Emission Standards for Locomotives and Locomotive Engines

SUMMARY: EPA is promulgating emission standards and associated

regulatory requirements for the control of emissions from locomotives

and locomotive engines as required by the Clean Air Act section

213(a)(5). The primary focus of this rule is the reduction of emissions

of oxides of nitrogen (NOX). The standards will take effect

in 2000 and will ultimately result in a more than 60 percent reduction

in NOX from locomotives. NOX is a precursor to

the formation of ground level ozone, which causes health problems such

as damage to lung tissue, reduction of lung function, and sensitization

of lungs to other irritants, as well as damage to terrestrial and

aquatic ecosystems. EPA is also promulgating standards for emissions of

hydrocarbons (HC), carbon monoxide (CO), particulate matter (PM), and

smoke. The overall cost-effectiveness of today's emissions standards is

158 dollars per ton of NOX, PM and HC reduced. Today's rule

also includes a variety of provisions to implement the standards and to

ensure that the standards are met in-use. These provisions include

certification test procedures, and assembly line and in-use compliance

testing programs. Also included in today's rule is an emissions

averaging, banking and trading program to improve feasibility and

provide flexibility in achieving compliance with the proposed

standards. Finally, EPA is promulgating regulations that preempt

certain state and local requirements relating to the control of

emissions from new locomotives and new locomotive engines, pursuant to

Clean Air Act section 209(e).

DATES: This final rule is effective June 15, 1998, except for

Secs. 92.133, 92.213, 92.216, 92.308, 92.309, 92.406, 92.504, 92.606,

92.708, and 92.910 which are not effective until the Office of

Management and Budget (OMB) has approved the information collection

requirements contained in them. EPA will publish a document in the

Federal Register announcing the effective date for those sections.

Documents will also be published in the Federal Register both when the

information collection request (ICR) is sent to OMB for approval and

when OMB approves the information collection requirements.

The incorporation by reference of certain publications listed in

the regulations is approved by the Director of the Federal Register as

of June 15, 1998.

ADDRESSES: Materials relevant to this final rule are contained in

Docket No. A-94-31, located at the Air Docket, 401 M Street SW,

Washington, DC 20460, and may be reviewed in Room M-1500 from 8:00 a.m.

until noon and from 1:30 p.m until 3:30 p.m. Monday through Friday. As

provided in 40 CFR part 2, a reasonable fee may be charged by EPA for

photocopying docket materials.

FOR FURTHER INFORMATION CONTACT: For information on this rulemaking

contact: John Mueller, U.S. EPA, Engine Programs and Compliance

Division, 2565 Plymouth Road, Ann Arbor, MI 48105; Telephone: (313)

668-4275, Fax: (313) 741-7816. Requests for hard copies of the

preamble, regulation text, Regulatory Support Document (RSD) and

Summary and Analysis of Comments Document (SAC) should be directed to

Carol Connell at (313) 668-4349.

SUPPLEMENTARY INFORMATION:

I. Introduction

II. Regulated Entities

III. Statutory Authority

IV. Description of Action

A. Applicability

B. Timing

C. Emission Standards

D. Other Nonroad Engines

E. Useful Life

F. Averaging, Banking and Trading

G. Compliance Assurance

H. Test Procedures

I. Railroad Requirements

J. Miscellaneous

K. Preemption

V. Public Participation

VI. Environmental Effects

VII. Economic Impacts

VIII. Cost-effectiveness

IX. Administrative Designation and Regulatory Assessment

Requirements

A. Executive Order 12866

B. Regulatory Flexibility

C. Paperwork Reduction Act

D. Unfunded Mandates Reform Act

E. Submission to Congress and the General Accounting Office

X. Copies of Rulemaking Documents

XI. Judicial Review

I. Introduction

The Clean Air Act as amended in 1990 (hereafter referred to as the

Act) mandated that EPA establish emission regulations for a variety of

previously unregulated nonroad mobile sources. Included in those

requirements was a specific mandate to adopt emission standards for

locomotives and locomotive engines. EPA published a Notice of Proposed

Rulemaking (NPRM) proposing emission standards and associated

compliance mechanisms (e.g., test procedures, certification and

enforcement provisions), as well as regulations concerning the

preemption of state and local emission standards and other requirements

for new locomotives and new locomotive engines on February 11, 1997 (62

FR 6365).

A public hearing was held on May 15, 1997 in Romulus, Michigan at

which verbal comments on the NPRM were received. Written comments

responding to the proposal were also received. In total, comments were

received from 31 public and private parties. The Agency fully

considered all comments received in developing today's final rule.

The remaining sections of this preamble describe EPA's resolution

of the issues associated with the rulemaking. Section II describes the

entities affected by this action. Section III describes EPA's legal

authority for this action. Section IV describes today's action and

summarizes the changes made from the proposed regulations. Subsequent

sections cover the public participation portion of the rulemaking

process, the environmental and economic impacts associated with today's

action, and a variety of administrative requirements.

II. Regulated Entities

Entities potentially regulated by this action are those which

manufacture, remanufacture and/or import locomotives and/or locomotive

engines; those which own and operate locomotives; and state and local

governments. Regulated categories and entities include:

------------------------------------------------------------------------

Examples of regulated

Category entities

------------------------------------------------------------------------

Industry.................................. Manufacturers,

remanufacturers and

importers of locomotives

and locomotive engines,

railroad owners and

operators.

Government................................ State and local

governments.\1\

------------------------------------------------------------------------

\1\ It should be noted that the regulations do not impose any

requirements on state and local governments (other than those that own

or operate local and regional railroads), but rather implement the

Clean Air Act preemption provision for locomotives.

This table is not intended to be exhaustive, but rather provides a

guide for readers regarding entities likely to be regulated by this

action. This table lists the types of entities that EPA is now aware

could potentially be regulated by this action. Other types of entities

not listed in the table could also be

[[Page 18979]]

regulated. To determine whether your company is regulated by this

action, you should carefully examine the applicability criteria in

sections 92.1, 92.801, 92.901 and 92.1001 of the regulatory text in

this document, as well as 40 CFR 85.1601 and 89.1. If you have

questions regarding the applicability of this regulation to a

particular entity, consult the person listed in the preceding FOR

FURTHER INFORMATION CONTACT section.

III. Statutory Authority

Authority for the actions promulgated in this document is granted

to the Environmental Protection Agency (EPA) by sections 114, 203, 204,

205, 206, 207, 208, 209, 213, 215, 216 and 301(a) of the Clean Air Act

as amended in 1990 (CAA or ``the Act'') (42 U.S.C. 7414, 7522, 7523,

7524, 7525, 7541, 7542, 7543, 7547, 7549, 7550 and 7601(a)).

EPA is promulgating emission standards for new locomotives and new

engines used in locomotives pursuant to its authority under section 213

of the Clean Air Act. Section 213(a)(5) directs EPA to adopt emissions

standards for ``new locomotives and new engines used in locomotives

that achieve the greatest degree of emissions reductions achievable

through the use of technology that the Administrator determines will be

available for such vehicles and engines, taking into account the cost

of applying such technology within the available time period, and

noise, energy, and safety factors associated with the application of

such technology.'' As described in this document and in the regulatory

support document, EPA has evaluated the available information to

determine the technology that will be available for locomotives and

engines proposed to be subject to EPA standards.

EPA is also acting under its authority to implement and enforce the

locomotive emission standards. Section 213(d) provides that the

standards EPA adopts for new locomotives and new engines used in

locomotives ``shall be subject to sections 206, 207, 208, and 209'' of

the Clean Air Act, with such modifications that the Administrator deems

appropriate to the regulations implementing these sections. In

addition, the locomotive standards ``shall be enforced in the same

manner as [motor vehicle] standards prescribed under section 202'' of

the Act. Section 213(d) also grants EPA authority to promulgate or

revise regulations as necessary to determine compliance with, and

enforce, standards adopted under section 213. Pursuant to this

authority, EPA is requiring that manufacturers (including

remanufacturers) of new locomotives and new engines used in locomotives

must obtain a certificate of conformity with EPA's emissions standards

and requirements, and must subject the locomotives and engines to

assembly line and in-use testing. The language of section 213(d)

directs EPA to generally enforce the locomotive emissions standards in

the same manner as it enforces motor vehicle emissions standards.

Pursuant to this authority, EPA is promulgating regulations similar to

those adopted for motor vehicles and engines under section 203 of the

Act, which prescribes certain enforcement-related prohibitions,

including a prohibition against introducing a new vehicle or engine

that is not covered by a valid certificate of conformity into commerce,

a prohibition against tampering, and a prohibition on importing a

vehicle or engine into the United States without a valid, applicable

certificate of conformity. In addition, EPA is promulgating emission

defect regulations that require manufacturers to report to EPA

emissions-related defects that affect a given class or category of

locomotives or locomotive engines.

EPA is also promulgating regulations to clarify the scope of the

Act's preemption of state regulation. Section 209(e) prohibits states

from adopting and enforcing standards and other requirements relating

to the control of emissions from new locomotives and new engines used

in locomotives. This provision also grants EPA authority to adopt

regulations to implement section 209(e). Pursuant to this authority,

EPA is promulgating regulations to implement the express preemption of

state emissions standards for new locomotives and new engines used in

locomotives, for the purpose of clarifying the scope of preemption for

states and industry.1

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\1\ EPA, the State of California and the Class I freight

railroads operating in Southern California have been developing a

unique, voluntary railroad fleet average program to achieve

additional NOx reductions for the South Coast ozone nonattainment

area. The program would be implemented principally by the railroads

and the California Air Resources Board. The parties are structuring

this agreement to achieve their mutual goals, including successful

implementation of the unique consultative process in the EPA's

approval of the 1994 California state implementation plan (SIP)

revisions for the South Coast. In particular, the agreed fleet

average program will achieve reductions that meet the targets of

measure M-14 included in the 1994 California SIP revisions approved

by EPA in 1996. In the event that the agreement fails to attain its

identified emission reductions, and is terminated as provided by the

agreement, EPA has reserved and will exercise its authorities to

assure emission reductions from railroads and/or, if necessary, from

other national transportation sources.

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IV. Description of Action

This section contains a description of each provision of today's

rule. This rule contains emission standards not only for locomotives

originally manufactured after the effective date of the standards, but

also for existing locomotives originally manufactured after 1972, when

remanufactured after the applicable effective date of today's action.

Today EPA is adopting the first national emission regulations

applicable to locomotives. In addition to emission standards, this rule

contains a variety of compliance and enforcement provisions, as well as

regulations concerning the preemption of certain state and local

controls over locomotives. Each of these items is discussed in detail

in this section and in the Summary and Analysis of Comments document

(SAC) accompanying this rule. For complete information on the new

program requirements the reader is referred to the accompanying

regulations appearing at the end of today's document. The reader is

also referred to the complete Title 40 , parts 85 and 89 of the Code of

Federal Regulations, which this rulemaking amends.2

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\2\ The regulations published at the end of this document do not

include a paragraph that was inadvertently included in the

regulations signed by the Administrator on December 17, 1997 and

released to the public electronically on December 18, 1997. The

final rule, as signed by the Administrator and released

electronically, contained a regulatory provision that was included

in a staff-level draft, but was intended to be deleted from the

final version prior to signature. However, due to a mistake, EPA

staff inadvertently failed to delete this particular provision prior

to signature. In this action, the Administrator removed the

following paragraph from the final locomotive emissions regulations:

``(2) Where the manufacturer or remanufacturer identifies the

reason(s) that the failing locomotives failed to comply with the

applicable emission standards, and demonstrates, to the

Administrator's satisfaction, that such reason(s) was (were) beyond

the control of the manufacturer or remanufacturer (or its suppliers,

or other entities contracted by the manufacturer or remanufacturer

to provide goods or services for the manufacture or remanufacture of

the locomotive), EPA will not pursue remedial action against the

manufacturer or remanufacturer.''

To the extent that the rule signed on December 17, 1997 may be

deemed to have been promulgated, EPA finds good cause for removing

this paragraph without prior notice and comment, since such

procedure is unnecessary, and contrary to the public interest.

Public notice and comment is unnecessary because EPA is simply

removing from the regulatory text a paragraph that the Agency did

not intend to include in the final locomotive regulations. Moreover,

public notice and comment in this instance is contrary to the public

interest because it would delay publication and effectiveness of

these emission standards, which would result in delaying the

emission benefits that will be achieved through implementation of

these standards.

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[[Page 18980]]

A. Applicability

Section 213(a)(5) of the Act specified that EPA establish emission

standards for ``new locomotives and new engines used in locomotives.''

Thus, the general applicability of this action is determined by the

definition of ``new locomotive'' and ``new locomotive engine''. The Act

does not define ``new locomotive'' or ``new locomotive engine.'' EPA is

today exercising its discretion to interpret the terms in the Act that

Congress did not expressly define, and is adopting a regulatory

definition of ``new locomotive'' and ``new locomotive engine''

consistent with the Act's definition of ``new motor vehicle'' and with

EPA's previously adopted definition of ``new'' for other nonroad

vehicles and engines. EPA is defining ``new locomotive'' and ``new

locomotive engine'' to mean a locomotive or locomotive engine the

equitable or legal title to which has never been transferred to an

ultimate purchaser; and a locomotive or locomotive engine that has been

remanufactured, until it is placed back into service. Where the

equitable or legal title to a locomotive or locomotive engine is not

transferred before the engine or vehicle is placed into service, then

the locomotive or locomotive engine will be new until it is placed into

service. EPA is also defining imported locomotives and locomotive

engines to be new unless they are covered by a certificate of

conformity at the time of importation. Finally, EPA is limiting the

applicability of the definition of new locomotive and new locomotive

engine to locomotives and locomotive engines originally manufactured

after 1972. As is described in the RSD, the applicability is limited in

this manner to eliminate the unwarranted burden of bringing very old

locomotives into compliance.

The definition of ``new locomotive'' and ``new locomotive engine''

is consistent with, but not identical to, the definition of ``new

nonroad engine'' and ``new nonroad vehicle'' that EPA promulgated on

July 20, 1994 (59 FR 36969), and revised on October 24, 1996 (61 FR

52102). The definition of ``new nonroad engine'' includes only freshly

manufactured engines, while today's definition of ``new locomotive''

and ``new locomotive engine'' includes both freshly manufactured and

remanufactured locomotives and engines, for the reasons described

below.

The Agency is defining ``remanufacture'' of a locomotive as a

process in which all of the power assemblies of a locomotive engine are

replaced with freshly manufactured (containing no previously used

parts) or refurbished power assemblies, or are inspected and qualified.

Inspecting and qualifying previously used parts can be done in several

ways, including such things as cleaning, measuring physical dimensions

for proper size and tolerance, and running performance tests to assure

that the parts are functioning properly and according to

specifications. The refurbished power assemblies could include some

combination of freshly manufactured parts, reconditioned parts from

other previously used power assemblies, and reconditioned parts from

the power assemblies that were replaced. In cases where all of the

power assemblies are not replaced at a single time, a locomotive will

be considered to be ``remanufactured'' (and therefore ``new'') if all

of the power assemblies from the previously new engine had been

replaced within a five year period.

EPA's determination that remanufactured locomotives and engines are

new is based on the remanufacturing practices of Class I railroads,

which use more than 90 percent of the fuel used in the current

locomotive fleet, and thus create more than 90 percent of total

locomotive fleet emissions. EPA is exempting from the definition of

``new locomotive'' and ``new locomotive engine'' remanufactured

locomotives and engines owned and operated by small railroads (as

defined by the Small Business Administration), pursuant to the Agency's

authority to adopt de minimis exemptions from statutory requirements

where the benefit of regulation is trivial or nonexistent. Alabama

Power v. EPA, 636 F.2d. 323 (D.C.Cir. 1979).

EPA believes that the emissions impacts of this exemption are

trivial, because the emissions from small railroad-owned and operated

post-1972 locomotives and engines that are in fact remanufactured are

trivial. EPA's analysis in the RSD demonstrates that the total

NOX emissions benefit that could be achieved from requiring

such locomotives and engines to meet Tier 0 standards when

remanufactured constitutes less than one percent of the total

NOX emissions inventory from the locomotive fleet. Because

these locomotives and engines will not be considered new when

remanufactured, the preemption provision adopted today does not apply

to them at the time of remanufacture. Many small railroads do not

actually remanufacture their locomotives and engine, as defined by the

regulations adopted today, but instead rebuild them periodically in a

manner that does not result in a new locomotive or engine. While

remanufacturing practices are generally consistent among Class I

railroads, there is a wide variety of practices among non-Class I

railroads. For example, non-Class I railroads are more likely to

replace power assemblies only when they fail, so that many of their

locomotives are likely to not have all power assemblies replaced within

a five-year period. EPA's definition of ``remanufacturing'' is intended

to encompass the remanufacturing practices of Class I railroads, which,

for the reasons described above and in the NPRM, result in a locomotive

or engine that is new. However, because of the broad spectrum of

rebuilding and repair actions taken by small railroads, it is difficult

for EPA to draw a ``bright line'' between such actions that do result

in a new engines, and therefore constitute remanufacturing, and those

that do not.

EPA is including in its definition of ``remanufacture'' the

conversion of a locomotive or locomotive engine to operate on a fuel

other than the fuel it was originally designed and manufactured to

operate on. Such conversions typically involve, at a minimum, the

replacement or modification of the fuel delivery system, and often

involve the replacement or modification of other emissions-critical

components, as well as the recalibration of some engine operating

parameters. Thus, converted locomotives and locomotive engines will be

considered new and subject to today's regulations.

In order to clarify the definition of ``freshly manufactured

locomotive'' for purposes of applicability of the repowering provisions

discussed later in the section on other nonroad engines, EPA has added

to its proposed definition a provision stating that freshly

manufactured locomotives do not contain more than 25 percent (by value)

previously used parts. EPA is allowing freshly manufactured locomotives

to contain up to 25 percent used parts because of the current industry

practice of using various combinations of used and unused parts. This

25 percent value applies to the dollar value of the parts being used

rather than the number because it more properly weights the

significance of the various used and unused components. The Agency

chose 25 percent as the cutoff because it believes that setting a very

low cutoff point would have allowed manufacturers to circumvent the

more stringent standards for freshly manufactured locomotives by

including a few used parts during the final assembly.

[[Page 18981]]

B. Timing

Three sets of standards (Tier 0, Tier 1 and Tier 2) are being

promulgated in today's action, with the applicability of each set being

dependent on the date of original manufacture of a locomotive. The

actual levels of these standards are discussed in more detail later in

this document. EPA proposed that the Tier 0 and Tier 1 standards take

effect January 1, 2000. However, to provide adequate lead time, as

discussed in the SAC, these standards are being phased in beginning

January 1, 2000. Locomotive manufacturers will have two options to

choose from, as described in the following paragraphs.

Under the first option, the Tier 0 standards apply to all new

production in the 2001 model year, as well as for the remanufacture of

any 1994 through 2001 model year freight locomotives (when

remanufactured January 1, 2001 or later). The Tier 0 standards apply to

all other 1973 through 2001 model year locomotives when remanufactured

on or after January 1, 2002. The Tier 1 standards apply to all

locomotives manufactured from 2002 through 2004, both at the time of

initial manufacture and at each remanufacture. The Tier 2 standards

apply to all locomotives manufactured in 2005 and later, and also apply

both at the time of initial manufacture and at each remanufacture.

Finally, beginning January 1, 2000, any 1990 or later locomotive for

which a certified Tier 0 retrofit kit is available for a reasonable

cost must comply with the Tier 0 standards when remanufactured.

Reasonable cost encompasses the cost of hardware, fuel and maintenance

associated with the complying remanufacture. Reasonable cost also

encompasses the idea that the remanufactured locomotive will have

reliability throughout its useful life that is similar to the

locomotive would have had had it been remanufactured without the

certified remanufacture system (i.e., well-maintained, certified

locomotives would not have significantly more road failures than would

an uncertified locomotive). The criteria for reasonable cost are

described in section 92.012 of the regulatory text.

An alternative to the provisions just discussed is being provided

for manufacturers for the 1994 through 2001 model year locomotives. Any

manufacturer which makes certified Tier 0 retrofit kits available by

January 1, 2000 for its primary 1994 through 1997 model year

locomotives will only be required to meet the Tier 0 standards on new

production in 2000 and 2001 for locomotives similar to their primary

1994 through 1997 model. Other new production models would not need to

comply with standards until the Tier 1 standards take effect with the

2002 model year. However, new production locomotives in 2000 and 2001

not meeting any emission standards when originally manufactured will be

required to meet the Tier 0 standards at the time of remanufacture.

Under this option the primary 1994 and later model year locomotives

would be locomotives powered by 710 series engines for General Motors,

and the Dash 9/AC4400 series of locomotives for General Electric. The

purpose of this approach is to achieve significant emission reductions

in the near term by improving the practical feasibility of meeting the

standards by limiting the number of locomotive models that a

manufacturer must develop Tier 0 remanufacture systems for in the

initial years of the program, while focusing efforts on newer, higher

usage locomotives. The Tier 1 and Tier 2 standards would be implemented

under this option in the same manner as discussed above, as would the

Tier 0 trigger provision which begins in 2000.

EPA is including a provision in today's action to allow for the

production of some locomotives which do not comply with the applicable

standards under certain extraordinary circumstances beyond a

manufacturer's control. For example, if a manufacturer had planned to

produce a certain number of Tier 1 locomotives in 2004 and some

extraordinary circumstance prevented completion of some of those

locomotives until 2005, EPA could allow those locomotives to be

produced, as planned, in compliance with the Tier 1 standards. Examples

of extraordinary circumstances could include, but are not limited to,

labor strikes at component suppliers, and damage to production

facilities through natural disasters or accidents.

C. Emission Standards

Today's rule contains emission standards for new locomotives and

new locomotive engines which are measured over specific duty-cycles.

This section first contains a description of those duty-cycles,

followed by a description of the actual emission standards. Finally, an

alternate set of standards which are provided as an option to the

primary standards is presented. Integral to the stringency and

feasibility of the emission standards discussed in this section is the

averaging, banking and trading program discussed in Section F.

C.1. Duty-cycles

A duty-cycle is defined as a usage pattern for any class of

equipment, using the percent of time at defined loads, speeds or other

readily identifiable and measurable parameters. EPA's emission

standards for mobile sources are typically numerical standards for

emissions performance measured during a test procedure that embodies a

specific duty-cycle for that kind of equipment. The standards adopted

today require compliance over two defined duty-cycles. The first duty-

cycle is one weighted towards operation in the higher power notches,

and is typical of line-haul applications. The second duty-cycle is

typical of switch operations, with more emphasis on idle and low power

notch emissions. These duty-cycles are presented in Table IV-1. Since

these duty-cycles merely represent the percent of time locomotives

typically spend in each throttle notch and are not used during actual

emissions testing, they are termed throttle notch weighting factors. In

other words, they are not actual test cycles.

Table IV-1.--Throttle Notch Weighting Factors for Locomotives and

Locomotive Engines

[Percent weighting per notch]

------------------------------------------------------------------------

Line-haul Switch

Throttle notch (high (low

power) power)

------------------------------------------------------------------------

Idle............................................ 38.0 59.8

Dynamic brake................................... 12.5 0.0

1............................................... 6.5 12.4

2............................................... 6.5 12.3

3............................................... 5.2 5.8

4............................................... 4.4 3.6

5............................................... 3.8 3.6

6............................................... 3.9 1.5

7............................................... 3.0 0.2

8............................................... 16.2 0.8

------------------------------------------------------------------------

C.2. Emission Standards

As proposed, today's rule contains three sets of exhaust gaseous

and particulate emission standards for locomotives (Tier 0, Tier 1 and

Tier 2), with the applicability of each dependent on the date of

original manufacture of a locomotive, as discussed in the previous

section on timing. Standards are included for NOX, PM, HC,

CO and smoke. EPA is not finalizing the proposed aldehydes standards

for alcohol locomotives because aldehydes are specifically measured,

and thus regulated, in the context of the THCE standards. Each set of

standards includes requirements that locomotives comply with duty-cycle

standards when using notch weighting factors representative of

operation in both line-haul and switch duty-cycles. In general,

locomotives covered by these standards must meet both sets of duty-

cycle

[[Page 18982]]

standards. However, Tier 0 switch locomotives (i.e., locomotives

dedicated to switch operation) rated at or under 2300 horsepower (hp)

are only required to meet the Tier 0 switch duty-cycle standards since

such locomotives are extremely unlikely to encounter high power

operation associated with line-haul operations, and because of the

potential difficulty in bringing such locomotives into compliance with

the line-haul duty-cycle standards. EPA requested comment on this

provision based on its applicability to switch locomotives rated at or

under 2000 hp, but is revising the hp rating based on new information

that a significant number of existing switch locomotives are between

2000 and 2300 hp. No individual certification throttle notch standards

are being promulgated, although in-use notch standards based on notch

emission levels measured at certification are included, as discussed in

the later section on defeat devices. The standards are summarized in

Table IV-2. In addition to the exhaust emission standards, there are

smoke opacity standards for all locomotives and locomotive engines

covered by today's action. These standards are shown in Table IV-3.

Table IV-2.--Exhaust Emission Standards for Locomotives 1

------------------------------------------------------------------------

Gaseous and particulate emissions (g/bhp-

hr)

Tier and duty-cycle -------------------------------------------

HC2 CO NOX PM

------------------------------------------------------------------------

Tier 0 line-haul duty-cycle. 1.00 5.0 9.5 0.60

Tier 0 switch duty-cycle.... 2.10 8.0 14.0 0.72

Tier 1 line-haul duty-cycle. 0.55 2.2 7.4 0.45

Tier 1 switch duty-cycle.... 1.20 2.5 11.0 0.54

Tier 2 line-haul duty-cycle. 0.30 1.5 5.5 0.20

Tier 2 switch duty-cycle.... 0.60 2.4 8.1 0.24

------------------------------------------------------------------------

\1\ For the applicability of these standards by locomotive model year

see the discussion on timing.

\2\ HC standards are in the form of THC for diesel, bio-diesel, or any

combination of fuels with diesel as the primary fuel; NMHC for natural

gas, or any combination of fuels where natural gas is the primary

fuel; and THCE for alcohol, or any combination of fuels where alcohol

is the primary fuel.

Table IV-3.--Smoke Standards for Locomotives

[Percent Opacity--Normalized]

----------------------------------------------------------------------------------------------------------------

Steady-state 30-sec peak 3-sec peak

----------------------------------------------------------------------------------------------------------------

Tier 0.......................................................... 30 40 50

Tier 1.......................................................... 25 40 50

Tier 2.......................................................... 20 40 50

----------------------------------------------------------------------------------------------------------------

As described in this notice, and in the Regulatory Support Document

(RSD), EPA has determined that the Tier 2 emissions standards for new

locomotives and new engines used in locomotives achieve the greatest

degree of emissions reductions achievable through the use of technology

that EPA has determined will be available for application in 2005,

taking into consideration cost and other factors. Comments from engine

manufacturers expressed strong concern about the technology forcing

nature of the standards and about their ability to identify, develop,

and apply the technologies that will be needed to locomotive engines by

2005. EPA's detailed response to the engine manufacturers' comments can

be found in the SAC for this rule.

EPA is confident that manufacturers will be able to comply with the

Tier 2 standards in a cost-effective manner by 2005, but recognizes

that these are technology forcing standards which will require

significant effort to achieve. The technology that the manufacturers

are likely to use to achieve the 2005 standards is not being used on

locomotives being manufactured today, but is being applied to various

degrees on other compression-ignition engine transportation sources.

Between the date of the promulgation of this rule and 2005, EPA expects

that manufacturers will make a strong comprehensive effort to comply

with the 2005 and later model year emission standards and later

provisions. Nonetheless, as with all technology forcing standards,

there is some uncertainty in predicting the successful development and

application of the expected emission control technologies. EPA

recognizes that industry experience over the next seven years will

demonstrate whether EPA's technical projections are accurate and valid.

If, with the full investment of resources expected, the data developed

by the manufacturers indicates that the standards or some portions of

them will not be achievable, then as is the case for all rules, the

manufacturer(s) may petition the Administrator to reconsider the Tier 2

standards, or any other aspect of this rulemaking.2 In

responding to any such petition, EPA will conduct an in-depth review of

all test data and information presented by the petitioner or otherwise

obtained by EPA, and will decide on the basis of that information

whether the Agency believes it is appropriate to reconsider the Tier 2

standards.

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\2\ In the event that EPA receives and grants a petition for

reconsideration of the Tier 2 NOX emission standard, the

Agency will begin to work on development of options for the federal

backstop of the South Coast Locomotive Fleet Average Agreement

discussed in footnote 1.

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EPA expects that a manufacturer petitioning the Agency to

reconsider the Tier 2 standards adopted today would include information

such as, but not limited to, the following: (1) A detailed description

of all activities undertaken by the manufacturer in its efforts to meet

the Tier 2 standards, including a description of all resources

allocated to research, development, and testing, all technological

options investigated by the manufacturer, and the results of these

investigations, and all technological options the manufacturer chose

not to investigate, with the basis and reasons for such choice, (2) a

detailed description of all then-current problems identified by the

manufacturer that would interfere with complying with the Tier 2

standards, (3) a

[[Page 18983]]

description of all potential solutions to these problems investigated

by the manufacturer to that time, and the results of these

investigations, and (4) a description of the specific changes or time

extensions to the Tier 2 regulations that the manufacturer is

requesting, along with an explanation of why these changes or

extensions would be appropriate under section 213(a)(5). In evaluating

any such petition, EPA would evaluate the new information concerning

issues relevant under section 213(a)(5), such as technological

feasibility, energy, noise, safety and the cost of complying with the

Tier 2 standards in 2005, in determining whether it is appropriate to

reconsider the Tier 2 standards. EPA would also consider factors such

as reliability and durability as relevant under section 213(a)(5).

As with any such petition received by the Agency, EPA believes that

a manufacturer's petition for reconsideration of the Tier 2 standards

warrants timely Agency response. Since submitting a petition for

reconsideration does not suspend implementation of the Agency action at

issue, EPA believes it is important to provide manufacturers with a

final decision on their request as early as possible once a petition

for reconsideration is filed. EPA also believes that a petitioner would

present a comprehensive and in-depth analysis of the appropriate issues

and would respond in a timely manner to reasonable Agency requests for

clarification or for additional information. Therefore, EPA expects to

respond to such petitions within 300 days of receipt. Once EPA has

taken its final action on the petition, petitioners could challenge

that action in the Court of Appeals. The Court would review EPA's

action on the petition using an appropriate standard of review as

described in the then-applicable case law. If EPA fails to take final

action on the petition within 300 days of receipt, the petitioner might

seek to compel Agency action through an ``unreasonable delay'' claim;

the district court would review any such challenge under the then-

applicable case law. As part of the response to such a petition the

Agency may pursue a rulemaking action to revise one or more provisions

of this rule or to develop nonconformance penalties for the

pollutant(s) at issue.

As part of its efforts to implement this rule, EPA intends to meet

annually with each manufacturer of new locomotives and new locomotive

engines to review its progress and future plans to comply with the

emissions standards and requirements adopted today. EPA believes such

exchanges will be helpful in gauging overall manufacturer progress and

identifying potential difficulties and resolutions early in the

technology development and assessment process.

C.3. Alternate Standards

EPA is promulgating an alternate (i.e., optional) set of CO and PM

standards that are intended primarily to address locomotives which

operate on alternative fuels such as natural gas. Natural gas

locomotives are expected to have somewhat higher (and more difficult to

control) CO emissions than diesel-fueled locomotives, but lower PM

emissions. These differences are due to the different molecular

structure of alternative fuels compared to diesel fuel which result in

the need to operate under different conditions (e.g., different air/

fuel ratios, spark ignition vs. compression ignition). The alternate

standards allow higher CO emissions than the primary standards

applicable to all covered locomotives and locomotive engines, but also

require lower PM emissions. The lower PM standards are appropriate

because alternative fuel vehicles in general have demonstrated

inherently lower PM emissions than diesel vehicles, and, as is

discussed in the RSD, there is no reason to believe that this will not

be the case for locomotives as well. Although these alternate standards

are primarily intended to address issues associated with alternative

fuels, manufacturers and remanufacturers can certify to such standards

in lieu of otherwise applicable Tier 0, Tier 1, and Tier 2 standards.

Manufacturers and remanufacturers can choose to comply with the

appropriate set of alternate standards, shown in Table IV-4, instead of

the applicable Tier 0, Tier 1, or Tier 2 CO and PM standards listed in

Table IV-2, for any locomotives or locomotive engines regardless of

fuel used. However, they are not allowed to mix the alternate CO

standards with the primary PM standards for a single engine family.

Table IV-4.--Alternate CO and PM Standards

[g/bhp-hr]

------------------------------------------------------------------------

Line-haul Switch cycle

cycle -------------

--------------

CO PM CO PM

------------------------------------------------------------------------

Tier 0...................................... 10.0 0.30 12.0 0.36

Tier 1...................................... 10.0 0.22 12.0 0.27

Tier 2...................................... 10.0 0.10 12.0 0.12

------------------------------------------------------------------------

Since alternative fuel locomotives are not currently in general

use, EPA expects that a certain amount of development work will be

needed to bring such locomotives to market. In order to accommodate

this development work and not inhibit the introduction of alternative

fuel locomotives, EPA is expecting manufacturers to use the general

testing exemptions. These exemptions from the requirements and

prohibitions of today's regulations will be granted based on a

demonstrated need for purposes of technology development. Testing

exemptions may be granted for periods up to two years. EPA is also

establishing another provision that would allow the Administrator to

certify an alternative fuel locomotive, but to waive some requirements

for the full useful life period of the locomotive. This provision would

only apply for locomotives involved in technology development programs,

and would be used at the Administrator's discretion.

D. Other Nonroad Engines

EPA is finalizing the proposed provision allowing any manufacturer

which manufactures nonroad engines not normally used in locomotives and

which are certified according to the provisions of 40 CFR Part 89 to

sell up to 25 of those engines a year for use in replacing existing

locomotive tractive power engines (i.e., repowering). In the final

rule, EPA is not including the proposed restrictions on the upper limit

of the hp rating of engines sold under this provision. EPA has

determined that an upper limit on hp is not necessary since essentially

all repowering done with non-locomotive engines is done to switch

locomotives. Manufacturers may sell such engines for repowering, within

the overall limit of 25 per year, in engine families for which

projected sales for non-locomotive applications exceed projected sales

for locomotive applications. Engines sold under this provision will be

treated the same as other locomotive engines with respect to preemption

because they meet the definition of new locomotive engine. EPA retains

the authority as a condition of the exemption from the Part 92

certification provisions to require testing of such engines at

locomotive power points. While such data could be used to detect the

presence of defeat devices, in general it will be used for

informational purposes only since the engines will not be certified to

the part 92 emission standards. Engines used to repower existing

locomotives under this provision will generally be subject to the

requirements of 40 CFR Part 89 and will therefore not be subject to in-

use

[[Page 18984]]

testing, or certification requirements if rebuilt to their original

configuration, or a different configuration certified according to 40

CFR Part 89. However, the tampering prohibitions apply when these

engines are rebuilt. EPA does not believe that this repowering

provision will be used to circumvent the intent of today's regulations,

and has included appropriate safeguards to assure that this will not be

the case. For example, this exemption is subject to EPA approval, and

if the Agency has reason to believe that this provision is being used

in such a manner it will not grant the exemption.

Engines used to repower existing locomotives but not eligible to

use the 40 CFR Part 89 provisions just discussed because they exceed

the sales limit must be certified according to the provisions of 40 CFR

Part 92 contained in this action. Engines which are used to repower

existing locomotives and which are identical to the original engine

(i.e., replacement engines) are considered repowers. As with all

locomotives and locomotive engines certified according to the

provisions of 40 CFR Part 92, in-use testing will be done on

locomotives, rather than engines. In-use nonconformities will be

determined based on such locomotive testing. Manufacturers of

repowering engines certified according to the provisions of 40 CFR Part

92 will be allowed to petition EPA for a shorter useful life than the

minimum useful life value of 7.5 megawatt-hours per horsepower (MW-hr/

hp) discussed in the next section.

In addition to the repowering provisions just discussed, EPA is

allowing locomotive manufacturers to use a small number of engines

certified to the standards in 40 CFR Part 89 in freshly manufactured

switch locomotives. The purpose of this provision is to reduce the

certification burden associated with the occasional locomotive

manufacturer practice of building very small numbers of switch

locomotives using nonroad engines not normally used in locomotives. For

a given locomotive manufacturer, this provision will be limited to 15

locomotives over any three year period. This limit will apply to the

locomotive manufacturer, rather than the engine manufacturer, in cases

where the engine manufacturer and locomotive manufacturer are

different. Engines sold by an engine manufacturer for use in freshly

manufactured locomotives under this provision will not be included in

the sales limit for engines used for the repowering of existing

locomotives discussed previously.

EPA is providing an exemption from the Tier 0 requirements in 40

CFR Part 92 for existing nonroad engines (i.e., engines which would

likely have fallen under the exemption for repowers previously

discussed if they were freshly manufactured) provided they use Tier 0

compliance kits which are certified on engines using the 40 CFR Part 89

test protocols. Such retrofit kits will be required under this

exemption to demonstrate a NOX reduction of 40 percent from

baseline levels to be considered to have met the Tier 0 requirements.

This 40 percent reduction is intended as a conservative approach to

address uncertainties associated with a lack of data correlating the 40

CFR Part 89 and Part 92 test procedures, and will assure that, given

the differences in engine operating test points between the locomotive

test procedures and those contained in 40 CFR Part 89, these Tier 0

locomotives will have emission reductions at least as great as Tier 0

locomotives certified according to the locomotive compliance provisions

contained in this rule. Alternately, such existing ``nonroad'' engines

can be exempted from the Tier 0 requirements in 40 CFR Part 92 provided

they are remanufactured into a configuration previously certified

according to 40 CFR Part 89.

E. Useful Life

A locomotive or locomotive engine covered by the standards

contained in this action will be required to comply with the standards

throughout its useful life. The minimum, or default, useful life period

for all locomotives certified in compliance with the standards is, in

MW-hrs, 7.5 times the rated horsepower, or ten years, whichever occurs

first. For Tier 0 locomotives not equipped with MW-hr meters, the

minimum useful life value is 750,000 miles or 10 years, whichever

occurs first. The minimum useful life value is intended to represent

the expected median remanufacture interval for the Class I railroad

locomotive fleet during the early part of the next century. Information

supporting these useful life values can be found in the RSD. Since it

is expected that future locomotives may well be designed to be operated

significantly beyond the minimum useful life values, manufacturers and

remanufacturers will be required to specify a longer useful life where

appropriate. In general, EPA expects that a locomotive model's useful

life be at least as long as its median remanufacture interval, and will

require manufacturers and remanufacturers to specify a longer useful

life if EPA believes that the median remanufacture interval will be, in

practice, longer than the manufacturer's or remanufacturer's specified

useful life. However, EPA would take into account special cases where a

railroad is operating locomotives beyond their legitimate design life,

as evidenced by significant increases in fuel consumption and/or

decreases in reliability or power output before the locomotives are

remanufactured.

F. Averaging, Banking and Trading

Today's action includes an emissions averaging, banking and trading

(ABT) program. This voluntary program allows the certification of one

or more locomotive engine families within a given manufacturer's or

remanufacturer's product line at levels above the emission standards,

provided the increased emissions are offset by one or more families

certified below the emission standards, such that the average of all

emissions for a particular manufacturer's or remanufacturer's fleet of

new locomotives and new locomotive engines (weighted by horsepower,

production volume and estimated remaining service life) is at or below

the level of the emission standards. In addition to the averaging

program just described, the ABT program contains a banking and trading

provision which allows a manufacturer or remanufacturer to generate

emission credits and bank them for future use in its own averaging

program or sell them to another entity. The ABT program is limited to

NOX and PM emissions, and compliance is determined on a

total mass emissions basis to account for differences in the production

volume, horsepower and expected remaining service life of different

locomotives, and to ensure credits have equivalent values.

When a manufacturer or a remanufacturer uses ABT, it will be

required to certify each participating engine family to a family

emission limit (FEL) which is determined by the manufacturer or

remanufacturer during certification testing. Further, every

configuration within that engine family must also comply with the FEL

for that family. A separate FEL will be determined for each pollutant

which the manufacturer or remanufacturer is including in the ABT

program. FEL ceilings are included for Tier 1 and Tier 2 locomotives,

such that no Tier 1 or Tier 2 engine family can be certified at an

emission level higher than the level of the previously applicable

standard. In other words, locomotives subject to the Tier 1 standards

cannot be certified at FELs above the Tier 0 standards. Likewise,

locomotives subject to the Tier 2 standards cannot be certified at

[[Page 18985]]

FELs above the Tier 1 standards. There are no FEL ceilings for Tier 0

locomotives. This approach to FEL ceilings differs from the proposed

approach of placing FEL ceilings at levels 1.25 times the standard in

response to comments received that the 1.25 factor is overly

restrictive and inconsistent with EPA's establishment of FEL ceilings

in other mobile source programs. In general, credits will be calculated

based on the difference between the certification FEL and the actual

emission standard. However, for Tier 0 and Tier 1 PM emissions, credits

will be calculated relative to the baseline levels of 0.32 g/bhp-hr for

line-haul and 0.44 g/bhp-hr for switch, rather than the Tier 0 and Tier

1 PM standards in order to prevent the generation of windfall credits

from locomotives which already emit PM at levels below the standards.

As was previously discussed, today's regulations require that all

new locomotives and locomotive engines meet both the line-haul and

switch duty-cycle standards, so that more than one standard (and

accompanying duty-cycle) applies to a single pollutant. Thus, separate

switch and line-haul ABT programs are being promulgated. Each engine

family will be allowed to participate in both the switch and line-haul

ABT programs. However, line-haul credits will not be allowed to be used

to meet the switch standards, and vice versa.

EPA proposed that ABT credits have a three year life, and requested

comment on both the proposed three year life and infinite life. In

response to comments received stating that a three year credit life

provides incentive to use the credits to prevent losing them, which

does not help the environment, EPA is finalizing an infinite credit

life. As proposed, there will be no credit discounting. EPA proposed to

restrict the exchange of credits between different tiers. However, in

order to improve the feasibility of the standards and encourage

compliance with the standards at the lowest cost, credit exchanges will

be allowed between Tier 0, Tier 1 and Tier 2 locomotive engine

families, and credits will be allowed to be exchanged to a limited

extent immediately upon their generation. However, to ensure that

progress is made toward compliance with the technology-forcing Tier 2

standards, EPA is placing some limits on the use of credits to comply

with the Tier 2 emission standards. This will encourage manufacturers

to make serious efforts toward meeting the Tier 2 standards, while

allowing some use of banked credits so manufacturers do not have to

ensure that each engine family it manufactures complies with the Tier 2

standards by 2005, allowing them to focus research and development

funds. In order to assure that the ABT program is not used to delay the

implementation of the Tier 2 technology, only 75 percent of a

manufacturer's Tier 2 production will be allowed to be certified at a

NOX FEL greater than the applicable Tier 2 NOX

standards in 2005 and 2006. Only 50 percent of a manufacturer's Tier 2

production will be allowed to be certified at a NOX FEL

greater than the applicable Tier 2 NOX standards in 2007 and

later.

In cases where credits are generated and traded in the same model

year EPA will hold both the buyers and sellers of those credits

potentially liable for any credit shortfall at the end of the year,

except in cases where fraud is involved or a buyer of credits does not

buy enough credits to cover its needs. A buyer of credits which are

shown later to be invalid will only be required to make up the credit

shortfall. There will be no penalty associated with the unknowing

purchase of invalid credits. Finally, emission credits will be allowed

to be held by entities other than the certificate holder (e.g., the

locomotive owner or operator, or any other entity with the approval of

the Administrator).

When a locomotive is remanufactured in compliance with the

standards contained in today's action, it is required, as a default, to

be certified as complying with the standards and/or FELs it was

originally certified as meeting before being re-introduced into service

following subsequent remanufactures. Any credits generated or used will

be calculated based on the estimated remaining service life of the

locomotive. For freshly manufactured locomotives it will be assumed for

calculation of credits or debits that the remaining service life is 40

years, or seven useful life periods. For Tier 0 locomotives, the age of

the locomotive at the time of the initial complying remanufacture will

determine its remaining service life to be used in credit calculation.

The reader is referred to the regulatory text at the end of this notice

and the RSD for the exact schedule to be used in determining the

remaining service life.3 EPA is requiring that locomotives

be remanufactured at any subsequent remanufactures in compliance with

the standards and/or FELs that they are originally certified as

meeting. However, remanufacturers can generate or use credits at the

time of subsequent remanufactures by certifying the remanufactured

locomotives to different FELs than they were originally certified as

meeting. In such cases credits generated or used will be calculated

relative to the previous certification levels (either standards or

FELs) rather than just the standards, and will be based on the

remaining service life of the locomotive.

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\3\ See 40 CFR Part 92, subpart D, of the regulations in this

document.

---------------------------------------------------------------------------

As was previously discussed, ABT credits will be weighted according

to several factors including the number of expected useful life periods

remaining at the time a credit is generated or used. Useful life will

generally be measured in megawatt-hours (MW-hrs), and EPA is finalizing

the proposed requirement that all locomotives certified in compliance

with the Tier 1 and Tier 2 standards be equipped with MW-hr meters.

However, for those Tier 0 locomotives which do not have MW-hr meters,

useful life will be measured in miles or years. For purposes of the ABT

program, EPA proposed to create separate ABT classes for Tier 0

locomotives with and without MW-hr meters, and further proposed to

restrict the exchange of credits between them. However, in order to

allow for a single averaging class which will encompass all Tier 0

locomotives, EPA is finalizing a provision whereby Tier 0 locomotives

without MW-hr meters will be assumed to have the minimum useful life in

MW-hrs provided they were certified according to the minimum useful

life in miles or years. Thus, EPA is not finalizing separate ABT

classes for Tier 0 locomotives with and without MW-hr meters, allowing

manufacturers and remanufacturers greater flexibility in complying with

the emission standards by not prohibiting use of credits generated from

an engine family towards another engine family simply because one has

MW-hr meters and the other does not. For Tier 0 locomotives which do

not have MW-hr meters and are which certified with useful life values

other than the minimum value, credits will be prorated according to the

ratio of the minimum useful life value and the actual certification

useful life. This ratio will then be applied to the MW-hr minimum

useful life value to determine the prorated useful life in MW-hr so

that the minimum useful life in MW-hr will be adjusted by the same

proportion for credit calculation as when measured in miles for

certification. This will allow the calculation of credits to be uniform

for all locomotives and will allow the exchange of credits between

locomotives with and without MW-hr meters.

EPA is allowing the early generation of credits prior to the

effective dates of the standards beginning in 1999 as

[[Page 18986]]

proposed. For early generation of credits for both freshly manufactured

locomotives, and existing locomotives when remanufactured, the

NOX line-haul duty-cycle standard from which credits would

be calculated is 10.5 g/bhp-hr. Similarly, the NOX switch

duty-cycle standard from which credits would be calculated is 14.0 g/

bhp-hr. This value is a default, and in the case of existing

locomotives a remanufacturer can choose to develop a model-specific

baseline value based on actual test data for a particular Tier 0

locomotive model. Credits for early compliance will only be calculated

for a single useful life period, as opposed to the remaining service

life used for most credit and debit calculation, and such locomotives

would have to be brought into compliance with the actual Tier 0

emission standards at their next remanufacture. EPA did not propose any

restrictions on who could hold credits generated prior to the effective

date of the standards. However, EPA will require that any credits from

a remanufactured locomotive which are generated and banked prior to

2002 can only be used for Tier 1 and later freshly manufactured

locomotives after 2001, in order to address competitiveness concerns

raised by locomotive aftermarket suppliers, as detailed in the SAC

accompanying this rule. Alternately, EPA is allowing such credits to be

used in an unrestricted fashion if they are transferred to the

locomotive owner.

EPA did not propose to give any form of credit for the purchase or

use of electric locomotives. Amtrak, whose locomotive fleet contains a

sizeable number of electric locomotives, commented that EPA should give

some form of credit for electric locomotives. While EPA is not

including any such provision in this rule, it intends to consider if it

is appropriate to give credit for actual emission reductions inherent

in the use of electric locomotives as compared to diesel locomotives.

Thus, the Agency intends to work with the Department of Transportation,

Amtrak, and the concerned commuter authorities to investigate and

develop such credits.

G. Compliance Assurance

This section covers the various aspects of the compliance programs

for locomotives. A discussion of the certification program is presented

first, followed by discussions of the production line and in-use

compliance programs, and specific phase-in provisions for these

regulations.

G.1. Engine Family Certification

In general, an engine family is a group of locomotives with similar

emission characteristics throughout useful life. The specific criteria

used to define an engine family are discussed later in this section.

For freshly manufactured locomotives an engine family would describe

all locomotive models covered by that engine family. For remanufactured

locomotives, the engine family must describe models of engines covered,

specific processes by which those engines would be remanufactured, and

specific locomotive models which those remanufactured engines would go

in. Similarly, for repowers and replacement engines, an engine family

would describe specific engine models and the specific locomotive

models into which those engines would go.

EPA stated in its proposal that, in most cases, locomotives (rather

than engines) would be required to be certified with respect to

compliance with the applicable emissions standards. The Agency also

proposed that in some limited cases locomotive engines, rather than

locomotives, be certified. In both cases EPA pointed out that it is the

emissions performance of the locomotive in use that is of primary

concern, and therefore that liability for in-use emissions performance

was to be based on locomotive testing, rather than engine testing. The

approach that EPA is finalizing retains the idea that it is the

emissions performance of the locomotive, not just the locomotive

engine, that is the ultimate concern in controlling locomotive

emissions. However, in order to simplify the certification process, EPA

is finalizing an approach by which the engine family (as described in

the previous and next paragraphs) is certified. Under this approach, it

is a condition of the certificate that the certificate holder accept

liability for in-use emissions performance as measured by actual

locomotive testing. The application for certification for that engine

family will include specifications for which locomotive models are

included by the engine family. Alternately, a manufacturer or

remanufacturer can specify the engine family's requirements in terms of

operating conditions, such as cooling rates, that any locomotive in the

engine family must provide. In either case, it must be clear for anyone

using a certified remanufacturing system that its engine family would

include the final remanufactured locomotive. These specifications, in

terms of locomotive model or operating condition limitations, will

become conditions of the engine family certificate, and the certificate

will cover engines in the engine family only when used in the specified

locomotives (or under the same operating conditions as specified in the

application). Any use of an engine included in that engine family in

locomotives or under operating conditions outside of those specified in

the certificate would not be covered by that engine families

certificate, and would be prohibited. Thus, it is ultimately

locomotives which will have to meet the applicable standards in-use.

The engines in an engine family will be certified for use in any

locomotive, and therefore any locomotive in which the engines are used

must meet applicable emission standards, unless a manufacturer or

remanufacturer includes specifications or limitations in its

application for certification with respect to locomotive models or

operating conditions, as described above. Without regard to how these

specifications are described, certification testing can be done on

either a locomotive or locomotive engine, as proposed. Also, EPA is

finalizing its proposed provision to allow a development engine, rather

than a preproduction prototype engine, to be tested for certification

purposes.

EPA is adopting regulatory definitions of engine family very

similar to those proposed for Tier 0, Tier 1, and Tier 2 locomotives.

The final definitions are, however, somewhat more flexible than the

proposed definitions. For all tiers, the conceptual definition of

engine family is ``a group of locomotives that are expected to have

similar emission characteristics for their useful lives.'' The

regulations also contain specifications for certain locomotive engine

parameters that determine whether various locomotives should be grouped

into the same engine family. For example, locomotive engines must have

the same bore and stroke, and use the same fuel to be grouped into the

same engine family. While the proposed definitions would have required

locomotives be identical with respect to nearly all of these engine

family parameters, the final definitions allow some reasonable

deviations for many of the parameters. Given the complexity of bringing

a variety of existing locomotive models into compliance, the

regulations provide additional flexibility for Tier 0 locomotives by

specifying fewer engine family parameters than are specified for Tiers

1 and 2. It is important to note that the engine family parameters

specified in the regulations are not intended to prevent manufacturers

or remanufacturers from grouping together any locomotives that have

similar

[[Page 18987]]

emission characteristics. Rather, the specification of these parameters

is intended to be a starting point for determining how to group

locomotives for compliance purposes. Where manufacturers or

remanufacturers have information showing that the emission

characteristics of locomotives which would be grouped into separate

engine families according to the parameters in the regulations are

actually similar, then EPA will allow them to be grouped together. EPA

believes, however, that for most cases, locomotives differing

significantly with respect to the specified engine family parameters

will have dissimilar emission characteristics.

As proposed, EPA is not requiring a pre-production durability

demonstration for certification. Such a demonstration would be

impractical for locomotives due to the time it would require to

accumulate mileage (several years) and the cost of fuel (around $1

million). As proposed, a manufacturer or remanufacturer must estimate

in-use emissions deterioration as part of the certification process

(through engineering evaluation or other means). In the absence of a

durability demonstration EPA will rely on the production line and in-

use testing programs to ensure compliance over the full useful life, as

described in the proposal.

EPA is finalizing a provision to reduce the reporting burden

associated with the application for certification. Certain documents

need not be submitted automatically, but must be retained and submitted

if requested by EPA. When the Agency exercises its authority to modify

the information submission requirements, it intends to provide

manufacturers and remanufacturers with a guidance document, similar to

the manufacturer guidance issued under the on-highway program, that

explains the modification(s). These modifications to the information

submission requirements will in no way change the actual requirements

of the regulations in terms of the emissions standards, test

procedures, etc. Manufacturers and remanufacturers must retain records

that comprise the certification application for eight years form the

issuance of a Certificate of Conformity whether or not EPA requires

that all such records be submitted to the Agency at the time of

certification. The Administrator would retain the right to review

records at any time and at any place she designates. In addition, in

order to facilitate the rapid introduction of complying locomotives,

and to reduce the cost and burden of certification, EPA will use a

streamlined certification process for the model years of the phase-in

(i.e., 2000 and 2001).

G.2. Production Line Testing

The production line testing (PLT) program is an emission compliance

program in which manufacturers are required to test locomotives as they

leave the point where the manufacture is completed. The objective of

the PLT program is to allow manufacturers, remanufacturers and EPA to

determine, with reasonable certainty, whether certification designs

have been translated into production locomotives that meet applicable

standards and/or FELs from the beginning, and before excess emissions

are generated in-use.

The Agency is finalizing the proposed PLT program for newly

manufactured units based on actual testing according to the federal

test procedure (FTP) for locomotives contained in this rule, and a PLT

program for remanufactured units requiring remanufacturers to audit a

certain number of remanufactures (e.g., assuring that the correct parts

are used and they are installed properly), with EPA having the ability

to require testing of remanufactured locomotives if in-use data

indicates a possible problem with production. Changes to the proposed

regulations are noted below. Both the manufacturer and remanufacturer

PLT programs begin January 1, 2002. EPA proposed the manufacturer PLT

program as a locomotive-based testing program, but is finalizing

provisions that allow the testing of either locomotives or locomotive

engines. This will reduce the overall cost of the PLT program because

it allows PLT testing at the locomotive manufacturers' engine

manufacturing facilities, where they already have some emissions

testing capabilities, instead of requiring them to build completely new

emission testing facilities at their locomotive manufacturing

facilities, which are geographically separated from their engine

facilities. EPA retains the authority to require locomotive (rather

than locomotive engine) testing for PLT purposes should it have reason

to believe that there are problems with any aspects of a manufacturer's

engine-based PLT program. Any such request by EPA to perform PLT

testing on locomotives rather than engines will allow a reasonable

amount of time for a manufacturer to prepare to conduct such testing.

This program is different than the approach EPA uses for some other

mobile sources, such as on-highway motor vehicles. The more traditional

approach relied on for assuring that the engines are produced as

designed for other mobile sources is called Selective Enforcement

Auditing (SEA). In the SEA program, EPA audits the emissions of new

production engines by requiring manufacturers to test engines pulled

off the production line upon short notice. This spot checking approach

relies largely on the deterrent effect: the premise is that

manufacturers will design their engines and production processes and

take other steps necessary to make sure their engines are produced as

designed and thereby avoid the penalties associated with failing SEA

tests, should EPA unexpectedly do an audit.

EPA has taken a different approach in the locomotive PLT program

than the SEA program just discussed, largely because of the very low

production volumes in the locomotive industry. The locomotive PLT

program implements a more flexibly organized testing regime that acts

as a quality control method that manufacturers will proactively utilize

and monitor to assure compliance. Manufacturers will continue to take

steps to produce engines within statistical tolerances and assure

compliance aided by the quality control data generated by PLT which

will identify poor quality in real time. As noted in the proposal, this

program is especially important given that EPA is allowing

certification of freshly manufactured locomotives and locomotive

engines based on data from a development engine, rather than a pre-

production prototype locomotive.

As proposed, manufacturers will select locomotives for the PLT

program from each engine family at a one percent sampling rate for

emissions testing in accordance with the FTP for locomotives. The

required sample size for an engine family is the lesser of five tests

per year or one percent of annual production. For engine families with

production of less than 100, a minimum of one test per year per engine

family is required. Manufacturers may elect to test additional

locomotives. EPA has the right to reject any locomotives selected by

the manufacturers or remanufacturers if it determines that such

locomotives are not representative of actual production. Tests must be

distributed evenly throughout the model year, to the extent possible,

and manufacturers must submit quarterly reports to EPA on all testing

done, as described in the proposal. EPA is finalizing the proposed

provision allowing a manufacturer to submit for EPA approval an

alternative plan for a PLT program. Any such plan must address the need

for the alternative, and should include justifications for the number

and representativeness of locomotives tested, as well as having

[[Page 18988]]

specific provisions regarding what constitutes a failure for an engine

family.

As proposed, if a locomotive or locomotive engine fails a

production line test, the manufacturer must test two additional

locomotives or locomotive engines out of the next fifteen produced in

that engine family in accordance with the FTP for locomotives. When the

average of the three test results, for any pollutant, are greater than

the applicable standard or FEL, the manufacturers fails the PLT for

that engine family. In all cases, individual locomotives and locomotive

engines which fail a test in the PLT program are required to be brought

into compliance.

Should production line testing show that an engine family is not

complying with the applicable standards or FELs, EPA may suspend or

revoke the engine family certificate of conformity in whole or in part

thirty days after an EPA nonconformance determination. EPA proposed a

fifteen day period but is finalizing thirty days as more appropriate

since the locomotive manufacturing industry is very low volume and

production of actual units proceeds at a much slower pace than for most

other mobile sources. Before the suspension or revocation goes into

effect, EPA will work with the manufacturer to facilitate approval of

the required production line remedy in order to eliminate the need to

halt production if possible. To have the certificate reinstated

subsequent to a suspension, or reissued subsequent to a revocation, the

manufacturer must demonstrate (through its PLT program) that

improvements, modifications, or replacement had brought the locomotive

and/or engine family into compliance. The Agency retains the legal

authority under section 207 of the Act to inspect and test locomotives

and locomotive engines, and may do so should such problems arise in the

PLT program.

Under the PLT program for remanufactured locomotives, the

certificate holder, as a condition of the certificate, is required to

audit its remanufacture of locomotives for the use of the proper parts,

their proper installation, and all proper calibrations. The certificate

holder is required to audit five percent of its systems for each

installer of the systems, with a maximum number for each installer of

ten systems per engine family. EPA proposed no maximum number of

required audits, but is including an upper limit in the rule because it

believes that if ten systems in a given engine family for a given

installer are audited and shown to have no problems then auditing more

would only add cost to the program with little or no additional

benefit.

A case of uninstalled, misinstalled, misadjusted or incorrect parts

constitutes a failure, and if a failure occurs, the remanufacturer

would be required to audit two additional locomotives in the same

engine family from the next ten produced for each failure. Whenever all

three locomotives failed the audit the engine family will be considered

to have failed the audit. Actions in the event of an audit failure

would be determined on a case-by-case basis, depending on whether the

failure is considered tampering, causing of tampering, inappropriate

parts in system, etc. EPA may order, on a case-by-case basis, that

remanufacturers conduct emissions testing of remanufactured locomotives

in the same manner as required under the PLT program adopted today for

freshly manufactured locomotives, and expects to do so if in-use

testing or remanufacture system audits showed evidence of

noncompliance.

G.3. In-Use Testing

Locomotives and locomotive engines are required to comply with

EPA's emission standards for the full extent of their useful lives. To

ensure such compliance, EPA is finalizing the proposed in-use testing

program for locomotive and locomotive engine manufacturers and

remanufacturers. To ensure continued compliance beyond the useful life,

and during operation within the period when certain state standards

relating to the control of emissions from new locomotives and new

locomotive engines are preempted (as discussed later in this notice),

EPA is finalizing an in-use testing program for locomotive operators,

for the reasons described in the proposal. Each of these programs is

discussed in more detail in the following paragraphs.

Under the manufacturer-based in-use testing program, which begins

with the 2002 model year, manufacturers and remanufacturers will be

required to test in-use locomotives that are properly maintained and

used from one engine family per year, using the full FTP. The Agency is

requiring manufacturers and remanufacturers to perform in-use testing

on locomotives that have reached between 50 and 75 percent of their

useful life. The manufacturer must test a minimum of two such

locomotives per year, within the subject engine family. If all

locomotives tested meet all of EPA's standards, the manufacturer or

remanufacturer is not required to perform any more in-use tests that

year. For each failing locomotive, two more locomotives would be tested

up to a maximum of ten. Manufacturers and remanufacturers will have

twelve months after the receipt of in-use testing notification to

complete the testing of an engine family.

EPA believes that it is appropriate to provide some flexibility

during the initial phase of this program. Therefore, EPA expects, as a

matter of policy, to provide an option for the first three years of the

in-use testing program (model years 2002 through 2004) whereby a

manufacturer or remanufacturer can choose to participate in a more

flexible emission factor program in lieu of the required in-use test

program. Manufacturers and remanufacturers choosing to participate in

this program would be required to test twice as many engine families as

required by the normal in-use test program, but would have more

flexibility in conducting the testing. The Agency expects that this

optional program would be used as an informational program, rather than

a compliance program. This option will allow a manufacturer or

remanufacturer to gain some experience with the new provisions without

an unreasonable fear of enforcement action, while providing EPA with

twice as much in-use data as it would otherwise receive. This data will

be useful to EPA both in the assessment of deterioration factors used

in certification testing and in targeting engine families and

technologies for future in-use testing.

Under section 207 of the Act, as applied to locomotives by section

213(d), the Administrator has authority to require manufacturers or

remanufacturers to submit a plan to remedy nonconforming locomotives or

locomotive engines if EPA determines that a substantial number of a

class or category of properly maintained and used locomotives or

locomotive engines do not conform with the requirements prescribed

under section 213 of the Act. A finding of nonconformance has

potentially serious economic and practical consequences, and

historically is not an action the Agency takes in insignificant or

trivial cases, especially where the manufacturer has made a good faith

effort to comply and the problem is unexpected. Manufacturer

requirements applicable in the event of a determination under section

207(c) of the Act include submittal of the manufacturer's remedial plan

for EPA approval, procedures for notification of locomotive owners,

submittal of quarterly reports on the progress of the recall campaign,

and procedures to be followed in the event that the manufacturer or

remanufacturer requests a public hearing to contest the

[[Page 18989]]

Administrator's finding of nonconformity. If a determination of

nonconformity with the requirements of section 207(c) of the Act is

made, the manufacturer or remanufacturer will not have the option of an

alternate remedial action, and an actual recall will be required.

EPA recognizes the unique nature of locomotives and railroad

operations relative to highway vehicles such as passenger cars used in

personal transportation. Furthermore, the Agency recognizes that in

some cases, the actual recall and repair of locomotives could impose

severe financial hardship on a manufacturer or remanufacturer if the

necessary repair was extremely complex and expensive, and could also

adversely impact railroads and other businesses when locomotives are

required to be taken out of service for those repairs. In these

particular cases and, assuming that the Administrator had not yet made

a determination of nonconformity, alternatives to traditional recall

will be strongly considered. These alternatives are required to have

the same or greater environmental benefit as conventional recall and to

provide at least equivalent incentives to manufacturers and

remanufacturers to produce locomotives which durably and reliably

control emissions.

The second component of the in-use testing program is the railroad

in-use testing program adopted pursuant to EPA's authority under

section 114 of the Act to require ``any person who owns or operates any

emission source to establish and maintain records, sample emissions

according to EPA specifications, and provide such other information as

the Administrator may reasonably require.'' The railroad in-use testing

program is being finalized for the reasons stated in the proposal. Each

Class I freight railroad is required to annually test a portion of its

total locomotive fleet beginning January 1, 2005. This start date is

appropriate because EPA does not expect that a significant number of

certified locomotives will have reached the end of their useful lives

prior to 2005. EPA proposed a railroad in-use testing program which

would have required that ten percent of a railroad's locomotives be

tested annually using a simple short test procedure, but also

considered and solicited comment on a program that would require

testing a much smaller number of locomotives in accordance with the FTP

for locomotives. Based on comments received and the lack of a suitable

short test, EPA is finalizing the FTP-based testing program. Testing

must therefore be done according to the FTP for locomotives contained

in this rule. The number of tests that each Class I freight railroad

must perform annually is at least 0.15 percent of that railroad's total

average locomotive fleet size the previous year. The tests shall be

done on locomotives which have reached the end of their useful lives

for reasons stated in the proposal. If the number of locomotives in a

given railroad's fleet which have reached the end of their useful lives

is not large enough to fulfill the testing requirement, railroads are

to test locomotives late in their useful lives, as specified in the

regulatory text. The test locomotives will be randomly selected by the

railroad, unless otherwise specified by the Administrator, and must

proportionally represent the railroad's fleet mix of locomotive models.

The railroads are required to submit annual reports summarizing all

emissions testing performed. If a particular engine family has

consistent emissions problems in all the railroads' fleets, then there

may be a problem with the design or manufacture of the locomotives. The

locomotives tested under this program will generally be past their

useful lives. No recall action can be taken against the manufacturer or

remanufacturer in the event of a failure of a locomotive tested beyond

the end of its useful life. However, EPA could use this information to

target engine families to be tested in the manufacturer/remanufacturer

in-use testing program, to target in-use testing by EPA, or to evaluate

the deterioration factors submitted with certification applications. If

the failures are limited to one railroad's fleet, then it may indicate

that tampering or malmaintenance has occurred, which may constitute a

violation of tampering prohibition discussed later in this notice.

Given the current size of the Class I locomotive fleet, EPA

estimates that there will be approximately 30 in-use locomotive tests

performed annually under the railroad in-use program initially. Today's

program also gives EPA authority to waive, in whole or in part, the

amount of testing required in future years, as described in section

92.1003 of the attached regulatory text. Also included in the railroad

in-use testing program is a provision which allows a railroad to

petition EPA for approval of alternative in-use testing programs that

provide information equivalent to EPA's in-use testing requirements

based on criteria such as test procedure accuracy compared to the FTP

for locomotives, and how any differences in accuracy are addressed in

the locomotive sample size. EPA is finalizing this option for

alternative programs in order to allow for the potential of less costly

but equally effective programs based on test procedures that may be

developed in the future.

G.4. Phase-In Provisions for Small Businesses

A large portion of the locomotive remanufacturing and aftermarket

parts industries is made up of small businesses. As such, these

industries do not tend to have the financial resources or technical

expertise to quickly respond to the Tier 0 requirements contained in

today's rule. As fully discussed in Chapter 5 of the SAC document

(docket item A-94-31-V-C-1), accompanying this rule, the Small Business

Regulatory Enforcement Fairness Act of 1996 and the Regulatory

Flexibility Act require EPA to take steps to identify and mitigate the

regulatory burden of regulations on small business entities. EPA has

taken a number of steps to mitigate any potential impact on the small

remanufacturers and component suppliers that are affected by this rule.

The delay the application of Tier 0 standards to locomotives

originally manufactured before 1990 until January 1, 2002, is not

specifically targeted at small businesses since it applies to all pre-

1990 locomotives regardless of who remanufactures them. EPA chose 1990

as a cut point for the phase-in of the Tier 0 standards because pre-

1990 locomotives represent the vast majority of locomotives for which

the above small business entities supply parts and remanufacturing

services. Also, a cut point of 1990 will allow manufacturers and

remanufacturers to target their resources more efficiently than if they

were required to comply with the Tier 0 standards for all locomotive

and locomotive engine models at the same time. This measure should

therefore address any feasibility concerns for these small business

entities.

The second measure establishes a streamlined certification program

for small businesses, applicable through the 2006 model year that will

reduce the financial burden of compliance. Under these provisions,

certification testing requirements will be phased-in, beginning in

2002. Remanufacturers have the option of testing locomotives (or

locomotive engines) using a modified version of the FTP, or of testing

using a less rigorous alternate procedure, subject to sales

restrictions set by EPA. The modified FTP requires measurement of

NOX, CO2, smoke, power output, and fuel

consumption over the full throttle notch schedule.

[[Page 18990]]

Remanufacturers choosing this option could be allowed other deviations

from the specified FTP with EPA approval.

Remanufacturers choosing to test using an alternate procedure may

specify their own test procedures consistent with good engineering

practice and subject to EPA approval, and must provide a supplemental

engineering analysis describing the emission controls. However, a

remanufacturer may only certify a limited number of rebuild systems

each year using such a short test. For example, in 2003, if an

individual small business certifies three systems using an alternate

test, then the combined number of locomotives remanufactured in that

year under those certificates could not exceed 300, with no limits as

to how the three certified systems are allocated among the 300

remanufactures. Any other small businesses certifying via an alternate

test procedure in 2003 would also be allowed to remanufacture up to 300

locomotives under their own certificates. This number would decrease in

subsequent years until 2007, when the small business entities must

certify using the full FTP, and must meet all other certification

requirements applicable to larger entities.

The phase-in provisions discussed in this section are contained in

section 92.012 of the regulatory text for this action.

H. Test Procedures

Due to the fundamental similarity between the emissions components

of locomotive engines and on-highway heavy-duty diesel engines, the

test procedures contained in today's regulation are based on the test

procedures previously established for on-highway heavy-duty diesel

engines in 40 CFR part 86, Subparts D and N. Specifically, the raw

sampling procedures and many of the instrument calibration procedures

are based on subpart D, and the dilute particulate sampling procedures

and general test procedures are based on subpart N. The most

significant aspects of the test procedures are described below. Also,

as with EPA's test procedures for other mobile sources, the regulations

will allow, with advance EPA approval, use of alternate test procedures

demonstrated to yield equivalent or superior results.

EPA is using a nominally steady-state test procedure to measure

gaseous and particulate emissions from locomotives; that is, a

procedure wherein measurements of gaseous and particulate emissions are

performed with the engine at a series of steady-state speed and load

conditions. Measurement of smoke would be performed during both steady-

state operations and during periods of engine accelerations between

notches (i.e., set speed and load operating points). For locomotive

testing, the engine would remain in the locomotive chassis, and the

power output would be dissipated as heat from resistive load banks

(internal or external). Measurement of exhaust emissions, fuel

consumption, inlet and cooling air temperature, power output, etc.

would begin after the engine has been warmed up, and would continue

through each higher notch to maximum power. The minimum duration of the

initial test point (idle or low idle), and each test point when power

is being increased is 6 minutes, with the exception of the maximum

power point, where the minimum duration of operation is 15 minutes.

Concentrations of gaseous exhaust pollutants are to be measured by

drawing samples of the raw exhaust to chemical analyzers; a

chemiluminescence analyzer for NOX, a heated flame

ionization detector (HFID) for HC, and nondispersive infrared (NDIR)

detector for CO and CO2. Smoke is to be measured with a

smoke opacity meter, and particulate measured by drawing a diluted

sample of the exhaust through a filter and weighing the mass of

particulate collected. The Agency is including NMHC, alcohol and

aldehyde measurement procedures similar to those that are currently

applicable to on-highway natural gas- and methanol-fueled engines (40

CFR part 86) be used for natural gas- and alcohol-fueled locomotives.

EPA is establishing test conditions that are representative of in-

use conditions. Specifically, the Agency is requiring that locomotives

comply with emission standards when tested at temperatures from 45

deg.F to 105 deg.F and at both sea level and altitude conditions up to

about 4,000 feet above sea level. While EPA is only requiring that

locomotives comply with emission standards when tested at altitudes up

to 4000 feet for purposes of certification and in-use liability, it is

requiring that manufacturers and remanufacturers submit evidence with

their certification applications, in the form of an engineering

analysis, that shows that their locomotives are designed to comply with

emission standards at altitudes up to 7000 feet. The Agency is

finalizing correction factors that will be used to account for the

effects of ambient temperature and humidity on NOX emission

rates.

The Agency is establishing test fuel specifications for compliance

testing (certification, PLT and manufacturer/remanufacturer in-use

testing) which are generally consistent with test fuel specifications

for on-highway heavy-duty engine certification testing, including the

provisions that fuels other than those specified can be used under

certain circumstances. The only exception is for the fuel sulfur level.

In the case of the sulfur specification, EPA is specifying a lower

limit of 0.2 weight percent, and an upper limit of 0.4. These limits

are intended to approximate worst case in-use conditions; in those

cases where in-use locomotives are operated on low sulfur on-highway

fuel, particulate emissions entering the atmosphere can be expected to

be lower than levels measured when using the certification test fuel.

EPA is taking this approach because there is no reason to believe that

in-use locomotives will use only low sulfur on-highway fuel, especially

given the higher price of low sulfur diesel fuels, and the difficulty

of obtaining low sulfur diesel fuel in some areas of the country. Since

the railroad in-use testing program is intended to provide EPA

information regarding compliance with emission standards near the end,

and beyond, a locomotive's useful life, and the results of such in-use

testing would not by themselves be the basis for an EPA recall action,

EPA does not believe it is necessary to require simulation of worst-

case conditions in railroad in-use testing. For this reason, and given

the cost and inconvenience of using a specific fuel for in-use testing

by railroads, EPA is not establishing any fuel specifications for in-

use railroad testing, and will allow the railroad testing to be done

whatever fuel is in the locomotive's tank at the time of testing.

The Agency recognizes that the potential exists for future

locomotives to include additional power notches, or even continuously

variable throttles, and is allowing alternate testing requirements for

such locomotives. Using the same procedures for such locomotives as are

specified for conventional locomotives would result in an emissions

measurement that does not accurately reflect their in-use emissions

performance because it would not be a reasonable representation of

their in-use operation. Thus, locomotives having additional notches are

required to be tested at each notch, and the mass emission rates for

the additional notches will be averaged with the nearest ``standard''

notch. Locomotives having continuously variable throttles will be

required to be tested at idle, dynamic brake, and 15

[[Page 18991]]

power levels assigned by the Administrator (including full power), with

average emission rates for two power levels (excluding full power)

assigned to the nearest ``standard'' notch. The 15 power levels

represent one level for full power and two, to be averaged, for each of

the seven intermediate power levels used on current locomotives. The

Administrator retains the authority to prescribe other procedures for

alternate throttle/power configurations.

The specified test procedures are intended primarily for the

testing of locomotives, rather than locomotive engines. However, EPA

does recognize that engine testing will be reasonable in some cases,

such as data collection from a development engine. For these cases, the

engine would be mounted on a stand, with its crankshaft attached to an

dynamometer or to a locomotive alternator/generator. Because the Agency

believes that it is critical that engine testing be as representative

of actual locomotive operation as can practically be achieved, it is

requiring that important operating conditions such as engine speed,

engine load, and the temperature of the charge air entering the

cylinder be the same as in a locomotive in use (within a reasonable

tolerance limit).

The test procedures are designed to minimize the variability in

measured values to the extent possible. However, given the practical

constraints that apply, some variability will remain. In cases where a

manufacturer or remanufacturer believes that the FTP provides

inadequate repeatability, EPA is allowing them to use replicate tests,

subject to some minor restrictions. EPA is also likely to allow special

flexibility with respect to replicate measurements for determining

compliance with the individual notch standards. This is because

problems of variability will be greater for single notch measurements

than cycle-weighted averages of the individual notch measurements.

I. Railroad Requirements

As was previously discussed in the section on compliance, today's

action contains a two-part in-use testing program, with one part

conducted by the manufacturers and remanufacturers, and the other part

conducted by the railroads. EPA expects the railroads to provide

reasonable assistance to the manufacturers and remanufacturers in

providing locomotives to test in support of the manufacturer/

remanufacturer in-use testing program. As proposed, if a manufacturer

or remanufacturer is unable to obtain a sufficient number of

locomotives for testing, EPA may require that the railroads do the

testing themselves, under the authority of section 114 of the Act. The

Class I freight railroads are also required to conduct the railroad in-

use testing program discussed previously.

For reasons discussed in the proposal, under today's action, any

locomotive owner that fails to properly maintain a locomotive subject

to this regulation will be subject to civil penalties for tampering.

Locomotive owners are required to perform a minimum amount of

maintenance as specified by the manufacturer or remanufacturer for

components that critically affect emissions performance. Such

maintenance is to be specified by the manufacturer or remanufacturer at

the time of certification, and the locomotive owner is required to

perform the specified (or equivalent) maintenance, or be subject to

tampering penalties.

J. Miscellaneous

J.1. Liability for Remanufactured Locomotives and Locomotive Engines

The Act defines ``manufacturer'' as ``any person engaged in the

manufacturing or assembling'' of the new motor vehicles or new motor

vehicle engines. In cases where a locomotive remanufacture system is

certified by one entity and installed by a different entity either

could conceivably be considered the manufacturer. In the proposal EPA

sought to define where liability for in-use emissions performance

should lie in such circumstance. EPA is finalizing the proposed

liability scheme today. Under this approach, the primary liability for

the in-use emissions performance of a remanufactured locomotive or

locomotive engine would be with the certificate holder. In cases where

the certificate holder and installer are separate entities, the

certificate holder will be required to provide adequate installation

instructions with the system. Since the primary liability is presumed

to apply to the certificate holder, the certificate holder has an

incentive to ensure that the systems are properly installed.

Ultimately, the installer will be liable for improper installation

under the tampering prohibitions. The installer will still be

considered to be a manufacturer, and thus is also potentially liable

under other provisions of this part and the Act. Similarly, any

supplier of parts could be considered a manufacturer, and potentially

liable for a locomotive's in-use emissions. However, EPA does not

intend to hold an entity liable for actions for which the Agency

believes that it has no knowledge of or control over. As was previously

discussed, EPA expects to hold the certificate holder primarily liable

for the in-use emissions performance of locomotives remanufactured

under it's certificate of conformity.

J.2. Defect Reporting and Voluntary Emission Recall

EPA is finalizing the provision that a manufacturer or

remanufacturer of locomotives or locomotive engines file a defect

information report whenever the manufacturer or remanufacturer

identifies the existence of a specific emission-related defect in ten

or more locomotives, or locomotive engines. EPA proposed that a defect

information report be filed if an emission related defect is identified

in a single locomotive or locomotive engine, but believes that ten is a

more appropriate number for reasons discussed in the SAC accompanying

this action. No report will need be filed if the defect is corrected

prior to the sale of the affected locomotives or locomotive engines.

Further, manufacturers must file a report whenever a voluntary emission

recall is undertaken.

J.3. Tampering

EPA is finalizing its proposal to codify the tampering prohibition

in section 203(a)(3)(A) of the Act in the locomotive regulations. While

this provision of the Act on its face applies to tampering with motor

vehicles and motor vehicle engines, section 213(d) directs EPA to

enforce the nonroad vehicle and engine emission standards in the same

manner as the Agency enforces the motor vehicle emission standards

adopted under section 202 of the Act. The statutory tampering

prohibition is critical to ensure that vehicles and engines designed

and manufactured to comply with EPA emission standards for their full

useful lives do not in fact violate such standards due to actions taken

both before and after introduction into commerce. For this reason,

pursuant to its authority to enforce locomotive emission standards in

the same manner as the motor vehicle emission standards, EPA is

adopting a regulatory provision that prohibits any person from removing

or rendering inoperative any device or element of design installed on

or in a locomotive or locomotive engine in compliance with EPA's

regulations prior to introduction into commerce, and from knowingly

removing or rendering inoperative any such device or element of design

after introduction into commerce.

All persons will be prohibited from tampering with any emission-

related

[[Page 18992]]

component or element of design installed on or in a locomotive or

locomotive engine. Locomotive tampering provisions will help ensure

that in-use locomotives remain in certified configurations and continue

to comply with emission requirements. The Agency is applying the

existing policies developed for on-highway tampering to locomotives and

locomotive engines included in this rule.4 In addition, EPA

considers knowingly failing to properly maintain a locomotive or

locomotive engine to be tampering, as was previously discussed in the

section on railroad requirements.

---------------------------------------------------------------------------

\4\ See Office of Enforcement and General Counsel; Mobile Source

Enforcement Memorandum No. 1A, June 25, 1974 (public docket A-94-31,

item II-B-5). EPA is not revising Memorandum No. 1A in today's

action.

---------------------------------------------------------------------------

J.4. Emission Warranty

In accordance with section 207(a) of the Act, manufacturers and

remanufacturers must warrant to the ultimate purchaser and any

subsequent purchaser, for a specified warranty period set by EPA, that

the emission related components and systems of locomotives and

locomotive engines are free from defects in material or workmanship

which would cause such locomotives or locomotive engines to fail to

conform with applicable regulations. The statute also requires

manufacturers to provide a ``time of sale'' warranty that the vehicle

or engine is designed, built, and equipped so as to conform at the time

of sale with applicable emission regulations. See 42 U.S.C. 7541(a)(1).

EPA proposed an emission warranty period for the full useful life

of a locomotive. However, for reasons fully discussed in the SAC, the

Agency is finalizing an emission warranty period for locomotives that

parallels that for the heaviest heavy-duty on-highway engines. For

those engines, the current warranty period is roughly one-third of

useful life. Thus, for locomotives the warranty period will be one-

third of useful life, as based on the minimum useful life value of 7.5

MW-hr. This period is the minimum warranty period. As for heavy-duty

diesel engines, if a locomotive is covered by a mechanical warranty for

a period longer than the minimum warranty period, then the regulations

require the emission warranty to be at least as long as the mechanical

warranty.

J.5. Defeat Devices

As is the case for other regulated nonroad and on-highway vehicles

and engines, these regulations for locomotives make it illegal for any

manufacturer, remanufacturer, or any other person to use a device on a

locomotive or locomotive engine which reduces the effectiveness of the

emission control system under conditions that would not be reflected in

measurements made using the normal emission test procedures and

conditions, especially where the feature had the effect of optimizing

fuel economy at the expense of emissions performance. Such ``defeat''

devices are specifically prohibited for motor vehicles under section

203 of the Act. Section 213(d) of the Act directs the Agency to enforce

the locomotive standards in the same manner as it enforces motor

vehicle standards. Therefore, EPA is establishing an explicit

prohibition against the use of defeat devices with locomotives or

locomotive engines subject to the federal standards. Examples of some

of the types of design features that EPA classifies as defeat devices

are contained in the RSD.

Since the use of defeat devices effectively renders the specified

test procedures for certification, production line, and in-use testing

inadequate to predict in-use emissions, EPA reserves the right to test

a certification test locomotive or engine, or require the manufacturer

or remanufacturer to perform such testing over a modified test

procedure if EPA has reason to believe a defeat device is being used by

a manufacturer or remanufacturer on a particular locomotive or

locomotive engine. In addition, EPA is also establishing notch caps for

in-use testing that prohibit any unreasonable deviation from

certification emission rates under any test conditions.

J.6. Exclusions and Exemptions

EPA is adopting regulations which allow exemptions from today's

regulations for certain purposes. These purposes include research,

investigations, studies, demonstrations, training, or for reasons of

national security. Export exemptions, manufacturer-owned locomotive

exemptions, and some national security exemptions are automatic, and

manufacturers and remanufacturers need not apply to EPA to obtain such

an exemption. Other exemptions must be obtained by application to EPA.

J.7. Nonconformance Penalties

EPA is not including any provisions for nonconformance penalties

(NCPs) in today's action, for the reasons described in the proposal.

However, the Agency will monitor efforts to develop technology to

comply with these regulations. Should the need for NCPs become evident

in the future, EPA will undertake a rulemaking action at that time to

develop appropriate NCPs.

J.8. Aftermarket Parts

In the proposal, EPA stated its intent to follow the approach to

aftermarket parts it currently uses for on-highway vehicles.

Specifically, EPA proposed to allow the certification of aftermarket

parts according to the provisions of 40 CFR part 85, subpart V. For

those aftermarket parts not certified according to those voluntary

provisions, EPA proposed to apply the policies described in EPA Mobile

Source Enforcement Memorandum No. 1A (``Memo 1A''), which outlines the

Agency's position on tampering with respect to the use of replacement

components on certified vehicles and engines.5 In general,

Memo 1A states that EPA will not consider the use of aftermarket parts

to be tampering if those parts can be shown to be identical in all

material respects to the original parts they are replacing. Conversely,

Memo 1A also states that the use of an aftermarket part would be

considered tampering if it causes or contributes to an increase in

emissions of a regulated pollutant. In general, EPA is finalizing the

approach it proposed. However, the Agency does not believe that the

provisions of 40 CFR part 85, subpart V are appropriate for the

locomotive industry since those provisions are intended to apply to on-

highway vehicles and engines. Instead, EPA is promulgating regulations

to allow aftermarket parts suppliers to petition the Agency for advance

approval of parts under the tampering policy. Such an approval would

not constitute a formal certification, but would merely show that,

based on an engineering analysis and/or emissions test data, that the

part is identical in all material respects to the original. This

advance approval would provide some assurance to entities which use the

part that they will not be subject to enforcement action under the

tampering prohibition for using that part. However, the entity which

manufactures and offers the part for sale will be held liable for any

in-use nonconformities attributable to that part, and could be subject

to a recall action if the part were used in the remanufacture of a

locomotive, as discussed previously in the discussion on liability for

remanufactured locomotives. If a part were used for maintenance, rather

than during remanufacture, and it caused an in-use nonconformity, its

manufacturer may be liable for a tampering violation.

---------------------------------------------------------------------------

\5\ Ibid.

---------------------------------------------------------------------------

[[Page 18993]]

J.9. Importation of Nonconforming Locomotives

Nonconforming locomotive engines originally manufactured after the

effective date of this rule will not be permitted to be imported for

purposes of resale, except under certain limited exemptions. This rule

finalizes most of the proposed exemptions, including temporary

exemptions for repairs and alterations, testing and display, and

permanent importation exemptions for national security. For reasons

discussed in the SAC, EPA is not finalizing the proposed provision to

allow the importation of certain locomotives and locomotive engines

proven to be identical, in all material respects, to their

corresponding EPA certified versions. While the U.S. Customs Service

may consider typical current cross-border traffic between the U.S. and

Canada or Mexico to constitute the importation of locomotives, EPA is

providing an exemption for such traffic if its use in the U.S. is

incidental to its primary operation. Such cross-border traffic is not

currently extensive.

EPA is not taking any specific actions, such as limiting export

exemptions, in order to assure that nonconforming locomotives from

Canada or Mexico do not operate extensively in the U.S. However, the

Act does give EPA the authority to regulate new locomotives and

locomotive engines manufactured (or remanufactured) for introduction

into U.S. commerce. A locomotive which is exported for use primarily

outside of the U.S. and whose operation within the U.S. would be

incidental to its primary operation is not considered to have been

introduced into U.S. commerce for the purposes of these emission

standards. Should the Agency determine in the future that emissions

from uncontrolled Canadian or Mexican locomotives operating in the U.S.

have become a significant problem because they are operated in such a

way that they should be considered to have been introduced into U.S.

commerce, then it will exercise its authority under the Act, consistent

with the restrictions of any relevant trade agreements, to control such

emissions.

J.10. Passenger Locomotives

The EPA recognizes Amtrak's comments to the docket on the proposed

rule. In the comments Amtrak noted that passenger railroads face a

variety of challenges both fiscally and otherwise in complying with the

remanufacturing aspects of the rule. EPA is thus delaying the effective

date of the Tier 0 requirements until January 1, 2007 for passenger

locomotives.

In order to address the concerns of Amtrak and to prevent

substantial negative impacts from the rule on passenger rail providers,

both intercity and commuter, the EPA will undertake to work with the

Department of Transportation, Amtrak, and concerned commuter

authorities to ensure that the cost of remanufacturing systems,

including all associated development and testing costs, do not create

an unreasonable economic burden. EPA will also develop a mechanism for

providing alternative compliance options such as ABT or NCPs for

locomotives for which compliance systems would present an unreasonable

economic burden or force a locomotive into noncompliance with Federal

safety standards, or other standards that govern the use of that

locomotive in revenue service (e.g., axle weight restrictions).

The EPA recognizes that no passenger service, either commuter or

intercity, covers its operating expenses; that these entities are

largely funded through tax transfers and other subsidies, and that

passenger rail represents a benefit, current and developing, to the

environment through modal displacement.

K. Preemption

EPA is adopting the proposed regulatory provision clarifying the

scope of federal preemption of state standards and requirements

relating to the control of emissions from new locomotives and new

engines used in locomotives, pursuant to the Agency's authority under

Section 209(e) to promulgate regulations to implement this section, for

the reasons stated in the NPRM. The provision adopted today codifies in

federal regulations the statutory preemption of such state standards

and requirements, and lists categories of state regulations that EPA

has determined are preempted for a period exceeding the useful life of

the locomotive or engine. These categories of state regulations are

preempted under Section 209(e)(1), even when applied to in-use

locomotives and engines for a period equivalent to 1.33 times the

useful life period, because of the significant effect such standards

and requirements would have on the design and manufacture of new

locomotives and new locomotive engines. EPA's analysis of each standard

listed in the preemption regulation provision is described in the NPRM.

EPA's detailed response to comments received on the proposed

preemption provision are contained in Chapter 1 of the SAC document in

the docket for this rulemaking. EPA solicited comment on the issue of

whether state in-use testing programs that utilize the FTP are

preempted by CAA Section 209(e)(1), and whether they should be included

in the list of preempted provisions in the regulations clarifying the

scope of federal preemption of state standards and requirements

relating to the control of emissions from new locomotives and new

locomotive engines. EPA received comments arguing that such state

testing requirements are preempted, and comments opposing that

position. Based on the available information, EPA is not currently

including such programs in the regulations specifying those state

requirements that are categorically preempted by Section 209(e)(1)

because EPA cannot conclude that a state's requirement that in-use

locomotives be tested using the FTP to determine compliance with the

federal standards would necessarily affect how manufacturers and

remanufacturers design new locomotives and new locomotive

engines.6

---------------------------------------------------------------------------

\6\ EPA is referring to real and concrete effects on the design

and manufacture of new locomotives and new locomotive engines,

whether or not large, rather than to speculative or trivial effects.

---------------------------------------------------------------------------

In addition to the discussion in the NPRM, EPA considered the

effect of its own compliance testing program, which includes pre-

production certification provisions to check that locomotives and

locomotive engines are designed to meet the emission standards,

production line testing to determine whether, when this design is put

into production, the new locomotives and engines meet the standards,

and an in-use testing program to check whether the standards are being

met while the locomotives and engines are in use in the railroad fleet.

These requirements taken together form one of the most comprehensive

mobile source compliance programs that has ever been implemented by

EPA. Given the robust nature of this program, EPA expects that

manufacturers and remanufacturers will make the efforts necessary to

ensure that their locomotives comply with the federal emission

standards in-use. Thus, EPA is confident that few, if any, states will

find it worth the effort to develop their own state testing program

using the FTP. As such, even without a federal regulation that

expressly preempts such state testing requirements, the Agency does not

expect that state emission testing of locomotives would ever be very

extensive. This is significant, because the amount of state testing

that is required would affect whether the program(s) would impact the

design of new locomotives and new locomotive engines in a manner that

warrants

[[Page 18994]]

preemption. With limited state testing, it is not clear what impact

state testing would have on the design of new locomotives, or whether

it would constitute the kind of effect that would warrant preemption of

state testing, especially because manufacturers and remanufacturers

will already be basing their compliance on the federal standards and

test procedure. Therefore, since EPA cannot conclude that state testing

using the FTP would have an effect on locomotive design, EPA is not

including state testing programs using the FTP in the list of preempted

provisions. Although EPA is not aware at this time of any state's

intent to adopt locomotive testing requirements, EPA will monitor state

actions in this area. If it turns out that state emission testing

requirements identical to the FTP do in fact affect the design and

manufacture of new locomotives and engines such that preemption is

warranted, EPA will reconsider the regulation adopted today, with a

view to including such state testing programs in its regulatory list of

preempted state controls.

EPA also received comment on the length of the preemption period.

EPA proposed a preemption period equivalent to 1.25 times the useful

life period. As is described in the SAC, EPA has determined that the

available information supports a preemption period of 1.33 times useful

life. This information shows that, because of the distribution of

remanufacturing intervals, a small but significant number of

locomotives will remain in use after the proposed preemption. EPA has

concluded that manufacturers and remanufacturers would be required by

the railroads to address any state requirements listed in the

regulation that applied to locomotives between 1.25 and 1.33 times the

useful life period.

The list of state controls that are explicitly preempted under

today's regulation is not intended to be exclusive. Any state control

that would affect how a manufacturer designs or produces new (including

remanufactured) locomotives or locomotive engines is preempted by

section 209(e)(1). It is also important to note that certain categories

of potential state requirements, while not expressly preempted by

section 209(e)(1) or EPA's regulations implementing section 209(e)(1),

are preempted because they would directly conflict with federal

regulations. Under section 203(a)(3) of the Act, tampering includes

actions that can reasonably be expected to contribute to an increase in

emissions of a regulated pollutant. For example, a state requirement to

alter the fuel injection system or air intake system of a locomotive to

achieve NOX reductions is likely to cause increased PM and

smoke emissions. Therefore, a railroad operator could not comply with

the state requirement without making an adjustment to its locomotive

that can reasonably be expected to result in an increase in emissions

of a regulated pollutant, and would therefore be violating the federal

prohibition against tampering. In such cases where it would be

impossible to comply with the state requirement without violating a

federal prohibition, the federal law preempts the state law. For this

reason, such state requirements would be prohibited under the national

rule. Finally, state emission controls that are not preempted may

violate the Commerce Clause of the U.S. Constitution by imposing an

undue burden on interstate commerce. Neither today's regulations, nor

section 209 of the Act, address the scope of any limitations on state

action under the U.S. Constitution.

It should be noted that EPA has previously promulgated regulations

that implement the provision of section 209(e)(2) of the Act that

requires that states obtain a waiver prior to regulating nonroad

sources. Under this provision, all state requirements relating to the

control of emissions from in-use locomotives and locomotive engines,

including state requirements not listed as preempted in 40 CFR

85.1603(c)(1), are subject to section 209(e)(2)'s waiver requirement.

The regulations state that EPA will authorize California to adopt and

enforce such standards and requirements, unless EPA makes certain

findings. For example, a waiver will not be granted if EPA finds that

California does not need such requirements to ``meet compelling and

extraordinary conditions,'' or if EPA finds that the requirements are

not consistent with section 209 of the Act. By including new

locomotives and new locomotive engines in section 209(e)(1) of the Act,

Congress recognized the unique factual circumstances relating to this

industry, and provided broader preemption for locomotives than for most

other nonroad vehicles and engines. EPA would not grant California a

waiver for any requirements if it finds that such California provisions

are inconsistent with section 209(e)(1). In determining whether to

grant a waiver, EPA would consider the unique circumstances applicable

to locomotives and railroads at that time, such as the effect on engine

design and on EPA's comprehensive program.

Unless EPA authorizes California to adopt and enforce its own

requirements relating to the control of emissions from locomotives, no

other state may adopt or enforce any such requirements. However, once

such authorization is granted, other states with state implementation

plan provisions approved under part D of Title I of the Act may adopt

and enforce, after notice to the Administrator, requirements identical

to those authorized for California. The significance of this provision

is that no state can adopt testing or other requirements relating to

the control of emissions from in-use locomotives unless California does

so, pursuant to EPA's authorization under section 209(e)(2). Thus, the

provisions of section 209(e) of the Act effectively limit California

and other states to adopting and enforcing testing programs utilizing

the FTP that would achieve the intended emission benefit without having

a real and concrete effect on the design or production of new

(including remanufactured) locomotives and engines. Since EPA's

authorization under section 209(e)(2) may only be granted after notice

and opportunity for public comment, railroads and other interested

parties will have an opportunity to provide comments to EPA on any

proposed authorization of California testing requirements.

V. Public Participation

A number of interested parties commented on EPA's February 11, 1997

NPRM. The comments included written submittals to the rulemaking docket

and those presented orally at the May 15, 1997 public hearing. The

Agency fully considered these comments in developing today's final

rule. Where today's action includes notable changes from the proposal,

those changes are noted in the previous description of the action. A

complete summary of all comments and EPA's analysis and response to

those comments is contained in the SAC accompanying this rule.

VI. Environmental Effects

This section contains a brief summary of the emission benefits

expected from the national locomotive emission standards contained in

this action. The complete analysis of the expected benefits is

contained in the RSD. The primary focus of this regulation is on

reducing NOX and PM, but reductions in HC will also be

achieved.8 Because the emission standards for CO adopted

today are intended as caps to prevent increases in CO emissions, no CO

[[Page 18995]]

reductions are expected to result from today's action.

---------------------------------------------------------------------------

\8\ For information on the impacts of NOX emissions

see, ``Nitrogen Oxides: Impacts on Public Health and the

Environment,'' EPA 452/R-97-002, August 1997.

---------------------------------------------------------------------------

The benefits analysis was performed in several steps. First, the

baseline locomotive fleet composition, emissions rates and total

inventory were determined. Second, future fleet composition was

projected, from which the emission factors for the fleet were

calculated for NOX, PM and HC. Future emission inventories

were then calculated by multiplying these emission factors by fuel

consumption to give total tons of emissions per year. Finally, those

controlled emission inventories were compared to the baseline fleet

emission inventories to arrive at mass NOX, PM and HC

emission reductions for the fleet. Table VI-1 contains a summary of

both the fleet percentage and mass reductions for NOX, PM

and HC. It should be noted that both the total emissions and the

projected reductions are larger than the corresponding numbers in the

proposal. This is because this final analysis includes small freight

and passenger railroads that were omitted in the draft analysis. While

EPA expects some emission reductions to occur in 2000 and 2001 under

today's action, Table VI-1 begins with 2002 because that is the first

year that the locomotive emission standards are fully phased in.

Table VI-1.--Nationwide Emission Reductions of NOX, PM and HC Compared to 1995 Baseline Levels

[Mass reduction in metric tons per year]

----------------------------------------------------------------------------------------------------------------

NOX PM HC

-------------------------------------------------------------------------------

Year Percent Mass Percent Mass Percent Mass

reduction reduction reduction reduction reduction reduction

----------------------------------------------------------------------------------------------------------------

2002............................ 10 110,000 0.0 0 0.1 44

2005............................ 28 304,000 3 928 3 1,430

2010............................ 41 449,000 16 4,350 15 6,280

2020............................ 49 538,000 28 7,640 26 11,020

2040............................ 59 648,000 46 12,390 43 18,070

----------------------------------------------------------------------------------------------------------------

VII. Economic Impacts

This section contains a summary of EPA's estimate of costs

associated with today's action. Costs are presented in Table VII-1 for

Tier 0, Tier 1 and Tier 2 locomotives on a per locomotive basis. The

initial compliance costs include research and development costs,

initial equipment costs (i.e., hardware costs for components needed to

comply with the standards initially, but which are not typically

replaced at remanufacture), and the costs of compliance such as

certification and testing costs. The remanufacture costs include all

costs associated with keeping the locomotive in compliance with the

standards through subsequent remanufactures. The fuel cost includes the

cost of any fuel economy penalties associated with compliance. The

costs presented here are EPA's best estimates of the actual expected

costs of this rule. EPA also estimated a worst-case scenario in the

RSD. The total and NPV costs under the worst case scenario are $5,076

million and $1,901 million, respectively.

Table VII-1.--Lifetime Cost per Locomotive

------------------------------------------------------------------------

Cost component Tier 0 Tier 1 Tier 2

------------------------------------------------------------------------

Initial compliance............... 27,673 71,451 39,589

Remanufacture and maintenance.... 8,526 25,420 9,840

Fuel............................. 30,589 92,865 200,900

--------------------------------------

Total...................... 66,785 189,736 250,329

--------------------------------------

Average annual................... 3,838 4,627 6,106

------------------------------------------------------------------------

Overall program costs and average annual program costs were

calculated over a forty-one year time period based on the per

locomotive costs and projections of future locomotive fleet

composition. These costs are shown in Table VII-2. Where applicable,

costs are presented in actual and discounted format. A complete

discussion of the methodology EPA used to calculate these costs is

contained in the RSD.

Table VII-2.--Summary of 41 Year Total Locomotive Program Costs

[Million $]

------------------------------------------------------------------------

Actual NPV

------------------------------------------------------------------------

Tier 0........................................ 1,123.35 584.93

Tier 1........................................ 214.66 132.57

Tier 2........................................ 1,935.04 613.54

Average Annual................................ 79.83 32.46

-------------------------

Total................................... 3,273.05 1,331.04

------------------------------------------------------------------------

VIII. Cost-effectiveness

The costs for NOX, PM and HC reductions are difficult to

assign to a single pollutant due to the relationship between

NOX, PM and HC emission generation. Thus, costs presented

below are for all reductions. The following table (Table VIII-1)

summarizes the costs and emission benefits of today's action. Costs and

emission benefits were

[[Page 18996]]

calculated over a 41 year program run to reflect the lifetime costs

associated with locomotives and locomotive engines, which typically

have lives of 40 years or more.

Table VIII-1.--Cost-Effectiveness

------------------------------------------------------------------------

NOX + PM

NOX +HC

------------------------------------------------------------------------

Total Emission Reduction (millions metric

tons)........................................ 20.05 20.76

Total Costs (million $)....................... 3,273 3,273

Annual Emission Reduction (metric tons)....... 489,087 506,271

Annual Costs (million $)...................... 79.83 79.83

Cost Effectiveness ($/ton).................... 163 158

------------------------------------------------------------------------

IX. Administrative Designation and Regulatory Assessment

Requirements

A. 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 OMB review and the requirements of the

Executive Order. The Order defines ``significant regulatory action'' as

one that is likely to result in a rule that may: (1) Have an annual

effect on the economy of $100 million or more or adversely affect in a

material way the economy, a sector of the economy, productivity,

competition, jobs, the environment, public health or safety, or State,

local, or tribal government or communities; (2) create a serious

inconsistency or otherwise interfere with action taken or planned by

another agency; (3) materially alter the budgetary impact of

entitlements, grants, user fees, or loan programs or the rights and

obligations of recipients thereof; or (4) raise novel legal or policy

issues arising out of legal mandates, the President's priorities, or

the principles set forth in the Executive Order.

Pursuant to the terms of Executive Order 12866, EPA has determined

that this is 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 have

been documented in the public record.

B. Regulatory Flexibility

The Regulatory Flexibility Act (RFA) generally requires an agency

to conduct a regulatory flexibility analysis of any rule subject to

notice and comment rulemaking requirements unless the agency certifies

that the rule will not have a significant economic impact on a

substantial number of small entities. Small entities include small

businesses, small not-for profit enterprises, and small governmental

jurisdictions. This rule will not have a significant impact on a

substantial number of small entities. The Agency has identified two

types of small entities which could potentially be impacted by this

proposal: (1) Small businesses involved in locomotive aftermarket parts

production and locomotive remanufacturing, and (2) small railroads. EPA

believes that, while today's proposal could potentially affect both of

these groups, the impacts would be minimal or nonexistent for the

following reasons.

In the case of small parts suppliers and remanufacturing

businesses, today's rules governing remanufacturing of locomotives or

locomotive engines require that any remanufacture of post-1972

locomotives or engines (except those exempted from the remanufacture

requirements, as discussed in the next paragraph) be done such that the

resultant locomotive or locomotive engine is in a configuration

certified as meeting applicable emissions standards. The small

remanufacturers would need to comply with these provisions by

remanufacturing a locomotive into a configuration certified as meeting

the applicable emission standards. The small parts suppliers would have

to either certify a remanufacture system which uses its parts or

produce parts which others can use in certified remanufacture systems.

In either case, EPA believes that the phase-in of the remanufacturing

requirements combined with the compliance flexibility given to small

businesses during the initial years of the program will allow small

businesses to successfully make the transition into the new marketplace

for certified remanufactures without hardship. Further, EPA believes

that the railroads have a genuine interest in keeping these small

businesses operating in order to assure an independent supply of parts

and remanufacture services, and will assist these companies in the

transition from their current practices to being part of a regulated

industry. Finally, while EPA believes that it has included sufficient

provisions in this rule to prevent a market disruption where these

small businesses are concerned, it has committed to reviewing the

situation and taking appropriate actions should the affected small

businesses find that the provisions included to help them through the

transition phase are not sufficient for the longer term.

EPA believes that today's rule will have a minimal impact on small

railroads for two reasons. First, these small railroads do not tend to

remanufacture their locomotives to ``as new'' condition like the Class

I railroads do, and thus, their locomotives do not become ``new.'' The

Agency has included a provision in this rule whereby small railroads

(as defined by the Small Business Administration) are exempt from the

Tier 0 remanufacturing requirements for their existing fleets. Second,

the railroad in-use test program included in today's rule only applies

to Class I freight railroads, thus exempting all small railroads from

this testing requirement. In developing this proposed regulation, EPA

has tailored the requirements so as to minimize or eliminate the

effects on small entities. Therefore, I believe that this action will

not have a significant economic impact on a substantial number of small

entities.

C. Paperwork Reduction Act

The information collection requirements in this rule will be

submitted for approval to the Office of Management and Budget (OMB)

under the Paperwork Reduction Act, 44 U.S.C. 3501 et seq. An

Information Collection Request has been prepared by EPA (ICR No.

1800.01) and a copy may be obtained from Sandy Farmer, OPPE Regulatory

Information Division, U.S. Environmental Protection Agency (2137), 401

M St., SW., Washington, DC 20460 or by calling (202) 260-2740.

The information being collected is to be used by EPA to certify new

locomotives and new locomotive engines in compliance with applicable

emissions standards, and to assure that locomotives and locomotive

engines

[[Page 18997]]

comply with applicable emissions standards when produced and in-use.

The annual public reporting and recordkeeping burden for this

collection of information is estimated to average 494 hours per

response, with collection required quarterly or annually (depending on

what portion of the program the collection is in response to). The

estimated number of respondents is 20 and the estimated number of

responses is 126. The total annualized capital/startup cost is $1.8

million. Burden means the total time, effort, or financial resources

expended by persons to generate, maintain, retain, or disclose or

provide information to or for a Federal agency. This includes the time

needed to review instructions; develop, acquire, install, and utilize

technology and systems for the purposes of collecting, validating, and

verifying information, processing and maintaining information, and

disclosing and providing information; adjusting the existing ways to

comply with any previously applicable instructions and requirements;

train personnel to be able to respond to a collection of information;

search data sources; complete and review the collection of information;

and transmit or otherwise disclose the information.

An agency may not conduct or sponsor, and a person is not required

to respond to a collection of information unless it displays a

currently valid OMB control number. The OMB control numbers for EPA's

regulations 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, OPPE Regulatory Information Division, U.S. Environmental

Protection Agency (2137), 401 M St., SW., 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.

D. 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 why that

alternative was not adopted. Before EPA establishes any regulatory

requirements that may significantly or uniquely affect small

governments, including tribal governments, it must have developed under

section 203 of the UMRA a small government agency plan. The plan must

provide for notifying potentially affected small governments, enabling

officials of affected small governments to have meaningful and timely

input in the development of EPA regulatory proposals with significant

Federal intergovernmental mandates, and informing, educating, and

advising small governments on compliance with the regulatory

requirements.

Today's rule contains no Federal mandates (under the regulatory

provisions of Title II of the UMRA) for State, local, or tribal

governments because the rule imposes no enforceable duty on any State,

local or tribal governments. The provisions in today's rule relating to

the private sector are mandated by section 213(a)(5) of the Act. Thus,

today's rule is not subject to the requirements of sections 202 and 205

of the UMRA. Further, EPA has determined that this rule contains no

regulatory requirements that might significantly or uniquely affect

small governments. EPA has determined that this rule contains federal

mandates that may result in expenditures of more than $100 million or

more in any one year for the private sector. EPA believes that the

program represents the least costly, most cost-effective approach to

achieving the air quality goals of the program. EPA has performed the

required analyses under Executive Order 12866 which contains identical

analytical requirements. The benefit and cost analyses of this action

can be found in Chapters 6 and 7 of the RSD.

E. Submission to Congress and the General Accounting Office

Under 5 U.S.C. 801(a)(1)(A) as added by the Small Business

Regulatory Enforcement Fairness Act of 1996, EPA submitted a report

containing this rule and other required information to the U.S. Senate,

the U.S. House of Representatives and the Comptroller General of the

General Accounting Office prior to publication of the rule in today's

Federal Register. This rule is a ``major rule'' as defined by 5 U.S.C.

804(2).

X. Copies of Rulemaking Documents

The preamble, regulatory text, Regulatory Support Document (RSD)

and Summary and Analysis of Comments document (SAC) are available

electronically from the EPA Internet Web site. This service is free of

charge, except for any cost you already incur for Internet

connectivity. An electronic version is made available on the day of

publication on the primary Web site listed below. The EPA Office of

Mobile Sources also publishes these documents on the secondary Web site

listed below.

http://www.epa.gov/docs/fedrgstr/EPA-AIR/ (either select desired date

or use Search feature)

http://www.epa.gov/OMSWWW/ (look in What's New or under the specific

rulemaking topic)

Please note that due to differences between the software used to

develop the document and the software into which the document may be

downloaded, changes in format, page length, etc. may occur.

XI. Judicial Review

Under section 307(b)(1) of the Act, EPA hereby finds that these

regulations are of national applicability. Accordingly, judicial review

of this action is available only by filing a petition for review in the

United States Court of Appeals for the District of Columbia Circuit by

June 15, 1998. Under section 307(b)(2) of the Act, the requirements

which are the subject of today's document may not be challenged later

in judicial proceedings brought by EPA to enforce these requirements.

List of Subjects

40 CFR Part 85

Environmental protection, Air pollution control, Confidential

business information, Imports, Labeling, Motor vehicle pollution,

Railroads, Reporting

[[Page 18998]]

and recordkeeping requirements, Research, Warranties.

40 CFR Part 89

Environmental protection, Administrative practice and procedure,

Air pollution control, Confidential business information, Imports,

Labeling, Motor vehicle pollution, Reporting and recordkeeping

requirements, Research, Warranties.

40 CFR Part 92

Environmental protection, Administrative practice and procedure,

Air pollution control, Confidential business information, Imports,

Incorporation by reference, Labeling, Penalties, Railroads, Reporting

and recordkeeping requirements, Warranties.

Dated: December 17, 1997.

Carol M. Browner,

Administrator.

For the reasons set forth in the preamble, chapter I of title 40 of

the Code of Federal Regulations is amended as set forth below:

PART 85--[AMENDED]

1. The authority citation for part 85 is revised to read as

follows:

Authority: 42 U.S.C. 7521, 7522, 7524, 7525, 7541, 7542, 7543,

7547, and 7601(a).

2. Section 85.1602 of subpart Q is amended by revising the

definition of ``locomotive'' and adding new definitions for ``new

locomotive'' and ``new engine used in a locomotive'' in alphabetical

order to read as follows:

Sec. 85.1602 Definitions.

* * * * *

Locomotive. The definition of locomotive specified in 40 CFR 92.2

applies to this subpart.

* * * * *

New engine used in a locomotive means new locomotive engine, as

defined in 40 CFR 92.2.

New locomotive. The definition of new locomotive specified in 40

CFR 92.2 applies to this subpart.

* * * * *

3. Section 85.1603 is amended by revising paragraph (c) to read as

follows:

Sec. 85.1603 Application of definitions; scope of preemption.

* * * * *

(c)(1) States and any political subdivisions thereof are preempted

from adopting or enforcing standards or other requirements relating to

the control of emissions from new locomotives and new engines used in

locomotives.

(2) During a period equivalent in length to 133 percent of the

useful life, expressed as MW-hrs (or miles where applicable), beginning

at the point at which the locomotive or engine becomes new, those

standards or other requirements which are preempted include, but are

not limited to, the following: emission standards, mandatory fleet

average standards, certification requirements, aftermarket equipment

requirements, and nonfederal in-use testing requirements. The standards

and other requirements specified in the preceding sentence are

preempted whether applicable to new or other locomotives or locomotive

engines.

* * * * *

PART 89--[AMENDED]

4. The authority citation for part 89 continues to read as follows:

Authority: Sections 202, 203, 204, 205, 206, 207, 208, 209, 213,

215, 216, and 301(a) of the Clean Air Act, as amended (42 U.S.C.

7521, 7522, 7523, 7524, 7525, 7541, 7542, 7543, 7547, 7549, 7550,

and 7601(a)).

5. Section 89.1 of subpart A is amended by revising paragraph

(b)(3) to read as follows:

Sec. 89.1 Applicability.

* * * * *

(b) * * *

(3) Engines subject to the standards of 40 CFR part 92 (engines

exempted from the requirements of 40 CFR part 92 under 40 CFR 92.907

are subject to the requirements of this part 89); and

* * * * *

Sec. 89.2 [Amended]

6. Section 89.2 of subpart A is amended by removing the definition

of ``locomotive''.

7. A new part 92 is added to read as follows:

PART 92--CONTROL OF AIR POLLUTION FROM LOCOMOTIVES AND LOCOMOTIVE

ENGINES

Subpart A--General Provisions for Emission Regulations for Locomotives

and Locomotive Engines

Sec.

92.1 Applicability.

92.2 Definitions.

92.3 Abbreviations.

92.4 Treatment of confidential information.

92.5 Reference materials.

92.6 Regulatory structure.

92.7 General standards.

92.8 Emission standards.

92.9 Compliance with emission standards.

92.10 Warranty period.

92.11 Compliance with emission standards in extraordinary

circumstances.

92.12 Interim provisions.

Subpart B--Test Procedures

92.101 Applicability.

92.102 Definitions and abbreviations.

92.103 Test procedures; overview.

92.104 Locomotive and engine testing; overview.

92.105 General equipment specifications.

92.106 Equipment for loading the engine.

92.107 Fuel flow measurement.

92.108 Intake and cooling air measurements.

92.109 Analyzer specifications.

92.110 Weighing chamber and micro-balance.

92.111 Smoke measurement system.

92.112 Analytical gases.

92.113 Fuel specifications.

92.114 Exhaust gas and particulate sampling and analytical system.

92.115 Calibrations; frequency and overview.

92.116 Engine output measurement system calibrations.

92.117 Gas meter or flow instrumentation calibration, particulate

measurement.

92.118 Analyzer checks and calibrations.

92.119 Hydrocarbon analyzer calibration.

92.120 NDIR analyzer calibration and checks.

92.121 Oxides of nitrogen analyzer calibration and check.

92.122 Smoke meter calibration.

92.123 Test procedure; general requirements.

92.124 Test sequence; general requirements.

92.125 Pre-test procedures and preconditioning.

92.126 Test run.

92.127 Emission measurement accuracy.

92.128 Particulate handling and weighing.

92.129 Exhaust sample analysis.

92.130 Determination of steady-state concentrations.

92.131 Smoke, data analysis.

92.132 Calculations.

92.133 Required information.

Subpart C--Certification Provisions

92.201 Applicability.

92.202 Definitions.

92.203 Application for certification.

92.204 Designation of engine families.

92.205 Prohibited controls, adjustable parameters.

92.206 Required information.

92.207 Special test procedures.

92.208 Certification.

92.209 Certification with multiple manufacturers or

remanufacturers.

92.210 Amending the application and certificate of conformity.

92.211 Emission-related maintenance instructions for purchasers.

92.212 Labeling.

92.213 Submission of locomotive and engine identification numbers.

92.214 Production locomotives and engines.

92.215 Maintenance of records; submittal of information; right of

entry.

92.216 Hearing procedures.

Subpart D--Certification Averaging, Banking, and Trading Provisions

92.301 Applicability.

92.302 Definitions.

92.303 General provisions.

92.304 Compliance requirements.

[[Page 18999]]

92.305 Credit generation and use calculation.

92.306 Certification.

92.307 Labeling.

92.308 Maintenance of records.

92.309 Reports.

92.310 Notice of opportunity for hearing.

Subpart E--Emission-related Defect Reporting Requirements, Voluntary

Emission Recall Program

92.401 Applicability.

92.402 Definitions.

92.403 Emission defect information report.

92.404 Voluntary emissions recall reporting.

92.405 Alternative report formats.

92.406 Reports filing: record retention.

92.407 Responsibility under other legal provisions preserved.

92.408 Disclaimer of production warranty applicability.

Subpart F--Manufacturer and Remanufacturer Production Line Testing and

Audit Programs

92.501 Applicability.

92.502 Definitions.

92.503 General requirements.

92.504 Right of entry and access.

92.505 Sample selection for testing.

92.506 Test procedures.

92.507 Sequence of testing.

92.508 Calculation and reporting of test results.

92.509 Maintenance of records; submittal of information.

92.510 Compliance with criteria for production line testing.

92.511 Remanufactured locomotives: installation audit requirements.

92.512 Suspension and revocation of certificates of conformity.

92.513 Request for public hearing.

92.514 Administrative procedures for public hearing.

92.515 Hearing procedures.

92.516 Appeal of hearing decision.

92.517 Treatment of confidential information.

Subpart G--In-Use Testing Program

92.601 Applicability.

92.602 Definitions.

92.603 General provisions.

92.604 In-use test procedure.

92.605 General testing requirements.

92.606 Maintenance, procurement and testing of in-use locomotives.

92.607 In-use test program reporting requirements.

Subpart H--Recall Regulations

92.701 Applicability.

92.702 Definitions.

92.703 Voluntary emissions recall.

92.704 Notice to manufacturer or remanufacturer of nonconformity;

submission of remedial plan.

92.705 Remedial plan.

92.706 Approval of plan: implementation.

92.707 Notification to locomotive or locomotive engine owners.

92.708 Records and reports.

92.709 Public hearings.

Subpart I--Importation of Nonconforming Locomotives and Locomotive

Engines

92.801 Applicability.

92.802 Definitions.

92.803 Admission.

92.804 Exemptions.

92.805 Prohibited acts; penalties.

Subpart J--Exclusion and Exemption Provisions

92.901 Purpose and applicability.

92.902 Definitions.

92.903 Exclusions.

92.904 Exemptions.

92.905 Testing exemption.

92.906 Manufacturer-owned, remanufacturer-owned exemption and

display exemption.

92.907 Non-locomotive-specific engine exemption.

92.908 National security exemption.

92.909 Export exemptions.

92.910 Granting of exemptions.

92.911 Submission of exemption requests.

Subpart K--Requirements Applicable to Owners and Operators of

Locomotives and Locomotive Engines

92.1001 Applicability.

92.1002 Definitions.

92.1003 In-use testing program.

92.1004 Maintenance and repair.

92.1005 In-use locomotives.

92.1006 Refueling requirements.

Subpart L--General Enforcement Provisions and Prohibited Acts

92.1101 Applicability.

92.1102 Definitions.

92.1103 Prohibited acts.

92.1104 General enforcement provisions.

92.1105 Injunction proceedings for prohibited acts.

92.1106 Penalties.

92.1107 Warranty provisions.

92.1108 In-use compliance provisions.

Appendices to Part 92

Appendix I to Part 92--Emission-Related Locomotive and Engine

Parameters and Specifications

Appendix II to Part 92--Interpretive Ruling for Sec. 92.705--Remedial

Plans

Appendix III to Part 92--Smoke Standards for Non-normalized

Measurements

Appendix IV to Part 92--Guidelines for Determining Equivalency Between

Emission Measurement Systems

Authority: 42 U.S.C. 7522, 7523, 7524, 7525, 7541, 7542, 7543,

7545, 7547, 7549,

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