Approval and Promulgation of Air Quality Implementation Plans; Michigan; Revision to the State Implementation Plan Vehicle Inspection and Maintenance Program

Federal RegisterJul 15, 1994

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[M129-01-6416; FRL-5013-3]

Approval and Promulgation of Air Quality Implementation Plans;

Michigan; Revision to the State Implementation Plan Vehicle Inspection

and Maintenance Program

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed rulemaking.

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SUMMARY: In this action, the EPA is proposing to approve portions and

to conditionally approve other portions of a revision to the Michigan

State Implementation Plan (SIP) for attainment of the National Ambient

Air Quality Standards for ozone. On November 12, 1993, Michigan

submitted a SIP revision request to the EPA to satisfy the requirements

of sections 182(b)(4) and 182(c)(3) of the Clean Air Act, as amended in

1990 (CAA or Act), and the Federal motor vehicle inspection and

maintenance (I/M) rule at 40 CFR part 51, subpart S. This revision

establishes and requires the implementation of an I/M program in the

Grand Rapids and Muskegon ozone nonattainment areas. The EPA's final

action to approve or conditionally approve portions of the State's SIP

revision is dependent upon the materials submitted to EPA 2 weeks prior

to the close of the public comment period. Alternatively, should the

State fail to timely submit the items described below, EPA is proposing

to disapprove the SIP submission.

DATES: Comments must be received on or before August 15, 1994.

ADDRESSES: Comments may be mailed to: Carlton Nash, United States

Environmental Protection Agency, Region 5, Air and Radiation Division,

Air Toxics and Radiation Branch, Regulation Development Section, 77

West Jackson Boulevard, Chicago, Illinois, 60604.

Copies of the documents relevant to this action are available at

the above address for public inspection during normal business hours.

FOR FURTHER INFORMATION CONTACT: Brad J. Beeson, (312) 353-4779.

SUPPLEMENTARY INFORMATION:

1. Introduction

The CAA requires States to make changes to improve existing I/M

programs or implement new ones. Section 182 requires any ozone

nonattainment area which has been classified as ``marginal'' (pursuant

to section 181(a) of the CAA) or worse with an existing I/M program

that was part of a SIP, or any area that was required by the 1977

Amendments to the CAA to have an I/M program, to immediately submit a

SIP revision to bring the program up to the level required in past EPA

guidance or to what had been committed to previously in the SIP,

whichever was more stringent. All carbon monoxide nonattainment areas

were also subject to this requirement to improve existing or previously

required programs to this level. In addition, all ozone nonattainment

areas classified as moderate or worse must implement a ``basic'' or an

``enhanced'' I/M program depending upon its classification, regardless

of previous requirements.

In addition, Congress directed the EPA in section 182(a)(2)(B) to

publish updated guidance for State I/M programs, taking into

consideration findings of the Administrator's audits and investigations

of these programs. The States were to incorporate this guidance into

the SIP for all areas required by the CAA to have an I/M program.

II. Background

The State of Michigan currently contains 3 ozone nonattainment

areas which are required to implement I/M programs in accordance with

the Act. The Detroit-Ann Arbor ozone nonattainment area is classified

as moderate and contains the following 7 counties: Wayne, Oakland,

Macomb, Washtenaw, St. Clair, Livingston, and Monroe. The Grand Rapids

ozone nonattainment area is classified as moderate and contains 2

counties: Kent and Ottawa. The Muskegon ozone nonattainment area is

classified as moderate and is comprised of Muskegon county. These

designations for ozone were published in the Federal Register (FR) on

November 6, 1991 and November 30, 1992 and have been codified in the

Code of Federal Regulations (CFR). See 56 FR 56694 (November 6, 1991)

and 57 FR 56762 (November 30, 1992), codified at 40 CFR 81.300-81.437.

III. I/M Regulation General SIP Submittal Requirements

On November 5, 1992 (57 FR 52950), the EPA published a final

regulation establishing the I/M requirements, pursuant to sections 182

and 187 of the CAA. The I/M regulation was codified at 40 CFR part 51,

subpart S, and requires States to submit an I/M SIP revision which

includes all necessary legal authority and the items specified in 40

CFR 51 by November 15, 1993.

Pursuant to these requirements, the State of Michigan was required

to submit a SIP revision that requires the establishment and

implementation of a ``basic'' I/M program in the Detroit-Ann Arbor,

Grand Rapids, and Muskegon nonattainment areas by November 15, 1993.\1\

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\1\This rulemaking is limited to the Grand Rapids and Muskegon

nonattainment areas. The I/M program in the Detroit-Ann Arbor

nonattainment will be addressed in a separate rulemaking.

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IV. State Submittal

On November 12, 1993, the Michigan Department of Natural Resources

(MDNR) submitted to the EPA a revision that provided for an I/M program

in Western Michigan (i.e., the Grand Rapids and Muskegon nonattainment

areas). Under the requirements of the EPA completeness review

procedures (40 CFR 51 Appendix V) and the requirements of section

110(k) of the CAA, the submittal was deemed complete by EPA on April

18, 1994.

In Western Michigan, the State will be implementing a biennial,

``test-only''

I/M program which meets the requirements of the EPA's ``enhanced''

performance standard and other requirements contained in the Federal

I/M rule in the applicable nonattainment counties. The Michigan

Department of Transportation (MDOT) has sole responsibility for

implementing the program, while the MDNR is responsible for enforcement

of the program. In addition, the State will enter into a contractual

agreement with a centralized contractor to provide the network of

services required to operate a program. Other aspects of the Western

Michigan I/M program include: testing of 1975 and later light duty

vehicles and trucks and heavy duty trucks, evaporative emission testing

for 1975 and later model year vehicles, a test fee to ensure the State

has adequate resources to implement the program, enforcement by

registration denial, a repair effectiveness program, contractual

requirements for testing convenience, quality assurance, data

collection, minimum expenditure waivers, reporting, test equipment and

test procedure specifications, public information and consumer

protection, and inspector training and certification, and contractual

requirements for a Total Quality Management Plan between the State and

the centralized contractor.

V. The EPA's Analysis of the Western Michigan I/M Program

The EPA has reviewed the State's submittal for consistency with the

statutory requirements of EPA regulations. A summary of the EPA's

analysis is provided below. More detailed support for approval of the

State's submittal is contained in a Technical Support Document (TSD),

dated May 31, 1994, which is available from the Region 5 Office, listed

above.

A. Applicability

The SIP needs to describe the applicable areas in detail and,

consistent with 57 FR 51.350, needs to include the legal authority or

rules necessary to establish program boundaries.

The Western Michigan I/M legislation specifies that an I/M program

be implemented in Kent, Ottawa, and Muskegon counties, as required.

B. I/M Performance Standard

The SIP revision provides for an I/M program in Western Michigan

that meets the ``enhanced'' I/M performance standard. The State elected

to design a program meeting the ``enhanced'' performance standard as a

means of meeting other requirements associated with the CAA (e.g.,

section 182(b)(1), Reasonable Further Progress). The performance

standard sets an emission reduction target that must be met by a

program in order for the SIP to be approvable. The SIP must also

provide that the program will meet the performance standard in actual

operation, with provisions for appropriate adjustments if the standard

is not met.

The State has submitted a modeling demonstration using the EPA

computer model MOBILE5a showing that the ``enhanced'' performance

standard is met.

C. Network Type and Program Evaluation

The SIP needs to include a description of the network to be

employed, the required legal authority, and in the case of areas making

claims for case-by-case equivalency, the required demonstration. Also,

for areas implementing ``enhanced'' I/M programs, the SIP needs to

include a description of the evaluation schedule and protocol, the

sampling methodology, the data collection and analysis system, the

resources and personnel for evaluation, and related details of the

evaluation program, and the legal authority enabling the evaluation

program.

The State has chosen to implement a ``centralized'' I/M network

program design which will utilize a centralized contractor to implement

the inspection portion of the program. The State has chosen not to make

a demonstration for case-by-case equivalency for a different network

design.

The MDNR describes and commits, in its SIP narrative, to institute

a continuous ongoing evaluation program consistent with the Federal I/M

rule. The results of the evaluation program will be reported to the EPA

on a biennial basis. Legal authority, which is contained in the H.B.

4165, authorizes the MDNR to implement this contractor operated

centralized program and conduct the program evaluation.

D. Adequate Tools and Resources

The SIP needs to include a description of the resources that will

be used for program operation, and discuss how the performance standard

will be met, which includes: (1) a detailed budget plan which describes

the source of funds for personnel, program administration, program

enforcement, purchase of necessary equipment (such as vehicles for

undercover audits), and any other requirements discussed throughout,

for the period prior to the next biennial self-evaluation required in

the Federal I/M rule, (2) a description of personnel resources, the

number of personnel dedicated to overt and covert auditing, data

analysis, program administration, enforcement, and other necessary

functions and the training attendant to each function.

The adopted legislation for the Western Michigan program, H.B.

4165, provides for a $24 per vehicle inspection fee which is adjusted

annually for inflation. Of this $24 fee, no less than $3 will be

devoted to oversight and management of the program. The SIP narrative

also describes the budget, staffing support, and equipment needed to

implement the program. The State expects to dedicate a staffing level

of 12 full-time equivalent employees to support the program.

E. Test Frequency and Convenience

The SIP needs to include the test schedule in detail including the

test year selection scheme if testing is other than annual. Also, the

SIP needs to include the legal authority necessary to implement and

enforce the test frequency requirement and explain how the test

frequency will be integrated with the enforcement process. In addition,

for ``enhanced'' I/M programs, the SIP needs to demonstrate that the

network of stations providing test services is sufficient to insure

short waiting times to get a test and short driving distances.

The SIP revision for Western Michigan requires biennial inspections

for all subject motor vehicles. For new vehicles, the first test is

required for re-registration, 2 years after initial titling. For

vehicles already titled at the time of program start-up, inspections

are required within 30 days prior to the anniversary of initial

titling. Newly registered used vehicles are required to be inspected

within thirty days of being registered initially in the State. The

inspections will be conducted on odd or even years corresponding to the

model year of the vehicle and timed with the registration process which

is explained in the SIP submittal. The authority for the enforcement of

the testing frequency is contained in the Western Michigan I/M

legislation.

Short waiting times and short driving distances relating to network

design are addressed in the contract between the State and its managing

contractor. The State is contractually requiring that the monthly

average waiting time shall not exceed 15 minutes more than 4 times in a

month. In addition, the location of stations shall be such that 70

percent of the vehicle population must be within 5 miles of an

inspection station, and that 90 percent of the vehicle population must

be within 12 miles of an inspection station.

F. Vehicle Coverage

The SIP needs to include a detailed description of the number and

types of vehicles to be covered by the program, and a plan for how

those vehicles are to be identified, including vehicles that are

routinely operated in the area but may not be registered in the area.

Also, the SIP needs to include a description of any special exemptions

which will be granted by the program, and an estimate of the percentage

and number of subject vehicles which will be impacted. Such exemptions

need to be accounted for in the emission reduction analysis. In

addition, the SIP needs to include the legal authority or rule

necessary to implement and enforce the vehicle coverage requirement.

The Western Michigan program includes coverage of all 1975 and

newer model year gasoline powered light-duty vehicles and light-duty

and heavy-duty trucks, registered or required to be registered within

the nonattainment areas and fleets primarily operated within an I/M

program area. Vehicles will be identified through the MDOT vehicle

registration database. Only the following vehicles are exempt from the

I/M requirement: historic vehicles, diesel vehicles, dedicated

alternative fuel vehicles, electric vehicles, motorcycles, and vehicles

used for covert monitoring of inspection station facilities. The State

has estimated exempted vehicles to account for 0.3 percent of the total

vehicle population. The legal authority for the vehicle coverage is

contained in the H.B. 4165.

G. Test Procedures and Standards

The SIP needs to include a description of each test procedure used.

The SIP also needs to include the rule, ordinance, or law describing

and establishing the test procedures.

The Western Michigan I/M SIP obligates the State to do IM240

testing in accordance with the EPA's guidance document entitled ``High-

Tech I/M Test Procedures, Emission Standards, Quality Control

Requirements, and Equipment Specifications'' (Technical Guidance). The

State will be requiring IM240 tests on 1981 and later model year

vehicles. This model year coverage complies with the EPA's I/M

regulation. All 1975 and later model year vehicles not receiving an

IM240 test will receive a loaded 2 speed test in accordance with the

EPA's test procedures contained in the appendices of the Federal I/M

rule. The test procedures are specifically and legally established in

the Request For Proposal (RFP), which the Western Michigan I/M

contractor is required to abide by.

H. Test Equipment

The SIP needs to include written technical specifications for all

test equipment used in the program and shall address each of the

requirements in 57 FR 51.358 of the Federal I/M rule. The

specifications need to describe the emission analysis process, the

necessary test equipment, the required features, and written acceptance

testing criteria and procedures.

The Western Michigan I/M SIP revision obligates the State to use

the written equipment specifications contained in the EPA's IM240

Technical Guidance and appendices of the Federal I/M rule. Michigan's

RFP sufficiently addresses the requirements in 40 FR 51.358 and

includes descriptions of performance features and functional

characteristics of the computerized test systems. The necessary test

equipment, required features, and acceptance testing criteria are also

mandated in the RFP.

I. Quality Control

The SIP needs to include a description of quality control and

record keeping procedures. The SIP needs to include the procedures

manual, rule, and ordinance or law describing and establishing the

procedures of quality control and requirements.

The Western Michigan SIP narrative and RFP contain descriptions and

requirements establishing the quality control procedures in accordance

with the Federal I/M rule. These requirements will help ensure that

equipment calibrations are properly performed and recorded as well as

maintaining compliance document security. The quality control

procedures manual is contained in the RFP. The Western Michigan SIP

revision obligates the State to comply with all specifications for all

quality control in accordance with the Federal I/M rule.

J. Waivers and Compliance Via Diagnostic Inspection

The SIP needs to include a maximum waiver rate expressed as a

percentage of initially failed vehicles. This waiver rate needs to be

used for estimating emission reduction benefits in the modeling

analysis. Also, the State needs to take corrective action if the waiver

rate exceeds that estimated in the SIP or revise the SIP and the

emission reductions claimed accordingly. In addition, the SIP needs to

describe the waiver criteria and procedures, including cost limits,

quality assurance methods and measures, and administration. Lastly, the

SIP shall include the necessary legal authority, ordinance, or rules to

issue waivers, set and adjust cost limits as required, and carry out

any other functions necessary to administer the waiver system,

including enforcement of the waiver provisions.

The Western Michigan I/M program includes a waiver rate as a

percentage of initially failed vehicles of 6 percent. This waiver rate

is used in the modeling demonstration. In the SIP narrative, the State

of Michigan commits to take corrective action if the actual waiver rate

rises above 6 percent. The SIP provides for only 1 type of waiver, that

being based on a minimum repair expenditure. This waiver is consistent

with the Federal I/M rule. The proper criteria, procedures, quality

assurance and administration regarding the issuance of waivers will be

ensured by MDOT and the managing contractor and are contained in the

SIP narrative and RFP. The waiver criteria are contained in both the

State's legislation and the RFP. The State has established a minimum

$300 expenditure for the issuance of a waiver. This minimum limit is in

accordance with the CAA and Federal I/M rule.

K. Motorist Compliance Enforcement

The SIP needs to provide information concerning the enforcement

process including: (1) a description of the existing compliance

mechanism, if it is to be used in the future, and the demonstration

that it is as effective or more effective than registration-denial

enforcement; (2) an identification of the agencies responsible for

performing each of the applicable activities in this section; (3) a

description of and accounting for all classes of exempt vehicles; and

(4) a description of the plan for testing fleet vehicles, rental car

fleets, leased vehicles, and any other special classes of subject

vehicles, e.g., those operated in (but not necessarily registered in)

the program area. Also, the SIP needs to include a determination of the

current compliance rate based on a study of the system that includes an

estimate of compliance losses due to loopholes, counterfeiting, and

unregistered vehicles. Estimates of the effect of closing such

loopholes and otherwise improving the enforcement mechanism need to be

supported with detailed analyses. In addition, the SIP needs to include

the legal authority to implement and enforce the program. Lastly, the

SIP needs to include a commitment to an enforcement level, at a

minimum, in practice.

The State has chosen to use registration-denial as its primary

enforcement mechanism. Motorists will be denied vehicle registration

unless the vehicle has complied with the I/M program requirements. The

motorist compliance enforcement program will be implemented in part, by

the MDOT in conjunction with the Michigan Department of State. The

Michigan State Police and local police departments will take the lead

in citing motorists who fail to comply with the registration

requirement. In addition, parking meter attendants also have the

authority to ticket parked vehicles with expired or otherwise invalid

license plates.

Only the following vehicles types are exempt from the I/M

requirement: historic vehicles, diesel vehicles, dedicated alternative

fuel vehicles, electric vehicles, motorcycles, and vehicles used for

covert monitoring of inspection station facilities. The State has

estimated exempted vehicles to account for 0.3 percent of the total

vehicle population.

Fleet vehicles, rental car fleets, and leased vehicles that do not

receive an annual registration will be required to meet the same

program requirements as all other vehicles that receive annual

registration. The project compliance rate is estimated to be 97

percent. The State commits to revise the I/M SIP if the State fails to

meet the 97 percent compliance rate.

The legal authority to implement and enforce the program is

included in H.B. 4165.

L. Motorist Compliance Enforcement Program Oversight

The SIP needs to include a description of enforcement program

oversight and information management activities.

The Western Michigan SIP revision provides for regular auditing of

its enforcement program and the following of effective management

practices, including adjustments to improve the program when necessary.

These program oversight and information management activities are

described in the SIP narrative and RFP which include: the establishment

of written procedures for personnel engaged in I/M document handling

and processing and the use of a bar-coded data entry system for

tracking program documents.

However, the submittal does not include, for example, the

procedures through which the activities of enforcement personnel are

quality-controlled, as described in 40 CFR part 51.362. Therefore, EPA

proposes to approve this portion of the State's submittal if Michigan

submits the necessary materials in time to allow EPA to place it in the

docket 2 weeks prior to the close of the public comment period. If

Michigan cannot submit the necessary materials, but does submit a

commitment to complete the necessary materials within 1 year of EPA's

final rulemaking, EPA proposes to conditionally approve this portion of

the State's submittal. Alternatively, if the State does not submit any

materials 2 weeks prior to the close of the public comment period, EPA

proposes to disapprove the SIP as failing to comply with section 110

and Part D. In order to receive final full approval, the State must

submit its final, signed contract addressing the requirements of 40 CFR

part 51.362 to EPA prior to final rulemaking.

M. Quality Assurance

The SIP needs to include a description of the quality assurance

program, and written procedures manuals covering both overt and covert

performance audits, record audits, and equipment audits.

The Western Michigan I/M SIP revision includes a description of its

quality assurance program. The program includes operation and progress

reports and overt and covert audits of all emission inspectors and

emission inspection and referee facilities. The program will be

conducted by a contractor with oversight provisions reserved to the

State. Procedures and techniques for overt and covert performance,

record, and equipment audits will be given to auditors and updated as

needed. In addition, all program auditors will themselves be audited at

least once per year.

N. Enforcement Against Contractors, Stations and Inspectors

The SIP needs to include the penalty schedule and the legal

authority for establishing and imposing penalties, civil fines, license

suspension, and revocations. In the case of State constitutional

impediments to immediate suspension authority, the State Attorney

General shall furnish an official opinion for the SIP explaining the

constitutional impediment as well as relevant case law. Also, the SIP

needs to describe the administrative and judicial procedures and

responsibilities relevant to the enforcement process, including which

agencies, courts, and jurisdictions are involved; who will prosecute

and adjudicate cases; and other aspects of the enforcement of the

program requirements, the resources to be allocated to this function,

and the source of those funds. In States without immediate suspension

authority, the SIP needs to demonstrate that sufficient resources,

personnel, and systems are in place to meet the 3 day case management

requirement for violations that directly affect emission reductions.

The Western Michigan SIP revision incorporates an innovative method

for ensuring that the I/M program will be run effectively. The State

will require the contractor to become part of the MDOT's Total Quality

Management (TQM) program.

However, while the State's submittal includes the legislative

authority for enforcement against contractors, the submittal does not

include, for example, a penalty schedule for those persons found in

violation of the rules of the

I/M program, as described in 40 CFR part 51.364. Therefore, EPA