Inspection/Maintenance Flexibility Amendments

ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 51

[FRL-5294-9]

Inspection/Maintenance Flexibility Amendments

AGENCY: Environmental Protection Agency.

ACTION: Final rule.

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SUMMARY: Today's action revises the motor vehicle Inspection/

Maintenance (I/M) Program Requirements. EPA announced its intent to

amend the I/M Program Requirements in December 1994 and held

stakeholders' meetings on January 24, 1995 and January 31, 1995. This

action creates an additional, less stringent enhanced I/M performance

standard which allows areas that can meet the 1990 Clean Air Act

requirements for Reasonable Further Progress and attainment to

implement an I/M program that falls below the originally promulgated

enhanced I/M performance standard. Because the new low enhanced I/M

performance standard eliminates the need for the special enhanced

performance standard for El Paso, Texas, today's action repeals that

special performance standard. This action also revises the high

enhanced I/M performance standard to include a visual inspection of the

positive crankcase ventilation (PCV) valve on all light-duty vehicles

and light-duty trucks from model years 1968 to 1971, inclusive, and of

the exhaust gas recirculation (EGR) valve on all light-duty vehicles

and light-duty trucks from

[[Page 48030]]

model years 1972 through 1983, inclusive. The low enhanced performance

standard contains similar testing requirements, which are necessary to

ensure full compliance with the Clean Air Act's requirement that all

federal performance standards for enhanced I/M programs be based upon a

model program that includes, at a minimum, two inspections per subject

vehicle: an emission inspection and a visual inspection. Today's action

also changes the waiver cost requirements by extending the deadline for

implementing the minimum expenditure to qualify for a waiver specified

in the Clean Air Act; allowing the application of pre-inspection

repairs toward meeting the waiver expenditure requirements under

limited circumstances; allowing the cost of primary emission control

components replaced by family or friends to apply toward the waiver

cost requirement; and removing the bar against issuing hardship

exemptions more than once per vehicle lifetime. EPA is also including

revised regulatory language to change the population cutoff for basic

I/M from 50,000 persons to 200,000 persons. Lastly, this rule makes

clarifying amendments to the I/M requirements for areas undergoing

redesignation. EPA will soon publish a separate Supplemental Notice of

Proposed Rulemaking proposing an additional performance standard for

attainment and moderate (with less than 200,000 population) ozone

nonattainment areas not otherwise required to implement basic I/M

programs in the Ozone Transport Region. That proposed standard is based

on minimum statutory requirements for these particular areas and would

afford them flexibility beyond that provided by this final action.

EFFECTIVE DATE: This rule will take effect on October 18, 1995.

ADDRESSES: Materials relevant to this rulemaking are contained in

Public Docket No. A-95-08. The docket is located at the Air Docket,

Room M-1500 (6102), Waterside Mall SW., Washington, DC 20460. The

docket may be inspected between 8 a.m. to 4:30 p.m. on weekdays. A

reasonable fee may be charged for copying docket material.

FOR FURTHER INFORMATION CONTACT: Eugene J. Tierney, Office of Mobile

Sources, National Vehicle and Fuel Emissions Laboratory, 2565 Plymouth

Road, Ann Arbor, Michigan, 48105. Telephone (313) 668-4456.

SUPPLEMENTARY INFORMATION:

I. Table of Contents

II. Summary of Rule

III. Authority

IV. Public Participation

A. Low Enhanced Performance Standard

B. Extended Deadline for Implementing the $450 Waiver

C. Population Requirements for Basic I/M

D. Test-and-Repair Discount and Program Equivalency

V. Administrative Requirements

A. Administrative Designation

B. Reporting and Recordkeeping Requirement

C. Regulatory Flexibility Act

D. Unfunded Mandates Act

II. Summary of Rule

Under the Clean Air Act as amended in 1990 (the Act), 42 U.S.C.

7401 et seq., the U.S. Environmental Protection Agency (EPA) published

in the Federal Register on November 5, 1992 (40 CFR part 51, subpart S)

rules related to plans for Motor Vehicle Inspection and Maintenance (I/

M) programs (hereafter referred to as the I/M rule, see 57 FR 52950).

EPA published a notice of proposed rule making proposing changes to the

I/M rule in the Federal Register on April 28, l995 (60 FR 20934). EPA

today takes final action to revise the 1992 I/M rule to provide greater

flexibility to states required to implement I/M programs.

Section 182 of the Act was prescriptive regarding the various

elements that are required as part of an enhanced I/M performance

standard. It also required that EPA provide states with flexibility in

meeting the requirement for enhanced or basic I/M programs. States have

requested additional flexibility in two areas: the timing of the Act's

mandated minimum expenditure required to qualify for a waiver and a

lower performance standard for areas that may not need an enhanced I/M

program as effective as the one EPA adopted in 1992 to meet the Act's

Reasonable Further Progress and attainment demonstration requirements.

(These two standards are referred as the low enhanced and high enhanced

performance standards, respectively.)

EPA is establishing an alternate, low enhanced I/M performance

standard. This standard is designed for nonattainment areas that are

required to implement enhanced I/M but which can obtain adequate

emission reductions from other sources to meet emission reduction

requirements, without the stringency of the high enhanced I/M

performance standard. EPA will approve an enhanced I/M SIP meeting the

low performance standard provided EPA has approved or is simultaneously

approving the state's 1996 15% VOC reasonable further progress SIP and

provided that the state's ozone or CO attainment SIP and its post-1996

VOC reasonable further progress SIPs have not been disapproved.

The low enhanced performance standard meets the Act's requirement

that it be based on centralized, annual testing of light duty cars and

trucks, and checks for tampering and exhaust emissions. Nevertheless,

this standard can be met with a comprehensive decentralized, test-and-

repair program.

EPA's opinion that states should have the flexibility to implement

only the low enhanced I/M program if more is not needed to meet their

air quality goals makes common sense for areas whose emissions affect

only themselves. With respect to states in the Northeast Ozone

Transport Region, however, there is the additional issue of the effect

of one area's emissions on downwind areas' air quality, even if the

first area's emissions result in achievement of all local goals for

clean air. EPA believes that making the low enhanced performance

standard available even within the OTR will result in needed reductions

on both local and regional scales, while offering useful flexibility

especially with respect to areas that themselves have no air quality

problem. OTR states are required to submit attainment plans for their

nonattainment areas, and these plans must address both local and

transported emissions. In fact, EPA now believes that the low

performance standard that EPA proposed and is finalizing today offers

insufficient flexibility, in that it would require states to create

all-new networks of emission testing stations in many cities currently

without them, cities with no air quality problem of their own. EPA

believes that the affected states will likely be able to find more

cost-effective and publicly preferred ways to provide for region-wide

attainment. However, EPA did not propose any more flexible policy for

these areas, and cannot take final action at this time to provide more

flexibility. Therefore, EPA will soon publish a Supplemental Notice of

Proposed Rulemaking, which offers additional flexibility by proposing

to establish a lower enhanced performance standard for qualified areas

in the OTR. The Supplemental Notice will also explain the legal basis

for this additional flexibility. The standard will allow attainment

areas and marginal and moderate (with less than 200,000 population)

ozone areas in the OTR, not otherwise required to implement basic I/M

programs, to implement enhanced

[[Page 48031]]

programs which meet the requirements of the statute without

establishing extensive emission test networks.

EPA published a Notice of Proposed Rulemaking (NPRM) on April 28,

1995 describing these and other proposed amendments to the I/M rule.

Proposed changes in the waiver requirements, population cutoff for

basic programs and requirements for basic areas which have been

redesignated to attainment were designed to offer greater flexibility

to the states in the implementation of their I/M programs. The NPRM

also proposed the inclusion of visual checks as part of the test

procedure for all vehicles subject to enhanced I/M. Readers should

refer to the NPRM for a complete description of the background and

rationale for the proposed amendments, which will not be restated here.

After receiving and considering public comment on the NPRM, EPA is

today finalizing each of the proposed amendments as follows.

(1) EPA is establishing the alternative low enhanced performance

standard.

(2) EPA is extending the deadline for the full implementation of

the minimum expenditure required to be eligible for a waiver for both

basic and enhanced I/M programs until January 1998. In the interim, a

state can establish any minimum expenditure it chooses, as long as it

accounts for the higher waiver rates that will occur between now and

1998 in its emission inventory forecasts in the Reasonable Further

Progress plan.

(3) EPA is allowing states to include qualified repair cost

expenditures that occur within 60 days of the initial test toward

meeting the minimum waiver expenditure.

(4) Additionally, EPA is allowing the cost of specified emission

control components replaced by persons other than recognized repair

technicians to apply towards the waiver cost limit.

(5) EPA is deleting language from the November 5, 1992 I/M rule

barring motorists from qualifying for more than one hardship exemption

during the lifetime of a vehicle.

(6) EPA is adding a visual inspection of the positive crankcase

ventilation (PCV) valve on all light-duty vehicles and light-duty

trucks of model year 1968 through 1971, inclusive, and of the exhaust

gas recirculation (EGR) valve on all light-duty vehicles and light-duty

trucks of model year 1972 through 1983, inclusive to the high enhanced

performance standard.

(7) In the proposed rule of April 28, 1995, EPA requested comment

on whether or not it should change the minimum population cutoff for

basic I/M programs. Based on the public comment received, EPA is

revising the regulatory language in this rulemaking to increase the

minimum threshold for basic I/M programs to 200,000 or more.

(8) Finally, EPA is clarifying the requirements for basic I/M areas

that are eligible for redesignation to attainment. Consistent with

EPA's original intent, EPA does not believe that a violation of the

standard in an area that has been redesignated automatically requires

the implementation or upgrade of an I/M program. EPA believes that, in

the event of a violation, a state should have the flexibility to select

whichever contingency measures are best suited to correcting the

problem to bring the area to attainment as quickly as possible. The

rule would continue to require, however, that such an upgraded basic I/

M program be among the contingency measures from which the state will

choose. Changes to remove extraneous language related to the

requirements for an implementation schedule will also go into effect.

III. Authority

Authority for the action in this notice is granted to EPA by

section 182 of the Clean Air Act as amended (42 U.S.C. 7401, et seq.).

IV. Public Participation

This section discusses the content of the most significant of the

flexibility amendments, the submissions to the docket received during

the comment period and EPA's response to those comments. Submissions

were received from approximately 60 commenters including state

governments and agencies, industry, environmental organizations and

other organizations. Copies of the original comments can be obtained in

their entirety for a reasonable copying fee from the docket for this

rule. The docket also includes a complete Response to Comments document

for this rule. Substantial comments were received on each of the

amendments and were fully addressed in that document.

A. Low Enhanced Performance Standard

1. Summary of Proposal

EPA proposed to establish an alternate, less stringent I/M

performance standard called the low enhanced performance standard. This

low enhanced standard is designed for areas which are required to

implement enhanced programs but which do not have a major mobile source

component to the air quality problem, or which can obtain adequate

reductions from other sources to meet the 15% VOC reduction requirement

and demonstrate attainment.

The low enhanced standard differs from the original standard, now

referred to as the high enhanced performance standard, in that it

allows for idle testing. Although the standard is based on an annual,

test-only network this can also be met with a biennial, test-and-repair

network.

2. Summary of Comments

Commenters generally supported the notion of flexibility and the

proposed low enhanced option, although most believe that it does not

offer enough flexibility. The thrust of these comments was that the

proposed flexibility will not be a viable option for most areas because

credit discounts for test-and-repair networks and other mandated

requirements preclude most states from implementing programs which they

believe to be equivalent to required programs. One comment asked for

clarification of an apparent inconsistency between the summary and the

proposed rule: whether the low enhanced standard can be applied if

attainment goals are met for either CO and/or ozone or both CO and

ozone.

Several commenters strongly opposed the proposed low enhanced

standard, claiming that it is inconsistent with Clean Air Act section

182(c)(3)(C)(vi), which mandates EPA to require centralized networks

unless states can demonstrate equivalency of decentralized networks.

They argue that these programs will be less effective and will result

in failure to meet attainment goals. Comments were also made that EPA

is mandated to establish ``a'' performance standard and that to

establish more than one is contrary to law.

3. Response to Comments

EPA has designed this flexibility specifically for those areas

which either do not have a major mobile source component to their air

pollution problem or which do not require I/M programs which achieve

substantial reductions in automotive emissions to achieve air quality

goals. To lower the standard any further and make it available to more

enhanced I/M areas by granting inappropriately large credits to test-

and-repair programs would undermine the goals of I/M and the Clean Air

Act. While the Act requires certain program parameters to ensure

programs are both effective and enforceable, EPA is mandated to ensure

that these programs meet their intended goals. EPA maintains that it

offers the states flexibility to do so by making a case-by-case

assessment of program

[[Page 48032]]

effectiveness and assigning credits accordingly. EPA is, in fact, in

the process of doing this with two test-and-repair states. EPA believes

that to allow more credit for test-and-repair networks than is

scientifically justified by the available data or make vital

requirements optional would lead to failed programs and attainment

goals. EPA supports its credit assessment for test-and-repair networks

later in this document.

EPA believes that the low enhanced performance standard is

consistent with the Act's requirement that a program be based on a

centralized network unless the state demonstrates that a decentralized

program is equally effective. EPA believes that low enhanced programs

that opt for the decentralized network can make such a demonstration

with the MOBILE5a model and a comprehensive program which includes

annual testing of heavy duty vehicles, pressure testing, and full anti-

tampering programs. EPA also maintains that the Act in no way bars it

from establishing multiple performance standards. This is not a new

interpretation, but rather one which EPA took in the case of El Paso

which was subject to an alternate standard under the original I/M rule.

To clarify the apparent inconsistency between the summary and the

rule: low enhanced I/M may be implemented only in those states that can

meet all of the 1990 Clean Air Act requirements for Reasonable Further

Progress (RFP) for ozone and attainment for both ozone and carbon

monoxide, if the area is required to implement enhanced I/M for both

pollutants. If an area is required to implement enhanced I/M for only

one pollutant (regardless of a requirement to implement basic I/M for

the other pollutant), then low enhanced may be implemented if RFP and

attainment requirements are met for that pollutant.

B. Extended Deadline for Implementing the $450 Waiver

1. Summary of Proposal

The original I/M rule requires that for enhanced programs, states

must implement the $450 minimum expenditure to qualify for a waiver

when the I/M program starts in 1995.

EPA proposed to postpone full implementation of the enhanced I/M

waiver requirement until January 1, 1998, to allow states time to reach

the long-term goals of the Clean Air Act. This action aims to provide

the short term regulatory relief states have been requesting and would

give states additional time to develop programs to assist low-income

vehicle owners to repair their vehicles.

Some states are in the process of developing programs to mitigate

the impact of I/M-related repair costs on low-income motorists. Such

efforts have generally involved either granting low-income motorists

time extensions of up to one full test cycle (per the November 5, 1992

rule), repair subsidy programs for individuals on some form of public

assistance, or scrappage programs for low value, high emitting

vehicles. Repair subsidy and scrappage based efforts tend to vary most

in the area of funding mechanism. In some programs, mitigation efforts

are funded by way of late fees collected from motorists who have missed

their scheduled testing deadline; in others, revenue is generated by

allowing new car buyers to pay a on-time ``mitigation fee'' which

exempts them from the first scheduled inspection. EPA is willing to

work with states that wish to develop other creative ways to deal with

the issue of repair costs for low-income motorists.

2. Summary of Comments

Comments were divided on the issue of whether EPA should extend the

deadline for implementing the $450 waiver. Most of the parties

unsatisfied by EPA's proposal argued that a CPI (Consumer Price Index)

adjustment of the $450 waiver expenditure would increase the repair

cost minimum to between $600-650 when the full waiver requirement would

be implemented in 1998, leading to public acceptance problems. With

respect to this issue, two parties made the following recommendations:

The EPA was urged to allow states to maintain their current minimum

waiver amounts until 1998, at which time the phase-in would begin. Once

$450 was applied as the limit during 1998, the minimum waiver amount

would be adjusted annually based on the CPI with 1998 as the base year.

Another commenter asked for revision of the rule language to clearly

state that the often-referenced CPI-adjusted $450 amount would be

likely to exceed $600 in 1998. One comment claimed that lost credit

would occur from extending the waiver and this would have to be made up

elsewhere. Another commenter queried why EPA was still interested in

identifying high emitters through enhanced test programs when the

amendment would mean that individuals would not be required to make all

the necessary repairs.

The general thrust of comments supporting the rule focused on the

additional flexibility this amendment would give states to phase in the

$450 minimum expenditure waiver and implement hardship waiver programs.

One comment suggested that the additional time would allow states to

work on building public acceptance of the program and improve

technician training. Another comment supported the extension of the

deadline but suggested that CPI adjustments be applied only to the full

minimum expenditure waiver amount no sooner than one full test cycle

following final implementation.

3. Response to Comments

For emissions-related repairs not covered by warranty, the Clean

Air Act very clearly requires a minimum expenditure of $450 for

vehicles to qualify for a waiver. It is also very clear that the waiver

limit is to be adjusted annually based on the Consumer Price Index,

with a base year of 1989. As the preamble to the original I/M rule

states, (page 52964, Federal Register), EPA will annually notify states

of the adjusted amount.

It is not the EPA's intention that states begin the phase-in in

1998. EPA maintains that states have more than enough flexibility to

begin the phase-in now to maintain a minimal increment by 1998. EPA

believes that the enhanced I/M program should be fully implemented by

1998, including the CPI adjusted $450 waiver, to enable areas to

achieve the reductions contemplated by the program prior to the

attainment deadline for serious areas (i.e., 11/15/99). Should areas

need reductions between now and 1998 to meet reasonable further

progress requirements, they would have to achieve them from other

programs should they choose to delay full implementation of the $450

waiver amount.

EPA believes that the extension of the waiver deadline will give

states the opportunity to improve technician training so that by 1998

the majority of vehicles would be repaired for well below the CPI-

adjusted $450 minimum waiver amount. The additional time will also give

states ample opportunity to set up hardship programs for low-income

vehicle owners and scrappage programs for vehicles that are not

economical to repair.

To clarify the apparent misunderstanding regarding the proposed

amendment's effect on repairs: I/M programs will continue as scheduled,

motorists will still be required to repair their vehicles, and real

emissions reductions will be achieved. However, the minimum waiver

amount will depend on the cost limit prescribed by the state's phase-in

[[Page 48033]]

program and the levels of emissions reductions will depend upon what

waiver rates result.

C. Population Requirements for Basic I/M

1. Summary of Proposal

EPA requested comment on whether it should change the minimum

population cut-off for basic I/M programs. Currently, basic I/M

programs are required in moderate ozone and carbon monoxide non-

attainment areas with a 1990 Census-defined population of 50,000 or

more. EPA considered raising this threshold to 200,000 or more.

2. Summary of Comments

The majority of responses to the proposed amendment were generally

supportive. Some commenters indicated that the issue did not affect

them since they were in the OTR (Ozone Transport Region) and therefore

required enhanced testing regardless of whether or not the population

cut-off was increased. Many of the commenters who supported the change

did so with a proviso: that the rule be applied only to areas that were

not currently included in I/M and that were in moderate attainment

areas. Two parties indicated that the proposed amendment should only

apply if an area can demonstrate that the absence of I/M would not

impact downwind areas. A few supported the change because they viewed

it as added flexibility for the states.

Commenters opposed to the amendment suggested that EPA had not

offered a reasonable explanation for this change and that areas with

less than 200,000 people deserved clean air protection. They argued

that the amendment would only serve to encourage states to opt-out of

OTR to avoid compliance.

3. Response to Comments

EPA proposed this amendment to grant states further flexibility in

designing I/M programs to meet local needs. Areas under 200,000

population which are still in nonattainment are required to achieve

whatever ozone reductions are needed to meet reasonable further

progress or attainment requirements. While exempted from the mandatory

basis I/M requirement under this amendment, such areas would have to

achieve those reductions from other programs, or implement an I/M

program, at the state's discretion.

EPA concludes that the 200,000 population cut-off for basic

programs is authorized by the Act because sections 182(a)(2)(B)(i) and

182(b)(4) require implementation only of an I/M program no less

stringent than that required under pre-1990 EPA I/M guidance. EPA's

pre-1990 I/M guidance required implementation of basic I/M programs

only in urbanized areas of 200,000 population. It is true that some

moderate areas would not be required to implement I/M programs if their

population were under 200,000, despite the fact that section 182(b)(4)

requires a basic I/M program in all moderate areas. However, the basic

program that is required is a program that applies only to areas of

200,000 or more population. The issue of whether Congress meant to

expand the geographic scope of basic I/M programs by requiring them in

all moderate areas was presented to the court in litigation on the 1992

I/M rules. The court ruled that the statutory language ``does not, in

our view, compel the conclusion that Congress sought silently to alter

any preexisting exclusions for basic I/M programs, particularly when

Congress explicitly incorporated the preexisting guidance by

reference.'' Further, the court concluded that ``the requirement that

states submit implementation plans for those moderate areas not covered

in the previous statute does not by its term affect the scope of I/M

programs within those areas''. Natural Resources Defense Council, Inc.

v. EPA, 22 F.3d 1125, 1141-2. Consequently, EPA believes that although

basic I/M programs are required for all moderate areas, they need only

be implemented in urbanized areas with populations of 200,000 or more

within such moderate areas.

Basic I/M is prescribed to solve local problems. Questions arising

from the transport of ozone and CO downwind across state boundaries may

be answered by referring to section 184 of the Clean Air Act.

As to the effects on OTR areas, states will not be encouraged to

opt out to avoid compliance. Rather, the SNPRM discussed previously

outlines the OTR-low enhanced performance standard which gives states

more flexibility and incentive to remain in the OTR.

D. Test-and-Repair Discount and Program Equivalency

1. Summary of the Issue

Although today's action does not address the credit allowances for

test-and-repair networks and the question of equivalency with test-only

networks, the issue has become a point of contention as some states

seek more flexibility in program design. A notable quantity of the

comments received on today's rulemaking dealt expressly with this

issue.

2. Summary of Comments

Commenters in support of the default discount stressed that SIP

credits must be based on real quantifiable emissions reductions and

that they supported the default discount and would also support data

that showed an even greater discount for a test-and-repair network.

Another commenter strongly supported the default discount, adding that

the undisputed performance disadvantage of ``test-and repair'' systems

should persuade EPA to keep the current credit structure. Another group

commented that their independent data analysis of two states, one with

a test-only system and one with a test-and-repair system, showed

conclusively that the test-and-repair system was achieving

significantly less emission reductions than the test-only system and

that the default discount used by the EPA accurately reflected the loss

of emission reductions for the test-and-repair system.

Commenters opposed to the default discount claimed that test-only

I/M does not work as well as EPA claims and that test-and-repair

programs are unfairly discounted by their comparison to an inflated

estimate of test-only effectiveness. Some commenters added that past

performance has shown that test-and-repair could be as effective as

test-only and should be credited accordingly. The California I/M Review

Committee was frequently cited along with studies by Georgia Tech, and

others as scientific evidence that the audit data upon which EPA

studies were based was somehow flawed.

3. Response to Comments

It should first be noted that in the original I/M rule EPA had

proposed granting ``provisional equivalency'' to test-and-repair

programs for purposes of initial SIP submission and approval, requiring

program evaluation to assure that programs meet the performance

standard. Comments by state agencies and others at that time were

compelling and strongly against provisional equivalency. They argued

that because both state and EPA evidence showed that test-and-repair

programs were inferior to test-only programs, in terms of emissions

reductions, it would be inadequate and probably illegal for EPA to

grant them full credit. They suggested that to grant provisional

equivalency without proven success would be irresponsible and would

allow ineffective and costly programs to continue while air quality

improvement would suffer. EPA acknowledged these

[[Page 48034]]

comments and eliminated provisional equivalency from the final I/M

rule. Nevertheless, EPA included provisions in the final rule allowing

states to make demonstrations based on local data that test-and-repair

was more effective than the national default credits.

EPA's default discount for test-and-repair services is based on the

best data from a broad set of indicators and across many programs.

Cited studies have not shown evidence that would cause EPA to revoke

the default discount. The most comprehensive study of test-and-repair

effectiveness was conducted by the California I/M Review Committee in

the early 1990s and showed that despite aggressive enforcement, the use

of advanced technology, and a huge outlay of government oversight, the

program still did not achieve more than half of what a test-only

program could achieve. While EPA continues to believe that the default

discount is appropriate as a national estimate when there is no local

data to prove another level, EPA is willing to consider local data to

determine whether it supports a higher or lower credit. EPA believes

the I/M rule allows it to give prospective credit based on a

retrospective analysis of such local data. EPA is working with Utah and

Virginia at this time to analyze local data in an attempt to establish

program specific credits.

EPA received only minor comment on all other proposals in the NPRM

for this rule. A summary of those comments and of EPA's response may be

found in the Response to Comments document included in the docket for

this rule.

Based upon the public comment received and a reasoned analysis, EPA

is proceeding with the adoption of each of the proposed amendments with

no substantive changes.

V. Administrative Requirements

A. Administrative Designation

It has been determined that these amendments to the I/M rule are a

significant regulatory action under the terms of Executive Order 12866

and are therefore subject to OMB review.

However, it does not create an annual effect on the economy of $100

million or more or otherwise adversely affect the economy or the

environment. Any impacts associated with these revisions do not

constitute additional burdens when compared to the existing I/M

requirements published in the Federal Register on November 5, 1992 (57

FR 52950). It is not inconsistent with nor does it interfere with

actions by other agencies. It does not alter budgetary impacts of

entitlements or other programs, and it does not raise any new or

unusual legal or policy issues.

B. Reporting and Recordkeeping Requirement

There are no information requirements in this final rule which

require the approval of the Office of Management and Budget under the

Paperwork Reduction Act 44 U.S.C. 3501 et seq.

C. Regulatory Flexibility Act

Pursuant to section 605(b) of the Regulatory Flexibility Act, 5

U.S.C. 605(b), the Administrator certifies that this final rule will

not have a significant economic impact on a substantial number of small

entities and, therefore, is not subject to the requirement of a

Regulatory Impact Analysis. A small entity may include a small

government entity or jurisdiction. A small government jurisdiction is

defined as ``governments of cities, counties, towns, townships,

villages, school districts, or special districts, with a population of

less than 50,000.'' This certification is based on the fact that the I/

M areas impacted by the rulemaking do not meet the definition of a

small government jurisdiction, that is, ``governments of cities,

counties, towns, townships, villages, school districts, or special

districts, with a population of less than 50,000.'' Furthermore, the

impact created by the action does not increase the pre-existing burden

which this final rule seeks to amend.

D. Unfunded Mandates Act

Under section 202 of the Unfunded Mandates Reform Act of 1995

(``Unfunded Mandates Act''), signed into law on March 22, 1995, EPA

must prepare a budgetary impact statement to accompany any proposed or

final rule where the estimated costs to State, local, or tribal

governments, or to the private sector, will be $100 million or more.

Under Section 205, EPA must select the most cost-effective and least

burdensome alternative that achieves the objective of the rule and is

consistent with statutory requirements. Section 203 requires EPA to

establish a plan for informing and advising any small governments that

may be significantly impacted by the rule.

To the extent that the rules being promulgated by this action would

impose any mandate as defined in Section 101 of the Unfunded Mandates

Act upon the state, local, or tribal governments, or the private

sector, as explained above, this rule is not estimated to impose costs

in excess of $100 million. Therefore, EPA has not prepared a statement

with respect to budgetary impacts. As noted above, this rule offers

opportunities to states that would enable them to lower economic

burdens from those resulting from the currently existing I/M rule.

List of Subjects in 40 CFR Part 51

Environmental protection, Administrative practice and procedure,

Air pollution control, Carbon monoxide, Transportation.

Dated: September 6, 1995.

Carol M. Browner,

Administrator.

For the reasons set out in the preamble, part 51 of title 40 of the

Code of Federal Regulations is amended to read as follows:

1. The authority citation for part 51 continues to read as follows:

Authority: 42 U.S.C. 740l-7671q.

2. Section 51.350 is amended by revising paragraphs (a)(4), (a)(6),

(a)(7), (a)(8), (a)(9) and (b)(4) and by removing and reserving

paragraph (a)(5) to read as follows:

Sec. 51.350 Applicability.

* * * * *

(a) * * *

(4) Any area classified as moderate ozone nonattainment, and not

required to implement enhanced I/M under paragraph (a)(1) of this

section, shall implement basic I/M in any 1990 Census-defined urbanized

area with a population of 200,000 or more.

(5) [Reserved]

(6) If the boundaries of a moderate ozone nonattainment area are

changed pursuant to section 107(d)(4)(A)(i)-(ii) of the Clean Air Act,

such that the area includes additional urbanized areas with a

population of 200,000 or more, then a basic I/M program shall be

implemented in these additional urbanized areas.

(7) If the boundaries of a serious or worse ozone nonattainment

area or of a moderate or serious CO nonattainment area with a design

value greater than 12.7 ppm are changed any time after enactment

pursuant to section 107(d)(4)(A) such that the area includes additional

urbanized areas, then an enhanced I/M program shall be implemented in

the newly included 1990 Census-defined urbanized areas, if the 1980

Census-defined urban area population is 200,000 or more.

(8) If a marginal ozone nonattainment area, not required to

implement enhanced I/M under paragraph (a)(1) of this section, is

reclassified to moderate, a basic I/M program shall be implemented in

the 1990 Census-defined urbanized area(s) with a

[[Page 48035]]

population of 200,000 or more. If the area is reclassified to serious

or worse, an enhanced I/M program shall be implemented in the 1990

Census-defined urbanized area, if the 1980 Census-defined urban area

population is 200,000 or more.

(9) If a moderate ozone or CO nonattainment area is reclassified to

serious or worse, an enhanced I/M program shall be implemented in the

1990 Census-defined urbanized area, if the 1980 Census-defined

population is 200,000 or more.

(b) * * *

(4) In a multi-state urbanized area with a population of 200,000 or

more that is required under paragraph (a) of this section to implement

I/M, any state with a portion of the area having a 1990 Census-defined

population of 50,000 or more shall implement an I/M program. The other

coverage requirements in paragraph (b) of this section shall apply in

multi-state areas as well.

* * * * *

3. Section 51.351 is amended by revising paragraphs (a)

introductory text, and (b), by removing and reserving paragraph (e) and

by adding paragraphs (f) and (g) to read as follows:

Sec. 51.351 Enhanced I/M performance standards.

(a) Enhanced I/M programs shall be designed and implemented to meet

or exceed a minimum performance standard, which is expressed as

emission levels in area-wide average grams per mile (gpm), achieved

from highway mobile sources as a result of the program. The emission

levels achieved by the state's program design shall be calculated using

the most current version, at the time of submittal, of the EPA mobile

source emission factor model or an alternative model approved by the

Administrator, and shall meet the minimum performance standard both in

operation and for SIP approval. Areas shall meet the performance

standard for the pollutants which cause them to be subject to enhanced

I/M requirements. In the case of ozone nonattainment areas subject to

enhanced I/M and subject areas in the Ozone Transport Region, the

performance standard must be met for both oxides of nitrogen (NOX)

and volatile organic compounds (VOCs), except as provided in paragraph

(d) of this section.

* * * * *

(b) On-road testing. The performance standard shall include on-road

testing of at least 0.5% of the subject vehicle population, or 20,000

vehicles whichever is less, as a supplement to the periodic inspection

required in paragraphs (f) and (g) of this section. Specific

requirements are listed in Sec. 51.371 of this subpart.

(e) [Reserved].

* * * * *

(f) High Enhanced Performance Standard. Except as provided in

paragraph (g) of this section, the model program elements for the

enhanced I/M performance standard shall be as follows:

(1) Network type. Centralized testing.

(2) Start date. For areas with existing I/M programs, 1983. For

areas newly subject, 1995.

(3) Test frequency. Annual testing.

(4) Model year coverage. Testing of 1968 and later vehicles.

(5) Vehicle type coverage. Light duty vehicles, and light duty

trucks, rated up to 8,500 pounds Gross Vehicle Weight Rating (GVWR).

(6) Exhaust emission test type. Transient mass-emission testing on

1986 and later model year vehicles using the IM240 driving cycle, two-

speed testing (as described in appendix B of this subpart S) of 1981-

1985 vehicles, and idle testing (as described in appendix B of this

subpart S) of pre-1981 vehicles is assumed.

(7) Emission standards. (i) Emission standards for 1986 through

1993 model year light duty vehicles, and 1994 and 1995 light-duty

vehicles not meeting Tier 1 emission standards, of 0.80 gpm

hydrocarbons (HC), 20 gpm CO, and 2.0 gpm NOX;

(ii) Emission standards for 1986 through 1993 light duty trucks

less than 6000 pounds gross vehicle weight rating (GVWR), and 1994 and

1995 trucks not meeting Tier 1 emission standards, of 1.2 gpm HC, 20

gpm CO, and 3.5 gpm NOX;

(iii) Emission standards for 1986 through 1993 light duty trucks

greater than 6000 pounds GVWR, and 1994 and 1995 trucks not meeting the

Tier 1 emission standards, of 1.2 gpm HC, 20 gpm CO, and 3.5 gpm

NOX;

(iv) Emission standards for 1994 and later light duty vehicles

meeting Tier 1 emission standards of 0.70 gpm HC, 15 gpm CO, and 1.4

gpm NOX;

(v) Emission standards for 1994 and later light duty trucks under

6000 pounds GVWR and meeting Tier 1 emission standards of 0.70 gpm HC,

15 gpm CO, and 2.0 gpm NOX;

(vi) Emission standards for 1994 and later light duty trucks

greater than 6000 pounds GVWR and meeting Tier 1 emission standards of

0.80 gpm HC, 15 gpm CO and 2.5 gpm NOX;

(vii) Emission standards for 1981-1985 model year vehicles of 1.2%

CO, and 220 gpm HC for the idle, two-speed tests and loaded steady-

state tests (as described in appendix B of this subpart S); and

(viii) Maximum exhaust dilution measured as no less than 6% CO plus

carbon dioxide (CO2) on vehicles subject to a steady-state test

(as described in appendix B of this subpart S); and

(viii) Maximum exhaust dilution measured as no less than 6% CO plus

carbon dioxide (CO2) on vehicles subject to a steady-state test

(as described in appendix B of this subpart S).

(8) Emission control device inspections. (i) Visual inspection of

the catalyst and fuel inlet restrictor on all 1984 and later model year

vehicles.

(ii) Visual inspection of the positive crankcase ventilation valve

on 1968 through 1971 model years, inclusive, and of the exhaust gas

recirculation valve on 1972 through 1983 model year vehicles,

inclusive.

(9) Evaporative system function checks. Evaporative system

integrity (pressure) test on 1983 and later model year vehicles and an

evaporative system transient purge test on 1986 and later model year

vehicles.

(10) Stringency. A 20% emission test failure rate among pre-1981

model year vehicles.

(11) Waiver rate. A 3% waiver rate, as a percentage of failed

vehicles.

(12) Compliance rate. A 96% compliance rate.

(13) Evaluation date. Enhanced I/M program areas shall be shown to

obtain the same or lower emission levels as the model program described

in this paragraph by 2000 for ozone nonattainment areas and 2001 for CO

nonattainment areas, and for severe and extreme ozone nonattainment

areas, on each applicable milestone and attainment deadline,

thereafter. Milestones for NOX shall be the same as for ozone.

(g) Alternate Low Enhanced I/M Performance Standard. An enhanced I/

M area which is either not subject to or has an approved State

Implementation Plan pursuant to the requirements of the Clean Air Act

Amendments of 1990 for Reasonable Further Progress in 1996, and does

not have a disapproved plan for Reasonable Further Progress for the

period after 1996 or a disapproved plan for attainment of the air

quality standards for ozone or CO, may select the alternate low

enhanced I/M performance standard described below in lieu of the

standard described in paragraph (f) of this section. The model program

elements for this alternate low enhanced I/M performance standard are:

(1) Network type. Centralized testing.

[[Page 48036]]

(2) Start date. For areas with existing I/M programs, 1983. For

areas newly subject, 1995.

(3) Test frequency. Annual testing.

(4) Model year coverage. Testing of 1968 and newer vehicles.

(5) Vehicle type coverage. Light duty vehicles, and light duty

trucks, rated up to 8,500 pounds GVWR.

(6) Exhaust emission test type. Idle testing of all covered

vehicles (as described in Appendix B of Subpart S).

(7) Emission standards. Those specified in 40 CFR Part 85, Subpart

W.

(8) Emission control device inspections. Visual inspection of the

positive crankcase ventilation valve on all 1968 through 1971 model

year vehicles, inclusive, and of the exhaust gas recirculation valve on

all 1972 and newer model year vehicles.

(9) Evaporative system function checks. None.

(10) Stringency. A 20% emission test failure rate among pre-1981

model year vehicles.

(11) Waiver rate. A 3% waiver rate, as a percentage of failed

vehicles.

(12) Compliance rate. A 96% compliance rate.

(13) Evaluation date. Enhanced I/M program areas subject to the

provisions of this paragraph shall be shown to obtain the same or lower

emission levels as the model program described in this paragraph by

2000 for ozone nonattainment areas and 2001 for CO nonattainment areas,

and for severe and extreme ozone nonattainment areas, on each

applicable milestone and attainment deadline, thereafter. Milestones

for NOx shall be the same as for ozone.

4. Section 51.360 is amended by revising the introductory text and

paragraphs (a)(1), (a)(5), (a)(6), (a)(7) introductory text, (a)(9) and

(b) to read as follows:

Sec. 51.360 Waivers and compliance via diagnostic inspection.

The program may allow the issuance of a waiver, which is a form of

compliance with the program requirements that allows a motorist to

comply without meeting the applicable test standards, as long as the

prescribed criteria described below are met.

(a) * * *

(1) Waivers shall be issued only after a vehicle has failed a

retest performed after all qualifying repairs have been completed.

Qualifying repairs include repairs of the emission control components,

listed in paragraph (a)(5) of this section, performed within 60 days of

the test date.

* * * * *

(5) General repairs shall be performed by a recognized repair

technician (i.e., one professionally engaged in vehicle repair,

employed by a going concern whose purpose is vehicle repair, or

possessing nationally recognized certification for emission-related

diagnosis and repair) in order to qualify for a waiver. I/M programs

may allow the cost of parts (not labor) utilized by non-technicians

(e.g., owners) to apply toward the waiver limit. The waiver would apply

to the cost of parts for the repair or replacement of the following

list of emission control components: oxygen sensor, catalytic

converter, thermal reactor, EGR valve, fuel filler cap, evaporative

canister, PCV valve, air pump, distributor, ignition wires, coil, and

spark plugs. The cost of any hoses, gaskets, belts, clamps, brackets or

other accessories directly associated with these components may also be

applied to the waiver limit.

(6) In basic programs, a minimum of $75 for pre-81 vehicles and

$200 for 1981 and newer vehicles shall be spent in order to qualify for

a waiver. These model year cutoffs and the associated dollar limits

shall be in full effect no later than January 1, 1998. Prior to January

1, 1998, states may adopt any minimum expenditure commensurate with the

waiver rate committed to for the purposes of modeling compliance with

the basic I/M performance standard.

(7) Beginning on January 1, 1998, enhanced I/M programs shall

require the motorist to make an expenditure of at least $450 in repairs

to qualify for a waiver. The I/M program shall provide that the $450

minimum expenditure shall be adjusted in January of each year by the

percentage, if any, by which the Consumer Price Index for the preceding

calendar year differs from the Consumer Price Index of 1989. Prior to

January 1, 1998, states may adopt any minimum expenditure commensurate

with the waiver rate committed to for the purposes of modeling

compliance with the relevant enhanced I/M performance standard.

* * * * *

(9) A time extension, not to exceed the period of the inspection

frequency, may be granted to obtain needed repairs on a vehicle in the

case of economic hardship when waiver requirements have not been met.

After having received a time extension, a vehicle must fully pass the

applicable test standards before becoming eligible for another time

extension. The extension for a vehicle shall be tracked and reported by

the program.

(b) Compliance via diagnostic inspection. Vehicles subject to a

transient IM240 emission test at the cutpoints established in

Secs. 51.351 (f)(7) and (g)(7) of this subpart may be issued a

certificate of compliance without meeting the prescribed emission

cutpoints, if, after failing a retest on emissions, a complete,

documented physical and functional diagnosis and inspection performed

by the I/M agency or a contractor to the I/M agency show that no

additional emission-related repairs are needed. Any such exemption

policy and procedures shall be subject to approval by the

Administrator.

* * * * *

5. Section 51.372 is amended by revising paragraphs (c)

introductory text, (c)(3), (c)(4), and (e) to read as follows:

Sec. 51.372 State implementation plan submissions.

* * * * *

(c) Redesignation requests. Any nonattainment area that EPA

determines would otherwise qualify for redesignation from nonattainment

to attainment shall receive full approval of a State Implementation

Plan (SIP) submittal under Sections 182(a)(2)(B) or 182(b)(4) if the

submittal contains the following elements:

* * * * *

(3) A contingency measure consisting of a commitment by the

Governor or the Governor's designee to adopt or consider adopting

regulations to implement an I/M program to correct a violation of the

ozone or CO standard or other air quality problem, in accordance with

the provisions of the maintenance plan.

(4) A contingency commitment that includes an enforceable schedule

for adoption and implementation of the I/M program, and appropriate

milestones. The schedule shall include the date for submission of a SIP

meeting all of the requirements of this subpart. Schedule milestones

shall be listed in months from the date EPA notifies the state that it

is in violation of the ozone or CO standard or any earlier date

specified in the state plan. Unless the state, in accordance with the

provisions of the maintenance plan, chooses not to implement I/M, it

must submit a SIP revision containing an I/M program no more than 18

months after notification by EPA.

* * * * *

(e) SIP submittals to correct violations. SIP submissions required

pursuant to a violation of the ambient ozone or CO standard (as

discussed in paragraph (c) of this section) shall address all of the

requirements of this subpart. The SIP shall demonstrate that

performance standards in either

[[Page 48037]]

Sec. 51.351 or Sec. 51.352 shall be met using an evaluation date

(rounded to the nearest January for carbon monoxide and July for

hydrocarbons) seven years after the date EPA notifies the state that it

is in violation of the ozone or CO standard or any earlier date

specified in the state plan. Emission standards for vehicles subject to

an IM240 test may be phased in during the program but full standards

must be in effect for at least one complete test cycle before the end

of the 5-year period. All other requirements shall take effect within

24 months of the date EPA notifies the state that it is in violation of

the ozone or CO standard or any earlier date specified in the state

plan. The phase-in allowances of Sec. 51.373(c) of this subpart shall

not apply.

[FR Doc. 95-23106 Filed 9-15-95; 8:45 am]

BILLING CODE 6560-50-P