I contacted the EPA in regards to kit boats and there exists a Personal-use exemption to the Tier III regulations. Of course the exemption is open to some interpretation but I believe as long as one personally does the assembly (manufacture) of the boat to a completed state they do not have to install a Tier III compliant marine diesel.
Here is the EPA's response:
The regulations at 40 CFR 1042.630 (see the link at
eCFR — Code of Federal Regulations and copied below) describe the personal-use exemption provisions. If your vessel meets the requirements listed there the engine installed is not required to be certified. If all the requirements are not met then a certified marine engine must be used.
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§1042.630 Personal-use exemption.
This section applies to individuals who manufacture vessels for personal use with used Category 1 engines. If you and your vessel meet all the conditions of this section, the vessel and its engine are considered to be exempt from the standards and requirements of this part that apply to new engines and new vessels. The prohibitions in §1068.101(a)(1) do not apply to engines exempted under this section. For example, you may install an engine that was not certified as a marine engine.
(a) The vessel may not be manufactured from a previously certified vessel, nor may it be manufactured from a partially complete vessel that is equivalent to a certified vessel. The vessel must be manufactured primarily from unassembled components, but may incorporate some preassembled components. For example, fully preassembled steering assemblies may be used. You may also power the vessel with an engine that was previously used in a highway or land-based nonroad application.
(b) The vessel may not be sold within five years after the date of final assembly.
(c) No individual may manufacture more than one vessel in any ten-year period under this exemption.
(d) You may not use the vessel in any revenue-generating service or for any other commercial purpose, except that you may use a vessel exempt under this section for commercial fishing that you personally do.
(e) This exemption may not be used to circumvent the requirements of this part or the requirements of the Clean Air Act. For example, this exemption would not cover a case in which a person sells an almost completely assembled vessel to another person, who would then complete the assembly. This would be considered equivalent to the sale of the complete new vessel. This section also does not allow engine manufacturers to produce new engines that are exempt from emission standards and it does not provide an exemption from the prohibition against tampering with certified engines.
(f) The vessel must be a vessel that is not classed or subject to Coast Guard inspections or surveys.
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