing tolerances, wear of injectors, or other factors.
    With individual cylinder fuel control, A/F variation among 
cylinders will be diminished, thereby further improving the 
effectiveness of the emission controls. By modeling the behavior of the 
exhaust gases in the exhaust manifold and using software algorithms to 
predict individual cylinder A/F, a feedback fuel control system for 
individual cylinders can be developed. Except for the replacement of 
the conventional front O2S with an HO2S sensor and a more powerful 
engine control computer, no additional hardware is needed in order to 
achieve individual cylinder fuel control. Software changes and the use 
of mathematical models of exhaust gas mixing behavior are required to 
perform this operation.
    In order to maintain good driveability, responsive performance, and 
optimum emission control, fluctuations of the A/F must remain small 
under all driving conditions including transient operation. Virtually 
all current fuel systems in automobiles incorporate an adaptive fuel 
control system that automatically adjusts the system for component 
wear, varying environmental

[[Page 53088]]

conditions, varying fuel composition, etc., to more closely maintain 
proper fuel control under various operating conditions. For some 
current fuel control systems, this adaptation process affects only 
steady-state operating conditions (i.e., constant or slowly changing 
throttle conditions). However, most vehicles are now being introduced 
with adaptation during ``transient'' conditions (e.g., rapidly changing 
throttle, purging of the evaporative system).
    Accurate fuel control during transient driving conditions has 
traditionally been difficult because of the inaccuracies in predicting 
the air and fuel flow under rapidly changing throttle conditions. 
Because of air and fuel dynamics (fuel evaporation in the intake 
manifold and air flow behavior) and the time delay between the air flow 
measurement and the injection of the calculated fuel mass, temporarily 
lean A/F ratios can occur during transient driving conditions that can 
cause engine hesitation, poor driveability and primarily an increase in 
NOX emissions. However, by utilizing fuel and air mass 
modeling, vehicles with adaptive transient fuel control are more 
capable of maintaining accurate, precise fuel control under all 
operating conditions. Virtually all cars will incorporate adaptive 
transient fuel control software; motorcycles with computer controlled 
fuel injection can also benefit from this technique at a relatively low 
cost.
    Three-way catalytic converters traditionally utilize rhodium and 
platinum as the catalytic material to control the emissions of all 
three major pollutants (hydrocarbons (HC), CO, NOX). 
Although this type of catalyst is very effective at converting exhaust 
pollutants, rhodium, which is primarily used to convert NOX, 
tends to thermally deteriorate at temperatures significantly lower than 
platinum. Recent advances in palladium and tri-metal (i.e., palladium-
platinum-rhodium) catalyst technology, however, have improved both the 
light-off performance (light-off is defined as the catalyst bed 
temperature where pollutant conversion reaches 50-percent efficiency) 
and high temperature durability over previous catalysts. In addition, 
other refinements to catalyst technology, such as higher cell density 
substrates and adding a second layer of catalyst washcoat to the 
substrate (dual-layered washcoats), have further improved catalyst 
performance from just a few years ago.
    Typical cell densities for conventional catalysts used in 
motorcycles are less than 300 cells per square inch (cpsi). To meet the 
Tier 2 standard, we expect manufacturers to use catalysts with cell 
densities of 300 to 400 cpsi. If catalyst volume is maintained at the 
same level (we assume volumes of up to 60 percent of engine 
displacement), using a higher density catalyst effectively increases 
the amount of surface area available for reacting with pollutants. 
Catalyst manufacturers have been able to increase cell density by using 
thinner walls between each cell without increasing thermal mass (and 
detrimentally affecting catalyst light-off) or sacrificing durability 
and performance.
    In addition to increasing catalyst volume and cell density, we 
believe that increased catalyst loading and improved catalyst washcoats 
will help manufacturers meet the Tier 2 standard. In general, increased 
precious metal loading (up to a certain point) will reduce exhaust 
emissions because it increases the opportunities for pollutants to be 
converted to harmless constituents. The extent to which precious metal 
loading is increased will be dependent on the precious metals used and 
other catalyst design parameters. We believe recent developments in 
palladium/rhodium catalysts are very promising since rhodium is very 
efficient at converting NOX, and catalyst suppliers have 
been investigating methods to increase the amount of rhodium in 
catalysts for improved NOX conversion.
    Double layer technologies allow optimization of each individual 
precious metal used in the washcoat. This technology can provide 
reduction of undesired metal-metal or metal-base oxide interactions 
while allowing desirable interactions. Industry studies have shown that 
durability and pollutant conversion efficiencies are enhanced with 
double layer washcoats. These recent improvements in catalysts can help 
manufacturers meet the Tier 2 standard at reduced cost relative to 
older three-way catalysts.
    New washcoat formulations are now thermally stable up to 1050 
deg.C. This is a significant improvement from conventional washcoats, 
which are stable only up to about 900  deg.C. With the improvements in 
light-off capability, catalysts may not need to be placed as close to 
the engine as previously thought. However, if placement closer to the 
engine is required for better emission performance, improved catalysts 
based on the enhancements described above would be more capable of 
surviving the higher temperature environment without deteriorating. The 
improved resistance to thermal degradation will allow closer placement 
to the engines where feasible, thereby providing more heat to the 
catalyst and allowing them to become effective quickly.
    It is well established that a warmed-up catalyst is very effective 
at converting exhaust pollutants. Recent tests on advanced catalyst 
systems in automobiles have shown that over 90 percent of emissions 
during the Federal Test Procedure (FTP) are now emitted during the 
first two minutes of testing after engine start up. Similarly, the 
highest emissions from a motorcycle occur shortly after start up. 
Although improvements in catalyst technology have helped reduce 
catalyst light-off times, there are several methods to provide 
additional heat to the catalyst. Retarding the ignition spark timing 
and computer-controlled, secondary air injection have been shown to 
increase the heat provided to the catalyst, thereby improving its cold-
start effectiveness.
    In addition to using computer-controlled secondary air injection 
and retarded spark timing to increase the heat provided to the 
catalyst, some vehicles may employ warm-up, pre-catalysts to reduce the 
size of their main catalytic converters. Palladium-only warm-up 
catalysts (also known as ``pipe catalysts'' or ``Hot Tubes'') using 
ceramic or metallic substrates may be added to further decrease warm-up 
times and improve emission performance. Although metallic substrates 
are usually more expensive than ceramic substrates, some manufacturers 
and suppliers believe metallic substrates may require less precious 
metal loading than ceramic substrates due to the reduced light-off 
times they provide.
    Improving insulation of the exhaust system is another method of 
furnishing heat to the catalyst. Similar to close-coupled catalysts, 
the principle behind insulating the exhaust system is to conserve the 
heat generated in the engine for aiding catalyst warm-up. Through the 
use of laminated thin-wall exhaust pipes, less heat will be lost in the 
exhaust system, enabling quicker catalyst light-off. As an added 
benefit, the use of insulated exhaust pipes will also reduce exhaust 
noise. Increasing numbers of manufacturers are expected to utilize air-
gap exhaust manifolds (i.e., manifolds with metal inner and outer walls 
and an insulating layer of air sandwiched between them) for further 
heat conservation.
    Besides the hardware modifications described above, motorcycle 
manufacturers may borrow from other current automobile techniques. 
These include using engine calibration changes such as a brief period 
of substantial ignition retard, increased

[[Page 53089]]

cold idling speed, and leaner air-fuel mixtures to quickly provide heat 
to a catalyst after cold-starts. Only software modifications are 
required for an engine which already uses a computer to control the 
fuel delivery and other engine systems. For these engines, calibration 
modifications provide manufacturers with an inexpensive method to 
quickly achieve light-off of catalytic converters. When combined with 
pre-catalysts, computer-controlled secondary air injection, and the 
other heat conservation techniques described above, engine calibration 
techniques may be very effective at providing the required heat to the 
catalyst for achieving the Tier 2 standard. These techniques are 
currently in use on most low emission vehicle (LEV) automobiles and may 
have applications in on-road motorcycles.
    The nature of motorcycling makes riders particularly aware of the 
many safety issues that confront them. Many riders that submitted 
comments to us following the publication of the ANPRM in December of 
2000 questioned whether catalytic converters could be implemented on 
motorcycles without increasing the risk of harm to the rider and/or 
passenger. The primary concern is regarding the close proximity of the 
riders to hot exhaust pipes and the catalytic converter. Protecting the 
rider from the excessive heat is a concern for both riders and 
manufacturers. The current use of catalytic converters on a number of 
motorcycles (accounting for tens of thousands of motorcycles in the 
current U.S. fleet and over 15 million worldwide) already indicates 
that these issues are not insurmountable on a variety of motorcycle 
styles and engine sizes. Countries that have successfully implemented 
catalyst-based emission control programs for motorcycles (some of which 
have many years of experience) do not report any safety issues 
associated with the use of catalytic converters on motorcycles under 
real-world conditions.\45\ A number of approaches to shielding the 
rider from the heat of the catalytic converter are possible, such as 
exterior pipe covers, shielded foot rests, and similar components. Some 
manufacturers have found that placing the converter on the underside of 
the engine can keep it adequately distant from the rider. Others may 
use double-pipe systems that reduce overall heat loss while remaining 
cooler on the exterior. Based on the significant lead time proposed 
that would be allowed for meeting these standards, as well as on the 
two years of prior experience in California before meeting the 
requirements federally, we believe that these issues can be 
satisfactorily resolved for the proportion of motorcycles for which 
catalytic converters would likely be used to meet the proposed 
standards.
---------------------------------------------------------------------------

    \45\ See written testimony of the Manufacturers of Emission 
Controls Association on the Proposed Rulemaking on Control of 
Emissions from Nonroad Large Spark-Ignited Engines and Recreational 
Engines. Available in the public docket for review (Docket A-2000-
01; document IV-D-213).
---------------------------------------------------------------------------

    We do not expect any of these possible changes to adversely affect 
performance. Indeed, the transition to some of these technologies 
(e.g., advanced fuel injection) would be expected to improve 
performance, fuel economy, and reliability. A direct comparison of 
several motorcycle models in the EPA certification database between the 
``California'' model (where one is offered; it is the exception rather 
than the rule that a manufacturer offers a separate engine system for 
California) and the model sold in the rest of the U.S. reveals no 
change in the performance characteristics in the database (e.g., rated 
horsepower, torque). We request comment on the impact these anticipated 
changes might have on performance-related factors.

VI. Projected Impacts

    This section summarizes the projected impacts of the proposed 
emission standards. The anticipated environmental benefits are compared 
with the projected cost of the program for an assessment of the cost 
per ton of reducing emissions for this proposal.

A. Environmental Impact

    Diurnal evaporative emission factors from marine vessels were 
developed using established equations for determining evaporative 
emission factors as a function of ambient conditions and fuel tank 
size. Permeation emissions were developed based on known material 
permeation rates as a function of surface area and temperature. Other 
inputs for these calculations were taken from the latest version of our 
NONROAD model. Emission estimates for highway motorcycles were 
developed using information on the emission levels of current 
motorcycles and updated information on motorcycle use provided by the 
motorcycle industry. A more detailed description of the methodology 
used for projecting inventories and projections for additional years 
can be found in the Chapter 6 of the Draft Regulatory Support Document. 
We request comment on all aspects of the emission inventory analysis, 
including the usage rates and other inputs used in the analysis.
    Tables V.A-1 and V.A-2 contain the projected emission inventories 
for the years 2010 and 2020, respectively, from the engines and 
vehicles subject to this proposal. The inventories are presented for 
the base case which assumes no change from current conditions (i.e., 
without the proposed standards taking effect) and assuming the proposed 
standards take effect. The inventories for 2010 and 2020 include the 
effect of growth. The percent reductions based on a comparison of 
estimated emission inventories with and without the proposed emission 
standards are also presented.

                               Table VI.A-1.--2010 Projected Emissions Inventories
                                              [Thousand short tons]
----------------------------------------------------------------------------------------------------------------
                                                     NOX                                    HC*
                                   -----------------------------------------------------------------------------
             Category                                With                                   With
                                     Base case     proposed     Percent     Base case     proposed     Percent
                                                  standards    reduction                 standards    reduction
----------------------------------------------------------------------------------------------------------------
Marine SI Evap....................            0            0            0          106           91           14
Highway motorcycles...............           11           10            9           46           41           11
                                   -----------------------------------------------------------------------------
      Total.......................           11           10            9          152          132           13
----------------------------------------------------------------------------------------------------------------
*Evaporative HC for marine SI; exhaust HC for highway motorcycles.


[[Page 53090]]


                               Table VI.A-2.--2020 Projected Emissions Inventories
                                              [Thousand short tons]
----------------------------------------------------------------------------------------------------------------
                                                     NOX                                    HC*
                                   -----------------------------------------------------------------------------
             Category                                With                                   With
                                     Base case     proposed     Percent     Base case     proposed     Percent
                                                  standards    reductions                standards    reduction
----------------------------------------------------------------------------------------------------------------
Marine SI Evap....................            0            0            0          114           50           56
Highway motorcycles...............           14            7           50           58           29           50
                                   -----------------------------------------------------------------------------
      Total.......................           14            7           50          172           79          53
----------------------------------------------------------------------------------------------------------------
*Evaporative HC for marine SI; exhaust HC for highway motorcycles.

    As described in Section II, there will also be environmental 
benefits associated with reduced haze in many sensitive areas.
    Finally, anticipated reductions in hydrocarbon emissions will 
correspond with reduced emissions of the toxic air emissions referenced 
in Section II. In 2020, the projected reduction in hydrocarbon 
emissions should result in an equivalent percent reduction in air toxic 
emissions.

B. Economic Impact

    In assessing the economic impact of setting emission standards, we 
have made a best estimate of the technologies and their associated 
costs to meet the proposed standards. In making our estimates we have 
relied on our own technology assessment, which includes information 
supplied by individual manufacturers and our own in-house testing. 
Estimated costs include variable costs (for hardware and assembly time) 
and fixed costs (for research and development, retooling, and 
certification). We projected that manufacturers will recover the fixed 
costs over the first five years of production and used an amortization 
rate of 7 percent in our analysis. The analysis also considers total 
operating costs, including maintenance and fuel consumption. Cost 
estimates based on the projected technologies represent an expected 
change in the cost of engines as they begin to comply with new emission 
standards. All costs are presented in 2001 dollars. Full details of our 
cost analysis can be found in Chapter 5 of the Draft Regulatory Support 
Document. We request comment on this cost information.
    Cost estimates based on the current projected costs for our 
estimated technology packages represent an expected incremental cost of 
vehicles in the near term. For the longer term, we have identified 
factors that would cause cost impacts to decrease over time. First, as 
noted above, we project that manufacturers will spread their fixed 
costs over the first five years of production. After the fifth year of 
production, we project that the fixed costs would be retired and the 
per unit costs would be reduced as a result.
    For highway motorcycles above 50cc, the analysis also incorporates 
the expectation that manufacturers and suppliers will apply ongoing 
research and manufacturing innovation to making emission controls more 
effective and less costly over time. Research in the costs of 
manufacturing has consistently shown that as manufacturers gain 
experience in production and use, they are able to apply innovations to 
simplify machining and assembly operations, use lower cost materials, 
and reduce the number or complexity of component parts.\46\ (see the 
Draft Regulatory Support Document for additional information). The cost 
analysis generally incorporates this learning effect by decreasing 
estimated variable costs by 20 percent starting in the third year of 
production and an additional 20 percent starting in the sixth year of 
production. Long-term impacts on costs are expected to decrease as 
manufacturers fully amortize their fixed costs and learn to optimize 
their designs and production processes to meet the standards more 
efficiently. The learning curve has not been applied to the marine 
evaporative controls or the motorcycles under 50cc because we expect 
manufacturers to use technologies that will be well established prior 
to the start of the program. We request comment on the methodology used 
to incorporate the learning curve into the analysis.
---------------------------------------------------------------------------

    \46\ For further information on learning curves, see previous 
final rules for Tier 2 highway vehicles (65 FR 6698, February 10, 
2000), marine diesel engines (64 FR 73300, December 29, 1999), 
nonroad diesel engines (63 FR 56968, October 23, 1998), and highway 
diesel engines (62 FR 54694, October 21, 1997).
---------------------------------------------------------------------------

    Evaporative emission controls for boats with marine SI engines have 
an average projected cost of about $36 per boat. While manufacturers 
may choose from a wide variety of technologies to meet emission 
standards, we base these cost estimates on all boats using limited flow 
orifices for diurnal emission control, fluorination for fuel tank 
permeation control and low permeability barrier for fuel hose 
permeation control. Under the proposed emission-credit program, 
manufacturers would have the option of offering different technologies 
to meet emission standards. Where there is a current demand for more 
sophisticated fuel-tank technology, we would expect a greater cost 
impact than from the lower-cost, high-production models. Emissions are 
reduced by preventing evaporation of fuel, so these controls translate 
directly into a fuel savings, which we have estimated to be about $27 
per boat (net present value at the point of sale). Therefore, we get an 
average cost of $9 per boat when the fuel savings are considered.
    We project average costs of $26 per Class III highway motorcycle to 
meet the Tier 1 standard and $35 to meet the Tier 2 standards. We 
anticipate the manufacturers will meet the proposed emission standards 
with several technology changes, including electronic fuel injection, 
catalysts, pulse-air systems, and other general improvements to 
engines. For motorcycles with engines of less than 50cc, we project 
average costs of $44 per motorcycle to meet the proposed standards. We 
anticipate the manufacturers of these small motorcycles (mostly 
scooters) will meet the proposed emission standards by transitioning 
any remaining two-stroke engines to four-strokes. The costs are based 
on the conversion to 4-stroke because we believe this to be the most 
likely technology path for the majority of scooters. Manufacturers 
could also choose to employ advanced technology two-stroke (e.g., 
direct injection and/or catalysts) designs. The process of developing 
clean technologies is very much underway already as a result of 
regulatory actions in Europe and the rest of world where the primary 
markets for

[[Page 53091]]

small motorcycles exist. Chapter 4 of the Draft Regulatory Support 
Document describes these technologies further. Because several models 
are already available with the anticipated long-term emission-control 
technologies, we believe that manufacturers and consumers will be able 
to bear the added cost associated with the new emission standards.
    The above analysis presents unit cost estimates for each engine 
type. These costs represent the total set of costs the engine 
manufacturers will bear to comply with emission standards. With current 
and projected estimates of engine and equipment sales, we translate 
these costs into projected direct costs to the nation for the new 
emission standards in any year. A summary of the annualized costs to 
manufacturers by equipment type is presented in Table VI.B-1. (The 
annualized costs are determined over the first twenty-years that the 
proposed standards would be effective.) The annual cost savings for 
marine vessels and highway motorcycles (50cc only) are due to reduced 
fuel costs. The total fleetwide fuel savings start slowly, then 
increase as greater numbers of compliant vessels or motorcycles (50cc 
only) enter the fleet. Table VI.B-1 presents a summary of the 
annualized reduced operating costs as well.

   Table VI.B-1.--Estimated Annual Cost to Manufacturers and Annual Fuel
                  Savings Due to the Proposed Standards
                             [Millions/year]
------------------------------------------------------------------------
                                                  Annualized     Annual
                   Category                        cost to        fuel
                                                manufacturers   savings
------------------------------------------------------------------------
Marine SI Evap................................        $27.5        $15.6
Highway Motorcycles...........................         18.8          0.2
Aggregate*....................................         42.0        13.3
------------------------------------------------------------------------
* Because of the different proposed implementation dates for the two
  classes, the aggregate is based on a 22 year (rather than 20 year)
  annualized cost. Therefore, the aggregate is not equal to the sum of
  the costs for the two engine types.

C. Cost per Ton of Emissions Reduced

    We calculated the cost per ton of emission reductions for the 
proposed standards. For these calculations, we attributed the entire 
cost of the proposed program to the control of ozone precursor 
emissions (HC or NOX or both). Table VI.C-1 presents the 
discounted cost-per-ton estimates for this proposal. Reduced operating 
costs offsets a portion of the increased cost of producing the cleaner 
marine vessels and highway motorcycles (50cc only).

                                         Table VI.C-1.--Estimated Cost-per-Ton of the Proposed Emission Standards
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                              Discounted                                                         Discounted cost per ton
                                                              reductions                                                       -------------------------
                    Category                      Effective   per engine                       Pollutants                         Without
                                                    date        (short                                                              fuel      With fuel
                                                                tons)                                                             savings      savings
--------------------------------------------------------------------------------------------------------------------------------------------------------
Marine SI:
    Diurnal....................................       2008          0.01  Evaporative HC......................................         $745         $382
    Tank permeation............................                     0.02                                                                523          160
    Hose permeation............................                     0.04                                                                367            4
    Aggregate..................................                     0.07                                                                478          115
Highway motorcycles >50cc......................       2006          0.03  Exhaust HC+NOX......................................          970          970
Highway motorcycles >50cc......................       2010          0.03  Exhaust HC+NOX......................................        1,230        1,230
Highway motorcycles >50cc......................       2006          0.02  Exhaust HC..........................................        2,130        1,750
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Because the primary purpose of cost-effectiveness is to compare our 
program to alternative programs, we made a comparison between the cost 
per ton values presented in this chapter and the cost-effectiveness of 
other programs. Table VI.C-2 summarizes the cost effectiveness of 
several recent EPA actions for controlled emissions from mobile 
sources. Additional discussion of these comparisons is contained in the 
Regulatory Impact Analysis.

Table VI.C-2--Cost-Effectiveness of Previously Implemented Mobile Source
                                Programs
                    [Costs adjusted to 2001 dollars]
------------------------------------------------------------------------
                         Program                               $/ton
------------------------------------------------------------------------
Tier 2 vehicle/gasoline sulfur..........................     1,437-2,423
2007 Highway HD diesel..................................     1,563-2,002
2004 Highway HD diesel..................................         227-444
Off-highway diesel engine...............................         456-724
Tier 1 vehicle..........................................     2,202-2,993
NLEV....................................................           2,069
Marine SI engines.......................................     1,255-1,979
On-board diagnostics....................................           2,480
Marine CI engines.......................................          26-189
------------------------------------------------------------------------

D. Additional Benefits

    For the marine evaporative emission standards, we expect there will 
be a fuel savings as manufacturers redesign their vessels to comply 
with the proposed standards. This savings is the result of preventing 
fuel from evaporating into the atmosphere. Overall, the fuel savings 
associated with the anticipated changes in technology are estimated to 
be about 31 million gallons per year once the program is fully phased 
in.
    For the motorcycle emission standards, we expect there will be a 
fuel savings as manufacturers redesign their engines to comply with the 
proposed standards. This savings is the result of converting 
motorcycles 50cc from 2-stroke designs to more fuel efficient 4-stroke 
designs. Overall, the fuel savings associated with the anticipated 
changes in technology are estimated to be about 0.3 million gallons per 
year once the program is fully phased in.
    The controls in this rule are a highly cost-effective means of 
obtaining reductions in HC and NOX emissions. A related 
subject concerns the value of the health and welfare benefits these 
reductions might produce. While we have not conducted a formal benefit-
cost analysis for this rule, we believe the benefits of this rule 
clearly will greatly outweigh any cost.

[[Page 53092]]

    Ozone causes a range of health problems related to breathing, 
including chest pain, coughing, and shortness of breath Exposure to PM 
(including secondary PM formed in the atmosphere from NOX 
and NMHC emissions) is associated with premature death, increased 
emergency room visits, and increased respiratory symptoms and disease 
Children, the elderly, and individuals with pre-existing respiratory 
conditions are most at risk regarding both ozone and PM. In addition, 
ozone, NOX, and PM adversely affect the environment in 
various ways, including crop damage, acid rain, and visibility 
impairment.
    In two recent mobile-source control rules, for light-duty vehicles 
(the Tier 2/Gasoline Sulfur rule) and for highway heavy-duty engines 
and diesel fuel, we conducted a full analysis of the expected benefits 
once the rules were fully implemented. These rules, which primarily 
reduced NOX and NMHC emissions, were seen to yield health 
and welfare benefits far exceeding the costs. Besides reducing 
premature mortality, there were large projected reductions in chronic 
bronchitis cases, hospital admissions for respiratory and 
cardiovascular causes, asthma attacks and other respiratory symptoms, 
and a variety of other effects.
    Given the similarities in pollutants being controlled, we would 
expect this rule to produce substantial benefits compared to its cost.

VII. Public Participation

    This rule was proposed under the authority of section 307(d) of the 
Clean Air Act. We request comment on all aspects of this proposal. This 
section describes how you can participate in this process.

A. How Do I Submit Comments?

    We are opening a formal comment period by publishing this document. 
We will accept comments for the period indicated under dates above. If 
you have an interest in the program described in this document, we 
encourage you to comment on any aspect of this rulemaking. We request 
comment on various topics throughout this proposal.
    We attempted to incorporate all the comments received in response 
to the Advance Notice of Proposed Rulemaking, though not all comments 
are addressed directly in this document. Anyone who has submitted 
comments on the Advance Notice, or any previous publications related to 
this proposal, and feels that those comments have not been adequately 
addressed is encouraged to resubmit comments as appropriate.
    Your comments will be most useful if you include appropriate and 
detailed supporting rationale, data, and analysis. If you disagree with 
parts of the proposed program, we encourage you to suggest and analyze 
alternate approaches to meeting the air quality goals described in this 
proposal. You should send all comments, except those containing 
proprietary information, to our Air Docket (see Addresses) before the 
end of the comment period.
    If you submit proprietary information for our consideration, you 
should clearly separate it from other comments by labeling it 
``Confidential Business Information.'' You should also send it directly 
to the contact person listed under for further information contact 
instead of the public docket. This will help ensure that no one 
inadvertently places proprietary information in the docket. If you want 
us to use your confidential information as part of the basis for the 
final rule, you should send a nonconfidential version of the document 
summarizing the key data or information. We will disclose information 
covered by a claim of confidentiality only through the application of 
procedures described in 40 CFR part 2. If you don't identify 
information as confidential when we receive it, we may make it 
available to the public without notifying you.

B. Will There Be a Public Hearing?

    We will hold a public hearing for issues related to highway 
motorcycles on July 16 in Dulles, VA. We will hold a public hearing for 
issues related to marine vessels on July 18 in Ann Arbor, MI. The 
hearings will start at 9:30 a.m. and continue until testimony is 
complete. See ADDRESSES above for location and phone information.
    If you would like to present testimony at a public hearing, we ask 
that you notify the contact person listed above at least ten days 
before the hearing. You should estimate the time you need for your 
presentation and identify any needed audio/visual equipment. We suggest 
that you bring copies of your statement or other material for the EPA 
panel and the audience. It would also be helpful if you send us a copy 
of your statement or other materials before the hearing.
    We will make a tentative schedule for the order of testimony based 
on the notification we receive. This schedule will be available on the 
morning of each hearing. In addition, we will reserve a block of time 
for anyone else in the audience who wants to give testimony.
    We will conduct the hearing informally, and technical rules of 
evidence won't apply. We will arrange for a written transcript of the 
hearing and keep the official record of the hearing open for 30 days to 
allow you to submit supplementary information. You may make 
arrangements for copies of the transcript directly with the court 
reporter.

VII. Administrative Requirements

A. Administrative Designation and Regulatory Analysis (Executive Order 
12866)

    Under Executive Order 12866 (58 FR 51735, October 4, 1993), the 
Agency must determine whether the regulatory action is ``significant'' 
and therefore subject to review by the Office of Management and Budget 
(OMB) and the requirements of this Executive Order. The Executive Order 
defines a ``significant regulatory action'' as any regulatory action 
that is likely to result in a rule that may:
     Have an annual effect on the economy of $100 million or 
more or adversely affect in a material way the economy, a sector of the 
economy, productivity, competition, jobs, the environment, public 
health or safety, or State, Local, or Tribal governments or 
communities;
     Create a serious inconsistency or otherwise interfere with 
an action taken or planned by another agency;
     Materially alter the budgetary impact of entitlements, 
grants, user fees, or loan programs, or the rights and obligations of 
recipients thereof; or
     Raise novel legal or policy issues arising out of legal 
mandates, the President's priorities, or the principles set forth in 
the Executive Order.
    A Draft Regulatory Support Document has been prepared and is 
available in the docket for this rulemaking and at the internet address 
listed under ADDRESSES above. Pursuant to the terms of Executive Order 
12866, OMB has notified EPA that it considers this a ``significant 
regulatory action'' within the meaning of the Executive Order. EPA has 
submitted this action to OMB for review. Changes made in response to 
OMB suggestions or recommendations will be documented in the public 
record.

B. Regulatory Flexibility Act

1. Overview
    The RFA generally requires an agency to prepare a regulatory 
flexibility analysis of any rule subject to notice and comment 
rulemaking requirements under the Administrative Procedure Act or any 
other statute unless the agency

[[Page 53093]]

certifies that the rule will not have a significant economic impact on 
a substantial number of small entities. Small entities include small 
businesses, small organizations, and small governmental jurisdictions.
    For purposes of assessing the impacts of this action on small 
entities, small entity is defined as: (1) A small business that meet 
the definition for business based on SBA size standards; (2) a small 
governmental jurisdiction that is a government of a city, county, town, 
school district or special district with a population of less than 
50,000; and (3) a small organization that is any not-for-profit 
enterprise which is independently owned and operated and is not 
dominant in its field. The following table provides an overview of the 
primary SBA small business categories potentially affected by this 
regulation.

     Table VIII.B-1.--Primary SBA Small Business Categories Potentially Affected by This Proposed Regulation
----------------------------------------------------------------------------------------------------------------
                     Industry                       NAICS \1\ codes   Defined by SBA as a small business If: \2\
----------------------------------------------------------------------------------------------------------------
Motorcycles and motorcycle parts manufacturers....          336991   500 employees.
Independent Commercial Importers of Vehicles and            421110   100 employees.
 parts.
Boat Building and Repairing.......................          336612    500 employees.
Fuel Tank Manufacturers...........................          336211   1000 employees.
----------------------------------------------------------------------------------------------------------------
\1\ North American Industry Classification System.
\2\ According to SBA's regulations (13 CFR part 121), businesses with no more than the listed number of
  employees or dollars in annual receipts are considered ``small entities'' for purposes of a regulatory
  flexibility analysis.

2. Background
    In accordance with Section 603 of the RFA, EPA prepared an initial 
regulatory flexibility analysis (IRFA) that examines the impact of the 
proposed rule on small entities along with regulatory alternatives that 
could reduce that impact. In preparing this IRFA, we looked at both the 
effect of this proposal and the October 5, 2001 proposal for other 
nonroad categories (66 FR 51098). The IRFA is available for review in 
the docket and is summarized below.
    The process of establishing standards for nonroad engines began in 
1991 with a study to determine whether emissions of carbon monoxide 
(CO), oxides of nitrogen (NOX), and volatile organic 
compounds (VOCs) from new and existing nonroad engines, equipment, and 
vehicles are significant contributors to ozone and CO concentrations in 
more than one area that has failed to attain the national ambient air 
quality standards for ozone and CO.\47\ In 1994, EPA finalized its 
finding that nonroad engines as a whole ``are significant contributors 
to ozone or carbon monoxide concentrations'' in more than one ozone or 
carbon monoxide nonattainment area.\48\
---------------------------------------------------------------------------

    \47\ ``Nonroad Engine and Vehicle Emission Study--Report and 
Appendices,'' EPA-21A-201, November 1991 (available in Air docket A-
91-24). It is also available through the National Technical 
Information Service, referenced as document PB 92-126960.
    \48\ 59 FR 31306 (July 17, 1994).
---------------------------------------------------------------------------

    Upon this finding, the Clean Air Act (CAA or the Act) requires EPA 
to establish standards for all classes or categories of new nonroad 
engines that cause or contribute to air quality nonattainment in more 
than one ozone or carbon monoxide (CO) nonattainment area. Since the 
finding in 1994, EPA has been engaged in the process of establishing 
programs to control emissions from nonroad engines used in many 
different applications. Nonroad categories already regulated include:
     Land-based compression ignition (CI) engines (e.g., farm 
and construction equipment),
     Small land-based spark-ignition (SI) engines (e.g., lawn 
and garden equipment, string trimmers),
     Marine engines (outboards, personal watercraft, CI 
commercial, CI engines 37kW), and
     Locomotive engines.
    On December 7, 2000, EPA issued an Advance Notice of Proposed 
Rulemaking (ANPRM) for the control of emissions from nonroad large SI 
engines, recreational vehicles (marine and land-based), and highway 
motorcycles. As discussed in the ANPRM, the proposal under development 
will be a continuation of the process of establishing standards for 
nonroad engines and vehicles, as required by CAA section 213(a)(3). If, 
as expected, standards for these engines and vehicles are established, 
essentially all new nonroad engines will be required to meet emissions 
control requirements.
    This proposal is the second part of an effort to control emissions 
from nonroad engines that are currently unregulated and for updating 
Federal emissions standards for highway motorcycles. The first part of 
this effort was a proposal published on October 5, 2001 for emission 
control from large spark-ignition engines such as those used in 
forklifts and airport tugs; recreational vehicles using spark-ignition 
engines such as off-highway motorcycles, all-terrain vehicles, and 
snowmobiles; and recreational marine diesel engines.
    EPA found that the nonroad engines described above cause or 
contribute to air quality nonattainment in more than one ozone or 
carbon monoxide (CO) nonattainment area.\49\ CAA section 213 (a)(3) 
requires EPA to establish standards that achieve the greatest degree of 
emissions reductions achievable taking cost and other factors into 
account. EPA plans to propose emissions standards and related programs 
consistent with the requirements of the Act.
---------------------------------------------------------------------------

    \49\ See Final Finding, ``Control of Emissions from New Nonroad 
Spark-Ignition Engines Rated above 19 Kilowatts and New Land-Based 
Recreational Spark-Ignition Engines'' for EPA's finding for Large SI 
engines and recreational vehicles (65 FR 76790, December 7, 2000). 
EPA's findings for marine engines are contained in 61 FR 52088 
(October 4, 1996) for gasoline engines and 64 FR 73299 (December 29, 
1999) for diesel engines.
---------------------------------------------------------------------------

    In addition to proposing standards for the nonroad vehicles and 
engines noted above, this proposal reviews EPA requirements for highway 
motorcycles. The emissions standards for highway motorcycles were 
established twenty-three years ago. These standards allow motorcycles 
to emit about 100 times as much per mile as new cars and light trucks. 
California recently adopted new emissions standards for highway 
motorcycles, and new standards and testing cycles are being considered 
internationally. There may be opportunities to reduce emissions in a 
cost-effective way.
    The program under consideration will cover engines and vehicles 
that vary in design and use, and many readers may only be interested in 
one or two of the applications. There are various ways EPA could group 
the engines and present information. For purposes of the proposed rule 
EPA has chosen to group engines by common applications (e.g, 
recreational land-based engines, marine

[[Page 53094]]

engines, large spark ignition engines used in commercial applications).
3. Summary of Regulated Small Entities
    The small entities directly regulated by this proposed rule are the 
following:
    a. Highway Motorcycles. Of the numerous manufacturers supplying the 
U.S. market for highway motorcycles, Honda, Harley Davidson, Yamaha, 
Kawasaki, Suzuki, and BMW are the largest, accounting for 95 percent or 
more of the total U.S. sales. All of these companies except Harley-
Davidson and BMW also manufacture off-road motorcycles and ATVs for the 
U.S. market. Harley-Davidson is the only company manufacturing highway 
motorcycles exclusively in the U.S. for the U.S. market.
    Since highway motorcycles have had to meet emission standards for 
the last twenty years, EPA has good information on the number of 
companies that manufacture or market highway motorcycles for the U.S. 
market in each model year. In addition to the big six manufacturers 
noted above, EPA finds as many as several dozen more companies that 
have operated in the U.S. market in the last couple of model years. 
Most of these are U.S. companies that are either manufacturing or 
importing motorcycles, although a few are U.S. affiliates of larger 
companies in Europe or Asia. Some of the U.S. manufacturers employ only 
a few people and produce only a handful of custom motorcycles per year, 
while others may employ several hundred and produce up to several 
thousand motorcycles per year.
    The proposed emission standards impose no new development or 
certification costs for any company producing compliant engines in 
California. If fact, implementing the California standards with a two-
year delay also allows manufacturers to streamline their production to 
further reduce the cost of compliance. The estimated hardware costs are 
less than one percent of the cost of producing a highway motorcycle, so 
none of these companies should have a compliance burden greater than 
one percent of revenues. We expect that a small number of companies 
affected by EPA emission standards will not already be certifying 
products in California. For these companies, the modest effort 
associated with applying established technology will add compliance 
costs representing between 1 and 3 percent of revenues. The flexible 
approach we are proposing to limit testing, reporting, and 
recordkeeping burden prevent excessive costs for all these companies.
    b. Marine Vessels. Marine vessels include the boat, engine, and 
fuel system. The evaporative emission controls discussed above may 
affect the boat builders and/or the fuel tank manufacturers. Exhaust 
emission controls including NTE requirements, as addressed in the 
August 29, 1999 SBAR Panel Report, would affect the engine 
manufacturers and may affect boat builders.
    EPA has less precise information about recreational boat builders 
than is available about engine manufacturers. EPA has utilized several 
sources, including trade associations and Internet sites when 
identifying entities that build and/or sell recreational boats. EPA has 
also worked with an independent contractor to assist in the 
characterization of this segment of the industry. Finally, EPA has 
obtained a list of nearly 1,700 boat builders known to the U.S. Coast 
Guard to produce boats using engines for propulsion. At least 1,200 of 
these companies install engines that use gasoline fueled engines and 
would therefore be subject to the evaporative emission control program 
discussed above. More than 90% of the companies identified so far would 
be considered small businesses as defined by SBA. EPA continues to 
develop a more complete picture of this segment of the industry and 
will provide additional information as it becomes available.
    Based on information supplied by a variety of recreational boat 
builders, fuel tanks for boats using SI marine engines are usually 
purchased from fuel tank manufacturers. However, some boat builders 
construct their own fuel tanks. The boat builder provides the 
specifications to the fuel tank manufacturer who helps match the fuel 
tank for a particular application. It is the boat builder's 
responsibility to install the fuel tank and connections into their 
vessel design. For vessels designed to be used with small outboard 
engines, the boat builder may not install a fuel tank; therefore, the 
end user would use a portable fuel tank with a connection to the 
engine.
    EPA has determined that total sales of tanks for gasoline marine 
applications is approximately 550,000 units per year. The market is 
broken into manufacturers that produce plastic tanks and manufacturers 
that produce aluminum tanks. EPA has determined that there are at least 
seven companies that make plastic fuel tanks with total sales of 
approximately 440,000 units per year. EPA has determined that there at 
least four companies that make aluminum fuel tanks with total sales of 
approximately 110,000 units per year. All but one of these plastic and 
aluminum fuel tank manufacturers is a small business as defined under 
SBA.
    EPA has determined that there are at least 16 companies that 
manufacture CI diesel engines for recreational vessels. Nearly 75 
percent of diesel engines sales for recreational vessels in 2000 can be 
attributed to three large companies. Six of the 16 identified companies 
are considered small businesses as defined by SBA. Based on sales 
estimates for 2000, these six companies represent approximately 4 
percent of recreational marine diesel engine sales. The remaining 
companies each comprise between two and seven percent of sales for 
2000.
    EPA has determined that there are at least 24 companies that 
manufacture SD/I gasoline engines (including airboats and jet boats) 
for recreational vessels. Seventeen of the identified companies are 
considered small businesses as defined by SBA. These 17 companies 
represent approximately 6 percent of recreational gasoline marine 
engines sales for 2000. Approximately 70-80 percent of gasoline SD/I 
engines manufactured in 2000 can be attributed to one company. The next 
largest company is responsible for about 10-20 percent of 2000 sales.
    For any boat builders that would certify to the proposed 
requirements, the costs of compliance would be much less than one 
percent of their revenues. Incremental costs of fuel tanks are dwarfed 
by the capital and variable costs associated with manufacturing power 
boats. Of the six known small businesses producing plastic fuel tanks 
for gasoline-powered marine vessels, these companies would have costs 
approaching 10 percent of revenues. While this is a large percentage, 
it comes predominantly from increasing variable costs to upgrade the 
fuel tanks. Capital expenses to upgrade to compliant products are 
relatively small. Also, to the extent that tank manufacturers certify 
their products, they will be increasing the value of their product for 
their customers, who would otherwise need to assume certification 
responsibilities. As a result, we believe that these companies will be 
able to largely recover their compliance costs over time. The net cost 
absorbed by tank manufacturers will be much less than one percent.
    For this proposal as a whole, there are hundreds of small 
businesses that will have total compliance costs less than 1 percent of 
their annual revenues. We estimate that three companies will have 
compliance costs between 1 and 3 percent of revenues and six companies

[[Page 53095]]

will have compliance costs exceeding 3 percent of revenues.
4. Potential Reporting, Recordkeeping, and Compliance
    For any emission control program, EPA must have assurances that the 
regulated engines will meet the standards. Historically, EPA programs 
have included provisions placing manufacturers responsible for 
providing these assurances. The program that EPA is considering for 
manufacturers subject to this proposal may include testing, reporting, 
and record keeping requirements. Testing requirements for some 
manufacturers may include certification (including deterioration 
testing), and production line testing. Reporting requirements would 
likely include test data and technical data on the engines including 
defect reporting. Manufacturers would likely have to keep records of 
this information.
5. Related Federal Rules
    The Panel is aware of several other current Federal rules that 
relate to the proposed rule under development. During the Panel's 
outreach meeting, SERs specifically pointed to Consumer Product Safety 
Commission (CPSC) regulations covering ATVs, and noted that they may be 
relevant to crafting an appropriate definition for a competition 
exclusion in this category. The Panel recommends that EPA continue to 
consult with the CPSC in developing a proposed and final rule in order 
to better understand the scope of the Commission's regulations as they 
may relate to the competition exclusion.
    Other SERs, representing manufacturers of marine engines, noted 
that the U.S. Coast Guard regulates vessel tanks, most notably tank 
pressure and anti-siphoning requirements for carburetted engines. Tank 
manufacturers would have to take these requirements into account in 
designing evaporative control systems. The Panel recommends that EPA 
continue to work with the Coast Guard to evaluate the safety 
implications of any proposed evaporative emissions standards and to 
avoid interference with Coast Guard safety regulations.
    The Panel is also aware of other Federal rules that relate to the 
categories that EPA would address with the proposed rule, but are not 
likely to affect policy considerations in the rule development process. 
For example, there are now EPA noise standards covering off-road 
motorcycles; however, EPA expects that most emission control devices 
are likely to reduce, rather than increase, noise, and that therefore 
the noise standards are not likely to be important in developing a 
proposed rule.
    OTAQ is currently developing a proposal that would revise the rule 
assigning fees to be paid by parties required to certify engines in 
return for continuing Government oversight and testing. Among other 
options, EPA could propose to extend the fee structure to several 
classes of non-road engines for which requirements are being 
established for the first time under the Recreation Rule. The Panel 
understands that EPA will carefully examine the potential impacts of 
the Fees Rule on small businesses. The Panel also notes that EPA's 
Office of Air Quality, Planning, and Standards (OAQPS) is preparing a 
Maximum Achievable Control Technology (MACT) standard for Engine 
Testing Facilities, which is a related matter.
6. Significant Panel Findings
    The Panel considered a wide range of options and regulatory 
alternatives for providing small businesses with flexibility in 
complying with the proposed emissions standards and related 
requirements. As part of the process, the Panel requested and received 
comment on several ideas for flexibility that were suggested by SERs 
and Panel members. The major options recommended by the Panel are 
summarized below. The complete set of recommendations can be found in 
Section 9 of the Panel's full Report.
    The panel recommendations for motorcycles described below were 
developed for the exhaust emission standards. Potential controls for 
permeation emissions from motorcycles were not part of the panel 
process, because review of the need for such controls resulted from 
comments received on the related recreational vehicles proposal and 
further investigation by EPA following the end of the panel process. 
However, EPA believes that the potential permeation emission controls 
on motorcycles would not, if promulgated, have a significant effect on 
the burdens of this rule on regulated entities, or on small entities in 
particular, due to the relatively low cost and the availability of 
materials and treatment support by outside vendors. Low permeation fuel 
hoses are available from vendors today, and we would expect that 
surface treatment for tanks would be applied through an outside 
company. We request comment on the need for flexibilities for the 
potential permeation standards, if they are adopted. If the comments or 
other information the Agency receives indicate that flexibilities 
similar to (or the same as) those for the motorcycle exhaust standards 
are appropriate for the motorcycle permeation standards, then we will 
adopt such flexibilities as part of our final rule if we adopt such 
permeation standards.
    Many of the flexible approaches recommended by the Panel can be 
applied to either marine vessels or highway motorcycles. These 
approaches are listed below:
    1. Additional lead time for compliance.
    2. Hardship provisions.
    3. Certification flexibility.
    4. Broadly defined product certification families.
    5. Averaging, banking, and trading.
    Based on consultations with SERs, the Panel believes that the first 
two provisions listed above are likely to provide the greatest 
flexibility for many small entities. These provisions are likely to be 
most valuable because they either provide more time for compliance 
(e.g., additional lead time and hardship provisions). The remaining 
three approaches have the potential to reduce near-term and even long-
term costs once a small entity has a product it is preparing to 
certify. These are important in that the reducing costs of testing 
several emission families and/or developing deterioration factors. 
Small businesses could also meet an emission standard on average or 
generate credits for producing engines which emit at levels below the 
standard; these credits could then be sold to other manufacturers for 
compliance or banked for use in future model years.
    During the consultation process, it became evident that, in a few 
situations, it could be helpful to small entities if unique provisions 
were available. Two such provisions are described below.
    a. Marine Vessel Tanks. Most of this sector involves small fuel 
tank manufacturers and small boat builders. The Panel recommends that 
the program be structured with longer lead times and an early credit 
generation program to enable the fuel tank manufacturers to implement 
controls on tanks on a schedule consistent with their normal turnover 
of fuel tank molds. Also, the panel recommends that the program allow 
small businesses have the option of certifying to the evaporative 
emission performance standards based on fuel tank design 
characteristics designed to reduce emissions.
    b. Highway Motorcycles. The California Air Resources Board (CARB) 
has found that California's Tier 2 standard is potentially infeasible 
for small manufacturers. Therefore, the Panel recommends that EPA delay 
making decisions on the applicability to small businesses of Tier 2 or 
other such

[[Page 53096]]

revisions to the federal regulations until California's 2006 review is 
complete.
7. Summary of SBREFA Process and Panel Outreach
    As required by section 609(b) of the RFA, as amended by SBREFA, EPA 
also conducted outreach to small entities and convened a Small Business 
Advocacy Review Panel to obtain advice and recommendations of 
representatives of the small entities that potentially would be subject 
to the rule's requirements.
    On May 3, 2001, EPA's Small Business Advocacy Chairperson convened 
this Panel under Section 609(b) of the Regulatory Flexibility Act (RFA) 
as amended by the Small Business Regulatory Enforcement Fairness Act of 
1996 (SBREFA). In addition to the Chair, the Panel consisted of the 
Director of the Assessment and Standards Division (ASD) within EPA's 
Office of Transportation and Air Quality, the Chief Counsel for 
Advocacy of the Small Business Administration, and the Deputy 
Administrator of the Office of Information and Regulatory Affairs 
within the Office of Management and Budget. As part of the SBAR 
process, the Panel met with small entity representatives (SERs) to 
discuss the potential emission standards and, in addition to the oral 
comments from SERs, the Panel solicited written input. In the months 
preceding the Panel process, EPA conducted outreach with small entities 
from each of the five sectors as described above. On May 18, 2001, the 
Panel distributed an outreach package to the SERs. On May 30 and 31, 
2001, the Panel met with SERs to hear their comments on preliminary 
alternatives for regulatory flexibility and related information. The 
Panel also received written comments from the SERs in response to the 
discussions at this meeting and the outreach materials. The Panel asked 
SERs to evaluate how they would be affected under a variety of 
regulatory approaches, and to provide advice and recommendations 
regarding early ideas for alternatives that would provide flexibility 
to address their compliance burden.
    SERs representing companies in each of the sectors addressed by the 
Panel raised concerns about the potential costs of complying with the 
rules under development. For the most part, their concerns were focused 
on two issues: (1) The difficulty (and added cost) that they would face 
in complying with certification requirements associated with the 
standards EPA is developing, and (2) the cost of meeting the standards 
themselves. SERs observed that these costs would include the 
opportunity cost of deploying resources for research and development, 
expenditures for tooling/retooling, and the added cost of new engine 
designs or other parts that would need to be added to equipment in 
order to meet EPA emission standards. In addition, in each category, 
the SERs noted that small manufacturers (and in the case of one 
category, small importers) have fewer resources and are therefore less 
well equipped to undertake these new activities and expenditures. 
Furthermore, because their product lines tend to be smaller, any 
additional fixed costs must be recovered over a smaller number of 
units. Thus, absent any provisions to address these issues, new 
emission standards are likely to impose much more significant adverse 
effects on small entities than on their larger competitors.
    The Panel discussed each of the issues raised in the outreach 
meetings and in written comments by the SERs. The Panel agreed that EPA 
should consider the issues raised by the SERs and that it would be 
appropriate for EPA to propose and/or request comment on various 
alternative approaches to address these concerns. The Panel's key 
discussions centered around the need for and most appropriate types of 
regulatory compliance alternatives for small businesses. The Panel 
considered a variety of provisions to reduce the burden of complying 
with new emission standards and related requirements. Some of these 
provisions would apply to all companies (e.g., averaging, banking, and 
trading), while others would be targeted at the unique circumstances 
faced by small businesses. A complete discussion of the regulatory 
alternatives recommended by the Panel can be found in the Final Panel 
Report. Copies of the Final Report can be found in the docket for this 
rulemaking or at http://www.epa.gov/sbrefa. Summaries of the Panel's 
recommended alternatives for each of the sectors subject to this action 
can be found in the respective sections of the preamble.
    As required by section 609(b) of the RFA, as amended by SBREFA, EPA 
also conducted outreach to small entities and convened a Small Business 
Advocacy Review Panel to obtain advice and recommendations of 
representatives of the small entities that potentially would be subject 
to the rule's requirements. EPA's Small Business Advocacy Chairperson 
convened this on May 3, 2001. In addition to the Chair, the Panel 
consisted of the Director of the Assessment and Standards Division 
(ASD) within EPA's Office of Transportation and Air Quality, the Chief 
Counsel for Advocacy of the Small Business Administration, and the 
Deputy Administrator of the Office of Information and Regulatory 
Affairs within the Office of Management and Budget.
    The proposal being developed includes marine sterndrive and inboard 
(SD/I) engines and boats powered by SI marine engines. In addition, EPA 
also intends to update EPA requirements for highway motorcycles. 
Finally, the proposal being developed included evaporative emission 
control requirements for gasoline fuel tanks and systems used on marine 
vessels.
    The Panel met with Small Entity Representatives (SERs) to discuss 
the potential emissions standards and, in addition to the oral comments 
from SERs, the Panel solicited written input. In the months preceding 
the Panel process, EPA conducted outreach with small entities from each 
of the five sectors as described above. On May 18, 2001, the Panel 
distributed an outreach package to the SERs. On May 30 and 31, 2001, 
the Panel met with SERs to hear their comments on preliminary options 
for regulatory flexibility and related information. The Panel also 
received written comments from the SERs in response to the discussions 
at this meeting and the outreach materials. The Panel asked SERs to 
evaluate how they would be affected under a variety of regulatory 
approaches, and to provide advice and recommendations regarding early 
ideas to provide flexibility. See Section 8 of the Panel Report for a 
complete discussion of SER comments, and Appendices A and B for 
summaries of SER oral comments and SER written comments.
    Consistent with the RFA/SBREFA requirements, the Panel evaluated 
the assembled materials and small-entity comments on issues related to 
the elements of the IRFA. A copy of the Panel report is included in the 
docket for this proposed rule. The following are Panel recommendations 
adopted by the Agency. Please note all Panel recommendations were 
adopted for this proposal.
    a. Related Federal Rules. The Panel recommends that EPA continue to 
consult with the CPSC in developing a proposed and final rule in order 
to better understand the scope of the Commission's regulations as they 
may relate to the competition exclusion. In addition, the Panel 
recommends that EPA continue to work with the Coast Guard to evaluate 
the safety implications of any proposed evaporative emissions standards 
and to avoid interference with Coast Guard safety regulations.

[[Page 53097]]

    b. Regulatory Flexibility Alternatives. The Panel recommends that 
EPA consider and seek comments on a wide range of alternatives, 
including the flexibility options described below.
    (i) Marine Vessels.
    (A) Smooth Transition to Proposed Standards.
    The Panel recommends that EPA propose an approach that would 
implement any evaporative standards five years after a regulation for 
marine engines takes effect. The Panel also recommends that EPA seek 
comment on this five year period and on whether there are small 
entities whose product line is dominated by tanks that turn over at a 
time rate slower time than five years.
    (B) Design-Based Certification.
    The Panel recommends that EPA propose to grant small businesses the 
option of certifying to the evaporative emission performance 
requirements based on fuel tank design characteristics that reduce 
emissions. The Panel also recommends that EPA seek comment on and 
consider proposing an approach that would allow manufacturers to use 
this averaging approach with designs other than those listed in the 
final rule.
    (C) ABT of Emission Credits with Design-Based Certification.
    The Panel recommends that EPA allow manufacturers using design-
based certification to generate credits. The Panel also recommends that 
EPA provide adequately detailed design specifications and associated 
emission levels for several technology options that could be used to 
certify.
    (D) Broadly Defined Product Certification Families.
    The Panel recommends that EPA take comment on the need for broadly 
defined emission families and how these families should be defined.
    (E) Hardship Provisions.
    The Panel recommends that EPA propose two types of hardship 
programs for marine engine manufacturers, boat builders and fuel tank 
manufacturers: (1) Allow small businesses to petition EPA for 
additional lead time to comply with the standards; and (2) allow small 
businesses to apply for hardship relief if circumstances outside their 
control cause the failure to comply (i.e. supply contract broken by 
parts supplier) and if the failure to sell the subject fuel tanks or 
boats would have a major impact on the company's solvency. The Panel 
also recommends that EPA work with small manufacturers to develop these 
criteria and how they would be used.
    (ii) Highway Motorcycles.
    The Panel recommends that EPA include the flexibilities described 
below for small entities with highway motorcycle annual sales of less 
than 3,000 units per model year (combined Class I, II, and III 
motorcycles) and fewer than 500 employees.
    (A) Delay of Proposed Standards.
    The Panel recommends that EPA propose to delay compliance with the 
Tier 1 standard of 1.4 g/km HC+NOX until the 2008 model year 
for small volume manufacturers. The Panel also recommends that EPA seek 
comment on whether additional time is needed for small businesses to 
comply with the Federal program. The Panel recommends that EPA 
participate with CARB in the 2006 progress review as these provisions 
are revisited, and delay making decisions on the applicability to small 
businesses of Tier 2 or other revisions to the federal regulations that 
are appropriate following the review. The Panel also recommends that 
any potential Tier 2 requirements for small manufacturer motorcycles 
consider potential test procedure changes arising from the ongoing 
World Motorcycle Test Cycle work described in the Panel Report.
    (B) Broader Engine Families.
    The Panel recommends that EPA keep the current existing regulations 
for small volume highway motorcycle manufacturers.
    (C) Exemption from Production Line Testing.
    The Panel recommends that EPA keep the current provisions for no 
mandatory production line testing requirement for highway motorcycles 
and allow the EPA to request production vehicles from any certifying 
manufacturer for testing.
    (D) Averaging, Banking, and Trading (ABT).
    The Panel recommends that EPA propose an ABT program for highway 
motorcycles.
    (E) Hardship Provisions.
    The Panel recommends that EPA propose two types of hardship 
programs for highway motorcycles: (1) Allow small businesses to 
petition EPA for additional lead time to comply with the standards; and 
(2) allow small businesses to apply for hardship relief if 
circumstances outside their control cause the failure to comply (i.e. 
supply contract broken by parts supplier) and if failure to sell the 
subject engines or vehicles would have a major impact on the company's 
solvency. The Panel also recommends that EPA request comment on the 
California requirements, which do not include hardship provisions.
    (F) Reduced Certification Data Submittal and Testing Requirements.
    The Panel recommends that EPA keep current EPA regulations allow 
significant flexibility for certification by manufacturers who project 
fewer than 10,000 unit sales of combined Class I, II, and III 
motorcycles.
    We invite comments on all aspects of the proposal and its impacts 
on small entities.

C. Paperwork Reduction Act

    The information collection requirements in this proposed rule have 
been submitted for approval to the Office of Management and Budget 
(OMB) under the Paperwork Reduction Act, 44 U.S.C. 3501 et seq. 
Information Collection Requests (ICR No. 1897.03 for marine vessels and 
0783.43 for highway motorcycles) have been prepared by EPA, and a copy 
may be obtained from Susan Auby, Collection Strategies Division; U.S. 
Environmental Protection Agency (2822); 1200 Pennsylvania Ave., NW., 
Washington, DC 20460, by e-mail at auby.susan@epamail.epa.gov, or by 
calling (202) 566-1672. A copy may also be downloaded off the internet 
at http://www.epa.gov.icr.
    The information being collected is to be used by EPA to ensure that 
new marine vessels and fuel systems and new highway motorcycles comply 
with applicable emissions standards through certification requirements 
and various subsequent compliance provisions.
    For marine vessels, the annual public reporting and recordkeeping 
burden for this collection of information is estimated to average 6 
hours per response, with collection required annually. The estimated 
number of respondents is 810. The total annual cost for the first 3 
years of the program is estimated to be $230,438 year and includes no 
annualized capital costs, $14,000 in operating and maintenance costs, 
at a total of 4,838 hours per year.
    For highway motorcycles, the annual public reporting and 
recordkeeping burden for this collection of information is estimated to 
average 228 hours per response, with collection required annually. The 
estimated number of respondents is 73. The total annual cost for the 
first 3 years of the program is estimated to be $3,430,908 per year and 
includes no annualized capital costs, $2,728,000 in operating and 
maintenance costs, at a total of 16,647 hours per year.
    Burden means the total time, effort, or financial resources 
expended by persons to generate, maintain, retain, 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 collecting, validating, and 
verifying information, processing and maintaining information, and 
disclosing and providing information; adjusting the

[[Page 53098]]

existing ways to comply with any previously applicable instructions and 
requirements; train personnel to be able 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 are displayed in 40 CFR part 9 and 48 CFR chapter 15.
    Comments are requested on the Agency's need for this information, 
the accuracy of the provided burden estimates, and any suggested 
methods for minimizing respondent burden, including through the use of 
automated collection techniques. Send comments on the ICR to the 
Director, Collection Strategies Division; U.S. Environmental Protection 
Agency (2822); 1200 Pennsylvania Ave., NW., Washington, DC 20460; and 
to the Office of Information and Regulatory Affairs, Office of 
Management and Budget, 725 17th St., NW., Washington, DC 20503, marked 
``Attention: Desk Officer for EPA.'' Include the ICR number in any 
correspondence. Since OMB is required to make a decision concerning the 
ICR between 30 and 60 days after August 14, 2002, a comment to OMB is 
best ensured of having its full effect if OMB receives it by September 
13, 2002. The final rule will respond to any OMB or public comments on 
the information collection requirements contained in this proposal.

D. Intergovernmental Relations

1. Unfunded Mandates Reform Act
    Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Pub. 
L. 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 of 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.
    This rule contains no Federal mandates for state, local, or tribal 
governments as defined by the provisions of Title II of the UMRA. The 
rule imposes no enforceable duties on any of these governmental 
entities. Nothing in the rule would significantly or uniquely affect 
small governments.
    EPA has determined that this rule contains federal mandates that 
may result in expenditures of less than $100 million to the private 
sector in any single year. EPA believes that the proposal represents 
the least costly, most cost-effective approach to achieve the air 
quality goals of the rule. The costs and benefits associated with the 
proposal are discussed in Section VI and in the Draft Regulatory 
Support Document.
2. 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 6, 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.'' ``Policies that have tribal 
implications'' is defined in the Executive Order to include regulations 
that have ``substantial direct effects on one or more Indian tribes, on 
the relationship between the Federal government and the Indian tribes, 
or on the distribution of power and responsibilities between the 
Federal government and Indian tribes.''
    This proposed rule does not have tribal implications. It will not 
have substantial direct effects on tribal governments, on the 
relationship between the Federal government and Indian tribes, or on 
the distribution of power and responsibilities between the Federal 
government and Indian tribes, as specified in Executive Order 13175. 
This rule contains no federal mandates for tribal governments. Thus, 
Executive Order 13175 does not apply to this rule. However, in the 
spirit of Executive Order 13175, and consistent with EPA policy to 
promote communications between EPA and tribal governments, we 
specifically solicit additional comment on this proposed rule from 
tribal officials.

E. National Technology Transfer and Advancement Act

    Section 12(d) of the National Technology Transfer and Advancement 
Act of 1995 (``NTTAA''), Public Law 104-113, Sec. 12(d) (15 U.S.C. 272 
note) directs EPA to use voluntary consensus standards in its 
regulatory activities unless doing so would be inconsistent with 
applicable law or otherwise impractical. Voluntary consensus standards 
are technical standards (e.g., materials specifications, test methods, 
sampling procedures, and business practices) that are developed or 
adopted by voluntary consensus standards bodies. NTTAA directs EPA to 
provide Congress, through OMB, explanations when the Agency decides not 
to use available and applicable voluntary consensus standards.
    This proposed rule involves technical standards. The following 
paragraphs describe how we specify testing procedures for engines 
subject to this proposal.
    We are proposing to test highway motorcycles with the Federal Test 
Procedure, a chassis-based transient test. There is no voluntary 
consensus standard that would adequately address engine or vehicle 
operation for suitable emission measurement.
    For marine vessels, we are proposing to use an evaporative emission 
test procedure based on the highway Federal Test Procedure. There is no 
voluntary consensus standard for testing evaporative emission from 
marine vessels. In addition, we are proposing the option of using 
design-based certification.

F. Protection of Children (Executive Order 13045)

    Executive Order 13045, ``Protection of Children from Environmental 
Health Risks and Safety Risks'' (62 FR 19885, April 23, 1997) applies 
to any rule that

[[Page 53099]]

(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 proposed rule is not subject to the Executive Order because it 
does not involve decisions on environmental health or safety risks that 
may disproportionately affect children.
    The effects of ozone and PM on children's health were addressed in 
detail in EPA's rulemaking to establish the NAAQS for these pollutants, 
and EPA is not revisiting those issues here. EPA believes, however, 
that the emission reductions from the strategies proposed in this 
rulemaking will further reduce air toxics and the related adverse 
impacts on children's health.

G. Federalism (Executive Order 13132)

    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.''
    Under Section 6 of Executive Order 13132, EPA may not issue a 
regulation that has federalism implications, that imposes substantial 
direct compliance costs, and that is not required by statute, unless 
the Federal government provides the funds necessary to pay the direct 
compliance costs incurred by State and local governments, or EPA 
consults with State and local officials early in the process of 
developing the proposed regulation. EPA also may not issue a regulation 
that has federalism implications and that preempts State law, unless 
the Agency consults with State and local officials early in the process 
of developing the proposed regulation.
    Section 4 of the Executive Order contains additional requirements 
for rules that preempt State or local law, even if those rules do not 
have federalism implications (i.e., the rules 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). Those 
requirements include providing all affected State and local officials 
notice and an opportunity for appropriate participation in the 
development of the regulation. If the preemption is not based on 
express or implied statutory authority, EPA also must consult, to the 
extent practicable, with appropriate State and local officials 
regarding the conflict between State law and Federally protected 
interests within the agency's area of regulatory responsibility.
    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.
    Although Section 6 of Executive Order 13132 does not apply to this 
rule, EPA did consult with representatives of various State and local 
governments in developing this rule. EPA has also consulted 
representatives from STAPPA/ALAPCO, which represents state and local 
air pollution officials.
    In the spirit of Executive Order 13132, and consistent with EPA 
policy to promote communications between EPA and State and local 
governments, EPA specifically solicits comment on this proposed rule 
from State and local officials.

H. Energy Effects (Executive Order 13211)

    This rule is not a ``significant energy action'' as defined in 
Executive Order 13211, ``Actions Concerning Regulations That 
Significantly Affect Energy Supply, Distribution, or Use'' (66 FR 28355 
(May 22, 2001)) because it is not likely to have a significant adverse 
effect on the supply, distribution or use of energy. The proposed 
standards have for their aim the reduction of emission from certain 
nonroad engines, and have no effect on fuel formulation, distribution, 
or use. Generally, the proposed program leads to reduced fuel usage due 
to the reduction of wasted fuel through evaporation.

I. Plain Language

    This document follows the guidelines of the June 1, 1998 Executive 
Memorandum on Plain Language in Government Writing. To read the text of 
the regulations, it is also important to understand the organization of 
the Code of Federal Regulations (CFR). The CFR uses the following 
organizational names and conventions.

Title 40--Protection of the Environment
Chapter I--Environmental Protection Agency
Subchapter C--Air Programs. This contains parts 50 to 99, where the 
Office of Air and Radiation has usually placed emission standards for 
motor vehicle and nonroad engines.
Subchapter U--Air Programs Supplement. This contains parts 1000 to 
1299, where we intend to place regulations for air programs in future 
rulemakings.
Part 1045--Control of Emissions from Marine Spark-ignition Engines and 
Vessels
Part 1068--General Compliance Provisions for Engine Programs. 
Provisions of this part apply to everyone.

    Each part in the CFR has several subparts, sections, and 
paragraphs. The following illustration shows how these fit together.

Part 1045
Subpart A
Section 1045.1
    (a)
    (b)
    (1)
    (2)
    (i)
    (ii)
    (A)
    (B)

    A cross reference to Sec. 1045.1(b) in this illustration would 
refer to the parent paragraph (b) and all its subordinate paragraphs. A 
reference to ``Sec. 1045.1(b) introductory text'' would refer only to 
the single, parent paragraph (b).

List of Subjects

40 CFR Part 86

    Environmental protection, Administrative practice and procedure, 
Confidential business information, Labeling, Motor vehicle pollution, 
Reporting and recordkeeping requirements

40 CFR Part 90

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

40 CFR Part 1045

    Environmental protection, Administrative practice and procedure,

[[Page 53100]]

Air pollution control, Confidential business information, Imports, 
Labeling, Penalties, Reporting and recordkeeping requirements, 
Research, Warranties

40 CFR Part 1051

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

40 CFR Part 1068

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

    Dated: July 25, 2002.
Christine Todd Whitman,
Administrator.

    For the reasons set out in the preamble, title 40, chapter I of the 
Code of Federal Regulations is proposed to be amended as set forth 
below:

PART 86--CONTROL OF EMISSIONS FROM NEW AND IN-USE HIGHWAY VEHICLES 
AND ENGINES

    1. The authority citation for part 86 continues to read as follows:

    Authority: 42 U.S.C. 7401-7521(l) and 7521(m)-7671q.

Subpart E--[Amended]

    2. A new Sec. 86.401-2006 is added to subpart E to read as follows:


Sec. 86.401-2006  General applicability.

    This subpart applies to 1978 and later model year, new, gasoline-
fueled motorcycles built after December 31, 1977, and to 1990 and later 
model year, new methanol-fueled motorcycles built after December 31, 
1989, and to 1997 and later model year, new natural gas-fueled and 
liquefied petroleum gas-fueled motorcycles built after December 31, 
1996, and to 2006 and later model year new motorcycles, regardless of 
fuel.
    3. Section 86.402-78(a) is amended by adding a definition for 
``Motor vehicle'' in alphabetical order to read as follows:


Sec. 86.402-78  Definitions.

    (a) * * *
    Motor vehicle has the meaning we give in 40 CFR 85.1703.
* * * * *
    4. A new Sec. 86.410-2006 is added to subpart E to read as follows:


Sec. 86.410-2006  Emission standards for 2006 and later model year 
motorcycles.

    (a)(1) Exhaust emissions from Class I and Class II motorcycles 
shall not exceed the standards listed in the following table:

      Table E.--2006.1 Class I and II Motorcycle Emission Standards
------------------------------------------------------------------------
                                                     Emission standards
                                                           (g/km)
                    Model year                     ---------------------
                                                        HC         CO
------------------------------------------------------------------------
2006 and later....................................        1.0       12.0
------------------------------------------------------------------------

    (2) Exhaust emissions from Class III motorcycles shall not exceed 
the standards listed in the following table:

        Table E.--2006.2 Class III Motorcycle Emission Standards
------------------------------------------------------------------------
                                                     Emission standards
                                                           (g/km)
         Tier                   Model year         ---------------------
                                                      HC+NOX       CO
------------------------------------------------------------------------
1....................  2006-2009..................        1.4       12.0
2....................  2010 and later.............        0.8       12.0
------------------------------------------------------------------------

    (b) The standards set forth in paragraphs (a) (1) and (2) of this 
section refer to the exhaust emitted over the driving schedule as set 
forth in subpart F and measured and calculated in accordance with those 
procedures.
    (c) Compliance with the HC+NOX standards set forth in 
paragraph (a)(2) of this section may be demonstrated using the 
averaging provisions of Sec. 86.449.
    (d) No crankcase emissions shall be discharged into the ambient 
atmosphere from any new motorcycle subject to this subpart.
    (e) Manufacturers with fewer than 500 employees and producing fewer 
than 3000 motorcycles per year are considered small-volume 
manufacturers for the purposes of this section. The following 
provisions apply for these small-volume manufacturers:
    (1) Small-volume manufacturers are not required to comply with the 
Tier 1 standards until model year 2008.
    (2) Small-volume manufacturers are not required to comply with the 
Tier 2 standards.
    5. A new Sec. 86.419-2006 is added to subpart E to read as follows:


Sec. 86.419-2006  Engine displacement, motorcycle classes.

    (a)(1) Engine displacement shall be calculated using nominal engine 
values and rounded to the nearest whole cubic centimeter, in accordance 
with ASTM E 29-67 (incorporated by reference in Sec. 86.1).
    (2) For rotary engines, displacement means the maximum volume of a 
combustion chamber between two rotor tip seals, minus the minimum 
volume of the combustion chamber between those two rotor tip seals, 
times three times the number of rotors, according to the following 
formula:

cc = (max. chamber volume - min. chamber volume)  x  3  x  no. of 
rotors

    (b) Motorcycles will be divided into classes based on engine 
displacement.
    (1) Class I--0 to 169 cc (0 to 10.4 cu. in.).
    (2) Class II--170 to 279 cc (10.4 to 17.1 cu. in.).
    (3) Class III--280 cc and over (17.1 cu. in. and over).
    (c) At the manufacturer's option, a vehicle described in an 
application for certification may be placed in a higher class (larger 
displacement). All procedures for the higher class must then be 
complied with, compliance withemission standards will be determined on 
the basis of engine displacement.
    6. A new Sec. 86.445-2006 is added to subpart E to read as follows:


Sec. 86.445-2006  What temporary provisions address hardship due to 
unusual circumstances?

    (a) After considering the circumstances, we may permit you to 
introduce into commerce highway motorcycles that do not comply with 
emission standards if all the following conditions and requirements 
apply:
    (1) Unusual circumstances that are clearly outside your control and 
that could not have been avoided with reasonable discretion prevent you 
from meeting requirements from this chapter.
    (2) You exercised prudent planning and were not able to avoid the 
violation; you have taken all reasonable steps to minimize the extent 
of the nonconformity.
    (3) Not having the exemption will jeopardize the solvency of your 
company.
    (4) No other allowances are available under the regulations to 
avoid the impending violation.
    (b) To apply for an exemption, you must send the Designated Officer 
a written request as soon as possible before you are in violation. In 
your request, show that you meet all the conditions and requirements in 
paragraph (a) of this section.
    (c) Include in your request a plan showing how you will meet all 
the applicable requirements as quickly as possible.
    (d) You must give us other relevant information if we ask for it.
    (e) We may include reasonable additional conditions on an approval 
granted under this section, including provisions to recover or 
otherwise address the lost environmental benefit or

[[Page 53101]]

paying fees to offset any economic gain resulting from the exemption. 
For example, we may require that you meet standards less stringent than 
those that currently apply.
    7. A new Sec. 86.446-2006 is added to subpart E to read as follows:


Sec. 86.446-2006  What are the provisions for extending compliance 
deadlines for small-volume manufacturers under hardship?

    (a) After considering the circumstances, we may extend the 
compliance deadline for you to meet new or revised emission standards, 
as long as you meet all the conditions and requirements in this 
section.
    (b) To be eligible for this exemption, you must qualify as a small-
volume manufacturer under Sec. 86.410-2006(e).
    (c) To apply for an extension, you must send the Designated Officer 
a written request. In your request, show that all the following 
conditionsand requirements apply:
    (1) You have taken all possible business, technical, and economic 
steps to comply.
    (i) In the case of importers, show that you are unable to find a 
manufacturer capable of supplying complying products.
    (ii) For all other manufacturers, show that the burden of 
compliance costs prevents you from meeting the requirements of this 
chapter.
    (2) Not having the exemption will jeopardize the solvency of your 
company.
    (3) No other allowances are available under the regulations to 
avoidthe impending violation.
    (d) In describing the steps you have taken to comply under 
paragraph (c)(1) of this section, include at least the following 
information:
    (1) Describe your business plan, showing the range of projects 
active or under consideration.
    (2) Describe your current and projected financial standing, with 
and without the burden of complying with regulations.
    (3) Describe your efforts to raise capital to comply with 
regulations.
    (4) Identify the engineering and technical steps you have taken or 
planto take to comply with regulations.
    (5) Identify the level of compliance you can achieve. For example, 
you may be able to produce engines that meet a somewhat less stringent 
emission standard than the regulations require.
    (e) Include in your request a plan showing how you will meet all 
the applicable requirements as quickly as possible.
    (f) You must give us other relevant information if we ask for it.
    (g) An authorized representative of your company must sign the 
request andinclude the statement: ``All the information in this request 
is true andaccurate, to the best of my knowledge.''
    (h) Send your request for this extension at least nine months 
before new standards apply. Do not send your request before the 
regulations in question apply to other manufacturers.
    (i) We may include reasonable requirements on an approval granted 
underthis section, including provisions to recover or otherwise address 
the lostenvironmental benefit. For example, we may require that you 
meet a less stringent emission standard or buy and use available 
emission credits.
    (j) We will approve extensions of up to one year. We may review and 
revisean extension as reasonable under the circumstances.
    8. A new Sec. 86.447-2006 is added to subpart E to read as follows:


Sec. 86.447-2006  What are the provisions for exempting motorcycles 
under 50 cc from the requirements of this part if they use engines you 
certify under other programs?

    (a) This section applies to you if you manufacture engines under 50 
cc for installation in a highway motorcycle. See Sec. 86.448-2006 if 
you are not the engine manufacturer.
    (b) The only requirements or prohibitions from this part that apply 
to a motorcycle that is exempt under this section are in this section 
and Sec. 86.448-2006.
    (c) If you meet all the following criteria regarding your new 
engine, itis exempt under this section:
    (1) You must produce it under a valid certificate of conformity for 
one of the following types of engines or vehicles:
    (i) Class II engines under 40 CFR part 90.
    (ii) Recreational vehicles under 40 CFR part 1051.
    (2) You must not make any changes to the certified engine that we 
could reasonably expect to increase its exhaust emissions. 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 any other emission-related components.
    (iii) Modify or design the engine cooling system so that 
temperatures or heat rejection rates are outside the original engine's 
specified ranges.
    (3) You must make sure the engine has the emission label we require 
under 40 CFR part 90 or part 1051.
    (4) You must make sure that fewer than 50 percent of the engine 
model'stotal sales, from all companies, are used in highway 
motorcycles.
    (d) If you produce only the engine, give motorcycle manufacturers 
anynecessary instructions regarding what they may or may not change 
under paragraph (c)(2) of this section.
    (e) If you produce both the engine and motorcycle under this 
exemption, you must do all of the following to keep the exemption 
valid:
    (1) Make sure the original emission label is intact.
    (2) Add a permanent supplemental label to the engine in a position 
where it will remain clearly visible after installation in the vehicle. 
In your engine's emission label, do the following:
    (i) Include the heading: ``Highway Motorcycle Emission 
ControlInformation''.
    (ii) Include your full corporate name and trademark.
    (iii) State: ``THIS ENGINE WAS ADAPTED FOR HIGHWAY USE WITHOUT 
AFFECTING ITS EMISSION CONTROLS.''.
    (iv) State the date you finished installation (month and year).
    (3) Send the Designated 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 models you expect to produce under this exemption in 
the coming year.
    (iii) State: ``We produce each listed model as a highway motorcycle 
without making any changes that could increase its certified emission 
levels, as described in 40 CFR 86.447.''.
    (f) If your vehicles do not meet the criteria listed in paragraph 
(c) of this section, they will be subject to the standards and 
prohibitions of this part. Producing these vehicles without a valid 
exemption or certificate of conformity would violate the prohibitions 
in Clean Air Act section 203 (42 U.S.C. 7522).
    (g) If we request it, you must send us emission test data on the 
duty cycle for Class I motorcycles. You may include the data in your 
application for certification or in your letter requesting the 
exemption.
    (h) Vehicles exempted under this section are subject to all the 
requirements affecting engines and vehicles under 40 CFR part 90 or 
part 1051, as applicable. The requirements and restrictions of 40 CFR 
part 90 or 1051 apply to anyone manufacturing these engines, anyone 
manufacturing vehicles that use these engines, and all other persons in 
the same manner as if

[[Page 53102]]

these engines were used in a nonroad application.
    9. A new Sec. 86.448-2006 is added to subpart E to read as follows:


Sec. 86.448-2006  What are the provisions for producing motorcycles 
under 50 cc with engines already certified under other programs?

    (a) You may produce a highway motorcycle under 50 cc using a 
nonroad engine if you meet three criteria:
    (1) The engine or vehicle is certified to 40 CFR part 90 or part 
1051.
    (2) The engine is not adjusted outside the manufacturer's 
specifications, as described in Sec. 86.447-2006(c)(2) and (d).
    (3) The engine or vehicle is not modified in any way that may 
affect its emission control.
    (b) This section does not apply if you manufacture the engine 
yourself; see Sec. 86.447-2006.
    10. A new Sec. 86.449 is added to subpart E to read as follows:


Sec. 86.449  Averaging provisions.

    (a) Compliance with the HC+NOX standards set forth in 
Sec. 86.410-2006(a)(2) may be demonstrated using the averaging 
provisions of this section. To do this you must show that your average 
emission levels are at or below the applicable standards in 
Sec. 86.410-2006. Family emission limits (FELs) may not exceed 5.0 g/
km.
    (b) Do not include any exported vehicles in the certification 
averaging program. Include only motorcycles certified under this 
subpart.
    (c) To use the averaging program, do the following things:
    (1) Certify each vehicle to a family emission limit.
    (2) Calculate a preliminary average emission level according to 
paragraph (d) of this section using projected production volumes for 
your application for certification.
    (3) After the end of your model year, calculate a final average 
emission level according to paragraph (d) of this section for each type 
of recreational vehicle or engine you manufacture or import. Use actual 
production volumes.
    (d) Calculate your average emission level for each type of 
recreational vehicle or engine for each model year according to the 
following equation and round it to the nearest tenth of a g/km. Use 
consistent units throughout the calculation.
    (1) Calculate the average emission level as:
    [GRAPHIC] [TIFF OMITTED] TP14AU02.000
    
Where:

FELi = The FEL to which the engine family is certified.
ULi = The useful life of the engine family.
Productioni = The number of vehicles in the engine family.

    (2) Use production projections for initial certification, and 
actual production volumes to determine compliance at the end of the 
model year.
    (e)(1) Maintain and keep five types of properly organized and 
indexed records for each group and for each emission family:
    (i) Model year and EPA emission family.
    (ii) FEL.
    (iii) Useful life.
    (iv) Projected production volume for the model year.
    (v) Actual production volume for the model year.
    (2) Keep paper records of this information for three years from the 
due date for the end-of-year report. You may use any additional storage 
formats or media if you like.
    (3) Follow paragraphs (f) through (i) of this section to send us 
the information you must keep.
    (4) We may ask you to keep or send other information necessary to 
implement this subpart.
    (f) Include the following information in your applications for 
certification:
    (1) A statement that, to the best of your belief, you will not have 
a negative credit balance for any type of recreational vehicle or 
engine when all credits are calculated. This means that if you believe 
that your average emission level will be above the standard (i.e., that 
you will have a deficit for the model year), you must have banked 
credits pursuant to paragraph (j) of this section to offset the 
deficit.
    (2) Detailed calculations of projected emission credits (zero, 
positive, or negative) based on production projections. If you project 
a credit deficit, state the source of credits needed to offset the 
credit deficit.
    (g) At the end of each model year, send an end-of-year report.
    (1) Make sure your report includes three things:
    (i) Calculate in detail your average emission level and any 
emission credits based on actual production volumes.
    (ii) If your average emission level is above the allowable average 
standard, state the source of credits needed to offset the credit 
deficit.
    (2) Base your production volumes on the point of first retail sale. 
This point is called the final product-purchase location.
    (3) Send end-of-year reports to the Designated Officer within 120 
days of the end of the model year. If you send reports later, you are 
violating the Clean Air Act.
    (4) If you generate credits for banking pursuant to paragraph (j) 
of this section and you do not send your end-of-year reports within 120 
days after the end of the model year, you may not use or trade the 
credits until we receive and review your reports. You may not use 
projected credits pending our review.
    (5) You may correct errors discovered in your end-of-year report, 
including errors in calculating credits according to the following 
table:

------------------------------------------------------------------------
           If. . .                 And if. . .          Then we . . .
------------------------------------------------------------------------
(i) Our review discovers an   the discovery occurs  restore the credits
 error in your end-of-year     within 180 days of    for your use.
 report that increases your    receipt.
 credit balance.
------------------------------------------------------------------------
(ii) You discover an error    the discovery occurs  restore the credits
 in your report that           within 180 days of    for your use.
 increases your credit         receipt.
 balance.
------------------------------------------------------------------------

[[Page 53103]]

 
(iii) We or you discover an   the discovery occurs  do not restore the
 error in your report that     more than 180 days    credits for your
 increases your credit         after receipt.        use.
 balance.
------------------------------------------------------------------------
(iv) We discover an error in  at any time after     reduce your credit
 your report that reduces      receipt.              balance.
 your credit balance.
------------------------------------------------------------------------

    (h) Include in each report a statement certifying the accuracy and 
authenticity of its contents.
    (i) We may void a certificate of conformity for any emission family 
if you do not keep the records this section requires or give us the 
information when we ask for it.
    (j) You may include motorcycles that you certify with 
HC+NOX emissions below 0.8 g/km in the following optional 
early banking program:
    (1) To include a motorcycle in the early banking program, assign it 
an emission rate of 0.8 g/km when calculating your average emission 
level for compliance with the Tier 1 standards.
    (2)(i) Calculate bankable credits from the following equation:
Bonus credit = Y x [ (0.8 g/km--Certfied emission level) ]x 
[(Production volume of engine family) x (Useful life) ]

    (ii) The value of Y is defined by the model year and emission 
level, as shown in the following table:

 
----------------------------------------------------------------------------------------------------------------
                                                                    Multiplier (Y) for use in MY 2010 or later
                                                                               corporate averaging
                                                                ------------------------------------------------
                                                                    If your certified
                           Model year                            emission level is less     If your certified
                                                                   than 0.8 g/km, but     emission level is less
                                                                 greater than 0.4 g/km,  than 0.4 g/km, then Y =
                                                                     then Y = . . .               . . .
----------------------------------------------------------------------------------------------------------------
2003 through 2006..............................................           1.5                                3.0
2007...........................................................           1.375                              2.5
2008...........................................................           1.250                              2.0
2009...........................................................           1.125                              1.5
----------------------------------------------------------------------------------------------------------------

    (3) Credits banked under this paragraph (j) may be used for 
compliance with any 2010 or later model year standards as follows:
    (i) If your average emission level is above the average standard, 
calculate your credit deficit according to the following equation, 
rounding to the nearest tenth of a gram:

Deficit = (Emission Level-Average Standard) x (Total Annual Production)

    (ii) Credits deficits may be offset using banked credits.

Subpart F--[Amended]

    11. A new Sec. 86.513-2004 is added to subpart F to read as 
follows:


Sec. 86.513-2004  Fuel and engine lubricant specifications.

    Section 86.513-2004 includes text that specifies requirements that 
differ from Sec. 86.513-94. Where a paragraph in Sec. 86.513-94 is 
identical and applicable to Sec. 86.513-2004, this may be indicated by 
specifying the corresponding paragraph and the statement ``[Reserved]. 
For guidance see Sec. 86.513-94.'' Where a corresponding paragraph of 
Sec. 86.513-94 is not applicable, this is indicated by the statement 
``[Reserved].''
    (a) Gasoline. (1) Gasoline having the following specifications will 
be used by the Administrator in exhaust emission testing of gasoline-
fueled motorcycles. Gasoline having the following specifications or 
substantially equivalent specifications approved by the Administrator, 
shall be used by the manufacturer for emission testing except that the 
octane specifications do not apply.

                                            Table 1 of Sec.  86.513-2004.--Gasoline Test Fuel Specifications
--------------------------------------------------------------------------------------------------------------------------------------------------------
                        Item                                                Procedure                                           Value
--------------------------------------------------------------------------------------------------------------------------------------------------------
Distillation Range:
    1. Initial boiling point,  deg.C................  ASTM D 86-97........................................  23.9--35.0.\1\
    2. 10% point,  deg.C............................  ASTM D 86-97........................................  48.9--57.2
    3. 50% point,  deg.C............................  ASTM D 86-97........................................  93.3--110.0.
    4. 90% point,  deg.C............................  ASTM D 86-97........................................  148.9--162.8.
    5. End point,  deg.C............................  ASTM D 86-97........................................  212.8.
Hydrocarbon composition:
    1. Olefins, volume %............................  ASTM D 1319-98......................................  10 maximum.
    2. Aromatics, volume %..........................  ASTM D 1319-98......................................  35 minimum.
    3. Saturates....................................  ASTM D 1319-98......................................  Remainder.
Lead (organic), g/liter.............................  ASTM D 3237.........................................  0.013 maximum.
Phosphorous, g/liter................................  ASTM D 3231.........................................  0.005 maximum.
Sulfur, weight %....................................  ASTM D 1266.........................................  0.08 maximum.
Volatility (Reid Vapor Pressure), kPa...............  ASTM D 3231.........................................  55.2 to 63.4.\1\
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ For testing at altitudes above 1 219 m, the specified volatility range is 52 to 55 kPa and the specified initial boiling point range is 23.9 deg. to
  40.6 deg. C.


[[Page 53104]]

    (2) Unleaded gasoline and engine lubricants representative of 
commercial fuels and engine lubricants which will be generally 
available though retail outlets shall be used in service accumulation.
    (3) The octane rating of the gasoline used shall be no higher than 
4.0. Research octane numbers above the minimum recommended by the 
manufacturer.
    (4) The Reid Vapor Pressure of the gasoline used shall be 
characteristic of commercial gasoline fuel during the season in which 
the service accumulation takes place.
    (b) through (d) [Reserved]. For guidance see Sec. 86.513-94.
    12. Section 86.544-90 is amended by revising the text preceding the 
formula to read as follows:


Sec. 86.544-90  Calculations; exhaust emissions.

    The final reported text results, with oxides of nitrogen being 
optional for model years prior to 2006 and required for 2006 and later 
model years, shall be computed by use of the following formula (The 
results of all emission tests shall be rounded, in accordance with ASTM 
E29-90 (incorporated by reference in Sec. 86.1), to the number of 
places to the right of the decimal point indicated by expressing the 
applicable standard to three significant figures.):
* * * * *

Subpart I--[Amended]

    13. Section 86.884-14 is amended by revising the equation in 
paragraph (a) to read as follows:


Sec. 86.884-14  Calculations.

    (a) * * *
* * * * *
[GRAPHIC] [TIFF OMITTED] TP14AU02.001

PART 90--CONTROL OF EMISSIONS FROM NONROAD SPARK-IGNITION ENGINES

    14. The authority for part 90 continues to read as follows:

    Authority: 42 U.S.C. 7521, 7522, 7523, 7524, 7525, 7541, 7542, 
7543, 7547, 7549, 7550, and 7601(a).

Subpart A--[Amended]

    15. Section 90.1 as proposed at 66 FR 51181 is amended by adding a 
new paragraph (f) to read as follows:


Sec. 90.1  Applicability.

* * * * *
    (f) This part also applies to engines under 50 cc used in highway 
motorcycles if the manufacturer uses the provisions of 40 CFR 86.447-
2006 to meet the emission standards in this part instead of the 
requirements of 40 CFR part 86. Compliance with the provisions of this 
part is a required condition of that exemption.

Subchapter U--Air Pollution Controls

    16. Part 1045 is added to subchapter U as proposed at 66 FR 51189 
to read as follows:

PART 1045--CONTROL OF EMISSIONS FROM SPARK-IGNITION MARINE VESSELS

Subpart A--Determining How to Follow This Part
Sec.
1045.1   Does this part apply to me?
1045.5   Are any of my vessels excluded from the requirements of 
this part?
1045.10   What main steps must I take to comply with this part?
1045.15   Do any other regulation parts affect me?
1045.20   Can I certify just the fuel system instead of the entire 
vessel?
Subpart B--Emission Standards and Related Requirements
1045.105   What evaporative emission standards must my vessels meet?
1045.115   What other requirements must my vessels meet?
1045.120   What warranty requirements apply to me?
1045.125   What maintenance instructions must I give to buyers?
1045.130   What installation instructions must I give to vessel 
manufacturers?
1045.135   How must I label and identify the vessels and fuel 
systems I produce?
1045.140   What interim provisions apply only for a limited time?
1045.145   What provisions apply to non-certifying manufacturers?
Subpart C--Certifying Emission Families
1045.201   What are the general requirements for submitting a 
certification application?
1045.205   How must I prepare my application?
1045.215   What happens after I complete my application?
1045.225   How do I amend my application to include a new or 
modified product?
1045.230   How do I select emission families?
1045.235   How does testing fit with my application for a 
certificate of conformity?
1045.240   How do I determine if my emission family complies with 
emission standards?
1045.245   What records must I keep and make available to EPA?
1045.250   When may EPA deny, revoke, or void my certificate of 
conformity?
Subpart D--[Reserved]
Subpart E--Testing In-use Engines
1045.401   What provisions apply for in-use testing of vessels?
Subpart F--Test Procedures
1045.501   What equipment and general procedures must I use to test 
my vessels?
1045.505   How do I test for diurnal evaporative emissions?
1045.506   How do I test my fuel tank for permeation emissions?
Subpart G--Compliance Provisions
1045.601   What compliance provisions apply to these vessels?
Subpart H--Averaging, Banking, and Trading for Certification
1045.701   General provisions.
1045.705   How do I average emission levels?
1045.710   How do I generate and bank emission credits?
1045.715   How do I trade or transfer emission credits?
1045.720   How do I calculate my average emission level or emission 
credits?
1045.725   What information must I keep?
1045.730   What information must I report?
Subpart I--Definitions and Other Reference Information
1045.801   What definitions apply to this part?
1045.805   What symbols, acronyms, and abbreviations does this part 
use?
1045.810   What materials does this part reference?
1045.815   How should I request EPA to keep my information 
confidential?
1045.820   How do I request a public hearing?

    Authority: 42 U.S.C. 7401-7671(q).

Subpart A--Determining How To Follow This Part


Sec. 1045.1  Does this part apply to me?

    (a) This part applies to you if you manufacture or import new 
spark-ignition marine vessels (defined in Sec. 1045.801) or part of a 
fuel system for such vessels (defined in Sec. 1045.801), unless we 
exclude the vessels under Sec. 1045.5. You should read Sec. 1045.145 to 
determine whether we require all manufacturers to meet a specific 
requirement.
    (b) See 40 CFR part 90 to meet exhaust-emission requirements for 
spark-ignition marine engines. Note that 40 CFR part 90 does not apply 
to all spark-ignition marine engines.
    (c) Note in subpart G of this part that 40 CFR part 1068 applies to 
everyone, including anyone who manufactures, owns, operates, or repairs 
any of the vessels this part covers.
    (d) You need not follow this part for vessels produced before the 
2008 model year, unless you certify voluntarily. See Sec. 1045.105, 
Sec. 1045.145, and the definition of model year in Sec. 1045.801

[[Page 53105]]

for more information about the timing of new requirements.
    (e) See Secs. 1045.801 and 1045.805 for definitions and acronyms 
that apply to this part.
    (f) For now, ignore references to engines, which will apply when we 
establish exhaust emission standards in this part for spark-ignition 
marine engines.


Sec. 1045.5  Are any of my vessels excluded from the requirements of 
this part?

    (a) The requirements of this part do not apply to either of two 
types of marine vessels:
    (1) Hobby vessels.
    (2) Vessels fueled with diesel fuel, LPG, natural gas, or other 
fuel that is not a volatile liquid fuel.
    (b) See part 1068, subpart C, of this chapter for exemptions of 
specific vessels.
    (c) We may require you to label a vessel if this section excludes 
it and other requirements in this chapter do not apply (for example, 
hobby vessels).
    (d) Send the Designated Officer a written request with supporting 
documentation if you want us to determine whether this part covers or 
excludes certain vessels. Excluding engines from this part's 
requirements does not affect other requirements that may apply to them.


Sec. 1045.10  What main steps must I take to comply with this part?

    (a) Every new vessel subject to the standards in this part must be 
covered by a certificate of conformity before it is sold, offered for 
sale, introduced into commerce, distributed or delivered for 
introduction into commerce, or imported into the United States. For 
evaporative emissions, either the vessel manufacturer or the fuel 
system manufacturer must apply for a certificate of conformity for each 
new model year.
    (b) To get a certificate of conformity and comply with its terms, 
you must do three things:
    (1) Show that each vessel will meet one of the individual emission 
standards and other requirements in subpart B of this part. You may 
also need to meet a corporate-average emission standard (see 
Sec. 1045.105).
    (2) Apply for certification (see subpart C of this part).
    (3) Follow our instructions throughout this part.
    (c) Subpart F of this part and 40 CFR part 86 describe the 
procedures you must follow to test your vessels. Subpart F of this part 
and Sec. 1045.20 describe cases for which you may test the fuel system 
alone instead of testing the entire vessel.
    (d) Subpart G of this part and 40 CFR part 1068 of this chapter 
describe requirements and prohibitions that apply to manufacturers, 
owners, operators, repairers, and all others associated with spark-
ignition marine vessels.


Sec. 1045.15  Do any other regulation parts affect me?

    (a) Part 86 of this chapter describes how to measure evaporative 
emissions. Subpart F of this part describes how to apply part 86 of 
this chapter to show you meet this part's emission standards.
    (b) Part 1068 of this chapter describes general provisions, 
including these seven areas:
    (1) Prohibited acts and penalties for manufacturers and others.
    (2) Rebuilding and other aftermarket changes.
    (3) Exemptions for certain vessels.
    (4) Importing vessels.
    (5) Selective enforcement audits of your production.
    (6) Defect reporting and recall.
    (7) Procedures for public hearing.
    (c) Other parts of this chapter affect you if referenced in this 
part.


Sec. 1045.20  Can I certify just the fuel system instead of the entire 
vessel?

    (a) You may certify only the fuel system if you manufacture part or 
all of the system for a vessel. Vessels using certified fuel systems do 
not need to be certified separately.
    (b) If you certify a fuel system, you must do two things:
    (1) Use good engineering judgment to ensure the engine will comply 
with emission standards after it is installed in a vessel.
    (2) Comply with Sec. 1045.130.
    (c) Do not use the provisions of this section to circumvent 
emission standards or other requirements of this part.

Subpart B--Emission Standards and Related Requirements


Sec. 1045.105  What evaporative emission standards must my vessels 
meet?

    Beginning January 1, 2008, each new vessel and new portable fuel 
tank must be certified to the emission standards of paragraphs (a) and 
(b) of this section (except as allowed by paragraph (c) of this 
section). Vessel manufacturers may certify vessels directly or use fuel 
systems certified by fuel-system manufacturers.
    (a) Diurnal Emissions. Diurnal emissions from your vessel may not 
exceed 1.1 grams per gallon per day as measured according to the 
diurnal evaporative test procedures in subpart F of this part. You may 
use the averaging provisions in Subpart H of this part to show you meet 
the standards of this paragraph (a). Emission standards described in 
this paragraph apply to marine vessels with installed fuel tanks; they 
do not apply to portable fuel tanks, which are addressed in paragraph 
(c) of this section.
    (b) Permeation emissions. Permeation emissions may not exceed the 
following standards:
    (1) Permeation emissions from your vessel's fuel tank(s) may not 
exceed 0.08 grams per gallon per day as measured according to the tank 
permeation test procedures in subpart F of this part.
    (2) Permeation emissions from your vessel's fuel lines may not 
exceed 5 grams per square-meter per day as measured according to the 
fuel line permeation test procedures in subpart F of this part. Use the 
inside diameter of the hose to determine the surface area of the hose.
    (c) You may certify portable fuel tanks to the diurnal emission 
standards in paragraph (a) of this section by meeting the following 
design criteria:
    (1) The tank may include no more than two vents, which must be 
readily sealable for pressures up 3 psig.
    (2) All vents and the fuel-line connection to the engine must seal 
automatically when disconnected.
    (d) You may certify vessels and fuel systems using the control 
technologies shown in the following tables ``by design.'' This means 
the design of these technologies certifies them to the standards 
specified in paragraph (a) of this section:

[[Page 53106]]



                       Table 1 of Sec.  1045.105.--Diurnal Levels for Design Certification
----------------------------------------------------------------------------------------------------------------
                                                             Then you may design-certify with a diurnal emission
         If the diurnal control technology is . . .                             level of . . .
----------------------------------------------------------------------------------------------------------------
1. Open-vented fuel tank...................................  1.5 g/gal/test.
----------------------------------------------------------------------------------------------------------------
2. A sealed fuel tank with a pressure-relief valve that      1.3 g/gal/test.
 would open at a pressure of 0.5 psi.
----------------------------------------------------------------------------------------------------------------
3. A sealed insulated fuel tank (R-value of 15 or better)    1.3 g/gal/test.
 with a limited flow orifice with a maximum cross-sectional
 area defined by the following equation: Area in mm\2\ =
 0.04  x  fuel tank capacity in gallons (Example: A 20
 gallon tank with an orifice no more than 1.0 mm in
 diameter.)
----------------------------------------------------------------------------------------------------------------
4. A sealed fuel tank with a pressure-relief valve that      1.1 g/gal/test.
 would open at a pressure of 1.0 psi.
----------------------------------------------------------------------------------------------------------------
5. A sealed fuel tank with a pressure-relief valve that      0.9 g/gal/test.
 would open at a pressure of 1.5 psi.
----------------------------------------------------------------------------------------------------------------
6. A sealed fuel tank with a pressure-relief valve that      0.7 g/gal/test.
 would open at a pressure of 2.0 psi.
----------------------------------------------------------------------------------------------------------------
7. A sealed fuel tank with a pressure-relief valve that      0.5 g/gal/test.
 would open at a pressure of 0.5 psi, and with a volume-
 compensating bag made from a low-permeability material\1\
 with a bag volume equal to at least 25 percent of the
 volume of the fuel tank.
----------------------------------------------------------------------------------------------------------------
8. A sealed bladder fuel tank made from a low-permeability.  0.1 g/gal/test.
----------------------------------------------------------------------------------------------------------------
\1\ Permeability of 5 g/m\2\/day or less.


                   Table 2 of Sec.  1045.105.--Tank Permeation Levels for Design Certification
----------------------------------------------------------------------------------------------------------------
                                                               Then you may design-certify with a tank emission
   If the tank permeability control technology is . . .                         level of . . .
----------------------------------------------------------------------------------------------------------------
1. A metal fuel tank with no non-metal gaskets or with       0.08 g/gal/test-day.
 gaskets made from a low-permeability material \1\.
----------------------------------------------------------------------------------------------------------------
2. A metal fuel tank with non-metal gaskets with an exposed  0.08 g/gal/test-day.
 surface area of 1000 mm\2\ or less.
----------------------------------------------------------------------------------------------------------------
\1\ Permeability of 10 g/m\2\/day or less.


  Table 3 of Sec.  1045.105.--Fuel and Vent-line Permeation Levels for
                          Design Certification
------------------------------------------------------------------------
  If the fuel-line and vent-line     Then you may design-certify with a
 permeability control technology    fuel line permeation emission level
             is . . .                             of . . .
------------------------------------------------------------------------
Hose meeting SAE 2260 Category 1   5 g/m\2\/test-day.
 permeation level \1\.
------------------------------------------------------------------------
\1\ Hose must also meet U.S. Coast Guard Regulations.

    (e) We may establish additional design certification options based 
on test data.


Sec. 1045.115  What other requirements must my vessels meet?

    (a) through (d) [Reserved]
    (e) Prohibited controls. You may not do either of the following 
things:
    (1) You may not design engines or vessels with an emission-control 
system that emits any noxious or toxic substance that the engine would 
not emit during operation in the absence of such a system, except as 
specifically permitted by regulation.
    (2) You may not design engines or vessels with an emission-control 
system that is unsafe. For example, emission controls must comply with 
all applicable U.S. Coast Guard regulations.
    (f) Defeat devices. You may not equip your vessels with a defeat 
device. A defeat device is an auxiliary emission-control device or 
other control feature that degrades emission controls under conditions 
you may reasonably expect the vessel to encounter during normal 
operation and use.
    (g) Evaporative technology. Make sure (by testing or engineering
    analysis) that technologies used to meet evaporative emission 
standards keep working for at least 30 days while the boat or engine is 
not used. Design them to last for the full useful life. The useful life 
for evaporative controls is ten years.
    (h) Fuel-tank location. The test procedures in subpart F of this 
part do not represent the experience of a vessel with the fuel tank 
exposed to direct sunlight (sun exposure can cause much greater fuel-
temperature swings, which would increase evaporative emissions). If you 
design your vessel this way, you must show that you meet emission 
standards by measuring emissions with a test that incorporates the 
effect of the sun's radiant heat. Note: This requirement does not apply 
to portable fuel tanks.


Sec. 1045.120  What warranty requirements apply to me?

    (a) You must warrant to the ultimate buyer that the new vessel 
meets two conditions:
    (1) You have designed, built, and equipped it to meet the 
requirements of this part.
    (2) It is free from defects in materials and workmanship that may 
keep it from meeting these requirements.
    (b) Your emission-related warranty for evaporative controls must be 
valid for at least 50 percent of the useful life in years. You may 
offer a warranty more generous than we require. This warranty may not 
be shorter than any published or negotiated warranty you offer for the 
vessel or any of its components.

[[Page 53107]]

Sec. 1045.125  What maintenance instructions must I give to buyers?

    Give the ultimate buyer of each new vessel written instructions for 
properly maintaining and using the vessel, including the emission-
control system.


Sec. 1045.130  What installation instructions must I give to vessel 
manufacturers?

    (a) If you sell a certified fuel system for someone else to install 
in a spark-ignition marine vessel, give the buyer of the fuel system 
written instructions for installing it consistent with the requirements 
of this part. Make sure these instructions have the following 
information:
    (1) Include the heading: ``Emission-related installation 
instructions.''
    (2) State: ``Failing to follow these instructions when installing a 
certified fuel system in a spark-ignition marine vessel violates 
federal law (40 CFR 1068.105(b)), subject to fines or other penalties 
as described in the Clean Air Act.''.
    (3) Describe any other instructions to make sure the installed fuel 
system will operate according to design specifications in your 
application for certification.
    (4) State: ``If you obscure the fuel system's emission label, you 
must attach a duplicate label to your vessel, as described in 40 CFR 
1068.105.''.
    (b) You do not need installation instructions for fuel systems you 
install in your own vessel.


Sec. 1045.135  How must I label and identify the vessels and fuel 
systems I produce?

    (a) [Reserved]
    (b) At the time of manufacture, add a permanent label identifying 
each tank. To meet labeling requirements, do three things:
    (1) Attach the label in one piece so it is not removable without 
being destroyed or defaced.
    (2) Design and produce it to be durable and readable for the 
vessel's entire life.
    (3) Write it in block letters in English.
    (c) On your fuel tank label, do ten things:
    (1) Include the heading ``EMISSION CONTROL INFORMATION.''
    (2) Include your full corporate name and trademark.
    (3) State: ``THIS VESSEL IS CERTIFIED TO OPERATE ON [specify 
operating fuel or fuels].''.
    (4) State the date of manufacture [DAY (optional), MONTH, and 
YEAR].
    (5) State: ``THIS VESSEL MEETS U.S. ENVIRONMENTAL PROTECTION AGENCY 
REGULATIONS FOR [MODEL YEAR] VESSELS].''.
    (6) Include EPA's standardized designation for the emission family.
    (7) Include the model number (or part number) of the fuel tank.
    (8) Include the part number(s) of the fuel lines.
    (9) Include the fuel tank capacity in U.S. gallons.
    (10) Describe other information on proper maintenance and use.
    (11) Identify any other emission standards to which you have 
certified the vessel.
    (d) You may combine the EPA emission control label with the label 
required by the U.S. Coast Guard. If you are unable to meet the exact 
labeling requirements described in paragraph (c) of this section for 
your combined label, you may ask us to modify the requirements 
consistent with the intent of this section.
    (e) Some vessels may not have enough space for a label with all the 
required information. In this case, we may allow you to omit some of 
the information required if you print it in the owner's manual instead.
    (f) If you are unable to meet these labeling requirements, you may 
ask us to modify them consistent with the intent of this section.
    (g) If you obscure the fuel-tank label while installing the tank in 
the vessel, you must place a duplicate label on the vessel. If someone 
else installs the fuel tank in a vessel, give them duplicate labels if 
they ask for them (see 40 CFR 1068.105).
    (h) Non-metallic fuel lines must be labeled with the name of the 
fuel line manufacturer and with a permeability classification.


Sec. 1045.140  What interim provisions apply only for a limited time?

    From 2004 to 2007, if you certify to an FEL below the average 
standard in Sec. 1045.105(a), you may generate early credits. Calculate 
credits according to Sec. 1045.720(b) by replacing ``Average Standard'' 
with 1.1 g/gallon and ``Emission Level'' with the FEL to which the 
emission family is certified.


Sec. 1045.145  What provisions apply to non-certifying manufacturers?

    (a) General requirements. The following general requirements apply 
to non-certifying manufacturers:
    (1) Every manufacturer is responsible for compliance with the 
requirements of this part that apply to manufacturers. However, if one 
manufacturer complies with a requirement, then we will consider all 
manufacturers to have complied with that specific requirement.
    (2) Where more than one entity meets the definition of manufacturer 
for a particular vessel and any one of the manufacturers obtains a 
certificate of conformity covering the whole vessel, the requirements 
of subparts C and H of this part and subparts E and F of part 1068 of 
this chapter apply to the manufacturer that holds the certificate of 
conformity. Other manufacturers must meet the requirements of subparts 
C and H of this part and subparts E and F of part 1068 of this chapter 
only if we say so. In this case, we will allow a reasonable time to 
meet the requirements that apply.
    (b) Requirements for permeability treatment. If you treat fuel 
tanks or fuel lines to reduce permeability but do not hold the 
certificate, you must keep records of the treatment process for three 
years after the treatment occurs. You must make these records available 
to us if we request them.
    (c) Requirements for fuel system or emission control components. If 
you manufacture a fuel system component or an emission control 
component or fuel lines used to reduce permeability but do not hold the 
certificate, we may require you to keep records of your manufacturing 
process for three years after the component is manufactured. You must 
make these records available to us if we request them.
    (d) Requirements for emission test data. If a certifying 
manufacturer uses your emission test data to certify, we may require 
you to give us a signed statement verifying that your tests were 
conducted using the test procedures in this part.

Subpart C--Certifying Emission Families


Sec. 1045.201  What are the general requirements for submitting a 
certification application?

    (a) Send us an application for a certificate of conformity for each 
emission family. Each application is valid for only one model year.
    (b) The application must not include false or incomplete statements 
or information (see Sec. 1045.250). We may choose to ask you to send us 
less information than we specify in this subpart, but this would not 
change your recordkeeping requirements.
    (c) Use good engineering judgment for all decisions related to your 
application (see Sec. 1068.005 of this chapter).
    (d) An authorized representative of your company must approve and 
sign the application.


Sec. 1045.205  How must I prepare my application?

    In your application, you must do all the following things:
    (a) Describe the emission family's specifications and other basic

[[Page 53108]]

parameters of the design. List the types of fuel you intend to use to 
certify the emission family (for example, gasoline or methanol).
    (b) Explain how the emission-control system operates. Describe in 
detail all the system's components, auxiliary emission-control devices, 
and all fuel-system components you will install on any production or 
test system. Explain how you determined that the emission-control 
system comply with the requirements of Sec. 1045.115, including why any 
auxiliary emission-control devices are not defeat devices (see 
Sec. 1045.115(f)). Do not include detailed calibrations for components 
unless we ask for them.
    (c) Describe the vessels, engines, tanks, and/or hoses you selected 
for testing and the reasons for selecting them.
    (d) Describe any special or alternate test procedures you used (see 
Sec. 1045.501).
    (e) [Reserved]
    (f) List the specifications of the test fuel to show that it falls 
within the required ranges we specify in 40 CFR part 1065, subpart C.
    (g) Identify the emission family's useful life.
    (h) Propose maintenance and use instructions for the ultimate buyer 
(see Sec. 1045.125).
    (i) Propose emission-related installation instructions if you sell 
fuel systems for someone else to install in a vessel (see 
Sec. 1045.130).
    (j) Propose an emission-control label.
    (k) Present emission data for HC to show you meet the emission 
standards we specify in Sec. 1045.105.
    (l) Report all test results, including those from invalid tests or 
from any nonstandard tests.
    (m) [Reserved]
    (n) Describe all adjustable operating parameters.
    (o) If you conducted testing, state that you conducted your 
emission tests according to the specified procedures and test 
parameters using the fuels described in the application to show you 
meet the requirements of this part.
    (p) If you did not conduct testing, state how your emission family 
meets the requirements for design certification.
    (q) State unconditionally that all the vessels in the emission 
family comply with the requirements of this part, other referenced 
parts, and the Clean Air Act (42 U.S.C. 7401 et seq.).
    (r) Include estimates of vessel (or fuel system) production.
    (s) Add other information to help us evaluate your application if 
we ask for it.


Sec. 1045.215  What happens after I complete my application?

    (a) If any of the information in your application changes after you 
submit it, amend it as described in Sec. 1045.225.
    (b) We may decide that we cannot approve your application unless 
you revise it.
    (1) If you inappropriately use the provisions of Sec. 1045.230(c) 
or (d) to define a broader or narrower emission family, we will require 
you to redefine your emission family.
    (2) If your proposed label is inconsistent with Sec. 1045.135, we 
will require you to change it (and tell you how, if possible).
    (3) If you require or recommend maintenance and use instructions 
inconsistent with Sec. 1045.125, we will require you to change them.
    (4) If we find any other problem with your application, we will 
tell you how to correct it.
    (c) If we determine your application is complete and shows you meet 
all the requirements, we will issue a certificate of conformity for 
your emission family for that model year. If we deny the application, 
we will explain why in writing. You may then ask us to hold a hearing 
to reconsider our decision (see Sec. 1045.820).


Sec. 1045.225  How do I amend my application to include a new or 
modified product?

    (a) You must amend your application for certification before you 
take either of the following actions:
    (1) Add a vessel, engine, or fuel system to a certificate of 
conformity.
    (2) Make a design change for a certified emission family that may 
affect emissions or an emission-related part over the lifetime of the 
vessel, engine, or fuel system.
    (b) Send the Designated Officer a request to amend the application 
for certification for an emission family. In your request, do all of 
the following:
    (1) Describe the model or configuration you are adding or changing.
    (2) Include engineering evaluations or reasons why the original 
testing is or is not still appropriate.
    (3) If the original testing for the emission family is not 
appropriate to show compliance for the new or modified vessel, include 
new test data showing that the new or modified product meets the 
requirements of this part.
    (c) You may start producing the new or modified product anytime 
after you send us your request.
    (d) You must give us test data within 30 days if we ask for more 
testing, or stop production if you are not able do this.
    (e) If we determine that the certificate of conformity would not 
cover your new or modified product, we will send you a written 
explanation of our decision. In this case, you may no longer produce 
these vessels, engines, or fuel systems, though you may ask for a 
hearing for us to reconsider our decision (see Sec. 1045.820).


Sec. 1045.230  How do I select emission families?

    (a) Divide your product line into groups of vessels (or fuel 
systems) that you expect to have similar emission characteristics. 
These groups are call emission families. (b) You need a separate 
emission family for each model year.


Sec. 1045.235  How does testing fit with my application for a 
certificate of conformity?

    This section describes how to do testing in your effort to apply 
for a certificate of conformity.
    (a) Test your vessels using the procedures and equipment specified 
in subpart F of this part.
    (1) For evaporative testing, you may test the fuel system without 
the vessel.
    (2) For exhaust testing, test the engine without the vessel.
    (b) Select from each emission family a test vessel for each fuel 
type with a configuration you believe is most likely to exceed an 
applicable standard (e.g., the diurnal evaporative standard). Using 
good engineering judgment, consider the emission levels of all 
regulated constituents over the full useful life of the vessel.
    (c) You may submit emission data for equivalent emission families 
from previous years instead of doing new tests, but only if the data 
shows that the test vessel would meet all the requirements for the 
latest models. We may require you to do new emission testing if we 
believe the latest models could be substantially different from the 
previously tested vessel.
    (d) We may choose to measure emissions from any of your test 
vessels.
    (1) If we do this, you must provide the test vessel at the location 
we select. We may decide to do the testing at your plant or any other 
facility. If we choose to do the testing at your plant, you must 
schedule it as soon as possible and make available the instruments and 
equipment we need. This provision does not apply for evaporative 
emission testing for manufacturers that use the design certification 
provisions for all of the products under Sec. 1045.105(d).
    (2) If we measure emissions on one of your test vessels, the 
results of that testing become the official data for the vessel. Unless 
we later invalidate this

[[Page 53109]]

data, we may decide not to consider your data in determining if your 
emission family meets the emission standards.
    (e) We may allow you to certify vessels using existing data from 
vessels with similarly-designed fuel systems that you did not 
manufacture. In those cases, you are not required to emission-test your 
vessels or fuel systems.
    (f) For fuel tanks that are design-certified based on permeability 
treatments for plastic fuel tanks, you do not need to test each 
emission family. However, you must use good engineering judgment to 
determine permeation rates for the tanks. Good engineering judgment 
requires that at least one fuel tank be tested for each set of 
treatment conditions. For example, if you treat tanks made from the 
same material using the identical tretament process, but that are in 
different emission families, then you would only need to test one tank.


Sec. 1045.240  How do I determine if my emission family complies with 
emission standards?

    (a) Your emission family complies with the applicable numerical 
emission standards in Sec. 1045.105 if all emission-data vessels 
representing that family have test results showing emission levels at 
or below all applicable standards, provided you also comply with the 
average emission standard for your total production.
    (b) Your emission family does not comply if any emission-data 
vessel representing that family has test results showing emission 
levels above the applicable standards from Sec. 1045.105.
    (c) If your average emission level is above an applicable standard, 
then all of emission families with emission levels above the average 
standard are noncompliant.


Sec. 1045.245  What records must I keep and make available to EPA?

    (a) Organize and maintain the following records to keep them 
readily available; we may review these records at any time:
    (1) A copy of all applications and any summary information you sent 
us.
    (2) Any of the information we specify in Sec. 1045.205 that you did 
not include in your application.
    (3) A detailed history of each emission-data vessel. In each 
history, describe the test vessel's construction, including its origin 
and buildup, steps you took to ensure that it represents production 
vessels, any components you built specially for it, and all emission-
related components.
    (b) Keep data from routine emission tests for one year after we 
issue the associated certificate of conformity. Keep all other 
information specified in paragraph (a) of this section for eight years 
after we issue your certificate.
    (c) Store these records in any format and on any media, as long as 
you can promptly send us organized, written records in English if we 
ask for them.
    (d) Send us copies of any vessel maintenance instructions or 
explanations if we ask for them.


Sec. 1045.250  When may EPA deny, revoke, or void my certificate of 
conformity?

    (a) We may deny your application for certification if your 
emission-data vessels fail to comply with emission standards or other 
requirements. Our decision may be based on any information available to 
us. If we deny your application, we will explain why in writing.
    (b) In addition, we may deny your application or revoke your 
certificate if you do any of the following:
    (1) Refuse to comply with any testing or reporting requirements.
    (2) Submit false or incomplete information (paragraph (d) of this 
section applies if this is fraudulent).
    (3) Render inaccurate any test data.
    (4) Deny us from completing authorized activities despite our 
presenting a warrant or court order (see Sec. 1068.020 of this 
chapter).
    (5) Produce vessels for importation into the United States at a 
location where local law prohibits us from carrying out authorized 
activities.
    (c) We may void your certificate if you do not keep the records we 
require or do not give us information when we ask for it.
    (d) We may void your certificate if we find that you committed 
fraud to get it. This means intentionally submitting false or 
incomplete information.
    (e) If we deny your application or revoke or void your certificate, 
you may ask for a hearing (see Sec. 1045.820). Any such hearing will be 
limited to substantial and factual issues.

Subpart D--[Reserved]

Subpart E--Testing In-use Engines


Sec. 1045.401  What provisions apply for in-use testing of vessels?

    We may conduct in-use testing of any vessel (or part of a vessel) 
subject to the standards of this part. If we determine that a 
substantial number of vessels do not comply with the regulations of 
this part, we may order the manufacturer to conduct a recall as 
specified in 40 CFR part 1068.

Subpart F--Test Procedures


Sec. 1045.501  What equipment and general procedures must I use to test 
my vessels?

    (a) Diurnal testing. Use the equipment specified in 40 CFR part 86 
subpart B (i.e., the procedures used to measure diurnal evaporative 
emissions for gasoline-fueled highway vehicles). Use the procedures 
specified in Sec. 1045.505 to measure diurnal emissions.
    (1) These provisions require placing your vessel or fuel system 
within a sealed, temperature-controlled enclosure called a SHED (Sealed 
Housing for Evaporative Determination).
    (2) You must include a fan to maintain a minimum wind speed of 5 
miles per hour across the tank.
    (b) Permeation testing. Use the following equipment and procedures 
for measuring permeation emissions:
    (1) For fuel tank permeation, see Sec. 1045.506.
    (2) For fuel line permeation, see SAE J1527 (incorporated by 
reference in Sec. 1045.810). Alternatively, you may use the equipment 
and procedures specified in SAE J1737 (incorporated by reference in 
Sec. 1045.810), except that all tests must be conducted at 23 deg.C 
 2 deg.C.
    (c) Special or alternate procedures. You may use special or 
alternate procedures, as described in Sec. 1065.010 of this chapter.


Sec. 1045.505  How do I test for diurnal evaporative emissions?

    Measure evaporative emissions by placing the preconditioned vessel 
or fuel system within a sealed, temperature-controlled SHED and 
recording the concentration of fuel vapors within the SHED as the 
temperature cycles between 22.2 deg.C and 35.6 deg.C.
    (a) Preconditioning and test preparation. To prepare your vessel or 
fuel system, follow these seven steps:
    (1) To precondition the tank, fill it to its nominal capacity and 
allow it to soak at 30 deg.C  5 deg.C for one month. Note: 
You may omit this step; however, if you omit this step, you may not 
correct measured emissions for permeation that occurs during the test.
    (2) Determine the tank's fuel capacity in gallons as configured in 
the vessel (using at least three significant figures).
    (3) Fill the fuel tank with the test fuel to its capacity. If you 
fill the tank within the SHED, do not spill any fuel.
    (4) Allow the tank and its contents to equilibrate to 22.2 deg.C 
 1 deg.C within the SHED.
    (5) Connect a fuel siphon to the tank outlet and drain 60 percent 
of the fuel. You may vent the tank before draining it. Do not spill any 
fuel.

[[Page 53110]]

    (6) Close the SHED and set the temperature control to 22.2 deg. F. 
Allow the SHED to equilibrate for two hours.
    (7) If the fuel tank vent will have an attached vent hose when 
installed in the vessel, attach a vent hose representative of the 
shortest length of vent hose that will be used when the tank is 
installed in the vessel. You may attach the hose at any time before you 
start the test run (Sec. 1045.505(b)).
    (b) Test run. To measure emissions from your vessel or fuel system, 
follow these six steps:
    (1) Ensure that the measured temperature within the SHED is 22.2 
 0.2 deg.C.
    (2) Ventilate the SHED.
    (3) Seal the SHED and record the hydrocarbon concentration within 
the SHED. This is the zero-hour value.
    (4) Begin the temperature cycle in Table 1 of Sec. 1045.505. Run 
the temperature cycle three times.
    (5) Record the hydrocarbon concentration at the end of each 
temperature cycle.
    (6) Use the calculation procedures of 40 CFR 86.143-96 to calculate 
the mass emissions for each of the three 24-hour temperature cycles. 
The highest of the these three is the official test result. If you 
precondition the tank as specified in Sec. 1045.505(a)(1), you may 
correct these results by subtracting the permeation emissions from the 
total, consistent with good engineering judgment.

    Table 1 of Sec.  1045.505--24-hour Temperature Cycle for Emission
                                 Testing
------------------------------------------------------------------------
                                                             Temperature
                        Time (hours)                           ( deg.C)
------------------------------------------------------------------------
0..........................................................        22.2
1..........................................................        22.5
2..........................................................        23.6
3..........................................................        26.6
4..........................................................        29.5
5..........................................................        31.8
6..........................................................        34.0
7..........................................................        34.8
8..........................................................        35.5
9..........................................................        35.6
10.........................................................        35.3
11.........................................................        34.4
12.........................................................        33.5
13.........................................................        31.8
14.........................................................        30.0
15.........................................................        28.6
16.........................................................        27.1
17.........................................................        26.1
18.........................................................        25.0
19.........................................................        24.3
20.........................................................        23.7
21.........................................................        23.3
22.........................................................        22.8
23.........................................................        22.5
24.........................................................        22.2
------------------------------------------------------------------------

Sec. 1045.506  How do I test my fuel tank for permeation emissions?

    Measure permeation emissions by weighing a sealed fuel tank before 
and after a temperature controlled soak.
    (a) Preconditioning. To precondition your fuel tank, follow these 
six steps:
    (1) Fill the tank and allow it to soak at 30 deg.C 
10 deg. C for 60 days.
    (2) Determine the tank's fuel capacity as configured in the vessel 
to the nearest tenth of a gallon.
    (3) Fill the fuel tank with the test fuel to its capacity. If you 
fill the tank within the SHED, do not spill any fuel.
    (4) Allow the tank and its contents to equilibrate to 40 deg.C 
2 deg. C.
    (5) Seal the fuel tank using nonpermeable fittings, such as metal 
or Teflon TM.
    (b) Test run. To measure emissions from your fuel tank, follow 
these nine steps:
    (1) Weigh the sealed fuel tank, and record the weight to the 
nearest 0.1 grams. (You may use less precise weights, provided that the 
difference in mass from the start of the test to the end of the test 
has at least three significant figures.)
    (2) Carefully place the tank within the temperature controlled 
container or SHED. Do not spill any fuel.
    (3) Close the container or SHED and record the time.
    (4) Ensure that the measured temperature within the container or 
SHED is 40 deg.C 2 deg. C.
    (5) Leave the tank in the container or SHED for 10 to 30 days, 
consistent with good engineering judgment (based on the expected 
permeation rate).
    (6) Hold the temperature of the container or SHED to 40 deg.C 
2 deg. C and record at least daily.
    (7) At the end of the soak period, weigh the sealed fuel tank and 
record the weight to the nearest 0.1 grams. (You may use less precise 
weights, provided that the difference in mass from the start of the 
test to the end of the test has at least three significant figures.)
    (8) Subtract the weight of the tank at the end of the test from the 
weight of the tank at the beginning of the test, and divide the 
difference by the capacity of the fuel tank. Divide this gram/gallon 
value by the number of test days to calculate the gram/gallon/test-day 
emission rate. Example: If a 20.4-gallon tank weighed 31782.3 grams at 
the beginning of the test, weighed 31760.2 grams after soaking for 
25.03 days, then the gram/gallon/test-day emission rate would be:

      (31882.3 g--31760.2 g) / 20.4 gal / 25.03 test days = 0.239 g/
gal/test-day

    (9) Round your result to the same number of decimal places as the 
standard.

Subpart G--Compliance Provisions


Sec. 1045.601  What compliance provisions apply to these vessels?

    Vessel manufacturers, as well as owners, operators, and rebuilders 
of these vessels, and all other persons, must observe the requirements 
and prohibitions in part 1068 of this chapter.

Subpart H--Averaging, Banking, and Trading for Certification


Sec. 1045.701  General provisions.

    (a) You may average, bank, and trade emission credits for 
certification as described in this subpart to meet the average 
standards of this part. You must comply with the averaging requirements 
if you certify with an emission level higher than the applicable 
average standard. Participation in banking and trading is voluntary. 
Note: Some standards, such as the tank permeation standard, do not 
allow you to comply on average.
    (b) The definitions of Subpart I of this part apply to this 
subpart. The following definitions also apply:
    (1) Average standard means the standard that applies on average to 
all your vessels, engines, or fuel systems that are subject to this 
part (except portable fuel tanks).
    (2) Broker means any entity that facilitates a trade between a 
buyer and seller.
    (3) Buyer means the entity that receives credits as a result of 
trade or transfer.
    (4) FEL means the familiy emission limit to which an emission 
family is certified
    (5) Group means a group of vessels having the same evaporative 
control technology, model year, and fuel-tank capacity.
    (6) Reserved credits means credits generated but not yet verified 
by EPA in the end of year report review.
    (7) Seller means the entity that provides credits during a trade or 
transfer.
    (8) Transfer means to convey control of credits an individual tank 
generates--
    (i) From a certifying tank manufacturer to a vessel manufacturer 
that buys the tank; or
    (ii) To a certifying tank manufacturer from a vessel manufacturer 
that buys the tank.
    (c) Do not include any exported vessel, engine, or tank in the 
certification averaging, banking, and

[[Page 53111]]

trading program. Include only vessels, engines, or fuel tanks certified 
under this part.


Sec. 1045.705  How do I average emission levels?

    (a) As specified in subpart B of this part, certify each emission 
family that you are including the averaging program to an FEL.
    (b) Calculate a preliminary average emission level according to 
Sec. 1045.720 using projected production volumes for your application 
for certification.
    (c) After the end of your model year, calculate a final average 
emission level according to Sec. 1045.720 using actual production 
volumes.
    (d) If your preliminary average emission level is below the 
allowable average standard, see Sec. 1045.710 for information about 
generating and banking emission credits. These credits will be 
considered reserved until verified by EPA during the end of year report 
review.


Sec. 1045.710  How do I generate and bank emission credits?

    (a) If your average emission level is below the average standard, 
you may calculate credits according to Sec. 1045.720.
    (b) You may generate credits if you are a certifying manufacturer. 
You may hold them if you are a fuel tank or vessel manufacturer
    (c) You may bank unused emission credits, but only after the end of 
the calendar year and after we have reviewed your end-of-year reports.
    (d) During the calendar year and before you send in your end-of-
year report, you may consider reserved any credits you originally 
designate for banking during certification. You may redesignate these 
credits for trading or transfer in your end-of-year report, but they 
are not valid to demonstrate compliance until verified.
    (e) You may use for averaging or trading any credits you declared 
for banking from the previous calendar year that we have not reviewed. 
But, we may revoke these credits later--following our review of your 
end-of-year report or audit actions. For example, this could occur if 
we find that credits are based on erroneous calculations; or that 
emission levels are misrepresented, unsubstantiated, or derived 
incorrectly in the certification process.


Sec. 1045.715  How do I trade or transfer emission credits?

    (a) You may trade only banked credits, not reserved credits.
    (b) Whether or not you hold a certificate, you may transfer 
unbanked credits to a manufacturer that is supplying a fuel tank to you 
or a vessel manufacturer that is buying a fuel tank from you.
    (c) How you handle unused transferred credits at the end of a model 
year depends on whether or not you hold a certificate.
    (1) If you hold a certificate, you may bank these credits.
    (2) If you do not hold a certificate, you may not bank these 
credits; you may only transfer them to a certificate holder.
    (d) If a negative credit balance results from a credit trade or 
transfer, both buyers and sellers are liable, except in cases involving 
fraud. We may void the certificates of all emission families 
participating in a negative trade.
    (1) If you buy credits but have not caused the negative credit 
balance, you must only supply more credits equivalent to the amount of 
invalid credits you used.
    (2) If you caused the credit shortfall, you may be subject to the 
requirements of Sec. 1045.730(b)(6).


Sec. 1045.720  How do I calculate my average emission level or emission 
credits?

    (a) Calculate your average emission level for each model year 
according to the following equation and round it to the nearest tenth 
of a gram per gallon. Use consistent units throughout the calculation.
    (1) Calculate the average emission level as:
    [GRAPHIC] [TIFF OMITTED] TP14AU02.002
    
Where:

FELi = The FEL to which the engine family is certified.
Capacityi = The capacity of the fuel tanks.
Productioni = The number of fuel tanks produced in that 
model year with a capacity of Capacityi.

    (2) Sum the emissions for each unique combination of emission 
family and fuel tank capacity.
    (3) Use production projections for initial certification, and 
actual production volumes to determine compliance at the end of the 
model year.
    (b) If your average emission level is below the average standard, 
calculate credits available for banking according to the following 
equation and round them to the nearest tenth of a gram:
[GRAPHIC] [TIFF OMITTED] TP14AU02.003

    (c) If your average emission level is above the average standard, 
calculate your preliminary credit deficit according to the following 
equation, rounding to the nearest tenth of a gram:
[GRAPHIC] [TIFF OMITTED] TP14AU02.004

Sec. 1045.725  What information must I keep?

    (a) Maintain and keep five types of properly organized and indexed 
records for each group and for each emission family:
    (1) Model year and EPA emission family.
    (2) Bin standard.
    (3) Fuel tank capacity.
    (4) Projected production volume for the model year.

[[Page 53112]]

    (5) Actual production volume for the model year.
    (b) Keep paper records of this information for three years from the 
due date for the end-of-year report. You may use any additional storage 
formats or media if you like.
    (c) Follow Sec. 1045.730 to send us the information you must keep.
    (d) We may ask you to keep or send other information necessary to 
implement this subpart.


Sec. 1045.730  What information must I report?

    (a) Include the following information in your applications for 
certification:
    (1) A statement that, to the best of your belief, you will not have 
a negative credit balance when all credits are calculated. This means 
that if you believe that your average emission level will be above the 
standard (i.e., that you will have a deficit for the model year), you 
must have banked credits (or project to have traded credits) to offset 
the deficit.
    (2) Detailed calculations of projected emission credits (zero, 
positive, or negative) based on production projections.
    (i) If you project a credit deficit, state the source of credits 
needed to offset the credit deficit.
    (ii) If you project credits, state whether you will reserve them 
for banking or transfer them.
    (b) At the end of each model year, send an end-of-year report.
    (1) Make sure your report includes three things:
    (i) Calculate in detail your average emission level and any 
emission credits (zero, positive, or negative) based on actual 
production volumes.
    (ii) If your average emission level is above the allowable average 
standard, state the source of credits needed to offset the credit 
deficit.
    (iii) If your average emission level is below the allowable average 
standard, state whether you will reserve the credits for banking or 
transfer them.
    (2) Base your production volumes on the point of first retail sale. 
This point is called the final product-purchase location.
    (3) Send end-of-year reports to the Designated Officer within 120 
days of the end of the model year. If you send reports later, you are 
violating the Clean Air Act.
    (4) If you generate credits for banking and you do not send your 
end-of-year reports within 120 days after the end of the model year, 
you may not use or trade the credits until we receive and review your 
reports. You may not use projected credits pending our review.
    (5) You may correct errors discovered in your end-of-year report, 
including errors in calculating credits according to the following 
table:

------------------------------------------------------------------------
           If. . .                 And if. . .          Then we. . .
------------------------------------------------------------------------
(i) Our review discovers an   the discovery occurs  restore the credits
 error in your end-of-year     within 180 days of    for your use.
 report that increases your    receipt.
 credit balance.
------------------------------------------------------------------------
(ii) You discover an error    the discovery occurs  restore the credits
 in your report that           within 180 days of    for your use.
 increases your credit         receipt.
 balance.
------------------------------------------------------------------------
(iii) We or you discover an   the discovery occurs  do not restore the
 error in your report that     more than 180 days    credits for your
 increases your credit         after receipt.        use.
 balance.
------------------------------------------------------------------------
(iv) We discover an error in  at any time after     reduce your credit
 your report that reduces      receipt.              balance.
 your credit balance.
------------------------------------------------------------------------

    (6) If our review of your end-of year-report shows a negative 
balance, you may buy credits to bring your credit balance to zero. But 
you must buy 1.1 credits for each 1.0 credit needed. If enough credits 
are not available to bring your credit balance to zero, we may void the 
certificates for all families certified to standards above the 
allowable average.
    (c) Within 90 days of any credit trade or transfer, you must send 
the Designated Officer a report of the trade or transfer that includes 
three types of information:
    (1) The corporate names of the buyer, seller, and any brokers.
    (2) Information about the credits that depends on whether you trade 
or transfer them.
    (i) For trades, describe the banked credits being traded.
    (ii) For transfers, calculate the credits in detail and identify 
the source or use of the credits.
    (3) Copies of contracts related to credit trading or transfer from 
the buyer, seller, and broker, as applicable.
    (d) Include in each report a statement certifying the accuracy and 
authenticity of its contents.
    (e) We may void a certificate of conformity for any emission family 
if you do not keep the records this section requires or give us the 
information when we ask for it.

Subpart I--Definitions and Other Reference Information


Sec. 1045.801  What definitions apply to this part?

    The definitions in this section apply to this part. The definitions 
apply to all subparts unless we note otherwise. All undefined terms 
have the meaning the Act gives to them. The definitions follow:
    Act means the Clean Air Act, as amended, 42 U.S.C. 7401 et seq.
    Adjustable parameter means any device, system, or element of design 
that someone can adjust (including those which are difficult to access) 
and that, if adjusted, may affect emissions or vessel performance 
during emission testing or normal in-use operation.
    Aftertreatment means relating to any system, component, or 
technology mounted downstream of the exhaust valve or exhaust port 
whose design function is to reduce exhaust emissions.
    Auxiliary emission-control device means any element of design that 
senses temperature, engine rpm, boat speed, transmission gear, 
atmospheric pressure, manifold pressure or vacuum, or any other 
parameter to activate, modulate, delay, or deactivate the operation of 
any part of the emission-control system. This also includes any other 
feature that causes in-use emissions to be higher than those measured 
under test conditions, except as we allow under this part.
    Broker means any entity that facilitates a trade of emission 
credits between a buyer and seller.
    Calibration means the set of specifications and tolerances specific 
to a particular design, version, or application of a component or 
assembly capable of functionally describing its operation over its 
working range.

[[Page 53113]]

    Capacity means the maximum volume of liquid fuel that a fuel tank 
can hold when installed in a vessel.
    Certification means obtaining a certificate of conformity for an 
emission family that complies with the emission standards and 
requirements in this part.
    Compression-ignition means relating to a type of reciprocating, 
internal-combustion vessel that is not a spark-ignition vessel.
    Crankcase emissions means airborne substances emitted to the 
atmosphere from any part of the vessel crankcase's ventilation or 
lubrication systems. The crankcase is the housing for the crankshaft 
and other related internal parts.
    Designated Officer means the Manager, Engine Compliance Programs 
Group (6403-J), U.S. Environmental Protection Agency, 1200 Pennsylvania 
Ave., Washington, DC 20460.
    Emission-control system means any device, system, or element of 
design that controls or reduces the regulated emissions from an vessel.
    Emission-data vessel means a vessel, engine, or fuel system that is 
tested for certification.
    Emission family means a group of vessels, engines or fuel systems 
with similar emission characteristics, as specified in Sec. 1045.230.
    Emission-related maintenance means maintenance that substantially 
affects emissions or is likely to substantially affect emissions 
deterioration.
    Fuel system means any or all of the components involved in 
transporting, metering, and mixing the fuel from the fuel tank to the 
combustion chamber(s), including the fuel tank, fuel tank cap, fuel 
pump, fuel filters, fuel lines, carburetor or fuel-injection 
components, and all fuel-system vents.
    Good engineering judgment has the meaning we give it in 
Sec. 1068.005 of this chapter.
    Hobby vessel means a recreational vessel that is a reduced-scale 
model vessel that is not capable of transporting a person.
    Hydrocarbon (HC) means the hydrocarbon group on which the emission 
standards are based for each fuel type. For gasoline- and LPG-fueled 
vessels, HC means total hydrocarbon (THC). For natural gas-fueled 
vessels, HC means nonmethane hydrocarbon (NMHC). For alcohol-fueled 
vessels, HC means total hydrocarbon equivalent (THCE).
    Identification number means a unique specification (for example, 
model number/serial number combination) that allows someone to 
distinguish a particular vessel from other similar vessels.
    Manufacturer has the meaning given in section 216(1) of the Act. In 
general, this term includes any person who manufactures a vessel, 
engine, or fuel system component for sale in the United States or 
otherwise introduces a new vessel, engine, or fuel system component 
into commerce in the United States. This includes importers and 
entities that treat fuel system components to reduce permeability.
    Maximum test power means the power output observed with the maximum 
fueling rate possible at the maximum test speed.
    Maximum test speed means the speed specified by 40 CFR 1065.515.
    Model year means one of the following things:
    (1) For freshly manufactured vessels (see definition of ``new 
vessel,'' paragraph (1), of this section), model year means one of the 
following:
    (i) Calendar year.
    (ii) Your annual new model production period if it is different 
than the calendar year. This must include January 1 of the calendar 
year for which the model year is named. It may not begin before January 
2 of the previous calendar year and it must end by December 31 of the 
named calendar year.
    (2) For a vessel modified by an importer (not the original vessel 
manufacturer) who has a certificate of conformity for the imported 
vessel (see definition of ``new vessel,'' paragraph (2), of this 
section), model year means one of the following:
    (i) The calendar year in which the importer finishes modifying and 
labeling the vessel.
    (ii) Your annual production period for producing vessels if it is 
different than the calendar year; follow the guidelines in paragraph 
(1)(ii) of this definition.
    (3) For a vessel you import that does not meet the criteria in 
paragraphs (1) or (2) of the definition of ``new vessel'' in this 
section, model year means the calendar year in which the manufacturer 
completed the original assembly of the vessel. In general, this applies 
to used vessels that you import without conversion or major 
modification.
    New vessel means any of the following things:
    (1) A freshly manufactured vessel for which the ultimate buyer has 
never received the equitable or legal title. The vessel is no longer 
new when the ultimate buyer receives this title or the product is 
placed into service, whichever comes first.
    (2) An imported vessel covered by a certificate of conformity 
issued under this part, where someone other than the original 
manufacturer modifies the vessel after its initial assembly and holds 
the certificate. The vessel is no longer new when it is placed into 
service.
    (3) An imported nonroad vessel that is not covered by a certificate 
of conformity issued under this part at the time of importation.
    Noncompliant vessel means a vessel, engine, or fuel system that was 
originally covered by a certificate of conformity, but is not in the 
certified configuration or otherwise does not comply with the 
conditions of the certificate.
    Nonconforming vessel means a vessel, engine, or fuel system not 
covered by a certificate of conformity that would otherwise be subject 
to emission standards.
    Nonroad means relating to nonroad engines or nonroad vehicles.
    Nonroad engine has the meaning given in Sec. 1068.025 of this 
chapter.
    Oxides of nitrogen means nitric oxide (NO) and nitrogen dioxide 
(NO2). Oxides of nitrogen are expressed quantitatively as if 
the NO were in the form of NO2 (assume a molecular weight 
for oxides of nitrogen equivalent to that of NO2).
    Physically adjustable range means the entire range over which a 
vessel parameter can be adjusted, except as modified by 
Sec. 1045.115(c).
    Placed into service means used for its intended purpose.
    Portable fuel tank means a fuel tank that has a permanently affixed 
handle, has a fuel capacity no greater than 12 gallons, and is not 
permanently mounted to a marine vessel.
    Propulsion marine engine means a marine engine that moves a vessel 
through the water or directs the vessel's movement.
    Revoke means to discontinue the certificate for an emission family. 
If we revoke a certificate, you must apply for a new certificate before 
continuing to produce the affected vessels. This does not apply to 
vessels you no longer possess.
    Round means to round numbers according to ASTM E29-93a, which is 
incorporated by reference (see Sec. 1045.810), unless otherwise 
specified.
    Scheduled maintenance means adjusting, repairing, removing, 
disassembling, cleaning, or replacing components or systems that is 
periodically needed to keep a part from failing or malfunctioning. It 
also may mean actions you expect are necessary to correct an overt 
indication of failure or malfunction for which periodic maintenance is 
not appropriate.

[[Page 53114]]

    Spark-ignition means relating to a type of engine with a spark plug 
(or other sparking device) and with operating characteristics 
significantly similar to the theoretical Otto combustion cycle. Spark-
ignition engines usually use a throttle to regulate intake air flow to 
control power during normal operation.
    Spark-ignition marine vessel means marine vessel that is powered by 
a spark-ignition engine.
    Stoichiometry means the proportion of a mixture of air and fuel 
such that the fuel is fully oxidized with no remaining oxygen. For 
example, stoichiometric combustion in gasoline vessels typically occurs 
at an air-fuel mass ratio of about 14.7.
    Suspend means to temporarily discontinue the certificate for an 
emission family. If we suspend a certificate, you may not sell vessels 
from that emission family unless we reinstate the certificate or 
approve a new one.
    Test sample means the collection of vessels selected from the 
population of an emission family for emission testing.
    Test vessel means a vessel, engine, or fuel system in a test 
sample.
    Total Hydrocarbon Equivalent means the sum of the carbon mass 
contributions of non-oxygenated hydrocarbons, alcohols and aldehydes, 
or other organic compounds that are measured separately as contained in 
a gas sample, expressed as petroleum-fueled vessel hydrocarbons. The 
hydrogen-to-carbon ratio of the equivalent hydrocarbon is 1.85:1.
    Ultimate buyer means ultimate purchaser.
    Ultimate purchaser means, with respect to any new nonroad equipment 
or new nonroad vessel, the first person who in good faith purchases 
such new nonroad equipment or new nonroad vessel for purposes other 
than resale.
    United States means the States, the District of Columbia, the 
Commonwealth of Puerto Rico, the Commonwealth of the Northern Mariana 
Islands, Guam, American Samoa, the U.S. Virgin Islands, and the Trust 
Territory of the Pacific Islands.
    U.S.-directed production volume means the number of vessel units, 
subject to the requirements of this part, produced by a manufacturer 
for which the manufacturer has a reasonable assurance that sale was or 
will be made to ultimate buyers in the Unites States.
    Useful life means the period during which the vessel or engine is 
designed to properly function in terms of reliability and fuel 
consumption, without being remanufactured, specified as a number of 
hours of operation or calendar years. It is the period during which a 
new vessel or new engine is required to comply with all applicable 
emission standards.
    Vessel means marine vessel as defined in the General Provisions of 
the United States Code, 1 U.S.C. 3.
    Void means to invalidate a certificate or an exemption. If we void 
a certificate, all the vessels produced under that emission family for 
that model year are considered noncompliant, and you are liable for 
each vessel produced under the certificate and may face civil or 
criminal penalties or both. If we void an exemption, all the vessels 
produced under that exemption are considered uncertified (or 
nonconforming), and you are liable for each vessel produced under the 
exemption and may face civil or criminal penalties or both. You may not 
produce any additional vessels using the voided exemption.
    Volatile liquid fuel means any fuel other than diesel or biodiesel 
that is a liquid at atmospheric pressure.


Sec. 1045.805  What symbols, acronyms, and abbreviations does this part 
use?

    The following symbols, acronyms, and abbreviations apply to this 
part:

 deg.C                              degrees Celsius.
ASTM                                American Society for Testing and
                                     Materials.
ATV                                 all-terrain vessel.
cc                                  cubic centimeters.
CO                                  carbon monoxide.
CO2                                 carbon dioxide.
EPA                                 Environmental Protection Agency.
FEL                                 Family emission limit.
g/kW-hr                             grams per kilowatt-hour.
LPG                                 liquefied petroleum gas.
m                                   meters.
mm Hg                               millimeters of mercury.
NMHC                                nonmethane hydrocarbon.
NMHCE                               nonmethane hydrocarbon equivalent.
NOX                                 oxides of nitrogen (NO and NO2).
psig                                pounds per square inch of gauge
                                     pressure.
rpm                                 revolutions per minute.
SAE                                 Society of Automotive Engineers.
SHED                                Sealed Housing for Evaporative
                                     Determination.
SI                                  spark-ignition.
THC                                 total hydrocarbon.
THCE                                total hydrocarbon equivalent.
U.S.                                United States
U.S.C.                              United States Code.
 

Sec. 1045.810  What materials does this part reference?

    We have incorporated by reference the documents listed in this 
section. The Director of the Federal Register approved the 
incorporation by reference as prescribed in 5 U.S.C. 552(a) and 1 CFR 
part 51. Anyone may inspect copies at U.S. EPA, OAR, Air and Radiation 
Docket and Information Center, 401 M Street, SW., Washington, DC 20460; 
or Office of the Federal Register, 800 N. Capitol St., NW., 7th Floor, 
Suite 700, Washington, DC.
    (a) ASTM material. Table 1 of Sec. 1045.810 lists material from the 
American Society for Testing and Materials that we have incorporated by 
reference. The first column lists the number and name of the material. 
The second column lists the sections of this part where we reference 
it. The second column is for information only and may not include all 
locations. Anyone may receive copies of these materials from American 
Society for Testing and Materials, 1916 Race St., Philadelphia, PA 
19103. Table 1 follows:

               Table 1 of Sec.  1045.810.--ASTM Materials
------------------------------------------------------------------------
         Document number and name               Part 1045 reference
------------------------------------------------------------------------
ASTM E29-93a, Standard Practice for Using  1045.240,
 Significant Digits in Test Data to        1045.315,
 Determine Conformance with                1045.345,
 Specifications.                           1045.410,
                                           1045.415.
------------------------------------------------------------------------

    (b) ISO material. [Reserved]
    (c) SAE material. [Reserved]


Sec. 1045.815  How should I request EPA to keep my information 
confidential?

    (a) Clearly show what you consider confidential by marking, 
circling, bracketing, stamping, or some other method. We will store 
your confidential information as described in 40 CFR part 2. Also, we 
will disclose it only as specified in 40 CFR part 2.
    (b) If you send us a second copy without the confidential 
information, we will assume it contains nothing confidential whenever 
we need to release information from it.
    (c) If you send us information without claiming it is confidential, 
we may make it available to the public without further notice to you, 
as described in 40 CFR 2.204.


Sec. 1045.820  How do I request a public hearing?

    (a) File a request for a hearing with the Designated Officer within 
15 days of a decision to deny, suspend, revoke, or void your 
certificate. If you ask later, we may give you a hearing for good 
cause, but we do not have to.
    (b) Include the following in your request for a public hearing:
    (1) State which emission family is involved.

[[Page 53115]]

    (2) State the issues you intend to raise. We may limit these 
issues, as described elsewhere in this part.
    (3) Summarize the evidence supporting your position and state why 
you believe this evidence justifies granting or reinstating the 
certificate.
    (c) We will hold the hearing as described in 40 CFR part 1068, 
subpart F.

PART 1051--CONTROL OF EMISSIONS FROM RECREATIONAL ENGINES AND 
VEHICLES

    17. The authority citation for part 1051 as proposed at 66 FR 51219 
continues to read as follows:

    Authority: 42 U.S.C. 7401-7671(q).

Subpart A--[Amended]

    18. Section 1051.1 as proposed at 66 FR 51220 is amended by adding 
a new paragraph (e) to read as follows:


Sec. 1051.1  Does this part apply to me?

* * * * *
    (e) This part also applies to engines under 50 cc used in highway 
motorcycles if the manufacturer uses the provisions of 40 CFR 86.447-
2006 to meet the emission standards in this part instead of the 
requirements of 40 CFR part 86. Compliance with the provisions of this 
part is a required condition of that exemption.

PART 1068--GENERAL COMPLIANCE PROVISIONS FOR NONROAD PROGRAMS

    19. The authority citation for part 1068 as proposed at 66 FR 51252 
continues to read as follows:

    Authority: 42 U.S.C. 7401-7671(q).

Subpart A--[Amended]

    20. Section 1068.1 as proposed at 66 FR 51253 is amended by 
revising paragraph (a) to read as follows:


Sec. 1068.1  Does this part apply to me?

    (a) The provisions of this part apply to everyone with respect to 
the following engines or to equipment using the following engines:
    (1) Marine vessels powered by spark-ignition engines we regulate 
under 40 CFR 1045.
    (2) Large nonroad spark-ignition engines we regulate under 40 CFR 
part 1048.
    (3) Snowmobiles, all-terrain vehicles, and off-highway motorcycles 
we regulate under 40 CFR part 1051.
* * * * *
[FR Doc. 02-19437 Filed 8-13-02; 8:45 am]
BILLING CODE 6560-50-P