To further clarify the definition of "new," 40 CFR 89.2 specifies that a nonroad engine, vehicle, or equipment is placed into service when it is used for its functional purpose. For the purpose of applying this criteria to marine diesel engines and new vessels, we have concluded that a marine diesel engine is used for its functional purpose when it is installed on a marine vessel. This clarification is needed because some marine diesel engines are made by modifying a highway or nonroad engine that has already been installed on a vehicle or other equipment. In other words, the engine has been transferred to an ultimate purchaser after it is used for its functional purpose as a land-based nonroad engine (for example, on a truck or a backhoe) and is therefore no longer new, but it is later removed for marinization and installation on a marine vessel. While the 40 CFR 89 requirements for land-based nonroad diesel engines do not contain such a requirement; we believe it is reasonable to treat these engines as new marine engines when they are installed on a vessel. While the practice of marinizing used highway or nonroad engines may be infrequent, it could become more common if these engines are not subject to the standards finalized in this document.
As described in the proposal, we are not applying emission standards to remanufactured engines. In Section VI we discuss the potential for considering this issue in the future.
B. Importing and Exporting Marine Engines
Engines imported for use in the United States are covered by this final rule whether they are imported as loose engines or are already installed on a vessel constructed elsewhere. We will require all imported engines to have a certificate of conformity from us before anyone may enter them into commerce in the United States, subject to limited exemptions. Accordingly, we are applying the approach contained in other highway and nonroad engine programs, according to which any engine or vessel that is imported into the United States without a valid certificate of conformity and that was built after the effective date of the applicable standards, will be considered new at the time it is imported into the United States. As a new engine, it will have to comply with the relevant emission limits in effect at the time it was manufactured. Thus, for example, a marine vessel manufactured in a foreign country in 2007 that is imported into the United States in 2010 would be considered new, and its engine would have to comply with the emission limits in effect for model year 2007. This provision is important to prevent manufacturers from avoiding the emission requirements by building vessels abroad, transferring their title, and then importing them as used vessels.
Engines that are to be exported to countries with emission standards different than ours are exempt from the requirements of this final rule. Marine engines that are exported but are subsequently re-imported into the United States must, however, meet the new emission standards that apply based on the manufacturing date of the engine. This would be the case when a foreign company purchases marine engines manufactured in the United States for installation on a vessel that will be subsequently exported to the United States. It would also be the case when a foreign company purchases marine engines manufactured in the United States for dressing and subsequent re-exportation to the United States. Engines that are intended for export but that will be re-imported into the United States are subject to the emission standards at the time the engine is manufactured, unless the vessel manufacturer or marinizer intends to re-certify the engines to comply with emission standards before they enter the United States. Consequently, foreign purchasers who do not wish to recertify the engines will need to make sure they purchase complying engines for those marine vessels or engines they intend to subsequently offer for sale in the United States. Engines intended for export and sale in a foreign country should be easily distinguishable from complying engines because complying engines are required to be labeled as such. Any person who introduces into commerce in the United States a noncomplying engine that is intended for export and use in a foreign country will be subject to civil penalties.
To determine when an engine or vessel will be considered "imported" for the purposes of determining compliance with emission standards, we will follow the approach contained in the Harmonized Tariff Schedule of the United States (HTSUS). According to HTSUS, vessels used in international trade or commerce or vessels brought into the territory of the United States by nonresidents for their own use in pleasure cruising are admitted without formal customs consumption entry or payment of duty.2 This approach is consistent with the Treasury Department's ruling, which concluded that vessels coming into the United States temporarily as carriers of passengers or merchandise are not subject to customs entry or duty, but if brought into the United States permanently, they are to be considered and treated as imported merchandise. See American Customs Brokerage Co., Inc., a/c Astral Corp. v. United States, 375 F. Supp. 1360, 1366 (Cust. Ct. 1974). This means that engines installed on vessels flagged in another country that come into the United States temporarily will not be subject to the emission standards, because they are not imported and are therefore not new engines under Clean Air Act Section 216(3) and 213(d).
2 HTSUS (1994), Additional U.S. Note 1. In particular, cruise ships, ferry boats, cargo ships, barges and "similar vessels for the transportation of persons or goods" are duty free. HTSUS (1994) 8901.
C. Marine Engine Definitions
In the final land-based nonroad engine rule, we determined that a portable auxiliary engine used onboard a marine vessel should not be considered a marine engine (October 23, 1998, 63 FR 56967). Instead, a portable auxiliary engine is considered to be a land-based engine subject to the requirements of 40 CFR Part 89. To distinguish a marine auxiliary engine installed on a marine vessel from a land-based portable auxiliary engine used on a marine vessel, we specified in that rulemaking that an auxiliary engine is installed on a marine vessel if its fuel, cooling, or exhaust systems are an integral part of the vessel. These auxiliary engines are therefore not fundamentally different than land-based engines and we regulate them under 40 CFR Part 89.
With very few exceptions, this final marine engine rule applies equally to propulsion and auxiliary engines. Consistent with the definitions in 40 CFR Part 89, a propulsion engine is one that is intended to move a vessel through the water or assists in guiding the direction of the vessel (including, for example, bow thrusters). Auxiliary engines are all other marine engines. Propulsion and auxiliary engines have different duty cycles and different load factors for calculating emission credits, Auxiliary engines will not be subject to not-to-exceed requirements until we finalize them for land-based nonroad engines. Also, auxiliary engines are not eligible to qualify as recreational engines.
