This section describes exemption and hardship provisions that are available for owner/operators of engines subject to the provisions of this subpart.

(a) Vessels owned and operated by entities that meet the size criterion of this paragraph (a) are exempt from the requirements of this subpart I. To be exempt, your gross annual revenue for the calendar year before the remanufacture must be less than $5,000,000 in 2008 dollars or the equivalent value for future years based on the Bureau of Labor Statistics' Producer Price Index (see www.bls.gov). Include all revenues from any parent company and its subsidiaries. The exemption applies only for years in which you meet this criterion.

(b) In unusual circumstances, we may exempt you from an otherwise applicable requirement that you apply a certified remanufacturing system when remanufacturing your marine engine.

(1) To be eligible, you must demonstrate that all of the following are true:

(i) Unusual circumstances prevent you from meeting requirements from this chapter.

(ii) You have taken all reasonable steps to minimize the extent of the nonconformity.

(iii) Not having the exemption will jeopardize the solvency of your company.

(iv) No other allowances are available under the regulations in this chapter to avoid the impending violation.

(2) Send the Designated Compliance Officer a written request for an exemption before you are in violation.

(3) We may impose other conditions, including provisions to use an engine meeting less stringent emission standards or to recover the lost environmental benefit.

(4) In determining whether to grant the exemptions, we will consider all relevant factors, including the following:

(i) The number of engines to be exempted.

(ii) The size of your company and your ability to endure the hardship.

(iii) The length of time a vessel is expected to remain in service.

(c) If you believe that a remanufacturing system that we identified as being available cannot be installed without significant modification of your vessel, you may ask us to determine that a remanufacturing system is not considered available for your vessel because the cost would exceed the total marginal cost threshold in §1042.815(a)(2).

(d) Other exemptions specified in subpart G of this part and 40 CFR part 1068, subparts C and D also apply to remanufactured engines. For example, the national security exemption applies to remanufactured engines as described in §1042.635.

[73 FR 37243, June 30, 2008, as amended at 74 FR 8426, Feb. 24, 2009; 75 FR 23009, Apr. 30, 2010; 81 FR 74153, Oct. 25, 2016]