STATE OF NORTH CAROLINA 

DEPARTMENT OF ENVIRONMENT AND NATURAL RESOURCES 

DIVISION OF AIR QUALITY 

REPORT OF PROCEEDINGS OF PUBLIC HEARING 

ON PROPOSED AMENDMENT TO 

 RULES 15A NCAC 02D .1002, APPLICABILITY; 15A NCAC 02D .1003, 

DEFINITIONS; 15A NCAC 02D .1005, ON-BOARD DIAGNOSTIC 

STANDARDS, 15A NCAC 02D .1006, AND SALE AND SERVICE OF 

ANALYZERS; AND PROPOSED REPEAL OF RULE 15A NCAC 02D .1009, 

MODEL YEAR 2008 AND SUBSEQUENT MODEL YEAR HEAVY-DUTY 

DIESEL VEHICLE REQUIREMENTS 

 

 

 

SEPTEMBER 18, 2013 

RALEIGH, NC 
ENVIRONMENTAL MANAGEMENT COMMISSION 

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CONTENTS 

CHAPTER I Summaries and Recommendations I-1

Background and Summary I-1

Comments and Responses Thereto I-2

Summary of Comments and Responses I-4

Conclusion I-4

Hearing Officers’ Recommendation I-5

CHAPTER II Rules Proposed for Adoption II-1

CHAPTER III Report of Proceedings III-1

Introduction III-1

Designation of Hearing Officer III-2

Public Notice III-3

Transcript III-5

CHAPTER IV Exhibits IV- 1

Proposed Rules as Presented at the Hearing IV-2 

Hearing Officer Comments at Hearing IV-6

CHAPTER V Written Comments During Comment Period V-1

CHAPTER VI Attachments VI-1

CHAPTER VII Documentation VII-1

 
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I-1 

CHAPTER I 

Summaries and Recommendations 

Proposed amendments to 15A NCAC 02D .1002, 02D .1003, 02D .1005, 02D .1006, and 02D 

.1009. 

BACKGROUND AND SUMMARY 

A public hearing was held in Raleigh, NC on September 18, 2013, to take public comments on 

amendments to the Motor Vehicle Emission Control Standards in 15A NCAC 02D Section 

.1000. Mr. Steven Vozzo was appointed as the hearing officer for this hearing. 

The North Carolina General Assembly passed legislation in 2012 calling for changes in the 

emissions testing program for newer cars and light-duty trucks. The North Carolina Motor 

Vehicle Emission Control Standard rules are proposed to be amended in order to incorporate the 

revised statutory exemption of the three most recent model year vehicles with less than 70,000 

miles on the odometer from vehicle emissions inspection. While the new law exempts such 

vehicles from an emission inspection, those vehicles will still require a safety inspection where a 

visual inspection of the vehicles emissions components occurs. The proposed action is pursuant 

to Session Law 2012-199 (House Bill 585), An Act To Exempt Vehicles Of The Three Newest 

Model Years And With Less Than Seventy Thousand Miles From Emissions Inspections. 

Additional minor housekeeping amendments to clarify definitions are also proposed. In addition, 

Rule 15A NCAC 02D .1009, Model Year 2008 and Subsequent Model Year Heavy-Duty Diesel 

Vehicle Requirements, is proposed for repeal because it is duplicative of United States 

Environmental Protection Agency (USEPA) rule requirements and therefore unnecessary.

15A NCAC 02D .1002, Applicability, is proposed to be amended to extend the exemption from 

emission inspections from the current model year vehicles to the three most recent model years 

vehicles with less than 70,000 miles on their odometer consistent with Session Law 2012-199 

and the North Carolina G.S. 20-183.2(b)(3). 

15A NCAC 02D .1003, Definitions, is proposed for amendment to add and modify the 

definitions of terms in Section 02D .1000, Motor Vehicles Emission Control Standards to reflect 

advancements in the industry that have resulted in new technologies powering vehicles and 

associated new terminology intrinsic with modern motor vehicles. For example, definitions were 

added for vehicles powered by hybrid (electric and gas), electricity, and fuel-cell technologies. 

Definitions of new terms prompted by the statute change were also added, such as the term 

"three most recent model years." 

15A NCAC 02D .1005, On-Board Diagnostic Standards, is proposed for amendment to align the 

rule with the new statutory exemption and to update the language for emergence of hybrid, 

electric, and fuel-cell powered vehicles. 
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15A NCAC 02D .1006, Sale and Service of Analyzers, is proposed to be amended to update 

language to reflect advancements and current capabilities for documenting and tracking emission 

inspection analyzer vendor repair and service calls. 

Finally, 15A NCAC 02D .1009, Model Year 2008 and Subsequent Model Year Heavy Duty 

Diesel Vehicle Requirements, is proposed to be repealed as it is equivalent to and duplicative of 

United States Environmental Protection Agency Heavy Duty Diesel rules and thus is no longer 

necessary. 

PUBLIC COMMENTS AND RESPONSES THERETO

Comments on similar issues have been grouped and a common response provided where 

appropriate. 

Comment: Chris Giguere, North Carolina State University Ph.D. graduate economics student 

and Intern with the North Carolina Division of Environmental Assistance and Customer Service, 

commented that his interest is evaluating available information on North Carolina’s public fleet 

(such as fuel economy, vehicle type, and mileage) to see if the exemption terms (three most 

recent model years with less than 70,000 miles on the odometer) are the right numbers relative to 

model years and mileage. He asked for a copy of the exemption study report that the North 

Carolina Division of Motor Vehicles (DMV) and Division of Air Quality (DAQ) produced for 

the General Assembly in 2012. 

Response: As requested, DAQ staff provided a copy of the DMV/DAQ exemption study 

report following the hearing. 

Comment: Michael Gaither of BanaLogic Corporation asked a series of questions on how the 

70,000 mileage exemption provision was to be enforced, what preparations are being made to 

enforce this mileage provision by January 2014, and how the inspection stations were going to 

police themselves on this provision. 

Response: The DMV is currently working with DAQ to prepare for the implementation of 

Session Law 2012-199 and will be updating stakeholders as the implementation date 

approaches. The DMV has statutory and administrative authority to manage and enforce the 

State Inspection and Maintenance (I/M) Program. Through this authority, DMV will use 

education and oversight to enforce the new provisions of Session Law 2012-199. Education 

efforts will come in two forms: 1.) updated material will be added to the initial and renewal 

certification courses to address changes in the law and, 2.) guidance will be provided through 

educational material and media sources to station owners and inspector mechanics who will not 

be attending a renewal course in the 2014 calendar year. Oversight will include overt and covert 

audits and investigations. Additionally, I/M mechanics are required to enter the vehicle mileage 

prior to performing any inspection. Data is recorded in the test record and this data could then be 

used to determine if any fraudulent activities have taken place. 
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Comment: Shawn Peticos representing himself commented that the rule change was just 

another tax break for the rich.

Comment: Joe Culotta of Asheville representing himself stated that the emission inspection 

is a scam in that more than 90 percent pass it on the first try. Given the passing rate is so high, 

then why is it required every year, and why not every 3 years for everyone? 

Comment: Terry Anderson of Gastonia representing himself commented that the annual 

emission test is a waste of his money and a scam. The vehicles before 1997 are not subject to an 

emission inspection and chances are they would fail a lot more. The diesel trucks are the worst 

polluters and they do not even get tested. He suggested exempting the five most recent model 

years. 

Comment: Jim McClesse of Fletcher, NC representing himself commented that the annual 

emission test is a waste of his money and a scam. He suggested exempting the three, four or 

five most recent model years. 

Comment: Max Potter representing himself commented that he would like to revoke all 

emissions inspections. The rule change unfairly places the burden of the emission inspection 

fees on the individuals that cannot afford new cars. These inspections have simply done nothing 

for the state except to increase fees paid by the citizenry that already pays annual taxes on the 

vehicles. He also questions why emission inspections are required in New Hanover County and 

not Brunswick County. 

Response: Although cars and trucks are collectively the largest source of air pollution in 

North Carolina, a joint study conducted for the legislature by the state DAQ and DMV revealed 

that the emissions controls on newer gasoline-powered vehicles seldom experienced failures. The 

study concluded that exempting such vehicles from emissions tests in the first three model years 

could save consumers money with negligible effects on air quality. A more recent DAQ analysis

has demonstrated that the exemption would not interfere with the attainment or maintenance of 

air quality standards in North Carolina. North Carolina’s motor vehicle emission control 

standards rules provide for emission inspections to meet federal standards for gasoline powered 

vehicles, but do not cover diesel powered vehicles at this time. Emission control standards are set 

by the USEPA for each vehicle class and fuel type. North Carolina G.S. 143-215.107A requires 

emission inspections in the 48 designated counties centered largely around the largest 

metropolitan areas in the state. As seen in the list below, emission inspections are required in 

New Hanover County and Brunswick County but not in neighboring Columbus and Pender 

Counties. The 48 counties are: Alamance, Brunswick, Buncombe, Burke, Cabarrus, Caldwell, 

Carteret, Catawba, Chatham, Cleveland, Craven, Cumberland, Davidson, Durham, Edgecombe, 

Forsyth, Franklin, Gaston, Granville, Guilford, Harnett, Haywood, Henderson, Iredell, Johnston, 

Lee, Lenoir, Lincoln, Mecklenburg, Moore, Nash, New Hanover, Onslow, Orange, Pitt, 
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Randolph, Robeson, Rockingham, Rowan, Rutherford, Stanly, Stokes, Surry, Union, Wake, 

Wayne, Wilkes, and Wilson. 

Rules exempting new vehicles up to the six most recent model years from emissions 

inspections have been passed and approved by the USEPA in at least 22 other states or local 

jurisdictions in the U.S. The rationale for the exemption is that the warranty coverage for the 

emissions control system on new vehicles is in effect for 80,000 miles. The Federal Clean Air 

Act (CAA) requires that catalytic converters and Onboard Diagnostic devices on 1995 and newer 

vehicles be warranted for a minimum of 8 years or 80,000 miles. The warranty provides 

protection to the vehicle owner in the event of a system failure for which a check-engine light 

will illuminate, which in turn prompts the owner to get the vehicle inspected and corrected at the 

dealer under warranty, making an annual inspection required by the state unnecessary. 

Comment: Craig Hauntings representing himself stated that he agrees in principle that 

emissions inspections for new cars seems like a waste of money. However, he claimed that it 

could create a problem by protecting enthusiastic owners who tamper with the emission control 

equipment to increase performance and gas mileage from otherwise being caught during annual 

emission inspections. 

Comment: William Mackin representing himself commented that he is strongly opposed to 

exempting new vehicles from emissions testing. However, he stated that it could create a 

problem by protecting enthusiastic vehicle owners who tamper with the emission control 

equipment in order to increase performance and gas mileage at the expense of the air that we all 

breathe. 

Response: An On-Board Diagnostic (OBD II) system has been installed on all gas-powered 

vehicles since model year 1996. OBD II is an automotive term referring to a vehicle's selfdiagnostic and reporting capability. OBD II systems give the vehicle owner or repair technician 

access to the status of the various vehicle sub-systems. OBD II systems use a standardized digital 

communications port to provide real-time data in addition to a standardized series of diagnostic 

trouble codes, which allow one to rapidly identify and remedy malfunctions within the vehicle. A 

North Carolina emissions inspection consists of connecting a certified analyzer to the vehicle's 

OBD II system to verify that all vehicle emissions components/systems are working per the 

manufacturer specifications along with a visual safety/tamper inspection. Tampering with the 

emission control system is a violation of federal and state laws. 

Comment: Kitty Rubin representing the N.C. Association of Inspection Only Stations and 

Ray Patterson of Charlotte representing Two Guys Inspection Stations commented that the rule 

change was just another tax break for those who can afford a new car. What should inspectors do 

when the check engine light is on? Do inspectors pretend to not see it, or do they fail it? If they 

are to fail it, then it is an emission inspection. This rule change would cut the inspection revenue 

to the inspection stations up to 20 percent. The inspection program has not seen a fee increase in 

over ten years and now the State is asking the stations to pay for the software update for this rule 
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change. Continuing to cut the revenue supporting the program would mean that inspection-only 

stations that are convenient for the public may not survive. New vehicles are easy to inspect and 

help to offset the extra resources needed to inspect the older ones numerous times before passing 

at no added charge. Please reconsider the rule and consider a fee increase for this program. 

Response: If the vehicle met the statutory requirements for the three year exemption, a safety 

inspection would still be conducted. The check engine light is a valid concern and the inspector 

mechanic shall not fail the vehicle only because the check engine light is on, but should inform 

the customer of the potential issues and recommend them getting their vehicle serviced soon to 

address the issue(s). 

A year before passing Session Law 2012-199, the North Carolina General Assembly directed the 

DMV and the DAQ to study the impacts of exempting the three newest model year vehicles and 

all vehicles from the emissions inspection requirements. Also evaluated were a) whether air 

quality standards would be violated based on existing or future air quality standards being 

considered for adoption by the USEPA; b) what fiscal impacts would result for motor vehicle 

owners, inspection stations, DMV, and DAQ; and c) any other issues pertinent to the study. 

Based on the detailed results of the study and its cost impacts, the General Assembly passed 

Session Law 2012-199. The General Assembly recognized that the vehicle owners benefit from 

cost savings are equally offset by the combined revenue losses by State government agencies and 

private sector impacts on inspection station owners. The proposed rule changes align the 

emissions inspection with state law requirements. 

Comment: Jeff Stahl representing himself asked how the state government agencies could 

afford a revenue loss of over $11 million from exempting 700,000 vehicles in the next three 

years. 

Response: The State agencies can absorb the revenue losses by planning a few years ahead 

and by making adjustments to the implementation of the program that will reduce state 

expenditures. Those adjustments were enabled by the completion of the e-sticker program 

(Session Law 2007-503) and investments in state information systems. Both will result in 

efficiencies that reduce state expenditures associated with the program. In addition, better 

utilization of the monetary resources that will be generated by the program and the projected rise 

in the population of vehicles subject to the program in the future will help to offset the revenue 

loss in the long term. 

 The DMV has become proactive in its approach to effectively utilize its resources and 

reduce its inspection program costs. The largest reduction in program cost can be seen in the 

purchase of the new State owned inspection system, which, once fully implemented, will actually 

reduce the State’s operating cost by approximately $5.7 million per year. This reduction in 

program cost will offset the loss in revenue due to the implementation of Session Law 2012-199, 

pay for the new system in less than 4 years and begin to save the State money thereafter. 
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Comment: Kitty Rubin representing the N.C. Association of Inspection Only Stations 

commented that with the passing of Senate Bill 402 the pie chart showing the public where the 

I/M program funds go is no longer correct and a software change would be needed to correct the 

pie chart so as not to deceive the public. She would like to make sure that the stations are not 

paying for a software change when the DMV needs this software change and could include any 

other changes at this time. 

Response: The comments have been shared with DMV, but are not considered to be within 

the scope of this rulemaking on the emissions inspection. 

Comment: Susan Gibson with the U.S. Department of the Army representing the Department 

of Defense objects to the 15 NCAC 02D .1002(a)(iii) language and recommends that it be 

removed from the rules based on the sovereign immunity provisions stated in the CAA Section 

118(c) and (d). She and the Department of Justice conclude that the USEPA I/M Rule for vehicle 

emission inspections is invalid to the extent it exceeds the waiver of sovereign immunity in CAA 

118(a), and therefore cannot be relied upon by the States to assert jurisdiction over the Federal 

Government.

Response: The CAA Section 118 set forth certain requirements for Federal facilities which 

are located in vehicle I/M program areas. The requirements in CAA Section 118(c) and (d) both 

apply to Federal facilities located in vehicle I/M program areas subject to the provisions of 

subparts 2 and 3 of Part D, which are areas designated nonattainment for ozone (O3) or carbon 

monoxide (CO). In addition, the provisions of 15 NCAC 02D .1002, G.S. 20-183.2 and 40 CFR 

51.356 all must meet the applicability requirements in 40 CFR 51.350 which requires I/M 

programs in both O3 and CO nonattainment areas. Therefore, federal facilities located in areas 

which have not been designated nonattainment for O3 and CO are not subject to 15 NCAC 02D 

.1002(a)(iii) requirements for vehicles not currently registered in a North Carolina county that 

requires I/M inspections as a part of the vehicle registration process. 

Comment: T. John Policastro of Raleigh, General Counsel for the North Carolina 

Automobile Dealers Association (NCADA) and David P. Ferrell of VANDEVENTER BLACK 

LLP of Raleigh representing the Inspection Station Association of North Carolina stated that 

they object to the ambiguous language or the absence of an electronic process mechanism in 

implementing the proposed amendments to the motor vehicle emission control standard rules. 

They noted that any inadvertent errors when or whether to conduct inspections (either 

conducting an inspection before it is required or erroneously excusing one that should have been 

conducted) can result in significant penalties costing money and licensing privileges. They 

provided comment in four areas: 

Three most recent model years. Oppose the proposed language in Rule 02D. 1002, 

Applicability, and Rule 02D .1003, Definitions, involving the terms “current model year” and 

“the three most recent model years.” The proposed language is confusing, ambiguous and 
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should be revised to more clearly define the intent to exempt the first three inspections for 

vehicles with less than 70,000 miles. There is ample opportunity for uncertainty created by 

multiple factors, any one of which could lead to an error implementing the rule, including: (i) 

model years overlapping calendar years, (ii) two possible current model years, (iii) no uniformity 

on timing among manufacturers when introducing new model years vehicles, and (iv) vehicles 

older than three years with less than 70,000 miles. He recommended a revision to the definition 

of said language derived from a example with motor vehicle damage requirements in G.S. 

Section 20-74.1. 

Response: Three most recent model years. DAQ agrees that the proposed terminology in 

Rule 02D .1002, Applicability, and corresponding definitions in Rule 02D .1003, Definitions, 

dealing with “the three most recent model years” leads to uncertainty in the interpretation of how 

it is to be implemented. Given the uncertainty, the comment has prompted a proposed change 

with the language in the Rule 02D .1003 in order to more clearly define how the rule is to be 

implemented as follows: 

- Revise the following definitions in Rule 02D. 1003 as follows: 

(10) “Current model year”. Delete its proposed definition. 

(11) "Three most recent model years." For the purposes of this section, the term “Three 

most recent model years” shall be calculated by adding three years to the vehicle’s model 

year obtained from the Vehicle Identification Number (VIN) or the registration card to 

determine the first calendar year an emissions inspection is required. 

Comment: 2. Electronic system. Given the ample opportunity for uncertainty and the liability 

in any errors, the proposed rule amendments should be revised to require the implementation of a 

government-provided electronic system to prescribe whether an emission inspection is required. 

The electronic system should be fully implemented before the effective date of the new threeyear exemption in order to permit an inspector to accurately determine whether a vehicle is 

exempt from the emissions inspection requirement. 

Response: Electronic system. The General Assembly did not allocate funds to pay for the 

cost of upgrading the emissions analyzer to make the determination of when a vehicle needs to 

be inspected. With no money designated for a software upgrade, the cost of any software change 

would be paid by the inspection stations. Instead of an electronic system, DMV has developed 

and will distribute guidance before the effective date of the rule change with a work flowchart 

defining the various steps in determining whether an emission inspection is required. It is 

reasonable to expect that trained staff under qualified inspection station management familiar 

with the DMV-provided work flowchart would be able to implement the rule change 

satisfactorily. 

Comment: 3. Cost of upgrading analyzer software. The approved Fiscal Note projected an 

annual revenue loss of nearly $11 million to inspection stations from the proposed rule change. 
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Software upgrades to analyzers could result in a one-time total expenditure of nearly $1 million 

at an average estimated cost of $180 per analyzer. As the inspection mechanics and inspection 

stations are already bearing the greatest financial impact, the cost of upgrading analyzer software 

to implement these changes should not be borne by inspection stations. 

Response: Cost of upgrading analyzer software. Since The General Assembly did not 

designate any funds to upgrade the emissions analyzer software, and the State does not plan a 

software upgrade. Since one is not planned, there will be no software upgrade costs assessed at 

this time. 

Comment: 4. Onboard diagnostic test equipment specifications. Oppose the proposed 

language in 02D .1006 Sale and Service of Analyzers Rule claiming that the onboard diagnostic 

test equipment specifications are weakened. The proposed rule amendments seek to increase the 

required time for a vendor to communicate with an inspection station on repairs and software 

revisions from 24 hours to two business days. 

 

Response: Onboard diagnostic test equipment specifications. G.S. 143-215.107(a)(14) 

directs and empowers the Environmental Management Commission (EMC) to develop and adopt 

rules governing the sale and service of mobile source exhaust emissions analyzers. This 

authority requires that vendors of these analyzers provide adequate surety to purchasers for the 

performance of the vendor's contractual or other obligations related to the sale and service of 

analyzers. The comment prompted a change to the proposed rule 02D .1006 back to the version 

prior to the notice. Upon consideration of the comment, DAQ believes the existing rule, 02D 

.1006, as it stood prior to the proposed revisions, best carries out the legislative intent and 

provides the most reasonable assurance that vendors are selling or leasing equipment that meet 

the program requirements stated in 40 CFR 85.2231. 

SUMMARY OF COMMENTS AND RESPONSES

Comments Responses

One person asked for a copy of the joint 

DMV/DAQ report that formed the basis of 

the Statute and the ensuing DAQ rules. 

A copy of the report was provided to the 

commenter. 

One person’s comment was a series of 

questions on how the 70,000 mileage 

exemption provision was to be enforced, 

what preparations are being made to enforce 

this mileage provision by January 2014, and 

how the inspection stations were going to 

police themselves on this provision. 

DMV is authorized to manage and enforce the 

State I/M Program and will use education and 

oversight to enforce the new provisions by using: 

 1.) updated material added to the certification 

courses to address the law changes and, 2.) 

guidance provided through educational material 

and media sources to station owners and I/M 

mechanics not attending a renewal course in 

2014. Oversight will include audits, 
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investigations, checks and safeguards to protect 

against fraudulent station operations, enable 

owners and I/M mechanics to complete the work, 

and hold them accountable for performing valid 

inspections. 

Rule is just another tax break for the rich. Newer vehicles seldom fail emission inspections. 

Given this, exempting newer vehicles citizens 

could save citizens money without harming air 

quality, as supported by recent modeling. 

Recent modeling shows a negligible air quality 

effect in 48 counties required by federal rules to 

have annual inspections on 1996 or newer 

vehicles. Rule in other states exempting up to the 

six most recent model years have been passed 

and approved by the USEPA. Federal rules 

require that emission controls and diagnostic 

devices on 1995 and newer vehicles be 

warranted for a minimum of 8 years or 80,000 

miles. The warranty provides protection for a 

system failure for which a check-engine light 

will illuminate, prompting an inspection and 

correction at the dealer under warranty, making 

annual inspection required by the state 

unnecessary. 

Emission inspection is a scam in that 90 

percent pass; why required every year, and 

why not every 3 years? 

Emission inspection is a waste of money and 

a scam. Pre-1997 vehicles are not subject to 

emission inspection and would probably fail. 

Diesel trucks are the worst polluters and they 

are tested. Suggest exempting the 5 most 

recent years. 

Emission inspection is a waste of money and 

a scam. Suggest exempting the 3, 4, or 5 

most recent years. 

Prefer to revoke all emissions inspections. 

Rule change favors the rich. Emission 

inspections have done nothing for the state 

except raise fees paid by the citizens. Why 

are emissions inspections required in one 

county and not another? 

Exemptions for newer vehicles would protect 

enthusiasts desiring higher performance and 

gas mileage from removing emission 

controls for three years, reconnecting it 

before the first inspection without being 

caught and penalized at the expense of air 

quality. 

On-board diagnostic (OBD II) systems are 

installed on all gasoline-powered vehicles since 

1996 to show the status of the key performance 

and emissions parameters. OBD II systems 

identify problems with the key parameters. A NC 

emissions inspection consists of connecting a 

certified analyzer to the OBD II system to verify 

that all emissions components are working 

properly along with a visual safety/ tamper 

inspection. Tampering with emission controls 

violates federal and state laws. 

Rule is just another tax break for the rich at 

the expense of business for inspection 

stations. What should inspectors do for 

exempt vehicles when the check-engine light 

is on; pretend not to see it, fix it, or fail them 

for an inspection they are not required to 

have? The inspection program has not seen a 

fee increase in over ten years. Stations are 

being hurt further as the rule exempts the 

newer, easier vehicles to inspect that 

previously offset the older ones that get reThe check engine light is a valid concern and the 

inspector shall not fail the vehicle only because 

the check engine light is on, but should inform 

the customer of the potential issues and 

recommend servicing the vehicle soon to address 

the issue(s). The General Assembly studied the 

impacts of exempting the three newest model 

year vehicles from emissions inspection. 

Included were air quality impacts and fiscal 

impacts for vehicle owners, inspection stations, 

DMV, and DAQ. Session Law 2012-199 was 
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inspected multiple times before passing. passed recognizing that the vehicle owners 

benefit from cost savings are equally offset by 

the combined revenue losses by State agencies 

and private sector impacts on inspection stations.

How could the state government agencies 

afford a revenue loss of over $11 million 

from exempting 700,000 vehicles in the next 

three years? 

The State agencies can absorb the revenue losses 

by planning ahead and making adjustments to 

program implementation to reduce state costs. 

Those adjustments were enabled by the e-sticker 

program completion and investments in state 

information systems. Both will result in 

efficiency gains to reduce costs. Also, the 

projected rise in the number of future vehicles 

will offset the revenue loss in the long term. 

The DMV has become proactive to effectively 

utilize its resources and reduce its inspection 

program costs. The largest cost reduction can be 

seen in the purchase of the new State owned 

inspection system, which will reduce the State’s 

operating cost by $5.7 million per year. This 

reduction in program cost will offset the loss in 

revenue from Session Law 2012-199, pay for the 

new system in less than four years and save the 

State money thereafter. 

The Defense Department objects to the 

requirement that the rule would apply to 

vehicles operated on a federal installation 

located in one of the 48 designated counties 

and recommends its removal based on the 

sovereign immunity provisions stated in the 

CAA Section 118(c) and (d). They conclude 

that the USEPA I/M Rule for emission 

inspections is invalid as it exceeds the waiver 

of sovereign immunity in CAA 118(a). 

The requirements in CAA Section 118(c) and (d) 

both apply to Federal facilities located in vehicle 

I/M program areas subject to the provisions of 

subparts 2 and 3 of Part D areas designated 

nonattainment for O3 or CO. The provisions of 

15 NCAC 02D .1002, G.S. 20-183.2 and 40 CFR 

51.356 all must meet the requirements in 40 CFR 

51.350 which requires I/M programs in both O3 

and CO nonattainment areas. 

Inspection stations oppose the proposed rule 

language involving “the three most recent 

model years” that is confusing, ambiguous 

and should be revised to more clearly define 

the intent to exempt the first three 

inspections. 

To address the ambiguity, DAQ is clarifying that 

“three most recent model years” shall be 

calculated by adding three years to the vehicle’s 

VIN or the registration card model year to 

determine the first calendar year an emissions 

inspection is required.

The proposed rule amendments should be 

revised to require the implementation of a 

government-provided electronic system to 

prescribe whether an emission inspection is 

required. 

Instead of an electronic system, DMV has 

developed a work flowchart defining the various 

steps in determining whether an emission 

inspection is required. Trained staff under 

qualified inspection station management familiar 

with the work flowchart should be able to 

implement the rule change suitably. 
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Software analyzer upgrades to implement 

rule changes could cost nearly $1 million at 

an average cost of $180 per analyzer. As 

inspection stations are bearing the greatest 

financial impact, the upgrade cost should not 

be borne by the stations. 

Since a software upgrade is not planned, there 

will be no upgrade software costs assessed at this 

time. 

Oppose the proposed language in Rule 02D 

.1006, Sale and Service of Analyzers, that 

weakens the onboard diagnostic test 

equipment specifications. 

G.S. 143-215.107(a)(14) empowers the EMC to 

adopt rules governing the sale and service of 

mobile source exhaust emissions analyzers. This 

authority requires that analyzer vendors provide 

surety for the performance of their contractual 

obligations. The comment prompted a change to 

the proposed rule 02D .1006 language back to 

the version prior to the notice. DAQ believes the 

existing rule, 02D .1006 best carries out the 

legislative intent and provides the most 

assurance that vendors are meeting 40 CFR 

85.2231 requirements. 

CONCLUSION

Fifteen people commented on the proposed rules. 

Two people made oral comments at the public hearing. One person asked for and received a 

copy of the joint DMV/DAQ report with all the information forming the basis for the Session 

Law 2012-199 and the ensuing DAQ rule changes. The other person’s comment was a series of 

questions on how the 70,000 mileage exemption provision was to be enforced, what preparations 

are being made to enforce this mileage provision by the rule’s effective date, and how the 

inspection stations were going to police themselves on this provision. The DMV is authorized to 

manage and enforce the State I/M Program and will use education and oversight to enforce the 

new provisions by using: 1.) updated material added to the certification courses to address the 

law changes and, 2.) guidance provided through educational material and media sources to those 

not attending a renewal course in 2014. Oversight will include audits, investigations, checks and 

safeguards to protect against fraudulent station operations, enable owners and I/M mechanics to 

complete the work, and hold them accountable for performing valid inspections. 

Five commenters raised concerns on the various aspects of the proposed rules which were 

aligned directly with the State statute in Session Law 2012-199. The aspects included the 

apparent favoritism in tax breaks for those who can afford newer cars, the number defining how 

many recent model years would be exempt, claims that inspections are a waste of money and a 

scam, and why inspections are required only in certain counties. The concerns are addressed as 

follows: A joint study conducted for the legislature by the DAQ and DMV revealed that the 

emissions controls on newer cars seldom experienced failures. The study concluded that 
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exempting vehicles from emissions tests in the first three model years could save consumers 

money with negligible effects on air quality. A more recent DAQ analysis demonstrates that the 

exemption would not interfere with the attainment or maintenance of air quality standards in 

North Carolina. North Carolina’s motor vehicle emission control standards rules provide for 

emission inspections to meet federal standards. Emission inspections are required in the 48 

designated counties under an EPA requirement. 

Two comments cautioned that the three year exemption would allow enthusiasts to disconnect 

their emission controls to improve vehicle performance and gas mileage, and then later have 

them reconnected before the first inspection without being caught. However, an OBD II system 

has been installed on all gas-powered vehicles since model year 1996 for self-diagnostic and 

reporting capability. These systems give access to the status of the various vehicle sub-systems 

and diagnostic trouble codes, which allow one to identify and remedy malfunctions within the 

vehicle. A North Carolina emissions inspection consists of connecting a certified analyzer to the 

OBD II system to verify that all emissions systems are working properly along with a visual 

safety/tamper inspection. 

Two people provided comments on whether and how inspectors would deal with issues on newer 

vehicles with diagnosed trouble code warning signals given their exemption statues from 

emissions inspections. They also stated that stations continue to be hurt financially since there 

has not been a fee increase in over ten years and the rule would command more resources since it 

exempts the newer, easier vehicles to inspect that previously offset the older ones that get reinspected multiple times before passing. The inspector shall not fail the vehicle only because the 

check engine light is on, but should inform the customer of the potential issues and recommend 

servicing the vehicle soon to address the issue(s). The General Assembly was aware of the 

results of an effort to study the impacts of exempting the three newest model year vehicles from 

emissions inspection. Included were air quality impacts; fiscal impacts for vehicle owners, 

inspection stations, and State agencies. With this awareness the General Assembly passed 

Session Law 2012-199 recognizing that the vehicle owners benefit from cost savings are equally 

offset by the combined revenue losses by State agencies and private sector impacts on inspection 

stations. 

One comment asked how the state agencies could afford a revenue loss of over $11 million from 

exempting 700,000 vehicles in the next three years. The State agencies can absorb the revenue 

losses by planning ahead and making adjustments to program implementation to reduce costs. 

Those adjustments were enabled by the e-sticker program completion and investments in 

information systems. Both will result in efficiency gains to reduce costs. Also, the projected rise 

in the number of future vehicles will offset the revenue loss in the longer term. The DMV has 

become proactive to effectively utilize its resources and reduce its inspection program costs. The 

largest reduction in cost can be seen in the purchase of the new State owned inspection system, 

which will reduce the State’s operating cost by $5.7 million per year. This reduction in cost will 
I-13 

offset the loss in revenue resulting from Session Law 2012-199, pay for the new system in less 

than four years and save the State money thereafter. 

One comment objected to the requirement that the rule would apply to vehicles operated on a 

federal installation located in one of the 48 designated counties of the inspection program. The 

CAA Section 118(c) and (d) both apply to Federal facilities located in vehicle I/M program areas 

designated nonattainment for O3 or CO. The provisions of 15 NCAC 02D .1002, G.S. 20-183.2 

and 40 CFR 51.356 all must meet the requirements in 40 CFR 51.350 which requires I/M 

programs in both O3 and CO nonattainment areas. 

Two people commented that the rule language was too ambiguous to implement properly, 

especially without an upgraded electronic system to determine whether an emissions inspection 

would be required. They also raised issue with the plan that the inspection owners would bear 

the cost of upgraded analyzer software and the weakening of onboard diagnostic test equipment 

specifications in Rule 02D .1006. The comment prompted a change in the definition of two 

terms in the proposed rule 02D .1003. To address the ambiguity, DAQ clarified its definitions to 

determine the first calendar year an emissions inspection is required. Instead of an electronic 

system, DMV developed a work flowchart defining the steps in determining whether an emission 

inspection is required. Trained staff under qualified inspection station management familiar with 

the work flowchart should be able to implement the rule change satisfactorily. Since a software 

upgrade is not planned, there will be no upgrade software costs assessed at this time. State 

statute empowers the EMC to adopt rules governing the sale and service of mobile source 

exhaust emissions analyzers. This authority requires that analyzer vendors provide surety for the 

performance of their contractual obligations. The comment prompted a change to the proposed 

rule 02D .1006 back to the version prior to the notice. DAQ believes the existing rule, 02D .1006 

best carries out the legislative intent and provides the most assurance that vendors are meeting 

federal requirements. 

HEARING OFFICER’S RECOMMENDATION

 

The Hearing Officer recommends that the proposed amendments as presented in Chapter II of 

this hearing record be adopted by the Environmental Management Commission. The Hearing 

Officer also recommends that DAQ study further the concerns raised regarding clarification of 

applicability to federal installations and commit to report back to the EMC no later than its 

March 2014 meeting and provide a concept for a rule change contingent upon the need for a rule 

change at that time. 
II-1 

1 

2 

CHAPTER II 

3 

4 

5 

15A NCAC 02D .1002 is amended with changes as published in 28:04 NCR 329 as follows: 

15A NCAC 02D .1002 APPLICABILITY 

6 (a) This Section [Rule] is applicable to all gasoline-powered and hybrid-powered motor vehicles, except 

7 motorcycles and excluding the current model year, year; vehicles for model years specified in Paragraphs (b) or (c) 

8 of this Rule. This Rule applies to all vehicles that are: 

9 [(1) until the time the criteria in subparagraph (a)(2) are met, 

10 (2) as of January 1, 2014 or the first day of a month that is 30 days after the U.S. Environmental 

11 Protection Agency approves the State Implementation Plan revision and the replacement of the 

12 Motor Vehicle Inspection and Law Enforcement System being certified by the Commissioner of 

13 Motor Vehicles, whichever occurs later, this rule is applicable to all gasoline-powered and hybrid14 powered motor vehicles of a 1996 or more recent model except the vehicles in the three most 

15 recent model years with less than 70,000 miles on their odometers, plug-in and fuel-cell electric 

16 motor vehicles and motorcycles as specified in G.S. 20-183.2(b) that are:] 

17 (1) (A) required to be registered by the North Carolina Division of Motor Vehicles in the 

18 counties identified in Paragraph (b)(e) of this Rule; 

19 

20 

(2) (B) part of a fleet primarily operated within the counties identified in Paragraph (b)(e) of this 

Rule; or 

(3) (C) operated on a federal installation located in a county identified in Paragraph (b)(e) of this 

Rule and 

21 

22 that meet the requirements of 40 CFR 51.356(a)(4). 

23 (b) This Rule applies to model year 1996 or more recent model years for motor vehicles under Paragraph (a) of this 

24 Rule, excluding the current model year.

25 (c) Beginning As of January 1, 2014 or the first day of a month that is 30 days after the U.S. Environmental 

26 Protection Agency approves the State Implementation Plan revision and the replacement of the Motor Vehicle 

27 Inspection and Law Enforcement System being certified by the Commissioner of Motor Vehicles, whichever occurs 

28 later, this Rule applies to 1996 or more recent model for motor vehicles under Paragraph (a) of this Rule, excluding 

29 the three most recent model years with less than 70,000 miles on their odometers.

30 (d) This Rule shall not apply to motorcycles, plug-in electric vehicles or fuel cell electric vehicles as specified in 

31 G.S. 20-183.2(b).

32 

33 

34 

35 

36 

37 

(b)(e) The emission control standards of this Section become effective in the counties identified in G.S. 143-

215.107A on the dates specified in G.S. 143-215.107A. 

History Note: Authority G.S. 20-128.2(a); 143-215.3(a)(1); 143-215.107(a)(3); 143-215.107(a)(6); 143-

215.107(a)(7); 143-215.107A; 20-183.2; 

Eff. December 1, 1982; 

1 
II-2 

1 

2 

3 

Amended Eff. July 1, 1992; April 1, 1991; 

Temporary Amendment Eff. January 1, 1993 for a period of 180 days or until the permanent rule 

becomes effective, whichever is sooner; 

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Amended Eff. January 1, 2014; August 1, 2002; July 1, 1994; July 1, 1993. 

2 
II-3 

1 

2 

3 

15A NCAC 02D .1003 is amended with changes as published in 28:04 NCR 329-330 as follows: 

15A NCAC 02D .1003 DEFINITIONS 

4 The following definitions of terms apply to Rules 02D .1002 through 02D .1006 regulating gasoline-powered and 

5 hybrid-powered motor vehicles throughout this Section: 

6 

7 

8 

(1) "Heavy-duty Gasoline Vehicle" means a gasoline-powered and hybrid-powered motor vehicle 

which is designed primarily for: 

(a) transportation of property and has a GVWR (Gross Vehicle Weight Rating) of more than 

9 8,500 pounds. pounds but less than 14,001 pounds;

10 

11 

12 

13 

(b) transportation of persons and has a capacity of more than 12 persons; or 

(c) use as a recreational motor vehicle, which is designed primarily to provide temporary or 

permanent living quarters for travel, camping, or other recreational use and has a GVWR 

of more than 8,500 pounds. 

14 

15 

16 

17 

(2) "Light-duty Gasoline Vehicle" means a gasoline-powered and hybrid-powered motor vehicle 

which is designed primarily for: 

(a) transportation of property and has a GVWR of 8,500 pounds or less; or 

(b) transportation of persons and has a capacity of 12 persons or less. 

18 (3) "Motor Vehicle" means any self-propelled vehicle used for transporting property or persons.

19 every vehicle which is self-propelled and every vehicle designed to run upon the highways which 

20 is pulled by a self-propelled vehicle as defined in G.S. 20-4.01(23). 

21 (4) "Motorcycle" means any motor vehicle having a seat or saddle for the use of the rider and 

22 designed to travel on not more than three wheels in contact with the ground. saddle for the use of 

23 the rider and designed to travel on not more than three wheels in contact with the ground, 

24 including motor scooters and motor-driven bicycles, but excluding tractors and utility vehicles 

25 equipped with an additional form of device designed to transport property, three-wheeled vehicles 

26 while being used by law-enforcement agencies and mopeds as defined in subdivision d1 of this 

27 subsection” as defined in G.S. 20-4.01(27)d. 

28 (5) “Gasoline-powered Motor Vehicle” means a four-wheeled motor vehicle designed primarily to be 

29 propelled by the burning of gasoline in an internal combustion engine.

30 (6) “Hybrid-powered Vehicle” means a four-wheeled motor vehicle designed to be propelled by a 

31 combination of one or more electric motors and the burning of gasoline in an internal combustion 

32 engine. 

33 (7) “Plug-in Electric Vehicle” as defined in G.S. 20-4.01(28a). 

34 (8) “Fuel Cell Electric Vehicle” as defined in G.S. 20-4.01(12a). 

35 (9) “Model year” means the year used to designate a discrete vehicle model, irrespective of the 

36 calendar year in which the vehicle was actually produced, provided that the production period 

37 does not exceed 24 months.

3 
II-4 

1 [(10)] [“Current model year means the most recent year used to designate a discrete vehicle model, 

2 irrespective of the calendar year in which the vehicle was actually produced, provided that the 

3 production period does not exceed 24 months.]

4 (10) [(11)]“Three most recent model years” For the purposes of this section, the term “Three most recent 

5 model years” shall be calculated by adding three years to the vehicle’s Vehicle Identification 

6 Number (VIN) model year to determine the first calendar year an emissions inspection is required.

7 [means the current (first) model year and the second and third model years following the current 

8 model year.] 

9 (11) [(12)]“Vendor" means any person who sells or leases equipment to inspection stations that is used to 

10 

11 

12 

perform on-board diagnostic tests to show compliance with Rule 02D .1005 of this Section.

13 

14 

History Note: Authority G.S. 143-215.3(a)(1); 20-4.01 (12a); 20-4.01 (28a)

Eff. December 1, 1982, 

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Amended Eff. January 1, 2014.

4 
II-5 

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15A NCAC 02D .1005 is proposed for amendment as follows: 

15A NCAC 02D .1005 ON-BOARD DIAGNOSTIC STANDARDS 

4 (a) This Rule applies according to Rule .1002 of this Section to all 1996 and later gasoline-powered and hybrid5 powered motor vehicles, vehicles 1996 or more recent models except the vehicles in the three most recent model 

6 

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17 

years with less than 70,000 miles on their odometers, except plug-in and fuel-cell electric motor vehicles, and

motorcycles, in the counties identified in G.S. 143-215.107A. 

(b) Vehicles covered under this Rule shall pass annually the on-board diagnostic test described in 40 CFR 85.2222. 

The vehicle shall fail the on-board diagnostic test if any of the conditions of 40 CFR 85.2207 are met. Equipment 

used to perform on-board diagnostic tests shall meet the requirements of 40 CFR 85.2231. 

(c) The tester shall provide the owner of a vehicle that fails the on-board diagnostic test described in Paragraph (b) 

of this Rule a report of the test results. This report shall include the codes retrieved (these codes are listed in 40 CFR 

85.2223(b)), the status of the malfunction indicator light illumination command, and the customer alert statement 

described in 40 CFR 85.2223(c). 

(d) Persons performing on-board diagnostic tests shall provide the Division of Air Quality data necessary to 

determine the effectiveness of the on-board diagnostic testing program. The data submitted shall be what is 

necessary to satisfy the requirements of 40 CFR 51.365, Data Collection, and 40 CFR 51.366, Data Analysis and 

18 Reporting. Reporting, and 40 CFR 51.358, Test Equipment.

19 

20 

21 

22 

History Note: Authority G.S. 20-128.2(a); 143-215.3(a)(1); 143-215.107(a)(6); 143-215.107(a)(7); 143-

215.107A(b); S.L. 1999 c. 328 s. 3.2 

Eff. December 1, 1982; 

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Amended Eff. January 1, 2014; Amended Eff. August 1, 2002; July 1, 1998; April 1, 1991; 

November 1, 1986. 

5 
II-6 

1 

2 

3 

15A NCAC 02D .1006 is amended with changes as published in 28:04 NCR 330-331 as follows: 

15A NCAC 02D .1006 SALE AND SERVICE OF ANALYZERS 

4 (a) Definition. For the purposes of this Rule, "vendor" means any person who sells or leases equipment to 

5 inspection stations that is used to measure emissions from motor vehicles for the purpose of showing 

6 compliance with Rule .1004 of this Section or that is used to perform on-board diagnostic tests to show 

7 compliance with Rule .1005 of this Section.

8 

9 

10 

11 

(b) (a) Requirements. A vendor shall not sell or lease equipment unless it meets the requirements of 40 CFR 85.2231 

Onboard Diagnostic Test Equipment Requirements, and has the software necessary to record and transmit the data 

required by the Division of Motor Vehicles and the Division of Air Quality to determine compliance with the 

inspection/maintenance program requirements of this Section. 

(c) (b) Hardware repair and software repair. When equipment hardware or software fails to meet the requirements of 

Paragraph (b)

12 

13 (a) of this Rule for a particular analyzer, the vendor, after receiving a call to its respective service call 

14 center, shall communicate with the impacted station within 24 hours. [: two business days and shall complete repairs 

15 within the warranty guidelines of the vendor.] Where the hardware problem is stopping 20 percent or more 

16 inspections for a particular analyzer or is compromising the security of the inspection system, the vendor shall repair 

17 the problem within 48 hours after the initial call to its respective service call center. 

18 (1) Where the hardware problem is stopping less than 20 percent of all inspections for a particular 

analyzer and is not compromising the security of the inspection system, the vendor shall repair the 

problem within 72 hours after the initial call to its respective service call center. 

19 

20 

21 (2) Where the hardware problem is not stopping inspections and is not compromising the security of the 

22 inspection system, the vendor shall repair the problem within 96 hours after the initial call to its 

23 respective service call center. 

(d) (c) Software repair revisions. When analyzer software fails to meet the requirements of Paragraph (b) of this 

Rule, the vendor, after receiving a call to its respective service call center, shall communicate with the station within 

24 

25 

24 hours. [two business days.] The vendor shall identify and characterize the software problem within 5 days. The 

vendor shall, within that same 5-day period, inform the station owner and the Division as to the nature of the 

26 

27 

28 problem and the proposed corrective course of action and: [action.]

29 (1) Where the software problem is stopping 20 percent or more inspections for a particular analyzer or 

30 is compromising the security of the inspection system, the vendor shall submit a new revision of the 

31 software to the Division for approval within 19 days after receiving the initial call to its service call 

32 center. 

33 (2) Where the software problem is stopping less than 20 percent of all inspections for a particular 

34 analyzer and is not compromising the security of the inspection system, the vendor shall submit a 

35 new revision of the software to the Division for approval within 33 days after receiving the initial 

36 call to its service call center. 

6 
II-7 

1 (3) The vendor shall distribute the new revision of the software to all impacted stations within 14 days 

2 after the vendor receives written notification from the Division that the software has been approved 

3 as meeting the requirements of Paragraph (b) of this Rule. 

4 (e) (d) Documentation of the initial service call. The vendor's service call center shall assign a unique service 

5 response number to every reported new hardware or software problem. The time and date of the initial call shall 

6 be recorded and identified with the service response number. The service response number shall be 

7 communicated to the inspection station operator at the time of the initial contact. 

8 

9 History Note: Authority G.S. 143-215.3(a)(1); 143-215.107(a)(6), (14); 

10 Eff. January 1, 2007. 2007;

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Amended Eff. January 1, 2014; 

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II-8 

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4 

15A NCAC 02D .1009 is proposed to be repealed: 

15A NCAC 02D .1009 MODEL YEAR 2008 AND SUBSEQUENT MODEL YEAR HEAVY-DUTY 

DIESEL VEHICLE REQUIREMENTS (REPEALED) 

5 (a) Applicability. This Rule applies to model year 2008 and subsequent model years heavy-duty diesel vehicles.

6 (b) Definitions. For the purposes of this Rule the following definitions shall apply.

7 (1) "Heavy-duty diesel vehicle" means a motor vehicle (excluding trailer(s)) with a gross vehicle 

8 weight rating (as certified by the manufacturer) of 14,001 pounds or greater that is propelled by a 

9 diesel engine.

10 (2) "Motor vehicle dealer" means motor vehicle dealer as defined in G.S. 20-286(11) and includes 

11 "new motor vehicle dealer" as defined in G.S. 20-286(13) and "used motor vehicle dealer" as 

12 defined in G.S. 20-286(16).

13 (3) "New motor vehicle" means new motor vehicle as defined in G.S. 20-286(10)(a).

14 (4) "Used motor vehicle" means used motor vehicle as defined in G.S. 20-286(10)(b). 

15 (c) Exemptions. For the purposes of this Rule the exemption of military tactical vehicles and equipment as specified 

16 in Title 13 of the California Code of Regulations, Section 1905 shall apply.

17 (d) Requirement. No model year 2008 or subsequent model year heavy-duty diesel vehicle that is a

18 (1) used heavy-duty diesel vehicle sold by a motor vehicle dealer; or

19 (2) new motor vehicle, however it is sold,

20 may be leased or registered within North Carolina unless the vehicle or its engine has been certified by the 

21 California Air Resources Board as meeting the applicable model year requirements of Title 13 of the California 

22 Code of Regulations, Section 1956.8, California Exhaust Emission Standards and Test Procedures for 1985 and 

23 Subsequent Model Heavy-Duty Diesel Engines and Vehicles.

24 (e) Referenced Regulation. The California Code of Regulations Title 13, Division 3, Chapter 1, Article 1, Section 

25 1905 and Article 2, Section 1956.8 are incorporated by reference in this Rule and include any later amendments 

26 thereto. A copy of the referenced materials may be obtained free of charge via the internet from the Office of 

27 Administrative Law California Code of Regulations website at http://ccr.oal.ca.gov/, or a hard copy may be obtained 

28 at a cost of $5.00 from the Public Information Office, California Air Resources Board, P.O. Box 2815, Sacramento, 

29 CA, 95812.

30 

31 History Note: Authority G.S. 143-215.3(a)(1); 143-215.107(a)(6)-(7); 

32 Eff. December 1, 2004. 2004; 

33 Repealed Eff. January 1, 2014; 

34 

35 
CHAPTER III 

REPORT OF PROCEEDINGS 

Introduction 

The Department of Environmental and Natural Resources, Division of Air Quality, held a public 

hearing on September 18, 2013 at 6:00pm at the Training Room #1210, DENR Green Square 

Office Building, 217 West Jones Street, Raleigh, NC 27603. 

The hearing considered the proposed amendments to Rule 15A NCAC 02D .1002, Applicability; 

02D .1003, Definitions; 02D .1005, On-Board Diagnostic Standards; 02D .1006, Sale and 

Service of Analyzers; and 02D .1009, Model Year 2008 and Subsequent Model Year HeavyDuty Diesel Vehicle Requirements. 

 The proposed effective date for these rules is projected to be January 1, 2014. 

A public notice announcing this hearing was mailed to each person on the official mailing list for 

rule-making hearings. The public notice was also published in the North Carolina Register at 

least 30 days before the public hearing. 

 

III-1
III-2


Transcript

A transcript of the September 18, 2013 hearing has not been prepared; however, an audio 

recording of the proceeding will be kept on file with the Division of Air Quality (DAQ) for one 

year from the date of the final actions by the Environmental Management Commission. 

A list of those attending the hearing is as follows: 

Hearing Officer 

Mr. Steven Vozzo, DAQ, DENR, Fayetteville Regional Office Supervisor 

Staff Members 

 

Ms. Joelle Burleson, DENR, DAQ 

Mr. Steve Schliesser, DENR DAQ, 

Mr. Patrick Knowlson, DENR, DAQ, 

Mr. Brian Phillips, DENR, DAQ, 

Ms. Sushma Masemore, DENR, DAQ, 

Mr. Michael Abraczinskas, DENR, DAQ, Deputy Director 

Members of the General Public 

Mr. Michael Gaither, BanaLogic Corporation, Snow Camp, NC 

Mr. Mark Newell, CMW Inspections, Raleigh, NC 

Mr. Kirk Fordham, DEKRA Certifications, Inc., Auburn, Georgia 

Mr. Chris Giguere, NC State University, Raleigh, NC 

Ms. Marge Howell, North Carolina Department of Motor Vehicles staff, Raleigh, NC 

Mr. Robert Sawyer, North Carolina Department of Motor Vehicles staff, Raleigh, NC 

III-5
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III-6
CHAPTER IV 

EXHIBITS 

EXHIBIT PAGE

Proposed Regulations as Published in the North Carolina Register and Presented at the 

Hearing 

IV-2 

Hearing Officer Comments at the Public Hearing IV-6 

IV-1
PROPOSED RULES 

28:04 NORTH CAROLINA REGISTER AUGUST 15, 2013 

329 

 RRC certified on: 

 Not Required

Link to agency website pursuant to G.S. 150B-19.1(c): 

http://www.ncair.org/rules/hearing 

Proposed Effective Date: January 1, 2014 

Public Hearing: 

Date: September 18, 2013 

Time: 6:00 p.m. 

Location: Training Room (#1210), DENR Green Square Office 

Building, 217 West Jones Street, Raleigh, NC 

Reason for Proposed Action: In response to statutory 

revisions in North Carolina Session Law 2012-199, the Division 

of Air Quality (DAQ) is proposing changes to its emission 

inspections rules. In the existing rule, only the current model 

year vehicles are excluded from emission inspections in the 48 

counties required to have an emission inspection program under 

federal or State rules. The revised statute excludes from 

emissions inspections those vehicles in the three most recent 

model years with less than 70,000 miles on the odometer. 

Several additional minor housekeeping rule amendments are 

proposed to clarify definitions. Also, DAQ recommends 

repealing Rule .1009 and relying solely on the federal heavyduty engine standards rules. This is based on the fact that the 

California rule referenced in Rule .1009 is equivalent to the EPA 

Heavy Duty Diesel (HDD) regulations and EPA did not delay or 

relax their HDD rules. 

Comments may be submitted to: Joelle Burleson, Division of 

Air Quality, 1641 Mail Service Center, Raleigh, NC 27699-

1641, phone (919)707-8720, fax (919)707-8720, 

joelle.burleson@ncdenr.gov 

Comment period ends: October 14, 2013 

Procedure for Subjecting a Proposed Rule to Legislative 

Review: If an objection is not resolved prior to the adoption of 

the rule, a person may also submit written objections to the 

Rules Review Commission after the adoption of the Rule. If the 

Rules Review Commission receives written and signed 

objections after the adoption of the Rule in accordance with G.S. 

150B-21.3(b2) from 10 or more persons clearly requesting 

review by the legislature and the Rules Review Commission 

approves the rule, the rule will become effective as provided in 

G.S. 150B-21.3(b1). The Commission will receive written 

objections until 5:00 p.m. on the day following the day the 

Commission approves the rule. The Commission will receive 

those objections by mail, delivery service, hand delivery, or 

facsimile transmission. If you have any further questions 

concerning the submission of objections to the Commission, 

please call a Commission staff attorney at 919-431-3000. 

Fiscal impact (check all that apply). 

 State funds affected 

 Environmental permitting of DOT affected 

 Analysis submitted to Board of Transportation 

 Local funds affected 

 Date submitted to OSBM: June 11, 2013

 Substantial economic impact (≥$500,000) 

 Approved by OSBM 

 No fiscal note required by G.S. 150B-21.4 

CHAPTER 02 - ENVIRONMENTAL MANAGEMENT 

SUBCHAPTER 02D - AIR POLLUTION CONTROL 

REQUIREMENTS 

SECTION .1000 - CONTROL OF TOXIC AIR 

POLLUTANTS 

15A NCAC 02D .1002 APPLICABILITY 

(a) This Section Rule is applicable to all gasoline-powered and 

hybrid-powered motor vehicles, except motorcycles and 

excluding the current model year, year; 

(1) until the time the criteria in Subparagraph 

(a)(2) are met, 

(2) as of January 1, 2014 or the first day of a 

month that is 30 days after the U.S. 

Environmental Protection Agency approves 

the State Implementation Plan revision and the 

replacement of the Motor Vehicle Inspection 

and Law Enforcement System being certified

by the Commissioner of Motor Vehicles, 

whichever occurs later, this Rule is applicable 

to all gasoline-powered and hybrid-powered 

motor vehicles of a 1996 or more recent model 

except the vehicles in the three most recent 

model years with less than 70,000 miles on 

their odometers, plug-in and fuel-cell electric 

motor vehicles and motorcycles as specified in 

G.S. 20-183.2(b) that are: 

(1)(A) required to be registered by the North 

Carolina Division of Motor Vehicles 

in the counties identified in Paragraph 

(b) of this Rule; 

(2)(B) part of a fleet primarily operated 

within the counties identified in 

Paragraph (b) of this Rule; or 

(3)(C) operated on a federal installation 

located in a county identified in 

Paragraph (b) of this Rule and that 

meet the requirements of 40 CFR 

51.356(a)(4). 

(b) The emission control standards of this Section become 

effective in the counties identified in G.S. 143-215.107A on the 

dates specified in G.S. 143-215.107A. 

Authority G.S. 20-128.2(a); 143-215.3(a)(1); 143-215.107(a)(3); 

143-215.107(a)(6); 143-215.107(a)(7); 143-215.107A; 20-

183.2. 

15A NCAC 02D .1003 DEFINITIONS 

The following definitions of terms apply to Rules 02D .1002 

through 02D .1006 regulating gasoline-powered and hybridpowered motor vehicles throughout this Section: 

IV-2
PROPOSED RULES 

28:04 NORTH CAROLINA REGISTER AUGUST 15, 2013 

330 

(1) "Heavy-duty Gasoline Vehicle" means a 

gasoline-powered and hybrid-powered motor 

vehicle which is designed primarily for: 

(a) transportation of property and has a 

GVWR (Gross Vehicle Weight 

Rating) of more than 8,500 pounds.

pounds but less than 14,001 pounds;

(b) transportation of persons and has a 

capacity of more than 12 persons; or 

(c) use as a recreational motor vehicle, 

which is designed primarily to 

provide temporary or permanent 

living quarters for travel, camping, or 

other recreational use and has a 

GVWR of more than 8,500 pounds. 

(2) "Light-duty Gasoline Vehicle" means a 

gasoline-powered and hybrid-powered motor 

vehicle which is designed primarily for: 

(a) transportation of property and has a 

GVWR of 8,500 pounds or less; or 

(b) transportation of persons and has a 

capacity of 12 persons or less. 

(3) "Motor Vehicle" means any self-propelled 

vehicle used for transporting property or 

persons. every vehicle which is self-propelled 

and every vehicle designed to run upon the 

highways which is pulled by a self-propelled 

vehicle as defined in G.S. 20-4.01(23). 

(4) "Motorcycle" means any motor vehicle having 

a seat or saddle for the use of the rider and 

designed to travel on not more than three 

wheels in contact with the ground. saddle for 

the use of the rider and designed to travel on 

not more than three wheels in contact with the 

ground, including motor scooters and 

motor-driven bicycles, but excluding tractors 

and utility vehicles equipped with an 

additional form of device designed to transport 

property, three-wheeled vehicles while being 

used by law-enforcement agencies and mopeds 

as defined in subdivision d1 of this subsection" 

as defined in G.S. 20-4.01(27)d. 

(5) "Gasoline-powered Motor Vehicle" means a 

four-wheeled motor vehicle designed primarily 

to be propelled by the burning of gasoline in 

an internal combustion engine.

(6) "Hybrid-powered Vehicle" means a 

four-wheeled motor vehicle designed to be 

propelled by a combination of one or more 

electric motors and the burning of gasoline in 

an internal combustion engine. 

(7) "Plug-in Electric Vehicle" as defined in G.S. 

20-4.01(28a). 

(8) "Fuel-Cell Electric Vehicle" as defined in G.S. 

20-4.01(12a). 

(9) "Model year" means the year used to designate 

a discrete vehicle model, irrespective of the 

calendar year in which the vehicle was 

actually produced, provided that the 

production period does not exceed 24 months.

(10) "Current model year" means the most recent 

year used to designate a discrete vehicle 

model, irrespective of the calendar year in 

which the vehicle was actually produced, 

provided that the production period does not 

exceed 24 months.

(11) "Three most recent model years" means the 

current (first) model year and the second and 

third model years following the current model 

year.

(12) "Vendor" means any person who sells or 

leases equipment to inspection stations that is 

used to perform on-board diagnostic tests to 

show compliance with Rule 02D .1005 of this 

Section.

Authority G.S. 20-4.01(12a); 20-4.01(28a); 143-215.3(a)(1). 

15A NCAC 02D .1005 ON-BOARD DIAGNOSTIC 

STANDARDS 

(a) This Rule applies according to Rule .1002 of this Section to 

all 1996 and later gasoline-powered and hybrid-powered motor 

vehicles, vehicles 1996 or more recent models except the 

vehicles in the three most recent model years with less than 

70,000 miles on their odometers, except plug-in and fuel-cell 

electric motor vehicles, and motorcycles, in the counties 

identified in G.S. 143-215.107A. 

(b) Vehicles covered under this Rule shall pass annually the onboard diagnostic test described in 40 CFR 85.2222. The vehicle 

shall fail the on-board diagnostic test if any of the conditions of 

40 CFR 85.2207 are met. Equipment used to perform on-board 

diagnostic tests shall meet the requirements of 40 CFR 85.2231. 

(c) The tester shall provide the owner of a vehicle that fails the 

on-board diagnostic test described in Paragraph (b) of this Rule a 

report of the test results. This report shall include the codes 

retrieved (these codes are listed in 40 CFR 85.2223(b)), the 

status of the malfunction indicator light illumination command, 

and the customer alert statement described in 40 CFR 

85.2223(c). 

(d) Persons performing on-board diagnostic tests shall provide 

the Division of Air Quality data necessary to determine the 

effectiveness of the on-board diagnostic testing program. The 

data submitted shall be what is necessary to satisfy the 

requirements of 40 CFR 51.365, Data Collection, and 40 CFR 

51.366, Data Analysis and Reporting. Reporting, and 40 CFR 

51.358, Test Equipment.

Authority G.S. 20-128.2(a); 143-215.3(a)(1); 143-215.107(a)(6); 

143-215.107(a)(7); 143-215.107A(b); S.L. 1999 c. 328 s. 3.2. 

15A NCAC 02D .1006 SALE AND SERVICE OF 

ANALYZERS 

(a) Definition. For the purposes of this Rule, "vendor" means 

any person who sells or leases equipment to inspection stations 

that is used to measure emissions from motor vehicles for the 

purpose of showing compliance with Rule .1004 of this Section 

IV-3
PROPOSED RULES 

28:04 NORTH CAROLINA REGISTER AUGUST 15, 2013 

331 

or that is used to perform on-board diagnostic tests to show 

compliance with Rule .1005 of this Section.

(b)(a) Requirements. A vendor shall not sell or lease equipment 

unless it meets the requirements of 40 CFR 85.2231 Onboard 

Diagnostic Test Equipment Requirements, and has the software 

necessary to record and transmit the data required by the 

Division of Motor Vehicles and the Division of Air Quality to 

determine compliance with the inspection/maintenance program 

requirements of this Section. 

(c)(b) Hardware repair and software repair. When equipment 

hardware or software fails to meet the requirements of Paragraph 

(b)(c) of this Rule for a particular analyzer, the vendor, after 

receiving a call to its respective service call center, shall 

communicate with the impacted station within 24 hours: two 

business days and shall complete repairs within the warranty 

guidelines of the vendor. Where the hardware problem is 

stopping 20 percent or more inspections for a particular analyzer 

or is compromising the security of the inspection system, the 

vendor shall repair the problem within 48 hours after the initial 

call to its respective service call center. 

(1) Where the hardware problem is stopping less 

than 20 percent of all inspections for a 

particular analyzer and is not compromising 

the security of the inspection system, the 

vendor shall repair the problem within 72 

hours after the initial call to its respective 

service call center.

(2) Where the hardware problem is not stopping 

inspections and is not compromising the 

security of the inspection system, the vendor 

shall repair the problem within 96 hours after 

the initial call to its respective service call 

center.

(d)(c) Software repair revisions. When analyzer software fails to 

meet the requirements of Paragraph (b) of this Rule, the vendor, 

after receiving a call to its respective service call center, shall 

communicate with the station within 24 hours. two business 

days. The vendor shall identify and characterize the software 

problem within 5 days. The vendor shall, within that same 5-day 

period, inform the station owner and the Division as to the 

nature of the problem and the proposed corrective course of 

action and: action.

(1) Where the software problem is stopping 20 

percent or more inspections for a particular 

analyzer or is compromising the security of the 

inspection system, the vendor shall submit a 

new revision of the software to the Division 

for approval within 19 days after receiving the 

initial call to its service call center.

(2) Where the software problem is stopping less 

than 20 percent of all inspections for a 

particular analyzer and is not compromising 

the security of the inspection system, the 

vendor shall submit a new revision of the 

software to the Division for approval within 33 

days after receiving the initial call to its 

service call center.

(3) The vendor shall distribute the new revision of 

the software to all impacted stations within 14 

days after the vendor receives written 

notification from the Division that the software 

has been approved as meeting the 

requirements of Paragraph (b) of this Rule.

(e)(d) Documentation of the initial service call. The vendor's 

service call center shall assign a unique service response number 

to every reported new hardware or software problem. The time 

and date of the initial call shall be recorded and identified with 

the service response number. The service response number shall 

be communicated to the inspection station operator at the time of 

the initial contact. 

Authority G.S. 143-215.3(a)(1); 143-215.107(a)(6),(14). 

15A NCAC 02D .1009 MODEL YEAR 2008 AND 

SUBSEQUENT MODEL YEAR HEAVY-DUTY DIESEL 

VEHICLE REQUIREMENTS 

(a) Applicability. This Rule applies to model year 2008 and 

subsequent model years heavy-duty diesel vehicles.

(b) Definitions. For the purposes of this Rule the following 

definitions shall apply.

(1) "Heavy-duty diesel vehicle" means a motor 

vehicle (excluding trailer(s)) with a gross 

vehicle weight rating (as certified by the 

manufacturer) of 14,001 pounds or greater that 

is propelled by a diesel engine.

(2) "Motor vehicle dealer" means motor vehicle 

dealer as defined in G.S. 20-286(11) and 

includes "new motor vehicle dealer" as defined 

in G.S. 20-286(13) and "used motor vehicle 

dealer" as defined in G.S. 20-286(16).

(3) "New motor vehicle" means new motor 

vehicle as defined in G.S. 20-286(10)(a).

(4) "Used motor vehicle" means used motor 

vehicle as defined in G.S. 20-286(10)(b). 

(c) Exemptions. For the purposes of this Rule the exemption of 

military tactical vehicles and equipment as specified in Title 13 

of the California Code of Regulations, Section 1905 shall apply.

(d) Requirement. No model year 2008 or subsequent model 

year heavy-duty diesel vehicle that is a

(1) used heavy-duty diesel vehicle sold by a motor 

vehicle dealer; or

(2) new motor vehicle, however it is sold,

may be leased or registered within North Carolina unless the 

vehicle or its engine has been certified by the California Air 

Resources Board as meeting the applicable model year 

requirements of Title 13 of the California Code of Regulations, 

Section 1956.8, California Exhaust Emission Standards and Test 

Procedures for 1985 and Subsequent Model Heavy-Duty Diesel 

Engines and Vehicles.

(e) Referenced Regulation. The California Code of Regulations 

Title 13, Division 3, Chapter 1, Article 1, Section 1905 and 

Article 2, Section 1956.8 are incorporated by reference in this 

Rule and include any later amendments thereto. A copy of the 

referenced materials may be obtained free of charge via the 

internet from the Office of Administrative Law California Code 

of Regulations website at http://ccr.oal.ca.gov/, or a hard copy 

may be obtained at a cost of $5.00 from the Public Information 

IV-4
PROPOSED RULES 

28:04 NORTH CAROLINA REGISTER AUGUST 15, 2013 

332 

Office, California Air Resources Board, P.O. Box 2815, 

Sacramento, CA, 95812.

Authority G.S. 143-215.3(a)(1); 143-215.107(a)(6)-(7). 

* * * * * * * * * * * * * * * * * * * * * 

Notice is hereby given in accordance with G.S. 150B-21.2 that 

the Environmental Management Commission intends to amend 

the rules cited as 15A NCAC 02D .1104; 02Q .0701-.0704, 

.0706, .0709, .0711 and repeal the rules cited as 15A NCAC 02Q 

.0705 and .0704. 

Agency obtained G.S. 150B-19.1 certification: 

 OSBM certified on: June 28, 2013

 RRC certified on: 

 Not Required

Link to agency website pursuant to G.S. 150B-19.1(c): 

http://www.ncair.org/rules/hearing/ 

Proposed Effective Date: January 1, 2014 

Public Hearing: 

Date: September 19, 2013 

Time: 3:00 p.m. 

Location: Training Room (#1210), DENR Green Square Office 

Building, 217 West Jones Street, Raleigh, NC 

Reason for Proposed Action: Session Law 2012-91 provides 

an exemption from North Carolina’s air toxics rules for certain 

sources of toxic air pollutants as long as the Division of Air 

Quality (DAQ) determines that the emissions from that facility 

will not pose an unacceptable risk to human health. 

Section 1 of the law exempts sources subject to federal maximum 

achievable control technology (MACT), generally available 

control technology (GACT), or case-by-case emission limits for 

toxic air pollutants established under Section 112(j) of the Clean 

Air Act, and codifies the Director’s Call provision of the state 

air toxics rules. 

Section 2 of the law requires rule amendments consistent with 

Section 1. 

Section 3 of the Session Law requires the DAQ to review the 

existing air toxics rules and make recommendations to the 

Environmental Review Commission (ERC) on whether further 

changes could be made that would reduce unnecessary 

regulatory burden and increase the efficient use of Division 

resources while maintaining public health protections. 

The proposed recommendations include: develop additional set 

of toxic emission permitting rates (TPER) for unobstructed 

vertical stacks; exempt natural gas and propane-fired 

combustion sources less than 450 mm BTU/hr that are only 

source of benzene; exempt emergency engines less than 4843 hp 

that are only source of formaldehyde; repeal Standard Industrial 

Classification (SIC) call rule; clarify the term “actual rate of 

emissions”; and remove the term “unadulterated wood”. 

Rules in Section 15A NCAC 02Q .0700 are proposed to be 

amended or repealed to incorporate the Section 1 statutory 

exemptions and the Section 3 report recommendations. In 

addition, Rule 15A NCAC 02Q .0714, Waste Water Treatment 

Systems At Pulp And Paper Mills, is proposed to be repealed 

due to applicable requirements having expired. 

Existing rule numerical values for the asbestos ambient air level 

(AAL) in 15A NCAC 02D .1104 and the associated asbestos 

TPER in 15A NCAC 02Q .0711 are proposed to be revised due 

to a calculation error in their original development. 

Comments may be submitted to: Joelle Burleson, Division of 

Air Quality, 1641 Mail Service Center, Raleigh, NC 27699-

1641, Phone (919)707-8720, fax (919)707-8720, email 

joelle.burleson@ncdenr.gov. 

Comment period ends: October 14, 2013 

Procedure for Subjecting a Proposed Rule to Legislative 

Review: If an objection is not resolved prior to the adoption of 

the rule, a person may also submit written objections to the 

Rules Review Commission after the adoption of the Rule. If the 

Rules Review Commission receives written and signed 

objections after the adoption of the Rule in accordance with G.S. 

150B-21.3(b2) from 10 or more persons clearly requesting 

review by the legislature and the Rules Review Commission 

approves the rule, the rule will become effective as provided in 

G.S. 150B-21.3(b1). The Commission will receive written 

objections until 5:00 p.m. on the day following the day the 

Commission approves the rule. The Commission will receive 

those objections by mail, delivery service, hand delivery, or 

facsimile transmission. If you have any further questions 

concerning the submission of objections to the Commission, 

please call a Commission staff attorney at 919-431-3000. 

Fiscal impact (check all that apply). 

 State funds affected 

 Environmental permitting of DOT affected 

 Analysis submitted to Board of Transportation 

 Local funds affected 

 Date submitted to OSBM: 

 Substantial economic impact (≥$500,000) 

 Approved by OSBM 

 No fiscal note required by G.S. 150B-21.4 

CHAPTER 02 - ENVIRONMENTAL MANAGEMENT 

SUBCHAPTER 02D - AIR POLLUTION CONTROL 

REQUIREMENTS 

SECTION .1100 - CONTROL OF TOXIC AIR 

POLLUTANTS 

Note: Text in italics was previously published in 27:20 NCR 

1903-1906 and has not yet been adopted by the Environmental 

Management Commission. 

IV-5
Hearing Officer's Suggested Hearing Comments 

Raleigh, NC – September 18, 2013 

INTRODUCTION

[Steven Vozzo, hearing officer]: 

 Good evening ladies and gentlemen. My name is Steven Vozzo. I am Regional Supervisor of 

the Division of Air Quality’s Fayetteville Regional Office. My role as hearing officer is to listen 

to all relevant comment on these proceedings and report them to the full commission. Sitting 

with me is Ms. Joelle Burleson. She is with the North Carolina Division of Air Quality, Planning 

Section. 

 Some of the staff from the Division of Air Quality are here to assist. Ms. Burleson, please 

introduce the staff present. 

Ms. Burleson. (Introduce staff) 

[Steven Vozzo]: 

 This evening we are conducting a public hearing to take comments on amendments to rules 

concerning Motor Vehicle Emission Control Standards in 15A NCAC 02D Section .1000. A 

fiscal note has been written for the rule amendments presented in the hearing tonight and was 

approved and certified by the Office of State Budget and Management. This hearing will be held 

according to the North Carolina Administrative Procedures Act. The public notice for this 

hearing has been advertised in the North Carolina Register and on the Division of Air Quality 

website. Copies of the notice have also been sent to those on the official DAQ mailing list. I 

will enter the public notice, proposed amendments and fiscal note into the hearing record without 

reading them at this time. 

It would be helpful if any person desiring to comment would also submit a written statement for 

inclusion into the hearing record. Once called to speak, please come to the podium and state your 

name clearly, identify the rule or rules you are commenting on, and whom you represent. I will 

now open the hearing and take relevant comments on amendments to the Motor Vehicle 

IV-6
Emission Control Standard rules to incorporate the revised statutory exemption of the three most 

recent model year vehicles with less than 70,000 miles on the odometer from vehicle emissions 

inspection pursuant to Session Law 2012-199, An Act To Exempt Vehicles Of The Three 

Newest Model Years And With Less Than Seventy Thousand Miles From Emissions 

Inspections. Additional minor housekeeping amendments to clarify definitions are also proposed. 

In addition, Rule 15A NCAC 02D .1009, Model Year 2008 and Subsequent Model Year HeavyDuty Diesel Vehicle Requirements, is proposed for repeal because it is duplicative of United 

States Environmental Protection Agency rule requirements and therefore unnecessary. 

{optional script if there are a large number of speakers} 

--------------------------------------------------------------------------------------------------------------------- 

[Hearing officer]: Optional Time Limit: Many people have requested to speak at this 

hearing. Due to time constraints, speakers’ presentations will be limited to ____ minutes. 

--------------------------------------------------------------------------------------------------------------------- 

[Steven Vozzo]: 

 I will now take any comments you may have. 

[SPEAKERS] 

 Is there anyone else who would like to comment? If there are no more comments, then 

the hearing is closed. The hearing record will remain open until October 14, 2013 for additional 

written comments. 

IV-7
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IV-8
CHAPTER V 

COMMENTS DURING THE COMMENT PERIOD 

INDEX OF COMMENTERS 

NAME REPRESENTING PAGE

Chris Giguere V-2

Michael Gaither BanaLogic Corporation V-3

Shawn Petico V-4

Joe Culotta V-5

Terry Anderson V-6

Jim McClesse V-7

Max Potter V-8

Craig Hauntings V-9

William Markin V-10

Kitty Rubin N.C. Association of Inspection Only Stations V-11

Jeff Stahl V-13

Ray Patterson V-14

Susan Gibson Department of Defense V-15

T. John Policastro North Carolina Automobile Dealers Association V-23

David Ferrell Inspection Station Association of North Carolina V-30

V-1
[ Chris Giguere, North Carolina State University Ph.D. graduate economics student and Intern 

with the North Carolina Division of Environmental Assistance and Customer Service]: 

My name is Chris Giguere. I’m an intern in the Division of Environmental Assistance in 

customer service and I’m also a GHG student in economics at NC State. I already have a data 

set from the Division of Air Quality from 2006 thru 2012 of all the emissions and safety 

inspections conducted in the state. I understand that there is a report that Brian worked on that 

I’m going to get access to that and look at it, but I’m interested in is whether three years is the 

right amount of time. We’re trying to build a data set right now to try to study that and other 

effects of automobile policies on extensive and intensive margins. Choices in terms of the fleet 

fuel economy, the type of car that you drive and also the mileage that you drive. My main 

comment is that I’m very interested to look at this report and I am interested in also trying to 

come to the same conclusion. I’m interested in doing the analysis and checking. Thank you. 

V-2
[Michael Gaither of BanaLogic Corporation]: 

My name is Mike Gaither and I’m employed with BanaLogic Corporation. I have a question 

more than a comment. I think technology is such that this three-year exemption is certainly no 

surprise to anybody. It’s just a matter of time. My question is how is it going to be enforced and 

what preparations are being made to enforce it. Will this all be in effect January 1st or if there’s 

no enforcement, will the stations police themselves? How is this going to be enforced, especially 

the mileage part? 

V-3
1

Burleson, Joelle

From: Shawn Peticos [shawn41@bellsouth.net]

Sent: Monday, September 23, 2013 3:21 PM

To: Burleson, Joelle

Subject: Tax

This is just another tax break for the rich, what middle class working family buy new cars? Me and

90% of my coworkers don't own a car 3 years old or less and we make good money in Aerospace.  

Shawn  

V-4
1

Burleson, Joelle

From: joe cool [joecool26368@yahoo.com]

Sent: Wednesday, September 18, 2013 8:26 PM

To: Burleson, Joelle

Subject: Emissions test

Hello, 

This "Annual Test" is a scam. 

I understand 90% plus pass first try. 

If this is so why do we have to do this EVERY Year? 

How about every 3 years for EVERYONE? 

This would be less of a financial hardship and less of a waste of time 

for all drivers. 

Also, the so called safety inspection is a joke. In all the years we have been 

doing this, only 1 station ever raised the car on a hoist. 

Joe Culotta 

Asheville, NC 

V-5
1

Burleson, Joelle

From: terry483@lycos.com

Sent: Wednesday, September 18, 2013 8:48 PM

To: Burleson, Joelle

Subject: My Suggestion on Emission Test

To tell you the truth, I think this annual requirement for emissions is a Waste of our 

money. 

 

Why do you insist on scamming us on this stuff? 

 

The vehicles before 1997 do not even have to do this and chances are they would 

fail a lot more. 

 

The diesel trucks are the worst polluters and they do not even get tested. 

 

Stop this foolishness and drop it back to every 5 years. 

 

Waste of our money. 

 

Terry Anderson 

Gastonia 

V-6
1

Burleson, Joelle

From: j c [jccmac483@yahoo.com]

Sent: Wednesday, September 18, 2013 8:32 PM

To: Burleson, Joelle

Subject: Emission Test Input

I think this whole emission thing is a scam. 

Why do you force people to waste their money every year on this? 

Some of us actually work for a living and hate to waste their money on this every year. 

How about doing this every 3-5 years? 

I would rather donate the money to Goodwill instead of this. I really 

feel ripped off! 

Jim Mcclesse 

Fletcher, NC 

V-7
1

Burleson, Joelle

From: max potter [potter_max@yahoo.com]

Sent: Wednesday, September 18, 2013 2:57 PM

To: Burleson, Joelle

Subject: emissions testing

 I would like to ask the commission to revoke all emissions testing. as the new law stands right now you are 

removing the extra testing from cars that are less than three years old with less than 70,000 miles. This places the 

burden of the extra money for an inspection on the individuals that cannot afford new cars. This is unfair to those 

individuals. It is also a quandary why New Hanover County has to have this and Brunswick doesn't. the emissions test 

have simply done nothing for the state except to increase fees paid by the citizenry that already pays annual taxes on 

the vehicles. 

 

 

Thank you 

Max Potter 

V-8
1

Burleson, Joelle

From: cbhauntings@cs.com

Sent: Thursday, September 12, 2013 11:59 AM

To: Burleson, Joelle

Subject: New Car Emissions Testing

Dear Joelle, 

While I agree in principle that emissions testing for a new car seems like a waste of money, and it probably is for most car and 

truck owners. The problem comes to how best to police the aftermarket car upgrades that are performed all the time by many car

and truck owners who like to modify their vehicles for speed and driving on race tracks from time to time. Many upgrades are safe 

(its their driving that may come into question), but not street legal, usually because they would fail an emissions test...not a safety 

inspection. One modification that is common for track-use only is the removal of the power-robbing catalytic converter and 

replaced by a straight exhaust pipe system. It also makes the car/truck exhaust louder (more unrestricted exhaust airflow-think 

NASCAR). The emission system is the single biggest horsepower robbing feature of all cars and trucks, and would be swapped 

out and/or bypassed immediately by many more drivers if it were legal. What better time to do it than when you get the car new! 

Buy the car, increase the horsepower and instead of having to swap it back to factory original for a yearly emission inspection, you 

get to keep your mods for 3 years...then swap it back to original and as often occurs, turn in your leased car for a new one and do 

it again!!! Come on...such people who flip 2yr and 3yr car leases would never have to pay a dime in emissions testing and have a 

lot of "racing" fun circumventing the process. Just a thought. 

Regards, 

Craig

V-9
1

Burleson, Joelle

From: William Mackin [willmackin@gmail.com]

Sent: Thursday, September 12, 2013 9:13 AM

To: Burleson, Joelle

Subject: Caution against this 3 year exemption for emissions testing

Dear Ms. Bureleson, 

 

I am strongly opposed to exempting new vehicles from emissions testing. 

 

This move is naïve. Of course new vehicles will have working emissions equipment. However, people will 

immediately modify their vehicles to removes emissions control equipment so they can have "better performance" from 

their vehicle at the expense of the air that we all breathe. 

 

I am outdoors enough to experience pre-emissions testing vehicles. You can feel it as they drive by and you have 

trouble breathing. There is an idea that we don't need the EPA. It is a stupid idea and the people that espouse it should 

be forced to run behind a 1979 dodge pickup truck for 10 minutes. 

 

The emissions from new vehicles with their emissions control systems removed will be equally bad. It will contribute 

to Lung Disease and Terrible Air Quality, and many of our cities are already in violation of the Clean Air Act. 

 

The people who came up with this idea are ignorant, naïve, or corrupt, in my humble opinion. Please put a stop to it or 

create massive penalties for vehicles that have had their emisisons control systems disabled. 

 

Thanks, 

William A. Mackin, PhD 

-- 

www.wicbirds.net

919-358-1714 

V-10
1

Burleson, Joelle

From: kitty rubin [ncinspection@yahoo.com]

Sent: Tuesday, October 08, 2013 1:19 PM

To: Burleson, Joelle

Subject: Inspection program changes

Hello, 

The N.C. Association of Inspection only Stations would like to comment on the changes to the inspection 

program. This plan to exempt the first three year models of cars is clearly a perk to the motoring public that 

can afford to buy a new car. We would like to know who asked for this perk? These vehicles are new and 

should be checked for emissions one year after purchase for compliance. Our members would like to know 

what we should do when one of these vehicles comes in for inspection and the check engine light is on? Do 

we pretend to not see it or do we fail it, something we can't do with the current system. If we are to fail it 

then it is an emission inspection. 

This plan to exempt these cars would cut the inspection revenue to the inspection stations by 18 to 20 

percent. This is already on top of a program that has not seen a fee increase in over ten years and asking 

the stations to pay for the software update for this change is absurd. Continuing to cut this program would 

mean that Inspection only stations may not survive. These stations are convenient for the public. 

This is a change that is not needed and is not fair to the motoring public that cannot afford a new car. 

These cars that are new are easy to inspect and help to offset the older cars that are not ready and are 

tested numerous times before passing at no added charge. 

With this change the state will lose revenue the stations will lose revenue and the burden of paying for the 

communication to the VID will be placed on the motoring public with the older cars. 

Please reconsider these changes and consider a fee increase for this program. 

Thanks, Kitty Rubin 

N.C. Association of Inspection only Stations 

V-11
1

Burleson, Joelle

From: kitty rubin [ncinspection@yahoo.com]

Sent: Monday, October 14, 2013 11:32 AM

To: Burleson, Joelle

Subject: Inspection Program

The N.C. Association of Inspection only Stations would like to point out that with the passing of Senate Bill 

402 that the pie chart that shows the Motoring Public where the funds that are raised in the IM program go is 

no longer correct and a software change would be needed to correct the pie chart so as not to deceive the 

Motoring Public. 

The N.C. Association of Inspection only Stations would like to make sure that the stations are not paying for 

a software change when DOT/DMV need this software change and could include any other changes at this 

time. 

Thanks, Kitty Rubin 

V-12
1

Burleson, Joelle

From: Jeff Stahl [jes353@yahoo.com]

Sent: Friday, October 11, 2013 2:09 PM

To: Burleson, Joelle

Subject: Inspection Program

According to NCDENR figures, with the 3 year exemption for new cars about 700,000 vehicles will be getting 

a safety inspection instead of an emission inspection in 2014. At the SI rate that will bring in about $595,000 

in revenue for the program, at the IM rate it will bring in about $4,375,00. How can your department, DMV 

and the state justify losing about $3,780,000 in revenue in 2014 alone and then keep losing at the same rate 

until 2017, a total of over $11,340,000 in 3 years. I am looking forward to your reply 

 Thank you 

 Jeff Stahl 

V-13
1

Burleson, Joelle

From: ray patterson [ray_p100@yahoo.com]

Sent: Friday, October 11, 2013 2:55 PM

To: Burleson, Joelle

Subject: INSPECTION CHANGES

The N.C. Association of Inspection only Stations would like to comment on the changes to the 

inspection program. This plan to exempt the first three year models of cars is clearly a perk to 

the motoring public that can afford to buy a new car. We would like to know who asked for 

this perk? These vehicles are new and should be checked for emissions one year after 

purchase for compliance. Our members would like to know what we should do when one of 

these vehicles comes in for inspection and the check engine light is on? Do we pretend to not 

see it or do we fail it, something we can't do with the current system. If we are to fail it then it 

is an emission inspection. 

This plan to exempt these cars would cut the inspection revenue to the inspection stations by 

18 to 20 percent. This is already on top of a program 

that has not seen a fee increase in over ten 

years and asking the stations to pay for the 

software update for this change is absurd. Continuing to cut this program would mean that Inspection only stations may not 

survive. These stations are convenient for the public.

This is a change that is not needed and is not fair to the motoring public that cannot afford a 

new car. These cars that are new are easy to inspect and help to offset the older cars that are 

not ready and are tested numerous times before passing at no added charge. 

With this change the state will lose revenue the stations will lose revenue and the burden of 

paying for the communication to the VID will be placed on the motoring public with the older 

cars. 

Please reconsider these changes and consider a fee increase for this program. 

Ray Patterson, Partner 

Two Guys Inspection Stations 

Charlotte, NC 

704 566 0355 

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V-19
U.S. Department of Justice 

Environmental and Natural Resources 

Division

July 29, 1998 

Scott Fulton, Acting General Counsel 

United States Environmental Protection Agency 

401 M Street, SW 

Washington, DC 20460 

Re: Federal Agency Compliance with the Clean Air Act Vehicle Inspection and Maintenance 

Requirements

Dear Mr. Fulton: 

I am writing to you about an issue that has been identified concerning an EPA regulation that 

implements Clean Air Act ("CAA") provisions relating to state vehicle inspection and 

maintenance ("I/M") requirements for federal fleet and federal employee vehicles. See 40 C.F.R. 

§ 51.356. This issue was brought to our attention by several federal agencies, including the 

United States Postal Service, the Department of Defense, the General Services Administration, 

as well as our own Justice Management Division, after the Commonwealth of Virginia issued 

regulations which imposed discriminatory I/M obligations on federal fleet and federal employee 

vehicles in reliance on the EPA regulation at issue. Per discussions with the EPA and the 

affected federal agencies, this Division has reached the conclusion, which is concurred in by the 

Department's Office of Legal Counsel, that the EPA regulation should be revised so as not to 

provide that the federal government is subject to Virginia's I/M requirements. If you concur with 

our conclusion, we suggest that appropriate steps be taken to revise the EPA regulation. 

In short, the EPA regulation appears to be premised on the assumption that CAA section 118 

includes a waiver of immunity that permits states to impose discriminatory I/M requirements on 

federal fleet and federal employee vehicles. Section 118 does contain a waiver of immunity, but 

only as to requirements a state imposes on the federal government "in the same manner and to 

the same extent as non-governmental entities." Section 118(a) 42 U.S.C. § 7418(a). 

The express waiver of immunity in section 118(a) does not extend to sections 118(c) and (d). 

Although sections 118(c) and (d) require federal fleet and federal employee vehicles to comply 

with valid state I/M requirements, because they do not contain an express waiver, the 

responsibility for ensuring compliance with them lies with the federal government, not the states. 

The EPA regulation does not reflect this distinction between section 118(a), which waives 

immunity for nondiscriminatory state I/M requirements, and sections 118(c) and (d), which do 

not. On the contrary, it authorizes the states to enforce sections 118(c) and (d) and further, 

requires the states to do so. Specifically, the EPA regulation requires that state CAA 

implementation plans ("SIPs") include the legal authority to implement and enforce I/M 

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requirements on all federal fleet and federal employee vehicles that operate on a federal facility. 

40 C.F.R. § 51.356. Currently, a number of states, including Virginia and Maryland, have issued 

regulations, subsequently incorporated into EPA-approved SIPs, that single out the federal fleet 

and federal employee vehicles for discriminatory I/M requirements. However, EPA's regulation 

is invalid to the extent that it exceeds the waiver of sovereign immunity, and therefore cannot be 

relied upon by states to assert jurisdiction over the federal government. See Mitrelfelt v. 

Department of Air Force, 903 F.2d 1293, 1296 (10th Cir. 1990) ("[A]dministrative regulations 

cannot waive the federal government's sovereign immunity"), citing United States v. Mitchell, 

463 U.S. 206, 215 (1983); c.f. LEAF v. EPA 118 F.3d 1467, 1473 (11th Cir. 1997) ("[I]f 

regulations are inconsistent with the statute... these regulations would be void ab initio"). 

In enacting the Clean Air Act Congress recognized that the federal government shares an 

important responsibility with other units of government and non-governmental entities to ensure 

that all Americans can live in areas that meet or exceed the National Ambient Air Quality 

Standards. As you know, I am a strong advocate of ensuring that the federal government takes 

seriously the responsibility to comply with its legal obligations and assume its fair share in 

controlling air emissions to protect public health. The revision to the EPA regulation at issue 

would simply ensure that the federal agencies are not subjected to discriminatory state I/M 

requirements. Several states, including the State of Washington, have included in their SIPs state 

I/M requirements for all fleet vehicles that operate within certain areas of the state, and such 

nondiscriminatory requirements are a valid imposition on federal fleets consistent with the 

waiver of immunity in section 118(a). 

In recognition that federal agencies are required to comply with all nondiscriminatory state I/M 

requirements, an interagency work group was established to develop an implementation plan for 

compliance with applicable state I/M requirements at federal facilities. The work group, with 

EPA's assistance, has devised a draft interim guidance and model implementation plan. EPA has 

reviewed the draft interim guidance and model implementation plan, and we understand that 

EPA will adopt them to assure that the state I/M requirements are met until EPA issues its own 

guidance and/or regulations directing federal agency compliance with sections 118(c) and (d). 

There is one additional matter I would like to bring to your attention about the Northern Virginia 

SIP. In devising a system to impose user-fees on the I/M program, Virginia has developed a 

program that requires the federal government to remit $2 for each vehicle operating on or 

commuting to federal facilities in the Northern Virginia area, including employee and contractor 

vehicles. In our view such an assessment cannot be imposed on the United States. The United 

States is constitutionally immune from state taxes and regulatory fees, and the $2 fee falls 

outside the waiver of immunity in CAA section 118 because it discriminates against the United 

States. And, in addition, while the United States is not immune from user fees imposed by the 

states, the $2 fee does not quality as a user fee. Although Virginia could construct a fee system 

that passes constitutional muster and that is consistent with the limited waiver of immunity in 

CAA section 118 to offset any overhead it may incur in overseeing federal agency compliance 

with its I/M requirements, its current scheme lacks the necessary features of a valid fee system. 

I appreciate your attention to this matter. If you have any questions please feel free to contact me 

or Deputy Assistant Attorney General Nancy Firestone. 

V-21
Sincerely,

//s// 

Lois J. Schiffer 

Assistant Attorney General

Environment and Natural Resources Division 

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North Carolina Automobile Dealers Association

1029 Wade Avenue y Post Office Box 12167 y Raleigh, NC 27605-2167 

 919-828-4421 y FAX 919-829-9525 

October 14, 2013 

Via U.S. Mail and Electronic Mail

Ms. Joelle Burleson 

North Carolina Department of Environment and Natural Resources 

Division of Air Quality 

1641 Mail Service Center 

Raleigh, North Carolina 27699-1641 

Re: Proposed Amendments to Motor Vehicle Emission Control Standard Rules Incorporating 

 Session Law 2012-199 

Dear Ms. Burleson: 

On behalf of the North Carolina Automobile Dealers Association (“NCADA”), the following comments 

are respectfully submitted on the proposed amendments to the motor vehicle emission control standard 

rules incorporating Session Law 2012-199. NCADA is a trade association representing the franchised 

(new) automobile, truck and motorized RV dealers in North Carolina. Many of the dealer members of 

NCADA also operate licensed North Carolina motor vehicle inspection stations. NCADA did not 

oppose the final version of Session Law 2012-199, and these comments do not in any way relate to the 

underlying public policy issues and decisions included in that session law. 

NCADA and its members strongly support the overall goals of North Carolina’s Motor Vehicle 

Inspection/Maintenance program and thank the Division of Air Quality and the Division of Motor 

Vehicles (“DMV”) for their efforts related to the operation of the program. The public policy debates in 

the North Carolina General Assembly on these issues have continued for several years now and have 

required the extensive work of the Department of Environment and Natural Resources, Division of Air 

Quality (“DAQ”). DAQ has been responsible for conducting various studies, data collection and 

assessment, and now the development of these proposed rule amendments that will ultimately be 

included in the revised State Implementation Plan and subject to approval by the US Environmental 

Protection Agency. Again, NCADA commends DAQ, as well as DMV, for your continued work on 

these issues. 

Background

An important aspect of the inspection program includes ensuring that all regulated individuals (including 

vehicle owners, inspection mechanics and inspection stations) have a clear understanding of the program 

and its requirements. Violations of various program requirements, including those resulting from 

the most inadvertent and unintentional of errors, can result in significant monetary penalties and 

license suspensions/revocations for inspection mechanics and inspection stations. The suspension 

of a station inspection license can put the licensee out of business, and leave its employees without a 

job. 

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Comments of NCADA 

October 14, 2013 

Page 2

Throughout the numerous public policy debates on these issues, the emissions inspection exemption 

included in Session Law 2012-199, has generally been referred to as a “three-year” exemption. 

Specifically, in addition to the first year exemption provided for in current law (which is actually an 

exemption for any new motor vehicle regardless of model year), a vehicle would be exempt from the 

emissions inspection at its next two annual inspections, provided the vehicle has less than 70,000 miles 

on its odometer at the time of inspection. NCADA believes that this was the intent of Session Law 

2012-199 and also what DAQ is attempting to implement. 

However, as currently drafted, the proposed rule amendments could be interpreted to create a 

measurement mechanism that will be extremely difficult for inspection mechanics and inspection 

stations to discern and that will not necessarily result in a true “three-year” exemption for all vehicles 

under 70,000 miles. 

Such an interpretation would significantly increase the burden of compliance, both in operations and in 

cost, for inspection mechanics and inspection stations in North Carolina. NCADA respectfully requests 

that the proposed amendments be revised before they are adopted in order to reduce the significant 

compliance burden and to provide a clear and unambiguous means for inspection mechanics and 

inspection stations to discern whether a vehicle being presented for inspection is exempt from the 

emissions inspection requirement. 

Summary of Concerns

These comments highlight various concerns with the proposed rule amendments as currently drafted. 

However, as noted above, the more significant overarching concerns are twofold: 

1) “Three most recent model years” calculation - Throughout the numerous public policy debates on 

these issues, the emissions inspection exemption included in Session Law 2012-199, has been generally 

referred to as a “three-year” exemption. Specifically, in addition to the first year exemption in current 

law, a vehicle would be exempt from the emissions inspection at its next two annual inspections, 

provided the vehicle has less than 70,000 miles on its odometer at the time of inspection. However, as 

noted above, the proposed rule amendments could be interpreted as creating a measurement mechanism 

that will not necessarily result in a “three-year” exemption for all vehicles under 70,000 miles. Further, 

it appears that, whether a particular vehicle is exempt from having an emissions inspection conducted 

would not be determined with relative ease by simply looking at the calendar year. Rather, it would be 

based on whether a third subsequent model year for the particular model in question has been released 

on the date of inspection. If it is the intent of these proposed rule amendments that the emissions 

inspection exemption be an exemption for the first three inspections of a vehicle with less than 70,000 

miles, NCADA would recommend that the proposed rule amendments be revised to clearly reflect that 

intent. 

2) Potential significant additional burden on inspection mechanics and inspection stations - As 

noted above, the proposed rule amendments appear to require an inspection mechanic to know, at the 

time of inspection, whether a certain model year has been released for the vehicle being inspected. 

However, the proposed rule amendments do not include any method by which inspection mechanics and 

inspection stations may accurately determine the first model year when an inspection would be required 

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Comments of NCADA 

October 14, 2013 

Page 3

for a particular type of vehicle. This is particularly problematic because there is no set date on which 

new model year vehicles are introduced. This can happen for an individual model at any time during the 

calendar year. Inspection mechanics and inspection stations would be required to somehow monitor and 

constantly update the release date for each model of vehicle sold in the United States. This lack of 

readily available information could subject inspection mechanics and inspections stations to the high 

risk of significant penalties and license suspensions. The proposed rule amendments should be revised 

to require the implementation of an electronic system or system updates that will immediately alert the 

inspection mechanic as to the proper inspection to perform, regardless of how the “three-year” 

exemption is measured, and before the law and these proposed rule amendments become effective. 

“Three most recent model years” calculation

Among other changes, the proposed amendments to 15A NCAC 02D .1003 include definitions for the 

terms: “model year”, “current model year”, and “three most recent model years.” The proposed model 

year definitions (model year and current model year) refer to the, “year used to designate a discrete 

vehicle model.” 

As such, under these proposed rules, it can be interpreted that the determination of whether a vehicle 

falls within the “three most recent model years” would not be based upon a measurement starting with 

the vehicle’s first or initial year’s emission inspection exemption (at point of sale or lease), plus the next 

two (2) inspections due in the next two (2) calendar years. Rather, it would be a measure of the current 

model year (most recent model year) of the vehicle in question, plus the next two (2) model years 

released for that particular vehicle regardless of calendar year. Stated another way, the determination 

provided for in the proposed rule amendments appears to be dependent upon whether the particular 

vehicle manufacturer has released a third additional model year for that vehicle before its next 

inspection due date. 

As an example, if a new 2014 model year Chevrolet Impala is purchased and registered in June, 2014, 

that vehicle would be exempt from an initial emissions inspection (first year exemption). When the 

vehicle is due for its second safety inspection in June, 2015, it is extremely likely that the vehicle will 

still be within the three most recent model years at that time and the emissions inspection exemption will 

apply (second year exemption). However, when the vehicle’s third safety inspection is due in June, 

2016, it is quite possible that the 2017 model year for that particular vehicle model will have been 

released and the vehicle will no longer be within the “three most recent model years” as currently 

defined in the proposed rule amendments. This would be the case even though it would only have been 

two calendar years since the vehicle was purchased and the vehicle was only exempted from its first and 

second year emissions inspections. Further, it is conceivable that two different owners could purchase 

the same vehicle on the same date in June, 2014, but that the third year exemption could apply to one 

vehicle and not the other depending upon the inspection date and the 2017 model year release date (e.g., 

June 15, 2016 release date of 2017 model with one 2014 model year vehicle inspected the day before on 

June 14 and the other on June 15). 

Also, it is important to note that there is no specific uniformity to automobile manufacturer model 

year release dates. The time frame between model years of a particular vehicle model is not 

necessarily a full twelve (12) months. Also, the release date for a particular vehicle model is rarely 

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Comments of NCADA 

October 14, 2013 

Page 4

in the same calendar month, much less on the same calendar date every year. There is really no 

way we know of for inspection mechanics and inspection stations to track release dates on all 

vehicle models sold. 

Recommendation - NCADA would recommend a revision to the various model year definitions and the 

definition of “three most recent model years” to clearly provide for a definitive time frame involving 

calendar years. As an example, G.S. §20-74.1, addresses motor vehicle damage disclosure requirements 

and requires a damage disclosure statement when transferring a motor vehicle, “up to and including five 

model years old....” G.S. §20-74.1(a1) goes on to define the term “five model years” as follows: 

“(a1) For the purposes of this section, the term “five model years” shall be calculated by 

counting the model year of the vehicle’s manufacture as the first model year and the 

current calendar year as the final model year.” 

Under this definition and method of measuring, it would be clear that the requirement would apply to a 

2014 model year vehicle from 2014 up to and including 2018. 

As Session Law 2012-199 did not define “three most recent model years” in statute, the above example 

involving G.S. §20-74.1 provides an example of how this type of term has been defined in other motor 

vehicle statutes. 

Potential significant additional burden on inspection mechanics and inspection stations

Under current law, while there are other exemptions to the emissions inspection requirements, a vehicle 

is generally subject to an emissions inspection if it is a 1996 or newer motor vehicle and is not a new 

motor vehicle. This determination is a relatively easy task for the inspection mechanic and one currently 

performed every day. 

Under Session Law 2012-199 and the proposed rule amendments, a vehicle with 70,000 or more miles 

on its odometer at the time of inspection will not be exempt from an emissions inspection regardless of 

whether the vehicle is in the three most recent model years. This mileage assessment appears to also be 

a relatively easy and quick task for an inspection mechanic and one not easily susceptible to inadvertent 

error, provided that the odometer is functioning properly and can be read. 

However, as noted above, the proposed rule amendments as currently drafted, could be interpreted to 

require that an inspection mechanic also make a determination, at the time of vehicle inspection, 

whether an automobile manufacturer has released the third subsequent model year following the model 

year of the vehicle being inspected. Clearly, this would present a significant, if not impossible, burden 

for inspection mechanics and inspection stations to accurately determine on their own. Also, as noted 

above, under such an interpretation, the emissions inspection requirement for a particular vehicle could 

change, theoretically, on a day to day basis. 

Again, NCADA would recommend clarifying changes be made to the proposed rule amendments to 

avoid this type of interpretation. However, this issue demonstrates the need for some type of electronic 

process for inspection mechanics and inspection stations to determine the proper required inspection for 

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Comments of NCADA 

October 14, 2013 

Page 5

the vehicle being inspected. Such a process should be in place before the rule amendments and the new 

“three-year” exemption become effective, regardless of how the exemption will be measured. 

In the Fiscal Note prepared by the Division of Air Quality for these proposed rule amendments, the 

following is noted on Page 15 in the Section X. Consideration of Alternatives: 

“Based on present Analyzer and VID Central logic, inspection procedures can be 

performed in the same manner they are presently being performed without Analyzer 

and/or VID Central updates. The responsibility to perform the correct inspection on the 

vehicle presented would be that of the Inspector-Mechanic, which is no different than it is 

presently allowed or practiced now. The Analyzer and VID Central updates would 

incorporate additional system logic to warn the Inspector Mechanic from continuing 

with an OBD/Emissions Inspection, or to convert a Safety-Only Inspection to an 

OBD/ Emissions Inspection on a vehicle that meets the requirements outlined in 

Session Law 2012-199.” (emphasis added). 

The above statement recognizes that the responsibility for performing the “correct inspection” 

supposedly falls on the inspection mechanic. The above statement also recognizes the importance of 

incorporating some type of “system logic” to inspection analyzers to warn an inspection mechanic not to 

conduct an emission inspection for the particular vehicle, and more importantly, to ensure that an 

emissions inspection is conducted when required. While such system logic changes appear to have been 

contemplated, such a requirement is not included in the proposed rule amendments. 

Further, the following additional statement is included in Section X. Consideration of Alternatives: 

“A determination must be made by DMV as to the absolute necessity of an analyzer and 

VID Central update, resulting in almost $1.2 million when a proposed, but not yet 

developed, web-based system and software application could eliminate the need for this 

and future individual analyzer updates, if all current analyzers are converted to the webbased system. The incremental cost for the web-based system and software application 

associated with the rule change is assumed to be negligible. Until then, appropriate 

statutes are present to address improper inspections should they occur. It is 

important to remember that if this type of improper inspection should occur, the 

inspection that occurs is a more stringent inspection and not a less stringent one, but 

is still subject to penalties for an improper inspection.” (emphasis added).

The above statement appears to indicate that if the necessary systems changes to properly warn 

inspection mechanics are too costly to implement and/or if the system changes will be delayed until 

some future date when an alternative system can be developed after the effective date of the new law 

and the proposed rule changes, that the “backstop” will be the penalties the inspection mechanic and 

inspection station will receive should an improper inspection occur. Again, these penalties mandate 

inspection license suspensions, including possible multi-year license suspensions regardless of the 

inadvertency of the errors or the diligence of the inspection mechanic. 

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Comments of NCADA 

October 14, 2013 

Page 6

Further, NCADA does not agree with the premise of the last sentence in the above statement. If an 

improper inspection occurs under these proposed rule amendments, it is just as possible that the 

error will involve not performing an emissions inspection when required. That is, per the examples 

noted above, the error may not be in conducting an emissions inspection too early in the life of a new 

vehicle, but rather, in not conducting an emissions inspection early enough in the life of the vehicle. 

Such potential errors and the possibility for a considerable amount of vehicles to receive the incorrect 

inspection despite the diligence of the inspection mechanic and inspection station, would appear to 

justifiably place in jeopardy the chances for the ultimate approval of the revisions to the Statewide 

Implementation Plan (including the proposed rule amendments) based on the changes to the emissions 

inspection program in Session Law 2012-1999, by the United States Environmental Protection Agency. 

Recommendation - NCADA recommends that the proposed rule amendments be revised to include a 

requirement that the necessary electronic systems or system changes be fully implemented before the 

effective date of the new “three-year” exemption in order to permit an inspection mechanic to 

accurately determine whether a particular vehicle is exempt from the emissions inspection requirement. 

Again, such changes should be implemented regardless of how the “three-year exemption” is calculated. 

However, if the proposed rule amendments are interpreted to require a determination of manufacturer 

vehicle model release dates, such system changes would need to include regularly updated data 

regarding the current model year (most recent model year) of all vehicles. It is important to note that 

such information can change on a daily basis as there is no uniformity to individual manufacturer and/or 

individual vehicle model release dates. Without such a system in place before these proposed rule 

amendments become effective, these changes in inspection requirements pose a clear trap for even the 

most diligent of inspection mechanics and inspection stations. 

Costs of Implementation

As noted throughout the Fiscal Note prepared by DAQ for these proposed rule amendments, 

implementation of the “three-year” exemption, will certainly be costly for inspection mechanics and 

inspection stations. In the March 1, 2012, Study of the Potential Impacts of Exempting Motor Vehicles 

from Emissions Inspections, submitted by the Department of Transportation, Division of Motor Vehicles 

and the Department of Environment and Natural Resources, Division of Air Quality to multiple 

legislative committees, it is noted that a projected combined annual revenue loss of $10,359,418 to 

inspection stations in the 48 emission counties by exempting the first three model years from emission 

inspection requirement. Further, the Fiscal Note prepared by DAQ for these proposed rule amendments 

includes similar projected decrease in revenues for emissions inspection stations. 

It is noted in the Fiscal Note that software upgrades to analyzers could result in a one-time expenditure 

of $990,000, at a cost of approximately $180 per analyzer. As the inspection mechanics and inspection 

stations are already bearing the greatest financial impact resulting from Session Law 2012-199 and these 

proposed rule amendments, the cost of upgrading analyzer software to implement these changes should 

not be borne by inspection stations. 

 

Recommendation – NCADA recommends that the proposed rule amendments be revised to not only 

require the required systems changes to be implemented before the effective date of Session Law 2012-

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Comments of NCADA 

October 14, 2013 

Page 7

199 and the proposed rule amendments as noted earlier, but also to provide that any costs incurred be 

borne by the vendor of any such system. 

Analyzer Performance Standards

As noted above, Session Law 2012-199 and the proposed rule amendments will increase the compliance 

burden for inspection mechanics and inspections stations regardless of how the “three-year exemption” 

is calculated. However, the proposed rule amendments also include changes that appear to potentially 

weaken the required performance standards of inspection station analyzer equipment and equipment 

vendors depending upon the warranty guidelines of a current vendor. These proposed amendments to 

15A NCAC 02D .1006 do not appear to be authorized or required by Session Law 2012-199, and it is 

unclear if such revisions will result in weakening the minimum performance standards at a time when a 

significant change to the inspections program and increased burdens are being placed on inspection 

mechanics and inspection stations. 

Specifically, the proposed rule amendments seek to increase the required time frame for a vendor to 

communicate with an impacted inspection station on a hardware or software repair and software repair 

revisions from 24 hours to two (2) business days. Further, the changes would eliminate the specifically 

stated maximum time frames for necessary repairs and replace with the vendor’s warranty guidelines. In 

addition, for software repair revisions, the maximum time frames for necessary repairs are simply 

eliminated. 

Recommendation - Again, it is not clear from the proposed rule amendment or the Fiscal Note, the 

impetus or the necessity for these proposed changes. However, if such changes would weaken the 

performance standards required of inspection analyzer equipment and/or equipment vendors, then 

NCADA would recommend against these proposed changes. 

New motor vehicle emissions inspection exemption

Finally, under the current version of G.S. §20-183.2, and as it will be amended by Session Law 2012-

199, new motor vehicles as defined in G.S. §20-286(10)a. are exempt from the emissions inspection 

requirement. Current rule 15A NCAC 02D .1002 refers to this exemption as applying to “current model 

year” vehicles, but does not define the term. The proposed rule amendments will now define the term 

“current model year” as the most recent model year used to designate a discrete vehicle model....” 

However, this definition does not necessarily incorporate all new motor vehicles. For example, a certain 

model year vehicle can still be a “new motor vehicle” even after the next model year for that particular 

vehicle is released. As such, even though it is still a “new motor vehicle” and would still be exempt 

from the emission inspection requirement per G.S. §20-183.2(7), the new motor vehicle may not 

actually be the “most recent model year” vehicle, and thus, not a “current model year” vehicle. 

Recommendation - NCADA recommends the inclusion of a reference to the exemption of “new motor 

vehicles” in the proposed amendment to 15A NCAC 02D .1002, in addition to the “current model year” 

reference. While it is certainly likely that any new motor vehicle will still be in the three most recent 

model years when it is first purchased and inspected, the definition of “current model year” could be 

effective for some time before the criteria in the proposed subparagraph (a)(2) of 15A NCAC 02D .1002 

V-29
Comments of NCADA 

October 14, 2013 

Page 8

are met. As such, it would not be accurate for the rule to be interpreted as limiting the current first year 

emissions inspection exemption to just “current model year” vehicles during the time frame before the 

(a)(2) criteria are met. Again, “new motor vehicles” are excluded regardless of model year. 

Conclusion

Based upon the concerns noted above, as currently drafted, NCADA respectfully objects to the proposed 

amendments to the motor vehicle emission control standard rules with the exception of the proposed 

repeal of 15A NCAC 02D .1009. NCADA welcomes the opportunity to work with the DAQ, and any 

other interested stakeholders in recommending revisions to the rules in question and to properly 

implement Session Law 2012-199 in a clear and unambiguous manner as well as in a manner that is not 

overly burdensome to the individuals and entities that are regulated by the rules. 

Thank you. 

Respectfully submitted, 

T. John Policastro 

General Counsel 

North Carolina Automobile Dealers Association 

Email: jpolicastro@ncada.com 

Phone: 919-828-4421 

Mobile: 919-349-0122 

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V-40
CHAPTER VI 

INDEX OF ATTACHMENTS 

ATTACHMENTS PAGE

Economic Analysis for Amendment to Vehicle Emissions Control Standards VI-2 

VI-1
Fiscal Note 

Rule Topic: Exemption of Certain Motor Vehicles from Emission Inspections (517) 

Rule Citation: 15A NCAC 02D .1002 Applicability, 

15A NCAC 02D .1003 Definitions, 

15A NCAC 02D .1005 On-Board Diagnostic Standards 

15A NCAC 02D .1006 Sale and Service of Analyzers 

15A NCAC 02D .1009 Model Year 2008 and Subsequent Model Year HeavyDuty Diesel Vehicle Requirements 

DENR Division: Division of Air Quality 

Agency Contact: Joelle Burleson, Rule Development Branch Supervisor 

Division of Air Quality (DAQ) 

(919) 707-8720 

Joelle.Burleson@ncdenr.gov

Analyst: Steve Schliesser, DAQ 

 (919) 707-8701 

Steve.Schliesser@ncdenr.gov

Impact Summary: State government: Yes 

Local government: Yes 

Substantial impact: Yes 

Federal government: No 

Authority: G.S. 20-128.2(a); G.S. 20-183.2(b); 143-215.3(a)(1); 143-

215.107(a)(3),(4),(6),(7); 143-215.107A; 143-215.108

Necessity: In response to statutory revisions in North Carolina Session Law 2012-199, the 

Division of Air Quality (DAQ) is proposing changes to its emission inspections 

rules. In the existing rule, only the current model year vehicles are excluded 

from emission inspections in the 48 counties required to have an emission 

inspection program under federal or State rules. The revised statute excludes 

from emissions inspections those vehicles in the three most recent model years 

with less than 70,000 miles on the odometer. Several additional minor 

housekeeping rule amendments are proposed to clarify definitions. Also, DAQ 

recommends repealing rule .1009 and relying solely on the federal heavy-duty 

engine standards rules. This is based on the fact that the California rule 

referenced in rule .1009 is equivalent to the EPA Heavy Duty Diesel (HDD) 

regulations and EPA did not delay or relax their HDD rules. NC General Statute 

150B-19.3 stipulates that a State agency may not adopt a rule for environmental 

protection that imposes a more restrictive standard than that imposed by federal 

law. 

2 

OSBM approval 7-16-13 filename Final IM Fiscal Note 7-16-13.docx 

VI-2
I. Executive Summary 

The purpose of this document is to conduct an evaluation of the costs and benefits associated with 

changes and revisions to the DAQ rules on motor vehicles emission inspections in the 48 counties 

required to have those inspections under State or federal rules. The new statute will amend the current 

rule’s exclusion of the current model year for emission inspection to exclude vehicles of the three most 

recent model years with less than 70,000 miles on its odometer. This change directly involves 

amending four rules: 

• 15A NCAC 02D .1002, Applicability; 

• 15A NCAC 02D .1003, Definitions; 

• 15A NCAC 02D .1005, On-Board Diagnostic Standards; and 

• 15A NCAC 02D .1006, Sale and Service of Analyzers (see proposed changes in Appendix A). 

These four rules establish and define which vehicles are subject to the Motor Vehicle Emission Control 

Standard and which analyzers are suitable for conducting the emission inspections. 

In addition, this change involves minor housekeeping amendments and the repealing a rule – 15A 

NCAC 02D .1009, Model Year 2008 and Subsequent Model Year Heavy-Duty Diesel Vehicle 

Requirements. This rule establishes heavy-duty diesel vehicle requirements for 2008 and more recent 

model years referencing regulations from California instead of regulations from EPA. None of these 

minor changes have any additional impact. 

Table 1, Estimated Fiscal Impacts of the Proposed Amendments, shows the fiscal impacts of 

exempting the second and third model year vehicles which are estimated to be $6.7 million during the 

last half of State Fiscal Year (SFY) ending on June 30, 2014. The full impacts are realized in SFY2015 and SFY-2016, reaching $14.0 million and $14.6 million, respectively, due to a projected 2.8% 

annual growth on the number of vehicles affected. Owners of vehicles benefit from cost savings that 

are equally offset by the combined revenue losses by State government agencies and private sector 

impacts on owners of inspection stations. If station owners are required to purchase software upgrades 

to implement the rule changes, there could be an additional one-time expenditure of $990,000 paid by 

the 4,550 station owners (about $180 for the typical station) and $200,000 paid by DMV. 

The net present value of these fiscal impacts of these proposed amendments are estimated to equal 

$30,155,000 over the initial three year period of this analysis. These rule amendments cause substantial 

economic impacts, as defined in the Administrative Procedures Act in N.C.G.S. 150B-21.4, meaning 

that the estimated impacts exceed $500,000 in any calendar year. 

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Table 1. Estimated Fiscal Impacts of the Proposed Amendments* 

SFY-2014 (Jan.-Jun.) SFY-2015 SFY-2016

Vehicles in 2nd & 3rd Model Year 405,500 846,000 883,000

 DAQ Impacts -$264,000 -$550,000 -$574,000

+ DMV Emission Program Account -$1,216,000 -$2,538,000 -$2,648,000

+ DMV Telecommunications Account -$710,000 -$1,480,000 -$1,545,000

= Total North Carolina Agency Impacts -$2,190,000 -$4,568,000 -$4,767,000

+ Inspection Station Owners Impacts -$4,461,000 -$9,306,000 -$9,714,000

= Total Revenue + Receipts Impacts** -$6,651,000 -$13,874,000 -$14,481,000

 

 State Motor Fleet Savings $21,000 $43,000 $45,000

+ Local Government Motor Fleet Savings $39,000 $81,000 $83,000

+ Private Vehicle Owner Savings $6,591,000 $13,750,000 $14,353,000 

= Total Vehicle Owners Savings** $6,651,000 $13,874,000 $14,481,000

* The table excludes the one-time cost to station owners (total of $990,000) and DMV ($200,000) for 

potentially needed station software upgrades to implement the proposed exemption. These costs may 

be borne by the vendors of analyzers used to perform the emission inspection or even DMV. 

**Total revenues to emission inspection station owners plus State government receipts equal the 

savings experienced by vehicle owner due to the proposed exemptions. 

II. Background 

The federal Clean Air Act (CAA), as amended, established National Ambient Air Quality Standards 

(NAAQS) for the following criteria pollutants: carbon monoxide, lead, ozone, nitrogen dioxide, 

particulate matter and sulfur dioxide. The North Carolina vehicle inspection and maintenance (I&M) 

program started in 1982 with Mecklenburg County being required to have an emission inspection 

program to address violations of the carbon monoxide NAAQS. In 1984, Wake County was added to 

the program for carbon monoxide NAAQS violations. With the passage of the 1990 CAA 

Amendments, seven other Counties (Cabarrus, Durham, Forsyth, Gaston, Guilford, Orange and Union) 

were added to the emission inspection program to address violations of the 1-hour ozone and/or carbon 

monoxide standards. Under the 1997 8-hour ozone standard, the Charlotte/Gastonia/Rock Hill area was 

designated as a moderate nonattainment area. Senate Bill 953 (Session Law 1999-328) required an 

additional 39 counties to have the vehicle emission program in order to improve air quality statewide. 

These counties were added to the program based on population, vehicle miles traveled, and the likely 

contribution by motor vehicles to high ozone levels in these counties and nearby counties. This 

expanded the program to a total of 48 counties. 

The initial emission inspection program in North Carolina was based on a “tail-pipe” test. The test was 

administered by inserting a probe in the vehicle’s tail-pipe and measuring the emissions of the 

pollutants. The tail-pipe test measured carbon monoxide and total hydrocarbon emissions. The test 

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could not identify the emission-related component that was malfunctioning, nor could it measure 

emissions of nitrogen oxides, which is a key precursor to ozone formation. 

Starting in October 2002, inspection stations in the original nine counties converted from tailpipe 

testing to the new On-Board Diagnostic II (OBD) emission testing for all 1996 and newer light duty 

gasoline vehicles. The program continued to expand until January 1, 2006, at which time inspection 

stations in 48 counties were performing the OBD emission test on all 1996 and newer light duty 

gasoline vehicles. Once the program was fully implemented, tail-pipe testing for vehicles older than 

1996 was discontinued. Model year 1996 and newer vehicles have standardized computer systems that 

continually monitor the electronic sensors of engines and emission control system parameters. When a 

potential problem is detected, a dashboard warning light is illuminated to alert the driver. An OBD 

system detects a problem well before symptoms such as poor performance, high emissions or poor fuel 

economy are recognized by the driver. An OBD emission test provides a more timely and 

comprehensive picture of a vehicle’s emission status because it continuously evaluates emission 

performance during operation, whereas a tail-pipe test measures emissions only for a few moments 

once a year. Early detection helps to avoid costly repairs and improves engine and emission 

performance. 

In 2008, North Carolina began the electronic authorization program. This program replaced the paper 

stickers that had been placed on vehicle windshields by inspection stations with electronic 

authorizations. The electronic authorization program also synchronized the vehicle registration renewal 

date with the vehicle inspection renewal date. A safety only inspection is required for all vehicles less 

than 35 years old. A vehicle that qualifies for an emission waiver may have their registration renewed 

after passing the safety equipment portion of the inspection and receiving a waiver for the OBD 

portion. The Department of Transportation (DOT) Division of Motor Vehicles (DMV) had contracted 

with Verizon Business to manage the Vehicle Inspection Database (VID). In April 2012 the DMV 

signed a contract with Systech International (now Opus Inspection) to serve as the State’s new VID 

program vendor and to enhance its functionality. This new system will allow for real time data transfer 

between the inspection stations, the VID and the DMV’s vehicle registration database, thus minimizing 

wait time for vehicle registration issuance and renewals. 

The rule amendments discussed in this analysis are necessary to comply with the new Session Law 

2012-199 statute that reduces the regulatory burden on many vehicle owners while meeting federal air 

quality standards. The DMV and DAQ jointly led a study per Session law 2011-145 to examine 

exempting vehicles from the emission inspection requirements under G.S. 20-183.2(b) for the three 

newest model year vehicles. As part of this study, DAQ in coordination with the DMV evaluated the 

potential impacts of exempting these motor vehicles on emission levels and air quality and determined 

that the exemption would not have a negative effect on air quality or on EPA accepting the State 

Implementation Plan (SIP) revision. Despite a slight emission increase from the inspection exemption, 

DAQ modeling showed that the offsetting emission effects of a higher compliance rate were stronger, 

the net result having a positive effect on air quality. A higher compliance rate than in previous 

modeling was assumed because recent data shows a higher rate has been achieved since the 2008 

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statute started the electronic authorization program. The results of the joint DMV and DAQ study1

were contained in a report with a recommendation to exempt the three newest model year vehicles 

from emission inspections and for the State to adjust compliance rate targets in the SIP to make up for 

the projected deficit in emission reductions. 

The January 2014 effective date of this legislation is structured to allow the DMV the time needed to 

recode its software to properly reflect the change in legislation. Additionally, it is important that the 

State submit to EPA the appropriate SIP revisions addressing any legislative change in the program 

prior to implementation of the amendment. The effective date would allow DAQ to submit the 

revisions demonstrating that no net increase in certain pollutants would result from 16 percent of the 

baseline number of vehicles being exempt from emission inspections since this would be offset by a 

higher compliance rate. Recent data shows a higher compliance rate than what is stated in the current 

SIP has been achieved since the electronic authorization program and synchronized vehicle registration 

and inspection renewal dates started in 2008. As a result, the State could move forward with the 

proposed three most recent model years exemption without losing eligibility to secure federal 

transportation funds. 

III. Description of Existing Rules 

15A NCAC 02D .1002, Applicability. This rule defines the trigger mechanisms for which specific 

vehicles (i.e., current model year) are subject to the Motor Vehicle Emission Control Standard in the 

48 counties specified in G.S. 143-215.107A. Those subject are gasoline-powered motor vehicles, 

except motorcycles and excluding the current model year, that are: 

(1) required to be registered by the DMV in the 48 designated counties; 

(2) part of a fleet primarily operated within the 48 counties; or 

(3) operated on a federal installation located in one of the 48 counties. 

15A NCAC 02D .1003, Definitions. This rule defines the key terms, but the previous version did not 

include all the terminology with corresponding definitions for the related new rule and available types 

of motor vehicles (i.e., hybrids, and the different types of electric vehicles), which are added in the rule 

change.

15A NCAC 02D .1005, On-Board Diagnostic Standards. This rule defines what the requirements are 

for the vehicles subject to emission inspection and those performing the inspection. The standards are: 

1. pass the on-board diagnostic test as prescribed in 40 CFR 85.2207, 

2. use equipment meeting the performance warranty tests in 40 CFR 85.2231, and 

3. report the test results to DAQ satisfying the computerized system and data analysis 

requirements specified in 40 CFR 51.358, 51.365, and 51.366. 

 

1

 DOT/DMV and DENR/DAQ, “A Study of the Potential Impacts of Exempting Motor Vehicles from Emissions 

Inspections,” March 1, 2012, submitted pursuant to the requirement of Section 28.24(a) of Session Law 2011-145. 

http://www.ncleg.net/PED/Reports/documents/Emissions/Emissions_Report.pdf

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15A NCAC 02D .1006, Sale and Service of Analyzers. This rule defines what the performance 

requirements are for the analyzer hardware and software responsible for conducting the emissions 

inspections and communicating the results on the identified vehicles to government officials. 

15A NCAC 02D .1009, Model Year 2008 and Subsequent Model Year Heavy-Duty Diesel Vehicle 

Requirements. This rule establishes heavy-duty diesel (HDD) vehicle requirements for 2008 and more 

recent model years referencing a regulation from California. DAQ adopted the California on-road 

heavy-duty diesel (HDD) regulations by reference in 2004 as a backstop in case the U.S. EPA delayed 

or relaxed their HDD regulations. Given that EPA did not delay or relax their HDD regulations and the 

California rule is equivalent to and duplicative of EPA HDD rules, DAQ recommends eliminating the 

02D .1009 Rule. 

IV. Motivation for the Proposed Rules 

The motivation for the Session Law 2012-199 statute and the ensuing proposed rule is to reduce the 

economic impact of environmental rules while not interfering with the State’s ability to attain federal 

air standards, resulting in loss of future federal transportation funding. Session Law 2011-145 required 

DMV and DAQ to investigate and report on the feasibility of extending the current one-year 

exemption to three-years. The agencies: 

• Reported that while North Carolina only exempts the current model year, 22 other State and 

local governments have laws granting multi-year exemptions (up to 6 years) for the on-board 

diagnostic standards meeting EPA approval; 

• Produced scientific findings that the exemptions would maintain EPA air quality standards; and 

• Determined the fiscal impacts resulting from the extended exemptions for vehicle owners, 

inspection stations, and State government agencies.2 

V. Identification of the Affected Sources 

Affected sources will be the owners of vehicles of the second and third most recent model years with 

less than 70,000 miles in the 48 counties specified in G.S. 143-215.107A. Vehicle documentation and 

records are kept systematically by DMV, as each vehicle must have a registration card, license plate, 

and annual safety inspection with the odometer mileage recorded. Within a given calendar year there 

are two vehicle model years, as manufacturers are allowed and always issue a new model year 

sometime after January 2 for a given year. The model year and the actual calendar year of production 

do not always coincide for motor vehicles. In the United States, government authorities allow cars of a 

given model year to be sold starting on January 2 of the previous calendar year. For example, this 

means that a 2013 model year vehicle can legally go on sale on January 2, 2012. 

Table 2 below provides a projection of the number of vehicles in North Carolina that would be subject 

to the emission inspection under the current rules and the number of vehicles subject with the 

enactment of the proposed exemption. The information in Table 2 was derived based on a detailed 

 

2

 Ibid. 

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national annual growth trend forecast from the US EPA MOVES2010 model.3

 National annual growth 

trends of roughly 2.8 percent in vehicles of model year 1996 or more recent, excluding the current 

model year, was used to predict the subject vehicle numbers in North Carolina in the period of interest, 

2014 – 2016. Vehicle age distributions were also obtained from the EPA MOVES2010 model to 

estimate the fraction of first model year. Those fractions were applied to the projected number of NC 

vehicles after an adjustment for vehicles with more than 70,000 miles was made. For this analysis, one 

percent of the second most recent model year and five percent of the third most recent model year are 

assumed to exceed the 70,000 mile limit on eligibility for the exemption based on 2011 DMV data. 

Table 2. Baseline and Additional Vehicles Exempted under the Revised Statute 

State Fiscal Year 2014 2015 2016 

Baseline Number of Vehicles Subject to Emissions 

Inspection 5,186,000 5,327,000 5,477,000

Percent change from baseline due to proposal to exempt 2nd

and 3rd Model Years with less than 70,000 miles 15.64% 15.88% 16.11%

Exempted 2nd and 3rd Model Year Vehicles 811,000 846,000 883,000

Resulting Number of Vehicles Subject to Emissions 

Inspection with exemption 4,375,000 4,481,000 4,594,000

During the next year the DMV has plans to recode its software to reflect the change in DAQ rules 

required by recent legislation. The software change will identify the affected vehicles of the three most 

recent model years with less than 70,000 miles, instead of only the current model year independent of 

mileage, in the designated 48 counties. 

VI. Establishment of the Regulatory Baseline 

This section presents what the revenues and costs to affected parties would have been without the 

exemption for second and third most recent model year vehicles. Under the current rules, only the 

current model year vehicles within a calendar year in the designated 48 counties are exempt from the 

OBD inspection for emission control standards. For example, in the 2011 calendar year, any new 

vehicles that have not been previously titled by DMV receive a safety-only inspection prior to sale in 

the 48 designated emission counties. 

For owners of vehicles subject to the rules, an emission and safety inspection costs up to $30, while a 

safety-only inspection costs $13.60. Table 3, Cost Breakdown for Vehicle Emission and Safety 

Inspection, delineates the inspection station cost and various government fee components in the vehicle 

emission and safety inspections. 

 

3

 US EPA MOVES2010 Model. 

http://www.epa.gov/otaq/models/moves/tools/MOVES2010DefaultAgeDistributions20100209.xls 

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Table 3. Cost Breakdown for Vehicle Emission and Safety Inspection 

1. Emission Inspection Fee Cost Sub-total 

 - Emission Program Account (DMV) $3.00 

 - Telecommunications Account (DMV) $1.75 

 - Division of Air Quality (DENR) $0.65 

Fee Sub-total $5.40 

Emission Inspection Cost $11.00 

Emission Inspection Sub-total 

(maximum allowed) $16.40

2. Safely Inspection

 - Highway Fund (DMV) $0.55 

 - Volunteer Rescue/EMS Fund $0.18 

 - Rescue Squad Workers’ Relief Fund $0.12 

Fee Sub-total $0.85 

Safety Inspection $12.75 

Safety Inspection Sub-total $13.60

Total Government Agencies Fee Revenue $6.25

Total Inspection Stations Revenue $23.75 

TOTAL INSPECTION COST TO VEHICLE 

OWNERS $30.00

Table 4, Baseline Revenue and Expenditures from Emission Inspections, presents receipt projections 

from emission inspections for the affected State agencies, DAQ and DMV, based on the projected 

number of vehicles that would have been subject to inspection under the current rules (see column two 

of Table 2). The table also includes the baseline projections for inspection station owners and owners 

of vehicles, including state and local governments, subject to emission inspections. 

Table 4. Baseline Revenue and Expenditures from Emission Inspections 

Baseline Revenue and Expenditures SFY-2014 (Jan.-Jun.) SFY-2015 SFY-2016

Vehicles Subject to Emission 

Inspections 2,593,000 5,327,000 5,477,000

 DAQ Emission Inspection Receipts $1,685,000 $3,463,000 $3,560,000

+ DMV Emission Program Account $7,779,000 $15,981,000 $16,431,000

+ DMV Telecommunications Account $4,538,000 $9,322,000 $9,585,000

= Total State Agency Receipts $14,002,000 $28,766,000 $29,576,000

+ Inspection Station Revenue $28,523,000 $58,597,000 $60,247,000

= Total Receipts + Revenues $42,525,000 $87,363,000 $89,823,000

Vehicle Owner Expenditures -$42,525,000 -$87,363,000 -$89,823,000

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VII. Changes from the Baseline: Estimate Impacts to the Existing Affected Sources 

Under the existing rule, only the current model year vehicles are exempt from emission inspection 

amounting to roughly 97,000 vehicles for calendar year 2012. The changes from the baseline include 

the number of the second and third most recent model year vehicles being exempted from emission 

inspections, and are presented in Table 2 for State fiscal year (SFY) 2014, 2015, and 2016. 

Table 5, Changes from Baseline Revenue and Expenditures, presents the projections for the changes in 

the receipts from the emission inspections to affected State agencies, inspection station owners, and 

owners of vehicles subject to emission inspections, which includes private owners as well as state and 

local governments. Based on current size of State and local government motor fleets, the estimates in 

the Table 5 below assume that there would be about 1,250 in SFY-2014, 2,600 in SFY-2015 and 2,700 

in SFY-2016 vehicles in the State motor fleet and 2,400 in SFY-2014, 4,900 in SFY-2015 and 5,100 in 

SFY-2016 vehicles in the local government motor fleet due to the vehicles exempted under the 

proposed rule during the period of this analysis. There is limited available data on the future makeup of 

local government owned vehicles, therefore the assumption was made that the current ratio of about 12 

percent of State owned vehicle that are in the second and third model year to the fleet size would hold 

for the next few years. Additionally, it was assumed that only 93 percent of the State and local 

government motor fleets are subject to emission inspections and that this percentage would stay 

constant over the next few years. This percentage comes from a report by the North Carolina Solar 

Center’s Clean Transportation Program4

 regarding the share of State’s motor fleet that is fueled by 

gasoline. 

Table 5. Changes from the Baseline Revenue and Expenditures with Proposed Exemption

Changes from the Baseline SFY-2014 (Jan.-Jun.) SFY-2015 SFY-2016

Vehicles in 2nd & 3rd Model Year 405,500 846,000 883,000

 DAQ Impacts -$264,000 -$550,000 -$574,000

+ DMV - Emission Program Account -$1,216,000 -$2,538,000 -$2,648,000

+ DMV - Telecommunications Account -$710,000 -$1,480,000 -$1,545,000

= Total North Carolina Agency Impacts -$2,190,000 -$4,568,000 -$4,767,000

+ Inspection Station Owners Impacts -$4,461,000 -$9,306,000 -$9,714,000

= Total Revenue + Receipts Impacts* -$6,651,000 -$13,874,000 -$14,481,000

 

 State Motor Fleet Savings $21,000 $43,000 $45,000

+ Local Government Motor Fleet Savings $39,000 $81,000 $83,000

+ Private Vehicle Owner Savings $6,591,000 $13,750,000 $14,353,000 

= Total Vehicle Owners Savings* $6,651,000 $13,874,000 $14,481,000

* Numbers may not add up due to rounding. 

 

4

 NC State University, North Carolina Solar Center. “North Carolina FY 2011-2012 Petroleum Displacement Program 

Report.” Available at: http://ncsc.ncsu.edu/wp-content/uploads/FY11-12-PDP-Annual-Report_final-draft-9_27_12.pdf 

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Table 6, Net Present Value of the Impacts, calculates the net present value of the impacts to be 

$30,155,000 during the initial three years of implementation of these proposed amendments, using a 

seven percent discount rate. 

Table 6. Net Present Value of the Impacts* 

Affected Parties Net Present Value

+ DAQ Impacts -$1,196,000

+ DMV - Emission Program Account -$5,515,000

+ DMV - Telecommunications Account -$3,217,000

= Total North Carolina Agency Impacts -$9,928,000

+ Inspection Station Owners Impacts -$20,227,000

= Total Revenue + Receipts Impacts* -$30,155,000

 

State Motor Fleet Savings $94,000

+ Local Government Motor Fleet Savings $175,000

+ Private Vehicle Owner Savings $29,886,000

= Total Vehicle Owners Savings* $30,155,000

*Assumes a 7% discount rate on fiscal impacts, over the initial 3 State fiscal years. 

Revenue Losses

As shown in Table 5 above, the combined revenue losses for the State government agencies are 

estimated to be nearly $2.2 million during the last half of SFY 2014. The full impacts are realized in 

SFY-2015 and SFY-2016, reaching $4.6 million and $4.8 million, respectively. The two DMV 

accounts (emission program and telecommunication accounts) would bear most of the losses with $1.9 

million during the last half of SFY-2014. The full impacts are realized in SFY-2015 and SFY-2016, 

reaching $4.0 million and $4.2 million, respectively. 

Private sector revenue losses for all the inspection station owners in the 48 counties are estimated to be 

$4.5 million during the last half of SFY 2014 and reaching $9.3 million and $9.7 million in the 

following two years, respectively. 

There is no guarantee that a VID software update or analyzer software changes are necessary. An online application is presently being explored by DMV with OPUS Inspection (previously Systech 

International) that would allow for software updates and negate the need for an individual analyzer 

software update. This online application would eliminate future need and associated cost with analyzer 

updates. These new enhancements will not only benefit the State by reducing administrative costs, but 

they will minimize the financial impact currently placed on inspection station owners. These 

enhancements will be recognized through the implementation of a web based solution to eliminate the 

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need for inspection stations to own specific analyzers, maintain costly service contracts and dedicated 

phone lines for dial up connections. 

However, in the event that analyzer updates are considered necessary, the estimate for the emission 

inspection software upgrades according to the seven vendors of analyzers could be a one-time 

expenditure of roughly $990,000 paid by the 4,550 station owners resulting in a roughly $180 cost per 

analyzer. Software upgrades to the VID could also add a one-time cost to DMV of roughly $200,000, 

according to information obtained from DMV. There are less than 5,600 analyzers that could require 

software modification and over 80 percent of inspection stations only have one. The vendors estimated 

weighted-average software upgrade cost ranges from $160 to $190. 

There is also uncertainty regarding who would actually pay for the upgrades. The current North 

Carolina Analyzer Specification (NCAS) states that inspection station owners may have to purchase 

software upgrades directly from the analyzer vendors when initiated due to a statutory change, which 

suggests the stations would bear the cost. However, there are several requirements of vendors in 15A 

NCAC 02D .1006, Sale and Service of Analyzers, that in the past have created business decisions by 

vendors to waive the software upgrade costs to inspection stations. The current rule .1006, defines 

“vendor” to mean “any person who sells or leases equipment to inspection stations that is used to 

measure emissions from motor vehicles for the purpose of showing compliance with Rule [15A NCAC 

02D .1004] or that is used to perform on-board diagnostic tests to show compliance with Rule [15A 

NCAC 02D.1005].”5

 Rule .1006 states in the current paragraph (b), Requirements, that a vendor shall 

not sell or lease equipment unless it meets the requirements of 40 CFR 85.2231 On-board Diagnostic 

Test Equipment Requirements, and has the software necessary to record and transmit the data required 

by the Division of Motor Vehicles and the Division of Air Quality to determine compliance with the 

inspection/ maintenance program requirements. In effect, if the software for their analyzer is not 

meeting the requirements, then they are no longer legitimate vendors. 

Although the estimates show revenue losses to State government, the DAQ expects to be able to 

absorb these losses, primarily as a result of offsetting these losses through the growth in the number of 

vehicles subject to emission inspections. Figures 1and 2 below illustrate this point by showing that the 

baseline receipts to State agencies and inspection stations in fiscal year 2011 change little from the 

forecasted level of receipts once the changes are in place. The point that DAQ could absorb the 

estimated losses is further illustrated in Appendix B, Revenue and Expenditure Data and Projections 

for State Fiscal Years 2011 – 2016, which presents a time series of these revenue and expenditure 

estimates used in this analysis from 2011 to 2016. 

Figure 1, DMV and DAQ Annual Receipts from the Emission Inspection Program, illustrates the 

baseline receipts and the fact that proposed receipts to DMV and DAQ are relatively unchanged from 

receipts in State fiscal year 2011. This supports the conclusion that these changes can be absorbed 

while maintaining the historic levels of program support. 

 

5

 Note in the proposed changes, this definition moves to 15A NCAC 02D .1002, and the reference to Rule .1004 is deleted. 

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Figure 1. DMV and DAQ Annual Receipts from the Emission Inspection Program 

$0

$2,000,000

$4,000,000

$6,000,000

$8,000,000

$10,000,000

$12,000,000

$14,000,000

$16,000,000

$18,000,000

SFY-2011 SFY-2012 SFY-2013 SFY-2014 SFY-2015 SFY-2016

Baseline: DOT 

Emission Program $

Proposed: DOT 

Emission Program $

Baseline: DOT 

Telecommunication $

Proposed DOT: 

Telecommunication $

Baseline: DAQ 

Emissions Program $

Proposed: DAQ 

Emission Program $

Figure 2, State Agency Annual Receipts and Emission Inspection Station Revenue from the Emission 

Inspection Program, illustrates the baseline receipts and the fact that proposed receipts and revenues 

are relatively unchanged when compared to levels in State fiscal year 2011. This supports the 

conclusion that these changes can be absorbed while maintaining the historic levels of program 

support. 

Figure 2. State Agency Annual Receipts and Emission Inspection Station Revenue from the 

Emission Inspection Program 

$0

$10,000,000

$20,000,000

$30,000,000

$40,000,000

$50,000,000

$60,000,000

$70,000,000

SFY-2011 SFY-2012 SFY-2013 SFY-2014 SFY-2015 SFY-2016

Baseline: Emission Inspection Station Revenue

Proposed: Emission Inspection Station Revenue

Baseline: State Agency Receipts

Proposed: State Agency Receipts

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Revenue Savings

With a three-year exemption of the emission inspection, affected vehicle owners will still be required 

to pass a safety-only inspection that costs $13.60. Therefore, affected vehicle owners would save a 

maximum of $16.40 a vehicle per year. Based on the predicted number of affected vehicles exempt 

according to DMV records and national trends, affected vehicle owners would incur cost savings of 

$6.6 million during the last half of SFY-2014 and $13.9 million and $14.5 million in the following two 

fiscal years, respectively, as shown in Table 5 above. The savings to State and local governments from 

fewer government owned vehicles requiring an emission inspection are also included in these 

estimates; however, their share of the savings is only 0.3 percent and 0.6 percent, respectively. 

Figure 3, Annual Impacts on State Agencies, Emission Inspection Station Owners and Vehicle 

Owners, shows the predicted savings by comparing costs to owners under the current rules with costs 

under the proposed changes. 

Figure 3. Annual Impacts on State Agencies, Emission Inspection Station Owners and Vehicle 

Owners

$70,000,000

$75,000,000

$80,000,000

$85,000,000

$90,000,000

$95,000,000

$100,000,000

SFY-2011 SFY-2012 SFY-2013 SFY-2014 SFY-2015 SFY-2016

Baseline: State Agency $ + Emission Station $ = Vehicle Owner $

Proposed: State Agency $ + Emission Station $ = Vehicle Owner $

Inspection station owners may also incur a savings in terms of the opportunity cost of labor since 

station staff would spend less time performing emission inspections than they would absent the rule 

change. Given that second and third model year cars would still need to undergo a safety inspection, 

these savings were assumed to be marginal and are not included in this analysis. 

VIII. Comparison with Original Analysis 

The original statute, Session Law 2011-145, studied the impact of exempting the three most recent 

model years independent of mileage from emissions inspection in the 48 designated counties. The 

original economic analysis in response to Session Law 2011-145 only looked at one set of vehicle data 

(three most recent model years, 2009-2011), assumed future years would contain the same number of 

new vehicles as the 2009-2011 period, and did not account for vehicles with 70,000 miles or more on 

their odometers. In addition, the one data set evaluated happened to occur in a time period with an 

unusually low number of new car purchases following the 2008 economic recession. 

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VI-14
The revised statute, Session Law 2012-199, will exclude vehicles of the three most recent model years 

with less than 70,000 miles in the 48 designated counties. This section summarizes the impacts 

presented in the tables above. It is important to note that there are cost impacts that were not 

considered in the original analysis that accompanied the statute-making process. These include a 

higher projected number of vehicles affected due to using US trends in the growth in new car sales (2.8 

percent growth annually) and vehicle age distribution profile. In addition, one percent of the second 

most recent model year and five percent of the third most recent model year are assumed to exceed the 

70,000 mile limit on eligibility for the exemption based on 2011 DMV inspection data. Also, as this 

rule change is expected to become effective in the second-half of the SFY-2014 (Jan. 1, 2014), this 

analysis assumes the change would affect only one-half of the annual emission inspection fee receipts 

for SFY-2014. 

IX. Risk and Uncertainty 

This economic analysis relies upon several US default data references that could contribute to 

significant error in the resulting projection. To the extent that deviations occurred in the underlying 

assumption, the projection will be off accordingly. For example, if the 2.8 percent growth in the 

number of vehicles subject to emission inspection is instead level or drops, then the growth component 

would be overestimated accordingly. The long run trend in the US default vehicle age profile was 

responsive to the drop off in 2008 and shows a steady recovery to the normal long term default. If 

another economic shock were to happen, then the forecast will be off accordingly. 

The vehicle inspection data from DMV for 2011 shows that about one percent of the second most 

recent model year vehicles and five percent of the third most recent model year exceed the 70,000 

odometer miles limit. To the extent that these percentages continue to be expressed in the vehicle 

population into the future, these assumptions could be a small source of uncertainty. 

The estimates of the State and local government vehicles that could benefit from these amendments 

have a certain degree of uncertainty. Although these estimates are based on 2010 DMV registration 

data, that information does not include the fuel type of the vehicles. As a result, the assumption was 

made that 93 percent of the State motor pool fleet is gasoline based. That 93 percent factor was used to 

scale down the 22,000 permanent plated State owned vehicles. The remainder of the 64,600 

government owned vehicles were assumed to be owned by units of local government. The State 

government fraction of gasoline vehicles was assumed to be reasonable to estimate the local 

government fraction. There is no readily available data to confirm or refute this assumption, and as 

such, this data gap could cause uncertainty in these estimates. Also the fraction of local government 

owned vehicles within their second and third most recent model year is not known, therefore the State 

fractions of about 12 percent was applied. All of these simplifying assumptions contribute to this 

uncertainty. 

As stated in Section VII, there is uncertainty regarding the necessity for the VID update or analyzer 

software changes and who, if anybody, would then bear those estimated costs. Currently under certain 

circumstances, the vendors may require inspection stations to purchase software updates. Thus far the 

vendors have not exercised this option to pass along these costs. When major software upgrades have 

been required by the State, DMV has used receipts from the telecommunications account fund to pay 

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VI-15
vendors. In the event that those costs become necessary, then the cost impacts would have to be added 

to the impacts presented in this economic assessment. 

X. Consideration of Alternatives 

The statutory revisions were specific and only added the second and third most recent model year 

vehicles to the current exemptions from emission inspections. The exclusion of additional model years 

would imply additional environmental and air quality reductions which would require additional 

offsetting benefits elsewhere in the State implementation plan revision. Given that further offsets were 

not likely achievable, such an alternative would be unacceptable to the EPA. Therefore no other viable 

alternatives were considered in this analysis. 

Based on present Analyzer and VID Central logic, inspection procedures can be performed in the same 

manner they are presently being performed without Analyzer and/or VID Central updates. The 

responsibility to perform the correct inspection on the vehicle presented would be that of the InspectorMechanic, which is no different than it is presently allowed or practiced now. The Analyzer and VID 

Central updates would incorporate additional system logic to warn the Inspector Mechanic from 

continuing with an OBD/Emissions Inspection, or to convert a Safety-Only Inspection to an OBD/ 

Emissions Inspection on a vehicle that meets the requirements outlined in Session Law 2012-199. 

A determination must be made by DMV as to the absolute necessity of an analyzer and VID Central 

update, resulting in almost $1.2 million when a proposed, but not yet developed, web-based system 

and software application could eliminate the need for this and future individual analyzer updates, if all 

current analyzers are converted to the web-based system. The incremental cost for the web-based 

system and software application associated with the rule change is assumed to be negligible. Until 

then, appropriate statutes are present to address improper inspections should they occur. It is important 

to remember that if this type of improper inspection should occur, the inspection that occurs is a more 

stringent inspection and not a less stringent one, but is still subject to penalties for an improper 

inspection. 

XI. Conclusions 

There would be substantial economic impacts from the revised statute, but the rule change itself has no 

impact beyond that created by the statute since its purpose is solely to bring the related rules into 

agreement with the revised statute. There are minor cost impacts such as the savings to State and local 

government vehicle owners that were not considered in development of the statute. State agencies or 

units of local government that own exempted second or third most recent model year vehicles may also 

benefit from the $16.40 cost saving when switching to safety only inspection requirement for two 

years. 

The total fiscal impacts of exempting the second and third most recent model year vehicles are 

estimated to be $6.7 million during the last half of SFY-2014. The full impacts are realized in SFY2015 and SFY-2016, reaching $13.9 million and $14.5 million, respectively. The net present value of 

these fiscal impacts of these proposed amendments are estimated to equal $30,155,000 over the initial 

three year period of this analysis. These rule amendments cause substantial economic impacts, as 

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defined in the Administrative Procedures Act in N.C.G.S. 150B-21.4, meaning that the estimated 

impacts exceed $500,000 in any calendar year. Owners of vehicles benefit from cost savings that are 

equally offset by the combined revenue losses by State government agencies and private sector impacts 

on inspection station owners. 

If Analyzer and VID Central Updates are found necessary, the estimates for the updates could be onetime expenditures of roughly $990,000 paid by the station owners and roughly $200,000 paid by 

DMV, respectively. 

There are no expected cost impacts from the repeal of Rule 02D .1009 or any of the other minor 

changes proposed alongside the emission exemption for second and third year models. 

VI-17
1 Appendix A. Proposed Rule Changes 

2 

3 

4 

5 

6 

15A NCAC 02D .1002 is proposed for amendment as follows: 

15A NCAC 02D .1002 APPLICABILITY 

(a) This Section Rule is applicable to all gasoline-powered and hybrid-powered motor vehicles, except motorcycles and 

excluding the current model year,

7 

8 year; 

9 (1) until the time the criteria in subparagraph (a)(2) are met, 

10 (2) as of January 1, 2014 or the first day of a month that is 30 days after the U.S. Environmental Protection 

11 Agency approves the State Implementation Plan revision and the replacement of the Motor Vehicle 

12 Inspection and Law Enforcement System being certified by the Commissioner of Motor Vehicles, 

13 whichever occurs later, this rule is applicable to all gasoline-powered and hybrid-powered motor vehicles 

14 of a 1996 or more recent model except the vehicles in the three most recent model years with less than 

15 70,000 miles on their odometers, plug-in and fuel-cell electric motor vehicles and motorcycles as 

16 specified in G.S. 20-183.2(b) that are: 

(1) (i) required to be registered by the North Carolina Division of Motor Vehicles in the counties 

identified in Paragraph (b) of this Rule; 

17 

18 

19 (2) (ii) part of a fleet primarily operated within the counties identified in Paragraph (b) of this Rule; or 

(3) (iii) operated on a federal installation located in a county identified in Paragraph (b) of this Rule and 

that meet the requirements of 40 CFR 51.356(a)(4). 

20 

21 

22 

23 

24 

25 

26 

27 

28 

29 

30 

(b) The emission control standards of this Section become effective in the counties identified in G.S. 143-215.107A on the 

dates specified in G.S. 143-215.107A. 

History Note: Authority G.S. 20-128.2(a); G.S. 143-215.3(a)(1); G.S. 143-215.107(a)(3); G.S. 143-215.107(a)(6); G.S. 

143-215.107(a)(7); G.S. 143-215.107A; G.S. 20-183.2; 

Eff. December 1, 1982; 

Amended Eff. July 1, 1992; April 1, 1991; 

Temporary Amendment Eff. January 1, 1993 for a period of 180 days or until the permanent rule 

becomes effective, whichever is sooner; 

31 Amended Eff. January 1, 2014; August 1, 2002; July 1, 1994; July 1, 1993. 

32 

33 

34 

35 

36 

37 

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1 15A NCAC 02D .1003 is proposed for amendment as follows: 

2 

3 15A NCAC 02D .1003 DEFINITIONS 

4 The following definitions of terms apply to Rules 02D .1002 through 02D .1006 regulating gasoline-powered and hybrid5 powered motor vehicles throughout this Section: 

(1) "Heavy-duty Gasoline Vehicle" means a gasoline-powered and hybrid-powered motor vehicle which is 

designed primarily for: 

6 

7 

8 (a) transportation of property and has a GVWR (Gross Vehicle Weight Rating) of more than 8,500 

9 pounds. pounds but less than 14,001 pounds;

10 

11 

12 

13 

(b) transportation of persons and has a capacity of more than 12 persons; or 

(c) use as a recreational motor vehicle, which is designed primarily to provide temporary or 

permanent living quarters for travel, camping, or other recreational use and has a GVWR of 

more than 8,500 pounds. 

(2) "Light-duty Gasoline Vehicle" means a gasoline-powered and hybrid-powered motor vehicle which is 

designed primarily for: 

14 

15 

16 

17 

(a) transportation of property and has a GVWR of 8,500 pounds or less; or 

(b) transportation of persons and has a capacity of 12 persons or less. 

18 (3) "Motor Vehicle" means any self-propelled vehicle used for transporting property or persons.

19 every vehicle which is self-propelled and every vehicle designed to run upon the highways which is 

20 pulled by a self-propelled vehicle as defined in G.S. 20-4.01(23). 

21 (4) "Motorcycle" means any motor vehicle having a seat or saddle for the use of the rider and designed to 

22 travel on not more than three wheels in contact with the ground. saddle for the use of the rider and 

23 designed to travel on not more than three wheels in contact with the ground, including motor scooters and 

24 motor-driven bicycles, but excluding tractors and utility vehicles equipped with an additional form of 

25 device designed to transport property, three-wheeled vehicles while being used by law-enforcement 

26 agencies and mopeds as defined in G.S. 20-4.01(27)d. 

27 (5) "Gasoline-powered Motor Vehicle" means a four-wheeled motor vehicle designed primarily to be 

28 propelled by the burning of gasoline in an internal combustion engine.

29 (6) "Hybrid-powered Vehicle" means a four-wheeled motor vehicle designed to be propelled by a 

30 combination of one or more electric motors and the burning of gasoline in an internal combustion engine. 

31 (7) "Plug-in Electric Vehicle" as defined in G.S. 20-4.01(28a). 

32 (8) "Fuel-cell Electric Vehicle" as defined in G.S. 20-4.01(12a). 

33 (9) "Model year" means the year used to designate a discrete vehicle model, irrespective of the calendar year 

34 in which the vehicle was actually produced, provided that the production period does not exceed 24 

35 months.

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VI-19
1 (10) "Current model year" means the most recent year used to designate a discrete vehicle model, irrespective 

2 of the calendar year in which the vehicle was actually produced, provided that the production period does 

3 not exceed 24 months.

4 (11) "Three most recent model years" means the current (first) model year and the second and third model 

5 years following the current model year. 

6 (12) "Vendor" means any person who sells or leases equipment to inspection stations that is used to perform 

7 on-board diagnostic tests to show compliance with Rule 02D .1005 of this Section.

8 

9 

10 History Note: Authority G.S. 143-215.3(a)(1); G.S. 20-4.01 (12a); G.S. 20-4.01 (28a)

11 Eff. December 1, 1982, 

12 Amended Eff. January 1, 2014.

13 

14 

15 

16 

17 

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19 

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1 15A NCAC 02D .1005 is proposed for amendment as follows: 

2 

3 15A NCAC 02D .1005 ON-BOARD DIAGNOSTIC STANDARDS 

4 (a) This Rule applies according to Rule .1002 of this Section to all 1996 and later gasoline-powered and hybrid-powered 

5 motor vehicles, vehicles 1996 or more recent models except the vehicles in the three most recent model years with less than 

70,000 miles on their odometers, except plug-in and fuel-cell electric motor vehicles, and motorcycles, in the counties 

identified in G.S. 143-215.107A. 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

(b) Vehicles covered under this Rule shall pass annually the on-board diagnostic test described in 40 CFR 85.2222. The 

vehicle shall fail the on-board diagnostic test if any of the conditions of 40 CFR 85.2207 are met. Equipment used to 

perform on-board diagnostic tests shall meet the requirements of 40 CFR 85.2231. 

(c) The tester shall provide the owner of a vehicle that fails the on-board diagnostic test described in Paragraph (b) of this

Rule a report of the test results. This report shall include the codes retrieved (these codes are listed in 40 CFR 85.2223(b)),

the status of the malfunction indicator light illumination command, and the customer alert statement described in 40 CFR 

85.2223(c). 

(d) Persons performing on-board diagnostic tests shall provide the Division of Air Quality data necessary to determine the 

effectiveness of the on-board diagnostic testing program. The data submitted shall be what is necessary to satisfy the 

17 requirements of 40 CFR 51.365, Data Collection, and 40 CFR 51.366, Data Analysis and Reporting. Reporting, and 40 

18 CFR 51.358, Test Equipment.

19 

20 

21 

22 

History Note: Authority G.S. 20-128.2(a); 143-215.3(a)(1); 143-215.107(a)(6); 143-215.107(a)(7); 143-215.107A(b); 

S.L. 1999 c. 328 s. 3.2 

Eff. December 1, 1982; 

Amended Eff. January 1, 2014; Amended Eff. August 1, 2002; July 1, 1998; April 1, 1991; November 1, 

1986. 

23 

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31 

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33 

34 

35 

36 

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VI-21
1 15A NCAC 02D .1006 is proposed to be amended as follows: 

2 

3 15A NCAC 02D .1006 SALE AND SERVICE OF ANALYZERS 

4 (a) Definition. For the purposes of this Rule, "vendor" means any person who sells or leases equipment to inspection 

5 stations that is used to measure emissions from motor vehicles for the purpose of showing compliance with Rule .1004 

6 of this Section or that is used to perform on-board diagnostic tests to show compliance with Rule .1005 of this 

7 Section.

(b) (a) Requirements. A vendor shall not sell or lease equipment unless it meets the requirements of 40 CFR 85.2231 

Onboard Diagnostic Test Equipment Requirements, and has the software necessary to record and transmit the data required 

by the Division of Motor Vehicles and the Division of Air Quality to determine compliance with the 

inspection/maintenance program requirements of this Section. 

8 

9 

10 

11 

(c) (b) Hardware repair and software repair. When equipment hardware or software fails to meet the requirements of 

Paragraph (b)

12 

 (a) of this Rule for a particular analyzer, the vendor, after receiving a call to its respective service call center, 

shall communicate with the impacted station within 24 hours:

13 

14 two business days and shall complete repairs within the 

15 warranty guidelines of the vendor. Where the hardware problem is stopping 20 percent or more inspections for a particular 

16 analyzer or is compromising the security of the inspection system, the vendor shall repair the problem within 48 hours after 

17 the initial call to its respective service call center.

18 (1) Where the hardware problem is stopping less than 20 percent of all inspections for a particular analyzer and 

19 is not compromising the security of the inspection system, the vendor shall repair the problem within 72 

20 hours after the initial call to its respective service call center.

21 (2) Where the hardware problem is not stopping inspections and is not compromising the security of the 

22 inspection system, the vendor shall repair the problem within 96 hours after the initial call to its respective 

23 service call center.

24 (d) (c) Software repair revisions. When analyzer software fails to meet the requirements of Paragraph (b) of this Rule, the 

25 vendor, after receiving a call to its respective service call center, shall communicate with the station within 24 hours. 

two business days. The vendor shall identify and characterize the software problem within 5 days. The vendor shall, 

27 within that same 5-day period, inform the station owner and the Division as to the nature of the problem and the 

proposed corrective course of action and:

26 

28 action.

29 (1) Where the software problem is stopping 20 percent or more inspections for a particular analyzer or is 

30 compromising the security of the inspection system, the vendor shall submit a new revision of the software 

31 to the Division for approval within 19 days after receiving the initial call to its service call center.

32 (2) Where the software problem is stopping less than 20 percent of all inspections for a particular analyzer and 

33 is not compromising the security of the inspection system, the vendor shall submit a new revision of the 

34 software to the Division for approval within 33 days after receiving the initial call to its service call center.

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VI-22
1 (3) The vendor shall distribute the new revision of the software to all impacted stations within 14 days after 

2 the vendor receives written notification from the Division that the software has been approved as meeting 

3 the requirements of Paragraph (b) of this Rule.

4 (e) (d) Documentation of the initial service call. The vendor's service call center shall assign a unique service response 

5 number to every reported new hardware or software problem. The time and date of the initial call shall be recorded and 

6 identified with the service response number. The service response number shall be communicated to the inspection 

7 station operator at the time of the initial contact. 

8 

9 History Note: Authority G.S. 143-215.3(a)(1); 143-215.107(a)(6), (14); 

10 Eff. January 1, 2007. 2007;

11 Amended Eff. January 1, 2014; 

12 

13 

14 

15 

16 

17 

18 

19 

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21 

22 

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1 

2 

3 

4 

15A NCAC 02D .1009 is proposed to be repealed: 

15A NCAC 02D .1009 MODEL YEAR 2008 AND SUBSEQUENT MODEL YEAR HEAVY-DUTY DIESEL 

VEHICLE REQUIREMENTS (REPEALED) 

5 (a) Applicability. This Rule applies to model year 2008 and subsequent model years heavy-duty diesel vehicles.

6 (b) Definitions. For the purposes of this Rule the following definitions shall apply.

7 (1) "Heavy-duty diesel vehicle" means a motor vehicle (excluding trailer(s)) with a gross vehicle weight 

8 rating (as certified by the manufacturer) of 14,001 pounds or greater that is propelled by a diesel engine.

9 (2) "Motor vehicle dealer" means motor vehicle dealer as defined in G.S. 20-286(11) and includes "new 

10 motor vehicle dealer" as defined in G.S. 20-286(13) and "used motor vehicle dealer" as defined in G.S. 

11 20-286(16).

12 (3) "New motor vehicle" means new motor vehicle as defined in G.S. 20-286(10)(a).

13 (4) "Used motor vehicle" means used motor vehicle as defined in G.S. 20-286(10)(b). 

14 (c) Exemptions. For the purposes of this Rule the exemption of military tactical vehicles and equipment as specified in 

15 Title 13 of the California Code of Regulations, Section 1905 shall apply.

16 (d) Requirement. No model year 2008 or subsequent model year heavy-duty diesel vehicle that is a

17 (1) used heavy-duty diesel vehicle sold by a motor vehicle dealer; or

18 (2) new motor vehicle, however it is sold,

19 may be leased or registered within North Carolina unless the vehicle or its engine has been certified by the California Air 

20 Resources Board as meeting the applicable model year requirements of Title 13 of the California Code of Regulations, 

21 Section 1956.8, California Exhaust Emission Standards and Test Procedures for 1985 and Subsequent Model Heavy-Duty 

22 Diesel Engines and Vehicles.

23 (e) Referenced Regulation. The California Code of Regulations Title 13, Division 3, Chapter 1, Article 1, Section 1905 and 

24 Article 2, Section 1956.8 are incorporated by reference in this Rule and include any later amendments thereto. A copy of 

25 the referenced materials may be obtained free of charge via the internet from the Office of Administrative Law California 

26 Code of Regulations website at http://ccr.oal.ca.gov/, or a hard copy may be obtained at a cost of $5.00 from the Public 

27 Information Office, California Air Resources Board, P.O. Box 2815, Sacramento, CA, 95812.

28 

29 History Note: Authority G.S. 143-215.3(a)(1); 143-215.107(a)(6)-(7); 

30 Eff. December 1, 2004. 2004; 

31 Repealed Eff. January 1, 2014; 

32 

33 

34 

35 

36 

37 

VI-24
Appendix B. Emission Inspection Revenue and Expenditure Data and Projections, SFY2011 – SFY-2016 

Baseline Revenue or Expenditures SFY-2011 SFY-2012 SFY-2013 SFY-2014 SFY-2015 SFY-2016 

Vehicles subject to Emission Inspection 4,809,000 4,903,000 5,044,000 5,186,000 5,327,000 5,477,000 

+ DAQ Emission Receipts $3,126,000 $3,187,000 $3,279,000 $3,371,000 $3,462,000 $3,560,000 

+ DMV - Emission Program Account $14,427,000 $14,710,000 $15,132,000 $15,558,000 $15,980,000 $16,432,000 

+ DMV - Telecommunications Account $8,416,000 $8,581,000 $8,827,000 $9,076,000 $9,321,000 $9,585,000 

= Total North Carolina Agency Receipts $25,969,000 $26,478,000 $27,238,000 $28,005,000 $28,763,000 $29,577,000 

+ Inspection Station Revenue $52,900,000 $53,937,000 $55,484,000 $57,046,000 $58,597,000 $60,247,000 

= Total Receipts + Revenues from 

Emission Inspection $78,869,000 $80,415,000 $82,722,000 $85,051,000 $87,360,000 $89,824,000 

= Vehicle Owner Expenditures* -$78,869,000 -$80,415,000 -$82,722,000 -$85,051,000 -$87,360,000 -$89,824,000 

 

Changes From Baseline SFY-2011 SFY-2012 SFY-2013 

SFY-2014 

(Jan.-Jun.) SFY-2015 SFY-2016 

Exempt 2nd & 3rd Model Year Vehicles 0 0 0 405,500 846,000 883,000 

+ DAQ Impacts $0 $0 $0 -$264,000 -$550,000 -$574,000 

+ DMV - Emission Program Account $0 $0 $0 -$1,216,000 -$2,538,000 -$2,649,000 

+ DMV - Telecommunications Account $0 $0 $0 -$710,000 -$1,480,000 -$1,545,000 

= Total North Carolina Agency Impacts $0 $0 $0 -$2,190,000 -$4,568,000 -$4,768,000 

+ Inspection Station Owners Impacts $0 $0 $0 -$4,461,000 -$9,306,000 -$9,713,000 

= Total Revenue + Receipts Impacts $0 $0 $0 -$6,651,000 -$13,874,000 -$14,481,000 

= Vehicle Owners Savings $0 $0 $0 $6,651,000 $13,874,000 $14,481,000 

 

Net Revenue or Expenditures SFY-2011 SFY-2012 SFY-2013 SFY-2014 SFY-2015 SFY-2016 

Vehicles subject to Emission Inspection 4,809,000 4,903,000 5,044,000 4,780,500 4,481,000 4,594,000 

+ DAQ Emission Receipts $3,126,000 $3,187,000 $3,279,000 $3,107,000 $2,912,000 $2,986,000 

+ DMV - Emission Program Account $14,427,000 $14,710,000 $15,132,000 $14,342,000 $13,442,000 $13,783,000 

+ DMV - Telecommunications Account $8,416,000 $8,581,000 $8,827,000 $8,366,000 $7,841,000 $8,040,000 

= Total North Carolina Agency Receipts $25,969,000 $26,478,000 $27,238,000 $25,815,000 $24,195,000 $24,809,000 

+ Inspection Station Revenue $52,900,000 $53,937,000 $55,484,000 $52,585,000 $49,291,000 $50,534,000 

= Total Receipts + Revenues from 

Emission $78,869,000 $80,415,000 $82,722,000 $78,400,000 $73,486,000 $75,343,000 

= Vehicle Owner Expenditures - $78,869,000 - $80,415,000 - $82,722,000 - $78,400,000 - $73,486,000 - $75,343,000 

* Includes expenditures/savings related to State and local government motor fleet, which account for an estimated 0.3% and 0.6% of total. 

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VII-1 

Chapter VII 

The following documentation of filing and notification is incorporated as part of this hearing record and is 

maintained on file: 

1. ENR 101 Internal Approval Form. 

2. Submission for Notice Form and material submitted to the Office of Administrative 

Hearings. 

3. The public notice as it appears in The North Carolina Register Volume 28, Issue 04, 

pages 328-332. 

4. Memorandum transmitting hearing notice and proposal to regional offices for public 

inspection. 

5. Memorandum transmitting hearing notice and proposal to local programs. 

6. Submission of Filing Forms and material filed with Office of Administrative Hearings. 

 7. Executive Order No. 70 Certification Form 
VII-2 

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