This case addresses violations of the Clean Air Act (CAA) by Kubota Corporation and Kubota Tractor Corporation (collectively, Kubota), a Japanese manufacturer of tractors. On October 18,2011 Kubota disclosed that between March and October of 2011, Kubota imported 27 tractors equipped with 73.6 kW diesel engines under the 40 C.F.R. Part 89 flexibility program for equipment manufacturers. However, the Part 89 flexibility program had expired for this engine power category at the end of 2010. Therefore these engines were required to meet Tier 3 emission standards which went into effect for these engines in 2008 (unless othenvise exempted or excluded). As Kubota had not complied with the 40 C.F.R. Part 1039 transition program for equipment manufacturers, and no other exemption or exclusion applied, these engines were imported in violation of 40 C.F.R. §89.1003(a)(1) and section 203(a)(1) of the Clean Air Act, 42 U.S.C. §7522(a)(1).
As part of the settlement with EPA, Kubota has agreed to paid a $27,000 civil penalty. Kubota agreed to redress this matter by reducing the number of engines it is entitled to produce under 40 C.F.R. § 1039.625(d)(4) by 27, and complying with all other provisions of § 1039.625(d)(4). For instance, Kubota must provide notice to EPA of its intent to rely on the 40 C.F.R. Part 1039 transition program for equipment manufacturers, and must account for all 27 of the engines as part of this program. Since Kubota is using allowances under 40 C.F.R. §